SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2000
Commission File Number 1-3761
TEXAS INSTRUMENTS INCORPORATED
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(Exact name of Registrant as specified in its charter)
Delaware 75-0289970
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(State of Incorporation) (I.R.S. Employer Identification No.)
12500 TI Boulevard, P.O. Box 660199, Dallas, Texas 75266-0199
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 972-995-3773
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
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Common Stock, par value $1.00 New York Stock Exchange
The Swiss Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
The aggregate market value of voting stock held by non-affiliates of the
Registrant was approximately $77,800,000,000 as of January 31, 2001.
1,734,216,602
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(Number of shares of common stock outstanding as of January 31, 2001)
Parts I, II, III and IV hereof incorporate information by reference to the
Registrant's proxy statement for the 2001 annual meeting of stockholders.
PART I
ITEM 1. Business.
General Information
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Texas Instruments Incorporated ("TI" or the "company," including subsidiaries
except where the context indicates otherwise) is headquartered in Dallas,
Texas, and has manufacturing, design or sales operations in 28 countries.
TI's largest geographic markets are in the United States, Asia, Japan and
Europe. TI has been in operation since 1930.
The financial information with respect to TI's business segments and
operations outside the United States, which is contained in the note to the
financial statements captioned "Business Segment and Geographic Area Data" on
pages B-23 through B-25 of TI's proxy statement for the 2001 annual meeting
of stockholders, is incorporated herein by reference to such proxy statement.
Semiconductor
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TI is a global semiconductor company and the world's leading designer and
supplier of digital signal processors and analog integrated circuits, the
engines driving the digitization of electronics. These two types of
semiconductor products work together in digital electronic devices such as
digital cellular phones. Analog technology converts analog signals like
sound, light, temperature and pressure into the digital language of zeros and
ones, which can then be processed in real-time by a digital signal processor.
Analog integrated circuits also translate digital signals back to analog.
Digital signal processors and analog integrated circuits enable a wide range
of new products and features for TI's more than 30,000 customers in
commercial, industrial and consumer markets.
TI also is a world leader in the design and manufacturing of other
semiconductor products. Those products include standard logic devices,
application-specific integrated circuits, reduced instruction-set computing
microprocessors, microcontrollers and digital imaging devices.
The semiconductor business comprised 87% of TI's 2000 revenues. TI's
semiconductor products are used in a diverse range of electronic systems,
including cellular telephones, personal computers, servers, communications
infrastructure equipment, digital cameras, digital audio players, motor
controls and automobiles. Products are sold to original-equipment
manufacturers, contract manufacturers and distributors. TI's semiconductor
patent portfolio has been established as an ongoing contributor to
semiconductor revenues. Revenues generated from sales to TI's top five
semiconductor customers accounted for approximately 28% of total
semiconductor revenues in 2000.
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The semiconductor business is intensely competitive, subject to rapid
technological change and pricing pressures, and requires high rates of
investment. TI is the leading supplier of digital signal processors and
analog integrated circuits, yet faces strong competition in all of its
semiconductor product lines. The rapid pace of change and technological
breakthroughs constantly create new opportunities for existing competitors
and start-ups, which can quickly render existing technologies less valuable.
In digital signal processors, TI competes with a growing number of large and
small companies, both U.S.-based and international. New product development
capabilities, applications support, software knowledge and advanced
semiconductor process technology are the primary competitive factors in this
business.
The market for analog integrated circuits is highly fragmented. TI competes
with many large and small companies, both U.S.-based and international.
Primary competitive factors in this business are the availability of
innovative designs and designers, a broad range of process technologies and
applications support and, particularly in the standard products area, price.
Other TI Businesses
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In addition to semiconductors, TI has two other principal segments. The
largest, representing 9% of TI's 2000 revenues, is Sensors & Controls
(formerly known as Materials & Controls). This business sells electrical and
electronic controls, sensors and radio-frequency identification systems into
commercial and industrial markets. Typically the top supplier in targeted
product areas, Sensors & Controls faces strong multinational and regional
competitors. The primary competitive factors in this business are product
reliability, manufacturing costs and engineering expertise. The products of
the business are sold to original equipment manufacturers and distributors.
Revenues generated from sales to TI's top five Sensors & Controls customers
accounted for approximately 28% of total Sensors & Controls revenues in 2000.
Educational & Productivity Solutions (E&PS) represents 4% of TI's 2000
revenues and is a leading supplier of graphing and educational calculators.
This business sells primarily through retailers and to schools through
instructional dealers. TI's principal competitors in this business are
Japan- and U.S.-based companies. Technology expertise, price and
infrastructure for education and market understanding are primary competitive
factors in this business. Revenues generated from sales to TI's top five
E&PS customers accounted for approximately 38% of total E&PS revenues in
2000.
Acquisitions and Divestitures
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From time to time TI considers acquisitions and divestitures that may
strengthen its business portfolio. TI may effect one or more of these
transactions at such time or times as it determines to be appropriate. In
2000, to support TI's focus on digital signal processors and analog
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integrated circuits, it acquired technology companies that brought unique
expertise in key markets for these core product areas. In the first quarter,
TI acquired Toccata Technology ApS, a developer of digital-audio amplifier
technology and board solutions. In the third quarter, TI acquired Burr-Brown
Corporation, a developer of analog semiconductors, principally in the data
converter and amplifier segments of the market; Dot Wireless, Inc., a
developer of CDMA third-generation wireless system architecture and protocol
software for voice and high-speed data applications; and Alantro
Communications, Inc., a developer of wireless local area networking
technology. The acquisition of Burr-Brown was accounted for as a pooling of
interests in 2000. All prior periods have been restated. In addition, in
the fourth quarter, Sensors & Controls divested its specialty-clad metals and
electrical contacts activity.
Backlog
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The dollar amount of backlog of orders believed by TI to be firm was $2411
million as of December 31, 2000 and $1907 million as of December 31, 1999.
Backlog orders are, under certain circumstances, subject to cancellation.
Also, there is generally a short cycle between order and shipment.
Accordingly, the company believes that its backlog as of any particular date
may not be indicative of revenue for any future period.
Raw Materials
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TI purchases materials, parts and supplies from a number of suppliers. The
materials, parts and supplies essential to TI's business are generally
available at present and TI believes at this time that such materials, parts
and supplies will be available in the foreseeable future.
Patents and Trademarks
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TI owns many patents in the United States and other countries in fields
relating to its business. The company has developed a strong, broad-based
patent portfolio. TI also has several agreements with other companies
involving license rights and anticipates that other licenses may be
negotiated in the future. TI does not consider its business materially
dependent upon any one patent or patent license, although taken as a whole,
the rights of TI and the products made and sold under patents and patent
licenses are important to TI's business.
TI owns trademarks that are used in the conduct of its business. These
trademarks are valuable assets, the most important of which are "Texas
Instruments" and TI's corporate monogram.
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Research and Development
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TI's research and development expense was $1747 million in 2000, compared
with $1379 million in 1999 and $1265 million in 1998. Included is a charge
for the value of acquisition-related purchased in-process research and
development of $112 million in 2000, $79 million in 1999 and $25 million in
1998.
Seasonality
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TI's revenues and operating results are subject to some seasonal variation.
Employees
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The information concerning the number of persons employed by TI at December
31, 2000 on page B-39 of TI's proxy statement for the 2001 annual meeting of
stockholders is incorporated herein by reference to such proxy statement.
