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TEXAS INSTRUMENTS INCORPORATED
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[Company Logo]
TEXAS INSTRUMENTS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 22, 1999
Dear Stockholders:
You are cordially invited to attend the 1999 annual meeting of stockholders on
Thursday, April 22, 1999 at the cafeteria on our property at 8505 Forest Lane,
Dallas, Texas, at 10:00 a.m. (Dallas time). At the meeting we will:
0 Elect directors for the next year.
0 Consider and act upon such other matters as may properly come
before the meeting.
Stockholders of record at the close of business on February 23, 1999 are
entitled to vote at the annual meeting.
We urge you to vote your shares as promptly as possible by: (1) calling the
toll-free number, (2) accessing the Internet web site, or (3) signing, dating
and mailing the enclosed proxy.
Sincerely,
/s/ RICHARD J. AGNICH
----------------------------
Richard J. Agnich
Senior Vice President,
Secretary and General Counsel
Dallas, Texas
March 5, 1999
TABLE OF CONTENTS
Page
Voting Procedures..........................................................4
Election of Directors......................................................4
Nominees for Directorship............................................4
Nominees' Ages, Service and Share Ownership..........................8
Board Organization.........................................................8
Board and Committee Meetings.........................................8
Committees of the Board..............................................8
Directors Compensation.....................................................10
Cash Compensation....................................................10
Deferral Election....................................................10
Restricted Stock Units...............................................10
Stock Options........................................................11
Director Award Program...............................................11
Executive Compensation.....................................................11
Compensation Overview................................................11
Summary Compensation Table...........................................12
Table of Option Grants in 1998.......................................14
Table of Option Exercises in 1998 and Year-End Option Values.........15
U.S. Pension Plan Table..............................................16
U.K. Pension Plan Table..............................................17
Compensation Committee Report on Executive Compensation....................18
Comparison of Total Shareholder Return.....................................21
Additional Information.....................................................22
Voting Securities....................................................22
Share Ownership of Certain Persons...................................22
Cost of Solicitation.................................................23
2
Table of Contents (Continued)
Page
Proposals of Stockholders............................................23
Quorum Requirement...................................................24
Vote Required........................................................24
Telephone and Internet Voting........................................24
Independent Auditors.................................................25
3
[Company Logo]
TEXAS INSTRUMENTS
EXECUTIVE OFFICES: 8505 FOREST LANE, DALLAS, TEXAS
MAILING ADDRESS: POST OFFICE BOX 660199, DALLAS, TEXAS 75266-0199
PROXY STATEMENT
March 5, 1999
VOTING PROCEDURES
TI's board of directors requests your proxy for the annual meeting of
stockholders on April 22, 1999. If you sign and return the enclosed proxy, or
vote by telephone or on the Internet, you authorize the persons named in the
proxy to represent you and vote your shares for the purposes we mentioned in
the notice of annual meeting.
If you come to the meeting, you can of course vote in person. But, if you
don't come to the meeting, your shares can be voted only if you have returned a
properly executed proxy or followed the telephone or Internet voting
instructions. If you execute and return your proxy but do not give voting
instructions, the shares represented by that proxy will be voted as recommended
by the board of directors. You can revoke your authorization at any time
before the shares are voted at the meeting.
ELECTION OF DIRECTORS
Directors are elected at the annual meeting to hold office until the next
annual meeting and until their successors are elected and qualified. The board
of directors has designated the following persons as nominees. Unless you
withhold authority to vote for directors in your proxy, your shares will be
voted for: JAMES R. ADAMS, DAVID L. BOREN, JAMES B. BUSEY IV, DANIEL A. CARP,
THOMAS J. ENGIBOUS, GERALD W. FRONTERHOUSE, DAVID R. GOODE, WAYNE R. SANDERS,
GLORIA M. SHATTO and CLAYTON K. YEUTTER.
Nominees for Directorship
All of the nominees for directorship are now directors of the company. If any
nominee becomes unable to serve before the meeting, the people named as proxies
may vote for a substitute or the number of directors will be reduced
accordingly.
4
[Photo of J.R. Adams] JAMES R. ADAMS Director
Chair, Board Organization and Nominating
Committee; member, Audit Committee.
Chairman of the board of the company from 1996
to April 1998. Group president, SBC
Communications Inc. from 1992 until retirement
in 1995; president and chief executive officer
of Southwestern Bell Telephone Company,
1988-92.
[Photo of D.L. Boren] DAVID L. BOREN Director
Member, Audit and Stockholder Relations and
Public Policy Committees.
President of the University of Oklahoma since
1994. U.S. Senator, 1979-94; Governor of
Oklahoma, 1975-79. Director, AMR Corporation,
Phillips Petroleum Company, Torchmark
Corporation and Waddell & Reed, Inc.; Chairman,
Oklahoma Foundation for Excellence.
[Photo of J.B. Busey IV] JAMES B. BUSEY IV Director
Chair, Audit Committee; member, Board
Organization and Nominating Committee.
Retired from U.S. Navy as Admiral in 1989.
President and chief executive officer, Armed
Forces Communications and Electronics
Association, 1992-96; Deputy Secretary,
Department of Transportation, 1991-92;
Administrator, Federal Aviation Administration,
1989-91. Director, Curtiss-Wright Corporation
and S.T. Research Corporation; trustee and
vice-chairman, MITRE Corporation.
[Photo of D.A. Carp] DANIEL A. CARP Director
Member, Audit and Board Organization and
Nominating Committees.
President and chief operating officer of
Eastman Kodak Company since January 1997; also,
director since December 1997. Executive vice
president and assistant chief operating officer
of Eastman Kodak, 1995-97; general manager,
European Region, 1991-95.
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[Photo of T.J. Engibous] THOMAS J. ENGIBOUS Chairman, President and
Chief Executive Officer
President and chief executive officer of the
company since 1996; also, chairman since April
1998. Joined the company in 1976; elected
executive vice president in 1993. Director,
Catalyst, J.C. Penney Company, Inc. (effective
March 9, 1999); member, The Business Council
and The Business Roundtable; trustee, Southern
Methodist University.
[Photo of G.W. Fronterhouse] GERALD W. FRONTERHOUSE Director
Chair, Compensation Committee; member,
Stockholder Relations and Public Policy
Committee.
Investments. Former chief executive officer
(1985-88) of First RepublicBank Corporation.
President and director, Hoblitzelle Foundation.
[Photo of D.R. Goode] DAVID R. GOODE Director
Member, Board Organization and Nominating and
Compensation Committees.
Chairman of the board and chief executive
officer of Norfolk Southern Corporation since
1992; also, president since 1991. Director,
Aeroquip-Vickers, Inc., Caterpillar, Inc.,
Delta Airlines, Inc. (effective April 22, 1999)
and Georgia-Pacific Corporation; member, The
Business Council and The Business Roundtable;
trustee, Hollins College.
[Photo of W.R. Sanders] WAYNE R. SANDERS Director
Member, Compensation and Stockholder Relations
and Public Policy Committees.
