NXP Semiconductors
Annual Report 2015

Plain-text annual report

Table of ContentsAs filed with the Securities and Exchange Commission on February 26, 2016 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 20-F ¨REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGEACT OF 1934OR xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2015OR ¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934OR ¨SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934Date of event requiring this shell company report For the transition period from to Commission file number 001-34841 NXP Semiconductors N.V.(Exact name of Registrant as specified in its charter) The Netherlands(Jurisdiction of incorporation or organization)High Tech Campus 60, Eindhoven 5656 AG, the Netherlands(Address of principal executive offices)Jean Schreurs, SVP and Chief Corporate Counsel, High Tech Campus 60, 5656 AG, Eindhoven, the NetherlandsTelephone: +31 40 2728686 / E-mail: jean.schreurs@nxp.com(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class Name of each exchange on which registeredCommon shares—par value euro (EUR) 0.20 per share The NASDAQ Global Select MarketSecurities registered or to be registered pursuant to Section 12(g) of the Act.None(Title of class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.Common shares—par value EUR 0.20 per share(Title of class) Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the AnnualReport. Class Outstanding at December 31, 2015Ordinary shares, par value EUR 0.20 per share 346,002,862 sharesIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes ¨ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ¨ Yes x NoNote—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934from their obligations under those Sections.Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. x Yes ¨ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). x Yes ¨ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP x International Financial Reporting Standards as issuedby the International Accounting Standards Board ¨ Other ¨If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ¨ Item 18 ¨If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct). ¨ Yes x No Table of ContentsTABLE OF CONTENTS Page Introduction Part I Item 1. Identity of Directors, Senior Management and Advisers 2 Item 2. Offer Statistics and Expected Timetable 2 Item 3. Key Information 2 A. Selected Financial Data 2 B. Capitalization and Indebtedness 4 C. Reasons for the Offer and Use of Proceeds 4 D. Risk Factors 4 Item 4. Information on the Company 19 A. History and Development of the Company 19 B. Business Overview 19 C. Organizational Structure 28 D. Property, Plant and Equipment 30 Item 4A. Unresolved Staff Comments 30 Item 5. Operating and Financial Review and Prospects 30 A. Operating Results 33 B. Liquidity and Capital Resources 40 C. Research and Development, Patents and Licenses, etc. 45 D. Trend Information 46 E. Off-Balance Sheet Arrangements 46 F. Tabular Disclosure of Contractual Obligations 47 G. Safe Harbor 48 Item 6. Directors, Senior Management and Employees 48 A. Directors and Senior Management 48 B. Compensation 52 C. Board Practices 58 D. Employees 59 E. Share Ownership 60 Item 7. Major Shareholders and Related Party Transactions 60 A. Major Shareholders 60 B. Related Party Transactions 61 C. Interests of Experts and Counsel 61 Item 8. Financial Information 61 A. Consolidated Statements and Other Financial Information 61 B. Significant Changes 61 Item 9. The Offer and Listing 62 A. Offer and Listing Details 62 B. Plan of Distribution 62 C. Markets 62 D. Selling Shareholders 62 E. Dilution 62 F. Expenses of the Issue 62 Table of Contents Page Item 10. Additional Information 62 A. Share Capital 62 B. Memorandum and Articles of Association 62 C. Material Contracts 62 D. Exchange Controls 63 E. Taxation 64 F. Dividends and Paying Agents 68 G. Statement by Experts 68 H. Documents on Display 68 I. Subsidiary Information 69 Item 11. Quantitative and Qualitative Disclosures About Market Risk 69 Item 12. Description of Securities Other than Equity Securities 69 Part II Item 13. Defaults, Dividend Arrearages and Delinquencies 70 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 70 Item 15. Controls and Procedures 70 Item 16. A. Audit Committee Financial Expert 70 B. Code of Ethics 71 C. Principal Accountant Fees and Services 71 D. Exemptions from the Listing Standards for Audit Committees 71 E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 72 F. Change in Registrant’s Certifying Accountant 72 G. Corporate Governance 72 H. Mine Safety Disclosures 74 Part III Item 17. Financial Statements 75 Item 18. Financial Statements 75 Item 19. Exhibits 75 GLOSSARY 79 Financial Statements F-1 Table of ContentsIntroductionThis Annual Report contains forward-looking statements that contain risks and uncertainties. Our actual results may differ significantly from futureresults as a result of factors such as those set forth in Part I. Item 3D. Risk Factors and Part I, Item 5G. Safe Harbor.The financial information included in this Annual Report is based on United States Generally Accepted Accounting Principles (U.S. GAAP), unlessotherwise indicated.In presenting and discussing our financial position, operating results and cash flows, management uses certain non-U.S. GAAP financial measures.These non-U.S. GAAP financial measures should not be viewed in isolation or as alternatives to the equivalent U.S. GAAP measures and should be used inconjunction with the most directly comparable U.S. GAAP measures. A discussion of non-U.S. GAAP measures included in this Annual Report and areconciliation of such measures to the most directly comparable U.S. GAAP measures are set forth under “Use of Certain Non-U.S. GAAP FinancialMeasures” contained in this report under Part I, Item 5A. Operating Results.Unless otherwise required, all references herein to “we”, “our”, “us”, “NXP” and the “Company” are to NXP Semiconductors N.V. and its consolidatedsubsidiaries.A glossary of abbreviations and technical terms used in this Annual Report is set forth on page 79. 1Table of ContentsPART IItem 1. Identity of Directors, Senior Management and AdvisersNot applicable.Item 2. Offer Statistics and Expected TimetableNot applicable.Item 3. Key InformationA. Selected Financial DataThe following table presents a summary of our selected historical consolidated financial data. We prepare our financial statements in accordance withU.S. GAAP.The results of operations for prior years are not necessarily indicative of the results to be expected for any future period.On December 7, 2015, we acquired Freescale Semiconductor, Ltd. (“Freescale”) for a total consideration of approximately $11.6 billion (the “Merger”).The results of their operations and the estimated fair value of the assets acquired and liabilities assumed in the business combination are included in ourfinancial statements from the date of acquisition forward. 2Table of ContentsThe selected historical consolidated financial data should be read in conjunction with the discussion under Part I, Item 5A. Operating Results and theConsolidated Financial Statements and the accompanying notes included elsewhere in this Annual Report. As of and for the years ended December 31, ($ in millions unless otherwise stated) 2015 2014 2013 2012 2011 Consolidated Statements of Operations: Revenue 6,101 5,647 4,815 4,358 4,194 Gross profit(1) 2,787 2,640 2,177 1,988 1,906 Total operating expenses(2) (2,035) (1,601) (1,535) (1,605) (1,553) Other income (expense)(3) 1,263 10 9 29 4 Operating income (loss) 2,015 1,049 651 412 357 Financial income (expense) (529) (410) (274) (437) (257) Income (loss) from continuing operationsattributable to stockholders 1,526 539 348 (116) (44) Income (loss) from discontinued operationsattributable to stockholders — — — 1 434 Net income (loss) attributable to stockholders 1,526 539 348 (115) 390 Per share data: Basic earnings per common share attributable to stockholders in $ - Income (loss) from continuing operations 6.36 2.27 1.40 (0.46) (0.17) - Income (loss) from discontinued operations — — — — 1.74 - Net income (loss) 6.36 2.27 1.40 (0.46) 1.57 Diluted earnings per common share attributable to stockholders in $ - Income (loss) from continuing operations 6.10 2.17 1.36 (0.46) (0.17) - Income (loss) from discontinued operations — — — — 1.74 - Net income (loss) 6.10 2.17 1.36 (0.46) 1.57 Weighted average number of shares of common stock outstanding during the year (inthousands) • Basic 239,764 237,954 248,526 248,064 248,812 • Diluted 250,116 248,609 255,050 248,064(4) 248,812(4) Consolidated balance sheet data(5): Cash and cash equivalents 1,614 1,185 670 617 743 Total assets 26,354 6,850 6,402 6,393 6,565 Net assets 11,803 801 1,546 1,284 1,357 Working capital(6) 2,820 1,340 939 765 969 Total debt(7), (8) 9,212 3,956 3,274 3,446 3,752 Total stockholders’ equity 11,515 538 1,301 1,049 1,145 Common stock 68 51 51 51 51 Other operating data: Capital expenditures (341) (329) (215) (251) (221) Depreciation and amortization(9) 517 405 514 533 591 Consolidated statements of cash flows data: Net cash provided by (used for): Operating activities 1,330 1,468 891 722 175 Investing activities (430) (387) (240) (243) (202) Financing activities (449) (554) (598) (574) (926) Net cash provided by (used for) continuing operations 451 527 53 (95) (953) Net cash provided by (used for) discontinued operations — — — (45) 809 (1)Gross profit in 2015 includes a charge of $149 million resulting from the purchase accounting effect on the inventory acquired from Freescale.(2)Total operating expenses in 2015 include charges related to the acquisition of Freescale as follows—$226 million in restructuring charges, $105million for the amortization of acquisition-related intangibles, $49 million of stock based compensation charges related to employees terminated as aresult of the Merger and $42 million of merger related costs.(3)Other income (expense) in 2015 includes the recognition of the gains from the sale of our Bipolar business on November 9, 2015 and the sale of our RFPower business on December 7, 2015. See the section on Other Material Transactions in Part I, Item 4, B, Business Overview.(4)Due to our net losses from continuing operations attributable to stockholders in the years 2011 and 2012, all potentially dilutive securities have beenexcluded from the calculation of diluted earnings per common share because their effect would be anti-dilutive.(5)Consolidated balance sheet data in 2015 includes the impact of purchase accounting on the assets acquired and liabilities assumed in connection withour acquisition of Freescale.(6)Working capital is calculated as current assets less current liabilities (excluding short-term debt).(7)On December 7, 2015, in connection with the Merger, NXP entered into a $2.7 billion secured term loan (“Term Loan B”). Proceeds from among othersthe Term Loan B were used to (i) pay the cash consideration in connection with the Merger, (ii) effect the repayment of certain amounts underFreescale’s outstanding credit facility and (iii) pay certain transaction costs. 3Table of Contents(8)As adjusted for our cash and cash equivalents our net debt was calculated as follows: ($ in millions) 2015 2014 2013 2012 2011 Long-term debt 8,656 3,936 3,234 3,141 3,700 Short-term debt 556 20 40 305 52 Total debt 9,212 3,956 3,274 3,446 3,752 Less: cash and cash equivalents (1,614) (1,185) (670) (617) (743) Net debt 7,598 2,771 2,604 2,829 3,009 Net debt is a non-GAAP financial measure. See “Use of Certain Non-GAAP Financial Measures” under Part I, 5A. Operating Results. (9)Depreciation and amortization includes the effect of purchase accounting related to acquisitions. The effect of purchase accounting in depreciation andamortization was $252 million in 2015, $164 million in 2014, $246 million in 2013, $273 million in 2012 and $301 million in 2011.As used in this Annual Report, “euro”, or “€” means the single unified currency of the European Monetary Union. “U.S. dollar”, “USD”, “U.S. $” or “$”means the lawful currency of the United States of America. As used in this Annual Report, the term “noon buying rate” refers to the exchange rate for euro,expressed in U.S. dollars per euro, as announced by the Federal Reserve Bank of New York for customs purposes as the rate in the city of New York for cabletransfers in foreign currencies.The table below shows the average noon buying rates for U.S. dollars per euro for the five years ended December 31, 2015. The averages set forth in thetable below have been computed using the noon buying rate on the last business day of each month during the periods indicated. Year ended December 31, 2015 2014 2013 2012 2011 Average $ per € 1.1150 1.3297 1.3281 1.2859 1.3931 The following table shows the high and low noon buying rates for U.S. dollars per euro for each of the six months in the six-month period endedFebruary 12, 2016: Month High Low ($ per €) 2015 August 1.1580 1.0868 September 1.1358 1.1104 October 1.1437 1.0963 November 1.1026 1.0562 December 1.1025 1.0573 2016 January 1.0964 1.0743 On February 12, 2016, the noon buying rate was $1.1235 per €1.00.Fluctuations in the value of the euro relative to the U.S. dollar have had a significant effect on the translation into U.S. dollar of our euro-denominatedassets, liabilities, revenue and expenses, and may continue to do so in the future. For further information on the impact of fluctuations in exchange rates onour operations, see the “Fluctuations in Foreign Rates May Have An Adverse Effect On Our Financial Results” section in Part I, Item 3D. Risk Factors andthe “Foreign Currency Risks” section in Part I, Item 11. Quantitative and Qualitative Disclosures About Market Risk.B. Capitalization and IndebtednessNot applicable.C. Reasons for the Offer and Use of ProceedsNot applicable.D. Risk FactorsThe following section provides an overview of the risks to which our business is exposed. You should carefully consider the risk factors describedbelow and all other information contained in this Annual Report, including the Consolidated Financial Statements and related notes. The occurrence of therisks described below could have a material adverse impact on our business, financial condition or results of operations. Various statements in this AnnualReport, including the following risk factors, contain forward-looking statements. Please also refer to Part I, Item 5G. Safe Harbor, contained elsewhere inthis Annual Report. 4Table of ContentsRisks related to our businessOur ongoing business is subject to certain risks related to our integration of Freescale.As described elsewhere in this Annual Report, we completed the Merger on December 7, 2015. The Merger involved the integration of two companiesthat previously operated independently with principal offices in two distinct locations. We are devoting significant management attention and resources tointegrating the companies. Potential difficulties we may encounter as part of the integration process include the following: • the inability to successfully combine the former businesses of NXP and Freescale, or particular business segments such as automotive, in amanner that permits us to enjoy the advantages of highly complementary product portfolios and end-market exposure of the businesses of NXPand Freescale, to be able to offer more innovative and complete solutions to its customers by leveraging NXP’s security capability andFreescale’s broad based microcontroller offering, to achieve the full cost synergies and other benefits anticipated to result from the Merger, andto further expand our global market reach and customer base and expand into other business areas of strategic importance; • our inability, or particular business segments such as automotive, to achieve or maintain leading industry standards in quality, supply chainmanagement and innovation; • complexities associated with managing our businesses after the Merger, including challenges of integrating complex systems, technology,networks and other assets in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies; • integrating the workforces of the former businesses of NXP and Freescale while maintaining focus on providing consistent, high quality customerservice; and • potential unknown liabilities and unforeseen increased expenses or delays associated with the Merger, including costs to integrate the formerbusinesses of NXP and Freescale that may exceed the anticipated costs that we estimated prior to the execution of the Merger agreement.Any of the foregoing could adversely affect our ability to maintain relationships with customers, suppliers, employees and other constituencies or ourability to achieve the anticipated benefits of the Merger or could reduce our earnings or otherwise adversely affect our business and financial results.Accordingly, there can be no assurance: (i) that the Merger will result in the realization of the full benefits of synergies, innovation and operationalefficiencies that we currently expect; (ii) that these benefits will be achieved within the anticipated timeframe: (iii) that we will be able to fully and accuratelymeasure any such synergies; or (iv) that we will be able to implement new strategies to transform the combined businesses of NXP and Freescale. Failure tosuccessfully integrate the businesses and realize the projected synergies, innovation and operational efficiencies may have a material adverse effect on ourbusiness and financial results.Our future results may suffer if we do not effectively manage our expanded operations following the completion of the Merger.Following the completion of the Merger, the size of our business has increased significantly beyond the former size of either NXP’s or Freescale’sbusiness. Our future success depends, in part, upon our ability to manage this expanded business, which will pose substantial challenges for management,including challenges related to the management and monitoring of new operations and associated increased costs and complexity. There can be noassurances that we will be successful or that it will realize the expected operating efficiencies, cost savings and other benefits that were anticipated from theMerger.The semiconductor industry is highly cyclical.Historically, the relationship between supply and demand in the semiconductor industry has caused a high degree of cyclicality in the semiconductormarket. Semiconductor supply is partly driven by manufacturing capacity, which in the past has demonstrated alternating periods of substantial capacityadditions and periods in which no or limited capacity was added. As a general matter, semiconductor companies are more likely to add capacity in periodswhen current or expected future demand is strong and margins are, or are expected to be, high. Investments in new capacity can result in overcapacity, whichcan lead to a reduction in prices and margins. In response, companies typically limit further capacity additions, eventually causing the market to be relativelyundersupplied. In addition, demand for semiconductors varies, which can exacerbate the effect of supply fluctuations. As a result of this cyclicality, thesemiconductor industry has in the past experienced significant downturns, such as in 1997/1998, 2001/2002 and in 2008/2009, often in connection with, orin anticipation of, maturing life cycles of semiconductor companies’ products and declines in general economic conditions. These downturns have beencharacterized by diminishing demand for end-user products, high inventory levels, under-utilization of manufacturing capacity and accelerated erosion ofaverage selling prices. The foregoing risks have historically had, and may continue to have, a material adverse effect on our business, financial condition andresults of operations. 5Table of ContentsSignificantly increased volatility and instability and unfavorable economic conditions may adversely affect our business.In 2008 and 2009, Europe, the United States and international markets experienced increased volatility and instability. In 2015, volatility andinstability in financial markets continued following renewed investor concerns related to the economic situation in parts of the world, a decline in the growthrate of the Chinese economy, increased hostilities in the Middle East, and other world events. These, or other events, could further adversely affect theeconomies of the European Union, the United States and those of other countries and may exacerbate the cyclicality of our business. Among other factors, weface risks attendant to declines in general economic conditions, changes in demand for end-user products and changes in interest rates.Despite indications of recovery and aggressive measures taken by governments and central banks, there is a significant risk that the global economycould fall into recession again. If economic conditions remain uncertain or deteriorate, our business, financial condition and results of operations could bematerially adversely affected.As a consequence of the significantly increased volatility and instability, it is difficult for us, our customers and suppliers to forecast demand trends.We may be unable to accurately predict the extent or duration of cycles or their effect on our financial condition or result of operations and can give noassurance as to the timing, extent or duration of the current or future business cycles. A recurrent decline in demand or the failure of demand to return to priorlevels could place pressure on our results of operations. The timing and extent of any changes to currently prevailing market conditions is uncertain andsupply and demand may be unbalanced at any time.The semiconductor industry is highly competitive. If we fail to introduce new technologies and products in a timely manner, this could adverselyaffect our business.The semiconductor industry is highly competitive and characterized by constant and rapid technological change, short product lifecycles, significantprice erosion and evolving standards. Accordingly, the success of our business depends to a significant extent on our ability to develop new technologiesand products that are ultimately successful in the market. The costs related to the research and development necessary to develop new technologies andproducts are significant and any reduction of our research and development budget could harm our competitiveness. Meeting evolving industry requirementsand introducing new products to the market in a timely manner and at prices that are acceptable to our customers are significant factors in determining ourcompetitiveness and success. Commitments to develop new products must be made well in advance of any resulting sales, and technologies and standardsmay change during development, potentially rendering our products outdated or uncompetitive before their introduction. If we are unable to successfullydevelop new products, our revenue may decline substantially. Moreover, some of our competitors are well-established entities, are larger than us and havegreater resources than we do. If these competitors increase the resources they devote to developing and marketing their products, we may not be able tocompete effectively. Any consolidation among our competitors could enhance their product offerings and financial resources, further strengthening theircompetitive position. In addition, some of our competitors operate in narrow business areas relative to us, allowing them to concentrate their research anddevelopment efforts directly on products and services for those areas, which may give them a competitive advantage. As a result of these competitivepressures, we may face declining sales volumes or lower prevailing prices for our products, and we may not be able to reduce our total costs in line with thisdeclining revenue. If any of these risks materialize, they could have a material adverse effect on our business, financial condition and results of operations.In many of the market segments in which we compete, we depend on winning selection processes, and failure to be selected could adversely affect ourbusiness in those market segments.One of our business strategies is to participate in and win competitive bid selection processes to develop products for use in our customers’ equipmentand products. These selection processes can be lengthy and require us to incur significant design and development expenditures, with no guarantee ofwinning a contract or generating revenue. Failure to win new design projects and delays in developing new products with anticipated technological advancesor in commencing volume shipments of these products may have an adverse effect on our business. This risk is particularly pronounced in markets wherethere are only a few potential customers and in the automotive market, where, due to the longer design cycles involved, failure to win a design-in couldprevent access to a customer for several years. Our failure to win a sufficient number of these bids could result in reduced revenue and hurt our competitiveposition in future selection processes because we may not be perceived as being a technology or industry leader, each of which could have a material adverseeffect on our business, financial condition and results of operations.The demand for our products depends to a significant degree on the demand for our customers’ end products.The vast majority of our revenue is derived from sales to manufacturers in the automotive, identification, wireless infrastructure, lighting, industrial,mobile, consumer and computing markets. Demand in these markets fluctuates significantly, driven by consumer spending, consumer preferences, thedevelopment of new technologies and prevailing economic conditions. In addition, the specific products in which our semiconductors are incorporated maynot be successful, or may experience price erosion or other competitive factors that affect the price manufacturers are willing to pay us. Such customers havein the past, and may in the future, vary order levels significantly from period to period, request postponements to scheduled delivery dates, modify theirorders or reduce lead times. This is particularly common during periods of low demand. This can make managing our business difficult, as it limits thepredictability of future revenue. It can also affect the accuracy of our financial forecasts. Furthermore, developing industry trends, including customers’ use ofoutsourcing and new and revised supply chain models, may affect our revenue, costs and working capital requirements. Additionally, a significant portion ofour products is made to order. 