TEXAS INSTRUMENTS INC - Proxy Solicitation & Information Statement 2015

DEF 14A 1 texas_def14a.htm DEFINITIVE PROXY STATEMENT

United States Securities and Exchange Commission Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )

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| [X] | Definitive Proxy
Statement | | |
| [ ] | Definitive Additional
Materials | | |

| Texas
Instruments Incorporated |
| --- |
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Specified In Its Charter) |
| (Name
of Person(s) Filing Proxy Statement, if Other Than the
Registrant) |

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

April 16, 2015

Dear Stockholder:

You are cordially invited to attend the 2015 annual meeting of stockholders on Thursday, April 16, 2015, at the cafeteria on our property at 12500 TI Boulevard, Dallas, Texas, at 9:00 a.m. (Central time). At the meeting we will consider and act upon the following matters:

● the election of directors for the next year,

● advisory approval of the companys executive compensation,

● ratification of the appointment of Ernst & Young LLP as the companys independent registered public accounting firm for 2015, and

● such other matters as may properly come before the meeting.

Stockholders of record at the close of business on February 17, 2015, are entitled to vote at the annual meeting.

We urge you to vote your shares as promptly as possible by: (1) accessing the Internet website, (2) calling the toll-free number or (3) signing, dating and mailing the enclosed proxy.

Sincerely,
●
Joseph F.
Hubach
Senior Vice
President,
Secretary
and
General
Counsel

Dallas, Texas March 4, 2015

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 71

TABLE OF CONTENTS

Voting procedures and quorum	72
Election of directors	73
Nominees for directorship	74
Director nomination process	75
Board diversity and nominee qualifications	75
Communications with the board	77
Corporate governance	77
Annual meeting attendance	78
Director independence	78
Board organization	79
Board and committee meetings	79
Committees of the board	79
Board leadership structure	81
Risk oversight by the board	82
Director compensation	82
2014 director compensation	84
Executive compensation	85
Proposal regarding advisory approval of
the
companys executive compensation	85
Compensation Discussion and Analysis	86
Compensation Committee report	97
2014 summary compensation table	98
Grants of plan-based awards in 2014	100
Outstanding equity awards at fiscal year-end 2014	101
2014 option exercises and stock vested	103
2014 pension benefits	104
2014 non-qualified deferred compensation	106
Potential payments upon termination or
change
in control	107

Audit Committee report	110
Proposal to ratify appointment of independent
registered public accounting
firm	111
Additional information	112
Voting securities	112
Security ownership of certain beneficial owners	112
Security ownership of directors and management	113
Related person transactions	114
Compensation committee interlocks and
insider
participation	115
Cost of solicitation	115
Stockholder proposals for 2016	116
Benefit plan voting	116
Section 16(a) beneficial ownership reporting
compliance	116
Telephone and Internet voting	116
Stockholders sharing the same address	117
Electronic delivery of proxy materials and copies
of our Form
10-K	117
Notice regarding forward-looking statements	117
Directions and other annual meeting information	118
Appendix (Non-GAAP reconciliations)	119

PROXY STATEMENT MARCH 4, 2015

EXECUTIVE OFFICES 12500 TI BOULEVARD, DALLAS, TEXAS 75243 MAILING ADDRESS: P.O. BOX 660199, DALLAS, TEXAS 75266-0199

Voting procedures and quorum

TIs board of directors requests your proxy for the annual meeting of stockholders on April 16, 2015. 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 4, 2015. If you come to the meeting, you can vote in person. If you do not 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 common 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 instruction.

72 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

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. On each of these matters you may vote for, against or abstain. The vote required for the election of directors and approval of the other matters is shown in the table below.

| Matter | Required Vote | Impact of Abstentions or Broker
Non-Votes |
| --- | --- | --- |
| Election of
directors | Majority of
votes present in person or by proxy at the meeting and entitled to be cast
in the election with respect to a nominee must be cast for that
nominee. | Abstentions
have the same effect as votes against. Broker non-votes are not counted as
votes for or against. |
| Advisory vote to approve named executive officer
compensation. | Majority of votes present in person or by proxy at the meeting must
be cast for the proposal. | Abstentions and broker non-votes have the same effect as a vote
against. |
| Proposal to
ratify appointment of independent registered public accounting
firm. | Majority of
votes present in person or by proxy at the meeting must be cast for the
proposal. | Abstentions
have the same effect as votes against. (Brokers are permitted to exercise
their discretion and vote without specific instruction on this matter.
Accordingly, there are no broker non-votes.) |
| Any other matter that may properly be submitted at the
meeting. | Majority of votes present in person or by proxy at the meeting must
be cast for the proposal. | Abstentions and broker non-votes have the same effect as votes
against. |

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: RALPH W. BABB, JR., MARK A. BLINN, DANIEL A. CARP, CARRIE S. COX, RONALD KIRK, PAMELA H. PATSLEY, ROBERT E. SANCHEZ, WAYNE R. SANDERS, RUTH J. SIMMONS, RICHARD K. TEMPLETON and CHRISTINE TODD WHITMAN.

If you return a proxy that is not otherwise marked, your shares will be voted FOR each of the nominees.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 73

Nominees for directorship

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 75-77. If any nominee becomes unable to serve before the meeting, the persons named as proxies may vote for a substitute or the number of directors will be reduced accordingly.

Directors

| ● | RALPH W. BABB,
JR. Age 66 Director since 2010 Chair, Audit Committee | ● | RONALD KIRK Age 60 Director since
2013 Member, Governance and
Stockholder Relations Committee | ● | RUTH J.
SIMMONS Age 69 Director since 1999 Member, Audit Committee |
| --- | --- | --- | --- | --- | --- |
| ● | MARK A. BLINN Age 53 Director since
2013 Member, Audit
Committee | ● | PAMELA H.
PATSLEY Age 58 Director since 2004 Member, Compensation Committee | ● | RICHARD K.
TEMPLETON Age 56 Chairman since 2008 and director since
2003 |
| ● | DANIEL A.
CARP Age 66 Director since 1997 Member, Governance and Stockholder Relations
Committee | ● | ROBERT E.
SANCHEZ Age 49 Director since 2011 Chair, Compensation Committee | ● | CHRISTINE TODD
WHITMAN Age 68 Director since 2003 Member, Compensation Committee |
| ● | CARRIE S. COX Age 57 Director since
2004 Member, Governance and
Stockholder Relations Committee | ● | WAYNE R.
SANDERS Age 67 Director since 1997 Lead Director; Chair, Governance and Stockholder Relations
Committee | | |

74 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Director nomination process

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 www.ti.com/corporategovernance.

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, TX 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 skills:

● Outstanding achievement in the individuals personal career.

● Breadth of experience.

● Soundness of judgment.

● Ability to make independent, analytical inquiries.

● 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 Committee.

All nominees for directorship are directors of the company.

The board believes its current size is within the desired range as stated in the boards corporate governance guidelines.

Board diversity and nominee qualifications

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 respectful deliberation that occurs at board and committee meetings and in shaping the agendas for those meetings.

As it considered director nominees for the 2015 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 research and development (R&D) and capital investment 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 industrial, automotive, personal electronics, communications equipment and enterprise systems 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 significant 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. Ten of them have experience in serving on the board of directors of at least one other major corporation, and two have 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 the willingness to ask difficult questions to board deliberations.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 75

Mr. Babb

● 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.

● As Audit Committee chair at the company (April 19, 2013-present), 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), has gained extensive audit knowledge and experience in audit- and financial control-related matters.

Mr. Blinn

● As CEO and a director of Flowserve Corporation (2009-present), has gained first-hand experience in managing a large, multinational corporation operating in global industrial markets, with ultimate management responsibility for the organizations financial performance and significant capital and R&D investments.

● As chief financial officer of Flowserve Corporation (2004-2009), chief financial officer of FedEx Kinkos Office and Print Services Inc. (2003-2004) and vice president and controller of Centex Corporation (2000-2002), has developed a keen appreciation for audit- and financial control-related matters.

Mr. Carp

● As chairman and CEO (2000-2005) and president (1997-2001, 2002-2003) of Eastman Kodak Company, has gained first-hand experience in managing a large, multinational corporation focused on worldwide electronics markets, with ultimate management responsibility for the corporations financial performance and its significant investments in capital and R&D.

● As chairman of the board of directors of Delta Air Lines, Inc. (2007-present), a director of Norfolk Southern Corporation (2006-present) and a 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 capital-intensive.

Ms. Cox

● As chairman (2013-present), CEO and a director (2010-present) of Humacyte, Inc., 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, 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).

Mr. Kirk

● As U.S. Trade Representative (2009-2013), has gained first-hand experience in managing a complex organization that operates on an international scale and developed insight into issues bearing on global economic activity, international trade policies and strategies and the workings of foreign governments.

● As Senior Of Counsel of Gibson, Dunn & Crutcher LLP (2013-present), and as a partner of Vinson & Elkins, LLP (2005-2009), has gained first-hand experience as an advisor to numerous multinational companies.

● As a director of Brinker International, Inc. (1997-2009) and Dean Foods Company (1997-2009), has helped oversee the strategy and operations of other large corporations.

Ms. Patsley

● 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 in 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 (2006-April 18, 2013), a member of the audit committee at Dr Pepper Snapple Group, Inc., chief financial officer of First USA, Inc. (1987-1994) and an auditor at KPMG Peat Marwick for almost six years before joining First USA, has developed a keen appreciation for audit- and financial control-related matters.

● As a director of Dr Pepper Snapple Group, Inc. (2008-present) and a director of Molson Coors Brewing Company (2005-2009), has helped oversee the strategy and operations of other major multinational corporations.

76 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Mr. Sanchez

● As chairman and CEO (2013-present), president (2012-2014) and chief operating officer (2012) of Ryder System, Inc., and as president of its Global Fleet Management Solutions business segment (2010-2012), has gained first-hand experience in managing a large, multinational, transportation-related organization, with responsibility for the organizations financial performance and significant capital investments.

● As executive vice president and chief financial officer (2007-2010) and as senior vice president and chief information officer (2003-2005) of Ryder System, Inc., has 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.

Mr. Sanders

● As chairman (1992-2003) and CEO (1991-2002) of Kimberly-Clark Corporation, has 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 a director of Belo Corporation (2003-2013), has helped oversee the strategy and operations of other large corporations.

Ms. Simmons

● As president of Brown University (2001-2012) and president of Smith College (1995-2001), has gained first-hand experience in managing large, complex institutions, and 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 director of Fiat Chrysler Automobiles N.V. (2014-present), Chrysler Group LLC (2012-2014) and Mondelez International, Inc. (2012-present) and as a former director of The Goldman Sachs Group, Inc. (2000-2010), has helped oversee the strategy and operations of other large corporations.

Mr. Templeton

● As a 34-year veteran of the semiconductor industry, serving the last 19 years at a senior level at the company, including as chairman since 2008, CEO since 2004 and director since 2003, has developed a deep knowledge of all aspects of the company and of the semiconductor industry.

Ms. Whitman

● As Administrator of the Environmental Protection Agency (2001-2003) and Governor of the state of New Jersey (1994-2000), has 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.

Communications with the board

Stockholders and others who wish to communicate with the board, a board committee or an individual director, may write to them at: P.O. Box 655936, MS 8658, Dallas, TX 75265-5936. All communications sent to this address will be shared with the board, committee or individual director as applicable.

Corporate governance

The board has a long-standing commitment to responsible and effective corporate governance. We annually conduct extensive governance reviews and engage in investor outreach specific to governance and executive compensation matters. 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 CEO 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, TX 75266-0199, Attn: Investor Relations.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 77

Annual meeting attendance

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 2014, all directors attended TIs annual meeting of stockholders.

Director independence

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, directors 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 independence.

| A. | In no event
will a director be considered independent if: | |
| --- | --- | --- |
| | 1. | He or she is a current
partner of or is employed by the companys independent
auditors; |
| | 2. | A 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 companys audit; |
| | 3. | Within the current or
preceding three fiscal years he or she was, and remains at the time of the
determination, a partner in or a controlling shareholder, an executive
officer or an employee of an organization that in the current year or any
of the past three fiscal years (a) made payments to, or received payments
from, the company for property or services, (b) extended loans to or
received loans from, the company, or (c) received charitable contributions
from the company, in an amount or amounts which, in the aggregate in such
fiscal year, exceeded the greater of $200,000 or 2 percent of the
recipients consolidated gross revenues for that 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);
or |
| | 4. | Within the current or
preceding three fiscal years a family member of the director was, and
remains at the time of the determination, a partner in or a controlling
shareholder or an executive officer of an organization that in the current
year or any of the past three fiscal years (a) made payments to, or
received payments from, the company for property or services, (b) extended
loans to or received loans from the company, or (c) received charitable
contributions from the company, in an amount or amounts which, in the
aggregate in such fiscal year, exceeded the greater of $200,000 or 2
percent of the recipients consolidated gross revenues for that 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). |
| B. | In no event
will a director be considered independent if, within the preceding three
years: | |
| | 1. | 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); |
| | 2. | He or she received
more than $120,000 during any twelve-month period in compensation from the
company (other than (a) compensation for board or board committee service,
(b) compensation received for former service lasting no longer than one
year 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 compensation); |
| | 3. | A family member of the
director was employed as an executive officer by the company; |
| | 4. | A family member of the
director received more than $120,000 during any twelve-month period in
compensation from the company (excluding compensation as a non-executive
officer employee of the company); |
| | 5. | He or she was (but is
no longer) a partner or employee of the companys independent auditors and
worked on the companys audit within that time; |
| | 6. | A family member of the
director was (but is no longer) a partner or employee of the companys
independent auditors and worked on the companys audit within that
time; |
| | 7. | He or she was an
executive officer of another entity at which any of the companys current
executive officers at any time during the past three years served on that
entitys compensation committee; or |
| | 8. | A family member of the
director was an executive officer of another entity at which any of the
companys current executive officers at any time during the past three
years served on that entitys compensation committee. |
| C. | No member of
the Audit Committee may accept directly or indirectly any consulting,
advisory or other compensatory fee from the company, other than in his or
her capacity as a member 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
the company (provided that such compensation is not contingent in any way
on continued service). In addition, no member of the Audit Committee may
be an affiliated person of the company except in his or her capacity as a
director. | |

78 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

| D. | With respect to service
on the Compensation Committee, the board will consider all factors that it
deems relevant to determining whether a director has a relationship to the
company that is material to that directors ability to be independent from
management in connection with the duties of a Compensation Committee
member, including but not limited to: | |
| --- | --- | --- |
| | 1. | The source of compensation of the
director, including any consulting, advisory or compensatory fee paid by
the company to the director; and |
| | 2. | Whether the director is
affiliated with the company, a subsidiary of the company or an affiliate
of a subsidiary of the company. |
| E. | For any 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 this section. | |

For purposes of these independence determinations, company and family member will have the same meaning as under NASDAQ rules.

Board organization

Board and committee meetings

During 2014, the board held nine meetings. The board has three standing committees described below. The committees of the board collectively held 20 meetings in 2014. Each director attended at least 87 percent of the board and relevant committee meetings combined. Overall attendance at board and committee meetings was approximately 97 percent.

Committees of the board

Audit Committee

The Audit Committee is a separately designated standing committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. All members of the Audit Committee are independent under NASDAQ rules and the boards corporate governance guidelines. Since April 19, 2013, the committee members have been Mr. Babb (Chair), Mr. Blinn and Ms. Simmons. The Audit Committee is generally responsible for:

● Appointing, compensating, retaining and overseeing TIs independent registered public accounting firm.

● Reviewing the annual report of TIs independent registered public accounting firm related to quality control.

● Reviewing TIs annual and quarterly reports to the SEC, including the financial statements and the Managements Discussion and Analysis portion of those reports, and recommending appropriate action to the board.

● Reviewing TIs audit plans.

● Reviewing before issuance TIs news releases regarding annual and interim financial results and discussing with management any related earnings guidance that may be provided to analysts and rating agencies.

● Discussing TIs audited financial statements with management and the independent registered public accounting firm, including a discussion with the firm regarding the matters required to be reviewed under applicable legal or regulatory requirements.

● Reviewing relationships between the independent registered public accounting firm and TI.

● Reviewing and discussing the adequacy of TIs internal accounting controls and other factors affecting the integrity of TIs financial reports with management and with the independent registered public accounting firm.

● Creating and periodically reviewing TIs whistleblower policy.

● Reviewing TIs risk assessment and risk management policies.

● Reviewing TIs compliance and ethics program.

● Reviewing a report of compliance of management and operating personnel with TIs code of business conduct, including TIs conflict of interest policy.

● Reviewing TIs non-employee-related insurance programs.

● Reviewing changes, if any, in major accounting policies of the company.

● Reviewing trends in accounting policy changes that are relevant to the company.

● Reviewing the companys policy regarding investments and financial derivative products.

The board has determined that all members of the Audit Committee are financially sophisticated, as the board has interpreted such qualifications in its business judgment. In addition, the board has designated Mr. Babb as the audit committee financial expert as defined in the Securities Exchange Act of 1934, as amended.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 79

The Audit Committee met six times in 2014. The Audit Committee holds regularly scheduled meetings and reports its activities to the board. The committee also continued its long-standing practice of meeting directly with our internal audit staff to discuss the audit plan and to allow for direct interaction between Audit Committee members and our internal auditors. Please see page 110 for a report of the committee.

Compensation Committee

All members of the Compensation Committee are independent. From April 19, 2013, to April 17, 2014, the committee members were Ms. Cox (Chair), Ms. Patsley and Mr. Sanchez. Since April 18, 2014, the committee members have been Mr. Sanchez (chair), Ms. Patsley and Ms. Whitman. The committee is responsible for:

● Reviewing the performance of the CEO and determining his compensation.

● Setting the compensation of the companys other executive officers.

● Overseeing administration of employee benefit plans.

● Making recommendations to the board regarding:

○ Institution and termination of, revisions in and actions under employee benefit plans that (i) increase benefits only for officers of the company or disproportionately increase benefits for officers of the company more than other employees of the company, (ii) require or permit the issuance of the companys stock or (iii) the board must approve.

○ Reservation of company stock for use as awards of grants under plans or as contributions or sales to any trustee of any employee benefit plan.

● Taking action as appropriate regarding the institution and termination of, revisions in and actions under employee benefit plans that are not required to be approved by the board.

● Appointing, setting the compensation of, overseeing and considering the independence of any compensation consultant or other advisor.