Chairman of the board of Kimberly-Clark
Corporation since 1992; also, chief executive
officer since 1991. Director, Adolph Coors
Company, Coors Brewing Company and Chase Bank
of Texas, N.A.; trustee, Marquette University.
[Photo of G.M. Shatto] GLORIA M. SHATTO Director
Member, Audit and Stockholder Relations and
Public Policy Committees.
President Emerita of Berry College. President
of Berry College from 1980 to June 1998.
Director, Becton Dickinson and Company, Georgia
Power Company and The Southern Company;
trustee, Rice University.
6
[Photo of C.K. Yeutter] CLAYTON K. YEUTTER Director
Chair, Stockholder Relations and Public Policy
Committee; member, Compensation Committee.
Of counsel, Hogan & Hartson. Counselor to
President Bush for domestic policy during 1992;
chairman, Republican National Committee,
1991-92; Secretary, Department of Agriculture,
1989-91; U.S. Trade Representative, 1985-89.
Director, Allied Zurich, P.L.C., Caterpillar
Inc., ConAgra, Inc., FMC Corporation, and
Oppenheimer Funds.
7
Nominees' Ages, Service and Share Ownership
The table below shows the ages and holdings of common stock of the nominees and
the year they became a director.
Common Stock
Director Ownership at
Nominee Age Since December 31, 1998*
------- --- -------- ------------------
James R. Adams 59 1989 121,681
David L. Boren 57 1995 6,320
James B. Busey IV 66 1992 8,637
Daniel A. Carp 50 1997 2,166
Thomas J. Engibous 46 1996 538,287
Gerald W. Fronterhouse 62 1986 11,773
David R. Goode 58 1996 3,408
Wayne R. Sanders 51 1997 3,800
Gloria M. Shatto 67 1992 7,720
Clayton K. Yeutter 68 1992 9,320
- ---------------
*Includes any shares subject to restricted stock unit awards. Also
includes (a) shares that can be acquired within 60 days through the exercise of
options by Mr. Adams, 100,000 shares, and Mr. Engibous, 474,215 shares, and
(b) shares credited to profit sharing stock accounts for Mr. Adams, 833 shares,
and Mr. Engibous, 4,324 shares. Excludes shares held by a family member if a
director has disclaimed beneficial ownership. Each director owns less than 1%
of the company's common stock.
BOARD ORGANIZATION
During 1998, the board of directors undertook a review of its committee
structure. As a result of this review, it discontinued the Benefit Plans,
Finance and Trust Review Committees. The discontinued committees'
responsibilities were, in most cases, transferred to the full board or other
board committees. Some responsibilities were also delegated to management.
Board and Committee Meetings
During 1998, the board held 10 meetings. The board has four standing
committees described below. Overall attendance at board and committee meetings
was approximately 95%.
Committees of the Board
Audit Committee. The Audit Committee is generally responsible for:
o Making recommendations to the board regarding the appointment of independent
public accountants for the company.
8
o Approving:
o The company's annual report to stockholders (except for portions not
required by Securities and Exchange Commission or stock exchange rules).
o Certain non-audit services of the independent public accountants.
o Reviewing:
o The company's quarterly reports to the SEC.
o Proposed changes in major accounting policies.
o Scope of the annual audit.
o Reports of compliance of management and operating personnel with the
company's code of ethics.
o Adequacy of the company's system of internal accounting controls.
o Other factors affecting the integrity of published financial reports.
The Audit Committee met 7 times in 1998.
Board Organization and Nominating Committee. The Board Organization and
Nominating Committee is generally responsible for:
o Making recommendations to the board regarding:
o Nominees for election as directors.
o Structure, size and composition of the board.
o Compensation of board members.
o Organization and responsibilities of board committees.
o Reviewing:
o General responsibilities and functions of the board.
o A desirable balance of expertise among board members.
o Overall company organizational health, particularly succession plans for
top management positions within TI.
Any stockholder who wishes to recommend a prospective board nominee for the
committee to consider can write to Richard J. Agnich, Secretary, Board
Organization and Nominating Committee, c/o Texas Instruments Incorporated, Post
Office Box 660199, MS 8658, Dallas, Texas 75266-0199.
The Board Organization and Nominating Committee met 6 times in 1998.
Compensation Committee. The Compensation Committee is generally responsible
for:
o Making recommendations to the board regarding:
o Revisions in and actions under benefit plans of the company that the
board must approve.
o Institution of, revisions in, terminations of and actions under pension,
profit sharing or other benefit plans that only benefit officers of the
company or disproportionately benefit officers and plans requiring or
permitting the issuance of the company's stock.
o Reservation of company stock for use as awards or grants under plans or
as contributions or sales to any trustee of a company employee benefit
plan.
o Purchase of company stock in connection with benefit plans.
9
o Taking action as appropriate regarding:
o Changes in compensation of executive officers of the company.
o Actions that are required or permitted to be taken by the committee under
employee benefit plans of the company.
The Compensation Committee met 6 times in 1998.
Stockholder Relations and Public Policy Committee. The Stockholder Relations
and Public Policy Committee is generally responsible for:
o Making recommendations to the board regarding topics affecting the
relationship between management and stockholders and public issues.
o Reviewing:
o Contribution policies of the company and of the TI Foundation.
o Revisions to TI's code of ethics.
The Stockholder Relations and Public Policy Committee met 4 times in 1998.
DIRECTORS COMPENSATION
Cash Compensation
Directors who are not employees are paid each year:
o A board retainer of $40,000.
o A committee retainer of $15,000.
o $2,500 for attendance at the company's strategic planning conference.
o $2,500 for attendance at the company's annual planning conference.
Compensation for other activities, like visits to TI facilities and attendance
at certain company events, is $1,000 per day. In 1998, the company made
payments (an aggregate of $9,109) relating to premiums for life, medical,
dental, travel and accident insurance policies covering directors.
Deferral Election
Subject to some limitations, directors can choose to have all or part of their
compensation deferred until they leave the board (or certain other specified
times). The deferred amounts are credited to either a cash account or stock
unit account. Cash accounts earn interest from the company at a rate
(currently based on published interest rates on certain corporate bonds)
determined by the Board Organization and Nominating Committee. Stock unit
accounts fluctuate in value with the underlying shares of company common stock,
which will be issued after the deferral period.
Restricted Stock Units
Under the company's restricted stock unit plan for directors, new directors are
given 2,000 restricted stock units (each representing one share of company
common stock). The restricted stock units provide for issuance of company
common stock at the time of retirement from the board, or upon earlier
termination of service from the board after completing eight years of service
or because of death or disability.
10
Stock Options
Beginning in January 1999, under the company's stock option plan for
non-employee directors, non-employee directors will annually be granted a
10-year option to purchase 5,000 shares of the company's common stock. The
purchase price of the shares is 100% of the fair market value on the date of
grant. These nonqualified options become exercisable in four equal annual
installments beginning on the first anniversary date of the grant and also may
become fully exercisable in the event of a change in control (as defined in the
plan) of the company.