6Table of ContentsIf customers do not purchase products made specifically for them, we may not be able to resell such products to other customers or may not be able torequire the customers who have ordered these products to pay a cancellation fee. The foregoing risks could have a material adverse effect on our business,financial condition and results of operations.The semiconductor industry is characterized by continued price erosion, especially after a product has been on the market.One of the results of the rapid innovation in the semiconductor industry is that pricing pressure, especially on products containing older technology,can be intense. Product life cycles are relatively short, and as a result, products tend to be replaced by more technologically advanced substitutes on a regularbasis.In turn, demand for older technology falls, causing the price at which such products can be sold to drop, in some cases precipitously. In order tocontinue profitably supplying these products, we must reduce our production costs in line with the lower revenue we can expect to generate per unit. Usually,this must be accomplished through improvements in process technology and production efficiencies. If we cannot advance our process technologies orimprove our efficiencies to a degree sufficient to maintain required margins, we will no longer be able to make a profit from the sale of these products.Moreover, we may not be able to cease production of such products, either due to contractual obligations or for customer relationship reasons, and as a resultmay be required to bear a loss on such products. We cannot guarantee that competition in our core product markets will not lead to price erosion, lowerrevenue or lower margins in the future. Should reductions in our manufacturing costs fail to keep pace with reductions in market prices for the products wesell, this could have a material adverse effect on our business, financial condition and results of operations.Goodwill and other identifiable intangible assets represent a significant portion of our total assets, and we may never realize the full value of ourintangible assets.Goodwill and other identifiable intangible assets are recorded at fair value on the date of an acquisition. As a result of our acquisition of Freescale, werecognized goodwill of approximately $7.4 billion and intangible assets of approximately $8.5 billion. We review our goodwill and other intangible assetsbalance for impairment upon any indication of a potential impairment, and in the case of goodwill, at a minimum of once a year. Impairment may result from,among other things, a sustained decrease in share price, deterioration in performance, adverse market conditions, adverse changes in applicable laws orregulations, including changes that restrict the activities of or affect the products and services we sell, challenges to the validity of certain registeredintellectual property, reduced sales of certain products incorporating registered intellectual property and a variety of other factors. The amount of anyquantified impairment must be expensed immediately as a charge to results of operations. Depending on future circumstances, it is possible that we maynever realize the full value of our intangible assets. Any future determination of impairment of goodwill or other identifiable intangible assets could have amaterial adverse effect on our financial position, results of operations and stockholders’ equity.As our business is global, we need to comply with laws and regulations in countries across the world and are exposed to international business risksthat could adversely affect our business.We operate globally, with manufacturing, assembly and testing facilities in several continents, and we market our products globally.As a result, we are subject to environmental, labor and health and safety laws and regulations in each jurisdiction in which we operate. We are alsorequired to obtain environmental permits and other authorizations or licenses from governmental authorities for certain of our operations and have to protectour intellectual property worldwide. In the jurisdictions where we operate, we need to comply with differing standards and varying practices of regulatory,tax, judicial and administrative bodies.In addition, the business environment is also subject to many economic and political uncertainties, including the following international businessrisks: • negative economic developments in economies around the world and the instability of governments, such as the sovereign debt crisis in certainEuropean countries; • social and political instability in a number of countries around the world, including continued hostilities and civil unrest in the Middle East. Theinstability may have a negative effect on our business, financial condition and operations via our customers and volatility in energy prices andthe financial markets; • potential terrorist attacks; • epidemics and pandemics, which may adversely affect our workforce, as well as our local suppliers and customers in particular in Asia; • adverse changes in governmental policies, especially those affecting trade and investment; • our customers or other groups of stakeholders might impose requirements that are more stringent than the laws in the countries in which we areactive; • volatility in foreign currency exchange rates, in particular with respect to the U.S. dollar, and transfer restrictions, in particular in Greater China;and • threats that our operations or property could be subject to nationalization and expropriation.No assurance can be given that we have been or will be at all times in complete compliance with the laws and regulations to which we are subject orthat we have obtained or will obtain the permits and other authorizations or licenses that we need. If we violate or fail to comply with laws, regulations,permits and other authorizations or licenses, we could be fined or otherwise sanctioned by regulators. In this case, or if any of the international business riskswere to materialize or become worse, they could have a material adverse effect on our business, financial condition and results of operations. 7Table of ContentsIn addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for publiccompanies, further increasing legal and financial compliance costs. These laws, regulations and standards are subject to varying interpretations, in manycases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory andgoverning bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure.Interruptions in our information technology systems could adversely affect our business.We rely on the efficient and uninterrupted operation of complex information technology applications, systems and networks to operate our business.The reliability and security of our information technology infrastructure and software, and our ability to expand and continually update technologies inresponse to our changing needs is critical to our business. Any significant interruption in our business applications, systems or networks, including but notlimited to new system implementations, computer viruses, cyberattacks, security breaches, facility issues or energy blackouts could have a material adverseimpact on our business, financial condition and results of operations.Our computer systems and networks are subject to attempted security breaches and other cybersecurity incidents, which, if successful, could impactour business.We have, from time to time, experienced attempted cyber-attacks of varying degrees to obtain access to our computer systems and networks. As of thedate of this Annual Report, no such attacks have succeeded in obtaining access to our critical systems. However, such attacks may be successful in the future.Cyber-attacks could result in the misappropriation of our proprietary information and technology, the compromise of personal and confidential informationof our employees, customers or suppliers or interrupt our business. In the current environment, there are numerous and evolving risks to cybersecurity andprivacy, including criminal hackers, state-sponsored intrusions, industrial espionage, employee malfeasance, and human or technological error. Computerhackers and others routinely attempt to breach the security of technology products, services, and systems, and those of customers, suppliers, and some ofthose attempts may be successful. Such breaches could result in, for example, unauthorized access to, disclosure, modification, misuse, loss, or destruction ofour, our customer, or other third party data or systems, theft of sensitive or confidential data including personal information and intellectual property, systemdisruptions, and denial of service. In the event of such breaches, we, our customers or other third parties could be exposed to potential liability, litigation, andregulatory action, as well as the loss of existing or potential customers, damage to our reputation, and other financial loss. In addition, the cost andoperational consequences of responding to breaches and implementing remediation measures could be significant. As these threats continue to develop andgrow, we have been adapting the security measures and we continue to increase the amount we allocate to implement, maintain and/or update securitysystems to protect data and infrastructure. As a global enterprise, we could also be impacted by existing and proposed laws and regulations, as well asgovernment policies and practices related to cybersecurity, privacy and data protection. Additionally, cyber-attacks or other catastrophic events resulting indisruptions to or failures in power, information technology, communication systems or other critical infrastructure could result in interruptions or delays tous, our customers, or other third party operations or services, financial loss, potential liability, and damage our reputation and affect our relationships with ourcustomers and suppliers.In difficult market conditions, our high fixed costs combined with low revenue may negatively affect our results of operations.The semiconductor industry is characterized by high fixed costs and, notwithstanding our utilization of third-party manufacturing capacity, most ofour production requirements are met by our own manufacturing facilities. In less favorable industry environments, like we faced in the second half in 2011,we are generally faced with a decline in the utilization rates of our manufacturing facilities due to decreases in demand for our products. During such periods,our fabrication plants could operate at lower loading level, while the fixed costs associated with the full capacity continue to be incurred, resulting in lowergross profit.The semiconductor industry is capital intensive and if we are unable to invest the necessary capital to operate and grow our business, we may notremain competitive.To remain competitive, we must constantly improve our facilities and process technologies and carry out extensive research and development, each ofwhich requires investment of significant amounts of capital. This risk is magnified by the indebtedness we currently have, since we are required to use aportion of our cash flow to service that debt. If we are unable to generate sufficient cash flow or raise sufficient capital to meet both our debt service andcapital investment requirements, or if we are unable to raise required capital on favorable terms when needed, this could have a material adverse effect on ourbusiness, financial condition and results of operations. 8Table of ContentsWe rely to a significant extent on proprietary intellectual property. We may not be able to protect this intellectual property against improper use byour competitors or others.Our success and future revenue growth depends, in part, on our ability to protect our proprietary technology, our products, our proprietary designs andfabrication processes, and other intellectual property against misappropriation by others. We primarily rely on patent, copyright, trademark and trade secretlaws, as well as nondisclosure agreements and other methods, to protect our intellectual property. We may have difficulty obtaining patents and otherintellectual property rights to protect our proprietary products, technology and intellectual property, and the patents and other intellectual property rights wereceive may be insufficient to provide us with meaningful protection or commercial advantage. We may not be able to obtain patent protection or secureother intellectual property rights in all the countries in which we operate, and under the laws of such countries, patents and other intellectual property rightsmay be or become unavailable or limited in scope. Even if new patents are issued, the claims allowed may not be sufficiently broad to effectively protect ourproprietary technology, processes and other intellectual property. In addition, any of our existing patents, and any future patents issued to us may bechallenged, invalidated or circumvented. The protection offered by intellectual property rights may be inadequate or weakened for reasons or circumstancesthat are out of our control. Further, our proprietary technology, designs and processes and other intellectual property may be vulnerable to disclosure ormisappropriation by employees, contractors and other persons. It is possible that competitors or other unauthorized third parties may obtain, copy, use ordisclose our proprietary technologies, our products, designs, processes and other intellectual property despite our efforts to protect our intellectual property.While we hold a significant number of patents, there can be no assurances that additional patents will be issued or that any rights granted under our patentswill provide meaningful protection against misappropriation of our intellectual property. Our competitors may also be able to develop similar technologyindependently or design around our patents. We may not have foreign patents or pending applications corresponding to all of our primary patents andapplications. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. In particular, intellectual property rights aredifficult to enforce in some countries, since the application and enforcement of the laws governing such rights may not have reached the same level ascompared to other jurisdictions where we operate, such as the United States, Germany and the Netherlands. Consequently, operating in some countries maysubject us to an increased risk that unauthorized parties may attempt to copy or otherwise use our intellectual property or the intellectual property of oursuppliers or other parties with whom we engage. There is no assurance that we will be able to protect our intellectual property rights or have adequate legalrecourse in the event that we seek legal or judicial enforcement of our intellectual property rights under the laws of such countries. Any inability on our partto adequately protect our intellectual property may have a material adverse effect on our business, financial condition and results of operations.We may become party to intellectual property claims or litigation that could cause us to incur substantial costs, pay substantial damages or prohibitus from selling our products.We have from time to time received, and may in the future receive, communications alleging possible infringement of patents and other intellectualproperty rights of others. Further, we may become involved in costly litigation brought against us regarding patents, copyrights, trademarks, trade secrets orother intellectual property rights. If any such claims are asserted against us, we may seek to obtain a license under the third party’s intellectual propertyrights. We cannot assure you that we will be able to obtain any or all of the necessary licenses on satisfactory terms, if at all. In the event that we cannotobtain or take the view that we don’t need a license, these parties may file lawsuits against us seeking damages (and potentially treble damages in the UnitedStates) or an injunction against the sale of our products that incorporate allegedly infringed intellectual property or against the operation of our business aspresently conducted. Such lawsuits, if successful, could result in an increase in the costs of selling certain of our products, our having to partially orcompletely redesign our products or stop the sale of some of our products and could cause damage to our reputation. Any litigation could require significantfinancial and management resources regardless of the merits or outcome, and we cannot assure you that we would prevail in any litigation or that ourintellectual property rights can be successfully asserted in the future or will not be invalidated, circumvented or challenged. The award of damages, includingmaterial royalty payments, or the entry of an injunction against the manufacture and sale of some or all of our products, could affect our ability to compete orhave a material adverse effect on our business, financial condition and results of operations.We rely on strategic partnerships, joint ventures and alliances for manufacturing and research and development. However, we often do not controlthese partnerships and joint ventures, and actions taken by any of our partners or the termination of these partnerships or joint ventures could adverselyaffect our business.As part of our strategy, we have entered into a number of long-term strategic partnerships with other leading industry participants. For example, wehave entered into a joint venture with Taiwan Semiconductor Manufacturing Company Limited (“TSMC”) called Systems on Silicon ManufacturingCompany Pte. Ltd. (“SSMC”). We have also established Advanced Semiconductor Manufacturing Corporation Limited (“ASMC”) together with a number ofChinese partners. Furthermore, together with Advanced Semiconductor Engineering Inc. (“ASE”), we established the assembly and test joint venture ASENSemiconductors Co. Ltd. (“ASEN”). In 2015, we established WeEn Semiconductors, a Bipolar joint venture in China with JianGuang Asset Management Co,Ltd. See Part I, Item 4B.-Business Overview, “Other Significant Transactions”. 9Table of ContentsIf any of our strategic partners in industry groups or in any of the other alliances we engage with were to encounter financial difficulties or change theirbusiness strategies, they may no longer be able or willing to participate in these groups or alliances, which could have a material adverse effect on ourbusiness, financial condition and results of operations. We do not control some of these strategic partnerships, joint ventures and alliances in which weparticipate. We may also have certain obligations, including some limited funding obligations or take or pay obligations, with regard to some of our strategicpartnerships, joint ventures and alliances. For example, we have made certain commitments to SSMC, in which we have a 61.2% ownership share, wherebywe are obligated to make cash payments to SSMC should we fail to utilize, and TSMC does not utilize, an agreed upon percentage of the total availablecapacity at SSMC’s fabrication facilities if overall SSMC utilization levels drop below a fixed proportion of the total available capacity.Notwithstanding the recent closing of the Merger, we may continue to make other acquisitions and engage in other transactions to complement orexpand our existing businesses. However, we may not be successful in acquiring other suitable targets or we may not be successful in integrating Freescaleor any such other target into our operations. Any acquisitions we make may lead to a diversion of management resources.Our future success may depend on acquiring businesses and technologies, making investments or forming joint ventures that complement, enhance orexpand our current portfolio or otherwise offer us growth opportunities. We may engage in acquisitions or strategic transactions or make strategicinvestments that could adversely affect our financial results or fail to enhance stockholder value. On December 7, 2015, we completed the Merger withFreescale. In pursuing further acquisitions, we may face competition from other companies in the semiconductor industry. We may have to expend substantialamounts of cash, incur debt, assume loss-making divisions and incur other types of expenses in order to pursue such further acquisitions. Our acquisitions orstrategic investments may not generate financial returns or result in increased adoption or continued use of our technologies, products or services. In somecases, we may be required to consolidate or record our share of the earnings or losses of companies in which we have acquired ownership interests. Inaddition, we may record impairment charges related to our acquisitions or strategic investments. Any losses or impairment charges that we incur related tostrategic investments or other transactions will have a negative impact on our financial results, and we may continue to incur new or additional losses relatedto strategic assets or investments that we have not fully impaired or exited.Achieving the anticipated benefits of business acquisitions depends in part upon our ability to integrate the acquired businesses in an efficient andeffective manner. The integration of companies that have previously operated independently involves significant challenges, including, among others:retaining key employees; successfully integrating new employees, business systems, technology and products; retaining customers and suppliers of theacquired business; consolidating research and development and/or supply operations; minimizing the diversion of management’s attention from ongoingbusiness matters; and consolidating corporate and administrative infrastructures. We may not derive any commercial value from acquired technologies orproducts or from future technologies or products based on the acquired technologies, and we may be subject to liabilities that are not covered byindemnification protection that we may obtain, or we may become subject to litigation. We may also face challenges in successfully integrating Freescale orany such other acquired companies into our existing organization or in creating the anticipated cost synergies. Each of these risks could have a materialadverse effect on our business, financial condition and results of operations.We may from time to time desire to exit certain product lines or businesses, or to restructure our operations, but may not be successful in doing so.From time to time, we may decide to divest certain product lines and businesses or restructure our operations, including through the contribution ofassets to joint ventures. We have, in recent years, exited several of our product lines and businesses, and we have closed several of our manufacturing andresearch facilities. We may continue to do so in the future. However, our ability to successfully exit product lines and businesses, or to close or consolidateoperations, depends on a number of factors, many of which are outside of our control. For example, if we are seeking a buyer for a particular business line,none may be available, or we may not be successful in negotiating satisfactory terms with prospective buyers. In addition, we may face internal obstacles toour efforts. In particular, several of our operations and facilities are subject to collective bargaining agreements and social plans or require us to consult withour employee representatives, such as work councils which may prevent or complicate our efforts to sell or restructure our businesses. In some cases,particularly with respect to our European operations, there may be laws or other legal impediments affecting our ability to carry out such sales orrestructuring.If we are unable to exit a product line or business in a timely manner, or to restructure our operations in a manner we deem to be advantageous, thiscould have a material adverse effect on our business, financial condition and results of operations. Even if a divestment is successful, we may face indemnityand other liability claims by the acquirer or other parties. 10Table of ContentsWe may from time to time restructure parts of our processes. Any such restructuring may impact customer satisfaction and the costs ofimplementation may be difficult to predict.Between 2008 and 2011, we executed a redesign program and, in 2013 we executed a restructuring initiative designed to improve operationalefficiency and to competitively position the company for sustainable growth. In 2015, we began a restructuring initiative to prepare for and implement theintegration of Freescale into our existing businesses. We plan to continue to restructure and make changes to parts of the processes in our organization.Furthermore, if the global economy remains volatile or if the global economy reenters a deeper and longer lasting recession, our revenues could decline, andwe may be forced to take additional cost savings steps that could result in additional charges and materially affect our business. The costs of implementingany restructurings, changes or cost savings steps may differ from our estimates and any negative impacts on our revenues or otherwise of such restructurings,changes or steps, such as situations in which customer satisfaction is negatively impacted, may be larger than originally estimated.If we fail to extend or renegotiate our collective bargaining agreements and social plans with our labor unions as they expire from time to time, ifregular or statutory consultation processes with employee representatives such as works councils fail or are delayed, or if our unionized employees were toengage in a strike or other work stoppage, our business and operating results could be materially harmed.We are a party to collective bargaining agreements and social plans with our labor unions. We are also required to consult with our employeerepresentatives, such as works councils, on items such as restructurings, acquisitions and divestitures. Although we believe that our relations with ouremployees, employee representatives and unions are satisfactory, no assurance can be given that we will be able to successfully extend or renegotiate theseagreements as they expire from time to time or to conclude the consultation processes in a timely and favorable way. The impact of future negotiations andconsultation processes with employee representatives could have a material impact on our financial results. Also, if we fail to extend or renegotiate our laboragreements and social plans, if significant disputes with our unions arise, or if our unionized workers engage in a strike or other work stoppage, we couldincur higher ongoing labor costs or experience a significant disruption of operations, which could have a material adverse effect on our business.Our working capital needs are difficult to predict.Our working capital needs are difficult to predict and may fluctuate. The comparatively long period between the time at which we commencedevelopment of a product and the time at which it may be delivered to a customer leads to high inventory and work-in-progress levels. The volatility of ourcustomers’ own businesses and the time required to manufacture products also makes it difficult to manage inventory levels and requires us to stockpileproducts across many different specifications.Our business may be adversely affected by costs relating to product defects, and we could be faced with product liability and warranty claims.We make highly complex electronic components and, accordingly, there is a risk that defects may occur in any of our products. Such defects can giverise to significant costs, including expenses relating to recalling products, replacing defective items, writing down defective inventory and loss of potentialsales. In addition, the occurrence of such defects may give rise to product liability and warranty claims, including liability for damages caused by suchdefects. If we release defective products into the market, our reputation could suffer and we may lose sales opportunities and incur liability for damages.Moreover, since the cost of replacing defective semiconductor devices is often much higher than the value of the devices themselves, we may at times facedamage claims from customers in excess of the amounts they pay us for our products, including consequential damages. We also face exposure to potentialliability resulting from the fact that our customers typically integrate the semiconductors we sell into numerous consumer products, which are then sold intothe marketplace. We are exposed to product liability claims if our semiconductors or the consumer products based on them malfunction and result in personalinjury or death. We may be named in product liability claims even if there is no evidence that our products caused the damage in question, and such claimscould result in significant costs and expenses relating to attorneys’ fees and damages. In addition, our customers may recall their products if they prove to bedefective or make compensatory payments in accordance with industry or business practice or in order to maintain good customer relationships. If such arecall or payment is caused by a defect in one of our products, our customers may seek to recover all or a portion of their losses from us. If any of these risksmaterialize, our reputation would be harmed and there could be a material adverse effect on our business, financial condition and results of operations.Our business has suffered, and could in the future suffer, from manufacturing problems.We manufacture, in our own factories as well as with third parties, our products using processes that are highly complex, require advanced and costlyequipment and must continuously be modified to improve yields and performance. Difficulties in the production process can reduce yields or interruptproduction, and, as a result of such problems, we may on occasion not be able to deliver products or do so in a timely or cost-effective or competitive manner.As the complexity of both our products and our fabrication processes has become more advanced, manufacturing tolerances have been reduced andrequirements for precision have become more demanding. As is common in the semiconductor industry, we have in the past experienced manufacturingdifficulties that have given rise to delays in delivery and quality control problems. There can be no assurance that any such occurrence in the future wouldnot materially harm our results of operations. Further, we may suffer disruptions in our manufacturing operations, either due to production difficulties such asthose described above or as a result of external factors beyond our control. We may, in the future, experience manufacturing difficulties or permanent ortemporary loss of manufacturing capacity due to the preceding or other risks. Any such event could have a material adverse effect on our business, financialcondition and results of operations. 