Proxy statement March 6,
12500 TI BOULEVARD, DALLAS, TEXAS 75243
MAILING ADDRESS: P.O. BOX 660199, DALLAS, TEXAS
Voting procedures and
TIs board of directors
requests your proxy for the annual meeting of stockholders on April 19, 2012. 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 mentioned in the notice of annual meeting. This proxy
statement and related proxy are being distributed on or about March 6, 2012. If
you come to the meeting, you can vote in person. If you dont come to the
meeting, your shares can be voted only if you have returned a properly signed
proxy or followed the telephone or Internet voting instructions, which can be
found on the enclosed proxy. If you sign 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.
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 entitled to vote are present in
person or by proxy, a quorum will exist. Abstentions and broker non-votes are
counted as present for purposes of establishing a quorum. Broker non-votes occur
when a beneficial owner who holds company stock through a broker does not
provide the broker with voting instructions as to any matter on which the broker
is not permitted to exercise its discretion and vote without specific
Scheduled to be considered at the meeting
are the election of directors, an advisory vote regarding approval of the
companys executive compensation, and ratification of the appointment of our
independent registered public accounting firm. Each of these matters is
discussed elsewhere in this proxy statement.
Any other matter that may properly be
submitted at the meeting is approved if a majority of the votes present at the
meeting vote for the proposal. On such matters you may vote for, against
or abstain; abstentions and broker non-votes have the same effect as votes
|56 n 2012 PROXY
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: RALPH W. BABB, JR., DANIEL A. CARP, CARRIE S.
COX, PAMELA H. PATSLEY, ROBERT E. SANCHEZ, WAYNE R. SANDERS, RUTH J. SIMMONS,
RICHARD K. TEMPLETON and CHRISTINE TODD WHITMAN. Stephen P. MacMillan, a highly
valued director since 2008, resigned from the board in February
return a proxy that is not otherwise marked, your shares will be voted FOR each
of the nominees.
Directors must be elected by a
majority of the votes present at the meeting and entitled to be cast in the
election. You may vote for, against, or abstain. Abstentions have the same
effect as votes against. Broker non-votes are not counted as votes for or
All of the nominees for directorship
are directors of the company. For a discussion of each nominees qualifications
to serve as a director of the company, please see pages 58-59. 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
||RALPH W. BABB,
Director since 1997
Member, Governance and Stockholder
Director since 2004
Lead Director; Chair, Audit Committee
Director since 1997
Member, Governance and Stockholder
Chairman since 2008
director since 2003
Director since 2003
Chair, Governance and Stockholder
STATEMENT n 57
The board is responsible for
approving nominees for election as directors. To assist in this task, the board
has designated a standing committee, the Governance and Stockholder Relations
Committee (the G&SR Committee), which is responsible for reviewing and
recommending nominees to the board. The G&SR Committee is comprised solely
of independent directors as defined by the rules of The NASDAQ Stock Market
(NASDAQ) and the boards corporate governance guidelines. Our board of
directors has adopted a written charter for the G&SR Committee. It can be
found on our website at
It is a long-standing policy of the board to consider
prospective board nominees recommended by stockholders. A stockholder who wishes
to recommend a prospective board nominee for the G&SR Committees
consideration can write to the Secretary of the G&SR Committee, Texas
Instruments Incorporated, P.O. Box 655936, MS 8658, Dallas, Texas 75265-5936.
The G&SR Committee will evaluate the stockholders prospective board nominee
in the same manner as it evaluates other nominees.
In evaluating prospective nominees, the G&SR
Committee looks for the following minimum qualifications, qualities and
- Outstanding achievement in the individuals
- Breadth of experience.
- Soundness of judgment.
- Ability to make independent, analytical
- Ability to contribute to a diversity of
viewpoints among board members.
- Willingness and ability to devote the time
required to perform board activities adequately (in this regard, the G&SR
Committee will consider the number of
other boards on which the individual serves as a director, and in particular
the boards policy that directors should
not serve on the boards of more than three other public companies).
- Ability to represent the total corporate
interests of TI (a director will not be selected to, nor will he or she be
expected to, represent the interests of
any particular group).
Stockholders, non-employee directors,
management and others may submit recommendations to the G&SR
The board believes its current size is
within the desired range as stated in the boards corporate governance
Board diversity and nominee
As indicated by the criteria above,
the board prefers a mix of background and experience among its members. The
board does not follow any ratio or formula to determine the appropriate mix.
Rather, it uses its judgment to identify nominees whose backgrounds, attributes
and experiences, taken as a whole, will contribute to the high standards of
board service at the company. The effectiveness of this approach is evidenced by
the directors participation in the insightful and robust yet collegial
deliberation that occurs at board and committee meetings and in shaping the
agendas for those meetings.
As it considered director nominees for
the 2012 annual meeting, the board kept in mind that the most important issues
it considers typically relate to the companys strategic direction; succession
planning for senior executive positions; the companys financial performance;
the challenges of running a large, complex enterprise, including the management
of its risks; major acquisitions and divestitures; and significant capital
investment and research and development (R&D) decisions. These issues arise
in the context of the companys operations, which primarily involve the
manufacture and sale of semiconductors all over the world into communications,
computing, industrial and consumer electronics end markets.
