Investor Presentaiton

The exercise price of the options was the closing price of TI stock on January 29, 2016, the second trading day after the company released its annual and fourth-quarter financial results for 2015. All grants were made under the Texas Instruments 2009 Long- Term Incentive Plan, which shareholders approved in April 2009. All grants have the terms described under "Outstanding equity awards at fiscal year-end 2016." 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 2017, the committee set the 2016 bonus compensation for executive officers based on its assessment of 2016 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 O revenue growth, 。 operating profit as a percentage of revenue, о 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 committee's assessment of the company's 2016 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 company's 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"): Advanced Micro Devices, Inc. Analog Devices, Inc. Broadcom Limited Infineon Technologies AG Intel Corporation Intersil Corporation Linear Technology Corporation Marvell Technology Group Ltd. Maxim Integrated Products, Inc. Microchip Technology Incorporated NVIDIA Corporation NXP Semiconductors N.V. ON Semiconductor Corporation QUALCOMM Incorporated Skyworks Solutions, Inc. STMicroelectronics N.V. 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 2016, three companies were removed from the list after being acquired by other companies. Also, in July 2016, the committee added Skyworks Solutions, Inc. to increase the overall comparability of the group to TI. The committee made no other changes to the list of competitor companies in 2016. Assessment of 2016 performance The committee spent extensive time in December and January assessing TI's results and strategic progress for 2016. In setting bonuses, the committee considered quantitative and qualitative measures on both an absolute and relative basis and made certain that resulting decisions were founded on both solid data and sound judgment. On an absolute basis all measures were positive and improved from the prior year, and in relative comparisons with competitors most measures were as good as or better than the median. In aggregate, the committee determined that performance in 2016 was strong and on par with the prior year, which also was strong. Therefore, the committee held bonuses for 2016 performance to the same levels they were in 2015 for named executive officers, except for one individual whose bonus increased to reflect the growth of his role and the increased impact he had on the performance of the company. Details on the committee's assessment are below. PROXY STATEMENT 24 24 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT

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