Cautionary Statements Regarding Future Results of Operations
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You should read the following cautionary statements in conjunction with the
factors discussed elsewhere in this and other of TI's filings with the
Securities and Exchange Commission (SEC) and in materials incorporated by
reference in these filings. These cautionary statements are intended to
highlight certain factors that may affect the financial condition and results
of operations of TI and are not meant to be an exhaustive discussion of risks
that apply to companies with broad international operations, such as TI.
Like other businesses, TI is susceptible to macroeconomic downturns in the
United States or abroad that may affect the general economic climate and
performance of TI or its customers. Similarly, the price of TI's securities
is subject to volatility due to fluctuations in general market conditions,
differences in TI's results of operations from estimates and projections
generated by the investment community and other factors beyond TI's control.
A Weakening in the Semiconductor Market May Adversely Affect TI's
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Performance.
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TI's semiconductor business represents its largest business segment and
the principal source of its revenues. The semiconductor market has
historically been cyclical and subject to significant economic downturns. A
significant weakening in the semiconductor market may adversely affect TI's
results of operations and have an adverse effect on the market price of its
securities. In particular, TI's strategic focus in this business is on the
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development and marketing of digital signal processors and analog integrated
circuits. While TI believes that focusing its efforts on digital signal
processors and analog integrated circuits offers the best opportunity for TI
to achieve its strategic goals and that TI has developed, and will continue
to develop, a wide range of innovative and technologically advanced products,
the results of TI's operations may be adversely affected in the future if
demand for digital signal processors or analog integrated circuits decreases
or if these markets grow at a pace significantly less than that projected by
management.
The Technology Industry is Characterized by Rapid Technological Change
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that Requires TI to Develop New Technologies and Products.
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TI's results of operations depend in part upon its ability to
successfully develop and market innovative products in a rapidly changing
technological environment. TI requires significant capital to develop new
technologies and products to meet changing customer demands that, in turn,
may result in shortened product lifecycles. Moreover, expenditures for
technology and product development are generally made before the commercial
viability for such developments can be assured. As a result, there can be no
assurance that TI will successfully develop and market these new products,
that the products TI does develop and market will be well received by
customers or that TI will realize a return on the capital expended to develop
such products.
TI Faces Substantial Competition that Requires TI to Respond Rapidly to
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Product Development and Pricing Pressures.
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TI faces intense technological and pricing competition in the markets in
which it operates. TI expects that the level of this competition will
increase in the future from large, established semiconductor and related
product companies, as well as from emerging companies serving niche markets
also served by TI. Certain of TI's competitors possess sufficient financial,
technical and management resources to develop and market products that may
compete favorably against those products of TI that currently offer
technological and/or price advantages over competitive products. Competition
results in price and product development pressures, which may result in
reduced profit margins and lost business opportunities in the event that TI
is unable to match price declines or technological, product, applications
support, software or manufacturing advances of its competitors.
6
TI's Performance Depends upon its Ability to Enforce Its Intellectual
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Property Rights and to Develop or License New Intellectual Property.
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TI benefits from royalties generated from various license agreements
that will be in effect through the year 2005. Access to worldwide markets
depends on the continued strength of TI's intellectual property portfolio.
Future royalty revenue depends on the strength of TI's portfolio and
enforcement efforts, and on the sales and financial stability of TI's
licensees. TI actively enforces and protects its intellectual property
rights, but there can be no assurance that TI's efforts will be adequate to
prevent the misappropriation or improper use of the protected technology.
Moreover, there can be no assurance that, as TI's business expands into new
areas, TI will be able to independently develop the technology, software or
know-how necessary to conduct its business or that it can do so without
infringing the intellectual property rights of others. TI may have to rely
increasingly on licensed technology from others. To the extent that TI
relies on licenses from others, there can be no assurance that it will be
able to obtain all of the licenses it desires in the future on terms it
considers reasonable or at all.
A Decline in Demand in Certain End-User Markets Could Have a Material
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Adverse Effect on the Demand for TI's Products and Results of
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Operations.
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TI's customer base includes companies in a wide range of industries, but
TI generates a significant amount of revenues from sales to customers in the
telecommunications and computer-related industries. Within these industries,
a large portion of TI revenues is generated by the sale of digital signal
processors and analog integrated circuits to customers in the cellular phone,
personal computer and communications infrastructure markets. A significant
decline in any one or several of these end-user markets could have a material
adverse effect on the demand for TI's products and its results of operations.
TI's International Manufacturing Operations and Sales Subject It to
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Risks Associated with Legal, Political, Economic or Other Changes
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Outside of the United States.
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TI operates in 28 countries worldwide and in 2000 derived in excess of
72% of its revenues from sales to locations outside the United States.
Operating internationally exposes TI to changes in the laws or policies, as
well as the general economic conditions, of the various countries in which it
operates, which could result in an adverse effect on TI's business operations
in such countries and its results of operations. Also, as discussed in more
7
detail on pages B-11 and B-43 of TI's proxy statement for the
2001 annual meeting of stockholders, TI uses forward currency exchange
contracts to minimize the adverse earnings impact from the effect of exchange
rate fluctuations on the company's non-U.S. dollar net balance sheet
exposures. Nevertheless, in periods when the U.S. dollar strengthens in
relation to the non-U.S. currencies in which TI transacts business, the
remeasurement of non-U.S. dollar transactions can have an adverse effect on
TI's non-U.S. business.
The Loss of or Significant Curtailment of Purchases by any of TI's
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Largest Customers Could Adversely Affect TI's Results of Operations.
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While TI generates revenues from thousands of customers worldwide, the
loss of or significant curtailment of purchases by one or more of its top
customers, including curtailments due to a change in the design or
manufacturing sourcing policies or practices of these customers, may
adversely affect TI's results of operations.
TI's Continued Success Depends Upon Its Ability to Retain and Recruit a
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Sufficient Number of Qualified Employees in a Competitive Environment.
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TI's continued success depends on the retention and recruitment of
skilled personnel, including technical, marketing, management and staff
personnel. Experienced personnel in the electronics industry are in high
demand and competition for their skills is intense. There can be no
assurance that TI will be able to successfully retain and recruit the key
personnel that it requires.
Available Information
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TI files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements and
other information filed by TI at the SEC's public reference rooms at 450
Fifth Street, N.W., Washington, D.C. 20549, or at the SEC offices in New
York, New York and Chicago, Illinois. Please call (800) SEC-0330 for further
information on the public reference rooms. TI's filings are also available
to the public from commercial document retrieval services and at the web site
maintained by the SEC at http://www.sec.gov.
8
ITEM 2. Properties.
TI's principal executive offices are located at 12500 TI Boulevard, Dallas,
Texas. TI owns and leases facilities in the United States and 12 other
countries for manufacturing, design and related purposes. The following
table indicates the general location of TI's principal manufacturing and
design operations and the business segments which make major use of them.
Except as otherwise indicated, these facilities are owned by TI.
Sensors
Semiconductor & Controls E&PS
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Dallas, Texas(1) X X X
Houston, Texas X
Sherman, Texas(1)(2) X
Tucson, Arizona X
Santa Cruz, California X
Attleboro, X X
Massachusetts
Hiji, Japan X
Miho, Japan X
Kuala Lumpur, X X
Malaysia(3)
Baguio, X
Philippines(4)
Taipei, Taiwan X
Nice, France X
Freising, Germany X X
Aguascalientes, Mexico X X
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(1) Certain facilities or portions thereof in Dallas and Sherman are leased
to Raytheon Company or Raytheon-related entities in connection with the
sale in 1997 of TI's defense systems and electronics business.