Director Award Program
Each director who has been on the board for five years, and whose board
membership ceases because of the mandatory retirement age or, in the case of
non-employee directors, because of death or disability, can participate in a
director award program. The program was established to promote the company's
interest in supporting educational institutions. The company may contribute a
total of $500,000 per eligible director to up to three educational institutions
or other charitable institutions recommended by the director and approved by
the company. The contributions will be made in five annual installments of
$100,000 each following the director's death. Directors receive no financial
benefit from the program, and all charitable deductions belong to the company.
EXECUTIVE COMPENSATION
Compensation Overview
The company is committed to building shareholder value through improved
performance and growth. To achieve this objective, the company seeks to create
an environment in which employees recognize that they are valued as individuals
and treated with respect, dignity and fairness.
The company uses a merit-based system of compensation to encourage individual
employees to reach their productive and creative potential, and to link
individual financial goals to company performance. The company regularly
compares its compensation system with those of competitors and refines its
system as necessary to encourage a motivated and productive work force.
The following tables provide information regarding the compensation of the
company's chief executive officer and each of the five other most highly
compensated executive officers.
11
Summary Compensation Table
The following table shows the compensation of the company's chief executive
officer and each of the five other most highly compensated executive officers
for services in all capacities to the company in 1996, 1997 and 1998.
Annual Compensation Long-Term Compensation
--------------------------------------- ---------------------------------------
Awards Payouts
------------------------- ------------
Name and Other Annual Restricted Stock Long-Term All Other
Principal Compensation Stock Awards Options Incentive Compensation
Position Year Salary Bonus (1) (2) (in shares) Plan Payouts (3)
- -------------------- ---- -------- ---------- ------------ ------------ ----------- ------------ ----------
T.J. Engibous 1998 $677,540 $1,800,000 -- 0 200,000 0 $174,732
Chairman, 1997 $645,870 $1,500,000 -- 0 260,000 0 $ 98,604
President & CEO 1996 $509,640 $ 0 -- $875,000 120,000 0 $ 15,484
R.K. Templeton 1998 $407,540 $1,200,000 -- 0 90,000 0 $135,948
Executive Vice 1997 $358,770 $1,100,000 -- 0 140,000 0 $ 41,248
President 1996 $278,750 $ 0 -- 0 120,000 0 $ 3,200
R.J. Agnich 1998 $365,400 $ 500,000 -- 0 40,000 0 $ 73,830
Senior Vice 1997 $363,950 $ 600,000 -- 0 70,000 0 $ 47,954
President, 1996 $346,500 $ 0 -- 0 40,000 0 $ 19,040
Secretary &
General Counsel
W.A. Aylesworth 1998 $365,400 $ 500,000 -- 0 40,000 0 $ 73,783
Senior Vice 1997 $363,950 $ 600,000 -- 0 70,000 0 $ 47,888
President, 1996 $346,500 $ 0 -- 0 40,000 0 $ 20,516
Treasurer &
Chief Financial
Officer
J.C. Scarisbrick(4) 1998 $325,396 $ 595,607 -- 0 40,000 0 $115,538
Senior Vice
President
D.A. Whitaker(4) 1998 $332,080 $ 650,000 -- 0 40,000 0 $ 60,753
Senior Vice
President
- ------------------
(1) The dollar value of perquisites and other personal benefits for each
of the named executive officers was less than the established reporting
thresholds.
(2) For purposes of the table, restricted stock units awarded under the
company's Long-Term Incentive Plan are valued at market on the date of award.
Payments relating to the restricted stock units awarded to Mr. Engibous in
1996 are based primarily on whether the company meets specific goals regarding
return on net assets and revenue growth over a period of five years (as
determined in accordance with the terms of the award) and generally are
payable only if Mr. Engibous remains employed by the company for a period of
ten years. As of December 31, 1998, the value of the 40,000 unvested shares
was $3,425,000.
12
Dividend equivalent payments are paid on restricted stock units at the same
rate as dividends on the company's common stock.
(3) During 1998, the company made payments in connection with split-dollar
life insurance policies in the following amounts: Mr. Engibous, $44,164;
Mr. Templeton, $10,994; Mr. Agnich, $14,051; and Mr. Aylesworth, $14,004.
Also, the company made payments in connection with travel and accident
insurance policies in the amount of $200 for each of the executive officers
named in the summary compensation table.
During 1998, the company made matching contributions to 401(k) accounts in the
amount of $3,200 for Messrs. Engibous, Agnich, Aylesworth and Whitaker and
$6,400 for Mr. Templeton.
For 1998, cash payments and contributions (plus ERISA reductions for which the
company will provide an offsetting supplemental benefit) under the U.S. profit
sharing plan were as follows: Mr. Engibous, $127,168; Mr. Templeton, $88,040;
Mr. Agnich, $56,379; Mr. Aylesworth, $56,379; and Mr. Whitaker, $57,353.
Also, the company made a contribution of $56,897 under the U.K. profit sharing
plan for Mr. Scarisbrick.
The company made a contribution (plus an ERISA reduction for which the company
will provide an offsetting supplemental benefit) in the amount of $30,314
under the deferred contribution retirement plan for Mr. Templeton.
The amount shown for Mr. Scarisbrick includes $22,857 for special allowances
and $35,684 of tax reimbursement payments relating to his assignment outside
the United States.
(4) Messrs. Scarisbrick and Whitaker became executive officers of the
company in 1998.
13
Table of Option Grants in 1998
The following table shows stock options granted to the named executive
officers in 1998. Additionally, in accordance with the rules of the
Securities and Exchange Commission, the table shows the hypothetical gains or
"option spreads" that would exist for the respective options. These gains are
based on assumed rates of annual compound stock appreciation of 5% and 10%
from the date the options were granted over the full option term.
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Appreciation for Option Term (10 Years)
------------------------------------------------------------
5% 10%
------------------------- --------------------------------
Options % of Total
Granted Options Stock Stock
(in Granted to Exercise Expir- Price (per Price (per
shares) Employees Price(per ation share) share)
Name (1) in 1998 share) Date (2) Gain (2) Gain
- ------------- ------- ---------- -------- ------- ---------- ----------------- ----------- ----------------
T.J. Engibous 200,000 2.48% $46.22 1/14/08 $75.29 $5,813,111 $119.88 $14,731,933
R.K. Templeton 90,000 1.12% $46.22 1/14/08 $75.29 $2,615,900 $119.88 $ 6,629,370
R.J. Agnich 40,000 0.50% $46.22 1/14/08 $75.29 $1,162,622 $119.88 $ 2,946,387
W.A. Aylesworth 40,000 0.50% $46.22 1/14/08 $75.29 $1,162,622 $119.88 $ 2,946,387
J.C. Scarisbrick 40,000 0.50% $46.22 1/14/08 $75.29 $1,162,622 $119.88 $ 2,946,387
D.A. Whitaker 40,000 0.50% $46.22 1/14/08 $75.29 $1,162,622 $119.88 $ 2,946,387
- ---------------
(1) These nonqualified options become exercisable in four equal annual
installments beginning on January 14, 1999 and also may become fully
exercisable in the event of a change in control (as defined in the options) of
the company. In some cases, the exercise price may be paid by delivery of
already-owned shares and tax withholding obligations related to exercise may
be paid in shares.