The Compensation Committee met seven times in 2014. The Compensation Committee holds regularly scheduled meetings, reports its activities to the board, and consults with the board before setting annual executive compensation. Please see page 97 for a report of the committee.

In performing its functions, the committee is supported by the companys Human Resources organization. The committee has the authority to retain any advisors it deems appropriate to carry out its responsibilities. The committee retained Pearl Meyer & Partners as its compensation consultant for the 2014 compensation cycle. The committee instructed the consultant to advise it directly on executive compensation philosophy, strategies, pay levels, decision-making processes and other matters within the scope of the committees charter. Additionally, the committee instructed the consultant to assist the companys Human Resources organization in its support of the committee in these matters with such items as peer-group assessment, analysis of the executive compensation market, and compensation recommendations.

The Compensation Committee considers it important that its compensation consultants objectivity not be compromised by other engagements with the company or its management. In support of this belief, the committee has a policy on compensation consultants, a copy of which may be found on www.ti.com/corporategovernance. During 2014, the committee determined that its compensation consultant was independent of the company and had no conflict of interest.

The Compensation Committee considers executive compensation in a multistep process that involves the review of market information, performance data and possible compensation levels over several meetings leading to the annual determinations in January. Before setting executive compensation, the committee reviews the total compensation and benefits of the executive officers and considers the impact that their retirement, or termination under various other scenarios, would have on their compensation and benefits.

The CEO and the senior vice president responsible for Human Resources, who is an executive officer, are regularly invited to attend meetings of the committee. The CEO is excused from the meeting during any deliberations or vote on his compensation. No executive officer determines his or her own compensation or the compensation of any other executive officer. As members of the board, the members of the committee receive information concerning the performance of the company during the year and interact with our management. The CEO gives the committee and the board an assessment of his own performance during the year just ended. He also reviews the performance of the other executive officers with the committee and makes recommendations regarding their compensation. The senior vice president responsible for Human Resources assists in the preparation of and reviews the compensation recommendations made to the committee other than for her compensation.

80 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

The Compensation Committees charter provides that it may delegate its power, authority and rights with respect to TIs long-term incentive plans, employee stock purchase plan and employee benefit plans to (i) one or more committees of the board established or delegated authority for that purpose; or (ii) employees or committees of employees except that no such delegation may be made with respect to compensation of the companys executive officers.

Pursuant to that authority, the Compensation Committee has delegated to a special committee established by the board the authority to grant a limited number of stock options and restricted stock units under the companys long-term incentive plans. The sole member of the special committee is Mr. Templeton. The special committee has no authority to grant, amend or terminate any form of compensation for TIs executive officers. The Compensation Committee reviews the grant activity of the special committee.

Governance and Stockholder Relations Committee

All members of the G&SR Committee are independent. From April 19, 2013 to April 17, 2014, the committee members were Ms. Whitman (Chair), Mr. Carp and Mr. Sanders, with Mr. Kirk joining the committee on September 19, 2013. Since April 18, 2014, the committee members have been Mr. Sanders (chair), Mr. Carp, Ms. Cox and Mr. Kirk. The G&SR Committee is generally responsible for:

●	Making recommendations to the board regarding:
	○	The
development and revision of our corporate governance principles.
	○	The size,
composition and functioning of the board and board committees.
	○	Candidates
to fill board positions.
	○	Nominees to
be designated for election as directors.
	○	Compensation
of board members.
	○	Organization
and responsibilities of board committees.
	○	Succession
planning by the company.
	○	Issues of
potential conflicts of interest involving a board member raised under TIs
conflict of interest policy.
	○	Election of
executive officers of the company.
	○	Topics
affecting the relationship between the company and stockholders.
	○	Public
issues likely to affect the company.
	○	Responses to
proposals submitted by stockholders.
●	Reviewing:
	○	Contribution
policies of the company and the TI Foundation.
	○	Revisions to
TIs code of ethics.
●	Electing officers of the company other than the executive
officers.
●	Overseeing an annual evaluation of the board and the committee.

The G&SR Committee met seven times in 2014. The G&SR Committee holds regularly scheduled meetings and reports its activities to the board. Please see page 75 for a discussion of stockholder nominations and page 77 for a discussion of communications with the board.

Board leadership structure

The boards current leadership structure combines the positions of chairman and CEO, and includes a lead director who presides at executive sessions and performs the duties listed below. The board believes that this structure, combined with its other practices (such as (a) including on each board agenda an opportunity for the independent directors to comment on and influence the proposed strategic agenda for future meetings and (b) holding an executive session at each board meeting), allows it to maintain the active engagement of independent directors and appropriate oversight of management.

The lead director is elected by the independent directors annually. The independent directors have elected Mr. Sanders to serve as lead director. The duties of the lead director are to:

| ● | Preside at
all meetings of the board at which the chairman is not present, including
executive sessions of the independent directors; |
| --- | --- |
| ● | Serve as
liaison between the chairman and the independent directors; |
| ● | Approve
information sent to the board; |
| ● | Approve
meeting agendas for the board; |
| ● | Approve
meeting schedules to assure that there is sufficient time for discussion
of all agenda items; and |
| ● | If requested
by major shareholders, ensure that he or she is available for consultation
and direct communication. |

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 81

In addition, the lead director has authority to call meetings of the independent directors.

The board, led by its G&SR Committee, regularly reviews the boards leadership structure. The boards consideration is guided by two questions: would stockholders be better served and would the board be more effective with a different structure. The boards views are informed by a review of the practices of other companies and insight into the preferences of top stockholders, as gathered from face-to-face dialogue and review of published guidelines. The board also considers how board roles and interactions would change if its leadership structure changed. The boards goal is for each director to have an equal stake in the boards actions and equal accountability to the corporation and its stockholders.

The board continues to believe that there is no uniform solution for a board leadership structure. Indeed, the company has had varying board leadership models over its history, at times separating the positions of chairman and CEO and at times combining the two, and now utilizing a lead director.

Risk oversight by the board

It is managements responsibility to assess and manage the various risks TI faces. It is the boards responsibility to oversee management in this effort. In exercising its oversight, the board has allocated some areas of focus to its committees and has retained areas of focus for itself, as more fully described below.

Management generally views the risks TI faces as falling into the following categories: strategic, operational, financial and compliance. The board as a whole has oversight responsibility for the companys strategic and operational risks (e.g., major initiatives, competitive markets and products, sales and marketing, and research and development). Throughout the year the CEO discusses these risks with the board during strategy reviews that focus on a particular business or function. In addition, at the end of the year, the CEO provides a formal report on the top strategic and operational risks.

TIs Audit Committee has oversight responsibility for financial risk (such as accounting, finance, internal controls and tax strategy). Oversight responsibility for compliance risk is shared by the board committees. For example, the Audit Committee oversees compliance with the companys code of conduct and finance- and accounting-related laws and policies, as well as the companys compliance program itself; the Compensation Committee oversees compliance with the companys executive compensation plans and related laws and policies; and the G&SR Committee oversees compliance with governance-related laws and policies, including the companys corporate governance guidelines.

The Audit Committee oversees the companys approach to risk management as a whole. It reviews the companys risk management process at least annually by means of a presentation by the CFO.

The boards leadership structure is consistent with the board and committees roles in risk oversight. As discussed above, the board has found that its current structure and practices are effective in fully engaging the independent directors. Allocating various aspects of risk oversight among the committees provides for similar engagement. Having the chairman and CEO review strategic and operational risks with the board ensures that the director most knowledgeable about the company, the industry in which it operates and the competition and other challenges it faces shares those insights with the board, providing for a thorough and efficient process.

Director compensation

The G&SR Committee has responsibility for reviewing and making recommendations to the board on compensation for non-employee directors, with the board making the final determination. The committee has no authority to delegate its responsibility regarding director compensation. In carrying out this responsibility, it is supported by TIs Human Resources organization. The CEO, the senior vice president responsible for Human Resources and the Secretary review the recommendations made to the committee. The CEO also votes, as a member of the board, on the compensation of non-employee directors.

The compensation arrangements in 2014 for the non-employee directors were:

| ● | Annual
retainer of $80,000 for board and committee service. |
| --- | --- |
| ● | Additional
annual retainer of $25,000 for service as the lead director. |

82 TEXAS INSTRUMENTS ● 2015 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 boards 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 directors service terminates
due to death, disability or ineligibility to stand for re-election under
the companys 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 directors 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 boards 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 directors
termination was due to death, disability or ineligibility to stand for
re-election under the companys 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 directors 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 Moodys 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.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 83

2014 director compensation

The following table shows the compensation of all persons who were non-employee members of the board during 2014 for services in all capacities to TI in 2014.

					Change in
					Pension
					Value and
				Non-Equity	Nonqualified
	Fees Earned or	Stock	Option	Incentive Plan	Deferred	All Other
	Paid in	Awards	Awards	Compensation	Compensation	Compensation
Name	Cash ($) (1)	($) (2)	($) (3)	($)	Earnings (4)	($) (5)	Total ($)
R. W. Babb, Jr.	$ 110,000	$ 99,996	$ 99,993			$ 40	$ 310,029
M. A.
Blinn	$ 80,000	$ 99,996	$ 99,993			$ 40	$ 280,029
D. A. Carp	$ 80,000	$ 99,996	$ 99,993			$ 779	$ 280,768
C. S.
Cox	$ 95,000	$ 99,996	$ 99,993		$ 2,352	$ 9,040	$ 306,381
R. Kirk	$ 80,000	$ 99,996	$ 99,993			$ 40	$ 280,029
P. H.
Patsley	$ 80,000	$ 99,996	$ 99,993			$ 40	$ 280,029
R. E. Sanchez	$ 93,333	$ 99,996	$ 99,993			$ 10,040	$ 303,362
W. R.
Sanders	$ 106,667	$ 99,996	$ 99,993			$ 779	$ 307,435
R. J. Simmons	$ 80,000	$ 99,996	$ 99,993		$ 471	$ 40	$ 280,500
C. T.
Whitman	$ 85,000	$ 99,996	$ 99,993			$ 40	$ 285,029

| (1) | Includes amounts deferred at the
directors election. |
| --- | --- |
| (2) | Shown is the aggregate grant date
fair value of awards granted in 2014 calculated in accordance with
Financial Accounting Standards Board Accounting Standards Codification
Topic 718, Compensation-Stock Compensation (ASC 718). The discussion of
the assumptions used for purposes of calculating the grant date fair value
appears in Note 5 to the financial statements contained in Item 8 (Note 5
to the Financial Statements) in TIs annual report on Form 10-K for the
year ended December 31, 2014. |
| | The table below shows the
aggregate number of shares underlying outstanding restricted stock units
held by the named individuals as of December 31, 2014. |

	Restricted
	Stock Units
Name	(in Shares)
R. W. Babb, Jr.	13,293
M. A.
Blinn	4,268
D. A. Carp	29,957
C. S.
Cox	23,293
R. Kirk	4,268
P. H.
Patsley	13,293
R. E. Sanchez	10,406
W. R.
Sanders	20,893
R. J. Simmons	29,293
C. T.
Whitman	20,793

| | Each restricted stock unit
represents the right to receive one share of TI common stock. For
restricted stock units granted prior to 2007, shares are issued at the
time of mandatory retirement from the board (age 70) or upon the earlier
of termination of service from the board after completing eight years of
service or death or disability. For information regarding share issuances
under restricted stock units granted after 2006, please see the discussion
on page 83. |
| --- | --- |
| (3) | Shown is the aggregate grant date
fair value of awards granted in 2014 calculated in accordance with ASC
718. The discussion of the assumptions used for purposes of calculating
the grant date fair value appears in Note 5 to the Financial Statements in
TIs annual report on Form 10-K for the year ended December 31,
2014. |

84 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

The table below shows the aggregate number of shares underlying outstanding stock options held by the named individuals as of December 31, 2014.

	Options
Name	(in Shares)
R. W. Babb, Jr.	49,206
M. A.
Blinn	12,299
D. A. Carp	92,206
C. S.
Cox	92,206
R. Kirk	12,299
P. H.
Patsley	92,206
R. E. Sanchez	39,204
W. R.
Sanders	64,206
R. J. Simmons	49,206
C. T.
Whitman	92,206

| | The terms of these options are as
set forth on page 83 except that for options granted before November 2006,
the exercise price is the average of the high and low price of TI common
stock on the date of grant, and for options granted before 2010, the grant
becomes fully exercisable upon a change in control of TI. |
| --- | --- |
| (4) | SEC rules require the disclosure
of earnings on deferred compensation to the extent that the interest rate
exceeds a specified rate (Federal Rate), which is 120 percent of the
applicable federal long-term interest rate with compounding. Under the
terms of the Director Plan, deferred compensation cash amounts earn
interest at a rate based on Moodys Seasoned Aaa Corporate Bonds. For
2014, this interest rate exceeded the Federal Rate by 0.69 percentage
points. Shown is the amount of interest earned on the directors deferred
compensation accounts that was in excess of the Federal Rate. |
| (5) | Consists of (a) the annual cost
($40 per director) of premiums for travel and accident insurance policies,
(b) contributions under the TI Foundation matching gift program of $10,000
for Mr. Sanchez and $9,000 for Ms. Cox and (c) for Messrs. Carp and
Sanders, third-party administration fees for the Director Award Program.
Each director whose service commenced prior to June 20, 2002, is eligible
to participate in the Director Award Program, a charitable donation
program under which we will contribute a total of $500,000 per eligible
director to as many as three educational institutions recommended by the
director and approved by us. The contributions are made following the
directors death. Directors receive no financial benefit from the program,
and all charitable deductions belong to the company. In accordance with
SEC rules, we have included the companys annual costs under the program
in All Other Compensation of the directors who participate. The cost
attributable to each of Messrs. Carp and Sanders for their participation
in this program was $739. |

Executive compensation

We are providing the following advisory vote on named executive officer compensation as required by Section 14A of the Securities Exchange Act. The company holds this vote annually.

Proposal regarding advisory approval of the companys executive compensation

The board asks the shareholders to cast an advisory vote on the compensation of our named executive officers. The named executive officers are the chief executive officer, chief financial officer and three other most highly compensated executive officers, as named in the compensation tables on pages 98-110.

Specifically, we ask the shareholders to approve the following resolution:

RESOLVED, that the compensation paid to the companys named executive officers, as disclosed in this proxy statement pursuant to the Securities and Exchange Commissions compensation disclosure rules, including the Compensation Discussion and Analysis, compensation tables and narrative discussion on pages 86-110 of this proxy statement, is hereby approved.

We encourage shareholders to review the Compensation Discussion and Analysis section of the proxy statement, which follows. It discusses our executive compensation policies and programs and explains the compensation decisions relating to the named executive officers for 2014. We believe that the policies and programs serve the interests of our shareholders and that the compensation received by the named executive officers is commensurate with the performance and strategic position of the company.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 85

Although the outcome of this vote is not binding on the company or the board, the Compensation Committee of the board will consider it when setting future compensation for the executive officers.

The board of directors recommends a vote FOR the resolution approving the named executive officer compensation for 2014, as disclosed in this proxy statement.

Compensation Discussion and Analysis

This section describes TIs compensation program for executive officers. It will provide insight into the following:

| ● | The elements
of the 2014 compensation program, why we selected them and how they relate
to one another; and |
| --- | --- |
| ● | How we
determined the amount of compensation for 2014. |

Currently, TI has 10 executive officers. These executives have the broadest job responsibilities and policy-making authority in the company. We hold them accountable for the companys performance and for maintaining a culture of strong ethics. Details of compensation for our CEO, CFO and the three other highest paid individuals who were executive officers in 2014 (collectively called the named executive officers) can be found in the tables beginning on page 98.

Executive summary

| ● | TIs compensation program is structured to pay for
performance and deliver rewards that encourage executives to think and act
in both the short- and long-term interests of our shareholders. The
majority of total compensation for our executives each year comes in the
form of variable cash and equity compensation. Variable cash is tied to
the short-term performance of the company, and the value of equity is tied
to the long-term performance of the company. We believe our compensation
program holds our executive officers accountable for the financial and
competitive performance of TI. | |
| --- | --- | --- |
| ● | 2014 compensation decisions for the
CEO: | |
| | ○ | Base salary
was increased by 3.3 percent over 2013. |
| | ○ | The grant
date fair value of equity compensation awarded in 2014 was 5 percent
higher than in 2013. |
| | ○ | The bonus
decision was based primarily on the following performance results in
2014: |

| | 2014
Absolute Performance | 2014
Relative Performance ** |
| --- | --- | --- |
| Revenue Growth: Total TI Revenue Growth without
legacy wireless products * | 6.9% 11.0% | Median Above Median |
| Profit from Operations as a % of Revenue (PFO%) | 30.3% | Above
Median |
| Total Shareholder Return (TSR) | 25.1% | Above
Median |
| Year-on-Year Change in CEO Bonus (2014 bonus compared to
2013) | 15%
change | |

| * | Revenue growth for total TI excluding wireless products
that we exited by year-end 2013. See note 3 on page 92. |
| --- | --- |
| ** | Relative to semiconductor
competitors as outlined on page 91. Includes estimates and projections of
certain competitors financial results. See pages 92-93 for details of the
Compensation Committees assessment of TIs
performance. |

●
○	Executive
officers do not have employment contracts and are not guaranteed salary
increases or bonus amounts.
○	We have
never repriced stock options. We do not grant reload options. We grant
equity compensation with double-trigger change-in-control terms, which
accelerate the vesting of grants only if the grantee has been terminated
involuntarily within a limited time after a change in control of the
company.

86 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

| ○ | Bonus and
equity compensation awards are subject to clawback under the committees
policy described on page 95. |
| --- | --- |
| ○ | We do not
provide excessive perquisites. We provide no tax gross-ups for
perquisites. |
| ○ | We do not
guarantee a return or provide above-market returns on compensation that
has been deferred. |
| ○ | Pension
benefits are calculated on salary and bonus only; the proceeds earned on
equity or other performance awards are not part of the pension
calculation. |

The committees strategy for setting cash and non-cash compensation is described in the table that follows immediately below. Its compensation decisions for the named executive officers for 2014 are discussed on pages 89-94. Benefit programs in which the executive officers participate are discussed on pages 95-96. Perquisites are discussed on page 96.

Detailed discussion

Compensation philosophy and elements The Compensation Committee of TIs board of directors is responsible for setting the compensation of all TI executive officers. The committee consults with the other independent directors and its compensation consultant, Pearl Meyer & Partners, before setting annual compensation for the executives. The committee chair regularly reports on committee actions at board meetings.