(2) Leased.
(3) Approximately half of this site is owned on leased land; the remainder
is leased.
(4) Owned on leased land.
TI's facilities in the United States contained approximately 17,300,000
square feet as of December 31, 2000, of which approximately 3,000,000 square
feet were leased. TI's facilities outside the United States contained
approximately 5,500,000 square feet as of December 31, 2000, of which
approximately 1,600,000 square feet were leased.
TI believes that its existing properties are in good condition and suitable
for the manufacture of its products. At the end of 2000, the company
utilized substantially all of the space in its facilities.
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Leases covering TI's leased facilities expire at varying dates generally
within the next 10 years. TI anticipates no difficulty in either retaining
occupancy through lease renewals, month-to-month occupancy or purchases of
leased facilities, or replacing the leased facilities with equivalent
facilities.
ITEM 3. Legal Proceedings.
Italian government auditors have substantially completed a review, conducted
in the ordinary course, of approximately $275 million of grants from the
Italian government to TI's former memory operations in Italy. The auditors
have raised a number of issues relating to compliance with grant requirements
and the eligibility of specific expenses for the grants. These issues are
subject to final decision by the Ministry of the Treasury. Depending on the
Ministry's decision, the review may result in a demand from the Italian
government that TI repay a portion of the grants. In November 2000, a
criminal proceeding concerning a portion of the grants relating to specified
research and development activities was dismissed without indictment. The
company believes that the grants were obtained and used in compliance with
applicable law and contractual obligations.
TI is involved in various investigations and proceedings conducted by the
federal Environmental Protection Agency and certain state environmental
agencies regarding disposal of waste materials. Although the factual
situations and the progress of each of these matters differ, the company
believes that the amount of its liability will not have a material adverse
effect upon its financial position or results of operations and, in most
cases, TI's liability will be limited to sharing clean-up or other remedial
costs with other potentially responsible parties.
ITEM 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
The information which is contained in the note to the financial statements
captioned "Common Stock Prices and Dividends" on page B-52 of TI's proxy
statement for the 2001 annual meeting of stockholders, and the information
concerning the number of stockholders of record at December 31, 2000 on page
B-39 of such proxy statement, are incorporated herein by reference to such
proxy statement.
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ITEM 6. Selected Financial Data.
The "Summary of Selected Financial Data" for the years 1996 through 2000
which appears on page B-39 of TI's proxy statement for the 2001 annual
meeting of stockholders is incorporated herein by reference to such proxy
statement.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information contained under the caption "Management Discussion and
Analysis of Financial Condition and Results of Operations" on pages B-40
through B-50 of TI's proxy statement for the 2001 annual meeting of
stockholders is incorporated herein by reference to such proxy statement.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
Information concerning market risk is contained on pages B-43 through B-45 of
TI's proxy statement for the 2001 annual meeting of stockholders and is
incorporated by reference to such proxy statement.
ITEM 8. Financial Statements and Supplementary Data.
The consolidated financial statements of the company at December 31, 2000 and
1999 and for each of the three years in the period ended December 31, 2000,
and the report thereon of the independent auditors, on pages B-1 through
B-38 of TI's proxy statement for the 2001 annual meeting of stockholders,
are incorporated herein by reference to such proxy statement.
The "Quarterly Financial Data" on pages B-51 and B-52 of TI's proxy statement
for the 2001 annual meeting of stockholders is also incorporated herein by
reference to such proxy statement.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The information with respect to directors' names, ages, positions, term of
office and periods of service, which is contained under the caption "Nominees
for Directorship" in the company's proxy statement for the 2001 annual
meeting of stockholders, is incorporated herein by reference to such proxy
statement.
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The following is an alphabetical list of the names and ages of the executive
officers of the company and the positions or offices with the company
presently held by each person named:
Name Age Position
William A. Aylesworth 58 Senior Vice President,
Treasurer and
Chief Financial Officer
Gilles Delfassy 45 Senior Vice President
Thomas J. Engibous 48 Director; Chairman of the
Board, President and
Chief Executive Officer
Michael J. Hames 42 Senior Vice President
Joseph F. Hubach 43 Senior Vice President,
Secretary and
General Counsel
Stephen H. Leven 49 Senior Vice President
Keh-Shew Lu 54 Senior Vice President
Richard J. Schaar 55 Senior Vice President
(President, Educational &
Productivity Solutions)
M. Samuel Self 61 Senior Vice President and
Controller (Chief Accounting
Officer)
Elwin L. Skiles, Jr. 59 Senior Vice President
Richard K. Templeton 42 Executive Vice President and
Chief Operating Officer (President,
Semiconductor)
Teresa L. West 40 Senior Vice President
Thomas Wroe 50 Senior Vice President
(President, Sensors & Controls)
The term of office of the above listed officers is from the date of their
election until their successor shall have been elected and qualified.
Messrs. Delfassy and Hames were elected to their respective offices on
November 30, 2000. The most recent date of election of the other officers
was April 20, 2000. Messrs. Aylesworth, Engibous and Skiles have served as
12
officers of the company for more than five years. Mr. Templeton has served
as an officer of the company since 1996, and he has been an employee of the
company for more than five years. Ms. West and Messrs. Delfassy, Hames,
Hubach, Leven, Lu, Schaar, Self, and Wroe have served as officers of the
company since 1998 and have been employees of the company for more than five
years.
ITEM 11. Executive Compensation.
The information which is contained under the captions "Directors
Compensation" and "Executive Compensation" in the company's proxy statement
for the 2001 annual meeting of stockholders is incorporated herein by
reference to such proxy statement.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information concerning (a) the only persons that have reported beneficial
ownership of more than 5% of the common stock of TI, and (b) the ownership of
TI's common stock by the Chief Executive Officer and the four other most
highly compensated executive officers, and all executive officers and
directors as a group, which is contained under the caption "Voting
Securities" in the company's proxy statement for the 2001 annual meeting of
stockholders, is incorporated herein by reference to such proxy statement.
The information concerning ownership of TI's common stock by each of the
directors, which is contained under the caption "Nominees for Directorship"
in such proxy statement, is also incorporated herein by reference to such
proxy statement.
ITEM 13. Certain Relationships and Related Transactions.
Not applicable.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1 and 2. Financial Statements and Financial Statement Schedules:
The financial statements and financial statement schedules are listed in the
index on page 21 hereof.
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3. Exhibits:
Designation of
Exhibit in
this Report Description of Exhibit
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2 Agreement and Plan of Merger, dated as of June 21, 2000,
by and among the Registrant, Burr-Brown Corporation and
Burma Acquisition Corp. (disclosure schedules omitted;
Registrant agrees to provide the Commission, upon request,
copies of such schedules)(incorporated by reference to
Texas Instruments Tucson Corporation's Current Report on
Form 8-K dated June 22, 2000).
3(a) Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(a) to the
Registrant's Annual Report on Form 10-K for the year 1993).
3(b) Certificate of Amendment to Restated Certificate of
Incorporation of the Registrant (incorporated by reference
to Exhibit 3(b) to the Registrant's Annual Report on Form
10-K for the year 1993).
3(c) Certificate of Amendment to Restated Certificate of
Incorporation of the Registrant (incorporated by reference
to Exhibit 3(c) to the Registrant's Annual Report on Form
10-K for the year 1993).
3(d) Certificate of Amendment to Restated Certificate of
Incorporation of the Registrant (incorporated by reference
to Exhibit 3 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996).