(2) The price of TI common stock at the end of the 10-year term of the
stock options granted at a 5% annual appreciation would be $75.29, and at a
10% annual appreciation would be $119.88.
14
Table of Option Exercises in 1998 and Year-End Option Values
The following table lists the number of shares acquired and the value realized
as the result of option exercises in 1998 by the named executive officers. It
also includes the number and value of the exercisable and unexercisable
options as of December 31, 1998. The table contains values for "in-the-
money" options, meaning a positive spread between the year-end share price of
$85.63 and the exercise price.
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares December 31, 1998 December 31, 1998
Acquired on Value -------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------- ----------- --------- ----------- ------------- ----------- -------------
T.J. Engibous - - 329,000 425,000 $20,909,075 $19,873,575
R.K. Templeton - - 341,000 225,000 $22,339,765 $10,876,625
R.J. Agnich - - 66,000 102,500 $ 4,041,005 $ 4,921,238
W.A. Aylesworth 15,500 $ 639,676 140,000 102,500 $ 9,061,535 $ 4,921,238
J.C. Scarisbrick 61,700 $2,247,647 41,000 102,500 $ 2,433,995 $ 5,013,663
D.A. Whitaker 84,000 $4,572,810 25,000 75,000 $ 1,458,025 $ 3,442,875
15
U.S. Pension Plan Table
The following table shows the approximate annual benefits relating to the
company's U.S. pension plan that would be payable as of December 31, 1998 to
employees in higher salary classifications for the average credited earnings
and years of credited service indicated. It assumes retirement at age 65.
Benefits are based on eligible earnings. Eligible earnings include salary and
bonus as shown in the summary compensation table. Other elements of
compensation shown in the summary compensation table or referred to in the
footnotes to that table are not included in eligible earnings.
In 1997, the company's U.S. employees were given the option of continuing to
participate in the pension plan or to participate in a new defined contribution
retirement plan. Mr. Templeton chose to participate in the new plan.
Accordingly, his benefits under the pension plan (discussed in footnote 1) were
frozen as of December 31, 1997. Contributions to the new plan for
Mr. Templeton's benefit are shown in the summary compensation table.
Mr. Scarisbrick participated in the company's U.K. pension plan which is
described on page 17.
Estimated Annual Benefits Under Pension Plan for
Specified Years of Credited Service(2)(3)
---------------------------------------------------------------------------------
Average
Credited
Earnings
(1) 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years 45 Years
- ---------- -------- -------- -------- -------- -------- --------- ----------
$ 500,000 $108,998 $145,331 $181,664 $217,996 $254,329 $291,829 $ 329,329
$ 600,000 $131,498 $175,331 $219,164 $262,996 $306,829 $351,829 $ 396,829
$ 700,000 $153,998 $205,331 $256,664 $307,996 $359,329 $411,829 $ 464,329
$ 800,000 $176,498 $235,331 $294,164 $352,996 $411,829 $471,829 $ 531,829
$ 900,000 $198,998 $265,331 $331,664 $397,996 $464,329 $531,829 $ 599,329
$1,000,000 $221,498 $295,331 $369,164 $442,996 $516,829 $591,829 $ 666,829
$1,100,000 $243,998 $325,331 $406,664 $487,996 $569,329 $651,829 $ 734,329
$1,200,000 $266,498 $355,331 $444,164 $532,996 $621,829 $711,829 $ 801,829
$1,300,000 $288,998 $385,331 $481,664 $577,996 $674,329 $771,829 $ 869,329
$1,400,000 $311,498 $415,331 $519,164 $622,996 $726,829 $831,829 $ 936,829
$1,500,000 $333,998 $445,331 $556,664 $667,996 $779,329 $891,829 $1,004,329
- ---------------
(1) The average credited earnings is the average of the five consecutive
years of highest earnings.
At December 31, 1998, the named executive officers were credited with the
following years of credited service and had the following average credited
earnings: Mr. Engibous, 21 years, $1,180,881; Mr. Agnich, 26 years, $763,879;
Mr. Aylesworth, 32 years, $703,991; and Mr. Whitaker, 30 years, $626,141.
Mr. Templeton had 16 years of credited service and $536,761 in average credited
earnings as of December 31, 1997.
(2) If the amount otherwise payable under the pension plan should be
restricted by the applicable provisions of ERISA, the amount in excess of
ERISA's restrictions will be paid by the company.
16
(3) The benefits under the plan are computed as a single life annuity
beginning at age 65.
The amounts shown in the table reflect the offset provided in the pension plan
under the pension formula adopted July 1, 1989 to comply with the social
security integration requirements. The integration offset is $3,502 for
15 years of credited service, $4,669 for 20 years of credited service, $5,837
for 25 years of credited service, $7,004 for 30 years of credited service,
$8,171 for 35 years of credited service, $8,171 for 40 years of credited
service and $8,171 for 45 years of credited service.
U.K. Pension Plan Table
The following table shows the approximate annual benefits relating to the
company's U.K. pension plan that would be payable as of December 31, 1998 to
employees in higher salary classifications for the average credited earnings
and years of service indicated. It assumes retirement at age 65. Benefits are
based on eligible earnings. Eligible earnings include salary and bonus as
shown in the summary compensation table. Other elements of compensation shown
in the summary compensation table or referred to in the footnotes to that table
are not included in eligible earnings.
Estimated Annual Benefits Under Pension Plan for
Specified Years of Credited Service (2)
---------------------------------------------------------------------------------
Average
Credited
Earnings
(1) 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years 45 Years
- ---------- -------- -------- -------- -------- -------- ---------- -----------
$ 300,000 $ 78,750 $105,000 $131,250 $157,500 $183,750 $200,000 $200,000
$ 400,000 $105,000 $140,000 $175,000 $210,000 $245,000 $266,667 $266,667
$ 500,000 $131,250 $175,000 $218,750 $262,500 $306,250 $333,333 $333,333
- ------------
(1) At December 31, 1998, Mr. Scarisbrick was credited with 22 years of
service and had $322,682 of average credited earnings for purposes of the U.K.
pension plan.
(2) The benefits under the plan are computed as a joint life annuity
beginning at age 65.
17
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation paid or awarded to executive
officers for 1998:
The company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the Committee), which is
composed of the individuals listed below, all of whom are independent
directors of the company. The program consists of base salaries, annual
performance awards and long-term compensation. At higher management levels,
the mix of compensation is weighted more to the performance-based
components -- annual performance awards and long-term compensation. This
year, the Committee was advised by an outside compensation consulting firm.