The primary elements of our executive compensation program are as follows:

Near-term compensation, paid in cash

Element	Purpose	Strategy	Terms
Base salary	Basic, least variable form of
compensation	Pay below market median in order to weight total compensation to
the performance-based elements described below in this chart.	Paid twice monthly
Profit sharing	Broad-based program designed to
emphasize that each employee contributes to the companys profitability
and can share in it	Pay according to a formula that focuses
employees on a company goal, and at a level that will affect behavior.
Profit sharing is paid in addition to any performance bonus awarded for
the year. For the last ten years, the formula has been
based on company-level annual operating profit margin. The formula was set
by the TI board. The committees practice has been not to adjust amounts
earned under the formula.	Payable in a single cash payment
shortly after the end of the performance year As in recent years, the formula for
2014 was: ● Below 10% company-level annual operating profit as a
percentage of revenue (Margin): no profit sharing ● At 10% Margin: profit sharing = 2% of base
salary ● At Margin above 10%: profit sharing increases by 0.5% of
base salary for each percentage point of Margin between 10% and 24%, and
1% of base salary for each percentage point of Margin above 24%. The
maximum profit sharing is 20% of base salary. In 2014, TI delivered Margin of
30.3%. As a result, all eligible employees, including executive officers,
received profit sharing of 15.3% of base
salary.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 87

Element	Purpose	Strategy	Terms
Performance bonus	To motivate executives and reward
them according to the companys relative and absolute performance and the
executives individual performance	Determined primarily on the basis of
one-year and three-year company performance on certain measures (revenue
growth percent, operating margin and total shareholder return 1 )
as compared to competitors and on our strategic progress in key markets
and with customers. These factors have been chosen to reflect our
near-term financial performance as well as our progress in building
long-term shareholder value. The committee aims to pay total cash
compensation (base salary, profit sharing and bonus) appropriately above
median if company performance is above that of competitors, and pay total
cash compensation appropriately below the median if company performance is
below competitors. The committee does not rely on
formulas or performance targets or thresholds. Instead it uses its
judgment based on its assessment of the factors described
above.	Determined by the committee and paid in a single payment after the
performance year
Long-term compensation, awarded
in equity
Stock options and
restricted stock units	Alignment with shareholders;
long-term focus; retention, particularly with respect to restricted stock
units	We grant a combination of
nonqualified stock options and restricted stock units, generally targeted
at the median level of equity compensation awarded to executives in
similar positions at the Comparator Group.	The terms and conditions of stock
options and restricted stock units are summarized on pages 102-103. The
committees grant procedures are described on page
95.

Comparator group The Compensation Committee considers the market level of compensation when setting the salary, bonuses and equity compensation of the executive officers. The committee targets salary below market median in order to weight total compensation to performance-based elements. To estimate the market level of pay, the committee uses information provided by its compensation consultant and TIs Compensation and Benefits organization about compensation paid to executives in similar positions at a peer group of companies (the Comparator Group).

The committee sets the Comparator Group. In general, the Comparator Group companies (1) are U.S.-based, (2) engage in the semiconductor business or other electronics or information technology activities, (3) have executive positions comparable in complexity to those of TI and (4) use forms of executive compensation comparable to TIs.

Shown in the table below is the Comparator Group used for the compensation decisions for 2014.

| Analog Devices,
Inc. | Intel
Corporation |
| --- | --- |
| Applied
Materials, Inc. | Motorola
Solutions, Inc. |
| Broadcom
Corporation | QUALCOMM
Incorporated |
| Computer
Sciences Corporation | Seagate
Technology |
| eBay
Inc. | TE Connectivity
Ltd. |
| EMC
Corporation | Western Digital
Corporation |
| Emerson Electric
Co. | Xerox
Corporation |

1 Total shareholder return refers to the percentage change in the value of a stockholders investment in a company over the relevant time period, as determined by dividends paid and the change in the companys share price during the period. See page 93.

88 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

The committee set the Comparator Group in July 2013 for the base salary and equity compensation decisions it made in January 2014. For a discussion of the factors considered by the committee in setting the Comparator Group, please see page 72 of the companys 2014 proxy statement.

In July 2014, the committee conducted its regular review of the Comparator Group in terms of industry, revenue and market capitalization. With the advice of its compensation consultant, the committee determined that the group was still comparable overall to TI. Accordingly, it used the same Comparator Group for the bonus decisions in January 2015 relating to 2014 performance as it used to set salary and equity compensation in January 2014. The table below compares the group to TI in terms of revenue and market capitalization.

	Revenue	Market Cap
Company	($ billion) *	($ billion) *
Intel Corporation	55.0	174.9
QUALCOMM
Corporation	26.5	123.3
Emerson Electric Co.	24.5	42.6
EMC
Corporation	24.1	60.4
Xerox Corporation	21.1	15.6
eBay
Inc.	17.5	69.6
Western Digital Corporation	15.3	25.5
TE Connectivity
Ltd.	14.1	25.5
Seagate Technology	14.0	21.6
Computer
Sciences Corporation	12.9	8.8
Applied Materials, Inc.	9.1	30.2
Broadcom
Corporation	8.3	25.4
Motorola Solutions, Inc.	6.6	16.0
Analog Devices, Inc.	2.9	17.3
Median	14.7	25.5
Texas
Instruments Incorporated	13.0	56.3

Trailing four-quarter revenue as reported by Thomson Reuters on February 2, 2015. Market capitalization as of December 31, 2014.

Analysis of compensation determinations for 2014

Total compensation Before finalizing the compensation of the executive officers, the committee reviewed all elements of compensation. The information included total cash compensation (salary, profit sharing and projected bonus), the grant date fair value of equity compensation, the impact that proposed compensation would have on other compensation elements such as pension, and a summary of benefits that the executives would receive under various termination scenarios. The review enabled the committee to see how various compensation elements relate to one another and what impact its decisions would have on the total earnings opportunity of the executives. In assessing the information, the committee did not target a specific level of total compensation or use a formula to allocate compensation among the various elements. Instead, it used its judgment in assessing whether the total was consistent with the objectives of the program. Based on this review, the committee determined that the level of compensation was appropriate.

Base salary The committee set the 2014 rate of base salary for the named executive officers as follows:

Officer	2014 Annual Rate	2013 Annual Rate
R. K. Templeton	$ 1,110,000		3.3 %
K. P.
March	$ 630,000		3.3 %
B. T. Crutcher	$ 775,000	*	14.8 %
S. A.
Anderson	$ 550,000	*	20.9 %
K. J. Ritchie	$ 650,000		4.0 %

2014 annual rate for Mr. Crutcher and Mr. Anderson includes salary increase approved in June 2014.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 89

The committee set the 2014 base-salary rate for each of the named executive officers in January 2014. In keeping with its strategy, the committee set the annual base-salary rates to be below the estimated median level of salaries expected to be paid to similarly situated executives of the Comparator Group in 2014.

In June 2014, the committee increased the salary rate for Mr. Crutcher and Mr. Anderson as they assumed new leadership roles. The salary adjustments were consistent with the policy described in the preceding paragraph.

The salary differences between the named executive officers were driven primarily by the market rate of pay for each officer, and not the application of a formula designed to maintain a differential between the officers.

Equity compensation In 2014, the committee awarded equity compensation to each of the named executive officers. The grants are shown in the Grants of plan-based awards in 2014 table on page 100. The grant date fair value of the awards is reflected in that table and in the Stock Awards and Option Awards columns of the 2014 summary compensation table on page 98. The table below is provided to assist the reader in comparing the grant date fair values and number of shares for each of the years shown in the summary compensation table.

		Grant Date	Stock Options	Stock Units
Officer	Year	Fair Value *	(in Shares)	(in Shares)
R. K. Templeton	2014	$ 9,800,034		602,692	111,137
	2013	$ 9,299,374		525,000	175,000
	2012	$ 9,074,035		475,000	158,334
K. P.
March	2014	$ 2,700,039		166,048	30,620
	2013	$ 2,656,964		150,000	50,000
	2012	$ 2,865,478		150,000	50,000
B. T. Crutcher	2014	$ 4,500,008		276,747	51,032
	2013	$ 3,985,446		225,000	75,000
	2012	$ 3,581,848		187,500	62,500
		$ 2,760,000	**		100,000	**
S. A.
Anderson	2014	$ 2,700,039		166,048	30,620
		$ 2,000,003	***		41,745	***
K. J. Ritchie	2014	$ 4,000,015		245,997	45,362
	2013	$ 3,542,630		200,000	66,667
	2012	$ 3,343,079		175,000	58,334

| * | See notes 2 and 3 to the summary
compensation table on page 98 for information on how grant date fair value
was calculated. |
| --- | --- |
| ** | Retention grant made in June
2012, when Mr. Crutcher assumed new responsibilities. |
| *** | Retention grant made in June
2014, when Mr. Anderson assumed new
responsibilities. |

In January 2014, the committee awarded equity compensation to each of the named executive officers. The committees objective was to award to those officers equity compensation that had a grant date fair value at approximately the median market level, in this case the 40 th to 60 th percentile of the 3-year average of equity compensation (including an estimate of amounts for 2014) granted by the Comparator Group.

In assessing the market level, the committee considered information presented by TIs Compensation and Benefits organization (prepared using data provided by the committees compensation consultant) on the estimated value of the awards expected to be granted by the Comparator Group to similarly situated executives. The award value was estimated using the same methodology used for financial accounting.

For each officer, the committee set the desired grant value. The committee decided to allocate the value equally between restricted stock units and options for each officer, to give equal emphasis to promoting retention, motivating the executive and aligning his interests with those of shareholders.

90 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Before approving the grants, the committee reviewed the amount of unvested equity compensation held by the officers to assess its retention value. In making this assessment, the committee used its judgment and did not apply any formula, threshold or maximum. This review did not result in an increase or decrease of the awards.

The exercise price of the options was the closing price of TI stock on January 23, 2014, the second trading day after the company released its annual and fourth quarter financial results for 2013. All grants were made under the Texas Instruments 2009 Long-Term Incentive Plan, which shareholders approved in April 2009.

In addition to the January 2014 awards described above, the committee awarded restricted stock units to Mr. Anderson as he assumed new and broader responsibilities in June 2014. The award was intended to increase the retention value of his outstanding equity compensation. In setting the value, the committee applied its judgment following a review of the current retention value.

All grants have the terms described on pages 102-103. The differences in the equity awards between the named executive officers were primarily the result of differences in the applicable estimated market level of equity compensation for their positions, and not the application of any formula designed to maintain differentials between the officers.

Bonus In January 2015, the committee set the 2014 bonus compensation for executive officers based on its assessment of 2014 performance. In setting the bonuses, the committee used the following performance measures to assess the company:

| ● | The relative one-year and three-year performance of TI as
compared with competitor companies, as measured by | |
| --- | --- | --- |
| | ○ | revenue
growth, |
| | ○ | operating
profit as a percentage of revenue, |
| | ○ | total
shareholder return; and |
| ● | The absolute one-year and three-year performance of TI on
the above measures. | |

In addition, the committee considered our strategic progress by reviewing how competitive we are in key markets with our core products and technologies, as well as the strength of our relationships with customers.

One-year relative performance on the three measures and one-year strategic progress were the primary considerations in the committees assessment of the companys 2014 performance. In assessing performance, the committee did not use formulas, thresholds or multiples. Because market conditions can quickly change in our industry, thresholds established at the beginning of a year could prove irrelevant by year-end. The committee believes its approach, which assesses the companys relative performance in hindsight after year-end, gives it the insight to most effectively and critically judge results and encourages executives to pursue strategies that serve the long-term interests of the company and its shareholders.

In the comparison of relative performance, the committee used the following companies (the competitor companies): 2

| Advanced Micro
Devices, Inc. | Linear
Technology Corporation |
| --- | --- |
| Altera
Corporation | Marvell
Technology Group Ltd. |
| Analog Devices,
Inc. | Maxim Integrated
Products, Inc. |
| Atmel
Corporation | Microchip
Technology Incorporated |
| Broadcom
Corporation | NVIDIA
Corporation |
| Fairchild
Semiconductor International, Inc. | NXP
Semiconductors N.V. |
| Freescale
Semiconductor, Ltd. | ON Semiconductor
Corporation |
| Infineon
Technologies AG | QUALCOMM
Incorporated |
| Intel
Corporation | STMicroelectronics N.V. |
| Intersil
Corporation | Xilinx,
Inc. |

This list includes both broad-based and niche suppliers that operate in our key markets or offer technology that competes with our products. The committee considers annually whether the list is still appropriate in terms of revenue, market capitalization and changes in business activities of the companies. In July 2014, the committee removed LSI Corporation from the list following its acquisition by another company. The committee made no other change to the list of competitor companies in 2014.

2 To the extent the companies had not released financial results for the year or most recent quarter, the committee based its evaluation on estimates and projections of the companies financial results for 2014.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 91

Assessment of 2014 performance

The committee spent extensive time in December and January assessing TIs results and strategic progress for 2014. The committee considered both quantitative and qualitative measures and applied judgment in its assessment. The companys performance improved from the prior year on both an absolute and relative basis (see list of competitor companies above), putting it in a stronger position for the near and long terms. Commensurate with this improvement, the committee set bonuses 15 percent higher than last year for the named executive officers, with two exceptions for promotions. The assessments for each measure are below.

Revenue and margin

●	Annual performance
	○	TI revenue grew 6.9 percent,
consistent with the median growth rate as compared with competitor
companies. However, this included a $445 million revenue decline in legacy
wireless products, for which the company has had publicly stated exit
plans under way for a number of years. Excluding legacy wireless products,
TIs revenue grew 11 percent, which was better than the median comparison
with competitors. 3 Revenues for the companys core
businesses of Analog and Embedded Processing were up 12.6 percent and 11.8
percent, respectively, resulting in share gains for each. These core
businesses have gained share in each of the last five
years.
	○	Operating
profit margin was 30.3 percent, above the median comparison with
competitors.
●	Three-year
performance
	○	Compound annual revenue growth for
2012-2014 was -1.7 percent, which was below the median competitor
comparison. Excluding the decline in legacy wireless products, compound
annual revenue growth was 4.7 percent, which was above the median
competitor comparison.
	○	Average operating profit for
2012-2014 was 23 percent, which was above the median competitor
comparison.
Total shareholder return
(TSR)
●	TSR was 25.1 percent, which was
better than the median comparison with competitors.
●	The company again generated strong
cash, with free cash flow at 26.9 percent of revenue. 4 More
than 100 percent of free cash flow was returned to shareholders in 2014
through share repurchases and dividends. Share repurchases of $2.8 billion
reduced outstanding shares by 3.3 percent (net of stock issuances during
the year). The quarterly dividend rate increased 13.3 percent (the
13 th increase in eleven years). Share repurchases and dividend
increases are important elements of TIs capital management
strategy.
●	The balance sheet remained robust,
ending the year with cash and short-term investments of $3.5
billion.
●	The three-year compound annual
growth rate for TSR was 25.8 percent, which was above the median
competitor comparison.
Strategic
progress
●	The companys strategic focus on
Analog and Embedded Processing semiconductors continues to provide the
foundation for strong results. These core businesses serve highly diverse
markets with thousands of applications and have dependable long-term
growth opportunities. In 2014, 83 percent of TIs revenue came from Analog
and Embedded Processing semiconductors, up 4 percentage points from the
prior year.
●	TI again improved the diversity of
its customer base in 2014 by increasing the percent of revenue from
industrial and automotive applications by one point each, and by
increasing the percentage of revenue that comes from small- to mid-sized
customers. This was the third consecutive year of similar improvement.
Diversity provides better stability because success does not depend on a
single market or customer.

| 3 | Revenue excluding legacy wireless
products (baseband products, and OMAP applications processors and
connectivity products sold into smartphone and consumer tablet
applications) is a non-GAAP financial measure. For a reconciliation to
GAAP, see the Appendix to this proxy statement. |
| --- | --- |
| 4 | Free cash flow was calculated by
subtracting Capital expenditures from the GAAP-based Cash flows from
operating activities. Free cash flow and the ratios based on it are
non-GAAP financial measures. For a reconciliation to GAAP, see the
Appendix to this proxy statement. |

92 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

| ● | TI is the only competitor with
in-house capability to produce high volumes of Analog semiconductors on
300-millimeter wafers. In 2014, the company initiated plans to increase
Analog production on 300-millimeter wafers. Such production provides cost
advantages that will further improve margins and cash generation over the
long term. TI will leverage existing facilities along with equipment that
has been strategically acquired at low price points, enabling the company
to grow, yet keep capital spending levels at about 4 percent of
revenue. |
| --- | --- |
| ● | The committee determined in
conclusion that TIs strategic condition was strengthened by managements
decisions in 2014, noting sustainable advantages in the companys
manufacturing and technology, the breadth and differentiation of its
product portfolio, and the diversity of markets and customers it
serves. |

Performance summary

Revenue growth: total TI	1-Year — 6.9 %	3-Year — -1.7 %	CAGR
Revenue growth
without legacy wireless products	11.0 %	4.7 %	CAGR
Operating margin	30.3 %	23.0 %	average
Free cash flow
as % of revenue	26.9 %	24.7 %	average
% of free cash flow returned to shareholders	118.4 %	115.1 %	average
Increase in
quarterly dividend rate	13.3 %	100.0 %
Total shareholder return (TSR)	25.1 %	25.8 %	CAGR

CAGR (compound annual growth rate) is calculated using the formula (Ending Value/Beginning Value) 1/number of years -1.

One-year TSR % = (adjusted closing price of the companys stock at year-end 2014, divided by 2013 year-end adjusted closing price) minus 1. The adjusted closing price is as shown under Historical Prices for the companys stock on Yahoo Finance and reflects stock splits and reinvestment of dividends.

Three-year TSR CAGR % = (adjusted closing price of the companys stock at year-end 2014, divided by 2011 year-end adjusted closing price) ⅓ minus 1. Adjusted closing price is as described above.

Before setting the bonuses for the named executive officers, the committee considered the officers individual performance. The performance of the CEO was judged according to the performance of the company. For the other officers, the committee considered the factors described below in assessing individual performance. In making this assessment, the committee did not apply any formula or performance targets.

Mr. March is the chief financial officer. The committee noted the financial management of the company.