3(e) Certificate of Ownership Merging Texas Instruments
Automation Controls, Inc. into the Registrant
(incorporated by reference to Exhibit 3(e) to the
Registrant's Annual Report on Form 10-K for the year
1993).
3(f) Certificate of Elimination of Designations of Preferred
Stock of the Registrant (incorporated by reference to
Exhibit 3(f) to the Registrant's Annual Report on Form 10-K
for the year 1993).
3(g) Certificate of Ownership and Merger Merging Tiburon
Systems, Inc. into the Registrant (incorporated by
reference to Exhibit 4(g) to the Registrant's Registration
Statement No. 333-41919 on Form S-8).
3(h) Certificate of Ownership and Merger Merging Tartan, Inc.
into the Registrant (incorporated by reference to
Exhibit 4(h) to the Registrant's Registration Statement
No. 333-41919 on Form S-8).
3(i) Certificate of Designation relating to the Registrant's
Participating Cumulative Preferred Stock (incorporated by
reference to Exhibit 4(a) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1998).
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3(j) Certificate of Elimination of Designation of Preferred
Stock of the Registrant (incorporated by reference to
Exhibit 3(j) to the Registrant's Annual Report on Form 10-K
for the year 1998).
3(k) Certificate of Ownership and Merger Merging Intersect
Technologies, Inc. into the Registrant (incorporated by
reference to Exhibit 3(k) to the Registrant's Annual Report
on Form 10-K for the year 1999).
3(l) Certificate of Ownership and Merger Merging Soft Warehouse,
Inc. into the Registrant (incorporated by reference to
Exhibit 3(l) to the Registrant's Annual Report on Form 10-K
for the year 1999).
3(m) Certificate of Ownership and Merger Merging Silicon
Systems, Inc. into the Registrant (incorporated by
reference to Exhibit 3(m) to the Registrant's Annual Report
on Form 10-K for the year 1999).
3(n) Certificate of Amendment to Restated Certificate of
Incorporation (incorporated by reference to Exhibit
3(n) to the Registrant's Registration Statement on
Form S-4 No. 333-41030 filed on July 7, 2000).
3(o) By-Laws of the Registrant (incorporated by reference to
Exhibit 3(n) to the Registrant's Annual Report on Form 10-K
for the year 1999).
4(a)(i) Rights Agreement dated as of June 18, 1998 between the
Registrant and Harris Trust and Savings Bank as Rights
Agent, which includes as Exhibit B the form of Rights
Certificate (incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A dated
June 23, 1998).
4(a)(ii) Amendment dated as of September 18, 1998 to the Rights
Agreement (incorporated by reference to Exhibit 2 to the
Registrant's Amendment No. 1 to Registration Statement on
Form 8-A dated September 23, 1998).
4(b) The Registrant agrees to provide the Commission, upon
request, copies of instruments defining the rights of
holders of long-term debt of the Registrant and its
subsidiaries.
10(a)(i) Amended and Restated TI Deferred Compensation Plan
(incorporated by reference to Exhibit 10(a)(i) to the
Registrant's Annual Report on Form 10-K for the year
1999).*
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10(a)(ii) First Amendment to Restated TI Deferred Compensation Plan
(incorporated by reference to Exhibit 10(a)(ii) to the
Registrant's Annual Report on Form 10-K for the year
1999).*
10(a)(iii) Second Amendment to Restated TI Deferred Compensation Plan
(incorporated by reference to Exhibit 10(a)(iii) to the
Registrant's Annual Report on Form 10-K for the year
1999).*
10(a)(iv) Third Amendment to Restated TI Deferred Compensation Plan.*
10(b)(i) TI Employees Supplemental Pension Plan (incorporated by
reference to Exhibit 10(b)(i) to the Registrant's Annual
Report on Form 10-K for the year 1999).*
10(b)(ii) First Amendment to TI Supplemental Pension Plan
(incorporated by reference to Exhibit 10(b)(ii) to the
Registrant's Annual Report on Form 10-K for the year
1999).*
10(c) Texas Instruments Long-Term Incentive Plan (incorporated by
reference to Exhibit 10(a)(ii) to the Registrant's Annual
Report on Form 10-K for the year 1993).*
10(d) Texas Instruments 1996 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996).*
10(e) Texas Instruments 2000 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10(e) to the
Registrant's Registration Statement on Form S-4
No. 333-41030 filed on July 7, 2000).*
10(f) Texas Instruments Executive Officer Performance Plan
(incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997).*
10(g) Texas Instruments Restricted Stock Unit Plan for Directors
(incorporated by reference to Exhibit 10(e) to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998).
10(h) Texas Instruments Directors Deferred Compensation Plan
(incorporated by reference to Exhibit 10(f) to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998).
10(i) Texas Instruments Stock Option Plan for Non-Employee
Directors.
16
10(j) Acquisition Agreement dated as of June 18, 1998 between
Texas Instruments Incorporated and Micron Technology, Inc.
(exhibit C omitted) (incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K
dated June 18, 1998).
10(k) Second Amendment to Acquisition Agreement dated as of
September 30, 1998 between Texas Instruments Incorporated
and Micron Technology, Inc. (incorporated by reference to
Exhibit 2.2 to the Registrant's Current Report on Form 8-K
dated October 15, 1998).
10(l) Securities Rights and Restrictions Agreement dated as of
September 30, 1998 between Texas Instruments Incorporated
and Micron Technology, Inc. (incorporated by reference to
Exhibit 10(k) to the Registrant's Annual Report on
Form 10-K for the year 1998).
11 Computation of Earnings Per Common and Dilutive Potential
Common Share.
12 Computation of Ratio of Earnings to Fixed Charges.
13 Portions of Registrant's Proxy Statement for 2001 Annual
Meeting of Stockholders Incorporated by Reference Herein
(incorporated by reference to Exhibit B to the Registrant's
Proxy Statement for the 2001 Annual Meeting of
Stockholders).
21 List of Subsidiaries of the Registrant.
23 Consent of Ernst & Young LLP.
- ----------------
* Executive Compensation Plans and Arrangements.
(b) Reports on Form 8-K:
Not applicable.
17
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:
This report includes "forward-looking statements" intended to qualify for the
safe harbor from liability established by the Private Securities Litigation
Reform Act of 1995. These forward-looking statements generally can be
identified by phrases such as TI or its management "believes," "expects,"
"anticipates," "foresees," "forecasts," "estimates" or other words or phrases
of similar import. Similarly, statements herein that describe TI's business
strategy, outlook, objectives, plans, intentions or goals also are forward-
looking statements. All such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those in forward-looking statements.
We urge you to carefully consider the following important factors that could
cause actual results to differ materially from the expectations of TI or its
management:
- - Market demand for semiconductors, particularly for digital signal
processors and analog integrated circuits in key markets, such as
telecommunications and computers.
- - TI's ability to develop, manufacture and market innovative products in a
rapidly changing technological environment.
- - TI's ability to compete in products and prices in an intensely
competitive industry.
- - TI's ability to maintain and enforce a strong intellectual property
portfolio and obtain needed licenses from third parties.
- - Timely completion and successful integration of announced acquisitions.
- - Global economic, social and political conditions in the countries in
which TI and its customers and suppliers operate, including fluctuations
in foreign currency exchange rates.
- - Losses or curtailments of purchases from key customers or the timing of
customer inventory corrections.
- - TI's ability to recruit and retain skilled personnel.
- - Availability of raw materials and critical manufacturing equipment.