11Table of ContentsWe rely on the timely supply of equipment and materials and could suffer if suppliers fail to meet their delivery obligations or raise prices. Certainequipment and materials needed in our manufacturing operations are only available from a limited number of suppliers.Our manufacturing operations depend on deliveries of equipment and materials in a timely manner and, in some cases, on a just-in-time basis. Fromtime to time, suppliers may extend lead times, limit the amounts supplied to us or increase prices due to capacity constraints or other factors. Supplydisruptions may also occur due to shortages in critical materials, such as silicon wafers or specialized chemicals. Because the equipment that we purchase iscomplex, it is frequently difficult or impossible for us to substitute one piece of equipment for another or replace one type of material with another. A failureby our suppliers to deliver our requirements could result in disruptions to our manufacturing operations. Our business, financial condition and results ofoperations could be harmed if we are unable to obtain adequate supplies of quality equipment or materials in a timely manner or if there are significantincreases in the costs of equipment or materials.Failure of our third party suppliers to perform could adversely affect our ability to exploit growth opportunities.We currently use outside suppliers for a portion of our manufacturing capacity. Outsourcing our production presents a number of risks. If our outsidesuppliers are unable to satisfy our demand, or experience manufacturing difficulties, delays or reduced yields, our results of operations and ability to satisfycustomer demand could suffer. In addition, purchasing rather than manufacturing these products may adversely affect our gross profit margin if the purchasecosts of these products are higher than our own manufacturing costs would have been. Prices for foundry products also vary depending on capacityutilization rates at our suppliers, quantities demanded, product technology and geometry. Furthermore, these outsourcing costs can vary materially fromquarter to quarter and, in cases of industry shortages, they can increase significantly, negatively affecting our gross profit.Loss of our key management and other personnel, or an inability to attract such management and other personnel, could affect our business.We depend on our key management to run our business and on our senior engineers to develop new products and technologies. Our success willdepend on the continued service of these individuals. Although we have several share based compensation plans in place, we cannot be sure that these planswill help us in our ability to retain key personnel, especially considering the fact that the stock options under some of our plans become exercisable upon achange of control (in particular, when a third party, or third parties acting in concert, obtains, whether directly or indirectly, control of us). The loss of any ofour key personnel, whether due to departures, death, ill health or otherwise, could have a material adverse effect on our business. The market for qualifiedemployees, including skilled engineers and other individuals with the required technical expertise to succeed in our business, is highly competitive and theloss of qualified employees or an inability to attract, retain and motivate the additional highly skilled employees required for the operation and expansion ofour business could hinder our ability to successfully conduct research activities or develop marketable products. The foregoing risks could have a materialadverse effect on our business.Disruptions in our relationships with any one of our key customers could adversely affect our business.A substantial portion of our revenue is derived from our top customers, including our distributors. We cannot guarantee that we will be able to generatesimilar levels of revenue from our largest customers in the future. If one or more of these customers substantially reduce their purchases from us, this couldhave a material adverse effect on our business, financial condition and results of operations.We receive subsidies and grants in certain countries, and a reduction in the amount of governmental funding available to us or demands forrepayment could increase our costs and affect our results of operations.As is the case with other large semiconductor companies, we receive subsidies and grants from governments in some countries. These programs aresubject to periodic review by the relevant governments, and if any of these programs are curtailed or discontinued, this could have a material adverse effecton our business, financial condition and results of operations. As the availability of government funding is outside our control, we cannot guarantee that wewill continue to benefit from government support or that sufficient alternative funding will be available if we lose such support. Moreover, if we terminateany activities or operations, including strategic alliances or joint ventures, we may face adverse actions from the local governmental agencies providing suchsubsidies to us. In particular, such government agencies could seek to recover such subsidies from us and they could cancel or reduce other subsidies wereceive from them. This could have a material adverse effect on our business, financial condition and results of operations.Legal proceedings covering a range of matters are pending in various jurisdictions. Due to the uncertainty inherent in litigation, it is difficult topredict the final outcome. An adverse outcome might affect our results of operations.We and certain of our businesses are involved as plaintiffs or defendants in legal proceedings in various matters. For example, we are involved in legalproceedings claiming personal injuries to the children of former employees as a result of employees’ alleged exposure to chemicals used in semiconductormanufacturing clean room environments operated by us or our former parent companies Philips and Motorola. Furthermore, because we continue to utilizethese clean rooms, we may become subject to future claims alleging personal injury that may lead to additional liability. A judgment against us or materialdefense cost could harm our business, financial condition and results of operations. 12Table of ContentsWe are exposed to a variety of financial risks, including currency risk, interest rate risk, liquidity risk, commodity price risk, credit risk and othernon-insured risks, which may have an adverse effect on our financial results.We are a global company and, as a direct consequence, movements in the financial markets may impact our financial results. We are exposed to avariety of financial risks, including currency fluctuations, interest rate risk, liquidity risk, commodity price risk and credit risk and other non-insured risks.We have euro-denominated assets and liabilities and, since our reporting currency is the U.S. dollar, the impact of currency translation adjustments to suchassets and liabilities may have a negative effect on our stockholders’ equity. We continue to hold or convert a part of our cash in euros as a hedge for euroexpenses and euro interest payments. We are exposed to fluctuations in exchange rates when we convert U.S. dollars to euro. We enter into diverse financialtransactions with several counterparties to mitigate our currency risk. We only use derivative instruments for hedging purposes. The U.S. dollar-denominateddebt issued by us and our subsidiary, NXP B.V., with functional currency euro may generate adverse currency results in our financial income and expenses.Part of this effect is mitigated due to the application of net investment hedge accounting, since May 2011, pursuant to which the currency results on (part of)the U.S. dollar-denominated debt is reported as part of other comprehensive income within equity instead of financial income and expense in theConsolidated Statements of Operations. Absent the application of net investment hedge accounting, we would have recorded an additional charge of $190million, before tax, within financial income and expense in the 2015 statement of operations. As of January 1, 2016, as a result of the acquisition of Freescale,NXP has concluded that the functional currency of the holding company is USD. Beginning from January 1, 2016, our U.S. dollar-denominated notes andshort-term loans will no longer need to be re-measured.We are also a purchaser of certain base metals, precious metals, chemicals and energy used in the manufacturing process of our products, the prices ofwhich can be volatile. Credit risk represents the loss that would be recognized at the reporting date if counterparties failed to perform upon their agreedpayment obligations. Credit risk is present within our trade receivables. Such exposure is reduced through ongoing credit evaluations of the financialconditions of our customers and by adjusting payment terms and credit limits when appropriate. We invest available cash and cash equivalents with variousfinancial institutions and are in that respect exposed to credit risk with these counterparties. We actively manage concentration risk on a daily basis adheringto a treasury management policy. We seek to limit the financial institutions with which we enter into financial transactions, such as depositing cash, to thosewith a strong credit rating wherever possible. If we are unable to successfully manage these risks, they could have a material adverse effect on our business,financial condition and results of operations.The impact of a negative performance of financial markets and demographic trends on our defined benefit pension liabilities and costs cannot bepredicted.We sponsor defined benefit pension plans in a number of countries and a significant number of our employees are covered by our defined benefitpension plans. As of December 31, 2015, we had recognized a net accrued benefit liability of $371 million, representing the unfunded benefit obligations ofour defined pension plans. The funding status and the liabilities and costs of maintaining these defined benefit pension plans may be impacted by financialmarket developments. For example, the accounting for such plans requires determining discount rates, expected rates of compensation and expected returnson plan assets, and any changes in these variables can have a significant impact on the projected benefit obligations and net periodic pension costs. Negativeperformance of the financial markets could also have a material impact on funding requirements and net periodic pension costs. Our defined benefit pensionplans may also be subject to demographic trends. Accordingly, our costs to meet pension liabilities going forward may be significantly higher than they aretoday, which could have a material adverse impact on our financial condition.Changes in the tax deductibility of interest may adversely affect our financial position and our ability to service the obligations under ourindebtedness.Effective January 1, 2013 certain new limitations apply to the tax deductibility of interest expense in the Netherlands. A Dutch company that isconsidered to be financed with excessive debt, may not be entitled to deduct interest expense on such excessive debt. Existing debt is not grandfatheredunder these rules. The measurement of whether there is excessive debt is based on arithmetic tests based on the amount of equity of the company in relationto the acquisition cost of and capital invested in the Netherlands and foreign subsidiaries of the Netherlands consolidated group. When the equity of thecompany is below a certain minimum threshold, the company may be considered to have excessive debt. Certain safe harbor rules apply when newoperational businesses are acquired by the company. Even though these limitations on tax deductibility have not yet impacted us, the application of thepotential limitation on tax deductibility of interest expense in the future may adversely affect our financial position and our ability to service the obligationsunder our indebtedness.We are exposed to a number of different tax uncertainties, which could have an impact on tax results.We are required to pay taxes in multiple jurisdictions. We determine the taxes we are required to pay based on our interpretation of the applicable taxlaws and regulations in the jurisdictions in which we operate. We may be subject to unfavorable changes in the respective tax laws and regulations to whichwe are subject. Tax controls, audits, change in controls and changes in tax laws or regulations or the interpretation given to them may expose us to negativetax consequences, including interest payments and potentially penalties. We have issued transfer-pricing directives in the areas of goods, services andfinancing, which are in accordance with the Guidelines of the Organization of Economic Co-operation and Development (OECD). As transfer pricing has across border effect, the focus of local tax authorities on implemented transfer pricing procedures in a country may have an impact on results in anothercountry. 13Table of ContentsTransfer pricing uncertainties can also result from disputes with local tax authorities about transfer pricing of internal deliveries of goods and servicesor related to financing, acquisitions and divestments, the use of tax credits and permanent establishments, and tax losses carried forward. These uncertaintiesmay have a significant impact on local tax results. We also have various tax assets resulting from acquisitions. Tax assets can also result from the generationof tax losses in certain legal entities. Tax authorities may challenge these tax assets. In addition, the value of the tax assets resulting from tax losses carriedforward depends on having sufficient taxable profits in the future.There may from time to time exist deficiencies in our internal control systems that could adversely affect the accuracy and reliability of our periodicreporting.We are required to establish and periodically assess the design and operating effectiveness of our internal control over financial reporting. Despite thecompliance procedures that we have adopted to ensure internal control over financial controls, there may from time to time exist deficiencies in our internalcontrol systems that could adversely affect the accuracy and reliability of our periodic reporting. Our periodic reporting is the basis of investors’ and othermarket professionals’ understanding of our businesses. Imperfections in our periodic reporting could create uncertainty regarding the reliability of our resultsof operations and financial results, which in turn could have a material adverse impact on our reputation or share price.Environmental laws and regulations expose us to liability and compliance with these laws and regulations, and any such liability may adverselyaffect our business.We are subject to many environmental, health and safety laws and regulations in each jurisdiction in which we operate, which govern, among otherthings, emissions of pollutants into the air, wastewater discharges, the use and handling of hazardous substances, waste disposal, the investigation andremediation of soil and ground water contamination and the health and safety of our employees. We are also required to obtain environmental permits fromgovernmental authorities for certain of our operations. We cannot assure you that we have been or will be at all times in complete compliance with such laws,regulations and permits. If we violate or fail to comply with these laws, regulations or permits, we could be fined or otherwise sanctioned by regulators.As with other companies engaged in similar activities or that own or operate real property, we face inherent risks of environmental liability at ourcurrent and historical manufacturing facilities. Certain environmental laws impose strict, and in certain circumstances, joint and several liability on current orprevious owners or operators of real property for the cost of investigation, removal or remediation of hazardous substances as well as liability for relateddamages to natural resources. Certain of these laws also assess liability on persons who arrange for hazardous substances to be sent to disposal or treatmentfacilities when such facilities are found to be contaminated. While we do not expect that any contamination currently known to us will have a materialadverse effect on our business, we cannot assure you that this is the case or that we will not discover new facts or conditions or that environmental laws or theenforcement of such laws will not change such that our liabilities would be increased significantly. In addition, we could also be held liable for consequencesarising out of human exposure to hazardous substances or other environmental damage. In summary, we cannot assure you that our costs of complying withcurrent and future environmental and health and safety laws, or our liabilities arising from past or future releases of, or exposures to, regulated materials, willnot have a material adverse effect on our business, financial conditions and results of operations.Scientific examination of, political attention to and rules and regulations on issues surrounding the existence and extent of climate change may resultin an increase in the cost of production due to increase in the prices of energy and introduction of energy or carbon tax. A variety of regulatory developmentshave been introduced that focus on restricting or managing the emission of carbon dioxide, methane and other greenhouse gases. Enterprises may need topurchase at higher costs new equipment or raw materials with lower carbon footprints. Environmental laws and regulations could also require us to acquirepollution abatement or remediation equipment, modify product designs, or incur expenses. New materials that we are evaluating for use in our operationsmay become subject to regulation. These developments and further legislation that is likely to be enacted could affect our operations negatively. Changes inenvironmental regulations could increase our production and operational costs, which could adversely affect our results of operations and financialcondition.Certain natural disasters, such as flooding, large earthquakes, volcanic eruptions or nuclear or other disasters, may negatively impact our business.There is increasing concern that climate change is occurring and may cause a rising number of natural disasters.Environmental and other disasters, such as flooding, large earthquakes, volcanic eruptions or nuclear or other disasters, or a combination thereof maynegatively impact our business. If flooding, a large earthquake, volcanic eruption or other natural disaster were to directly damage, destroy or disrupt ourmanufacturing facilities, it could disrupt our operations, delay new production and shipments of existing inventory or result in costly repairs, replacements orother costs, all of which would negatively impact our business. Even if our manufacturing facilities are not directly damaged, a large natural disaster mayresult in disruptions in distribution channels or supply chains and significant increases in the prices of raw materials used for our manufacturing process. Forinstance, the nuclear incident following the tsunami in Japan in 2011 impacted the supply chains of our customers and suppliers. Furthermore, any disasteraffecting our customers (or their respective customers) may significantly negatively impact the demand for our products and our revenues. 14Table of ContentsThe impact of any such natural disasters depends on the specific geographic circumstances but could be significant, as some of our factories are locatedin areas with known earthquake fault zones, flood or storm risks, including but not limited to the Philippines, Singapore, Taiwan, Malaysia or Thailand.There is increasing concern that climate change is occurring that may cause a rising number of natural disasters with potentially dramatic effects on humanactivity. We cannot predict the economic impact, if any, of natural disasters or climate change.The price of our common stock historically has been volatile. The price of our common stock may fluctuate significantly.The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performanceof companies. The market price for our common stock has varied between a high of $114.00 on June 1, 2015 and a low of $72.05 on August 24, 2015 in thetwelve-month period ending on December 31, 2015. The market price of our common stock is likely to continue to be volatile and subject to significant priceand volume fluctuations for many reasons, including in response to the risks described in this section, or for reasons unrelated to our operations, such asreports by industry analysts, investor perceptions or negative announcements by our customers, competitors, peer companies or suppliers regarding their ownperformance, or announcements by our competitors of significant contracts, market perception of the Merger with Freescale or other acquisitions, strategicpartnerships, joint ventures, joint marketing relationships or capital commitments, the passage of legislation or other regulatory developments affecting us orour industry, as well as industry conditions and general financial, economic and political instability. In the past, following periods of market volatility,shareholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resourcesand the attention of executive management from our business regardless of the outcome of such litigation.The Merger may not be accretive and may cause dilution to our earnings per share, which may harm the market price of our shares of common stock.We entered into the Merger with the expectation that it will be accretive to earnings per share in the near term. This expectation is based on preliminaryestimates which may materially change. We could also encounter additional transaction and integration-related costs or other factors such as the failure torealize all of the benefits anticipated in the Merger. All of these factors could cause dilution to our earnings per share or decrease or delay the expectedaccretive effect of the Merger and cause a decrease in the price of our shares of common stock.Future sales of our shares of common stock could depress the market price of our outstanding shares of common stock.The market price of our shares of common stock could decline as a result of sales of a large number of shares of our common stock in the market, or theperception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and at a price that we deem appropriate.In the future, we may issue additional shares of common stock in connection with acquisitions and other investments, as well as in connection with ourcurrent or any revised or new equity plans for management and other employees. The amount of our common stock issued in connection with any suchtransaction could constitute a material portion of our then outstanding common stock.Our actual operating results may differ significantly from our guidance.From time to time, we release guidance regarding our future performance that represents our management’s estimates as of the date of release. Thisguidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and subject to, the assumptions and the otherinformation contained or referred to in such release and the factors described under “Forward-Looking Statements”. Our guidance is not prepared with a viewtoward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our independent registered publicaccounting firm nor any other independent expert or outside party compiles or examines the guidance and, accordingly, no such person expresses anyopinion or any other form of assurance with respect thereto.Our guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, is inherently subject to significantbusiness, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions withrespect to future business decisions, some of which will change. We generally state possible outcomes as high and low ranges which are intended to provide asensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested ranges. The principalreason that we release this data is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept anyresponsibility for any projections or reports published by any such persons.Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will notmaterialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate of what management believes is realizable as of thedate of release. Actual results will vary from the guidance and the variations may be material. Investors should also recognize that the reliability of anyforecasted financial data diminishes the farther in the future the data is forecasted. In light of the foregoing, investors are urged to put the guidance in contextand not to place undue reliance on it.Any failure to successfully implement our operating strategy, or the occurrence of any of the events or circumstances set forth in, or incorporated byreference into, this Annual Report could result in the actual operating results being different than the guidance, and such differences may be adverse andmaterial. 