Texas Instruments 2015 Annual Report Download - page 89

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PROXY STATEMENT
•฀ Additional annual retainer of $30,000 for service as chair of the Audit Committee; $20,000 for service as chair of the
Compensation Committee; and $15,000 for service as chair of the G&SR Committee.
•฀ Annual grant of a 10-year option to purchase TI common stock pursuant to the terms of the Texas Instruments 2009 Director
Compensation Plan (Director Plan), which was approved by stockholders in April 2009. The grant date value is $100,000,
determined using a Black-Scholes option-pricing model (subject to the board’s ability to adjust the grant downward). These
non-qualified options become exercisable in four equal annual installments beginning on the first anniversary of the grant and also
will become fully exercisable in the event of termination of service following a change in control (as defined in the Director Plan) of
TI. If a director’s service terminates due to death, disability or ineligibility to stand for re-election under the company’s by-laws, or
after the director has completed eight years of service, then all outstanding options held by the director shall continue to full term.
If a director’s service terminates for any other reason, all outstanding options held by the director shall be exercisable for 30 days
after the date of termination, but only to the extent such options were exercisable on the date of termination.
•฀ Annual grant of restricted stock units pursuant to the Director Plan with a grant date value of $100,000 (subject to the board’s
ability to adjust the grant downward). The restricted stock units vest on the fourth anniversary of their date of grant and upon a
change in control as defined in the Director Plan. If a director is not a member of the board on the fourth anniversary of the grant,
restricted stock units will nonetheless settle (i.e., the shares will issue) on such anniversary date if the director has completed
eight years of service prior to termination or the director’s termination was due to death, disability or ineligibility to stand for
re-election under the company’s by-laws. The director may defer settlement of the restricted stock units at his or her election.
Upon settlement, the director will receive one share of TI common stock for each restricted stock unit. Dividend equivalents
are paid on the restricted stock units at the same rate as dividends on TI common stock. The director may defer receipt of
dividend equivalents.
•฀ $1,000 per day compensation for other activities designated by the chairman.
•฀ A one-time grant of 2,000 restricted stock units upon a director’s initial election to the board.
The board has determined that annual grants of equity compensation to non-employee directors will be timed to occur when grants
are made to our U.S. employees in connection with the annual compensation review process. Accordingly, such equity grants to
non-employee directors are made in January. Please see the discussion regarding the timing of equity compensation grants on page 95.
Directors are not paid a fee for meeting attendance, but we reimburse non-employee directors for their travel, lodging and related
expenses incurred in connection with attending board, committee and stockholders meetings and other designated TI events. In
addition, non-employee directors may travel on company aircraft to and from these meetings and other designated events. On occasion,
directors’ spouses are invited to attend board events; the spouses’ expenses incurred in connection with attendance at those events are
also reimbursed.
Under the Director Plan, some directors have chosen to defer all or part of their cash compensation until they leave the board (or
certain other specified times). These deferred amounts were credited to either a cash account or stock unit account. Cash accounts
earn interest from TI at a rate currently based on Moody’s Seasoned Aaa Corporate Bonds. For 2014, that rate was 4.56 percent. Stock
unit accounts fluctuate in value with the underlying shares of TI common stock, which will be issued after the deferral period. Dividend
equivalents are paid on these stock units. Directors may also defer settlement of the restricted stock units they receive.
We have arrangements with certain customers whereby our employees may purchase consumer products containing TI components
at discounted pricing. In addition, the TI Foundation has an educational and cultural matching gift program. In both cases, directors are
entitled to participate on the same terms and conditions available to employees.
Non-employee directors are not eligible to participate in any TI-sponsored pension plan.