In June 2014, Mr. Crutcher became responsible for all of the companys product lines and sales activities. Previously he was responsible for the companys analog semiconductor product lines. The committee noted the financial performance and strategic position of the product lines and activities for which he is responsible.

In June 2014, Mr. Anderson became responsible for the companys analog semiconductor product lines. Previously he was responsible for the companys High Performance Analog product line. The committee noted the financial performance and strategic position of the product lines for which he is responsible.

Mr. Ritchie is responsible for the companys semiconductor manufacturing operations. The committee noted the performance of those operations, including their cost-competitiveness and inventory management.

The bonuses awarded for 2014 performance are shown in the table on page 94. The differences in the amounts awarded to the named executive officers were primarily the result of differences in the officers level of responsibility and the applicable market level of total cash compensation expected to be paid to similarly situated officers in the Comparator Group. The bonus of each named executive officer was paid under the Executive Officer Performance Plan described on pages 97 and 100.

Results of the compensation decisions Results of the compensation decisions made by the committee relating to the named executive officers for 2014 are summarized in the following table. This table is provided as a supplement to the summary compensation table on page 98 for investors who may find it

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 93

useful to see the data presented in this form. Although the committee does not target a specific level of total compensation, it considers information similar to that in the table to ensure that the sum of these elements is, in its judgment, in a reasonable range. The principal differences between this table and the summary compensation table are explained in footnote 5 below. 5

						Equity Compensation
		Salary				(Grant Date
Officer	Year	(Annual Rate)	Profit Sharing		Bonus	Fair Value)	Total
R. K.
Templeton	2014	$ 1,110,000		$ 168,941	$ 3,450,000	$ 9,800,034	$ 14,528,975
	2013	$ 1,075,000		$ 92,199	$ 3,000,000	$ 9,299,374	$ 13,466,573
	2012	$ 1,040,000		$ 48,581	$ 2,700,000	$ 9,074,035	$ 12,862,616
K. P. March	2014	$ 630,000		$ 95,884	$ 1,110,000	$ 2,700,039	$ 4,535,923
	2013	$ 610,000		$ 52,317	$ 965,000	$ 2,656,964	$ 4,284,281
	2012	$ 590,000		$ 27,573	$ 875,000	$ 2,865,478	$ 4,358,051
B. T.
Crutcher	2014	$ 775,000	*	$ 112,860	$ 1,510,000	$ 4,500,008	$ 6,897,868
	2013	$ 675,000		$ 57,728	$ 1,210,000	$ 3,985,446	$ 5,928,174
	2012	$ 630,000	**	$ 27,573	$ 1,100,000	$ 6,341,848	$ 8,099,421
S. A. Anderson	2014	$ 550,000	*	$ 77,635	$ 925,000	$ 4,700,042	$ 6,252,677
K. J.
Ritchie	2014	$ 650,000		$ 98,872	$ 1,265,000	$ 4,000,015	$ 6,013,887
	2013	$ 625,000		$ 53,571	$ 1,100,000	$ 3,542,630	$ 5,321,201
	2012	$ 600,000		$ 27,945	$ 1,000,000	$ 3,343,079	$ 4,971,024

| * | Annual rate
effective July 2014. |
| --- | --- |
| ** | Annual rate effective June
2012. |

For Mr. Templeton, the Total was higher for 2014 than for 2013 due about equally to the higher level of his bonus and the higher grant date fair value of his equity compensation. For Mr. March, the Total was higher for 2014 primarily due to the higher level of his bonus. For the other officers, the Total was higher for 2014 primarily due to the higher grant date fair value of their equity compensation.

The compensation decisions shown above resulted in the following 2014 compensation mix for the named executive officers:

CEO	Other NEOs *
●	●
●
* Average data for the named
executive officers other than Mr.
Templeton.

5 This table shows the annual rate of base salary as set by the committee. In the summary compensation table, the Salary column shows the actual salary paid in the year. This table has separate columns for profit sharing and bonus. In the summary compensation table, profit sharing and bonus are aggregated in the column for Non-Equity Incentive Plan Compensation, in accordance with SEC requirements. Please see notes 2 and 3 to the summary compensation table for information about how grant date fair value was calculated.

94 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Equity dilution The Compensation Committees goal is to keep net annual dilution from equity compensation under 2 percent. Net annual dilution means the number of shares under equity awards granted by the committee each year to all employees (net of award forfeitures) as a percentage of the shares of the companys outstanding common stock. Equity awards granted in 2014 resulted in 1.4 percent net annual dilution.

Process for equity grants The Compensation Committee makes grant decisions for equity compensation at its January meeting each year. The dates on which these meetings occur are generally set three years in advance. The January meetings of the board and the committee generally occur in the week or two before we announce our financial results for the previous quarter and year.

On occasion, the committee may grant stock options or restricted stock units to executives at times other than January. For example, it has done so in connection with job promotions and for purposes of retention.

We do not back-date stock options or restricted stock units. We do not accelerate or delay the release of information due to plans for making equity grants.

If the committee meeting falls in the same month as the release of the companys financial results, the committees practice is to make grants effective (i) after the results have been released or (ii) on the meeting day if later. In other months, its practice is to make them effective on the day of committee action. The exercise price of stock options is the closing price of TI stock on the effective date of the grant.

Recoupment policy The committee has a policy concerning recoupment (clawback) of executive bonuses and equity compensation. Under the policy, in the event of a material restatement of TIs financial results due to misconduct, the committee will review the facts and circumstances and take the actions it considers appropriate with respect to the compensation of any executive officer whose fraud or willful misconduct contributed to the need for such restatement. Such action may include (a) seeking reimbursement of any bonus paid to such officer exceeding the amount that, in the judgment of the committee, would have been paid had the financial results been properly reported and (b) seeking to recover profits received by such officer during the twelve months after the restated period under equity compensation awards. All determinations by the committee with respect to this policy are final and binding on all interested parties.

Most recent stockholder advisory vote on executive compensation In April 2014, our shareholders cast an advisory vote on the companys executive compensation decisions and policies as disclosed in the proxy statement issued by the company in March 2014. Approximately 97 percent of the shares voted on the matter were cast in support of the compensation decisions and policies as disclosed. The committee considered this result and determined that it was not necessary at this time to make any material changes to the companys compensation policies and practices in response to the advisory vote.

Benefits

Retirement plans The executive officers participate in our retirement plans under the same rules that apply to other U.S. employees. We maintain these plans to have a competitive benefits program and for retention.

Like other established U.S. manufacturers, we have had a U.S. qualified defined benefit pension plan for many years. At its origin, the plan was designed to be consistent with those offered by other employers in the diverse markets in which we operated, which at the time included consumer and defense electronics as well as semiconductors and materials products. In order to limit the cost of the plan, we closed the plan to new participants in 1997. We gave U.S. employees as of November 1997 the choice to remain in the plan, or to have their plan benefits frozen (i.e., no benefit increase attributable to years of service or change in eligible earnings) and begin participating in an enhanced defined contribution plan. Mr. Templeton and Mr. Crutcher chose not to remain in the defined benefit plan. As a result, their benefits under that plan were frozen in 1997 and they participate in the enhanced defined contribution plan. Mr. Anderson, who joined the company in 1999, participates in the enhanced defined contribution plan. The other named executive officers have continued their participation in the defined benefit pension plan.

The Internal Revenue Code (IRC) imposes certain limits on the retirement benefits that may be provided under a qualified plan. To maintain the desired level of benefits, we have non-qualified defined benefit pension plans for participants in the qualified pension plan. Under the non-qualified plans, participants receive benefits that would ordinarily be paid under the qualified pension plan but for the limitations under the IRC. For additional information about the defined benefit plans, please see pages 104-106.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 95

Employees accruing benefits in the qualified pension plan, including the named executive officers other than Mr. Templeton, Mr. Crutcher and Mr. Anderson, also are eligible to participate in a qualified defined contribution plan that provides employer matching contributions. The enhanced defined contribution plan, in which Mr. Templeton, Mr. Crutcher and Mr. Anderson participate, provides for a fixed employer contribution plus an employer matching contribution.

In general, if an employee who participates in the pension plan (including an employee whose benefits are frozen as described above) dies after having met the requirements for normal or early retirement, his or her beneficiary will receive a benefit equal to the lump-sum amount that the participant would have received if he or she had retired before death. Having already reached the age of 55 and at least 20 years of employment, Mr. Templeton, Mr. March and Mr. Ritchie are eligible for early retirement under the pension plans.

Because benefits under the qualified and non-qualified defined benefit pension plans are calculated on the basis of eligible earnings (salary and bonus), an increase in salary or bonus may result in an increase in benefits under the plans. Salary or bonus increases for Mr. Templeton and Mr. Crutcher do not result in greater benefits for them under the companys defined benefit pension plans because their benefits under those plans were frozen in 1997. Mr. Anderson does not participate in the companys defined benefit pension plans. The committee considers the potential effect on the executives retirement benefits when it sets salary and performance bonus levels.

Deferred compensation Any U.S. employee whose base salary and management responsibility exceed a certain level may defer the receipt of a portion of his or her salary, bonus and profit sharing. Rules of the U.S. Department of Labor require that this plan be limited to a select group of management or highly compensated employees. The plan allows employees to defer the receipt of their compensation in a tax-efficient manner. Eligible employees include, but are not limited to, the executive officers. We have the plan to be competitive with the benefits packages offered by other companies.

The executive officers deferred compensation account balances are unsecured and all amounts remain part of the companys operating assets. The value of the deferred amounts tracks the performance of investment alternatives selected by the participant. These alternatives are a subset of those offered to participants in the defined contribution plans described above. The company does not guarantee any minimum return on the amounts deferred. In accordance with SEC rules, no earnings on deferred compensation are shown in the summary compensation table on page 98 for 2014 because no above market rates were earned on deferred amounts in that year.

Employee stock purchase plan We have an employee stock purchase plan. Under the plan, which our shareholders approved, all employees in the U.S. and certain other countries may purchase a limited number of shares of the companys common stock at a 15 percent discount. The plan is designed to offer the broad-based employee population an opportunity to acquire an equity interest in the company and thereby align their interests with those of shareholders. Consistent with our general approach to benefit programs, executive officers are also eligible to participate.

Health-related benefits Executive officers are eligible under the same plans as all other U.S. employees for medical, dental, vision, disability and life insurance. These benefits are intended to be competitive with benefits offered in the semiconductor industry.

Other benefits Executive officers receive only a few benefits that are not available to all other U.S. employees. The CEO is eligible for a company-paid physical and financial counseling. In addition, the board of directors has determined that for security reasons, it is in the companys interest to require the CEO to use company aircraft for personal air travel. Please see pages 99 (footnote 6) and 108 for further details. The company provides no tax gross-ups for perquisites to any of the executive officers.

Compensation following employment termination or change in control None of the executive officers has an employment contract. Executive officers are eligible for benefits on the same terms as other U.S. employees upon termination of employment or a change in control of the company. The current programs are described under the heading Potential payments upon termination or change in control, beginning on page 107. None of the few additional benefits that the executive officers receive continue after termination of employment, except the amount for financial counseling is provided in the following year in the event of retirement. The committee reviews the potential impact of these programs before finalizing the annual compensation for the named executive officers. The committee did not raise or lower compensation for 2014 based on this review.

96 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

The Texas Instruments 2009 Long-Term Incentive Plan generally establishes double-trigger change-in-control terms for grants made in 2010 and later years. Under those terms, options become fully exercisable and shares are issued under restricted stock unit awards (to the extent permitted by Section 409A of the IRC) if the grantee is involuntarily terminated within 24 months after a change in control of TI. These terms are intended to encourage employees to remain with the company through a transaction while reducing employee uncertainty and distraction in the period leading up to any such event.

Stock ownership guidelines and policy against hedging Our board of directors has established stock ownership guidelines for executive officers. The guideline for the CEO is four times base salary or 125,000 shares, whichever is less. The guideline for other executive officers is three times base salary or 25,000 shares, whichever is less. Executive officers have five years from their election as executive officers to reach these targets. Directly owned shares and restricted stock units count toward satisfying the guidelines.

Short sales of TI stock by our executive officers are prohibited. It is against TI policy for any employee, including an executive officer, to engage in trading in puts (options to sell at a fixed price on or before a certain date), calls (similar options to buy), or other options or hedging techniques on TI stock.

Consideration of tax and accounting treatment of compensation Section 162(m) of the IRC generally denies a deduction to any publicly held corporation for compensation paid in a taxable year to the companys CEO and three other highest compensated officers excluding the CFO, to the extent that the officers compensation (other than qualified performance-based compensation) exceeds $1 million. The Compensation Committee considers the impact of this deductibility limit on the compensation that it intends to award. The committee exercises its discretion to award compensation that does not meet the requirements of Section 162(m) when applying the limits of Section 162(m) would frustrate or be inconsistent with our compensation policies and/or when the value of the foregone deduction would not be material. The committee has exercised this discretion when awarding restricted stock units that vest over time, without performance conditions to vesting. The committee believes it is in the best interest of the company and our shareholders that restricted stock unit awards provide for the retention of our executive officers in all market conditions.

The Texas Instruments Executive Officer Performance Plan is intended to ensure that performance bonuses under the plan are fully tax deductible under Section 162(m). The plan, which shareholders approved in 2002, is further described on page 100. The committees general policy is to award bonuses within the plan, although the committee reserves the discretion to pay a bonus outside the plan if it determines that it is in the best interest of the company and our shareholders to do so. The committee set the bonuses of the named executive officers for 2014 performance at the levels described on page 94. The bonuses were awarded within the plan.

When setting equity compensation, the committee considers the cost for financial reporting purposes of equity compensation it intends to grant. Its consideration of the cost of grants made in 2014 is discussed on pages 90-91 above.

Compensation Committee report

The Compensation Committee of the board of directors has furnished the following report:

The committee has reviewed and discussed the Compensation Discussion and Analysis (CD&A) with the companys management. Based on that review and discussion, the committee has recommended to the board of directors that the CD&A be included in the companys annual report on Form 10-K for 2014 and the companys proxy statement for the 2015 annual meeting of stockholders.

Robert E. Sanchez, Chair Pamela H. Patsley Christine Todd Whitman

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 97

2014 summary compensation table

The table below shows the compensation of the companys CEO, CFO and each of the other three most highly compensated individuals who were executive officers during 2014 (collectively called the named executive officers) for services in all capacities to the company in 2014. For a discussion of the amount of a named executive officers salary and bonus in proportion to his total compensation, please see the CD&A on pages 86-94.

							Change in
							Pension Value
							and
						Non-Equity	Nonqualified
				Stock	Option	Incentive Plan	Deferred	All Other
Name and
Principal		Salary	Bonus	Awards	Awards	Compensation	Compensation	Compensation
Position	Year	($)	($) (1)	($) (2)	($) (3)	($) (4)	Earnings ($) (5)	($) (6)	Total ($)
Richard K. Templeton	2014	$ 1,107,083		$ 4,900,030	$ 4,900,004	$ 3,618,941	$ 199,552	$ 318,084	$ 15,043,694
Chairman, President	2013	$ 1,072,083		$ 5,740,000	$ 3,559,374	$ 3,092,199		$ 249,203	$ 13,712,859
& Chief Executive
Officer	2012	$ 1,035,841		$ 5,123,688	$ 3,950,347	$ 2,748,581	$ 185,472	$ 272,710	$ 13,316,639
Kevin P.
March	2014	$ 628,333		$ 1,350,036	$ 1,350,003	$ 1,205,884	$ 1,621,825	$ 20,509	$ 6,176,590
Senior Vice President	2013	$ 608,333		$ 1,640,000	$ 1,016,964	$ 1,017,317		$ 8,243	$ 4,290,857
& Chief Financial
Officer	2012	$ 587,917		$ 1,618,000	$ 1,247,478	$ 902,573	$ 1,065,717	$ 20,244	$ 5,441,929
Brian T. Crutcher	2014	$ 739,583		$ 2,250,001	$ 2,250,007	$ 1,622,860	$ 1,112	$ 110,688	$ 6,974,251
Executive Vice President	2013	$ 671,250		$ 2,460,000	$ 1,525,446	$ 1,267,728		$ 106,655	$ 6,031,079
	2012	$ 587,917		$ 4,782,500	$ 1,559,348	$ 1,127,573	$ 1,005	$ 95,375	$ 8,153,718
Stephen A.
Anderson	2014	$ 508,750		$ 3,350,039	$ 1,350,003	$ 1,002,635		$ 74,202	$ 6,285,629
Senior Vice President
Kevin J. Ritchie	2014	$ 647,917		$ 2,000,011	$ 2,000,004	$ 1,363,872	$ 2,146,473	$ 5,200	$ 8,163,477
Senior Vice President	2013	$ 622,917		$ 2,186,678	$ 1,355,952	$ 1,153,571		$ 7,427	$ 5,326,545
	2012	$ 595,835		$ 1,887,688	$ 1,455,391	$ 1,027,945	$ 1,371,918	$ 19,847	$ 6,358,624

| (1) | Performance bonuses for 2014 were
paid under the Texas Instruments Executive Officer Performance Plan. In
accordance with SEC requirements, these amounts are reported in the
Non-Equity Incentive Plan Compensation column. |
| --- | --- |
| (2) | Shown is the aggregate grant date
fair value of restricted stock unit (RSU) awards calculated in accordance
with ASC 718. The discussion of the assumptions used for purposes of the
valuation of the awards granted in 2014 appears in Note 5 to the Financial
Statements in TIs annual report on Form 10-K for the year ended December
31, 2014. For a description of the grant terms, please see page 103. The
discussion of the assumptions used for purposes of the valuation of the
awards granted in 2013 and 2012 appears in Note 5 in Exhibit 13 to,
respectively, TIs annual report on Form 10-K for the year ended December
31, 2013, and TIs annual report on Form 10-K for the year ended December
31, 2012. |
| (3) | Shown is the aggregate grant date
fair value of options calculated in accordance with ASC 718. The
discussion of the assumptions used for purposes of the valuation of
options granted in 2014 appears in Note 5 to the Financial Statements in
TIs annual report on Form 10-K for the year ended December 31, 2014. For
a description of the grant terms, please see page 102. The discussion of
the assumptions used for purposes of the valuation of the awards granted
in 2013 and 2012 appears in Note 5 in Exhibit 13 to, respectively, TIs
annual report on Form 10-K for the year ended December 31, 2013, and TIs
annual report on Form 10-K for the year ended December 31,
2012. |

