Texas Instruments 2014 Annual Report Download - page 108

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PROXY STATEMENT
(4) One-half of the shares became exercisable on January 26, 2015, and the remaining one-half become exercisable on January 26, 2016.
(5) Became fully exercisable on January 27, 2015.
(6) Vesting date is January 31, 2018.
(7) Vesting date is January 31, 2017.
(8) Vesting date is January 29, 2016.
(9) Vested on January 30, 2015.
(10) Vesting date is July 29, 2016.
(11) Vesting date is July 31, 2018.
The “Option Awards” shown in the table above are non-qualified stock options, each of which represents the right to purchase shares
of TI common stock at the stated exercise price. For grants before 2007, the exercise price is the average of the high and low price
of TI common stock on the grant date. For grants after 2006, the exercise price is the closing price of TI common stock on the grant
date. The term of each option is ten years unless the option is terminated earlier pursuant to provisions summarized in the chart below
and in the paragraph following the chart. Options vest (become exercisable) in increments of 25 percent per year beginning on the
first anniversary of the date of the grant. The chart below shows the termination provisions relating to stock options outstanding as
of December 31, 2014. The Compensation Committee of the board of directors established these termination provisions to promote
employee retention while offering competitive terms.
Employment
Termination Due to
Death or Permanent
Disability
Employment
Termination (at Least
6 Months after Grant)
When Retirement
Eligible *
Employment Termination
(at Least 6 Months after Grant)
with 20 Years of Credited
Service, but Not Retirement
Eligible **
Employment
Termination for
Cause
Other
Circumstances
of Employment
Termination
Vesting continues; option
remains in effect to end
of term
Vesting continues;
option remains
in effect to end
of term
Option remains in effect to the end of
the term; vesting does not continue after
employment termination
Option cancels Option remains
exercisable for
30 days
* Defined for purposes of equity awards made after 2012 as at least age 55 with 10 or more years of TI service or at least age 65. For
awards made before 2013, the definition of normal or early retirement eligibility in the relevant pension plan applies (see page 105).
** This provision is not applicable to grants made after 2012.
Options may be cancelled if, during the two years after employment termination, the grantee competes with TI or solicits TI employees
to work for another company, or if the grantee discloses TI trade secrets. In addition, for options received while the grantee was
an executive officer, the company may reclaim (or “claw back”) profits earned under grants if the officer engages in such conduct.
These provisions are intended to strengthen retention and provide a reasonable remedy to TI in case of competition, solicitation of our
employees or disclosure of our confidential information.
Options granted after 2009 become fully vested if the grantee is involuntarily terminated from employment with TI (other than for cause)
within 24 months after a change in control of TI. “Change in control” is defined as provided in the Texas Instruments 2009 Long-Term
Incentive Plan and occurs upon (1) acquisition of more than 50 percent of the voting stock or at least 80 percent of the assets of TI
or (2) change of a majority of the board of directors in a 12-month period unless a majority of the directors then in office endorsed
the appointment or election of the new directors (“Plan definition”). These terms are intended to reduce employee uncertainty and
distraction in the period leading up to a change in control, if such an event were to occur. For options granted before 2010, the stock
option terms provide that upon a change in control of TI, the option becomes fully vested to the extent it is then outstanding; and if
employment termination (except for cause) has occurred within 30 days before the change in control, the change in control is deemed to
have occurred first. “Change in control” is defined in these pre-2010 options as (1) acquisition of 20 percent of TI common stock other
than through a transaction approved by the board of directors, or (2) change of a majority of the board of directors in a 24-month period
unless a majority of the directors then in office have elected or nominated the new directors (together, the “pre-2010 definition”).