For a more detailed discussion of these factors see the text under the
heading "Cautionary Statements Regarding Future Results of Operations" in
Item 1 of this report. The forward-looking statements included in this
report are made only as of the date of this report and TI undertakes no
obligation to update the forward-looking statements to reflect subsequent
events or circumstances.
18
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
TEXAS INSTRUMENTS INCORPORATED
By: /S/ WILLIAM A. AYLESWORTH
-----------------------------
William A. Aylesworth
Senior Vice President,
Treasurer and Chief
Financial Officer
Date: February 27, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 27th day of February 2001.
Signature Title
/S/ JAMES R. ADAMS Director
- ------------------------------------
James R. Adams
/S/ DAVID L. BOREN Director
- ------------------------------------
David L. Boren
/S/ JAMES B. BUSEY IV Director
- ------------------------------------
James B. Busey IV
/S/ DANIEL A. CARP Director
- ------------------------------------
Daniel A. Carp
Chairman of the Board;
/S/ THOMAS J. ENGIBOUS President; Chief Executive
- ------------------------------------ Officer; Director
Thomas J. Engibous
19
/S/ GERALD W. FRONTERHOUSE Director
- ------------------------------------
Gerald W. Fronterhouse
Director
- ------------------------------------
David R. Goode
/S/ WAYNE R. SANDERS Director
- ------------------------------------
Wayne R. Sanders
/S/ RUTH J. SIMMONS Director
- ------------------------------------
Ruth J. Simmons
/S/ CLAYTON K. YEUTTER Director
- ------------------------------------
Clayton K. Yeutter
Senior Vice President;
/S/ WILLIAM A. AYLESWORTH Treasurer;
- ------------------------------------ Chief Financial Officer
William A. Aylesworth
Senior Vice President;
/S/ M. SAMUEL SELF Controller;
- ------------------------------------ Chief Accounting Officer
M. Samuel Self
20
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
(Item 14(a))
Page Reference
--------------
Proxy Statement
for the 2001
Annual Meeting
Form 10-K of Stockholders
--------- ---------------
Information incorporated by reference
to the Registrant's Proxy Statement for
the 2001 Annual Meeting of Stockholders
Consolidated Financial Statements:
Income for each of the three
years in the period ended
December 31, 2000 B-1
Balance sheet at December 31,
2000 and 1999 B-2
Cash flows for each of the
three years in the period
ended December 31, 2000 B-3
Stockholders' equity for
each of the three years in the
period ended December 31, 2000 B-4
Notes to financial statements B-5 - B-37
Report of Independent Auditors B-38
Consolidated Schedule for each of the three
years in the period ended December 31, 2000:
II. Allowance for Losses
All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements or the notes thereto.
21
Schedule II
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
ALLOWANCE FOR LOSSES
(In Millions of Dollars)
Years Ended December 31, 2000, 1999, 1998
Additions
Balance at Charged to Balance
Beginning Operating at End
of Year Results Usage of Year
[S] [C] [C] [C] [C]
2000 $56 $79 $(81) $54
- ---- === === ===== ===
1999 $60 $83 $(87) $56
- ---- === === ===== ===
1998 $63 $74 $(77) $60
- ---- === === ===== ===
Allowances for losses from uncollectible accounts, returns, etc., are deducted
from accounts receivable in the balance sheet.
22
Exhibit Index
Designation of
Exhibit in Electronic
this Report Description of Exhibit or Paper
- ------------ ---------------------- ----------
2 Agreement and Plan of Merger, dated as of June 21, E
2000, by and among the Registrant, Burr-Brown
Corporation and Burma Acquisition Corp. (disclosure
schedules omitted; Registrant agrees to provide the
Commission, upon request, copies of such schedules)
(incorporated by reference to Texas Instruments
Tucson Corporation's Current Report on Form 8-K
dated June 22, 2000).
3(a) Restated Certificate of Incorporation of the E
Registrant (incorporated by reference to
Exhibit 3(a) to the Registrant's Annual Report
on Form 10-K for the year 1993).
3(b) Certificate of Amendment to Restated Certificate E
of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(b) to
the Registrant's Annual Report on Form 10-K for
the year 1993).
3(c) Certificate of Amendment to Restated Certificate E
of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(c) to
the Registrant's Annual Report on Form 10-K for
the year 1993).
3(d) Certificate of Amendment to Restated Certificate E
of Incorporation of the Registrant
(incorporated by reference to Exhibit 3 to the
Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996).
3(e) Certificate of Ownership Merging Texas E
Instruments Automation Controls, Inc. into the
Registrant(incorporated by reference to
Exhibit 3(e) to the Registrant's Annual Report
on Form 10-K for the year 1993)
3(f) Certificate of Elimination of Designations of E
Stock of the Registrant (incorporated by
reference to Exhibit 3(f) to the Registrant's
Annual Report on Form 10-K for the year 1993).
3(g) Certificate of Ownership and Merger Merging E
Tiburon Systems, Inc. into the Registrant
(incorporated by reference to Exhibit 4(g) to
the Registrant's Registration Statement
No. 333-41919 on Form S-8).
3(h) Certificate of Ownership and Merger Merging E
Tartan, Inc. into the Registrant (incorporated
by reference to Exhibit 4(h) to the
Registrant's Registration Statement
No. 333-41919 on Form S-8).
23
3(i) Certificate of Designation relating to the E
Registrant's Participating Cumulative Preferred
Stock (incorporated by reference to
Exhibit 4(a) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1998).
3(j) Certificate of Elimination of Designation of E
Preferred Stock of the Registrant (incorporated
by reference to Exhibit 3(j) to the
Registrant's Annual Report on Form 10-K for the
year 1998).
3(k) Certificate of Ownership and Merger Merging E
Intersect Technologies, Inc. into the
Registrant (incorporated by reference to
Exhibit 3(k) to the Registrant's Annual Report
on Form 10-K for the year 1999).
3(l) Certificate of Ownership and Merger Merging E
Soft Warehouse, Inc. into the Registrant
(incorporated by reference to Exhibit 3(l) to
the Registrant's Annual Report on Form 10-K for
the year 1998).
3(m) Certificate of Ownership and Merger Merging E
Silicon Systems, Inc. into the Registrant
(incorporated by reference to Exhibit 3(m) to
the Registrant's Annual Report on Form 10-K for
the year 1998).
3(n) Certificate of Amendment to Restated Certificate of E
Incorporation (incorporated by reference to
Exhibit 3(n) to the Registrant's Registration
Statement on Form S-4 No. 333-41030 filed on
July 7, 2000).
3(o) By-Laws of the Registrant (incorporated by E
reference to Exhibit 3(n) to the Registrant's
Annual Report on Form 10-K for the year 1999).
4(a)(i) Rights Agreement dated as of June 18, 1998 E
between the Registrant and Harris Trust and
Savings Bank as Rights Agent, which includes as
Exhibit B the form of Rights Certificate
(incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A
dated June 23, 1998).
24
4(a)(ii) Amendment dated as of September 18, 1998 to the E
Rights Agreement (incorporated by reference to
Exhibit 2 to the Registrant's Amendment No. 1
to Registration Statement on Form 8-A dated
September 23, 1998).
4(b) The Registrant agrees to provide the E
Commission, upon request, copies of instruments
defining the rights of holders of long-term
debt of the Registrant and its subsidiaries.