98 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

| (4) | Consists of performance bonus and
profit sharing for 2014. Please see page 94 for the amounts of bonus and
profit sharing paid to each of the named executive officers for
2014. |
| --- | --- |
| (5) | The company does not pay
above-market earnings on deferred compensation. Therefore, no amounts are
reported in this column for deferred compensation. The amounts in this
column represent the change in the actuarial value of the named executive
officers benefits under the qualified defined benefit pension plan (TI
Employees Pension Plan) and the non-qualified defined benefit pension
plans (TI Employees Non-Qualified Pension Plan and TI Employees
Non-Qualified Pension Plan II) from December 31, 2013, through December
31, 2014. This change in the actuarial value is the difference between
the 2013 and 2014 present value of the pension benefit accumulated as of
year-end by the named executive officer, assuming that benefit is not paid
until age 65. Mr. Templetons and Mr. Crutchers benefits under the
companys pension plans were frozen as of December 31, 1997. Mr. Anderson
does not participate in any of the companys defined benefit pension
plans. |
| (6) | Consists of (i) the amounts in
the table below, which result from programs available to all eligible U.S.
employees, and (ii) perquisites and personal benefits that meet the
disclosure thresholds established by the SEC and are detailed in the
paragraph below. |

		Defined — Contribution	Unused
	401 (k)	Retirement	Vacation
Name	Contribution	Plan (a)	Time (b)
R. K. Templeton	$ 10,400	$ 223,316	$ 16,125
K. P.
March	$ 5,200	N/A	$ 15,309
B. T. Crutcher	$ 10,400	$ 100,288
S. A.
Anderson	$ 10,400	$ 58,289	$ 5,513
K. J. Ritchie	$ 5,200	N/A

| (a) | Consists of (i) contributions
under the companys enhanced defined contribution retirement plan of
$5,200 and (ii) an additional amount of $218,116 for Mr. Templeton,
$95,088 for Mr. Crutcher, and $53,089 for Mr. Anderson accrued by TI to
offset IRC limitations on amounts that could be contributed to the
enhanced defined contribution retirement plan, which amount is also shown
in the non-qualified deferred compensation table on page 106. |
| --- | --- |
| (b) | Represents payments for unused
vacation time that could not be carried
forward. |

The perquisites and personal benefits are as follows: $68,243 for Mr. Templeton, consisting of personal use of company aircraft ($57,095), financial counseling and an executive physical. Financial counseling and an executive physical were made available to the other named executive officers, but the amounts attributable to those officers were below the disclosure thresholds. The amount shown for personal use of aircraft is the incremental cost, which we valued using a method that takes into account: landing, parking and flight planning services expenses; crew travel expenses; supplies and catering expenses; aircraft fuel and oil expenses per hour of flight; communications costs; a portion of ongoing maintenance; and any customs, foreign permit and similar fees. Because company aircraft are primarily used for business travel, this methodology excludes the fixed costs, which do not change based on usage, such as pilots salaries and the lease or purchase cost of the company-owned aircraft.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 99

Grants of plan-based awards in 2014

The following table shows the grants of plan-based awards to the named executive officers in 2014.

| | | | | | | | | | | All
Other | All
Other | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | Stock | Option | Exercise | |
| | | | | | | | | | | Awards: | Awards: | or
Base | |
| | | | | Estimated
Possible Payouts | | | Estimated
Future Payouts | | | Number
of | Number
of | Price
of | Grant
Date |
| | | | | under
Non-Equity Incentive | | | under Equity
Incentive | | | Shares
of | Securities | Option | Fair
Value |
| | | | Date
of | Plan
Awards | | | Plan
Awards | | | Stock or | Underlying | Awards | of
Stock |
| | Grant | | Committee | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Options | ($/Sh) | and
Option |
| Name | Date | | Action | ($) | ($) | ($) | (#) | (#) | (#) | (#) (2) | (#) (3) | (4) | Awards (5) |
| R. K.
Templeton | 1/23/14 | (1) | 1/16/14 | * | * | * | | | | | 602,692 | $ 44.09 | $ 4,900,004 |
| | 1/23/14 | (1) | 1/16/14 | | | | | | | 111,137 | | | $ 4,900,030 |
| K. P. March | 1/23/14 | (1) | 1/16/14 | * | * | * | | | | | 166,048 | $ 44.09 | $ 1,350,003 |
| | 1/23/14 | (1) | 1/16/14 | | | | | | | 30,620 | | | $ 1,350,036 |
| B. T.
Crutcher | 1/23/14 | (1) | 1/16/14 | * | * | * | | | | | 276,747 | $ 44.09 | $ 2,250,007 |
| | 1/23/14 | (1) | 1/16/14 | | | | | | | 51,032 | | | $ 2,250,001 |
| S. A. Anderson | 1/23/14 | (1) | 1/16/14 | * | * | * | | | | | 166,048 | $ 44.09 | $ 1,350,003 |
| | 1/23/14 | (1) | 1/16/14 | | | | | | | 30,620 | | | $ 1,350,036 |
| | 6/19/14 | | 6/19/14 | | | | | | | 41,745 | | | $ 2,000,003 |
| K. J.
Ritchie | 1/23/14 | (1) | 1/16/14 | * | * | * | | | | | 245,997 | $ 44.09 | $ 2,000,004 |
| | 1/23/14 | (1) | 1/16/14 | | | | | | | 45,362 | | | $ 2,000,011 |

| * | TI did not use formulas or pre-set
thresholds or multiples to determine incentive awards. Under the terms of
the Executive Officer Performance Plan, each named executive officer is
eligible to receive a cash bonus equal to 0.5 percent of the companys
consolidated income (as defined in the plan). However, the Compensation
Committee has the discretion to set bonuses at a lower level if it decides
it is appropriate to do so. The committee decided to do so for
2014. |
| --- | --- |
| (1) | In accordance with the grant
policy of the Compensation Committee of the board (described on page 95),
the grants became effective on the second trading day after the company
released its financial results for the fourth quarter and year 2013. The
company released these results on January 21, 2014. |
| (2) | The stock awards granted to the
named executive officers in 2014 were RSU awards. These awards were made
under the companys 2009 Long-Term Incentive Plan. For information on the
terms and conditions of these RSU awards, please see the discussion on
page 103. |
| (3) | The options were granted under
the companys 2009 Long-Term Incentive Plan. For information on the terms
and conditions of these options, please see the discussion on page
102. |
| (4) | The exercise price of the options
is the closing price of TI common stock on January 23, 2014. |
| (5) | Shown is the aggregate grant date
fair value computed in accordance with ASC 718 for stock and option awards
in 2014. The discussion of the assumptions used for purposes of the
valuation appears in Note 5 to the Financial Statements in TIs annual
report on Form 10-K for the year ended December 31,
2014. |

None of the options or other equity awards granted to the named executive officers was repriced or modified by the company.

For additional information regarding TIs equity compensation grant practices, please see pages 88, 90-91, 95, 97 and 102-103.

100 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Outstanding equity awards at fiscal year-end 2014

The following table shows the outstanding equity awards for each of the named executive officers as of December 31, 2014.

	Option Awards						Stock Awards
										Equity
										Incentive	Equity
				Equity						Plan	Incentive
				Incentive						Awards:	Plan Awards:
				Plan						Number of	Market or
				Awards:						Unearned	Payout Value
	Number of	Number of		Number of				Market Value		Shares,	of Unearned
	Securities	Securities		Securities			Number of	of Shares or		Units or	Shares, Units
	Underlying	Underlying		Underlying			Shares or	Units of Stock		Other	or Other
	Unexercised	Unexercised		Unexercised	Option	Option	Units of Stock	That Have Not		Rights That	Rights That
	Options (#)	Options (#)		Unearned	Exercise	Expiration	That Have Not	Vested		Have Not	Have Not
Name	Exercisable	Unexercisable		Options (#)	Price ($)	Date	Vested (#)	($) (1)		Vested (#)	Vested
($)
R. K. Templeton		602,692	(2)		$ 44.09	1/23/2024	111,137	(6)	$ 5,942,495
	131,250	393,750	(3)		$ 32.80	1/25/2023	175,000	(7)	$ 9,357,250
	237,500	237,500	(4)		$ 32.36	1/26/2022	158,334	(8)	$ 8,466,119
	337,500	112,500	(5)		$ 34.63	1/27/2021	150,000	(9)	$ 8,020,500
	540,000				$ 23.05	1/28/2020
	664,461				$ 14.95	1/29/2019
	270,000				$ 29.79	1/25/2018
	270,000				$ 28.32	1/18/2017
	350,000				$ 32.55	1/19/2016
K. P.
March		166,048	(2)		$ 44.09	1/23/2024	30,620	(6)	$ 1,637,251
	37,500	112,500	(3)		$ 32.80	1/25/2023	50,000	(7)	$ 2,673,500
	75,000	75,000	(4)		$ 32.36	1/26/2022	50,000	(8)	$ 2,673,500
	103,125	34,375	(5)		$ 34.63	1/27/2021	45,834	(9)	$ 2,450,744
	107,500				$ 23.05	1/28/2020
B. T. Crutcher		276,747	(2)		$ 44.09	1/23/2024	51,032	(6)	$ 2,728,681
	56,250	168,750	(3)		$ 32.80	1/25/2023	75,000	(7)	$ 4,010,250
	65,625	93,750	(4)		$ 32.36	1/26/2022	62,500	(8)	$ 3,341,875
		40,625	(5)		$ 34.63	1/27/2021	54,167	(9)	$ 2,896,309
							100,000	(10)	$ 5,347,000
S. A.
Anderson		166,048	(2)		$ 44.09	1/23/2024	30,620	(6)	$ 1,637,251
	34,375	103,125	(3)		$ 32.80	1/25/2023	45,834	(7)	$ 2,450,744
	68,750	68,750	(4)		$ 32.36	1/26/2022	45,834	(8)	$ 2,450,744
	93,750	31,250	(5)		$ 34.63	1/27/2021	41,667	(9)	$ 2,227,934
							41,745	(11)	$ 2,232,105
K. J. Ritchie		245,997	(2)		$ 44.09	1/23/2024	45,362	(6)	$ 2,425,506
		150,000	(3)		$ 32.80	1/25/2023	66,667	(7)	$ 3,564,684
		87,500	(4)		$ 32.36	1/26/2022	58,334	(8)	$ 3,119,119
		40,625	(5)		$ 34.63	1/27/2021	54,167	(9)	$ 2,896,309

| (1) | Calculated by multiplying the
number of RSUs by the closing price of TI common stock on December 31,
2014 ($53.47). |
| --- | --- |
| (2) | One-quarter of the shares became
exercisable on January 23, 2015, and one-third of the remaining shares
become exercisable on each of January 23, 2016, January 23, 2017, and
January 23, 2018. |
| (3) | One-third of the shares became
exercisable on January 25, 2015, and one-half of the remaining shares
become exercisable on each of January 25, 2016, and January 25,
2017. |

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 101

| (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	Employment — Termination (at Least	Employment Termination — (at Least 6 Months after Grant)		Other
Termination Due to	6 Months
after Grant)	with 20 Years of Credited	Employment	Circumstances
Death or Permanent	When Retirement	Service, but Not Retirement	Termination for	of Employment
Disability	Eligible *	Eligible **	Cause	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).

102 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

The Stock Awards in the table of outstanding equity awards at fiscal year-end 2014 are RSU awards. Each RSU represents the right to receive one share of TI common stock on a stated date (the vesting date) unless the award is terminated earlier under terms summarized below. In general, the vesting date is approximately four years after the grant date. Each RSU includes the right to receive dividend equivalents, which are paid annually in cash at a rate equal to the amount paid to stockholders in dividends. The table below shows the termination provisions of RSUs outstanding as of December 31, 2014.

	Employment Termination	Employment	Other Circumstances
Employment Termination	(at Least 6 Months after Grant)	Termination for	of Employment
Due to Death or Permanent
Disability	When Retirement
Eligible	Cause	Termination
Vesting continues; shares are paid at the scheduled vesting
date	For grants made after 2012: Grant stays in effect and pays out
shares at the scheduled vesting date	Grant cancels; no shares are issued	Grant cancels; no shares are issued
	For grants
made before 2013: Grant stays in effect and pays out shares at the
scheduled vesting date. Number of shares reduced according to the duration
of employment over the vesting period *

Calculated by multiplying the number of RSUs by a fraction equal to the number of whole 365-day periods from the grant date to the employment termination date (or first day of any bridge leave of absence leading to retirement), divided by the number of years in the vesting period.

These termination provisions are intended to promote retention. All RSU awards contain cancellation and clawback provisions like those described above for stock options. The terms provide that, to the extent permitted by Section 409A of the IRC, the award vests upon involuntary termination of TI employment within 24 months after a change in control. Change in control is the Plan definition. These cancellation, clawback and change-in-control terms are intended to conform RSU terms with those of stock options (to the extent permitted by the IRC) and to achieve the objectives described above in the discussion of stock options.

In addition to the Stock Awards shown in the outstanding equity awards at fiscal year-end 2014 table on pages 101 and 102, Mr. Templeton holds an award of RSUs that was granted in 1995. The award, for 120,000 shares of TI common stock, vested in 2000. Under the award terms, the shares will be issued to Mr. Templeton in March of the year after his termination of employment for any reason. These terms were designed to provide a tax benefit to the company by postponing the related compensation expense until it was likely to be fully deductible. In accordance with SEC requirements, this award is reflected in the 2014 non-qualified deferred compensation table on page 106.

2014 option exercises and stock vested

The following table lists the number of shares acquired and the value realized as a result of option exercises by the named executive officers in 2014 and the value of any RSUs that vested in 2014. For option exercises, the value realized is calculated by multiplying the number of shares acquired by the difference between the exercise price and the market price of TI common stock on the exercise date. For RSUs, the value realized is calculated by multiplying the number of RSUs that vested by the market price of TI common stock on the vesting date.

| | Option Awards — Number
of | | Stock Awards — Number
of | |
| --- | --- | --- | --- | --- |
| | Shares
Acquired | Value Realized
on | Shares
Acquired | Value
Realized |
| Name | on Exercise (#) | Exercise ($) | on Vesting (#) | on Vesting ($) |
| R. K.
Templeton | 500,000 | $ 13,460,000 | 180,000 | $ 7,684,200 |
| K. P. March | 318,750 | $ 7,983,971 | 53,751 | $ 2,294,630 |
| B. T.
Crutcher | 150,000 | $ 2,282,377 | 150,000 | $ 6,887,500 |
| S. A. Anderson | 70,000 | $ 1,354,542 | 46,668 | $ 1,992,257 |
| K. J.
Ritchie | 606,250 | $ 10,747,804 | 62,501 | $ 2,668,168 |

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 103

2014 pension benefits

The following table shows the present value as of December 31, 2014, of the benefit of the named executive officers under our qualified defined benefit pension plan (TI Employees Pension Plan) and non-qualified defined benefit pension plans (TI Employees Non-Qualified Pension Plan (which governs amounts earned before 2005) and TI Employees Non-Qualified Pension Plan II (which governs amounts earned after 2004)). In accordance with SEC requirements, the amounts shown in the table do not reflect any named executive officers retirement eligibility or any increase in benefits that may result from the named executive officers continued employment after December 31, 2014.

					Payments
			Present		During
		Number of	Value of		Last
		Years Credited	Accumulated		Fiscal
Name (1)	Plan Name	Service (#)	Benefit ($) (6)		Year ($)
R. K. Templeton (2)	TI Employees Pension Plan	16	(3)	$ 654,426
	TI Employees Non-Qualified Pension Plan	16	(3)	$ 277,131
	TI Employees Non-Qualified Pension Plan II	16	(5)	$ 205,199
K. P.
March	TI Employees
Pension Plan	29	(3)	$ 885,211
	TI Employees
Non-Qualified Pension Plan	19	(4)	$ 169,888
	TI Employees
Non-Qualified Pension Plan II	29	(5)	$ 4,754,776
B. T. Crutcher (2)	TI Employees Pension Plan	0.9	(3)	$ 4,221
K. J.
Ritchie	TI Employees
Pension Plan	35	(3)	$ 1,322,463
	TI Employees
Non-Qualified Pension Plan	25	(4)	$ 501,132
	TI Employees
Non-Qualified Pension Plan II	35	(5)	$ 6,174,526

| (1) | Mr. Anderson does not participate
in any of the companys defined benefit pension plans because he joined TI
after these plans were closed to new participants. |
| --- | --- |
| (2) | In 1997, TIs U.S. employees were
given the choice between continuing to participate in the defined benefit
pension plans or participating in a new enhanced defined contribution
retirement plan. Messrs. Templeton and Crutcher chose to participate in
the defined contribution plan. Accordingly, their accrued pension benefits
under the qualified and non-qualified plans were frozen (i.e., they will
experience no increase attributable to years of service or change in
eligible earnings) as of December 31, 1997. Contributions to the defined
contribution plan for Mr. Templetons and Mr. Crutchers benefits are
included in the 2014 summary compensation table. |
| (3) | For each of the named executive
officers, credited service began on the date the officer became eligible
to participate in the plan. For Mr. Crutcher, eligibility to participate
began on the first day of the month following completion of one year of
employment. For each of the other named executive officers, eligibility to
participate began on the earlier of 18 months of employment, or January 1
following the completion of one year of employment. Accordingly, each of
the named executive officers has been employed by TI for longer than the
years of credited service shown above. |
| (4) | Credited service began on the
date the named executive officer became eligible to participate in the TI
Employees Pension Plan as described in note 3 above and ceased at December
31, 2004. |
| (5) | Credited service began on the
date the named executive officer became eligible to participate in the TI
Employees Pension Plan as described in note 3 above. |
| (6) | The assumptions and valuation
methods used to calculate the present value of the accumulated pension
benefits shown are the same as those used by TI for financial reporting
purposes and are described in Note 11 to the financial statements
contained in Item 8 in TIs annual report on Form 10-K for the year ended
December 31, 2014, except that a named executive officers retirement is
assumed (in accordance with SEC rules) for purposes of this table to occur
at age 65 and no assumption for termination prior to that date is used.
The amount of the lump-sum benefit earned as of December 31, 2014, is
determined using either (i) the Pension Benefit Guaranty Corporation
(PBGC) interest assumption of 1.50 percent or (ii) the Pension Protection
Act of 2006 (PPA) corporate bond yield interest assumption of 4.23 percent
for the TI Employees Pension Plan and 4.26 percent for the TI Employees
Non- Qualified Pension Plans, whichever rate produces the higher lump sum
amount. A discount rate assumption of 4.23 percent for the TI Employees
Pension Plan and 4.26 percent for the non-qualified pension plans was used
to determine the present value of each lump sum. |

104 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

TI Employees Pension Plan

The TI Employees Pension Plan is a qualified defined benefit pension plan. Please see page 95 for a discussion of the origin and purpose of the plan. Employees who joined the U.S. payroll after November 30, 1997, are not eligible to participate in this plan.