As described below, each of our director
nominees has achieved an extremely high level of success in his or her career,
whether at multi-billion dollar multinational corporate enterprises, major U.S.
universities or large governmental organizations. In these positions, each has
been directly involved in the challenges relating to setting the strategic
direction and managing the financial performance, personnel and processes of
large, complex organizations. Each has had exposure to effective leaders and has
developed the ability to judge leadership qualities. Seven of them have
experience in serving on the board of directors of at least one other major
corporation, and one has served in high political office, all of which provides
additional relevant experience on which each nominee can draw.
In concluding that each nominee should
serve as a director, the board relied on the specific experiences and attributes
listed below and on the direct personal knowledge, born of previous service on
the board, that each of the nominees brings insight and collegiality to board
- As chairman and CEO of Comerica Incorporated
and Comerica Bank (2002-present) and through a long career in banking,
has gained first-hand experience in
managing large, complex institutions, as well as insight into financial
markets, which experience is particularly
relevant to the company due to its global presence.
- As chief financial officer of Comerica
Incorporated and Comerica Bank (1995-2002), controller and later chief
financial officer of Mercantile
Bancorporation (1978-1995), and auditor and later audit manager at the
accounting firm of Peat Marwick Mitchell & Co. (1971-1978), gained extensive audit knowledge and experience in
audit- and financial control-related matters.
|58 n 2012 PROXY
- As chairman and CEO (2000-2005) and president
(1997-2001, 2002-2003) of Eastman Kodak Company, gained first-hand experience in managing a large, multinational
corporation focused on worldwide electronic consumer markets (which are of relevance to the company), with ultimate
management responsibility for the corporations financial performance and
its significant investments in capital and
- As chairman of the board of directors of
Delta Air Lines (2007-present), a director of Norfolk Southern Corporation
(2006-present) and a former director of
Liz Claiborne, Inc. (2006-2009), has helped oversee the strategy and
operations of major multinational corporations in various industries, including some that are
- As CEO and a director of Humacyte, Inc.
(2010-present), executive vice president and president of Global
Pharmaceuticals at Schering-Plough
Corporation (2003-2009) and executive vice president and president of Global
Prescription Business at Pharmacia
Corporation (1997-2003), has gained first-hand experience in managing large,
multinational organizations focused on
medical-related markets (which are of relevance to the company), with
responsibility for those organizations financial performance and significant capital and R&D investments. Is also a
director of Cardinal Health, Inc. (2009-present) and Celgene Corporation (2009-present).
- As chairman and CEO (2009-present) of
MoneyGram International, Inc., senior executive vice president of First Data
Corporation (2000-2007), and president and
CEO of Paymentech, Inc. (1991-2000), has gained first-hand experience managing
large, multinational organizations,
including the application of technology in the financial services sector, with
ultimate management responsibility for
their financial performance and significant capital investments.
- As Audit Committee chair at the company, a
member of the audit committee at Dr Pepper Snapple Group, Inc., chief
financial officer of First USA, Inc.
(1987-1994), and a former auditor at KPMG Peat Marwick for almost six years
before joining First USA, has developed a
keen appreciation for audit- and financial control-related issues.
- As a director of Dr Pepper Snapple Group,
Inc. (2008-present) and a former director of Molson Coors Brewing
Company (2005-2009), has helped oversee
the strategy and operations of other major multinational
- As president and chief operating officer (February
2012-present) and president, Global Fleet Management Solutions, of Ryder System, Inc. (September 2010-February
2012), has gained first-hand experience in managing a large,
organization, with responsibility for the organizations financial performance
and significant capital investments.
- As executive vice president and chief
financial officer (October 2007 to September 2010) and as senior vice
president and chief information officer
(2003-2005) of Ryder System, Inc., developed a keen appreciation for audit-
and financial control-related issues and
gained first-hand experience with all technology-related functions of a large
multinational corporation focused on transportation and logistics.
- As chairman (1992-2003) and CEO (1991-2002)
of Kimberly-Clark Corporation, gained first-hand experience in managing
a large, multinational consumer goods
corporation, with ultimate management responsibility for its financial
performance and its significant capital
and R&D investments.
- As chairman of Dr Pepper Snapple Group, Inc.
(2008-present) and director of Belo Corporation (2003-present), has
helped oversee the strategy and operations
of other large corporations.
- As president of Brown University
(2001-present) and president of Smith College (1995-2001), has gained
first-hand experience in managing large,
complex institutions, and has developed deep insight into the development and
training of professionals, including
engineers, scientists and technologists, on whom the company relies for its
next generation of employees.