In determining the compensation of the executive officers, the Committee
considered compensation practices of competitor companies (based on the best
available data from as many competitor companies as practicable) and the
relative performance of TI and competitor companies. The competitor companies
are major high-technology competitors of the company. While many of these
companies are included in the S&P Technology Sector Index appearing in the
graph regarding total shareholder return on page 21, these companies are not
the same as the companies comprising that index. The Committee also considered
the contribution of each executive officer toward achieving the company's
prior year and long-term strategic objectives; in this connection, the
Chairman and CEO made recommendations regarding the components of each
executive officer's compensation package except his own.
In its considerations, the Committee did not assign quantitative relative
weights to different factors or follow mathematical formulae. Rather, the
Committee exercised its discretion and made a judgment after considering the
factors it deemed relevant. The Committee's decisions regarding 1998
executive compensation were designed to: (1) align the interests of executive
officers with the interests of the stockholders by providing performance-based
awards; and (2) allow the company to compete for and retain executive officers
critical to the company's success by providing an opportunity for compensation
that is comparable to the levels offered by competitor companies.
Section 162(m) of the Internal Revenue Code generally denies a deduction to
any publicly held corporation for compensation paid in a taxable year to the
company's CEO and four other highest compensated officers to the extent that
the officer's compensation (other than qualified performance-based
compensation) exceeds $1 million. The company believes the Executive Officer
Performance Plan approved in April 1997 allows performance-based compensation
for the company's executive officers that complies with the requirements for
full deductibility under Section 162(m).
Compensation Components and Determination
Compensation decisions for 1998 were made such that TI executive officers will
receive a level of total annual compensation that, when compared to the total
annual compensation of competitor companies, reflects the company's
performance relative to those competitor companies. In order to weight more
18
of total compensation to performance-based components, the Committee's base
salary decisions are intended to provide salaries somewhat lower than the
median level of salaries for similarly situated executive officers of
competitor companies, or of divisions within competitor companies, of similar
size (in terms of total revenues). Annual performance awards for 1998 were
primarily driven by each individual's contribution to the company's strategic
focus on digital signal processing and its performance on three measures:
profit from operations as a percent of revenues for the year, change in net
revenues from the prior year, and total shareholder return for the year.
Guidelines for awards granted under TI's long-term incentive program were set
with the intention of providing TI executive officers an opportunity for
financial gain equivalent in present value to the opportunity provided by
similarly performing competitor companies through all their long-term
compensation programs. The Committee, in its discretion, adjusts the awards
considering each executive officer's individual contribution to the
implementation of the strategic plan of the company.
Base Salary
The Committee reviewed base salaries for executive officers of competitor
companies and set base salaries for its executive officers somewhat lower than
competitive levels. Mr. Engibous' annual salary during 1998 was below the
median annual salary of CEOs of competitor companies.
Annual Performance Award
The annual performance award varies significantly based on the company's
profitability, revenue growth, and total shareholder return; the achievement
of the strategic objectives of the company; and each individual's contribution
toward that performance. The Committee considered rankings of estimates of
competitor companies' 1998 performance compared to the company's performance,
and granted annual performance awards to executive officers intended to
approximate total annual compensation of executive officers in similarly
performing competitor companies. As a result, Mr. Engibous received an annual
performance award of $1,800,000.
Long-term Compensation
The Committee made long-term compensation determinations in January 1998.
Stock options constitute TI's primary long-term incentive vehicle. Stock
options granted in 1998 were granted at 100% of fair market value on the date
of grant, have a 10-year term, do not become exercisable until one year after
grant, and then become exercisable in four equal annual installments. Any
value actually realized by an executive officer from an option grant depends
completely upon increases in the price of TI common stock.
The Committee reviewed each officer's continuing contribution to achieving the
strategic objectives of the company, and followed the guidelines by granting
each officer stock options at a price per share of $46.22 (the market value of
TI's common stock on January 14, 1998 (the date of grant)). The Committee
intended for these grants to recognize progress toward accomplishment of the
19
strategic objectives and, since these stock options will result in increased
compensation to an executive officer only if TI's stock price increases, focus
the executive officers on building value for stockholders. Considering
Mr. Engibous' continuing contribution to execution of the strategic plan for
the company, the Committee granted Mr. Engibous an option to purchase 200,000
shares, resulting in a total long-term compensation opportunity comparable to
those of CEOs of similarly performing competitor companies.
The ranking of total compensation (annual plus long-term) for Mr. Engibous as
compared to the total compensation of CEOs of competitor companies was
intended to approximate the estimated ranking of TI performance compared to
the performance of competitor companies.
Gerald W. Fronterhouse, Chair Wayne R. Sanders
David R. Goode Clayton K. Yeutter
20
COMPARISON OF TOTAL SHAREHOLDER RETURN
This graph compares TI's total shareholder return with the S&P 500 Index and
the S&P Technology Sector Index over a five-year period, beginning December 31,
1993, and ending December 31, 1998. The total shareholder return assumes $100
invested at the beginning of the period in TI common stock, the S&P 500 and the
S&P Technology Sector Index. It also assumes reinvestment of all dividends.
[A performance graph showing five year cumulative
total return among the Company, the S&P 500 Index
and the S&P Technology Sector Index appears here.
The coordinates used in the graph appear below.]
Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98
Texas Instruments $100 $119 $166 $208 $296 $565
S&P 500(R) Index $100 $101 $139 $171 $229 $294
S&P(R) Technology $100 $117 $168 $236 $297 $514
Sector Index
*Assumes that the value of the investment in TI common stock and each index was
$100 on December 31, 1993, and that all dividends were reinvested.
**Year ending December 31.
21
ADDITIONAL INFORMATION
Voting Securities
As of February 23, 1999, 391,838,473 shares of the company's common stock were
outstanding. This is the only class of capital stock entitled to vote at the
meeting. Each holder of common stock has one vote for each share held. As
stated in the notice of meeting, holders of record of the common stock at the
close of business on February 23, 1999 may vote at the meeting or any
adjournment of the meeting.
Share Ownership of Certain Persons
The following table shows (a) the only persons that have reported beneficial
ownership of more than 5% of the common stock of the company, and (b) the
ownership of the company's common stock by the named executive officers, and
all executive officers and directors as a group. Persons generally
"beneficially own" shares if they have either the right to vote those shares
or dispose of them. More than one person may be considered to beneficially own
the same shares.
Shares Owned At Percent of
Name and Address December 31, 1998 Class
- -------------------------------- ----------------- ----------
FMR Corp.
82 Devonshire Street 41,679,627(1) 10.7%
Boston, MA 02109
Capital Research and
Management Company 20,334,260(2) 5.2%
333 South Hope Street
Los Angeles, CA 90071
Thomas J. Engibous 538,287(3) *
Richard K. Templeton 465,360(3) *
Richard J. Agnich 137,573(3) *
William A. Aylesworth 231,424(3) *
John C. Scarisbrick 94,386(3) *
Delbert A. Whitaker 75,686(3) *
All executive officers and 2,586,176(3)(4) *
directors as a group
- ---------------
*Less than 1%.