15Table of ContentsCharges to earnings resulting from the application of the purchase method of accounting in relation to the Merger may adversely affect the marketvalue of our shares of common stock.We have acquired Freescale for accounting purposes in accordance with U.S. GAAP and will account for the Merger using the acquisition method ofaccounting, which will result in charges to our earnings that could adversely affect the market value of our shares of common stock. Under the acquisitionmethod of accounting, we will allocate the total purchase price to the assets acquired and liabilities assumed from Freescale based on their fair values as ofthe date of the completion of the Merger, and record any excess of the purchase price over those fair values as goodwill. For certain tangible and intangibleassets, reevaluating their fair values as of the completion date of the Merger will result in our incurring additional depreciation and/or amortization expensethat exceed the combined amounts recorded by NXP and Freescale prior to the Merger. This increased expense will be recorded by us over the remaininguseful lives of the underlying assets. In addition, to the extent the value of goodwill or intangible assets were to become impaired, we may be required toincur charges relating to the impairment of those assets.Risks related to our corporate structureUnited States civil liabilities may not be enforceable against us.We are incorporated under the laws of the Netherlands and substantial portions of our assets are located outside of the United States. In addition,certain members of our board, our officers and certain experts named herein reside outside the United States. As a result, it may be difficult for investors toeffect service of process within the United States upon us or such other persons residing outside the United States, or to enforce outside the United Statesjudgments obtained against such persons in U.S. courts in any action. In addition, it may be difficult for investors to enforce, in original actions brought incourts in jurisdictions located outside the United States, rights predicated upon the U.S. laws.In the absence of an applicable treaty for the mutual recognition and enforcement of judgments (other than arbitration awards) in civil and commercialmatters to which the United States and the Netherlands are a party, a judgment obtained against the Company in the courts of the United States, whether ornot predicated solely upon the U.S. federal securities laws, including a judgment predicated upon the civil liability provisions of the U.S. securities law orsecurities laws of any State or territory within the United States, will not be directly enforceable in the Netherlands.In order to obtain a judgment which is enforceable in the Netherlands, the claim must be relitigated before a competent court of the Netherlands; therelevant Netherlands court has discretion to attach such weight to a judgment of the courts of the United States as it deems appropriate; based on case law, thecourts of the Netherlands may be expected to recognize and grant permission for enforcement of a judgment of a court of competent jurisdiction in the UnitedStates without re-examination or relitigation of the substantive matters adjudicated thereby, provided that (i) the relevant court in the United States hadjurisdiction in the matter in accordance with standards which are generally accepted internationally; (ii) the proceedings before that court complied withprinciples of proper procedure; (iii) recognition and/or enforcement of that judgment does not conflict with the public policy of the Netherlands; and(iv) recognition and/or enforcement of that judgment is not irreconcilable with a decision of a Dutch court rendered between the same parties or with anearlier decision of a foreign court rendered between the same parties in a dispute that is about the same subject matter and that is based on the same cause,provided that earlier decision can be recognized in the Netherlands.Based on the foregoing, there can be no assurance that U.S. investors will be able to enforce against us or members of our board of directors, officers orcertain experts named herein who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in civil andcommercial matters.In addition, there is doubt as to whether a Dutch court would impose civil liability on us, the members of our board of directors, our officers or certainexperts named herein in an original action predicated solely upon the U.S. laws brought in a court of competent jurisdiction in the Netherlands against us orsuch members, officers or experts, respectively.We are a Dutch public company with limited liability. The rights of our stockholders may be different from the rights of stockholders governed by thelaws of U.S. jurisdictions.We are a Dutch public company with limited liability (naamloze vennootschap). Our corporate affairs are governed by our articles of association andby the laws governing companies incorporated in the Netherlands. The rights of stockholders and the responsibilities of members of our board of directorsmay be different from the rights and obligations of stockholders in companies governed by the laws of U.S. jurisdictions. In the performance of its duties, ourboard of directors is required by Dutch law to consider the interests of our company, its stockholders, its employees and other stakeholders, in all cases withdue observation of the principles of reasonableness and fairness. It is possible that some of these parties will have interests that are different from, or inaddition to, your interests as a stockholder. See Part II, Item 16G. Corporate Governance.Our articles of association, Dutch corporate law and our current and future debt instruments contain provisions that may discourage a takeoverattempt.Provisions contained in our articles of association and the laws of the Netherlands, the country in which we are incorporated, could make it moredifficult for a third party to acquire us, even if doing so might be beneficial to our stockholders. Provisions of our articles of association impose variousprocedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions. 16Table of ContentsOn June 2, 2015, our general meeting of shareholders has empowered our board of directors to issue additional shares and grant rights to subscribe forshares of common stock, up to 10% of the issued share capital which authorization can be used for general purposes and an additional 10% if the shares ofcommon stock are issued or rights are granted in connection with an acquisition, merger or (strategic) alliance, and to restrict or exclude pre-emptive rightspertaining to (the right to subscribe for) shares for a period of 18 months from June 2, 2015 until December 2, 2016. On July 2, 2015, a separate authorizationwas approved by the general meeting of shareholders to issue additional shares to effect the Merger.In addition, our debt instruments contain, and future debt instruments may also contain, provisions that require prepayment or offers to prepay upon achange of control. These clauses may also discourage takeover attempts.We are a foreign private issuer and, as a result, are not subject to U.S. proxy rules but are subject to Exchange Act reporting obligations that, tosome extent, are more lenient and less frequent than those of a U.S. issuer.We report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as a non-U.S. company with foreign private issuer status.Because we qualify as a foreign private issuer under the Exchange Act and although we follow Dutch laws and regulations with regard to such matters, we areexempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including: (i) the sections of the Exchange Act regulatingthe solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act (ii) the sections of the Exchange Actrequiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short periodof time and (iii) the rules under the Exchange Act requiring the filing with the Commission of quarterly reports on Form 10-Q containing unaudited financialand other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. In addition, foreign private issuers arerequired to file their Annual Report on Form 20-F by 120 days after the end of each fiscal year while U.S. domestic issuers that are large accelerated filers arerequired to file their Annual Report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from the RegulationFair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, even though we arecontractually obligated and intend to make interim reports available to our stockholders, copies of which we are required to furnish to the Securities andExchange Commission (the “SEC”) on a Form 6-K, and even though we are required to furnish reports on Form 6-K disclosing whatever information we havemade or are required to make public pursuant to Dutch law or distribute to our stockholders and that is material to our company, you may not have the sameprotections afforded to investors in companies that are not foreign private issuers.We are a foreign private issuer and, as a result, in accordance with the listing requirements of the NASDAQ Global Select Market we rely on certainhome country governance practices rather than the corporate governance requirements of the NASDAQ Global Select Market.We are a foreign private issuer. As a result, in accordance with the listing requirements of the NASDAQ Global Select Market we rely on home countrygovernance requirements and certain exemptions thereunder rather than relying on the corporate governance requirements of the NASDAQ Global SelectMarket. For an overview of our corporate governance principles, see Item 16G.- Corporate Governance of our 2015 Annual Report, including the sectiondescribing the differences between the corporate governance requirements applicable to common stock listed on the NASDAQ Global Select Market and theDutch corporate governance requirements. Accordingly, you may not have the same protections afforded to stockholders of companies that are not foreignprivate issuers.Risks related to our indebtednessOur debt obligations expose us to risks that could adversely affect our financial condition, which could adversely affect our results of operations.As of December 31, 2015, we had outstanding indebtedness with an aggregate principal amount of $9,380 million. Our substantial indebtedness couldhave a material adverse effect on our business by: • increasing our vulnerability to adverse economic, industry or competitive developments; • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness,therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates because certain of our indebtedness, including our loans under the New RCF Agreement and theTerm Loans, bear interest at a variable rate; • making it more difficult for us to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of anyour debt instruments, including restrictive covenants and borrowing conditions, could result in an event default under the indentures governingour notes and agreements governing other indebtedness; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financial for working capital, capital expenditures, restructurings, product development, research anddevelopment, debt service requirements, investments, acquisitions and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantagecompared to our competitors who are less highly leveraged and who therefore, may be able to take advantage of opportunities that our leverageprevents us from exploiting.Despite our level of indebtedness, we may still incur significantly more debt, which could further exacerbate the risks described above and affect ourability to service and repay our debt. 17Table of ContentsIf we do not comply with the covenants in our debt agreements or fail to generate sufficient cash to service and repay our debt, it could adverselyaffect our operating results and our financial condition.The New RCF Agreement, the Term Loans, the indentures governing our Secured Notes and Unsecured Notes or any other debt arrangements that wemay have require us to comply with various covenants. If there were an event of default under any of our debt instruments that was not cured or waived, theholders of the defaulted debt could terminate commitments to lend and cause all amounts outstanding with respect to the debt to be due and payableimmediately, which in turn could result in cross defaults under our other debt instruments. Our assets and cash flow may not be sufficient to fully repayborrowings under all of our outstanding debt instruments if some or all of these instruments are accelerated upon an event of default.Our ability to make scheduled payments or to refinance our debt obligations depends on our financial condition and operating performance, which issubject to prevailing economic and competitive conditions and to certain financial, business, competitive, legislative, regulatory and other factors beyondour control. Our business may not generate sufficient cash flow from operations, or future borrowings under the New RCF Agreement or from other sourcesmay not be available to us in an amount sufficient to enable us to repay our indebtedness, or to fund our other liquidity needs, including our working capitaland capital expenditure requirements, and we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital orrestructure or refinance our indebtedness.If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capitalexpenditures, or to sell assets, seek additional capital, restructure or refinance our indebtedness or reduce or delay capital expenditures, strategic acquisitions,investments and alliances, any of which could have a material adverse effect on our business. We cannot guarantee that we will be able to obtain enoughcapital to service our debt and fund our planned capital expenditures and business plan. Our ability to restructure or refinance our debt will depend on thecondition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us tocomply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict usfrom adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timelybasis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. These alternative measures maynot be successful and may not permit us to meet our scheduled debt service obligations.The rating of our debt by major rating agencies may further improve or deteriorate, which could affect our additional borrowing capacity andfinancing costs.The major debt rating agencies routinely evaluate our debt. These ratings are based on current information furnished to the ratings agencies by us andinformation obtained by the ratings agencies from other sources. An explanation of the significance of such rating may be obtained from such rating agency.There can be no assurance that such credit ratings will remain in effect for any given period of time or that such ratings will not be lowered, suspended orwithdrawn entirely by the rating agencies, if, in each rating agency’s judgment, circumstances so warrant. Actual or anticipated changes or downgrades in ourcredit ratings, including any announcement that our ratings are under further review for a downgrade, could affect our market value and/or increase ourcorporate borrowing costs.Increases in interest rates could adversely affect our results of operations.An increase in prevailing interest rates could adversely affect our financial condition. LIBOR (the interest rate index on which our variable rate debt isbased) fluctuates on a regular basis. At December 31, 2015, we had approximately $3,483 million aggregate principal amount of variable interest rateindebtedness under our Term Loan agreements, which are subject to LIBOR floors. Any increased interest expense associated with increases in interest ratesaffects our cash flow and our ability to service our debt. Therefore, if the LIBOR rate exceeds the LIBOR floors on our Term Loan agreements, our cashinterest obligation would increase and could adversely affect our financial condition, results of operations and cash flows. At December 31, 2015, a 100 basispoint increase in LIBOR rates from their then current levels would result in an increase in our interest expense of $30 million per year. Our New RCFAgreement, which was undrawn at December 31, 2015, also has a variable interest rate.The conditional conversion feature of the 2019 Cash Convertible Senior Notes, if triggered, may adversely affect our financial condition andoperating results.In the event the conditional conversion feature of the 2019 Cash Convertible Senior Notes is triggered, holders thereof will be entitled to convert the2019 Cash Convertible Senior Notes solely into cash at any time during specified periods at their option. If one or more holders elect to convert their 2019Cash Convertible Senior Notes, we would be required to pay cash to settle any such conversion, which could adversely affect our liquidity. In addition, evenif holders do not elect to convert their 2019 Cash Convertible Senior Notes, we could be required under applicable accounting rules to reclassify all or aportion of the outstanding aggregate principal of the 2019 Cash Convertible Senior Notes as a current rather than long-term liability, which may adverselyaffect our net working capital. 18Table of ContentsThe accounting for the 2019 Cash Convertible Senior Notes results in recognized interest expense significantly greater than the stated interest rateof the 2019 Cash Convertible Senior Notes and may result in volatility to our Consolidated Statements of Operations.We will settle conversions of the 2019 Cash Convertible Senior Notes entirely in cash. Accordingly, the conversion option that is part of the 2019Cash Convertible Senior Notes is accounted for as a derivative pursuant to applicable accounting standards relating to derivative instruments and hedgingactivities. In general, this resulted in an initial valuation of the conversion option, which was bifurcated from the debt component of the 2019 CashConvertible Senior Notes, resulting in an original issue discount. The original issue discount is amortized and recognized as a component of interest expenseover the term of the 2019 Cash Convertible Senior Notes, which results in an effective interest rate reported in our Consolidated Statements of Operationssignificantly in excess of the stated coupon of 1.0%. This accounting treatment reduces our earnings, but does not affect the amount of cash interest paid toholders of Notes or our cash flows.For each financial statement period after issuance of the 2019 Cash Convertible Senior Notes, a hedge gain or loss is reported in our ConsolidatedStatements of Operations to the extent the valuation of the conversion option changes from the previous period. The cash convertible note hedge transactionswe entered into in connection with the 2019 Cash Convertible Senior Notes are also accounted for as derivative instruments, generally offsetting the gain orloss associated with changes to the valuation of the conversion option. Although we do not expect there to be a material net impact to our ConsolidatedStatements of Operations as a result of issuing the 2019 Cash Convertible Senior Notes and entering into the cash convertible note hedge transactions, wecannot assure you that these transactions will be completely offset, which may result in volatility to our Consolidated Statements of Operations.Item 4. Information on the CompanyA. History and Development of the CompanyOur legal name is NXP Semiconductors N.V. and our commercial name is “NXP” or “NXP Semiconductors”.We are incorporated in the Netherlands as a Dutch public company with limited liability (naamloze vennootschap).On August 5, 2010, we made an initial public offering of 34 million shares of our common stock and listed our common stock on the NASDAQ GlobalSelect Market.On March 2, 2015, NXP announced that the company had entered into a definitive agreement under which it would merge with FreescaleSemiconductor, Ltd. (“Freescale”) (the “Merger”). The Merger was consummated on December 7, 2015. As a result, Freescale’s results of operations areincluded in NXP’s Consolidated Statements of Operations for the period of December 7, 2015 through December 31, 2015.NXP accounted for the Merger under the acquisition method of accounting in accordance with Financial Accounting Standards Board AccountingStandards Topic 805, Business Combinations, with NXP treated as the accounting acquirer, see further discussion below.We are a holding company (the “holding” company) whose only material assets are the direct ownership of 100% of the shares of NXP B.V., a Dutchprivate company with limited liability (besloten vennootschap met beperkte aansprakelijkheid).Our corporate seat is in Eindhoven, the Netherlands. Our principal executive office is at High Tech Campus 60, 5656 AG Eindhoven, the Netherlands,and our telephone number is +31 40 2729233. Our registered agent in the United States is NXP Semiconductors USA, Inc., 411 East Plumeria Drive, San Jose,CA 95134, United States of America, phone number +1 408 5185400.B. Business OverviewSemiconductor Market OverviewSemiconductors perform a broad variety of functions within electronic products and systems, including processing data, sensing, storing informationand converting or controlling electronic signals. Semiconductors vary significantly depending upon the specific function or application of the end productin which the semiconductor is used and the customer who is deploying it. Semiconductors also vary on a number of technical characteristics including thedegree of integration, level of customization, programmability and the process technology utilized to manufacture the semiconductor. Advances insemiconductor technology have increased the functionality and performance of semiconductors, improving their features and power consumptioncharacteristics while reducing their size and cost. These advances have resulted in growth of semiconductors and electronic content across a diverse array ofproducts. The semiconductor market totaled $336 billion in 2014. 19Table of ContentsMergerOn December 7, 2015, we completed the Merger with Freescale in a stock and cash transaction.In connection with the Merger, each outstanding share of Freescale common stock was converted into 0.3521 shares of NXP common stock and $6.25in cash, without interest. NXP issued approximately 110 million shares of common stock to former holders of Freescale common stock, representingapproximately 32% of the 342 million total shares of outstanding NXP common stock after the Merger. NXP was determined to be the accounting acquirer.Freescale’s financial results from the Merger date through December 31, 2015, are included in our Consolidated Statement of Operations, as discussed herein.The Merger created a clear market leader in automotive, broad based microcontroller and security semiconductor solutions, with a highlycomplementary product portfolio. The Merger enables NXP to better serve a broader array of customers in strategic markets.IntegrationIntegration planning commenced shortly after the announcement of the Merger in March 2015. We expect the full integration process to take severalyears, with the initial focus on management consolidation and process integration. Work streams are underway in all of our business lines and the supportfunctions. Integration activities that likely will have a multi-year horizon include, but are not limited to, harmonizing brands, product and vendor selections,system integration and supply chain integration.The priorities are maintaining business and customer continuity while identifying and accelerating synergies and integrating organizations, processesand systems.The integration activities will transform the way NXP operates over the next few years. The remaining discussion in this “Business” section addressesthe way we operate currently; however, the integration is likely to significantly impact most of these processes in future periods.Other Significant TransactionsOn December 7, 2015, we also announced the divestiture of our RF Power business to JAC Capital.On November 9, 2015, we completed setting up WeEn Semiconductors, a Bipolar Power joint venture in China with JAC Capital. WeEnSemiconductors, in which JAC Capital owns 51% and we own 49%, combines our advanced technology from our former Bipolar Power business line withJAC Capital’s strong connections in the Chinese manufacturing network and distribution channels to lower manufacturing costs and boost profit margins ofhigh end electronic products in China.Our CompanyWe are a global semiconductor company and a long-standing supplier in the industry, with over 50 years of innovation and operating history. For theyear ended December 31, 2015, we generated revenue of $6,101 million, compared to $5,647 million for the year ended December 31, 2014.We provide leading High Performance Mixed Signal (HPMS) and Standard Product (SP) solutions that leverage our combined portfolio of intellectualproperty, deep application knowledge, process technology and manufacturing expertise in the domains of cryptography—security, high-speed interface,radio frequency (RF), mixed-signal analog-digital (mixed A/D), power management, digital signal processing and embedded system design.Our product solutions are used in a wide range of end-market applications including: automotive, personal security and identification, wireless andwireline infrastructure, mobile communications, multi-market industrial, consumer and computing. We engage with leading global original equipmentmanufacturers (OEM) and sell products in all major geographic regions.Reporting SegmentsNXP is organized into two market oriented reportable segments, High Performance Mixed Signal (“HPMS”) and Standard Products (“SP”). Corporateand Other represents the remaining portion (or “segment”) to reconcile to the Consolidated Financial Statements. You can find a description of each of ourreportable segments below. We also have a manufacturing group that manages our manufacturing and supply chain activities.Markets, applications and productsHPMS products consist of highly differentiated application-specific semiconductors and system solutions, which accounted for 79% of our totalproduct revenue in 2015. We believe the HPMS market is an attractive market due to the growth in excess of the overall semiconductor market, the highbarriers to entry, the loyalty of the customer base, the relative pricing stability and lower long-term capital intensity. 