- As a former director of The Goldman Sachs
Group, Inc. (2000-2010) and Pfizer, Inc. (1997-2007), helped oversee the
strategy and operations of other large
- As a 31-year veteran of the semiconductor
industry, serving the last 16 years at a senior level at the company,
including as chairman since April 2008,
CEO since 2004 and director since 2003, has developed a deep knowledge of all
aspects of the company and of the
- As Administrator of the Environmental
Protection Agency (2001-2003) and Governor of the state of New Jersey
(1994-2000), gained first-hand experience
managing a large, complex organization and developed keen insight into the
workings of government on the federal and
state level and how they might impact company operations.
- As a director of S.C. Johnson & Son, Inc.
(2003-present) and United Technologies Corp. (2003-present), has helped
oversee the strategy and operations of
other large corporations.
STATEMENT n 59
Communications with the
Stockholders and others who wish to
communicate with the board as a whole, or to individual directors, may write to
them at: P.O. Box 655936, MS 8658, Dallas, Texas 75265-5936. All communications
sent to this address will be shared with the board or the individual director,
if so addressed.
The board has a long-standing
commitment to responsible and effective corporate governance. The boards
corporate governance guidelines (which include the director independence
standards), the charters of each of the boards committees, TIs code of business conduct and our code of ethics for
our chief executive officer and senior financial officers are available on our
website at www.ti.com/corporategovernance.
Stockholders may request copies of these documents free of charge by writing to
Texas Instruments Incorporated, P.O. Box 660199, MS 8657, Dallas, Texas,
75266-0199, Attn: Investor Relations.
It is a policy of the board to
encourage directors to attend each annual meeting of stockholders. Such
attendance allows for direct interaction between stockholders and board members.
In 2011, all directors attended TIs annual meeting of stockholders.
The board has determined that each of
our directors is independent except for Mr. Templeton. In connection with this
determination, information was reviewed regarding directors business and
charitable affiliations, immediate family members and their employers, and any
transactions or arrangements between the company and such persons or entities.
The board has adopted the following standards for determining
||In no event will a director
be considered independent if:
||He or she is a current partner of or is employed by
the companys independent auditors; or
||An immediate family member of the director is (a) a
current partner of the companys independent auditors or (b) currently
employed by the companys independent auditors and personally works on the
||Within the current or preceding three fiscal years
he or she was, and remains at the time of the determination, an executive
officer or employee of an organization that (a) made payments to, or
received payments from, TI for property or services, (b) extended loans to
or received loans from, TI, or (c) received charitable contributions from
TI, in an amount or amounts which, in the aggregate in any single fiscal
year, exceeded the greater of $200,000 or 2 percent of the recipients
consolidated gross revenues for its last completed fiscal year (for
purposes of this standard, payments excludes payments arising solely
from investments in the companys securities and payments under
non-discretionary charitable contribution matching programs);
||Within the current or preceding three fiscal years
an immediate family member of the director was, and remains at the time of
the determination, an executive officer of an organization that (a) made
payments to, or received payments from, TI for property or services, (b)
extended loans to or received loans from TI, or (c) received charitable
contributions from TI, in an amount or amounts which, in the aggregate in
any single fiscal year, exceeded the greater of $200,000 or 2 percent of
the recipients consolidated gross revenues for its last completed fiscal
year (for purposes of this standard, payments excludes payments arising
solely from investments in the companys securities and payments under
non-discretionary charitable contribution matching programs).
||In no event will a director
be considered independent if, within the preceding three
||He or she was employed by the company (except in
the capacity of interim chairman of the board, chief executive officer or
other executive officer, provided the interim employment did not last
longer than one year) or any of its subsidiaries;
||He or she received more than $120,000 during any
twelve-month period in direct compensation from TI (other than (a)
compensation for board or board committee service, (b) compensation
received for former service as an interim chairman of the board, chief
executive officer or other executive officer and (c) benefits under a
tax-qualified retirement plan, or non-discretionary
||An immediate family member of the director was
employed as an executive officer by the company or any of its
||An immediate family member of the director received
more than $120,000 during any twelve-month period in direct compensation
from TI (excluding compensation as a non-executive officer employee of the
||He or she was (but is no longer) a partner or
employee of the companys independent auditors and personally worked on
the companys audit within that time;
||An immediate family member of the director was (but
is no longer) a partner or employee of the companys independent auditors
and personally worked on the companys audit within that
|60 n 2012 PROXY
||He or she was an executive
officer of another company at which any of TIs current executive officers
at the same time served on that companys compensation committee;
||An immediate family member
of the director was an executive officer of another company at which any
of TIs current executive officers at the same time served on that
companys compensation committee.
members may not accept any consulting, advisory or other compensatory fee
from TI, other than in their capacity as members of the board or any board
committee. Compensatory fees do not include the receipt of fixed amounts
of compensation under a retirement plan (including deferred compensation)
for prior service with TI (provided that such compensation is not
contingent in any way on continued service).|
other relationship, the determination of whether it would interfere with the
directors exercise of independent judgment in carrying out his or her
responsibilities, and consequently whether the director involved is independent,
will be made by directors who satisfy the independence criteria set forth in
purposes of these independence determinations, immediate family member will
have the same meaning as under NASDAQ rules.