A plan participant is eligible for normal retirement under the terms of the plan if he is at least 65 years of age with one year of credited service. A participant is eligible for early retirement if he is at least 55 years of age with 20 years of employment or 60 years of age with five years of employment. As of December 31, 2014, Mr. Templeton, Mr. March and Mr. Ritchie were eligible for early or normal retirement.

A participant may request payment of his accrued benefit at termination or any time thereafter. Participants may choose a lump sum payment or one of six forms of annuity. In order of largest to smallest periodic payment, the forms of annuity are: (i) single life annuity, (ii) 5-year certain and life annuity, (iii) 10-year certain and life annuity, (iv) qualified joint and 50 percent survivor annuity, (v) qualified joint and 75 percent survivor annuity, and (vi) qualified joint and 100 percent survivor annuity. If the participant does not request payment, he will begin to receive his benefit in April of the year after he reaches the age of 70½ in the form of annuity required under the IRC.

The pension formula for the qualified plan is intended to provide a participant with an annual retirement benefit equal to 1.5 percent multiplied by the product of (i) years of credited service and (ii) the average of the five highest consecutive years of his base salary plus bonus up to a limit imposed by the IRS, less a percentage (based on his year of birth, when he elects to retire and his years of service with TI) of the amount of compensation on which his Social Security benefit is based.

If an individual takes early retirement and chooses to begin receiving his annual retirement benefit at that time, such benefit is reduced by an early retirement factor. As a result, the annual benefit is lower than the one he would have received at age 65.

If the participants employment terminates due to disability, the participant may choose to receive his accrued benefit at any time prior to age 65. Alternatively, the participant may choose to defer receipt of the accrued benefit until reaching age 65 and then take a disability benefit. The disability benefit paid at age 65 is based on salary and bonus, years of credited service the participant would have accrued to age 65 had he not become disabled and disabled status.

The benefit payable in the event of death is based on salary and bonus, years of credited service and age at the time of death, and may be in the form of a lump sum or annuity at the election of the beneficiary. The earliest date of payment is the first day of the second calendar month following the month of death.

Leaves of absence, including a bridge to retirement, are credited to years of service under the qualified pension plan. Please see the discussion of leaves of absence on page 108.

TI employees non-qualified pension plans

TI has two non-qualified pension plans: the TI Employees Non-Qualified Pension Plan (Plan I), which governs amounts earned before 2005; and the TI Employees Non-Qualified Pension Plan II (Plan II), which governs amounts earned after 2004. Each is a non-qualified defined benefit pension plan. Please see pages 95-96 for a discussion of the purpose of the plans. As with the qualified defined benefit pension plan, employees who joined the U.S. payroll after November 30, 1997, are not eligible to participate in Plan I or Plan II. Eligibility for normal and early retirement under these plans is the same as under the qualified plan (please see above). Benefits are paid in a lump sum.

A participants benefits under Plan I and Plan II are calculated using the same formula as described above for the TI Employees Pension Plan. However, the IRS limit on the amount of compensation on which a qualified pension benefit may be calculated does not apply. Additionally, the IRS limit on the amount of qualified benefit the participant may receive does not apply to these plans. Once this non-qualified benefit amount has been determined using the formula described above, the individuals qualified benefit is subtracted from it. The resulting difference is multiplied by an age-based factor to obtain the amount of the lump-sum benefit payable to an individual under the non-qualified plans.

Amounts under Plan I will be distributed when payment of the participants benefit under the qualified pension plan commences. Amounts under Plan II will be distributed subject to the requirements of Section 409A of the IRC. Because the named executive officers are among the 50 most highly compensated officers of the company, Section 409A of the IRC requires that they not receive any lump sum distribution payment under Plan II before the first day of the seventh month following termination of employment.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 105

If a participant terminates due to disability, amounts under Plan I will be distributed when payment of the participants benefit under the qualified plan commences. For amounts under Plan II, distribution is governed by Section 409A of the IRC, and the disability benefit is reduced to reflect the payment of the benefit prior to age 65.

In the event of death, payment under both plans is based on salary and bonus, years of credited service and age at the time of death and will be in the form of a lump sum. The earliest date of payment is the first day of the second calendar month following the month of death.

Balances in the plans are unsecured obligations of the company. For amounts under Plan I, in the event of a change in control, the present value of the individuals benefit would be paid not later than the month following the month in which the change in control occurred. For such amounts, the pre-2010 definition of a change in control (please see page 102) applies. For all amounts accrued under this plan, if a sale of substantially all of the assets of the company occurred, the present value of the individuals benefit would be distributed in a lump sum as soon as reasonably practicable following the sale of assets. For amounts under Plan II, no distribution of benefits is triggered by a change in control.

Leaves of absence, including a bridge to retirement, are credited to years of service under the non-qualified pension plans. For a discussion of leaves of absence, please see page 108.

TI Employees Survivor Benefit Plan

TIs qualified and non-qualified pension plans provide that upon the death of a retirement-eligible employee, the employees beneficiary receives a payment equal to half of the benefit to which the employee would have been entitled under the pension plans had he retired instead of died. We have a survivor benefit plan that pays the beneficiary a lump sum that, when added to the reduced amounts the beneficiary receives under the pension plans, equals the benefit the employee would have been entitled to receive had he retired instead of died. Because Messers. Templeton, March and Ritchie were eligible for early retirement in 2014, their beneficiaries would be eligible for benefits under the survivor benefit plan if they were to die.

2014 non-qualified deferred compensation

The following table shows contributions to the named executive officers deferred compensation account in 2014 and the aggregate amount of his deferred compensation as of December 31, 2014.

	Executive	Registrant — Contributions			Aggregate		Aggregate
	Contributions	in Last FY	Aggregate Earnings in		Withdrawals/		Balance at Last
Name	in Last FY ($) (1)	($) (2)	Last FY ($)		Distributions
($)		FYE ($) (5)
R. K. Templeton	$ 153,169	$ 218,116	$ 1,333,056	(3)	$ 245,169	(4)	$ 7,221,662	(6)
K. P.
March
B. T. Crutcher	$ 79,954	$ 95,088	$ 43,939				$ 820,284
S. A.
Anderson	$ 31,846	$ 53,089	$ 24,458		$ 20,097		$ 435,908
K. J. Ritchie

| (1) | Amounts shown consist of portions
of 2014 salary and portions of their bonus for 2013 performance, which was
paid in 2014. |
| --- | --- |
| (2) | Company matching contributions
pursuant to the defined contribution plan. These amounts are included in
the All Other Compensation column of the 2014 summary compensation table
on page 98. |
| (3) | Consists of: (a) $148,800 in
dividend equivalents paid under the 120,000-share 1995 RSU award discussed
on page 103, settlement of which has been deferred until after termination
of employment; (b) a $1,147,200 increase in the value of the RSU award
(calculated by subtracting the value of the award at year-end 2013 from
the value of the award at year-end 2014 (in both cases, the number of RSUs
is multiplied by the closing price of TI common stock on the last trading
date of the year)); and (c) a $37,056 gain in Mr. Templetons deferred
compensation account in 2014. Dividend equivalents are paid at the same
rate as dividends on TI common stock. |
| (4) | Consists of dividend equivalents
paid on the RSU award discussed in note 3 and a scheduled distribution of
a portion of Mr. Templetons deferred compensation balance. |
| (5) | Includes amounts reported in the
summary compensation table in the current or prior-year proxy statements
as follows: Mr. Templeton, $805,262; Mr. Crutcher, $820,284; and Mr.
Anderson $10,096. The remainder of the amount for Mr. Anderson was the
deferral of his bonus for 2013, for which year he was not a named
executive officer. |
| (6) | Of this amount, $6,416,400 is
attributable to Mr. Templetons 1995 RSU award, calculated as described in
note 3. The remainder is the balance of his deferred compensation
account. |

106 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Please see page 96 for a discussion of the purpose of the plan. An employees deferred compensation account contains eligible compensation the employee has elected to defer and contributions by the company that are in excess of the IRS limits on (i) contributions the company may make to the enhanced defined contribution plan and (ii) matching contributions the company may make related to compensation the executive officer deferred into his deferred compensation account.

Participants in the deferred compensation plan may choose to defer up to (i) 25 percent of their base salary, (ii) 90 percent of their performance bonus, and (iii) 90 percent of profit sharing. Elections to defer compensation must be made in the calendar year prior to the year in which the compensation will be earned.

During 2014, participants could choose to have their deferred compensation mirror the performance of one or more of the following mutual funds, each of which is managed by a third party (these alternatives, which may be changed at any time, are a subset of those offered to participants in the defined contribution plans): Northern Trust Short Term Investment Fund, Northern Trust Aggregate Bond Index Fund-Lending, Northern Trust Russell 1000 Value Index Fund-Lending, Northern Trust Russell 1000 Growth Index Fund-Lending, Northern Trust Russell 2000 Index Fund-Lending, Northern Trust MidCap 400 Index Fund-Lending, Fidelity Puritan Fund, BlackRock Equity Index Fund F, BlackRock (EAFE) (Europe, Australia, Far East) Equity Index Fund F, BlackRock Lifepath Index 2020 Fund F, BlackRock Lifepath Index 2030 Fund F, BlackRock Lifepath Index 2040 Fund F, BlackRock Lifepath Index 2050 Fund F and BlackRock Lifepath Index Retirement Fund F. From among the available investment alternatives, participants may change their instructions relating to their deferred compensation daily. Earnings on a participants balance are determined solely by the performance of the investments that the participant has chosen for his plan balance. The company does not guarantee any minimum return on investments. A third party administers the companys deferred compensation program.

A participant may request distribution from the plan in the case of an unforeseeable emergency. To obtain an unforeseeable emergency withdrawal, a participant must meet the requirements of Section 409A of the IRC. Otherwise, a participants balance is paid pursuant to his distribution election and is subject to applicable IRC limitations.

Amounts contributed by the company, and amounts earned and deferred by the participant for which there is a valid distribution election on file, will be distributed in accordance with the participants election. Annually participants may elect separate distribution dates for deferred compensation attributable to a participants (i) bonus and profit sharing and (ii) salary. Participants may elect that these distributions be in the form of a lump sum or annual installments to be paid out over a period of five or ten consecutive years. Amounts for which no valid distribution election is on file will be distributed three years from the date of deferral.

In the event of the participants death, payment will be in the form of a lump sum and the earliest date of payment is the first day of the second calendar month following the month of death.

Like the balances under the non-qualified defined benefit pension plans, deferred compensation balances are unsecured obligations of the company. For amounts earned and deferred prior to 2010, a change in control does not trigger a distribution under the plan. For amounts earned and deferred after 2009, distribution occurs, to the extent permitted by Section 409A of the IRC, if the participant is involuntarily terminated within 24 months after a change in control. Change in control is the Plan definition.

Potential payments upon termination or change in control

None of the named executive officers has an employment contract with the company. They are eligible for benefits on generally the same terms as other U.S. employees upon termination of employment or change in control of the company. TI does not reimburse executive officers for any income or excise taxes that are payable by the executive as a result of payments relating to termination or change in control.

Termination

The following programs may result in payments to a named executive officer whose employment terminates. Most of these programs have been discussed above. For a discussion of the impact of these programs on the compensation decisions for 2014, please see page 96.

Bonus Our policies concerning bonus and the timing of payments are described on page 88. Whether a bonus would be awarded under other circumstances and in what amount would depend on the facts and circumstances of termination and is subject to the Compensation Committees discretion. If awarded, bonuses are paid by the company.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 107

Qualified and non-qualified defined benefit pension plans The purposes of these plans are described on pages 95-96. The formula for determining benefits, the forms of benefit and the timing of payments are described on pages 105-106. The amounts disbursed under the qualified and non-qualified plans are paid, respectively, by the TI Employees Pension Trust and the company.

Survivor benefit plan The purpose of this plan is described on page 106. The formula for determining the amount of benefit, the form of benefit and the timing of payments are described on page 106. Amounts distributed are paid by the TI Employees Health Benefit Trust.

Deferred compensation plan The purpose of this plan is described on page 96. The amounts payable under this program depend solely on the performance of investments that the participant has chosen for his plan balance. The timing of payments is discussed on page 107. Amounts distributed are paid by the company.

Equity compensation Depending on the circumstances of termination, grantees whose employment terminates may retain the right to exercise previously granted stock options and receive shares under outstanding RSU awards. Please see pages 102-103. RSU awards include a right to receive dividend equivalents. The dividend equivalents are paid annually by the company in a single cash payment after the last dividend payment of the year.

Perquisites Financial counseling is available to executive officers in the year after retirement. Otherwise, no perquisites continue after termination of employment.

In the case of a resignation pursuant to a separation arrangement, an executive officer (like other employees above a certain job grade level) will typically be offered a 12-month paid leave of absence before termination, in exchange for a non-compete and non-solicitation commitment and a release of claims against the company. The leave period will be credited to years of service under the pension plans described above. During the leave, the executive officers stock options will continue to become exercisable and his RSUs will continue to vest. Amounts paid to an individual during a paid leave of absence are not counted when calculating benefits under the qualified and non-qualified pension plans.

In the case of a separation arrangement in which the paid leave of absence expires when the executive officer will be at least 50 years old and have at least 15 years of employment with the company, the separation arrangement will typically include an unpaid leave of absence, to commence at the end of the paid leave and end when the executive officer has reached the earlier of age 55 with at least 20 years of employment or age 60 (bridge to retirement). The bridge to retirement will be credited to years of service under the qualified and non-qualified pension plans described above. Stock options will continue to become exercisable and RSUs will remain in effect, but for grants made before 2014, the number of RSUs will be reduced as described in note * on page 103.

Change in control

Our only program, plan or arrangement providing benefits triggered by a change in control is the TI Employees Non-Qualified Pension Plan. A change in control at December 31, 2014, would have accelerated payment of the balance under that plan. Please see page 106 for a discussion of the purpose of change in control provisions of that plan as well as the circumstances and the timing of payment.

Upon a change in control there is no acceleration of vesting of stock options and RSUs granted after 2009. Only upon an involuntary termination (not for cause) within 24 months after a change in control of TI will the vesting of such stock options and RSUs accelerate. Please see pages 97 and 102-103 for further information concerning change in control provisions relating to stock options and RSUs.

For a discussion of the impact of these programs on the compensation decisions for 2014, please see page 96.

108 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

The table below shows the potential payments upon termination or change in control for each of the named executive officers.

			Non-		Non-
	Qualified		Qualified		Qualified
	Defined		Defined		Defined
	Benefit		Benefit		Benefit
	Pension		Pension		Pension	Deferred					Stock
	Plan		Plan		Plan II	Compensation			RSUs		Options		Total
R. K. Templeton (10)
Disability	$ 948,016	(1)	$ 609,677	(2)	$ 235,673	(2)			$ 38,202,764	(3)	$ 97,538,189	(4)	$ 137,534,319
Death	$ 453,426	(5)	$ 189,952	(5)	$ 140,399	(5)	$ 805,262	(6)	$ 38,202,764	(3)	$ 97,538,189	(4)	$ 138,092,137	(11)
Involuntary
termination
for cause	$ 894,339	(7)	$ 374,379	(7)	$ 277,204	(7)			$ 6,416,400	(8)			$ 7,962,322
Resignation;
Involuntary
termination
(not for cause)	$ 894,339	(7)	$ 374,379	(7)	$ 277,204	(7)			$ 31,964,580	(12)	$ 97,538,189	(4)	$ 131,048,691
Retirement	$ 894,339	(7)	$ 374,379	(7)	$ 277,204	(7)			$ 31,964,580	(12)	$ 97,538,189	(4)	$ 131,048,691
Change in control			$ 374,379	(7)					$ 6,416,400	(8)			$ 6,790,779
K. P. March
(10)
Disability	$ 1,643,934	(1)	$ 349,792	(2)	$ 6,826,893	(2)			$ 9,434,995	(3)	$ 13,685,180	(4)	$ 31,940,794
Death	$ 628,772	(5)	$ 115,729	(5)	$ 3,288,071	(5)			$ 9,434,995	(3)	$ 13,685,180	(4)	$ 30,836,743	(11)
Involuntary
termination
for cause	$ 1,203,189	(7)	$ 224,695	(7)	$ 6,288,683	(7)							$ 7,716,567
Resignation;
Involuntary
termination
(not for cause)	$ 1,203,189	(7)	$ 224,695	(7)	$ 6,288,683	(7)			$ 7,485,586	(12)	$ 13,685,180	(4)	$ 28,887,333
Retirement	$ 1,203,189	(7)	$ 224,695	(7)	$ 6,288,683	(7)			$ 7,485,586	(12)	$ 13,685,180	(4)	$ 28,887,333
Change in control			$ 224,695	(7)									$ 224,695
B. T. Crutcher
Disability	$ 10,783	(1)							$ 18,324,116	(3)	$ 11,376,418	(4)	$ 29,711,317
Death	$ 1,881	(5)					$ 820,284	(6)	$ 18,324,116	(3)	$ 11,376,418	(4)	$ 30,522,699
Involuntary
termination
for cause	$ 3,728	(7)											$ 3,728
Resignation;
Involuntary
termination
(not for cause)	$ 3,728	(7)									$ 2,548,031	(9)	$ 2,551,759
Change in control
S. A.
Anderson
Disability									$ 10,998,779	(3)	$ 9,657,280	(4)	$ 20,656,059
Death							$ 435,908	(6)	$ 10,998,779	(3)	$ 9,657,280	(4)	$ 21,091,967
Involuntary
termination
for cause
Resignation;
Involuntary
termination
(not for cause)											$ 3,928,094	(9)	$ 3,928,094
Change in control
K. J. Ritchie (10)
Disability	$ 2,065,069	(1)	$ 926,549	(2)	$ 8,387,202	(2)			$ 12,005,619	(3)	$ 8,020,452	(4)	$ 31,404,891
Death	$ 873,590	(5)	$ 324,982	(5)	$ 4,008,109	(5)			$ 12,005,619	(3)	$ 8,020,452	(4)	$ 30,261,478	(11)
Involuntary
termination
for cause	$ 1,717,320	(7)	$ 639,440	(7)	$ 7,878,647	(7)							$ 10,235,407
Resignation;
Involuntary
termination
(not for cause)	$ 1,717,320	(7)	$ 639,440	(7)	$ 7,878,647	(7)			$ 9,722,022	(12)	$ 8,020,452	(4)	$ 27,977,881
Retirement	$ 1,717,320	(7)	$ 639,440	(7)	$ 7,878,647	(7)			$ 9,722,022	(12)	$ 8,020,452	(4)	$ 27,977,881
Change in control			$ 639,440	(7)									$ 639,440

