1. Trends Facing Environmental Health & Safety Functions of Business Texas Instruments Incorporated Sensors & Controls Francis J. Veale, Jr., Esq. Manager, Environmental, Safety & Health Department

2. Introduction to Texas Instruments, Sensors & Controls EHS Department Today Trends facing EHS Departments Final Thoughts Agenda

3. TI comprised of four business divisions. Semiconductor (85%), Sensors & Controls (10%), Educational Technology & Calculations (4%), DLP TV (1%). S&C comprised of three business units: Sensors, Controls, Radio Frequency Identification S&C has more than 7,000 employees around the globe Technology Development and Manufacturing in nine locations in the Americas, Asia and Europe Introduction: Texas Instruments Incorporated

4. Environmental Recognition: Selected Charter Member of EPA Performance Track Program. 2001 Governor’s Award for Excellence in Toxics Use Reduction. ISO 14001 Registered (November 2002) Introduction: Sensors & Controls

5. S&C manufactures sensors that are used in various automotive systems. Supplies all the major automakers directly as a tier one supplier or through others as a sub-tier supplier. Subject to the EU End-of- Life Vehicle (ELV) directive restricting material content and disposal of vehicles. Automotive Sensors Coolant Level Air Conditioning Power Steering ABS Oil Pressure Angular Rate Sensor Low G Accel. Trans- mission Occupant Weight Tire Pressure

6. Introduction: Sensors & Controls S&C manufactures controls that are used in various electrical systems. Supplies all the HVAC, telecommunications, and appliance markets. Entire Control Products business product lines subject to globalization pressures. Cost and location of key customers driving the shift of manufacturing to Asia. Control Products

7. EHS Functions – Future Trends n What are the roles of ESH function? Compliance with regulatory, customer, and all other applicable requirements to which the organization is subject. Prevention of ESH liabilities – existing, related to the growth, and new – from negatively impacting the organization ’ s bottom-line. ImprovementImprovement of the organization by supplying value added ESH services. n The basic role of the ESH function remains as it is currently constituted, but the distribution of resources applied to each of the functional area changes.

8. EHS Functions – Future Trends n Compliance: Operational Compliance: With outsourcing of operations to best cost manufacturing locations, domestic compliance requirements not as great a focus as international compliance. Recent Chinese government guidance of enforcement against “non-compliant companies thereby generating more market share for the remaining companies who follow the regulations.” Product Compliance: international material content and waste disposal directives, such as WEEE/RoHS and ELV, have become significant compliance requirements. These directives have created a new breed of EHS staffer – Product Environmental Engineer (the “E” equivalent of Product Safety)

9. EHS Functions – Future Trends EU Directives restricting Material Content (WEEE-RoHS, ELV) have caused OEMs and their entire supply chains to address, sometimes for the first time: the material content of their products, processes for communicating this data to customers, the re-design of their products. While these requirements originate in Europe, they are quickly becoming de-facto international standards. Failure to comply will severely restrict the sale of nonconforming product. These requirements are becoming the source of major market discontinuities that will likely result in significant shifts in market share.

10. EHS Functions – Future Trends n Liability Prevention: Liability Remediation: Domestic remediation placing a premium on and managing liabilities according to regulatory requirements. but at lowest cost to owner, and redeveloping contaminated facilities. Stronger linkage between the real estate developers and the environmental firms that specialize in subsurface remediation. International Liability: In addition to property liability, EHS function must learn to define the potential of acquisitions, new products and technology partnerships to increase company liability. Diminution of value due to inaccurate or incomplete assessment of liabilities related to international commerce.

11. EHS Functions – Future Trends n Improvement: Product Improvement: Trends show an increase in the quantity and complexity of EHS requirements worldwide. The EHS Function provides the expertise within the company to address these EHS requirements effectively. Advanced preparation (i.e., addressing the EHS concern before it becomes a requirement) is more cost effective than addressing the EHS concern after it becomes a requirement. Additionally, by addressing the requirement early, the company has the opportunity to turn the requirement into a competitive advantage. Management System Improvement: International emphasis on management systems including registration to ISO 14001 and OSHAS 18001.

12. Final Thoughts n The EHS Function is undergoing a dramatic change internationally. Domestic EHS Function dividing into three general categories: Compliance Management with emphasis on management systems (ISO14001) and international compliance. Liability Management with emphasis on Brownfields. Product Environmental Engineering – the environmental equivalent of Product Safety. Domestic EHS functions with responsibility for international locations must find an effective method for defining and managing international liability. Internationally, EHS Function typically emphasizes compliance with local requirements.