10(a)(i) Amended and Restated TI Deferred Compensation Plan E
(incorporated by reference to Exhibit 10(a)(i)
to the Registrant's Annual Report on Form 10-K
for the year 1999).*
10(a)(ii) First Amendment to Restated TI Deferred E
Compensation Plan (incorporated by reference to
Exhibit 10(a)(ii) to the Registrant's Annual
Report on Form 10-K for the year 1999).*
10(a)(iii) Second Amendment to Restated TI Deferred E
Compensation Plan (incorporated by reference to
Exhibit 10(a)(iii) to the Registrant's Annual
Report on Form 10-K for the year 1999).*
10(a)(iv) Third Amendment to Restated TI Deferred E
Compensation Plan.*
10(b)(i) TI Employees Supplemental Pension Plan E
(incorporated by reference to Exhibit 10(b)(i)
to the Registrant's Annual Report on Form 10-K
for the year 1999).*
10(b)(ii) First Amendment to TI Supplemental Pension Plan E
(incorporated by reference to Exhibit 10(b)(ii)
to the Registrant's Annual Report on Form 10-K
for the year 1999).*
10(c) Texas Instruments Long-Term Incentive Plan E
(incorporated by reference to Exhibit 10(a)(ii)
to the Registrant's Annual Report on Form 10-K
for the year 1993).*
10(d) Texas Instruments 1996 Long-Term Incentive Plan E
(incorporated by reference to Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996).*
10(e) Texas Instruments 2000 Long-Term Incentive Plan E
(incorporated by reference to Exhibit 10(e) to the
Registrant's Registration Statement on Form S-4
No. 333-41030 filed on July 7, 2000).*
25
10(f) Texas Instruments Executive Officer Performance E
Plan (incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997).*
10(g) Texas Instruments Restricted Stock Unit Plan for E
Directors (incorporated by reference to Exhibit
10(e) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998).
10(h) Texas Instruments Directors Deferred Compensation E
Plan (incorporated by reference to Exhibit
10(f) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31,
1998).
10(i) Texas Instruments Stock Option Plan for E
Non-Employee Directors.
10(j) Acquisition Agreement dated as of June 18, 1998 E
between Texas Instruments Incorporated and
Micron Technology, Inc. (exhibit C omitted)
(incorporated by reference to Exhibit 2.1 to
the Registrant's Current Report on Form 8-K
dated June 18, 1998).
10(k) Second Amendment to Acquisition Agreement dated as E
of September 30, 1998 between Texas Instruments
Incorporated and Micron Technology, Inc.
(incorporated by reference to Exhibit 2.2 to
the Registrant's Current Report on Form 8-K
dated October 15, 1998).
10(l) Securities Rights and Restrictions Agreement dated E
as of September 30, 1998 between Texas
Instruments Incorporated and Micron Technology,
Inc. (incorporated by reference to Exhibit
10(k) to the Registrant's Annual Report on Form
10-K for the year 1998).
11 Computation of Earnings Per Common and Dilutive E
Potential Common Share.
12 Computation of Ratio of Earnings to Fixed Charges. E
26
13 Portions of Registrant's Proxy Statement for the E
2001 Annual Meeting of Stockholders
Incorporated by Reference Herein (incorporated
by reference to Exhibit B to the Registrant's
Proxy Statement for the 2001 Annual Meeting of
Stockholders).
21 List of Subsidiaries of the Registrant. E
23 Consent of Ernst & Young LLP. E
- ----------------
*Executive Compensation Plans and Arrangements.
27
THIRD AMENDMENT
TO RESTATED
TI DEFERRED COMPENSATION PLAN
TEXAS INSTRUMENTS INCORPORATED, a Delaware corporation with its principal
offices in Dallas, Texas (hereinafter referred to as "TI" or the "Company")
hereby adopts this Third Amendment to the restated TI Deferred Compensation
Plan (the "Plan").
This Third Amendment to the restated TI Deferred Compensation Plan shall
be effective as of the dates specified. Except as hereby amended by this Third
Amendment, the Plan, as previously amended, shall continue in full force and
effect.
1. Effective June 15, 2000, Section 2.1 is hereby amended and restated
in the entirety to read as follows:
"Sec. 2-1. Eligibility. A Designated Employee shall be eligible to
participate in:
(i) a Deferred Compensation Account in accordance with the
provisions of Section 2.2 below, and/or
(ii) a Benefit Restoration Account in accordance with the provisions
of Section 2-3 or Section 2-4 below.
Any Employee who receives a credit pursuant to Section 2-3 or Section 2-4
shall be a Participant, but will be a Benefit Restoration Only Participant
unless the Employee is also a Designated Employee. The participation of a
Benefit Restoration Only Participant, and the participation of a Designated
Employee who is subject to Section 2-3 or Section 2-4 shall be automatic.
The participation of a Designated Employee in a Deferred Compensation
Account is elective, as described below."
2. Except as amended by this Third Amendment, the Company hereby
ratifies the Plan as last amended and restated in the entirety effective
January 1, 1998, and as amended thereafter.
IN WITNESS WHEREOF, Texas Instruments Incorporated has caused this
instrument to be executed by its duly authorized officer.
TEXAS INSTRUMENTS INCORPORATED
By: __________________________
TEXAS INSTRUMENTS
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
As Adopted April 16, 1998 and Amended November 30, 2000
The purpose of the Texas Instruments Stock Option Plan for Non-Employee
Directors (the "Plan") is to increase the proprietary and vested
interest of the non-employee directors of Texas Instruments Incorporated
(the "Company") in the growth and performance of the Company by granting
such directors options to purchase shares of the common stock of the
Company, $1.00 par value ("Shares").
Section 1. Administration.
The Plan shall be administered by the Secretary of the Company (the
"Secretary"). Subject to the provisions of the Plan, the Secretary
shall have full power and authority to construe, interpret and
administer the Plan. The Secretary may issue rules and regulations for
administration of the Plan. All decisions of the Secretary shall be
final, conclusive and binding upon all parties, including the Company,
the stockholders and the directors. In the event of the absence or
inability of the Secretary, any Assistant Secretary shall have the
authority to act in his place.
Subject to the terms of the Plan and applicable law, the Secretary
shall have full power and authority to: (i) interpret and administer the
Plan and any instrument or agreement relating to, or options to purchase
common stock of the Company granted under, the Plan; (ii) establish
amend, suspend or waive such rules and regulations and appoint such
agents as the Secretary shall deem appropriate for the proper
administration of the Plan; and (iii) make any other determination and
take any other action that the Secretary deems necessary or desirable
for the administration of the Plan.
Section 2. Eligibility.
A member of the Board of Directors of the Company (the "Board") who
is not an employee of the Company or its subsidiaries shall be eligible
for grant of options under the Plan ("Eligible Director"). Any holder
of an option granted hereunder shall hereinafter be referred to as a
"Participant."
Section 3. Shares Subject to the Plan.
The Shares deliverable upon the exercise of options will be made
available from treasury Shares.
Section 4. Option Grants.
Each individual who is an Eligible Director will be granted an
option to purchase 10,000 Shares as of the date of each regular January
meeting of the Compensation Committee of the Board or any successor
committee (the "Compensation Committee") following the effective date of
the Plan or, if no such January meeting is held, as of the date of the
first meeting of the Compensation Committee during a calendar year. The
options granted will be nonstatutory stock options not intended to
qualify under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") and shall have the following terms and conditions:
(a) Price. The Purchase price per share of Shares
deliverable upon the exercise of each option shall be
100% of the Fair Market Value per share of the Shares
on the date the option is granted. For purposes of
this Plan, Fair Market Value shall be determined to be
equal to the simple average of the high and low prices
of the Shares on the date of grant (or, if there is no
trading on the New York Stock Exchange on such date,
then on the first previous date on which there is such
trading) as reported in "New York Stock Exchange
Composite Transactions" in "The Wall Street Journal,"
rounded upward to the next whole cent if such Fair
Market Value should include a fraction of a cent.