20Table of ContentsSP products consists primarily of discrete semiconductor devices that can be incorporated in many different types of electronics equipment, aretypically sold to a wide variety of customers, and accounted for 21% of our total product revenue in 2015. NXP SP products are differentiated by our abilityto consistently deliver cost effective, high unit volumes, which meet stringent quality levels and are a reflection of our long history of operational supplychain and continuously improved manufacturing processes. As a result we have been successful in improving the overall profitability of our SP segment.High Performance Mixed SignalOn January 1, 2015, NXP reorganized the HPMS segment from the four business lines: Automotive, Identification, Infrastructure & Industrial andPortable & Computing into the following four business lines: Automotive, Secure Identification Solutions, Secure Connected Devices and Secure Interfacesand Power. Secure Interfaces and Power was later renamed to Secure Interfaces and Infrastructure. Effective with the Merger, the operations of Freescale wereincorporated into the HPMS reportable segment. The former Freescale product groups were aligned with the NXP HPMS business lines as follows: RF andDigital Networking are reported under Secure Interfaces and Infrastructure; Automotive MCU and Analog & Sensors are reported under Automotive andMicrocontrollers is reported under Secure Connected Devices. Additionally, certain portions of Freescale’s Analog & Sensor product group and other revenueis apportioned to various NXP operating segments consistent with NXP’s prior product and revenue classification approach, this included product-functionality alignment as well as IP sales and licensing revenue.We focus on developing products and system and sub-system solutions that are innovative and allow our customers to bring their end products tomarket more quickly. Our products, particularly our application system and sub-system solutions, help our customers design critical parts of their endproducts and thus help many of them to differentiate themselves based on feature performance, advanced functionality, cost or time-to-market.We apply our technical expertise in the areas of RF, analog, power management, interface, security technologies and digital processing across ourpriority applications markets. Our strong RF capabilities are utilized in our high performance RF for wireless infrastructure and industrial applications, carsecurity and car radio products, mobile connectivity and contactless identification products. Our power technologies and capabilities are applied in AC-DCpower conversion, power management and audio power products, while our ability to design ultra-low power semiconductors is used in a wide range of ourproducts including our consumer, mobile, identification, healthcare products and our microcontrollers. Our high-speed interface design skills are applied invarious interface products, and our security capability is used in our identification solutions, digital networking and microcontroller solutions. Finally, ourdigital processing capabilities are used in our microcontroller based products, our digital networking products, our Auto DSPs and the products leveragingour Coolflux ultra-low power DSPs, such as in our hearing aid products.The below table provides an overview of the key applications per each business line, the leading market positions and our key customers. Automotive Secure IdentificationSolutions Secure ConnectedDevices Secure Interfaces andInfrastructureKey applications • Car access & immobilizers• In vehicle networking• Car entertainment• ADAS• Telematics• ABS• Transmission/ throttle control• Automotive Lighting • Secure identity• Tagging • Secure transactions• Mobile handset• Tablet• Personal computer• Smart metering• White goods & homeappliances• Medical/Personal Healthcare• Industrial/ IoT• Consumer/TV/Set top box • Wireless base stations• Networking• Satellite & CATV infra• Radar• Power supplies• Lighting• Mobile Handsets• Pachinko machinesSelected market leading positions • #1 in Automotivesemiconductors• #1 Can/LIN/ Flex Ray in-vehiclenetworking• #1 passive keyless entry/immobilizers• #1 car radio• #2 automotive MCU• #2 audio amplifiers • #1 e-Government • #1 Transport & Accessmanagement• #1 Banking • #1 I broad based MCU • #1 NFC • #1 in RF Power • #1 in communicationprocessorsKey OEM and electronic manufacturingservices (EMS) end customers • Becker• Bosch• Continental• Delphi• Fujitsu Ten• Hella• Hyundai• LG• Panasonic• Visteon • Avery Dennison• China Vision Microelectronic• Chutian Dragon• DNP• Gemalto• Giesecke• Kona• Oberthur• Smartrac• Wuhan/Tianyu Info • Apple• BBK• HTC• Huawei• LG• Microsoft• Performance DesignedProducts• Samsung• ZLG Electronics• ZTE • Apple• Alcatel• Cisco• Ericsson• Huawei• Lite-On• NSN• Philips• Samsung• ZTEThe table above provides a list of our key OEM, ODM and electronic manufacturing services end customers in alphabetical order, based on 2015revenue, of which some of whom are supplied by distributors. Key distributors across these applications are Arrow, Avnet, Edom, Vitec and WPG. 21Table of ContentsAutomotive. Growth in semiconductor sales to the global automotive market relies on global economic trends, the unit growth of automobilesmanufactured and the growth in semiconductor content per vehicle which is being driven by the proliferation of electronic features throughout the vehicle.Among the highest growth applications are advanced driver assistance systems (ADAS), infotainment (information, convenience and connectivity), secure in-vehicle networking and electrified powertrain (hybrid and electric vehicles).Due to the high degree of regulatory scrutiny and safety requirements, the automotive semiconductor market is characterized by stringent qualificationprocesses, zero defect quality processes, functionally safe design architecture, high reliability, extensive design-in timeframes and long product life cycleswhich results in significant barriers to entry.Semiconductor content per vehicle continues to increase due to government regulation for improved safety and emissions, the standardization ofhigher-end options across a greater number of vehicle classes as well as consumer demand for greater fuel efficiency, advanced safety and multimediaapplications. Automotive safety features are evolving from passive safety systems to active safety systems with ADAS such as radar, vision, vehicle-to-vehicle and vehicle-to-infrastructure (V2X) systems. We believe regulatory actions and consumer demand in both the developed and emerging marketsshould drive the increase in applications such as ADAS, secure connectivity, electronic safety and stability control. Semiconductor content per vehicle is alsoincreasing to address applications such engine management, fuel economy improvement, driver comfort, convenience and user interface. In addition, with theincrease in overall semiconductor content in modern automobiles, the demand for secure in-vehicle networking continues to increase as various subsystemscommunicate within the automobile and with external devices and networks. Data integrity and security hardware features for safeguarding memory,communication and system data are also increasing in importance.As a result of the Merger, NXP became the largest semiconductor supplier to the automotive industry with strong positions in Car Entertainment, In-Vehicle Networking, Secure Car Access, Chassis & Safety and Powertrain. The combined portfolio is highly complementary, enabling NXP to address abroader scope of complete and complex solutions for our automotive partners. We continue to invest in growth areas including the evolution of the SecureConnected Car, ADAS and other safety and comfort applications.In Car Entertainment, as a result of the Merger, we are the market leader with the broadest portfolio of products offerings addressing both audio andvisual head-end unit applications. Our leadership in audio processing for mid-to-high-end car radio is driven by excellent reception performance as well ashigh-levels of integration of terrestrial, satellite and digital multi-band tuners. Within the low-end and after-market car radio, our leadership is a result ofhighly integrated, single-chip radio solutions that offer our customers ease of implementation and lower total cost of ownership. In digital reception, we havedeveloped multi-standard radios based on our software-defined radio implementation. In addition, we provide class-AB and class-D audio amplifiers andpower analog products for car entertainment. Our i.MX applications processors, which are developed and brought to market by our Microcontroller andProcessor teams, are highly integrated ARM-based application processors with integrated audio, video and graphics capability.In the In-vehicle Networking market, we are the market leader, having played a defining role in setting in-vehicle networking standards including theCAN, LIN, FlexRay and more recently the two-wire automotive Ethernet standard. We are a leading supplier to major OEMs and continue to drive newsystem concepts, such as partial networking for enhanced energy efficiency.In the Secure Car Access market, we are the market leader in two-way secure entry products, and have pioneered the development of next generationpassive keyless entry/start with our customers. As a result of our R&D innovations we are a key supplier to almost all major automobile manufacturers forsecure access products.In Chassis & Safety we offer a broad range of sensors and microcontrollers. Our inertial sensors enable vehicle stability control and airbag crashdetection while our pressure sensors are well-positioned for continued growth in tire pressure monitoring, occupancy detection and engine control.In Powertrain, we offer power management solutions which provide the intelligence engine management systems that reduce emissions and improvefuel efficiency. In December 2013, we announced a joint venture with Datang Telecom, targeting the China domestic hybrid and electrical car market. Thisjoint venture became active in April 2014.In ADAS, we are developing solutions for Radar, Vision and Secure V2X. In 2013, we made a strategic investment in Cohda Wireless, an equipmentvendor in the Intelligent Transport Systems (ITS) market with whom we co-operate for V2X solutions. In December 2013, we also announced the intendedsale of our Telematics Module business to Telit Communications which closed in March 2014.We employ our proprietary processes for automotive-grade, high-voltage, RF and non-volatile processes as well as our technology standards andleading edge security IP developed by our Secure Identification Solutions business, to deliver our automotive solutions. We design our products to becompliant with all key global relevant automotive quality standards (such as ISO/TS16949 and VDA6.3).For the full year 2015, we had High Performance Mixed Signal revenue of $1,342 million in automotive applications, compared to $1,144 million in2014, which represents a 17.3% year over year increase. According to Strategy Analytics, the total market for automotive semiconductors was $29.8 billion in2014, and projects it will grow at a compounded annual growth rate of 6.1% between 2014 and 2018.Secure Identification Solutions (SIS). The SIS business is focused on delivering solutions to address the security and privacy requirements of threespecific end market dynamics: (1) the increasing adoption of chip-based banking cards (“Banking”); (2) the increasing usage of high-volume, single-paymentplatform systems for urban transportation (“Transit—Access”); and (3) the increased need to provide government sponsored products to assure privacy andsecure cross-border movement of people (“eGov”). 22Table of ContentsNearly all of SIS products consist of multi-functional solutions comprised of passive RF connectivity devices facilitating information transfer from theuser document to reader infrastructure; secure, tamper-proof microcontroller devices in which information is securely encrypted (“secure element”); andsecure real-time operating system software products to facilitate the encryption-decryption of data, and the interaction with the reader infrastructure systems.Our solutions are developed to assure extreme levels of security of user information, undergoing stringent and continued global governmental and bankingcertification processes, as well as delivering the highest level of device performance enabling significant throughput and productivity to our customers.In the banking sector NXP is the market leader in the contact, contactless and dual-interface bank card market. We have innovated and deployed“multi-application” banking solutions which support a combination of payment, transit and access solutions all leveraging a single physical bank card. Inthe transit and access market, NXP’s MIFARE products are ubiquitous throughout the world, having been deployed in over 750 cities, facilitating the masstransit requirements of over one billion people per day. Additionally our transit and access products are deployed in application such as employeeidentification for facility access and security. We are also focused on deploying our technology into new emerging market applications such as interactivegaming, theme-park attendee management and supply chain and inventory product management to support high velocity supply chain management. In theeGovernment sector, NXP is a market leader providing solutions for chip-based cross-border passports, drivers-licenses, health cards and other governmentsponsored identification documents. We have also worked with emerging market government agencies to facilitate government sponsored identity cardswhich also serve as payment platforms helping the mass-population of under-banked.For the full year 2015, we had High Performance Mixed Signal revenue of $973 million in SIS, compared to $996 million in 2014, which represents a2.3% year over year decline. According to ABI Research, the market size for secure identification ICs was $3.5 billion in 2014, and is expected to grow at acompounded annual rate of 6% to $4.5 billion in 2018.Secure Connected Devices (SCD). The SCD business is focused on delivering solutions to enable the future of connected devices – also known as“Internet of Things” (IoT). We believe the future growth of secure connected devices requires the ability to deliver four fundamental functional capabilities:(1) embedded microcontrollers; (2) connectivity – short range RF and wireless technology (Bluetooth LE, Zigbee, Thread and NFC); (3) security; and(4) sensor—both location and environmental sensors. We see end-markets and applications emerging in the area of Mobile Payments, Smart Home-Health,Smart Cities and Smart Industrial.The SCD business has a broad portfolio products which we believe enables NXP to successfully compete and deliver all aspects of semiconductor-based technologies for connected devices including microcontrollers, secure mobile transactions solutions and various connectivity solutions.Post-merger, we are the largest supplier of broad based microcontrollers. We differentiate ourselves versus our competitors with a broad portfolio ofproducts addressing different processing power, connectivity standards, peripherals and security levels depending on customers evolving requirements.We have a strong position in multi-purpose 32-bit ARM-based microcontrollers serving a broad array of applications. Our portfolio is highly scalable,and is coupled with our extensive software and design tools. This enables our customers to design-in and deploy our MCUs families, leveraging a consistentsoftware development environment. Due to the scalability of our portfolio we are able to help future-proof our customer’s products as their systems evolve,becoming more complex or requiring greater processing capabilities over time. As a result of the Merger, we believe we have the broadest ARM portfolio inthe industry.Our i.MX family of processors are designed in conjunction with a broad suite of additional products including power management solutions, audiocodecs, touch sensors and accelerometers to provide full systems solutions across a wide range of operating systems and applications. Our i.MX 6 family ofapplications processors integrates one, two or four ARM Cortex-A9 cores running up to 1.2 GHz and includes five devices: the single-core i.MX 6Solo andi.MX 6SoloLite, dual-core i.MX 6Dual and i.MX 6DualLite, and quad-core i.MX 6Quad processors. Together, these products provide a family of applicationsprocessors featuring software, power and pin compatibility across single, dual and quad core implementations. Software support includes Linux and Androidimplementations.We are the market leader in secure mobile transactions. NXP has pioneered and led the development of the ISO standard for Near FieldCommunications (NFC), which is rapidly emerging as the de facto standard for secure short-range connectivity. In combination with our industry leadingSmartMX family of secure element device as well as our secure operating system, NXP has garnered market leadership in the deployment of mobile walletsand mobile payment. Our position leverages our decades long position in cryptography and security in the Banking, Transit – Access and eGov sectors.Post-merger NXP has a broad and diverse portfolio of connectivity assets, IP and application knowledge which we believe enables us to fulfill ourcustomer’s connectivity requirements for IoT applications, including smart lighting, smart energy, wireless remote controls & switches and healthcaremonitoring.In February 2015 we acquired Quintic, which brought assets and IP to broaden our connectivity portfolio. Specifically, Quintic is an innovator in thearea of Bluetooth Low Energy (BTLE), a key connectivity standard for IoT devices.Our mobile audio business focuses on smart speaker drivers and leverages many of the same core technologies and competencies as our personalhealthcare business. We also sell software solutions for mobile phones through our NXP Software business. The NXP Software solutions business developsaudio solutions that enable mobile device manufacturers to produce differentiated hand held products that enhance the end-user experience. Our software hasbeen incorporated into over 1 billion mobile devices produced by many of the world’s leading mobile device manufacturers. 23Table of ContentsOur personal healthcare revenue is generated by our hearing aid products, which leverage our proprietary, ultra-low power Coolflux – brand of DSPdevices, our low power audio IC design capabilities and our magnetic induction radio technology. We design customer-specific ICs for major hearing aidOEMs, and many of these customers fund our product development efforts.Our overall High Performance Mixed Signal revenue in the SCD business was $1,261 million in 2015, compared to $1,028 million in 2014, whichrepresents a 22.7% year over year growth. We estimate the worldwide market for Microcontrollers 32-bit was $7.4 billion in 2014, and we expect acompounded annual growth rate of 8.8% between 2014 and 2018.Our leadership in secure/smartcard Microcontrollers and the combined Freescale and NXP position in the non-secure Microcontrollers outsideAutomotive creates a number one position in broad based Microcontrollers.Secure Interfaces and Infrastructure (SI&I). Our SI&I businesses consist of: Digital Networking Processors, Secure Interface and System ManagementProducts, High-performance RF Power-Amplifiers (HPRF) and Smart Antennae solutions.As a result of the Merger, NXP became a significant participant in the communications infrastructure market. Our communications processors areprogrammable semiconductors that perform tasks related to control and management of digital data, as well as network interfaces. They are designed tohandle tasks related to data transmission between nodes within a network, the manipulation of that data upon arrival at its destination and protocolconversion. Our product portfolio includes 32-bit and 64-bit offerings ranging from a single core to 28- and 45-nanometer multicore QorIQ communicationsprocessors. Wireless-infrastructure processors combine communication processors with DSP functionality and specific wireless acceleration technology. Ourportfolio of secure wireless-infrastructure processors targets small cells and macro base stations. These products perform baseband processing and supportmultiple cellular-network air-interfaces such as LTE-Advanced, TD-LTE, LTE, HSPA+, TD-SCDMA, and CDMA2000K. Used by leading original equipmentmanufacturers (OEMs) worldwide, our broad portfolio of wireless-infrastructure and communications processors satisfies wireless infrastructure requirements.We are major supplier in the highly fragmented interface and system management products. Our products address many interface standards and weserve various applications across the mobile, computing, industrial, consumer and automotive markets. We have broad product portfolios including UARTs.Bridges-devices, I 2 C, SPI, LED-lighting controllers, low power real-time clocks and watch ICs, HDMI switches and transceivers, and display portmultiplexers. Our core competency is the ability to deliver products that manage high speed data and system voltage over the same interface. We generate alarge part of our revenue by selling products to a very broad customer base, which we serve through our distribution channel. We have successfully engagedwith leading OEMs to drive semi-custom products which in turn allow us to refine and accelerate our innovation and product roadmaps. We are engaged indevelopment activities and standard setting initiatives with many of the innovation leaders in each of these markets. Key growth drivers will be the adoptionrate of new high-speed interface standards such as USB type-C.We are also active in high efficiency AC-DC power conversion ICs for notebook personal computers. Our strength in AC-DC power conversion is basedon our leading edge high-voltage power analog process technologies and engineering capabilities in designing high efficiency power conversion products.Due to worldwide conservation efforts, many countries, states and local governments have adopted regulations that increase the demand for higher powerefficiency solutions in computing and consumer applications, especially in power conversion.We are the market leader in HPRF power amplifiers for markets, such as mobile base stations, wireless connectivity, satellite and CATV infrastructureand receivers, industrial applications, and to a lesser extent the military and aerospace markets. We are engaged with the majority of the largest customers inmobile base stations and in several other application areas.Both Freescale and NXP prior to the Merger were the main suppliers into the HPRF power amplifier market. As a result of the Merger, NXP was requiredto sell its HPRF business. On December 7, 2015 NXP completed the divestment of our RF Power business to JAC Capital.We have an emerging business offering Smart Antennae solutions based on Low Noise Amplifier (LNA) technology. We engage and sell our SmartAntennae solutions to varied customers in the mobile, consumer electronics and cable television infrastructure markets.Our overall revenue in these businesses was $1,144 million in 2015 versus $1,040 million in 2014, which represents an increase of 10.0% year overyear.Standard ProductsOur Standard Products business supplies a broad range of standard semiconductor components, such as small signal discretes, power discretes,protection and signal conditioning devices and standard logic devices, which we largely produce in dedicated in-house high-volume manufacturingoperations. Our portfolio consists of a large variety of catalog products, using widely-known production techniques, with characteristics that are largelystandardized throughout the industry as well as leading discrete solutions especially in the field of ESD protection / EMI filtering and low loss rectificationand power switching. Our Standard Products are often sold as separate components, but in many cases, are used in conjunction with our High PerformanceMixed Signal solutions, often within the same subsystems. Further, we are able to leverage customer engagements where we provide standard productsdevices, as discrete components, within a system to identify and pursue potential High Performance Mixed Signal opportunities. 24Table of ContentsOur products are sold both directly to OEMs as well as through distribution, and are primarily differentiated on cost, packaging type andminiaturization, and supply chain performance. Alternatively, our innovative products include “design-in” products, which require significant engineeringeffort to be designed into an application solution. For these products, our efforts make it more difficult for a competitor to easily replace our product, whichmakes these businesses more predictable in terms of revenue and pricing than is typical for standard products.Our key product applications, markets and customers are described in the table below. Key Products • SS Transistors and Diodes• SS MOS• Power MOS• Bipolar Power Transistors• Thyristors• Rectifiers • Interface protection devices• General Purpose Logic Key OEM andelectronic manufacturing services (EMS) end customers • Apple• BBK• Bosch• Continental• Delphi• Delta Electronics• Huawei• LG• Philips• SamsungThe table above provides a list of our key OEM and electronic manufacturing services end customers in alphabetical order, based on 2015 revenue, ofwhich some of whom are supplied by distributors. Key distributors across these applications are Arrow, Avnet, Future and WPG.In 2015, our Standard Products business generated net revenue of $1,241 million, compared to $1,275 million in 2014, which represents a 2.7% yearover year decline.We are the number one global supplier of small-signal discretes with one of the broadest product portfolios in the industry. We have a strong positiondue to our strong cost competitiveness, supply chain performance, leverage of our OEM relationships and a broadening portfolio. We are focusing onexpanding our share of higher margin products in this business. In addition, we are also building a small signal MOSFET product line, which leverages oursmall signal transistors and diodes packaging operations and strong customer relationships. In addition to our small signal discretes products, we have aPower MOSFET product line, which is focused on the low-voltage segment of the market. The majority of our revenue in Power MOSFETs is to automotivecustomers.During 2015, we introduced a new range of Automotive Power MOSFET products in our Trench 6 manufacturing process.We estimate that the market for discretes, excluding RF & Microwave, was $20 billion in 2014 and is expected to stay flat, between 2014 and 2018.Additionally, the Standard Products segment also includes Standard Logic ICs. We have the number two position in Standard Logic IC markets basedon worldwide revenue for 2014, which we deploy in a large number of our High Performance Mixed Signal solutions. We offer several product families forlow-voltage applications in communication equipment, personal computers, personal computer peripherals and consumer and portable electronics. Our 3Vand 5V families hold a leading share of the logic market. We continue to expand into the higher margin product range in this business by expanding, amongothers, our switches and translators (or custom logic) portfolio and optimizing our manufacturing. We estimate the worldwide Standard Logic market at $1.5billion in 2014, and is estimated to grow with compound annual rate of 4.3% between 2014 and 2018.Corporate and OtherWe manufacture integrated circuits and discrete semiconductors through a combination of wholly owned manufacturing facilities, manufacturingfacilities operated jointly with other semiconductor companies and third-party foundries and assembly and test subcontractors. Our manufacturing operationsprimarily focus on manufacturing and supplying products to our High Performance Mixed Signal and Standard Products businesses. We manage ourmanufacturing assets together through one centralized organization to ensure we realize scale benefits in asset utilization, purchasing volumes and overheadleverage across businesses.In the future, we expect to outsource an increased part of our internal demand for wafer foundry and packaging services to third-party manufacturingsources in order to increase our flexibility to accommodate increased demand mainly in our High Performance Mixed Signal and to a lesser extent inStandard Products businesses. 