(1) The amount shown is the lump-sum benefit payable at age 65 to the named executive officer in the event of termination as of December 31, 2014, due to disability, assuming the named executive officer does not request payment of his disability benefit until age 65. The assumptions used in calculating these amounts are the same as the age-65 lump-sum assumptions used for financial reporting purposes for the companys audited financial statements for 2014 and are described in note 6 to the 2014 pension benefits table on page 104.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 109

| (2) | The amount shown is the lump-sum
benefit payable at age 65, in the case of the Non-Qualified Defined
Benefit Pension Plan, or separation from service in the case of Plan II.
The assumptions used are the same as those described in note 1
above. |
| --- | --- |
| (3) | Calculated by multiplying the
number of outstanding RSUs by the closing price of TI common stock as of
December 31, 2014 ($53.47). In the event of termination due to disability
or death, all outstanding awards will continue to vest according to their
terms. Please see the outstanding equity awards at fiscal year-end 2014
table on page 101 for the number of unvested RSUs as of December 31, 2014,
and page 103 for a discussion of an additional outstanding RSU award held
by Mr. Templeton. |
| (4) | Calculated as the difference
between the grant price of all outstanding in-the-money options and the
closing price of TI common stock as of December 31, 2014 ($53.47),
multiplied by the number of shares under such options as of December 31,
2014. |
| (5) | Value of the benefit payable in a
lump sum to the executive officers beneficiary calculated as required by
the terms of the plan assuming the earliest possible payment date. The
plan provides that in the event of death, the beneficiary receives 50
percent of the participants accrued benefit, reduced by the
age-applicable joint and 50 percent survivor factor. |
| (6) | Balance as of December 31, 2014,
under the non-qualified deferred compensation plan. |
| (7) | Lump-sum value of the accrued
benefit as of December 31, 2014, calculated as required by the terms of
the plans assuming the earliest possible payment date. |
| (8) | Calculated by multiplying 120,000
vested RSUs by the closing price of TI common stock as of December 31,
2014 ($53.47). See page 103 for further information about this
award. |
| (9) | Calculated as the difference
between the grant price of all exercisable in-the-money options and the
closing price of TI common stock as of December 31, 2014 ($53.47),
multiplied by the number of shares under such options as of December 31,
2014. |
| (10) | Messrs. Templeton, March and
Ritchie were eligible to retire as of December 31, 2014. |
| (11) | Due to retirement eligibility,
the total includes the value of the benefit payable in a lump sum under
the Survivor Benefit Plan to the officers beneficiary in the following
amounts: Mr. Templeton $762,145, Mr. March $3,683,996 and Mr. Ritchie
$5,028,726. The amount of the benefit is calculated as required by the
terms of the plan assuming the earliest possible payment
date. |
| (12) | Due to retirement eligibility,
calculated by multiplying the number of outstanding RSUs held at such
termination by the closing price of TI common stock as of December 31,
2014 ($53.47). RSU awards stay in effect and pay out shares according to
the vesting schedule, although for grants made before 2014, the number of
shares is reduced according to the duration of employment over the vesting
period. See page 103 for additional details. |

Audit Committee report

The Audit Committee of the board of directors has furnished the following report:

As noted in the committees charter, TI management is responsible for preparing the companys financial statements. The companys independent registered public accounting firm is responsible for auditing the financial statements. The activities of the committee are in no way designed to supersede or alter those traditional responsibilities. The committees role does not provide any special assurances with regard to TIs financial statements, nor does it involve a professional evaluation of the quality of the audits performed by the independent registered public accounting firm.

The committee has reviewed and discussed with management and the independent accounting firm, as appropriate, (1) the audited financial statements and (2) managements report on internal control over financial reporting and the independent accounting firms related opinions.

The committee has discussed with the independent registered public accounting firm, Ernst & Young, the required communications specified by auditing standards together with guidelines established by the SEC and the Sarbanes-Oxley Act.

The committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board, regarding the independent registered public accounting firms communications with the Audit Committee concerning independence, and has discussed with Ernst & Young the firms independence.

Based on the review and discussions referred to above, the committee recommended to the board of directors that the audited financial statements be included in the companys annual report on Form 10-K for 2014 for filing with the SEC.

Ralph W. Babb, Jr., Chair Mark A. Blinn Ruth J. Simmons

110 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Proposal to ratify appointment of independent registered public accounting firm

The Audit Committee of the board has the authority and responsibility for the appointment, compensation, retention and oversight of the work of TIs independent registered public accounting firm. The Audit Committee has appointed Ernst & Young LLP to be TIs independent registered public accounting firm for 2015.

TI has engaged Ernst & Young or a predecessor firm to serve as the companys independent registered public accounting firm for over 60 years. In order to assure continuing auditor independence, the Audit Committee periodically considers whether the annual audit of TIs financial statements should be conducted by another firm.

The lead audit partner on the TI engagement serves no more than five consecutive years in that role, in accordance with SEC rules. The Audit Committee Chair and management have direct input into the selection of the lead audit partner.

The members of the Audit Committee and the board believe that the continued retention of Ernst & Young to serve as the companys independent registered public accounting firm is in the best interest of the company and its investors. Consequently, the board asks the stockholders to ratify the appointment of Ernst & Young. If the stockholders do not ratify the appointment, the Audit Committee will consider whether it should appoint another independent registered public accounting firm.

Representatives of Ernst & Young are expected to be present, and to be available to respond to appropriate questions, at the annual meeting. They have the opportunity to make a statement if they desire to do so; they have indicated that, as of this date, they do not.

The fees for services provided by Ernst & Young to the company are described below:

Audit fees . Ernst & Youngs Audit Fees were $9,134,000 in 2014 and $8,662,000 in 2013. The services provided in exchange for these fees were our annual audit, including the audit of internal control over financial reporting, reports on Form 10-Q, assistance with public debt offerings, statutory audits required internationally and accounting consultations.

Audit-related fees . Ernst & Youngs fees for Audit-related services were $797,000 in 2014 and $685,000 in 2013. The services provided in exchange for these fees included employee benefit plan audits, certification procedures relating to compliance with local-government or other regulatory standards for various non-U.S. subsidiaries, and access to Ernst & Youngs online research tool.

Tax fees . Ernst & Youngs fees for professional services rendered for tax compliance (preparation and review of income tax returns and other tax-related filings) and tax advice on U.S. and foreign tax matters were $1,802,000 in 2014 and $1,836,000 in 2013.

All other fees . Ernst & Youngs fees for all other professional services rendered were $32,000 in 2014 and $95,000 in 2013 for the TI Foundation audit, training and assistance with insurance claims.

Pre-approval policy . The Audit Committee is required to pre-approve the audit and non-audit services to be performed by the independent registered public accounting firm in order to assure that the provision of such services does not impair the firms independence.

Annually the independent registered public accounting firm and the director of internal audits present to the Audit Committee services expected to be performed by the firm over the next 12 months. The Audit Committee reviews and, as it deems appropriate, pre-approves those services. The services and estimated fees are presented to the Audit Committee for consideration in the following categories: Audit, Audit-related, Tax and All other (each as defined in Schedule 14A of the Securities Exchange Act). For each service listed in those categories, the committee receives detailed documentation indicating the specific services to be provided. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee reviews on at least a quarterly basis the services provided to date by the firm and the fees incurred for those services. The Audit Committee may revise the list of pre-approved services and related fees from time to time, based on subsequent determinations.

In order to respond to time-sensitive requests for services that may arise between regularly scheduled meetings of the Audit Committee, the committee has delegated pre-approval authority to its Chair (the Audit Committee does not delegate to management its responsibilities to pre-approve services). The Chair reports pre-approval decisions to the Audit Committee and seeks ratification of such decisions at the Audit Committees next scheduled meeting.

The Audit Committee or its Chair pre-approved all services provided by Ernst & Young during 2014.

The board of directors recommends a vote FOR ratification of the appointment of Ernst & Young LLP as the companys independent registered public accounting firm for 2015.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 111

Additional information

Voting securities

As of February 17, 2015, 1,047,142,301 shares of TI 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 annual meeting, holders of record of the common stock at the close of business on February 17, 2015, may vote at the meeting or any adjournment of the meeting.

Security ownership of certain beneficial owners

The following table shows the only persons who have reported beneficial ownership of more than 5 percent of the common stock of the company. Persons generally beneficially own shares if they have the right to either vote those shares or dispose of them. More than one person may be considered to beneficially own the same shares.

Name and Address	Shares Owned at — December 31, 2014		Percent — of Class
Capital Research Global Investors (1)
333 South Hope Street
Los Angeles, CA 90071	106,552,592	(2)	10.1 %
Capital World
Investors (1)
333 South Hope
Street
Los Angeles, CA
90071	69,752,362	(3)	6.6 %
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355	67,900,408	(4)	6.42 %
PRIMECAP
Management Company
225 South Lake
Ave., #400
Pasadena, CA
91101	57,436,034	(5)	5.44 %
BlackRock, Inc.
55 East 52 nd Street
New York, NY 10022	57,462,724	(6)	5.4 %

| (1) | A division of Capital Research
and Management Company (CRMC). |
| --- | --- |
| (2) | TI understands that Capital
Research Global Investors is deemed to be the beneficial owner of these
shares as a result of CRMC acting as an investment advisor to various
investment companies. Capital Research Global Investors has sole
dispositive power and sole voting power for these shares. |
| (3) | TI understands that Capital World
Investors is deemed to be the beneficial owner of these shares as a result
of CRMC acting as an investment advisor to various investment companies.
Capital World Investors has sole voting power and sole dispositive power
for these shares. |
| (4) | TI understands that The Vanguard
Group has sole voting power for 1,841,355, sole dispositive power for
66,154,118 and shared dispositive power for 1,746,290 of these
shares. |
| (5) | TI understands that PRIMECAP
Management Company has sole voting power for 7,709,048 and sole
dispositive power for all of these shares. |
| (6) | TI understands that BlackRock,
Inc. has sole voting power for 46,667,433 and sole dispositive power for
all of these shares. |

112 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Security ownership of directors and management

The following table shows the beneficial ownership of TI common stock by directors, the named executive officers and all executive officers and directors as a group. Each director and named executive officer has sole voting power (except for shares obtainable within 60 days, shares subject to RSUs and shares credited to deferred compensation accounts as detailed in the footnotes to the table) and sole investment power with respect to the shares owned. The table excludes shares held by a family member if a director or executive officer has disclaimed beneficial ownership. No director or executive officer has pledged shares of TI common stock.

	Shares Owned at	Percent
Name	December 31, 2014	of Class
Directors (1)
R. W. Babb,
Jr.	58,003	*
M. A. Blinn	11,076	*
D. A.
Carp	139,990	*
C. S. Cox	100,162	*
R.
Kirk	7,342	*
P. H. Patsley	133,870	*
R. E.
Sanchez	31,969	*
W. R. Sanders	77,995	*
R. J.
Simmons	78,198	*
R. K. Templeton	4,464,438	*
C. T.
Whitman	110,277	*
Management (2)
K. P.
March	828,106	*
B. T. Crutcher	677,625	*
S. A.
Anderson	544,087	*
K. J. Ritchie	420,910	*
All executive
officers and directors as a group (3)	10,384,904	*

less than 1 percent

(1) Included in the shares owned shown above are:

		Shares		Shares — Credited
	Shares	Credited to	RSUs	to
Deferred
	Obtainable	401(k)	(in Shares)	Compensation
Directors	within 60 Days	Account	(a)	Accounts (b)
R. W. Babb, Jr.	29,567		13,293	14,143
M. A.
Blinn	3,074		4,268	3,734
D. A. Carp	72,567		29,957	37,466
C. S.
Cox	72,567		23,293	1,163
R. Kirk	3,074		4,268
P. H.
Patsley	72,567		13,293	38,010
R. E. Sanchez	19,565		10,406	1,998
W. R.
Sanders	44,567		20,893	1,535
R. J. Simmons	29,567		29,293	19,338
R. K.
Templeton	3,313,999	12,800	714,471
C. T. Whitman	72,567		20,793	8,417

| (a) | The non-employee directors RSUs
granted before 2007 are settled in TI common stock generally upon the
directors termination of service provided he or she has served at least
eight years or has reached the companys retirement age for directors.
RSUs granted after 2006 are settled in TI common stock generally upon the
fourth anniversary of the grant date. |
| --- | --- |
| (b) | The shares in deferred
compensation accounts are issued following the directors termination of
service. |

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 113

(2) Included in the shares owned shown above are:

	Shares	Shares — Credited to
	Obtainable	401 (k)	RSUs
Executive Officer	within 60 Days	Account	(in Shares)
K. P. March	474,127	2,063	176,454
B. T.
Crutcher	334,926		342,699
S. A. Anderson	338,387		205,700
K. J.
Ritchie	195,989		224,530

(3)
(a)	6,943,668 shares
obtainable within 60 days;
(b)	33,646 shares credited
to 401(k) accounts;
(c)	2,595,665 shares
subject to RSU awards; for the terms of these RSUs, please see pages 83
and 103; and
(d)	125,804 shares
credited to certain non-employee directors deferred compensation
accounts; shares in deferred compensation accounts are issued following a
directors termination of service.

Related person transactions

The company has no reportable related person transactions.

Because we believe that company transactions with directors and executive officers of TI or with persons related to TI directors and executive officers present a heightened risk of creating or appearing to create a conflict of interest, we have a written related person transaction policy that has been approved by the board of directors. The policy states that TI directors and executive officers should obtain the approvals specified below in connection with any related person transaction. The policy applies to transactions in which:

| 1. | TI or any TI
subsidiary is or will be a participant; | |
| --- | --- | --- |
| 2. | The amount
involved exceeds or is expected to exceed $100,000 in a fiscal year;
and | |
| 3. | Any of the
following (a related person) has or will have a direct or indirect
interest: | |
| | (a) | A TI director or
executive officer, or an Immediate Family Member of a director or
executive officer; |
| | (b) | A stockholder owning
more than 5 percent of the common stock of TI or an Immediate Family
Member of such stockholder, or, if the 5 percent stockholder is not a
natural person, any person or entity designated in the Form 13G or 13D
filed under the SEC rules and regulations by the 5 percent stockholder as
having an ownership interest in TI stock (individually or collectively, a
5 percent holder); or |
| | (c) | An entity in which
someone listed in (a) or (b) above has a 5 percent or greater ownership
interest, by which someone listed in (a) or (b) is employed, or of which
someone listed in (a) or (b) is a director, principal or
partner. |

For purposes of the policy, an Immediate Family Member is any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law or any person (other than a tenant or employee) sharing the household of a TI director, executive officer or 5 percent holder.

The policy specifies that a related person transaction includes, but is not limited to, any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions or arrangements.

114 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

The required approvals are as follows:

| Arrangement
involving: | Approval required
by: |
| --- | --- |
| Executive officer who is also a member of the TI board, an
Immediate Family Member of such person, or an entity in which any of the
foregoing has a 5 percent or greater ownership interest | G&SR Committee |
| Chair of the
G&SR Committee, chief compliance officer, any of his or her Immediate
Family Members, or an entity in which any of the foregoing has a 5 percent
or greater ownership interest | G&SR
Committee |
| Any other director or executive officer, an Immediate Family Member
of such person, or an entity in which any of the foregoing has a 5 percent
or greater ownership interest | Chief compliance officer in consultation with the Chair of the
G&SR Committee |
| A 5 percent
holder | G&SR
Committee |

No member of the G&SR Committee will participate in the consideration of a related person arrangement in which such member or any of his or her Immediate Family Members is the related person.

The approving body or persons will consider all of the relevant facts and circumstances available to them, including (if applicable) but not limited to: the benefits to the company of the arrangement; the impact on a directors independence; the availability of other sources for comparable products or services; the terms of the arrangement; and the terms available to unrelated third parties or to employees generally. The primary consideration is whether the transaction between TI and the related person (a) was the result of undue influence from the related person or (b) could adversely influence or appear to adversely influence the judgment, decisions or actions of the director or executive officer in meeting TI responsibilities or create obligations to other organizations that may come in conflict with responsibilities to TI.

No related person arrangement will be approved unless it is determined to be in, or not inconsistent with, the best interests of the company and its stockholders, as the approving body or persons shall determine in good faith.

The chief compliance officer will provide periodic reports to the committee on related person transactions. Any related person transaction brought to the attention of the chief compliance officer or of which the chief compliance officer becomes aware that is not approved pursuant to the process set forth above shall be terminated as soon as practicable.

Compensation committee interlocks and insider participation

During 2014, Mses. Cox, Patsley and Whitman and Mr. Sanchez served on the Compensation Committee. No committee member (i) was an officer or employee of TI, (ii) was formerly an officer of TI or (iii) had any relationship requiring disclosure under the SECs rules governing disclosure of related person transactions (Item 404 of Regulation S-K). No executive officer of TI served as a director or member of the compensation committee of another entity, one of whose directors or executive officers served as a member of our board of directors or a member of the Compensation Committee.

Cost of solicitation

The solicitation is made on behalf of our board of directors. TI 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 TI may solicit proxies personally, by telephone, fax or e-mail, from some stockholders if proxies are not promptly received. We have also hired Georgeson Inc. to assist in the solicitation of proxies at a cost of $12,000 plus out-of-pocket expenses.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 115

Stockholder proposals for 2016

If you wish to submit a proposal for possible inclusion in TIs 2016 proxy material, we must receive your notice, in accordance with the rules of the SEC, on or before November 5, 2015. Proposals are to be sent to: Texas Instruments Incorporated, 12500 TI Boulevard, MS 8658, Dallas, TX 75243, Attn: Secretary.

If you wish to submit a proposal at the 2016 annual meeting (but not seek inclusion of the proposal in the companys proxy material), we must receive your notice, in accordance with the companys by-laws, on or before January 17, 2016.