(b) Payment. The Secretary shall determine the method or
methods by which, and the form or forms, including,
without limitation, cash, Shares, or other property,
or any combination thereof, having a Fair Market Value
on the exercise date equal to the relevant exercise
price, in which payment of the exercise price with
respect to an option may be made or deemed to have
been made.
(c) Exercisability and Term of Options. Subject to
Section 4(d), options shall become exercisable in four
equal annual installments commencing on the first
anniversary date of the grant, provided the holder of
such option remains an Eligible Director until such
anniversary date, and shall be exercisable through the
tenth anniversary date of the grant.
(d) Termination of Service as Eligible Director. The
effect of a Participant's termination of service as a
director of the Company shall be as follows:
(i) Termination for cause: All outstanding options
held by the Participant shall be canceled
immediately upon termination.
(ii) Death: All outstanding options held by
the Participant shall continue to full term,
becoming exercisable in accordance with
Section 4(c), and shall be exercisable by such
Participant's heirs.
(iii) Permanent disability: All outstanding
options held by the Participant shall continue
to full term, becoming exercisable in accordance
with Section 4(c).
(iv) Termination after 8 years of service: All
outstanding options held by the Participant
shall continue to full term, becoming
exercisable in accordance with Section 4(c),
except that any option granted within less than
six months prior to termination shall be
cancelled immediately upon termination.
(v) Termination by reason of ineligibility to stand
for reelection under the Company's by-laws:
All outstanding options held by the Participant
shall continue to full term, becoming
exercisable in accordance with Section 4(c).
(iv) Other: For any termination other than those
specified above, all outstanding options held
by the Participant shall be exercisable for 30
days after the date of termination, only to the
extent that such options were exercisable on
the date of termination, except as follows:
(A) If the Participant dies within 30 days
after his or her termination, then such
Participant's heirs may exercise the
options for a period of up to one year
after the Participant's death, but only
to the extent any unexercised portion was
exercisable on the date of termination.
(B) If the Participant's termination occurs
within 30 days before the effective date
of a Change in Control (as defined in
Section 6), then the Change in Control
will be deemed to have occurred first and
the options shall be exercisable in
accordance with Section 4(c).
(e) Non-transferability of Options. No option shall be
transferable by a Participant except by will or by the
laws of descent and distribution, and during the
Participant's lifetime may be exercised only by
Participant or, if permissible under applicable law,
by the Participant's legal guardian or representative.
(f) Option Agreement. Each option granted hereunder shall
be evidenced by an agreement with the Company which
shall contain the terms and provisions set forth
herein and shall otherwise be consistent with the
provisions of the Plan.
Section 5. Adjustment of and Changes in Shares.
In the event that the Secretary shall determine that any dividend
or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or
other securities of the Company, or other similar corporate transaction
or event affects the Shares such that an adjustment is determined by the
Secretary to be appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available
under the Plan, then the Secretary shall, in such manner as he or she
may deem equitable, adjust any or all of (a) the number and type of
Shares subject to outstanding options, and (b) the exercise price with
respect to any option or, if deemed appropriate, make provision for a
cash payment to the holder of an outstanding option; provided, however,
that no fractional Shares shall be issued or outstanding hereunder.
Notwithstanding any such corporate transaction or event, no adjustment shall be
made in the number of Shares subject to options to be granted after the
occurrence of any such corporate transaction or event.
Section 6. Change of Control.
The provisions of Section 4(c) shall not apply and options
outstanding under the Plan shall be exercisable in full if a Change in
Control occurs. Change in Control means an event when (a) any Person,
alone or together with its Affiliates and Associates or otherwise, shall
become an Acquiring Person otherwise than pursuant to a transaction or
agreement approved by the Board of Directors of the Company prior to the
time the Acquiring Person became such, or (b) a majority of the Board of
Directors of the Company shall change within any 24-month period unless
the election or the nomination for election by the Company's
stockholders of each new director has been approved by a vote of at
least a majority of the directors then still in office who were
directors at the beginning of the period. For the purposes hereof, the
terms Person, Affiliates, Associates and Acquiring Person shall have the
meanings given to such terms in the Rights Agreement dated as of
June 17, 1988 between the Company and Harris Trust and Savings Bank,
successor in interest to First Chicago Trust Company of New York,
(formerly Morgan Shareholder Services Trust Company), as in effect on
the date hereof; provided, however, that if the percentage employed in
the definition of Acquiring Person is reduced hereafter from 20% in such
Rights Agreement, then such reduction shall also be applicable for the
purposes hereof.
Section 7. No Rights of Stockholders.
Neither a Participant nor a Participant's legal representative
shall be, or have any of the rights and privileges of, a stockholder of
the Company in respect of any shares purchasable upon the exercise of
any option, in whole or in part, unless and until certificates for such
shares shall have been issued.
Section 8. Plan Amendments.
The Board may amend, alter, suspend, discontinue or terminate the
Plan without the consent of any stockholder or Participant or other
person: provided, however, that no such action shall impair the rights
under any option theretofore granted under the Plan and that,
notwithstanding any other provision of the Plan or any option agreement,
no such amendment, alteration, suspension, discontinuation or
termination shall be made that would permit options to be granted with a
per Share exercise price of less than the Fair Market Value of a Share
on the date of grant thereof.
Section 9. Effective Date.
The Plan shall become effective on April 16, 1998. The Plan shall
terminate April 16, 2003 unless the Plan is extended or terminated at an
earlier date.
Section 10. No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent the Company from
adopting or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally applicable
or applicable only in specific cases.
Section 11. Governing Law.
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with
the laws of the State of Delaware and applicable Federal law.
Section 12. Severability.
If any provision of the Plan or any option is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction, or
as to any person or option, or would disqualify the Plan or any option
under any law deemed applicable by the Board, such provision shall be
construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination
of the Board, materially altering the intent of the Plan or the option,
such provision shall be stricken as to such jurisdiction, person or
option, and the remainder of the Plan and any such option shall remain
in full force and effect.
Section 13. No Right to Continued Board Membership.
The grant of options shall not be construed as giving a participant
the right to be retained as a director of the Company. The Board may at
any time fail or refuse to nominate a participant for election to the
Board, and the stockholders of the Company may at any election fail or
refuse to elect any participant to the Board free from any liability or
claim under this Plan or any options.
Section 14. No Trust or Fund Created.
Neither the Plan nor any options shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship
between the Company and a participant or any other person. To the
extent that any person acquires a right to receive options, or Shares
pursuant to options, from the Company pursuant to this Plan, such right
shall be no greater than the right of any unsecured general creditor of
the Company.
