Investor Presentaiton

Profit Sharing Purpose Strategy Terms Performance Bonus Purpose Strategy Terms Broad-based program designed to emphasize that each employee contributes to the company's 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 12 years, the formula has been based on company-level annual operating profit margin. The formula was set by the TI board. The committee's 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 2016 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 2016, TI delivered Margin of 35.9%. As a result, all eligible employees, including executive officers, received profit sharing of 20.0% of base salary. To motivate executives and reward them according to the company's relative and absolute performance and the executive's 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 return¹) as compared with 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 Purpose Strategy Terms 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 within the Comparator Group. The terms and conditions of stock options and restricted stock units are summarized under "Outstanding equity awards at fiscal year-end 2016." The committee's grant procedures are described under "Process for equity grants." 1 Total shareholder return refers to the percentage change in the value of a shareholder's investment in a company over the relevant time period, as determined by dividends paid and the change in the company's share price during the period. See notes to the Performance summary table under "Analysis of compensation determinations - Bonus." 20 TEXAS INSTRUMENTS 2017 PROXY STATEMENT PROXY STATEMENT

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