25Table of ContentsThe manufacturing of a semiconductor involves several phases of production, which can be broadly divided into “front-end” and “back-end”processes. Front-end processes take place at highly complex wafer manufacturing facilities (called fabrication plants or “wafer fabs”), and involve theimprinting of substrate silicon wafers with the precise circuitry required for semiconductors to function. The front-end production cycle requires high levelsof precision and involves as many as 300 process steps. Back-end processes involve the assembly, test and packaging of semiconductors in a form suitable fordistribution. In contrast to the highly complex front-end process, back-end processing is generally less complicated, and as a result we tend to determine thelocation of our back-end facilities based more on cost factors than on technical considerations.We primarily focus our internal and joint venture wafer manufacturing operations on running proprietary specialty process technologies that enable usto differentiate our products on key performance features, and we generally outsource wafer manufacturing in process technologies that are available at third-party wafer foundries when it is economical to do so. In addition, we increasingly focus our in-house manufacturing on our competitive 8-inch facilities,which predominantly run manufacturing processes in the 140 nanometer, 180 nanometer and 250 nanometer process nodes, and have concentrated themajority of our manufacturing base in Asia. This focus increases our return on invested capital and reduces capital expenditures.Our front-end manufacturing facilities use a broad range of production processes and proprietary design methods, including CMOS, bipolar, bipolarCMOS (“BiCMOS”) and double-diffused metal on silicon oxide semiconductor (“DMOS”) technologies. Our wafer fabs produce semiconductors with linewidths ranging from 90 nanometers to 3 microns for integrated circuits and 0.5 microns to greater than 4 microns for discretes. This broad technologyportfolio enables us to meet increasing demand from customers for system solutions, which require a variety of technologies.Our back-end manufacturing facilities test and package many different types of products using a wide variety of processes. To optimize flexibility, weuse shared technology platforms for our back-end assembly operations. Most of our assembly and test activities are maintained in-house. Finally, a number ofour High Performance Mixed Signal products enjoy significant packaging cost and innovation benefits due to the scale of our Standard Products business,which manufactures tens of billions of units per year.The following table shows selected key information with respect to our major front-end and back-end facilities: Site Ownership Wafer sizes used Line widths used (vm) Technology/Products (Microns) Front-end(1) Singapore(2) 61.2% 8” 0.14-0.25 CMOSNijmegen, the Netherlands 100% 8” 0.14-0.80 CMOS, BiCMOS, LDMOSHamburg, Germany 100% 6”/8” 0.5-3.0 DiscretesManchester, United Kingdom 100% 6” 0.5 Power discretesOak Hill, Austin, US 100% 8” 0.25 CMOS, BiCMOS, Sensors,LDMOS, HDTMOS, PowerCMOSChandler, US 100% 8” 0.25-0.50 CMOS, eNVM, PowerCMOSAustin Technology and ManufacturingCenter, US 100% 8” 0.09-0.18 CMOS, eNVM, PowerCMOS,Advanced CMOS, SoCBack-end(3) Kaohsiung, Taiwan 100% — — NFC, Automotive Car-access, Micro-controllersBangkok, Thailand 100% — — Automotive In-Vehicle Networking andSensors, Banking and e-Passport modules,Standard LogicGuangdong, China 100% — — Discrete devices and Standard LogicSeremban, Malaysia 100% — — Discrete devices and Standard LogicCabuyao, Philippines 100% — — Power discrete and Automotive SensorsKuala Lumpur, Malaysia 100% — — Micro-processors, Micro-controllers, PowerManagement, Analog and Mixed Signal, RFdevicesTianjin, China 100% — — Micro-controllers, Automotive MCU,Analog and Sensors (1)In front-end we entered into a joint venture with JAC Capital for the Bipolar products in which we currently hold a 49% interest. The Jilin front end fabtransferred into this JV.(2)Joint venture with TSMC; we are entitled to 60% of the joint venture’s annual capacity.(3)In back-end manufacturing we entered into a joint venture with ASE in Suzhou, China (ASEN), in which we currently hold a 40% interest. 26Table of ContentsWe use a large number of raw materials in our front- and back-end manufacturing processes, including silicon wafers, chemicals, gases, lead frames,substrates, molding compounds and various types of precious and other metals. Our most important raw materials are the raw, or substrate, silicon wafers weuse to make our semiconductors. We purchase these wafers, which must meet exacting specifications, from a limited number of suppliers in the geographicregion in which our fabrication facilities are located. At our wholly owned fabrication plants, we use raw wafers ranging from 6 inches to 8 inches in size. OurSSMC wafer fab facility, which produces 8 inch wafers, is jointly owned by TSMC and ourselves. We are leveraging our experience in that fab facility inoptimizing our remaining wholly owned Nijmegen and Hamburg wafer fabs. The Merger has added multiple 8 inch fabs for production of a wide portfolio ofanalog, mixed signal and processors products and this large scale and knowledge base will enable us to further optimize processes. Our other remaining fabsare small and are focused exclusively on manufacturing power discretes. Emerging fabrication technologies employ larger wafer sizes and, accordingly, weexpect that our production requirements will in the future shift towards larger substrate wafers.We typically source our other raw materials in a similar fashion as our wafers, although our portfolio of suppliers is more diverse. Some of our suppliersprovide us with materials on a just-in-time basis, which permits us to reduce our procurement costs and the negative cash flow consequences of maintaininginventories, but exposes us to potential supply chain interruptions. We purchase most of our raw materials on the basis of fixed price contracts, but generallydo not commit ourselves to long-term purchase obligations, which permits us to renegotiate prices periodically.Sales, Marketing and CustomersWe market our products worldwide to a variety of OEMs, ODMs, contract manufacturers and distributors. We generate demand for our products bydelivering High Performance Mixed Signal solutions to our customers, and supporting their system design-in activities by providing application architectureexpertise and local field application engineering support.Our sales and marketing teams are organized into six regions, which are EMEA (Europe, the Middle East and Africa), the Americas, Japan, South Korea,Greater China and Asia Pacific. These sales regions are responsible for managing the customer relationships, design-in and promotion of new products. Weseek to further expand the presence of application engineers closely supporting our customers and to increase the amount of product development work thatwe can conduct jointly with our leading customers. Our web-based marketing tool is complementary to our direct customer technical support.Our sales and marketing strategy focuses on deepening our relationship with our top OEMs and electronic manufacturing service customers anddistribution partners and becoming their preferred supplier, which we believe assists us in reducing sales volatility in challenging markets. We have long-standing customer relationships with most of our customers. Our 10 largest OEM end customers, some of whom are supplied by distributors, in alphabeticalorder, are Apple, Bosch, Ericsson, Continental, Gemalto, Giesecke/ Devrient, Huawei,LG, Samsung and ZTE. When we target new customers, we generallyfocus on companies that are leaders in their markets either in terms of market share or leadership in driving innovation. We also have a strong position withour distribution partners being the number two semiconductor supplier (other than microprocessors and memory ICs) through distribution worldwide. Our 3largest distribution partners are Arrow, Avnet and WPG.Our revenue is primarily the sum of our direct sales to original equipment manufacturers, or OEMs, plus our distributors’ resale of NXP products. Twodistributors accounted for more than 10% of total 2015 revenue: WPG accounted for 14% of our revenue in 2015, 13% in 2014 and 11% in 2013. Avnetaccounted for 14% of our revenue in 2015 and 13% of our revenue in 2014. No other distributor accounted for more than 10% of our revenue in 2015, 2014or 2013. No individual OEM for which we had direct sales to accounted for more than 10% of revenue in 2015, 2014 or 2013.Research and Development, Patents and Licenses, etc.See the discussion set forth under Part I, Item 5C. Research and Development, Patents and Licenses, etc.CompetitionWe compete with many different semiconductor companies, ranging from multinational companies with integrated research and development,manufacturing, sales and marketing organizations across a broad spectrum of product lines, to “fabless” semiconductor companies, to companies that arefocused on a single application market segment or standard product. Most of these competitors compete with us with respect to some, but not all, of ourbusinesses. None of our competitors have operations across all of our business lines.Our key competitors in alphabetical order include Analog Devices Inc., Atmel Corporation, Broadcom, Cavium, Diodes, Fairchild Semiconductors,Infineon, Intel, Linear Technology, Maxim Integrated Products, Renesas, ON Semiconductor Corporation, Power Integrations, ROHM, Silicon Laboratories,STMicroelectronics and Texas Instruments.The basis on which we compete varies across market segments and geographic regions. Our High Performance Mixed Signal businesses competeprimarily on the basis of our ability to timely develop new products and the underlying intellectual property and on meeting customer requirements in termsof cost, product features, quality, warranty and availability. In addition, our High Performance Mixed Signal system solutions businesses require in-depthknowledge of a given application market in order to develop robust system solutions and qualified customer support resources. In contrast, our StandardProducts business competes primarily on the basis of manufacturing and supply chain excellence and breadth of product portfolio. 27Table of ContentsLegal ProceedingsThe information set forth under the “Litigation” caption of note 16 of our notes to the Consolidated Financial Statements included in Part III, Item 18of this Report is incorporated herein by reference. For additional discussion of certain risks associated with legal proceedings, see Part I, Item 3D. RiskFactors above.Environmental RegulationThe information set forth under the “Environmental remediation” caption of note 16 of our notes to the Consolidated Financial Statements included inPart III, Item 18 of this Report is incorporated herein by reference. For additional discussion of certain risks associated with environmental regulation, see PartI, Item 3D. Risk Factors above.C. Organizational StructureA list of our significant subsidiaries, including name, country of incorporation or residence and proportion of ownership interest and voting power isprovided as “Exhibit 21.1” under Part III, Item 19. Exhibits and is incorporated herein by reference. 28Table of ContentsCORPORATE STRUCTUREThe following chart reflects our corporate structure as of December 31, 2015. (1)For a more detailed description of our Long-Term Incentive Plans see the discussion set forth under “Share Based Compensation Plans” contained inthis Report in Part I, Item 6B. Compensation.(2)As of December 31, 2015, we had $1,150 million aggregate principal amount of 2019 Cash Convertible Senior Notes outstanding.(3)As of December 31, 2015, no borrowings outstanding under the New RCF Agreement.(4)As of December 31, 2015, we had $3,483 million aggregate principal amount outstanding under the Term Loans.(5)As of December 31, 2015, we had $3,250 million aggregate principal amount of Unsecured Notes outstanding.(6)As of December 31, 2015, we had $1,460 million aggregate principal amount of Secured Notes outstanding.(7)This list of material subsidiaries includes the subsidiaries that are guarantors under our New RCF Agreement and our New Secured Term CreditAgreement. Other subsidiaries provide a guarantee under certain of our other outstanding indebtedness. See Item 5, B. Liquidity and Capital Resources,under the captions 2015 Financing Activities, 2014 Financing Activities and 2013 Financing Activities. 29Table of ContentsD. Property, Plant and EquipmentNXP uses 136 sites in 32 countries with approximately 14.0 million square feet of total owned and leased building space of which 10.6 million squarefeet is owned property.The following table sets out our principal real property holdings as of December 31, 2015: Location Use Owned/leased Building space(square feet) Eindhoven, the Netherlands Headquarters Leased 152,666 Hamburg, Germany Manufacturing Owned 749,609 Nijmegen, the Netherlands Manufacturing Owned 1,515,550 Singapore Manufacturing Owned 738,877 Bangkok, Thailand Manufacturing Owned 516,022 Cabuyao, Philippines Manufacturing Owned 494,656 Kaohsiung, Taiwan Manufacturing Owned 636,395 Manchester, United Kingdom Manufacturing Owned 264,340 Guangdong, China Manufacturing Leased 927,569 Tianjin, China Manufacturing Owned 446,687 Seremban, Malaysia Manufacturing Owned 321,174 Kuala Lumpur, Malaysia Manufacturing Owned 834,208 Chandler, United States Manufacturing Owned 1,173,196 Austin (Oak Hill), United States Manufacturing Owned 1,510,938 Austin (Ed Bluestein), United States Manufacturing Owned 1,243,925 Areas which are not fully closed are not considered as buildings (eg. sport fields, parking space). If it is not possible to differentiate between productionfacility and offices in the same building all is considered manufacturing.Item 4A. Unresolved Staff CommentsNot applicable.Item 5. Operating and Financial Review and ProspectsCritical Accounting EstimatesThe preparation of financial statements and related disclosures in accordance with U.S. GAAP requires our management to make judgments,assumptions and estimates that affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Our management bases itsestimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonableunder the circumstances. Actual results may differ from these estimates under different assumptions or conditions.The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in ourconsolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need tomake estimates regarding matters that are inherently uncertain. Our most critical accounting estimates include: • the valuation of inventory, which impacts gross margin; • the assessment of recoverability of goodwill, identified intangible assets and tangible fixed assets, which impacts gross margin or operatingexpenses when we record asset impairments or accelerate their depreciation or amortization; • revenue recognition, which impacts our results of operations; • the recognition of current and deferred income taxes (including the measurement of uncertain tax positions), which impacts our provision forincome taxes; • the assumptions used in the determination of postretirement benefit obligations, which impacts operating expenses; • the assumptions used in the determination of share based compensation, which impacts gross margin and operating expenses; and • the recognition and measurement of loss contingencies, which impacts gross margin or operating expenses when we recognize a losscontingency or revise the estimates for a loss contingency.In the following section, we discuss these policies further, as well as the estimates and judgments involved. 30Table of ContentsInventoriesInventories are valued at the lower of cost or market. We regularly review our inventories and write down our inventories for estimated losses due toobsolescence. This allowance is determined for groups of products based on sales of our products in the recent past and/or expected future demand. Futuredemand is affected by market conditions, technological obsolescence, new products and strategic plans, each of which is subject to change with little or noforewarning. In estimating obsolescence, we utilize information that includes projecting future demand.The need for strategic inventory levels to ensure competitive delivery performance to our customers are balanced against the risk of inventoryobsolescence due to rapidly changing technology and customer requirements.The change in our reserves for inventories was primarily due to the normal review and accrual of obsolete or excess inventory. If actual future demandor market conditions are less favorable than those projected by our management, additional inventory write-downs may be required.GoodwillGoodwill is required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets maybe impaired. Such events or changes in circumstances can be significant changes in business climate, operating performance or competition, or upon thedisposition of a significant portion of a reporting unit. A significant amount of judgment is involved in determining if an indicator of impairment hasoccurred between annual test dates. This impairment review compares the fair value for each reporting unit containing goodwill to its carrying value.Determining the fair value of a reporting unit involves the use of significant estimates and assumptions, including projected future cash flows, discount ratesbased on weighted average cost of capital and future economic and market conditions. We base our fair-value estimates on assumptions we believe to bereasonable. Actual cash flow amounts for future periods may differ from estimates used in impairment testing.For the annual impairment assessment in 2015, we determined that for each of our reporting units, it was more likely than not that the fair value of thereporting units exceeded the carrying value. During the fourth quarter of each of the prior two fiscal years, we have completed our annual impairmentassessments and concluded that goodwill was not impaired in any of these years.Impairment or disposal of identified intangible assets and tangible fixed assetsWe perform reviews of property, plant and equipment, and certain identifiable intangibles, excluding goodwill, to determine if facts and circumstancesindicate that the useful life is shorter than what we had originally estimated or that the carrying amount of assets may not be recoverable. If such facts andcircumstances exist, we assess the recoverability of the long-lived assets by comparing the projected undiscounted net cash flows associated with the relatedasset or group of assets over their remaining lives against their respective carrying amounts. In the event such cash flows are not expected to be sufficient torecover the recorded value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flowsattributable to the assets or based on appraisals. Impairment losses, if any, are based on the excess of the carrying amount over the fair value of those assets.The assumptions and estimates used to determine future values and remaining useful lives of our intangible and other long-lived assets are complexand subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changesin our business strategy and our forecasts for specific product lines. In 2015, we recognized disposals of intangibles relative to our sale of the Bipolar and RFPower Businesses. No impairment or disposal of identified intangible assets and tangible fixed assets were required to be recognized in 2014 and 2013.Revenue recognitionThe Company’s revenue is derived from sales to distributors, made-to-order sales to Original Equipment Manufacturers (“OEMs”) and similarcustomers.Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or the service has been provided, the sales price isfixed or determinable, and collection is reasonably assured, based on the terms and conditions of the sales contract. For made-to-order sales, these criteria aremet at the time the product is shipped and delivered to the customer and title and risk have passed to the customer. Acceptance of the product by thecustomer is generally not contractually required, since, for made-to-order customers, design approval occurs before manufacturing and subsequently deliveryfollows without further acceptance protocols. Payment terms used are those that are customary in the particular geographic market. When management hasestablished that all aforementioned conditions for revenue recognition have been met and no further post-shipment obligations exist, revenue is recognized.For sales to distributors, revenue is recognized upon sale to the distributor (sell-in accounting). We record reductions to sales associated with reservesfor allowances for collectability, discounts, price protection, product returns and distributor incentive programs at the time the related sale is recognized. Theestablishment of such reserves is dependent on a variety of factors, including contractual terms, analysis of historical data, current economic conditions,industry demand and both the current and forecasted pricing environments. The process of evaluating these factors is highly subjective and requiressignificant estimates, including, but not limited to, forecasted demand, returns, pricing assumptions and inventory levels. In future periods, additionalprovisions may be necessary due to a deterioration in the semiconductor pricing environment, reductions in anticipated demand for semiconductor productsand/or lack of market acceptance for new products. If these factors result in a significant adjustment to our reserves, they could significantly impact our futureoperating results. 31Table of ContentsDistributor reserves estimate the impact of credits granted to distributors under certain programs common in the semiconductor industry wherebydistributors receive certain price adjustments to meet individual competitive opportunities, or are allowed to return or scrap a limited amount of product inaccordance with contractual terms agreed upon with the distributor, or receive price protection credits when our standard published prices are lowered fromthe price the distributor paid for product still in its inventory. The Company’s policy is to use a rolling historical experience rate, as well as a prospectiveview of products and pricing in the distribution channel for distributors who participate in our volume rebate incentive program, in order to estimate theproper provision for this program at the end of any given reporting period. We continually monitor the actual claimed allowances against our estimates, andwe adjust our estimates as appropriate to reflect trends in pricing environments and inventory levels. Distributor reserves are also adjusted when recenthistorical data does not represent anticipated future activity.Income taxesDeferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets andliabilities and their reported amounts. Measurement of deferred tax assets and liabilities is based upon the enacted tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities for withholding taxes on dividendsfrom subsidiaries are recognized in situations where the company does not consider the earnings indefinitely reinvested and to the extent that thesewithholding taxes are not expected to be refundable.Deferred tax assets, including assets arising from loss carryforwards, are recognized, net of a valuation allowance, if based upon the available evidenceit is more likely than not that the asset will be realized.The income tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained uponexamination by the relevant taxing authorities. The income tax benefit recognized is measured based on the largest benefit that is more than 50% likely to berealized upon resolution of the uncertainty. Unrecognized tax benefits are presented as a reduction to the deferred tax asset for related net operating losscarryforwards, unless these would not be available, in which case the uncertain tax benefits are presented together with the related interest and penalties as aliability, under accrued liabilities and other non-current liabilities based on the timing of the expected payment. Penalties are recorded as income taxexpense, whereas interest is reported as financial expense in the statement of operations.Postretirement benefitsThe Company’s employees participate in pension and other postretirement benefit plans in many countries. The costs of pension and otherpostretirement benefits and related assets and liabilities with respect to the Company’s employees participating in defined-benefit plans are based uponactuarial valuations.The projected defined-benefit obligation is calculated annually by qualified actuaries using the projected unit credit method. For the Company’s majorplans, the discount rate is derived from market yields on high quality corporate bonds. Plans in countries without a deep corporate bond market use adiscount rate based on the local government bond rates.In calculating obligation and expense, the Company is required to select actuarial assumptions. These assumptions include discount rate, expectedlong-term rate of return on plan assets and rates of increase in compensation costs determined based on current market conditions, historical information andconsultation with and input from our actuaries. Changes in the key assumptions can have a significant impact to the projected benefit obligations, fundingrequirements and periodic pension cost incurred. A sensitivity analysis is provided in note 14, “Postretirement Benefit Plans”.The Company determines the fair value of plan assets based on quoted prices or comparable prices for non-quoted assets. For a defined-benefit pensionplan, the benefit obligation is the projected benefit obligation; for any other postretirement defined benefit plan it is the accumulated postretirement benefitobligation.Share-based compensationWe recognize compensation expense for all share-based awards based on the grant-date estimated fair values, net of an estimated forfeiture rate. We usethe Black-Scholes option pricing model to determine the estimated fair value for certain awards. Share-based compensation cost for restricted share units(“RSU“s) with time-based vesting is measured based on the closing fair market value of our common stock on the date of the grant, reduced by the presentvalue of the estimated expected future dividends, and then multiplied by the number of RSUs granted. Share-based compensation cost for performance-basedshare units (“PSU“s) granted with performance or market conditions is measured using a Monte Carlo simulation model on the date of grant.Our valuation models and generally accepted valuation techniques require us to make assumptions and to apply judgment to determine the fair valueof our awards. These assumptions and judgments include estimating the volatility of our stock price, expected dividend yield, employee turnover rates andemployee stock option exercise behaviors. Due to the lack of extensive history as a public company, the computation of the expected volatility assumptionsused in the Black-Scholes calculations for grants was based on historical volatilities and implied volatilities of our peer group companies. When establishingthe expected life assumption, we used the ‘simplified’ method prescribed in ASC Topic 718 for companies that do not have adequate historical data. The risk-free interest rate is measured as the prevailing yield for a U.S. Treasury security with a maturity similar to the expected life assumption. We also estimate aforfeiture rate at the time of grant and revise this rate in subsequent periods if actual forfeitures or vesting differ from the original estimates. 32Table of ContentsWe evaluate the assumptions used to value our awards on a quarterly basis. If factors change and we employ different assumptions, share-basedcompensation expense may differ significantly from what we have recorded in the past. If there are any modifications or cancellation of the underlyingunvested securities, we may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense.Litigation and claimsWe are regularly involved as plaintiffs or defendants in claims and litigation relating to matters such as commercial transactions and intellectualproperty rights. In addition, our divestments sometimes result in, or are followed by, claims or litigation by either party. From time to time, we also are subjectto alleged patent infringement claims. We rigorously defend ourselves against these alleged patent infringement claims. There can be no assurance that theCompany’s accruals will be sufficient to cover the extent of its potential exposure to losses. Historically, legal actions have not had a material adverse effecton the Company’s business, results of operations or financial condition.The estimated aggregate range of reasonably possible losses is based on currently available information in relation to the claims that have arisen andon the Company’s best estimate of such losses for those cases for which such estimate can be made. For certain claims, the Company believes that an estimatecannot currently be made. The estimated aggregate range requires significant judgment, given the varying stages of the proceedings (including the fact thatmany of them are currently in preliminary stages), the existence of multiple defendants (including the Company) in such claims whose share of liability hasyet to be determined, the numerous yet-unresolved issues in many of the claims, and the attendant uncertainty of the various potential outcomes of suchclaims. Accordingly, the Company’s estimate will change from time to time, and actual losses may be more than the current estimate.Use of Certain Non-GAAP Financial MeasuresNet debt is a non-GAAP financial measure and represents total debt (short-term and long-term) after deduction of cash and cash equivalents.Management believes this measure is an appropriate reflection of our net leverage.We understand that, although net debt is used by investors and securities analysts in their evaluation of companies, this concept has limitations as ananalytical tool and it should not be used as an alternative to any other measure in accordance with U.S. GAAP.A. Operating Results 33Table of ContentsYear Ended December 31, 2015 Compared to Year Ended December 31, 2014Results of OperationsThe following table presents the composition of operating income for the years ended December 31, 2015 and 2014. ($ in millions, unless otherwise stated) 2015 2014 Revenue 6,101 5,647 % nominal growth 8.0 17.3 Gross profit 2,787 2,640 Research and development (890) (763) Selling, general and administrative (SG&A) (922) (686) Amortization of acquisition-related intangible assets (223) (152) Other income (expense) 1,263 10 Operating income 2,015 1,049 RevenueThe following table presents revenue by segment for the years ended December 31, 2015 and 2014. 