All suggestions from stockholders concerning the companys business are welcome and will be carefully considered by TIs management. To ensure that your suggestions receive appropriate review, the G&SR Committee reviews correspondence from stockholders and managements responses. Stockholders are thereby 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. Please see page 77 for information on contacting the board.

Benefit plan voting

If you are a participant in the TI Contribution and 401(k) Savings Plan, or the TI 401(k) Savings Plan, you are a named fiduciary under the plans and are entitled to direct the voting of shares allocable to your accounts under these plans. The trustee administering your plan will vote your shares in accordance with your instructions. If you wish to instruct the trustee on the voting of shares held for your accounts, you should do so by April 13, 2015, in the manner described in the notice of annual meeting.

Additionally, participants under the plans are designated as named fiduciaries for the purpose of voting TI stock held under the plans for which no voting direction is received. TI shares held by the TI 401(k) savings plans for which no voting instructions are received by April 13, 2015, will be voted in the same proportions as the shares in the plans for which voting instructions have been received by that date unless otherwise required by law.

Section 16(a) beneficial ownership reporting compliance

Section 16(a) of the Securities Exchange Act requires certain persons, including the companys directors and executive officers, to file reports with the SEC regarding beneficial ownership of certain equity securities of the company. The company believes that all reports during 2014 were timely filed by its directors and executive officers. In 2015, a report of a 2012 gift by Mr. Templeton was filed; the gift was not previously reported due to administrative error.

Telephone and Internet voting

Registered stockholders and benefit plan participants . Stockholders with shares registered directly with Computershare (TIs transfer agent) and participants who beneficially own shares in a TI benefit plan may vote telephonically by calling (800) 690-6903 (within the U.S. and Canada only, toll-free) or via the Internet at www.proxyvote.com.

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. TI has been advised by counsel that the telephone and Internet voting procedures, which have been made available through Broadridge Financial Solutions, Inc., are consistent with the requirements of applicable law.

Stockholders with 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 programs may differ from the program provided to registered stockholders and benefit plan participants. Check the information forwarded by your bank, broker or other holder of record to see which options are available to you.

Stockholders voting via the Internet 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.

116 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Stockholders sharing the same address

To reduce the expenses of delivering duplicate materials, we take advantage of the SECs householding rules which permit us to deliver only one set of proxy materials (or one Notice of Internet Availability of Proxy Materials) to stockholders who share an address unless otherwise requested. If you share an address with another stockholder and have received only one set of these materials, you may request a separate copy at no cost to you by calling Investor Relations at 214-479-3773 or by writing to Texas Instruments Incorporated, P.O. Box 660199, MS 8657, Dallas, TX 75266-0199, Attn: Investor Relations. For future annual meetings, you may request separate materials, or request that we send only one set of materials to you if you are receiving multiple copies, by calling (800) 542-1061 or writing to Investor Relations at the address given above.

Electronic delivery of proxy materials and copies of our Form 10-K

As an alternative to receiving printed copies of these materials in future years, we are pleased to offer stockholders the opportunity to receive proxy mailings electronically. To request electronic delivery, please vote via the Internet at www.proxyvote.com and, when prompted, enroll to receive or access proxy materials electronically in future years. After the meeting date, stockholders holding shares through a broker or bank may request electronic delivery by visiting www.icsdelivery.com/ti and entering information for each account held by a bank or broker. If you are a registered stockholder and would like to request electronic delivery, please visit www-us.computershare.com/investor or call TI Investor Relations at 214-479-3773 for more information. If you are a participant in a TI benefit plan and would like to request electronic delivery, please call TI Investor Relations for more information.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on April 16, 2015. This 2015 proxy statement and the companys 2014 annual report are accessible at: www.proxyvote.com.

The companys Annual Report to Stockholders, which contains consolidated financial statements for the year ended December 31, 2014, accompanies this Proxy Statement. You may also obtain a copy of the companys Annual Report on Form 10-K for the year ended December 31, 2014, that was filed with the SEC without charge by writing to Investor Relations, P.O. Box 660199, MS 8657, Dallas, TX 75266-0199. Our Form 10-K is also available in the Investor Relations section of our website at www.TI.com.

Sincerely,
●
Joseph F.
Hubach
Senior Vice
President,
Secretary and
General Counsel

March 4, 2015 Dallas, Texas

Notice regarding forward-looking statements

This proxy statement includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Statements herein that describe TIs business strategy, plans, goals, future capital spending levels and potential for growth, improved profit margins and cash generation are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results and amounts to differ materially from those in forward-looking statements. For a detailed discussion of the risks and uncertainties, see the Risk factors discussion in Item 1A of our annual report on Form 10-K for the year ended December 31, 2014. The forward-looking statements included in this proxy statement are made only as of the date of this proxy statement and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 117

Directions and other annual meeting information

Directions

From DFW airport: Take the North Airport exit to IH-635E. Take IH-635E to the Greenville Avenue exit. Turn right (South) on Greenville. Turn right (West) on Forest Lane. Texas Instruments will be on your right at the second traffic light. Please use the North entrance to the building.

From Love Field airport: Take Mockingbird Lane East to US-75N (Central Expressway). Travel North on 75N to the Forest Lane exit. Turn right (East) 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 North entrance to the building.

Parking

There will be reserved parking for all visitors at the North Lobby. Visitors with special needs requiring assistance will be accommodated at the South Lobby entrance.

Security

Please be advised that TIs security policy forbids weapons, cameras and audio/video recording devices inside TI buildings. All bags will be subject to search upon entry into the building.

118 TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT

Appendix Non-GAAP reconciliations

This proxy statement refers to (1) revenue excluding legacy wireless products (baseband products, and OMAP applications processors and connectivity products sold into smartphone and consumer tablet applications) and (2) ratios based on free cash flow. These are financial measures that were not prepared in accordance with generally accepted accounting principles in the U.S. (GAAP). Free cash flow is a non-GAAP measure calculated by subtracting Capital expenditures from the most directly comparable GAAP measure, Cash flows from operating activities (also referred to as Cash flow from operations). We believe revenue excluding legacy wireless products provides insight into our underlying business results. We believe free cash flow and these ratios based on it provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to investors, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures and are reconciled in the tables below to the most directly comparable GAAP measures.

									2014
	For Years Ended December
31,							One-Year	Three-Year
Revenue Excluding Legacy Wireless
Products	2014	2013		2012		2011		Growth	CAGR *
(Millions of
dollars)
Revenue (GAAP)	$ 13,045	$	12,205	$	12,825	$	13,735	6.9%	-1.7%
Legacy wireless
revenue	(25	)	(470	)	(1,200	)	(2,391	)
TI Revenue less legacy wireless revenue (non-GAAP)	$ 13,020	$	11,735	$	11,625	$	11,344	11.0%	4.7%

CAGR (compound annual growth rate) is calculated using the formula: (Ending Value/Beginning Value) 1/number of years -1.


	For Years Ended December
31,							For Years Ended December
31,
Free Cash Flow as a Percentage of
Revenue	2014	2013		2012		Total		2014	2013	2012	Total
(Millions of
dollars)
Revenue	$ 13,045	$	12,205	$	12,825	$	38,075
Cash flow from
operations (GAAP)	$ 3,892	$	3,384	$	3,414	$	10,690	29.8%	27.7%	26.6%	28.1%
Capital expenditures	(385	)	(412	)	(495	)	(1,292	)
Free cash flow
(non-GAAP)	$ 3,507	$	2,972	$	2,919	$	9,398	26.9%	24.4%	22.8%	24.7%

| Total Cash Returned to Shareholders as a Percentage of Free Cash
Flow | For Years Ended December 31, — 2014 | 2013 | 2012 | Total |
| --- | --- | --- | --- | --- |
| (Millions of
dollars) | | | | |
| Dividends
paid | $ 1,323 | $ 1,175 | $ 819 | $ 3,317 |
| Stock repurchases | 2,831 | 2,868 | 1,800 | 7,499 |
| Total cash
returned to shareholders | $ 4,154 | $ 4,043 | $ 2,619 | $ 10,816 |
| Percentage of Cash flow from
operations (GAAP) | 106.7% | 119.5% | 76.7% | 101.2% |
| Percentage of
free cash flow (non-GAAP) | 118.4% | 136.0% | 89.7% | 115.1% |

TEXAS INSTRUMENTS ● 2015 PROXY STATEMENT 119

PROXYCARD

TEXAS INSTRUMENTS INCORPORATED ATTN: JANE NAHRA P.O. BOX 655474 MS 3999 DALLAS, TX 75265-5474

For registered shares, your proxy must be received by 11:59 P.M. (Eastern time) on April 15, 2015.

For shares allocable to a benefit plan account, your proxy must be received by 11:59 P.M. (Eastern time) on April 13, 2015 .

VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until the applicable cut-off date and time above. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions until the applicable cut-off date and time above. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, so that it is received by the applicable date and time above.

| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS
FOLLOWS: | |
| --- | --- |
| M82127-P59162 | KEEP THIS PORTION FOR
YOUR RECORDS |
| | DETACH AND RETURN THIS PORTION
ONLY |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED. | |

TEXAS INSTRUMENTS INCORPORATED
The board of directors
recommends you vote FOR each of the nominees for director and FOR Proposals 2 and 3.
Vote on Directors
1.	Election of Directors
	Nominees:		For	Against	Abstain
	1a.	R. W. Babb, Jr.	☐	☐	☐
	1b.	M. A. Blinn	☐	☐	☐
	1c.	D. A. Carp	☐	☐	☐
	1d.	C. S. Cox	☐	☐	☐
	1e.	R. Kirk	☐	☐	☐
	1f.	P. H. Patsley	☐	☐	☐
	1g.	R. E. Sanchez	☐	☐	☐
	1h.	W. R. Sanders	☐	☐	☐
	1i.	R. J.
Simmons	☐	☐	☐
	1j.	R. K.
Templeton	☐	☐	☐
	1k.	C. T.
Whitman	☐	☐	☐

| 2. | Board proposal
regarding advisory approval of the Companys executive
compensation. | For — ☐ | Against — ☐ | Abstain — ☐ |
| --- | --- | --- | --- | --- |
| 3. | Board proposal
to ratify the appointment of Ernst & Young LLP as the Companys
independent registered public accounting firm for 2015. | ☐ | ☐ | ☐ |
| NOTE :
Such other business as may properly come before the meeting or any
adjournment thereof. | | | | |

| Please sign exactly as
your name(s) appear(s) hereon. When signing as attorney, executor,
administrator, or other fiduciary, please give full title as such. Joint
owners should each sign personally. All holders must sign. If a
corporation or partnership, please sign in full corporate or partnership
name by authorized officer. — Signature [PLEASE SIGN WITHIN
BOX] | Date | Signature (Joint
Owners) | Date |
| --- | --- | --- | --- |

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

APRIL 16, 2015

You are invited to attend the 2015 annual meeting of stockholders on Thursday, April 16, 2015, at the cafeteria on our property at 12500 TI Boulevard, Dallas, Texas, at 9:00 a.m. (Central time). At the meeting we will consider the election of directors, advisory approval of the Companys executive compensation, ratification of the appointment of Ernst & Young LLP as the Companys independent registered public accounting firm for 2015, and such other matters as may properly come before the meeting.

Electronic Delivery of Proxy Materials

We are pleased to offer stockholders the opportunity to receive future proxy mailings by e-mail. To request electronic delivery, please vote via the Internet at www.proxyvote.com and, when prompted, enroll to receive proxy materials electronically in future years.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The 2015 Notice and Proxy Statement and 2014 Annual Report are also available at www.proxyvote.com.

M82128-P59162

PROXY FOR ANNUAL MEETING TO BE HELD APRIL 16, 2015 This proxy is solicited on behalf of the Board of Directors

The undersigned hereby appoints RALPH W. BABB, JR., ROBERT E. SANCHEZ, WAYNE R. SANDERS, RICHARD K. TEMPLETON, 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 16, 2015, at 9:00 a.m. (Central time) and at any or all adjournments thereof, according to the number of shares of common stock that the undersigned would be entitled to vote if then personally present, in the election of directors, upon the board proposals and upon other matters properly coming before the meeting. If no contrary indication is made, this proxy will be voted FOR the election of each director nominee and FOR Proposals 2 and 3. If other matters come before the meeting, this proxy will be voted in the discretion of the named proxies.

Should you have an account in the TI Contribution and 401(k) Savings Plan or the TI 401(k) Savings Plan, this proxy represents the number of TI shares allocable to that plan account as well as other shares registered in your name. As a named fiduciary under the plans for TI shares allocable to that plan account and for shares for which no voting instructions are received, this proxy will serve as voting instructions for The Northern Trust Company, trustee for the plans, or its designee. The plans provide that the trustee will vote each participants shares in accordance with the participants instructions unless otherwise required by law. If the trustee does not receive voting instructions for TI shares under the plans by April 13, 2015, those shares will be voted, in accordance with the terms of plans, in the same proportion as the shares for which voting instructions have been received unless otherwise required by law. If other matters come before the meeting, the named proxies will vote plan shares on those matters in their discretion.

IMPORTANT - On the reverse side of this card are procedures on how to vote the shares. Please consider voting by Internet or telephone.

You received this e-mail because you are enrolled to receive TEXAS INSTRUMENTS INCORPORATED communications and vote by proxy via the Internet.

Important Notice Regarding the Availability of Proxy Materials

2015 TEXAS INSTRUMENTS INCORPORATED Annual Meeting of Shareholders

MEETING DATE: April 16, 2015 RECORD DATE: February 17, 2015 CUSIP NUMBER: 882508104

This e-mail represents all shares in the following account(s).

NAME
TEXAS INSTRUMENTS INC. COMMON	123,456,789,012.00000
TEXAS INSTRUMENTS INC. 401K
SAVINGS	123,456,789,012.00000
TEXAS INSTRUMENTS INC. 401K
SAVINGS	123,456,789,012.00000
TEXAS INSTRUMENTS INC. 401K	123,456,789,012.00000
TEXAS INSTRUMENTS INCORPORATED -
401K	123,456,789,012.00000
TEXAS INSTRUMENTS INCORPORATED -
401K	123,456,789,012.00000
EMAIL MATCHING FILE	123,456,789,012.00000
TEXAS INSTRUMENTS INC. COMMON	123,456,789,012.00000

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For registered shares, you may vote by Internet up until 11:59 p.m. Eastern time on April 15, 2015. For shares allocable to a benefit plan account, voting instructions must be received no later than 11:59 p.m. Eastern time on April 13, 2015.

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Annual Report and Proxy Statement http://materials.proxyvote.com/882508 interactive

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TEXAS INSTRUMENTS INCORPORATED Control#

2015 Annual Meeting of Shareholders

Thursday, April 16, 2015

For holders as of: Tuesday, February 17, 2015 Cusip: 882508-104

Meeting Material(s)

Annual Report and Proxy Statement

As your vote is very important, we recommend that all voting instructions be received at least one business day prior to the voting cut-off time stated in the proxy materials. Scroll down for proxy instructions and voting.

To vote via telephone, call 1-800-690-6903.

Vote 2. Review 3. Confirmed

PROXY BALLOT

TEXAS INSTRUMENTS INCORPORATED

2015 Annual Meeting of Shareholders To be held on Thursday, April 16, 2015 for holders of record as of Tuesday, February 17, 2015

PROXY FOR ANNUAL MEETING TO BE HELD APRIL 16, 2015 This proxy is solicited on behalf of the Board of Directors

Should you have an account in the TI Contribution and 401(k) Savings Plan or the TI 401(k) Savings Plan, this proxy represents the number of TI shares allocable to that plan account as well as other shares registered in your name. As a "named fiduciary" under the plans for TI shares allocable to that plan account and for shares for which no voting instructions are received, this proxy will serve as voting instructions for The Northern Trust Company, trustee for the plans, or its designee. The plans provide that the trustee will vote each participant's shares in accordance with the participant's instructions unless otherwise required by law. If the trustee does not receive voting instructions for TI shares under the plans by April 13, 2015, those shares will be voted, in accordance with the terms of plans, in the same proportion as the shares for which voting instructions have been received unless otherwise required by law. If other matters come before the meeting, the named proxies will vote plan shares on those matters in their discretion.

| 1A. | Proposal(s) — ELECTION OF
DIRECTOR: R.W. BABB, JR. | Recommendations of the Board of Directors — For | Vote Options — ○ | For | ○ | Against | ○ | Abstain |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 1B. | ELECTION OF
DIRECTOR: M.A. BLINN | For | ○ | For | ○ | Against | ○ | Abstain |
| 1C. | ELECTION OF
DIRECTOR: D.A. CARP | For | ○ | For | ○ | Against | ○ | Abstain |
| 1D. | ELECTION OF
DIRECTOR: C.S. COX | For | ○ | For | ○ | Against | ○ | Abstain |
| 1E. | ELECTION OF
DIRECTOR: R. KIRK | For | ○ | For | ○ | Against | ○ | Abstain |
| 1F. | ELECTION OF
DIRECTOR: P.H. PATSLEY | For | ○ | For | ○ | Against | ○ | Abstain |
| 1G. | ELECTION OF
DIRECTOR: R.E. SANCHEZ | For | ○ | For | ○ | Against | ○ | Abstain |
| 1H. | ELECTION OF
DIRECTOR: W.R. SANDERS | For | ○ | For | ○ | Against | ○ | Abstain |
| 1I. | ELECTION OF
DIRECTOR: R.J. SIMMONS | For | ○ | For | ○ | Against | ○ | Abstain |
| 1J. | ELECTION OF
DIRECTOR: R.K. TEMPLETON | For | ○ | For | ○ | Against | ○ | Abstain |
| 1K. | ELECTION OF DIRECTOR: C.T. WHITMAN | For | ○ | For | ○ | Against | ○ | Abstain |
| 2. | BOARD
PROPOSAL REGARDING ADVISORY APPROVAL OF THE COMPANY'S EXECUTIVE
COMPENSATION. | For | ○ | For | ○ | Against | ○ | Abstain |
| 3. | BOARD
PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
2015. | For | ○ | For | ○ | Against | ○ | Abstain |

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TEXAS INSTRUMENTS INC Proxy Solicitation & Information Statement 2015

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TEXAS INSTRUMENTS INC — Proxy Solicitation & Information Statement 2015

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TEXAS INSTRUMENTS INC Proxy Solicitation & Information Statement 2015