EXHIBIT 11
----------
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
EARNINGS PER COMMON AND DILUTIVE POTENTIAL COMMON SHARE
Years ended December 31
------------------------------------------
2000 1999 1998
---------- ---------- ----------
Income before cumulative effect of an
accounting change (in millions)..... $3,087 $1,451 $ 452
Add: Interest, net of tax effect
on convertible debentures
assumed converted................... 6 -- --
---------- ---------- ----------
Adjusted income before cumulative
effect of an accounting change.... 3,093 1,451 452
Cumulative effect of an accounting
change............................ (29) -- --
---------- ---------- ----------
Adjusted net income................. $3,064 $1,451 $ 452
========== ========== ==========
Diluted earnings per common and
dilutive potential common share:
Weighted average common shares
outstanding (in thousands)......... 1,717,484 1,680,282 1,665,307
Weighted average dilutive potential
common shares:
Stock option and
compensation plans............. 69,367 69,377 45,838
Convertible debentures......... 4,779 -- --
---------- ---------- ----------
Weighted average common and dilutive
potential common shares......... 1,791,630 1,749,659 1,711,145
========== ========== ==========
Diluted earnings per common share:
Income before cumulative effect
of an accounting change....... $1.73 $0.83 $0.26
Cumulative effect of an
accounting change............. (0.02) -- --
---------- ---------- ----------
Net income....................... $1.71 $0.83 $0.26
========== ========== ==========
Basic earnings per common share:
Weighted average common shares
outstanding (in thousands)......... 1,717,484 1,680,282 1,665,307
========== ========== =========
Basic earnings per common share:
Income before cumulative effect
of an accounting change....... $1.80 $0.86 $0.27
Cumulative effect of an
accounting change............. (0.02) -- --
---------- ---------- ----------
Net income......................... $1.78 $0.86 $0.27
========== ========== =========
Exhibit 12
----------
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
2000 1999 1998 1997 1996
Earnings:
Income from continuing operations
before income taxes plus fixed
charges and amortization of
capitalized interest less
interest capitalized................ $4,702 $2,205 $815 $973 $190
Fixed charges:
Total interest on loans (expensed
and capitalized).................... $98 $84 $86 $115 $108
Interest attributable to rental
and lease expense................... 32 30 41 44 44
Fixed charges............................. $130 $114 $127 $159 $152
Ratio of earnings to fixed charges........ 36.2 19.3 6.4 6.1 1.2
Exhibit 21
----------
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
LIST OF SUBSIDIARIES OF THE REGISTRANT
The following are current subsidiaries of the Registrant.
Subsidiary and Name Under Which Business is Done Where Organized
- ------------------------------------------------ ---------------
Amati Communications Corporation Delaware
Auto Circuits, Inc. Massachusetts
Automotive Sensors & Controls Dresden GmbH Germany
Benchmarq Microelectronics Corporation of South Korea Delaware
Burr-Brown AG Switzerland
Burr-Brown Europe Limited England
Burr-Brown Foreign Sales Corporation Barbados
Burr-Brown International B.V. Netherlands
Burr-Brown International GmbH Germany
Burr-Brown International Holding Corporation Delaware
Burr-Brown International S.A. France
Burr-Brown International Srl Italy
Burr-Brown Japan, Ltd. Japan
Burr-Brown Ltd. Cayman Islands
Burr-Brown Pte Ltd Singapore
Butterfly Communications Inc. Delaware
European Engineering and Technologies S.p.A. Italy
Fast Forward Technologies Limited England and Wales
GO DSP Corporation Canada
ICOT International Limited United Kingdom
Intelligent Instrumentation GmbH Germany
Intelligent Instrumentation, Inc. Arizona
Intelligent Instrumentation, Inc. Foreign Sales Barbados
Corporation
Intelligent Instrumentation S.A. France
Intelligent Instrumentation S.R.L. Italy
Power Trends, Inc. Illinois
Silicon Systems (Singapore) Pte Ltd Singapore
Telogy Networks, Inc. Delaware
Texas Instrumentos Eletronicos do Brasil Limitada Brazil
Texas Instruments A/S, Denmark Denmark
Texas Instruments Asia Limited Delaware
Texas Instruments Australia Limited Australia
Texas Instruments Automotive Sensors and Controls Delaware
San Jose Inc.
Texas Instruments (Bahamas) Limited Bahamas
Texas Instruments Belgium Belgium
Texas Instruments Business Expansion GmbH Germany
Texas Instruments Canada Limited Canada
Texas Instruments (China) Company Limited China
Texas Instruments China Incorporated Delaware
Texas Instruments, Copenhagen ApS Denmark
Texas Instruments de Mexico, S.A. de C.V. Mexico
Texas Instruments Deutschland G.m.b.H. Germany
Texas Instruments Electronic Systems Sdn. Bhd. Malaysia
Texas Instruments Espana, S.A. Spain
Texas Instruments Foreign Sales Corporation Barbados
Texas Instruments France S.A. France
Texas Instruments Gesellschaft m.b.H. Austria
Texas Instruments Holland B.V. Netherlands
Texas Instruments Hong Kong Limited Hong Kong
Texas Instruments (India) Limited India
Texas Instruments Insurance (Bermuda) Limited Bermuda
Texas Instruments International Capital Corporation Delaware
Texas Instruments International (Overseas) Limited United Kingdom
Texas Instruments International Trade Corporation Delaware
Texas Instruments (Ireland) Limited Ireland
Texas Instruments (Israel) Cable Broadband Israel
Communications Ltd.
Texas Instruments Israel Ltd. Israel
Texas Instruments Italia S.p.A. Italy
Texas Instruments Japan Limited Japan
Texas Instruments Korea Limited Korea
Texas Instruments Limited United Kingdom
Texas Instruments Malaysia Sdn. Bhd. Malaysia
Texas Instruments Oy Finland
Texas Instruments (Philippines) Incorporated Delaware
Texas Instruments Richardson LLC Delaware
Texas Instruments San Diego Incorporated California
Texas Instruments Santa Rosa Incorporated California
Texas Instruments (Shanghai) Co., Ltd. China
Texas Instruments Singapore (Pte) Limited Singapore
Texas Instruments Supply Company Texas
Texas Instruments Taiwan Limited Taiwan
Texas Instruments Trade & Investment Company S.A. Panama
Texas Instruments Tucson Corporation Delaware
TI Europe Limited United Kingdom
TI Information Engineering International Incorporated Delaware
TI Mexico Trade, S.A. de C.V. Mexico
Unitrode Corporation Maryland
Unitrode Electronics Asia Limited Hong Kong
Unitrode Electronics GmbH Germany
Unitrode Electronics (Singapore) Pte Ltd Singapore
Unitrode-Maine Maine
Unitrode S.r.l. Italy
Unitrode Trading (Singapore) Pte. Ltd. Singapore
Unitrode (UK) Limited United Kingdom
Exhibit 23
----------
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report on Form 10-K
of Texas Instruments Incorporated of our report dated January 22, 2001,
included in the proxy statement for the 2001 annual meeting of stockholders
of Texas Instruments Incorporated.
Our audits also included the financial statement schedule of Texas Instruments
Incorporated listed in Item 14(a). This schedule is the responsibility of the
Registrant's management. Our responsibility is to express an opinion based on
our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the following registration
statements, and in the related prospectuses thereto, of our report dated
January 22, 2001 with respect to the consolidated financial statements and
schedule of Texas Instruments Incorporated, included in or incorporated by
reference in this Annual Report on Form 10-K for the year ended December 31,
2000: Registration Statements (Forms S-8) No. 33-61154, No. 33-21407 (as
amended), No. 33-42172, No. 33-54615, No. 333-07127 (as amended),
No. 333-41913, No. 333-41919, No. 333-31319, No.333-31321, No. 333-31323,
No. 333-48389, and No. 333-44662, and Registration Statements (Forms S-3)
No. 333-03571, No. 333-93011, No. 333-37208, and No. 333-44572 (as amended),
and Registration Statements (Forms S-4) No. 333-89433, No. 333-89097,
No. 333-87199, No. 333-80157, and No. 333-41030 (as amended).
Dallas, Texas ERNST & YOUNG LLP
February 26, 2001