(1) The company understands that, as of December 31, 1998, (a) FMR Corp.
and its chairman, Edward C. Johnson 3d, had sole dispositive power with respect
to all of the above shares and FMR Corp. had sole voting power with respect to
3,331,967 of the above shares, and (b) the above shares include 37,782,950
22
shares beneficially owned by Fidelity Management & Research Company, a wholly-
owned subsidiary of FMR Corp., as a result of acting as investment advisor to
several investment companies, and as a result of acting as a sub-advisor to
Fidelity American Special Situations Trust.
(2) The company understands that as of December 31, 1998, Capital Research
and Management Company had sole dispositive power with respect to all of the
above shares.
(3) Includes shares subject to acquisition within 60 days by Messrs.
Engibous, Templeton, Agnich, Aylesworth, Scarisbrick and Whitaker for 474,000,
428,500, 103,500, 177,500, 83,500 and 50,000 shares, respectively, and shares
credited to profit sharing stock accounts for Messrs. Engibous, Templeton,
Agnich, Aylesworth, Scarisbrick and Whitaker in the amounts of 4,324, 2,625,
8,901, 5,768, 1,364 and 7,651, respectively. Excludes shares held by a family
member if a director or officer has disclaimed beneficial ownership.
(4) Includes (a) 2,141,850 shares subject to acquisition within 60 days,
and (b) 59,058 shares credited to profit sharing stock accounts.
As of December 31, 1998, the TI Employees Master Profit Sharing Trust held
22,088,749 shares (5.7%) of the company's common stock. Pursuant to the terms
of the trust, participants have the power to determine the voting and, to the
extent permitted, disposition of shares held by the trust.
Cost of Solicitation
The solicitation is made on behalf of the board of directors of the company.
The company will pay the cost of soliciting these proxies. We will reimburse
brokerage houses and other custodians, nominees and fiduciaries for reasonable
expenses they incur in sending these proxy materials to you if you are a
beneficial holder of our shares.
Without receiving additional compensation, officials and regular employees of
the company may solicit proxies personally, by telephone, fax or E-mail from
some stockholders if proxies are not promptly received. We have also hired
Georgeson & Company, Inc. to assist in the solicitation of proxies at a cost of
$12,000 plus out-of-pocket expenses.
Proposals of Stockholders
If you wish to submit a proposal for possible inclusion in the company's 2000
proxy material, we must receive your notice, in accordance with rules of the
Securities and Exchange Commission, on or before November 5, 1999.
If you wish to submit a proposal at the 2000 annual meeting (but not seek
inclusion of the proposal in the company's proxy material), we must receive
your notice, in accordance with SEC rules, on or before January 19, 2000.
Otherwise, the proxies named by the board of directors for the meeting may
exercise discretionary voting authority with respect to the proposal, without
any discussion of the proposal in the company's proxy material.
23
Suggestions from stockholders concerning the company's business are welcome and
all will be carefully considered by the company's management. So that your
suggestions receive appropriate review, the Stockholder Relations and Public
Policy Committee from time to time reviews correspondence from stockholders and
management's responses. This way, stockholders are given access at the board
level without having to resort to formal stockholder proposals. Generally, the
board prefers you present your views in this manner rather than through the
process of formal stockholder proposals.
Quorum Requirement
A quorum of stockholders is necessary to hold a valid meeting. If at least a
majority of the shares of TI stock issued and outstanding and eligible to vote
are present in person or by proxy, a quorum will exist.
Vote Required
The 10 nominees receiving the greatest number of votes cast by those entitled
to vote will be elected.
For all matters other than the election of directors submitted at the meeting,
an affirmative vote of the majority of the shares present in person or by proxy
is necessary for approval.
We do not expect any matters to be presented for a vote at the annual meeting
other then the election of directors. If you grant a proxy, the persons named
in the proxy will have the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting.
Under Delaware law and the company's Restated Certificate of Incorporation and
By-Laws, the aggregate number of votes entitled to be cast by all stockholders
present in person or represented by proxy at the meeting, whether those
stockholders vote FOR, AGAINST or abstain from voting, will be counted for
purposes of determining the minimum number of affirmative votes required for
approval of such matters. The total number of votes cast FOR each of these
matters will be counted for purposes of determining whether sufficient
affirmative votes have been cast. An abstention from voting on a matter by a
stockholder present in person or represented by proxy at the meeting has the
same legal effect as a vote AGAINST the matter even though the stockholder or
interested parties analyzing the results of the voting may interpret such a
vote differently.
Telephone and Internet Voting
Shares Directly Registered in the Name of the Stockholder. Stockholders with
shares registered directly with Harris Bank may vote telephonically by calling
Harris Bank at (888) 776-5653 or may vote via the Internet at the following
address on the World Wide Web:
www.harrisbank.com/wproxy
Shares Registered in the Name of a Brokerage Firm or Bank. A number of
brokerage firms and banks offer telephone and Internet voting options. These
24
programs differ from the program provided by Harris Bank for shares registered
in the name of the stockholder. Check the information forwarded by your bank,
broker or other holder of record to see which options are available to you.
The telephone and Internet voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to give their voting
instructions and to confirm that stockholders' instructions have been recorded
properly. The company has been advised by counsel that the telephone and
Internet voting procedures that have been made available through Harris Bank
are consistent with the requirements of applicable law. Stockholders voting
via the Internet through Harris Bank should understand that there may be costs
associated with electronic access, such as usage charges from telephone
companies and Internet access providers, that must be borne by the stockholder.
Independent Auditors
The board has, in accordance with the recommendation of its Audit Committee,
chosen the firm of Ernst & Young LLP as independent auditors for the company.
Representatives of Ernst & Young are expected to be present, and to be
available to respond to appropriate questions, at the annual meeting. They
will have the opportunity to make a statement if they desire to do so; they
have indicated that, as of this date, they do not.
By Order of the Board of Directors,
/s/ RICHARD J. AGNICH
-----------------------------
Richard J. Agnich
Senior Vice President,
Secretary and General Counsel
Dallas, Texas
March 5, 1999
25
DIRECTIONS TO ANNUAL MEETING SITE
From DFW Airport
Take the North Airport exit to 635E. Take 635E to the Greenville Avenue Exit.
Turn right on Greenville. Turn right on Forest Lane. Texas Instruments will
be on your right at the second traffic light. Please use the south entrance
to the building.
Directions from Love Field Airport
Take Mockingbird Lane to 75N (Central Expressway). Travel north on 75 to the
Forest Lane Exit. Turn right on Forest Lane. You will pass two traffic
lights. At the third light, the entrance to Texas Instruments will be on your
left. Please use the south entrance to the building.
PROXY PROXY
TEXAS INSTRUMENTS
PROXY FOR ANNUAL MEETING TO BE HELD APRIL 22, 1999
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints JAMES R. ADAMS, THOMAS J. ENGIBOUS, CLAYTON K.
