General Information

Texins Association Clubs is a non-profit organization consisting of over 25 different clubs. Texins Association Clubs works harmoniously with Texins Activity Centers in Dallas, Spring Creek and Sherman and its parent company, Texas Instruments.

Membership Eligibility

TO: TEXINS ASSOCIATION CLUBS PRESIDENTS

REF: MEMBERSHIP ELIGIBILITY IN THE TEXINS ASSOCIATION CLUBS

This message is a follow up to our June 25, 2003 Texins Association Clubs Annual Meeting.

I have attached a document entitled: "Texins Association 501-c-7 Membership Eligibility." It was presented by Kim Smith and distributed as a handout at the meeting. It describes the reasons for and impact of our conversion from a 501-c-4 non-profit to a 501-c-7, particularly the changes to our membership eligibility. Included in the attachment is a section from our Association Bylaws which describes the membership requirements in detail.

The membership requirements require some study and can be somewhat complex. Because of that, several questions were raised at the Annual Meeting.

Following are a list of those questions and a response to each:

Q: Are retirees from affiliated companies considered non-general public members, even retirees who never had a link to TI?

A: Yes. They are considered members because our bylaws include all retirees from affiliated companies, even those that may not have been TI employees.

Q: Are spouses and dependents of non-general public members considered a part of the non-general public membership or the general public membership? In other words do they count towards the 75% or 25% quota?

A: They are considered members and count against the 75% quota. Signing up family members can help increase the 75% proportion, thereby allowing more people from the general public to join the club.

Q: The 501-c-7 sales tax requirement is a State of Texas governed item. How does the sales tax operate in other states for the 501-c-7 clubs?

A: Our 501-c-7 non-profit status imposes IRS federal requirements. The sales tax issue applies to all state sales taxes not just those in Texas.

Q: Does an ex-TIer applying for club membership have to show some form of validation?

A: This is not a requirement. We assume that people will represent their employment correctly.

Q: Are there examples where someone was an eligible member before but would not be one today?

A: From an employment standpoint, I can cite no examples. However, if someone exhibited a serious breach of proper conduct, they could be considered ineligible for future membership. It would be advisable for club bylaws to take this into consideration.

Affiliated Companies:

In response to several requests, here is a list of the affiliated companies. Employees and retirees of these companies are considered non-general public members.

MEMC Southwest (Sherman) formerly the TI Materials Division
Photronics (Allen) formerly TI photo mask shop.
DSC Communications--TI sold its telecom business to them.
Sterling Software--TI sold its software business to them
Air Liquide (TI Dallas Expressway site) formerly TI Chemical Operations
Raytheon (North Texas Area) formerly TI Defense Systems and Electronics Group
Micron Technology formerly TI MOS Memory business

TriQuint

We recognize that these membership requirements will continue to generate questions. Please don't hesitate to contact me.

Regards,

Alesia Carroll

for the Texins Association Clubs Board of Directors

e-mail: amcarroll@ti.com

Membership Eligibility Restrictions - 75%/25% Requirement

TO: TEXINS ASSOCIATION CLUB PRESIDENTS

REF: MEMBERSHIP ELIGIBILITY RESTRICTIONS--THE 75 / 25 % REQUIREMENT

There was considerable discussion at our June Annual Meeting regarding the various implications of our 75 / 25% membership requirement. I recently sent you an e-mail which hopefully clarified many of the questions that were raised. It occurred to me that we have never explained the rationale for the requirement. I would like to do that now.

To recap the requirement briefly:

- There is no limit to the number of persons who can be club members if they are current employees, former employees, or retirees of TI or of the affiliated companies, i.e. those divested by TI. Also there is no limit to the number of spouses and dependent children of those persons who can be members.

- Members who are from the general public, i.e. those who do not fall into the first category, must represent no more than 25% of each club's membership.

Our two objectives in changing our organization from a 501-c -4 to a 501-c-7 were:

- Allow all club members to participate fully in club elections, voting and officer positions, i.e. eliminate the so-called guest member category.

- Open up geographic membership eligibility. Formerly we were restricted to the North Texas region, essentially the corridor from Dallas to Sherman.

Rationale:

To qualify as a 501-c-7 non-profit organization, the IRS requires that there be a common bond among the members of the various groups. Also the organization should not be a business that provides any substantial number of services or activities to the general public. Furthermore there are additional requirements stipulating that the proportion of income from general public participants must be limited. Violation of these restrictions could result in a loss of non-profit status.

The attorneys that we worked with in making our application to the IRS were concerned that the wide diversity of activities among our clubs, combined with the opening of our geographic membership area, could potentially compromise our common bond. The attorneys strongly advised us to maintain clear restrictions on the extent to which our clubs can serve the general public. Thus the 75 / 25% requirements.

I hope this helps you understand that we didn't come by this decision arbitrarily. In fact the attorneys suggested that we be more restrictive than 25%. But we decided to submit it. The IRS reviewed it and approved it.

If you have remaining questions, please contact me and I will try to address them.

Regards,

Alesia Carroll

e-mail: amcarroll@ti.com