2015 2014 ($ in millions, unless otherwise stated) Revenue % nominal growth Revenue % nominal growth High Performance Mixed Signal (“HPMS”) 4,720 12.2 4,208 19.1 Standard Products (“SP”) 1,241 (2.7) 1,275 11.4 Corporate and Other 140 (14.6) 164 19.7 Total 6,101 8.0 5,647 17.3 Revenue increased by $454 million to $6,101 million in 2015 compared to $5,647 million in 2014, a nominal increase of 8.0%. The increase wasdriven by growth in our HPMS segment, offset by a decrease in SP and Corporate and Other.Our HPMS segment saw an increase in revenue of $512 million to $4,720 million in 2015 compared to $4,208 million in 2014. The increase wasprimarily driven by the acquisition of Freescale and the inclusion of their activity from December 7, 2015, onward, increased demand in Secure ConnectedDevices with the ramp up of mobile transactions in high-end smartphone and tablet platforms and increased demand in Automotive, driven mainly by carentertainment products. These increases were partially offset by the divestment of RF Power on December 7, 2015. Our Secure Identification Solutionsbusiness remained essentially flat year on year.Revenue for our SP segment decreased by $34 million to $1,241 million in 2015, compared to $1,275 million in 2014. The decrease was primarily dueto decreased demand in general applications.Revenue for Corporate and Other amounted to $140 million in 2015, compared to $164 million in 2014 and mainly related to our manufacturingoperations.Gross ProfitThe following table presents gross profit by segment for the years ended December 31, 2015 and 2014. 2015 2014 ($ in millions, unless otherwise stated) GrossProfit % of segmentrevenue Gross Profit % of segmentrevenue HPMS 2,367 50.1 2,253 53.5 SP 417 33.6 382 30.0 Corporate and Other 3 2.1 5 3.0 Total 2,787 45.7 2,640 46.8 Gross profit in 2015 was $2,787 million, or 45.7% of revenue compared to $2,640 million, or 46.8% of revenue in 2014, an increase of $147 million.Our gross profit is heavily influenced by customer mix, product mix and manufacturing costs.Our HPMS segment had a gross profit of $2,367 million, or 50.1% of revenue in 2015, compared to $2,253 million, or 53.5% of revenue in 2014. Thedecrease in the gross profit percentage of 3.4 points as a percentage of revenue was primarily driven by the impact of purchase accounting on inventory of$149 million and property, plant and equipment of $15 million, as a result of the merger with Freescale.Gross profit in our SP segment was $417 million, or 33.6% of revenue in 2015, compared to $382 million, or 30.0% of revenue in 2014. The increase inthe gross profit percentage of 3.6 points was primarily driven by a more beneficial product mix and improved manufacturing costs. 34Table of ContentsOperating ExpensesThe following table presents operating expenses by segment for the years ended December 31, 2015 and 2014. 2015 2014 ($ in millions, unless otherwise stated) Operating expenses % of segmentrevenue Operating expenses % of segmentrevenue HPMS 1,674 35.5 1,278 30.4 SP 223 18.0 262 20.5 Corporate and Other 138 — 61 — Total 2,035 33.4 1,601 28.4 The following table below presents the composition of operating expenses by line item in the statement of operations. ($ in millions, unless otherwise stated) 2015 2014 Research and development 890 763 Selling, general and administrative 922 686 Amortization of acquisition-related intangible assets 223 152 Operating expenses 2,035 1,601 Operating expenses were $2,035 million, or 33.4% of revenue in 2015, compared to $1,601 million, or 28.4% of revenue in 2014, an increase of $434million, or an increase of 5.0 points as a percentage of revenue. The increase in operating expenses was primarily due to the acquisition of Freescale: theinclusion of their activity from December 7, 2015 onward and the related amortization of acquisition related intangibles of $105 million, the restructuringcharge of $226 million, the charge for the acceleration of share-based compensation costs of $49 million for employees terminated in relation to the Mergerand $42 million of merger-related costs.In our HPMS segment, operating expenses amounted to $1,674 million, or 35.5% of revenue in 2015, compared to $1,278 million, or 30.4% of revenuein 2014. The increase was primarily driven by the acquisition of Freescale—the inclusion of their activity from December 7, 2015 onward and the relatedamortization of acquisition related intangibles of $105 million, the restructuring charge of $226 million and the charge for the acceleration of share-basedcompensation costs of $49 million for employees terminated in relation to the Merger.Operating expenses in our SP segment decreased to $223 million, or 18.0% of revenue in 2015 compared to $262 million or 20.5% of revenue in 2014.The decrease in operating expenses was mainly driven by a strong focus on cost control to compensate for the decrease in revenue.Operating expenses in Corporate and Other increased by $77 million to $138 million in 2015 compared to $61 million in 2014. The increase comparedto the prior year period was primarily due to merger-related costs in connection with the acquisition of Freescale as noted above.Restructuring ChargesTotal restructuring and restructuring related costs amounted to $264 million in 2015 compared to $57 million in 2014.In 2015, restructuring charges included employee severance costs of $239 million, and other exit costs of $27 million. The majority of these costsrelated to the acquisition of Freescale.In 2014, we had restructuring charges, which related to a workforce reduction charge as a result of redundancy at our ICN 8 wafer fab in Nijmegen of$16 million and at our wafer fab in Hamburg of $5 million. The remaining restructuring and restructuring related costs were for the cumulative impact ofspecific targeted actions.Other Income (Expense)The following table presents other income (expense) for the years ended December 31, 2015 and 2014. ($ in millions, unless otherwise stated) 2015 2014 Other income (expense) 1,263 10 Other income (expense) reflects income of $1,263 million for 2015 compared to $10 million of income in 2014. Included in 2015 is the gain on thesale of NXP’s Bipolar Power business line and RF Power business to JAC Capital in the fourth quarter average of 2015. We established a 49% owned jointventure (JV) with JAC Capital to combine NXP’s advanced technology from its Bipolar Power business line with JAC Capital’s connections in the Chinesemanufacturing network and distribution channels. The results of the Bipolar Power business were previously consolidated in the reportable segment SP. Thenew joint venture will be reported in Corporate and Other going forward. The results of the RF Power business were previously consolidated in the reportablesegment HPMS. 35Table of ContentsFinancial Income (Expense) ($ in millions) For the years ended December 31, 2015 2014 Interest income 6 3 Interest expense (227) (158) Foreign exchange rate results (193) (246) Net gain (loss) on extinguishment of debt — (3) Change in fair value of the warrant liability (31) (2) Other (84) (64) Total (529) (410) Financial income (expense) was an expense of $529 million in 2015, compared to an expense of $410 million in 2014. In 2015, financial income(expense) included a loss of $193 million as a result of changes in foreign exchange rates mainly applicable to the re-measurement of our U.S. dollar-denominated notes and short-term loans, which reside in a euro functional currency entity, compared to a loss of $246 million in 2014. Net interest expenseamounted to $221 million in 2015 compared to $155 million in 2014. The increase in net interest expense was due to interest on our outstanding TermLoans, the Cash Convertible Senior Notes and the Secured Notes that we assumed in the acquisition of Freescale, together with the amortization of relateddebt issuance costs and the accretion of the debt discount on the newly issued Term Loan B and on the Cash Convertible Senior Notes. Starting in 2016, weexpect to incur significantly higher aggregate interest expense due to the full annual effect of the borrowings we incurred to acquire Freescale, including theimpact of purchase accounting on such debt. The related debt issuance costs will be charged to interest expense using the effective interest method over therespective borrowing terms. The change in fair value of the warrant liability, an expense of $31 million, resulted from the mark-to-market adjustment on theWarrant liability due to the increase in NXP’s share price over the 12-month period (2014: $2 million). In 2015, other included expenses of $71 millionrelated to the financing activities for the acquisition of Freescale. As of January 1, 2016, as a result of the acquisition of Freescale, NXP has concluded thatthe functional currency of the holding company is USD. Beginning from January 1, 2016, the warrants will now be classified in stockholders’ equity, andmark-to-market accounting will no longer be applicable. In addition our U.S. dollar-denominated notes and short-term loans will no longer need to be re-measured.Benefit (Provision) for Income TaxesThe effective tax rate was (7.0)% for 2015 compared with 6.3% for 2014. Our effective tax rate reflects the impact of our earnings being taxed in foreignjurisdictions at rates below the Netherlands statutory rate of 25.0%, and the relative mix of income and losses in these foreign jurisdictions including thosewhere a full valuation allowance is recorded, in addition to tax incentives in certain jurisdictions. We recognized a benefit from income taxes of $104 millionin 2015 compared with a provision for income taxes of $40 million in 2014. In 2015 we recognized a benefit from income taxes compared to a tax expense in2014 due to increased tax benefits for R&D tax allowances & incentives, tax benefits from a change in the valuation allowance and the impact of purchaseaccounting on intangible assets in relation to the acquisition of Freescale.Results Relating to Equity-accounted InvesteesResults relating to the equity-accounted investees amounted to a gain of $9 million in 2015, compared to a gain of $8 million in 2014.Non-controlling InterestsNon-controlling interests are related to the third party share in the results of consolidated companies, predominantly SSMC. Their share of non-controlling interests amounted to a profit of $73 million in 2015, compared to a profit of $68 million in 2014. 36Table of ContentsYear Ended December 31, 2014 Compared to Year Ended December 31, 2013Results of OperationsThe following table presents the composition of operating income for the years ended December 31, 2014 and 2013. ($ in millions, unless otherwise stated) 2014 2013 Revenue 5,647 4,815 % nominal growth 17.3 10.5 Gross profit 2,640 2,177 Research and development (763) (639) Selling, general and administrative (SG&A) (838) (896) Other income (expense) 10 9 Operating income 1,049 651 RevenueThe following table presents revenue by segment for the years ended December 31, 2014 and 2013. 2014 2013 ($ in millions, unless otherwise stated) Revenue % nominal growth Revenue % nominal growth High Performance Mixed Signal (“HPMS”) 4,208 19.1 3,533 18.7 Standard Products (“SP”) 1,275 11.4 1,145 (2.0) Corporate and Other 164 19.7 137 (36.0) Total 5,647 17.3 4,815 10.5 Revenue increased by $832 million to $5,647 million in 2014 compared to $4,815 million in 2013, a nominal increase of 17.3%. The increase wasdriven by strong growth in all of our business lines, highlighted by the growth in our HPMS segment.Our HPMS segment saw an increase in revenue of $675 million to $4,208 million in 2014 compared to $3,533 million in 2013. The increase wasprimarily driven by increased demand in all four business lines—Automotive, Identification, Infrastructure & Industrial and Portable & Computing. Theincrease in Automotive was driven by our In-Vehicle Networking products. The increase in Identification was primarily driven by our embedded securesolutions associated with the ramp up of mobile transactions used in high-end smartphone and tablet platforms and continued demand for banking dual-interface cards. The increase in Infrastructure & Industrial was mainly in RF Power, in connection with the roll out of 4G base stations. The increase inPortable & Computing was driven by our microcontrollers and interface products.Revenue for our SP segment increased by $130 million to $1.275 million in 2014, compared to $1,145 million in 2013. The increase was primarily dueto increased demand in general applications, as a result of market share gains.Revenue for Corporate and Other amounted to $164 million in 2014, compared to $137 million in 2013 and mainly related to our manufacturingoperations.Gross ProfitThe following table presents gross profit by segment for the years ended December 31, 2014 and 2013. 2014 2013 ($ in millions, unless otherwise stated) Gross Profit % of segmentrevenue Gross Profit % of segmentrevenue HPMS 2,253 53.5 1,905 53.9 SP 382 30.0 285 24.9 Corporate and Other 5 3.0 (13) (9.5) Total 2,640 46.8 2,177 45.2 Gross profit in 2014 was $2,640 million, or 46.8% of revenue compared to $2,177 million, or 45.2% of revenue in 2013, an increase of $463 million.This increase was primarily attributable to market share gains in all business lines but primarily in our HPMS segment. Our gross profit rate, up 1.6 pointswhen compared to 2013, is heavily influenced by our product mix and the end customer mix in our business lines.Our HPMS segment had a gross profit of $2,253 million, or 53.5% of revenue in 2014, compared to $1,905 million, or 53.9% of revenue in 2013. Thedecrease in the gross profit percentage of 0.4 points was driven by changes in our product mix primarily in our Identification business line as well as newproduct introduction costs. 37Table of ContentsGross profit in our SP segment was $382 million, or 30.0% of revenue in 2014, compared to $285 million, or 24.9% of revenue in 2013. The increase inthe gross profit percentage of 5.1 points was driven by the benefit of market share gains, favorable pricing, product mix and improved manufacturing costs,partly from lower depreciation expenses.Operating ExpensesThe following table presents operating expenses by segment for the years ended December 31, 2014 and 2013. 2014 2013 ($ in millions, unless otherwise stated) Operatingexpenses % of segmentrevenue Operatingexpenses % of segmentrevenue HPMS 1,278 30.4 1,193 33.8 SP 262 20.5 247 21.6 Corporate and Other 61 — 95 — Total 1,601 28.4 1,535 31.9 The following table below presents the composition of operating expenses by line item in the statement of operations. ($ in millions, unless otherwise stated) 2014 2013 Research and development 763 639 Selling, general and administrative 838 896 Operating expenses 1,601 1,535 Operating expenses were $1,601 million, or 28.4% of revenue in 2014, compared to $1,535 million, or 31.9% of revenue in 2013, an increase of $66million, or a decrease of 3.5 points as a percentage of revenue. The increase in operating expenses was primarily due to higher share-based compensationcosts and an increased investment in research and development. The increase was offset by lower PPA expenses mainly due to certain intangible assetsbecoming fully amortized in the course of 2014. The decrease of operating expenses as a percentage of revenue was primarily driven by our continued focuson cost controls in SG&A.In our HPMS segment, operating expenses amounted to $1,278 million, or 30.4% of revenue in 2014, compared to $1,193 million, or 33.8% of revenuein 2013. The increase was primarily driven by increased investment in research and development and increased share-based compensation costs.Operating expenses in our SP segment increased to $262 million, or 20.5% of revenue in 2014 compared to $247 million or 21.6% of revenue in 2013.The increase in operating expenses was mainly driven by higher share-based compensations costs.Operating expenses in Corporate and Other decreased by $34 million to $61 million in 2014 compared to $95 million in 2013. The decrease comparedto the prior year period was primarily due to lower restructuring and restructuring-related costs.Other Income (Expense)The following table presents other income (expense) for the years ended December 31, 2014 and 2013. ($ in millions, unless otherwise stated) 2014 2013 Other income (expense) 10 9 Other income (expense) reflects income of $10 million for 2014 compared to $9 million of income in 2013.Restructuring ChargesRestructuring and restructuring related costs amounted to $57 million in 2014 compared to $40 million in 2013.In 2014, we had restructuring charges, which related to a workforce reduction charge as a result of redundancy at our ICN 8 wafer fab in Nijmegen of$16 million and for our wafer fab in Hamburg of $5 million. The remaining restructuring and restructuring related costs were for the cumulative impact ofspecific targeted actions.In 2013, we had restructuring charges related mainly to a charge of $16 million associated with onerous contracts relating to leased office buildings inthe Netherlands and France. The remaining restructuring and restructuring related costs were for the cumulative impact of specific targeted actions. 38Table of ContentsOperating Income (Loss)The following table presents operating income (loss) by segment for the years ended December 31, 2014 and 2013. 2014 2013 ($ in millions, unless otherwise stated) Operating income(loss) % of segmentrevenue Operating income(loss) % of segmentrevenue HPMS 983 23.4 712 20.2 SP 120 9.4 39 3.4 Corporate and Other (54) — (100) — Total 1,049 18.6 651 13.5 The table below summarizes the PPA effects for the years ended December 31, 2015 and 2014 on operating income (loss) by segment. ($ in millions, unless otherwise stated) 2014 2013 HPMS (84) (163) SP (58) (59) Corporate and Other (25) (24) Total (167) (246) The table below depicts the PPA effects within the Statement of Operations for the years ended December 31, 2014 and 2013. ($ in millions) 2014 2013 Gross profit (12) (14) Selling, general and administrative (152) (232) Other income (expense) (3) — Operating income (loss) (167) (246) “PPA effects” reflect the amortization in the period related to fair value adjustments resulting from acquisition accounting and other acquisitionadjustments charged to the income statement applied to the formation of NXP on September 29, 2006 and all subsequent acquisitions. The PPA effect on theCompany’s gross profit refers to additional depreciation charges on tangible fixed assets, resulting from the step-up in fair values. The amortization chargesrelated to long-lived intangible assets are reflected in general and administrative expenses.The decrease in PPA effects results in part from certain items becoming fully amortized during the course of 2014.Financial Income (Expense) ($ in millions) For the years ended December 31, 2014 2013 Interest income 3 3 Interest expense (158) (214) Foreign exchange rate results (246) 62 Net gain (loss) on extinguishment of debt (3) (114) Other (6) (11) Total (410) (274) Financial income (expense) was an expense of $410 million in 2014, compared to an expense of $274 million in 2013. Extinguishment of debt in 2014amounted to a loss of $3 million compared to a loss of $114 million in 2013. In 2014, financial income (expense) included a loss of $246 million as a resultof changes in foreign exchange rates mainly applicable to re-measurement of our U.S. dollar-denominated notes and short-term loans, which reside in a eurofunctional currency entity, compared to a gain of $62 million in 2013. The net interest expense amounted to $155 million in 2014 compared to $211 millionin 2013. This was mainly attributable to a lower average interest rate on our long-term debt of 3.9% in 2014 compared to 5.2% in 2013.Benefit (Provision) for Income TaxesThe provision for income taxes was $40 million for the year ended December 31, 2014, compared to $20 million for the year ended December 31,2013, and the effective income tax rates were 6.3% and 5.3%, respectively. The effective income tax rates were impacted by foreign earnings taxed at lowerrates than the Netherlands statutory rate, tax incentives in certain jurisdictions, and the mix of income and losses in various jurisdictions. 39Table of ContentsResults Relating to Equity-accounted InvesteesResults relating to the equity-accounted investees amounted to a gain of $8 million in 2014, compared to a gain of $58 million in 2013. The gain in2013 primarily reflects a $46 million release of the contingent liability related to an arbitration commenced by ST. By ruling of April 2, 2013, the ICCarbitration tribunal dismissed all claims made by ST in this arbitration. No appeal is available to ST. Based on this award, the provision amounting to $46million, established in 2012 was released.Non-controlling InterestsNon-controlling interests are related to the third party share in the results of consolidated companies, predominantly SSMC. Their share of non-controlling interests amounted to a profit of $68 million in 2014, compared to a profit of $67 million in 2013.B. Liquidity and Capital ResourcesLiquidity and Capital ResourcesAs of December 31, 2015, our cash balance was $1,614 million, of which $485 million was held by SSMC, our consolidated joint venture companywith TSMC. Under the terms of our joint venture agreement with TSMC, a portion of this cash can be distributed by way of a dividend to us, but 38.8% of thedividend will be paid to our joint venture partner. In 2015, a dividend of $130 million was distributed, of which $50 million was distributed to the jointventure partner.Taking into account the available undrawn amount under the New RCF Agreement, we had access to $2,214 million of liquidity as of December 31,2015.Our capital expenditures were $341 million in 2015, compared to $329 million in 2014.The total amount of cash used for financing activities amounted to $449 million.As of December 31, 2015, we had an undrawn availability of $600 million remaining under the New RCF Agreement.For the year ended December 31, 2015, we incurred total net interest expense of $221 million compared to $155 million during 2014. The weightedaverage interest rates on our debt instruments as of December 31, 2015 and December 31, 2014 were 3.9% and 3.3%, respectively.We repurchased 5.3 million of our common stock pursuant to our share buyback program during 2015 at a weighted average price of $88.93 per share.Our sources of liquidity include cash on hand, cash flow from operations and amounts available under the New RCF Agreement. We believe that, basedon our current level of operations as reflected in our results of operations for the year ended December 31, 2015, these sources of liquidity will be sufficient tofund our operations, capital expenditures, and debt service for at least the next twelve months.From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies andproduct lines, such as our recent acquisition Freescale. Any such transaction could require significant use of our cash and cash equivalents, or require us toarrange for new debt and equity financing to fund the transaction. Our ability to make scheduled payments or to refinance our debt obligations depends onour financial and operating performance, which is subject to prevailing economic and competitive conditions. In the future, we may not be able to maintain alevel of cash flows from operating activities sufficient to permit us to pay principal, premium, if any, and interest on our indebtedness. Our business may notgenerate sufficient cash flow from operations, or we may not have enough capacity under the New RCF Agreement, or from other sources in an amountsufficient to enable us to repay our indebtedness, including the New RCF Agreement, the Term Loans, the Secured Notes, the Unsecured Notes or to fund ourother liquidity needs, including working capital and capital expenditure requirements. In any such case, we may be forced to reduce or delay capitalexpenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. See Part I, Item 3D. Risk Factors.Cash Flow from Operating ActivitiesIn 2015 our operating activities provided $1,330 million in cash. This was primarily the result of net income of $1,599 million and changes inoperating assets and liabilities of $56 million. Net income includes non-cash items, such as the gain on the sale of assets of $1,263 million, depreciation andamortization of $517 million and share-based compensation of $216 million.In 2014 our operating activities provided $1,468 million in cash. This was primarily the result of net income of $607 million and changes in operatingassets and liabilities of $82 million. Net income includes non-cash items, such as depreciation and amortization, of $778 million.In 2013 our operating activities provided $891 million in cash. This was primarily the result of net income of $415 million and changes in operatingassets and liabilities of $155 million. Net income includes non-cash items, such as depreciation and amortization, of $628 million. 40Table of ContentsCash Flow from Investing ActivitiesNet cash used for investing activities amounted to $430 million in 2015 and principally consisted of cash outflows for purchases of interests inbusiness (net of cash) of $1,692 million, capital expenditures of $341 million and $12 million for the purchase of identified intangible assets, mainly relatedto the purchase of software offset by proceeds of $1,605 million from the sale of business (net of cash).Net cash used for investing activities amounted to $387 million in 2014 and principally consisted of cash outflows for capital expenditures of $329million and $36 million for the purchase of identified intangible assets, mainly related to the purchase of software.Net cash used for investing activities amounted to $240 million in 2013 and principally consisted of cash outflows for capital expenditures of $215million and $35 million for the purchase of identified intangible assets, mainly related to the purchase of software.Cash Flow from Financing ActivitiesNet cash used for financing activities was $449 million in 2015, $554 million in 2014 and $598 million in 2013. The cash flows related to financingtransactions in 2015, 2014 and 2013 are primarily related to the financing activities described below under the captions 2015 Financing Activities, 2014Financing Activities and 2013 Financing Activities, respectively.In addition to the financing activities described below, net cash used for financing activities by year included: Year ended December 31, 2015 2014 2013 Net (repayments) borrowings under revolving credit facility — (150) (80) Proceeds from the sale of warrants — 134 — Cash paid for Notes hedge derivatives — (208) — Dividends paid to non-controlling interests (51) (50) (48) Purchase of non-controlling interest shares — — (12) Cash proceeds from exercise of stock options 51 145 177 Purchase of treasury shares (475) (1,435) (405) 2015 Financing ActivitiesNew RCF AgreementOn December 7, 2015, NXP B.V. and NXP Funding LLC, entered into a $600 million revolving credit facility agreement (the “New RCF Agreement”).There are currently no borrowings under this facility.Secured Bridge Term Credit AgreementOn December 7, 2015, NXP B.V. and NXP Funding LLC, entered into a $1,000 million secured bridge term credit facility agreement (the “SecuredBridge Term Credit Agreement”). The Secured Bridge Term Credit Agreement was repaid in full on December 16, 2015.Secured NotesIn connection with the Merger, the Indenture, dated as of May 31, 2013 (the “2021 Freescale Indenture”), by and among Freescale Semiconductor, Inc.