YEUTTER, or any one or more of them, the true and lawful attorneys of the
undersigned with power of substitution, to vote as proxies for the undersigned
at the annual meeting of stockholders of TEXAS INSTRUMENTS INCORPORATED to be
held in Dallas, Texas, on April 22, 1999, at 10:00 a.m. (Dallas time) and at
any or all adjournments thereof, according to the number of shares of common
stock which the undersigned would be entitled to vote if then personally
present, in the election of directors and upon other matters properly coming
before the meeting.
IMPORTANT-This Proxy must be signed and dated on the reverse side.
- ------------------------------------------------------------------------------
Dear Stockholder:
On the reverse side of this card are instructions on how to vote your
shares regarding the election of directors by telephone or Internet. Please
consider voting by telephone or Internet. Your vote is recorded as though you
had mailed in your proxy card.
TEXAS INSTRUMENTS
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [/]
_____________________________________________________________________________
The Board of Directors recommends a vote FOR the election of each Board
nominee.
FOR ALL
Election of Directors FOR WITHHELD Except Nominee(s)
ALL ALL Written Below
Nominees: 01-J.R. Adams, [ ] [ ] [ ]______________
02-D.L. Boren, 03-J.B. Busey IV,
04-D.A. Carp, 05-T.J. Engibous,
06-G.W. Fronterhouse, 07-D.R. Goode,
08-W.R. Sanders, 09-G.M. Shatto,
and 10-C.K. Yeutter.
In their discretion the named proxies are
authorized to vote upon such other matters as may
properly come before the meeting.
If no contrary indication is made, this proxy
will be voted FOR the election of each Board
nominee.
Dated __________________________, 1999
______________________________________________
Signature
______________________________________________
Signature
NOTE: Please sign exactly as your name appears on this document. For joint
accounts both owners should sign. When signing as executor, administrator,
attorney, trustee or guardian, etc., please give your full title.
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET,
PLEASE SEE THE INSTRUCTIONS BELOW.
- ------------------------------------------------------------------------------
CONTROL NUMBER
______________
| |
|______________|
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE OR INTERNET!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
Texas Instruments Incorporated encourages you to take advantage of the new and
convenient ways to vote your shares. If voting by proxy, this year you may
vote by mail, or choose one of the two methods described below. Your
telephone or Internet vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed, and returned your proxy card. To
vote by telephone or Internet, read the accompanying proxy statement and then
follow these easy steps:
TO VOTE BY PHONE
Call toll free 1-888-776-5653 any time on a touch tone telephone. There
is NO CHARGE to you for the call.
Enter the Control Number located above.
To vote FOR ALL nominees, Press 1; to WITHHOLD FOR ALL nominees, Press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the
instructions.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
TO VOTE BY INTERNET
Go to the following website: www.harrisbank.com/wproxy
Enter the information requested on your computer screen, including your
Control Number located above.
Follow the simple instructions on the screen.
If you vote by telephone or Internet, DO NOT mail back the proxy card.
THANK YOU FOR VOTING!
Proxy for Annual Meeting to be held April 22, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints James R. Adams, Thomas J. Engibous, Clayton
K. Yeutter, or any one or more of them, the true and lawful attorneys of the
undersigned with power of substitution, to vote as proxies for the
undersigned at the annual meeting of stockholders of Texas Instruments
Incorporated to be held in Dallas, Texas, on April 22, 1999, at 10:00 a.m.
(Dallas time) and at any or all adjournments thereof according to the number
of shares of common stock which the undersigned would be entitled to vote if
then personally present, in the election of directors and upon other matters
properly coming before the meeting.
- -----------------------------------------------------------------------------
The Board Of Directors recommends a vote "FOR" the election of each Board
nominee.
Election of directors:
01-J. R. Adams o For o Withhold
02-D. L. Boren o For o Withhold
03-J.B. Busey IV o For o Withhold
04-D. A. Carp o For o Withhold
05-T. J. Engibous o For o Withhold
06-G. W. Fronterhouse o For o Withhold
07-D. R. Goode o For o Withhold
08-W. R. Sanders o For o Withhold
09-G. M. Shatto o For o Withhold
10-C. K. Yeutter o For o Withhold
- -----------------------------------------------------------------------------
In their discretion the named proxies are authorized to vote upon
such other matters as may properly come before the meeting.
- -----------------------------------------------------------------------------
If no contrary indication is made, this proxy will be voted "FOR" the
election of each Board nominee.
---------------
| Submit Votes|
---------------
ANNUAL MEETING OF STOCKHOLDERS
April 22, 1999
March 5, 1999
TO: Participants in the TI Universal Profit Sharing Plan (the "Universal
Plan") and the TI U.S. Employees Retirement and Profit Sharing Plan (the
"Retirement and Profit Sharing Plan")
The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
and Instructions to Trustee on Voting relate to shares of common stock of
Texas Instruments Incorporated held by the Trustee for your profit sharing
accounts.
As noted in the Proxy Statement, the TI board of directors has designated the
following nominees for election to the board for the ensuing year: JAMES R.
ADAMS, DAVID L. BOREN, JAMES B. BUSEY IV, DANIEL A. CARP, THOMAS J. ENGIBOUS,
GERALD W. FRONTERHOUSE, DAVID R. GOODE, GLORIA M. SHATTO, WAYNE R. SANDERS
and CLAYTON K. YEUTTER. Biographies of the nominees appear in the Proxy
Statement. The board of directors of TI recommends a vote FOR the election of
directors.
The Trustee is required to vote the whole shares held for each of your
accounts (and whole and fractional shares held for Tax Credit Employee Stock
Ownership Accounts) in accordance with your instructions. If you wish to
instruct the Trustee on the voting of whole shares held for your accounts
(and whole and fractional shares held for Tax Credit Employee Stock Ownership
Accounts), you should complete and sign the "Instructions to Trustee on
Voting" form enclosed and return it in the addressed, postage-free envelope
or use the telephone voting procedures specified on the voting instructions
form by April 19, 1999.
If you are a participant in the Universal Plan and you do not instruct the
Trustee on voting the whole shares held for your accounts (except Tax Credit
Employee Stock Ownership Account shares) by April 19, 1999 in the manner
specified on the voting instructions form, the Trustee will vote such shares
in accordance with the vote of the majority of the shares for which the
Trustee receives voting instructions from other Universal Plan participants.
Similarly, if you are a participant in the Retirement and Profit Sharing
Plan, and do not instruct the Trustee on voting the whole shares held for
your accounts (except Tax Credit Employee stock ownership account shares) by
April 19, 1999 in the manner specified on the voting instructions form, the
Trustee will vote such shares in accordance with the vote of the majority of
the shares for which the Trustee receives voting instructions from other
Retirement and Profit Sharing Plan participants. Fractional shares and
unallocated shares held for accounts other than Tax Credit Employee Stock
Ownership Accounts will be voted in the same manner. The Trustee will vote
the shares held for each Tax Credit Employee Stock Ownership Account
(generally 8 to 64 whole shares per account) as instructed by participants by
April 19, 1999 or as required by law or otherwise where no instructions are
received.
NOTE: If you own TI shares in your own name, a Proxy for those shares will
be sent to you in a separate package. Please sign and date the Proxy, if
applicable, and return it in the envelope provided, or follow the telephone
or Internet voting procedures accompanying the Proxy.
/s/ STEVE LEVEN
------------------------------------
Steve Leven
Director, World Wide Human Resources
INSTRUCTIONS TO TRUSTEE ON VOTING
TI COMMON STOCK HELD UNDER THE
TI EMPLOYEES UNIVERSAL PROFIT SHARING PLAN
PLEASE VOTE BY SIGNING ON REVERSE SIDE AND RETURNING IN THE ENCLOSED
ENVELOPE OR BY FOLLOWING THE TELEPHONE VOTING PROCEDURES
These voting instructions are requested in conjunction
with a proxy solicitation by the Board of Directors
of Texas Instruments Incorporated.
[participant identifying information]
I hereby instruct Bankers Trust Company as Trustee of the TI Employees
Universal Profit Sharing Trust ("Trust") to vote in person or by proxy, at
the annual meeting of stockholders of Texas Instruments Incorporated ("TI")
on April 22, 1999, or any adjournments thereof, the whole shares of TI common
stock ("TI stock") held in the TI Stock Fund under the Trust which are
attributable to my Universal Profit Sharing Account and CODA Account and the
whole and fractional shares of TI Stock held in the TI Stock Fund which are
attributable to my Tax Credit Employee Stock Ownership Account in the manner
indicated on the reverse side of this form with respect to each item
identified thereon.
The Trustee will vote the shares represented by this voting instruction form
if, by April 19, 1999, (a) the form is properly signed and received, or
(b) the telephone voting procedures are followed. Shares for which no voting
instructions have been received will be voted in accordance with the vote of
the majority of the shares for which voting instructions are received from
other participants except that the Trustee will vote shares of TI stock
attributable to Tax Credit Employee Stock Ownership Accounts for which no
voting instructions have been received to the extent required by law or
otherwise.
- -----------------------------------------------------------------------------
On the reverse side of this card are procedures on how to vote your
shares regarding the election of directors by telephone. Please
consider voting by telephone. Your vote is recorded as though you
mailed in your voting instruction form. We believe this form of voting
to be convenient.
PLEASE MARK YOUR CHOICE IN OVAL IN THE FOLLOWING MANNER USING DARK INK
ONLY: [ / ]
________________________________________________________________________
The board of directors of TI recommends a vote FOR the election of each
Board nominee.
FOR ALL
Election of Directors - FOR WITHHELD Except Nominee(s)
ALL ALL Written Below
Nominees: 01-J.R. Adams, [ ] [ ] [ ]______________
02-D.L. Boren, 03-J.B. Busey IV,
04-D.A. Carp, 05-T.J. Engibous,
06-G.W. Fronterhouse, 07-D.R. Goode,
08-W.R. Sanders, 09-G.M. Shatto,
and 10-C.K. Yeutter.
Dated __________________________, 1999
______________________________________________
Signature
NOTE: Please sign exactly as name appears hereon. When signing as executor,
administrator, attorney, trustee or guardian, etc., please give your full
title.
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE SEE THE PROCEDURES BELOW.
- ------------------------------------------------------------------------------
CONTROL NUMBER
______________
| |
|______________|
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
Call toll free 1-888-776-5654 any time on a touch tone telephone. There
is NO CHARGE to you for the call.
Enter the Control Number located above.
To vote FOR ALL nominees, Press 1; to WITHHOLD FOR ALL nominees, Press 9.
TO WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the
instructions.
WHEN ASKED, PLEASE CONFIRM YOU VOTE BY PRESSING 1.
If you vote by telephone, DO NOT mail back the voting instructions form.
THANK YOU FOR VOTING!
INSTRUCTIONS TO TRUSTEE ON VOTING
TI COMMON STOCK HELD UNDER THE
TI U.S. EMPLOYEES RETIREMENT AND PROFIT SHARING PLAN
PLEASE VOTE BY SIGNING ON REVERSE SIDE AND RETURNING IN THE ENCLOSED
ENVELOPE OR BY FOLLOWING THE TELEPHONE VOTING PROCEDURES
These voting instructions are requested in conjunction
with a proxy solicitation by the Board of Directors
of Texas Instruments Incorporated.
[participant identifying information]
I hereby instruct Bankers Trust Company as Trustee of the TI U.S. Employees
Retirement and Profit Sharing Trust ("Trust") to vote in person or by proxy,
at the annual meeting of stockholders of Texas Instruments Incorporated
("TI") on April 22, 1999, or any adjournments thereof, the whole shares of TI
common stock ("TI stock") held in the TI Stock Fund under the Trust which are
attributable to my Profit Sharing Account and 401(k) Account and the whole
and fractional shares of TI Stock held in the TI Stock Fund which are
attributable to my Tax Credit Employee Stock Ownership Account in the manner
indicated on the reverse side of this form with respect to each item
identified thereon.
The Trustee will vote the shares represented by this voting instruction form
if, by April 19, 1999, (a) the form is properly signed and received, or
(b) the telephone voting procedures are followed. Shares for which no voting
instructions have been received will be voted in accordance with the vote of
the majority of the shares for which voting instructions are received from
other participants; except that the Trustee will vote shares of TI stock
attributable to Tax Credit Employee Stock Ownership Accounts for which no
voting instructions have been received to the extent required by law or
otherwise.
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On the reverse side of this card are procedures on how to vote your
shares regarding the election of directors by telephone. Please
consider voting by telephone. Your vote is recorded as though you
had mailed in your voting instruction form.
PLEASE MARK YOUR CHOICE IN OVAL IN THE FOLLOWING MANNER USING DARK INK
ONLY: [ / ]
________________________________________________________________________
The board of directors of TI recommends a vote FOR the election of each
Board nominee.
FOR ALL
Election of Directors - FOR WITHHELD Except Nominee(s)
ALL ALL Written Below
Nominees: 01-J.R. Adams, [ ] [ ] [ ]______________
02-D.L. Boren, 03-J.B. Busey IV,
04-D.A. Carp, 05-T.J. Engibous,
06-G.W. Fronterhouse, 07-D.R. Goode,
08-W.R. Sanders, 09-G.M. Shatto,
and 10-C.K. Yeutter.
Dated __________________________, 1999
______________________________________________
Signature
NOTE: Please sign exactly as name appears hereon. When signing as executor,
administrator, attorney, trustee or guardian, etc., please give your full
title.
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE SEE THE PROCEDURES BELOW.
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CONTROL NUMBER
______________
| |
|______________|
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
Call toll free 1-888-776-5655 any time on a touch tone telephone. There
is NO CHARGE to you for the call.
Enter the Control Number located above.
To vote FOR ALL nominees, Press 1; to WITHHOLD FOR ALL nominees, Press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the
instructions.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1
If you vote by telephone, DO NOT mail back the voting instruction form.
THANK YOU FOR VOTING!