(the “Freescale Issuer”), an indirect, wholly-owned subsidiary of Freescale, Freescale Semiconductor Holdings II, Ltd., Freescale Semiconductor Holdings III,Ltd., Freescale Semiconductor Holdings IV, Ltd., Freescale Semiconductor Holdings V, Inc. and SigmaTel LLC (the “Freescale Indenture Guarantors”) andThe Bank of New York Mellon Trust Company, N.A., as trustee (the “2021 Freescale Trustee”), governing Freescale’s 5.00% Senior Secured Notes due 2021(the “2021 Freescale Notes”) and the Indenture, dated as of November 1, 2013 (the “2022 Freescale Indenture” and, together with the 2021 FreescaleIndenture, the “Freescale Indentures”), by and among the Freescale Issuer, the Freescale Indenture Guarantors and Wells Fargo Bank, National Association, astrustee (the “2022 Freescale Trustee”, together with the 2021 Freescale Trustee, the “Freescale Trustees”), governing Freescale’s 6.00% Senior Secured Notesdue 2022 (the “2022 Freescale Notes” and, together with the 2021 Freescale Notes, the “Secured Notes”) were amended and restated on December 7, 2015(the “A&R Freescale Indentures”). In accordance with the A&R Freescale Indentures, among other things, (x) certain amendments previously approved by theholders of the Freescale Notes as part of the consents solicitations that launched on March 23, 2015 and closed on April 2, 2015 became operative and (y) theNXP B.V., NXP Funding LLC, NXP Semiconductors Netherlands B.V., NXP Semiconductors UK Limited, NXP Semiconductors USA, Inc., NXPSemiconductors Germany GmbH, NXP Semiconductors Hong Kong Limited, NXP Semiconductors Philippines Inc., NXP Semiconductors Singapore Pte. Ltd.,NXP Semiconductors Taiwan Ltd. and NXP Manufacturing (Thailand) Ltd. entered into and acceded to the A&R Freescale Indentures as additionalguarantors. 41Table of Contents2020 Senior Unsecured Notes and 2022 Senior Unsecured NotesOn June 9, 2015 our subsidiary, NXP B.V. together with NXP Funding LLC issued U.S dollar-denominated 4.125% and 4.625% Senior UnsecuredNotes with an aggregate principal amounts of $600 million due 2020 and $400 million due 2022, respectively (the “2020 Senior Unsecured Notes” and the“2022 Senior Unsecured Notes”). The 2020 Senior Unsecured Notes bear interest at a rate of 4.125% per year, while the 2022 Senior Unsecured Notes bearinterest at a rate of 4.625% per year, payable semi-annually on June 15 and December 15 of each year, beginning on December 15, 2015. The 2020 SeniorUnsecured Notes will mature on June 15, 2020. The 2022 Senior Unsecured Notes will mature on June 15, 2022. The 2020 Senior Unsecured Notes and the2022 Senior Unsecured Notes were issued at par and were recorded at their fair value of $600 million and $400 million, respectively, on the accompanyingConsolidated Balance Sheet.Term Loan BOn December 7, 2015, NXP B.V. and NXP Funding LLC, in connection with the Merger entered into a $2,700 million secured term credit agreement(the “New Secured Term Credit Agreement”). The term loan under the New Secured Term Credit Agreement was issued at 99.25% of par and was recorded at afair value of $2,680 million on the accompanying Consolidated Balance Sheet.The net proceeds of the 2020 Senior Unsecured Notes and 2022 Senior Unsecured Notes, together with the net proceeds of the Term Loan B, theSecured Bridge Term Credit Agreement, cash-on-hand and/or other available financing resources, were used to (i) pay the cash consideration in connectionwith the acquisition of Freescale, (ii) effect the repayment of certain amounts under Freescale’s outstanding credit facility and (iii) pay certain transactioncosts.2014 Financing Activities2017 Term LoanOn February 18, 2014, our subsidiary, NXP B.V. together with NXP Funding LLC entered into a new $400 million aggregate principal amount SeniorSecured Term Loan Facility due March 4, 2017 (the “2017 Term Loan”). Concurrently, NXP repaid the $486 million principal amount Senior Secured TermLoan Facility due March 4, 2017. A $100 million draw-down under our existing Revolving Credit Facility and approximately $5 million of cash on handwere used to settle the combined transactions, as well as pay the related call premium of $5 million and accrued interest of $4 million.2019 Cash Convertible Senior NotesOn November 24, 2014, NXP issued 2019 Cash Convertible Senior Notes with an aggregate principal amount of $1,150 million, which matureDecember 1, 2019. The 2019 Cash Convertible Senior Notes were issued at par and were recorded at their fair value of $1,150 million on the accompanyingConsolidated Balance Sheet. We used the net proceeds of $1,134 million (i) to fund the cost of entering into the cash convertible note hedge transactions (thecost of which were partially offset by the proceeds that NXP received from entering into warrant transactions) with certain hedge counterparties, as describedbelow, (ii) to repay up to €225 million in respect of intercompany loans to our subsidiary NXP B.V., (iii) to fund the repurchase of $150 million of ourcommon stock in privately negotiated transactions conducted concurrently with the pricing of the 2019 Cash Convertible Senior Notes, and (iv) for generalcorporate purposes, including additional share repurchases and potential acquisitions.In connection with the pricing of the 2019 Cash Convertible Senior Notes, NXP entered into separate privately negotiated cash convertible note hedgeand warrant transactions with counterparties that include the initial purchasers of the 2019 Cash Convertible Senior Notes or their respective affiliates (the“hedge counterparties”). The cash convertible note hedge transactions will be cash settled upon exercise and are expected generally to offset any cashpayments NXP is required to make in excess of the principal amount of the 2019 Cash Convertible Senior Notes upon conversion. The warrant transactionswill be net share settled upon exercise and could therefore have a dilutive effect with respect to NXP’s common stock to the extent that the market price pershare of NXP’s common stock exceeds the strike price of the warrants. The strike price of the warrant transactions will initially be approximately $133.32 pershare, which represents a premium of approximately 75% over the last reported sale price of NXP’s common stock on November 24, 2014, and is subject tocertain adjustments under the terms of the warrant transactions.2013 Financing Activities2021 Senior Unsecured NotesOn February 14, 2013 our subsidiary, NXP B.V. together with NXP Funding LLC issued U.S. dollar-denominated 5.75% Senior Unsecured Notes withan aggregate principal amount of $500 million, which mature February 15, 2021 (the “2021 Unsecured Notes”). The 2021 Unsecured Notes were issued at parand were recorded at their fair value of $500 million on the accompanying Consolidated Balance Sheet. On March 4, 2013, we used the net proceeds of $495million together with approximately $14 million of cash on hand to fully repay the outstanding principal amount of $494 million under the Senior SecuredTerm Loan Facility due April 3, 2017, as well as to pay related call premiums of $10 million and accrued interest of $5 million. 42Table of Contents2023 Senior Unsecured NotesOn March 12, 2013 our subsidiary, NXP B.V. together with NXP Funding LLC issued U.S. dollar-denominated 5.75% Senior Unsecured Notes with anaggregate principal amount of $500 million, which mature March 15, 2023 (the “2023 Unsecured Notes”). The 2023 Unsecured Notes were issued at par andwere recorded at their fair value of $500 million on the accompanying Consolidated Balance Sheet. On March 12, 2013, we used the net proceeds of $495million to fully repay the $471 million principal amount Senior Secured Term Loan Facility due March 19, 2019, to pay related call premiums of $5 millionand accrued interest of $5 million. We used the balance of $14 million for general corporate purposes.2018 Senior Unsecured NotesOn May 20, 2013 our subsidiary, NXP B.V. together with NXP Funding LLC issued U.S. dollar-denominated 3.75% Senior Unsecured Notes with anaggregate principal amount of $750 million, which mature June 1, 2018 (the “2018 Unsecured Notes”).The 2018 Unsecured Notes were issued at par and were recorded at their fair value of $750 million on the accompanying Consolidated Balance Sheet.On May 21, 2013, we used the net proceeds of $743 million together with cash on hand to redeem €142 million aggregate principal amount of SeniorSecured Floating Rate Notes due October 2013 for $184 million, to repurchase $58 million aggregate principal amount of Senior Secured Floating RateNotes due October 2013, and to redeem $615 million aggregate principal amount of Senior Secured Floating Rate Notes due November 2016, as well as topay related call premiums of $16 million and accrued interest of $2 million.2016 Senior Unsecured NotesOn September 24, 2013 our subsidiary, NXP B.V. together with NXP Funding LLC issued U.S. dollar-denominated 3.5% Senior Unsecured Notes withan aggregate principal amount of $500 million, which mature September 15, 2016 (the “2016 Unsecured Notes”, and together with the 2021 UnsecuredNotes, the 2023 Unsecured Notes and the 2018 Unsecured Notes, the “Unsecured Notes”, and together with the 2019 Cash Convertible Senior Notes, the“Notes”). The 2016 Unsecured Notes were issued at par and were recorded at their fair value of $500 million on the accompanying Consolidated BalanceSheet. On October 15, 2013, we used the net proceeds of $495 million to redeem $422 million aggregate principal amount of Senior Secured Notes dueAugust 2018, as well as to pay related call premiums of $51 million and accrued interest of $8 million. We used the balance of $14 million for generalcorporate purposes.2020 Term LoanOn November 27, 2013 our subsidiary, NXP B.V. together with NXP Funding LLC entered into a new $400 million aggregate principal amount SeniorSecured Term Loan Facility due January 11, 2020 (the “2020 Term Loan”, and together with the 2017 Term Loan, the “Term Loans”). Concurrently, NXPrepaid the $496 million principal amount Senior Secured Term Loan Facility due January 11, 2020. A $100 million draw-down under our existing RevolvingCredit Facility and approximately $6 million of cash on hand were used to settle the combined transactions, as well as pay the related call premium of $5million and accrued interest of $5 million. The exchange of the First 2020 Term Loan for the 2020 Term Loan was a non-cash financing transaction.Debt PositionShort-term DebtAs of December 31, 2015, our short-term debt of $556 million included other short-term bank borrowings of $6 million, related to a local bank loan inChina.As of December 31, 2014, our short-term debt of $20 million included other short-term bank borrowings of $8 million, related to a local bank loan inChina. 43Table of ContentsLong-term DebtAs of December 31, 2015, we had outstanding debt of: ($ in millions) December 31,2014 Accrual/releaseOriginalIssuance/DebtDiscount and DebtIssuance Cost Debt Exchanges/Repurchases/ NewBorrowings Other(15) December 31,2015 U.S. dollar-denominated secured term credit agreement dueMarch 2017 (1) 388 2 (4) 386 U.S. dollar-denominated secured term credit agreement dueJanuary 2020 (2) 384 2 (4) 382 U.S. dollar-denominated secured term credit agreement dueDecember 2020 (3) — (41) 2,700 (27) 2,632 U.S. dollar-denominated 3.50% senior unsecured notes dueSeptember 2016(4) 497 2 (499) — U.S. dollar-denominated 3.75% senior unsecured notes dueJune 2018(5) 744 2 746 U.S. dollar-denominated 4.125% senior unsecured notes dueJune 2020(6) — (6) 600 594 U.S. dollar-denominated 5.75% senior unsecured notes dueFebruary 2021(7) 495 1 496 U.S. dollar-denominated 5.00% senior secured notes dueMay 2021(8) — 500 19 519 U.S. dollar-denominated 6.00% senior secured notes dueJanuary 2022(9) — 960 62 1,022 U.S. dollar-denominated 4.625% senior unsecurednotes due June 2022 (10) — (4) 400 396 U.S. dollar-denominated 5.75% senior unsecurednotes due March 2023 (11) 495 1 496 U.S. dollar-denominated 1.00% cash convertible senior notesdue December 2019(12) 930 42 972 3,933 1 5,160 (453) 8,641 New RCF Agreement (13) — Other long-term debt (14) 3 12 15 Total long-term debt 3,936 1 5,160 (441) 8,656 (1)On February 18, 2014, we entered into the 2017 Term Loan for an aggregate principal amount of $400 million at a rate of interest of LIBOR plus 2.00%with a floor of 0.75%.(2)On November 27, 2013, we entered into the 2020 Term Loan for an aggregate principal amount of $400 million at a rate of interest of LIBOR plus2.50% with a floor of 0.75%.(3)On December 7, 2015, we entered into a new Term Loan B for an aggregate principal amount of $2,700 million at a rate of interest of LIBOR plus3.00% with a floor of 0.75%.(4)On September 24, 2013, we issued $500 million aggregate principal amount of 3.50% Senior Unsecured Notes due 2016.(5)On May 20, 2013, we issued $750 million aggregate principal amount of 3.75% Senior Unsecured Notes due 2018.(6)On June 9, 2015, we issued $600 million aggregate principal amount of 4.125% Senior Unsecured Notes due 2020.(7)On February 14, 2013, we issued $500 million aggregate principal amount of 5.75% Senior Unsecured Notes due 2021.(8)On December 7, 2015, we entered into the A&R Indenture governing the 2021 Freescale Notes, Freescale’s 5.00% Senior Secured Notes due 2021.(9)On December 7, 2015, we entered into the A&R Indenture governing the 2022 Freescale Notes, Freescale’s 6.00% Senior Secured Notes due 2022.(10)On June 9, 2015, we issued $400 million aggregate principal amount of 4.625% Senior Unsecured Notes due 2022.(11)On March 15, 2013, we issued $500 million aggregate principal amount of 5.75% Senior Unsecured Notes due 2023.(12)On November 24, 2014, we issued $1,150 million aggregate principal amount of 1.00% Cash Convertible Senior Notes due 2019.(13)On December 7, 2015, we entered into a $600 million revolving credit facility agreement due 2020.(14)Other long-term debt mainly concerns capital lease obligations.(15)Other mainly concerns the reclassification of the current portion of long-term debt and the purchase price accounting step-up of the Freescale Notes.We may from time to time continue to seek to retire or purchase our outstanding debt through cash purchases and/or exchanges, in open marketpurchases, privately negotiated transactions or otherwise. See the discussion in the “Recent Developments” section in Part I, Item 5A. Operating Results andPart II, Item 10C. Material Contracts. 44Table of ContentsCertain Terms of the 2019 Cash Convertible Senior NotesWe have issued $1,150 million aggregate principal amount of 2019 Cash Convertible Senior Notes, which bear interest at 1.00% per annum andmature on December 1, 2019, unless earlier converted, repurchased or redeemed. The 2019 Cash Convertible Senior Notes pay interest on June 1 andDecember 1 of each year, beginning on June 1, 2015. The 2019 Cash Convertible Senior Notes are senior unsecured obligations of NXP Semiconductor N.V.and will be settled solely in cash upon conversion. We may not redeem the 2019 Cash Convertible Senior Notes prior to their maturity date other thanfollowing the occurrence of certain tax law changes as set forth in the indenture governing the 2019 Cash Convertible Senior Notes (the “Convertible NotesIndenture”). Upon the occurrence of certain events which constitute a “fundamental change” under the Convertible Notes Indenture, such as certain changeof control, the holders of 2019 Cash Convertible Senior Notes may require us to repurchase for cash all or part of their 2019 Cash Convertible Senior Notes ata price equal to 100% of the principal amount thereof plus accrued and unpaid interest.Prior to September 1, 2019, holders may convert their 2019 Cash Convertible Senior Notes only upon satisfaction of certain conditions specified in theConvertible Notes Indentures. On or after September 1, 2019 until the close of business on the second scheduled trading day immediately preceding thematurity date, holders may, at their option, convert their 2019 Cash Convertible Senior Notes solely into cash at any time.Upon conversion, in lieu of receiving any shares of our common stock, a holder will receive, per $1,000 principal amount of 2019 Cash ConvertibleSenior Notes being converted, an amount in cash equal to the settlement amount, determined as described in the Convertible Notes Indenture. Theconversion rate will initially be 9.7236 shares of our common stock per $1,000 principal amount (equivalent to an initial conversion price of approximately$102.84 per share). The conversion rate for the 2019 Cash Convertible Senior Notes is subject to customary anti-dilution adjustments and will also beadjusted for any fundamental change or tax redemption, each as described in the Convertible Notes Indenture.Concurrently with the issuance of the 2019 Cash Convertible Senior Notes, we entered into cash convertible note hedge and warrant transactions. Forfurther information on the cash convertible note hedge and warrant transactions, please see “—Financial Instruments.”Cash Convertible Note Hedge Transactions and Warrant TransactionsOn November 24, 2014 and November 25, 2014, in connection with our issuances of the 2019 Cash Convertible Senior Notes, we entered into cashconvertible note hedge transactions with affiliates of the initial purchasers of the 2019 Cash Convertible Senior Notes (in such capacity, the “OptionCounterparties”) to offset any cash payment we are required to make in excess of the principal amount of the 2019 Cash Convertible Senior Notes.In these transactions, we paid approximately $208 million for call options relating to, subject to customary anti-dilution adjustments, approximately11.18 million shares of NXP’s common stock (which is equal to the number of shares that initially underlie the 2019 Cash Convertible Senior Notes), with astrike price of approximately $102.84 per share. The Option Counterparties or their respective affiliates may enter into, or unwind, various over-the-counterderivatives and/or purchase or sell our common stock in open market and/or privately negotiated transactions prior to maturity of the 2019 Cash ConvertibleSenior Notes, including during any observation period for the settlement of conversions of the 2019 Cash Convertible Senior Notes, or upon any repurchaseof the 2019 Cash Convertible Senior Notes by us, which could adversely impact the price of our common stock and of the 2019 Cash Convertible SeniorNotes.Separately, we sold warrants to the Option Counterparties for $134 million giving them the right to purchase from us, subject to customary anti-dilution adjustments, approximately 11.18 million shares of NXP’s common stock, with a strike price of $133.32 per share. The warrants will have a dilutiveeffect with respect to our common stock to the extent that the market price per share of our common stock exceeds the strike price of the warrants on or priorto the expiration date of the warrants.C. Research and Development, Patents and Licenses, etc.Research and DevelopmentWe believe that our future success depends on our ability to both improve our existing products and to develop new products for both existing andnew markets. We direct our research and development efforts largely to the development of new High Performance Mixed Signal semiconductor solutionswhere we see significant opportunities for growth. We target applications that require stringent overall system and subsystem performance. As new andchallenging applications proliferate, we believe that many of these applications will benefit from our solutions. We have assembled a global team of highlyskilled semiconductor and embedded software design engineers with expertise in RF, analog, power management, interface, security and digital processing.As of December 31, 2015, we had approximately 8,831 employees in research and development, of which approximately 8,481 support our High PerformanceMixed Signal businesses and approximately 350 support our Standard Products businesses. Our research and development expenses were $890 million in2015 (of which 90% related to our High Performance Mixed Signal businesses) and $763 million in 2014.To outpace market growth we invest in research and development to extend or create leading market positions, with an emphasis on fast growingsizable market segments, such as identification and smart mobile, and emerging markets, such as the Internet of Things and automotive solid state lighting.Finally, we invest a few percent of our total research and development expenditures in research activities that develop fundamental new technologies orproduct categories that could contribute significantly to our company growth in the future. 45Table of ContentsWe annually perform a fundamental review of our business portfolio and our related new product and technology development opportunities in orderto decide on changes in the allocation of our research and development resources. For products targeting established markets, we evaluate our research anddevelopment expenditures based on clear business need and risk assessments. For break-through technologies and new market opportunities, we look at thestrategic fit and synergies with the rest of our portfolio and the size of the potential addressable market. Overall, we allocate our research and development tomaintain a healthy mix of emerging growth and mature businesses.Intellectual PropertyThe creation and use of intellectual property is a key aspect of our strategy to differentiate ourselves in the marketplace. We seek to protect ourproprietary technologies by obtaining patents, trademarks, domain names, retaining trade secrets and defending, enforcing and utilizing our intellectualproperty rights, where appropriate. We believe this strategy allows us to preserve the advantages of our products and technologies, and helps us to improvethe return on our investment in research and development. We have a broad portfolio of approximately 9,000 patent families (each patent family includingall patents and patent applications originating from the same invention). To protect certain confidential technical information and software, we rely oncopyright and trade secret law and enter into confidentiality agreements as applicable. In situations where we believe that a third party has infringed on ourintellectual property, we enforce our rights through all available legal means to the extent that we determine the benefits of such actions to outweigh anycosts and risks involved.We engage in licensing and selling of certain patents and technology to third parties and other activities aimed at generating income and derivingother benefits from our intellectual property assets. Revenue associated with intellectual property sales and licensing depends in part on the continuedstrength of our intellectual property portfolio, enforcement efforts and market forces and can fluctuate from quarter to quarter. We own a number oftrademarks that are used in the conduct of our business. Where we consider it desirable, we develop names for our new products and secure trademarkprotection. Our trademarks allow us to further distinguish our company and our products and are important in our relationships with customers, suppliers,partners and end-users.While our patents and trade secrets constitute valuable assets, we do not view any one of them as being material to our operations as a whole. Instead,we believe it is the combination of our patents and other intellectual property rights that creates an advantage for our business.In addition to obtaining our own patents and other intellectual property rights, we have entered into licensing, broad-scope cross licensing and otheragreements authorizing us to use patents, trade secrets, confidential technical information, software and related technology owned by third parties and/oroperate within the scope of patents and other intellectual property owned by third parties.D. Trend InformationWithin the overall umbrella of Secure Connections for a Smarter World, NXP addresses four key macro growth trends: Intelligent Devices, Mobility,Hyper-connectivity and Security that drive applications such as the Connected Car, Portable & Wearable and the Internet of Things, with Security being arequirement across all applications. Our innovative solutions are used in a wide range of applications. Many electronic payment and government ID servicesare enabled by our secure identification solutions and with the transition of those services to new form factors in secure connected devices, there is strongmarket demand for embedded security solutions such as mobile payment, cyber-security and authentication. Fast innovation in smart phones & tablets drivesdemand for our secure interface and power solutions while always-on requirements in secure connected devices further drive demand for our advanced mobileaudio, sensing and connectivity solutions, with advanced magnetic induction radios for implantable medical devices such as hearing aids as an example.Cities, buildings and industrial production systems all want to become smart, connected and secure; they provide fertile new markets for our broad range ofmicrocontrollers smart grid, intelligent logistics and industrial security solutions. Next generation networks which deliver the increasing demand for data areenabled by our new high-performance RF power amplifier products allow wireless network operators to expand network capacity with fewer base stations andDigital Networks. Our new high-performance RF power amplifier products allow wireless network operators to expand network capacity with fewer basestations. The automotive industry brings fast trends in advanced driver assistance, seamless consumer electronics experience and energy efficiency, and werespond to those by delivering solutions for secure car access, car entertainment and in-vehicle networking. In addition, we leverage our core competencies toinnovate in the transition to highly and eventually fully automated cars with ground breaking solutions in secure vehicle-to-infrastructure & vehicle-to-vehicle and radar.We believe that we are strategically positioned to capture rapid growth in emerging markets through our strong position in Asia Pacific (excludingJapan), which represented 69% of our revenue in 2015, compared to 68% of our revenue in 2014. In particular, Greater China represented 53% of our revenuein 2015, compared to 51% of our revenue in 2014.E. Off-balance Sheet ArrangementsAs of December 31, 2015, we had no off-balance sheet arrangements. 46Table of ContentsF. Tabular Disclosure of Contractual ObligationsPresented below is a summary of our contractual obligations as of December 31, 2015 ($ in millions) Total 2016 2017 2018 2019 2020 2021 andthereafter Long-term debt 8,193 535(1) 419(2) 781(3) 30 3,568(4) 2,860(5) 2019 Cash Convertible Senior Notes (6) 1,150 — — — 1,150 — — Capital lease obligations 32 17 15 — — — — Short-term debt 6 6 — — — — — Operating leases 172 50 37 24 18 13 30 Interest on the notes (7) 1,758 362 338 319 305 270 164 Long-term purchase contracts 809 514 183 40 24 6 42 Total contractual cash obligations (7)(8)(9) 12,120 1,484 992 1,164 1,527 3,857 3,096 (1)On September 24, 2013, we issued $500 million aggregate principal amount of 3.5% Senior Unsecured Notes due 2016.(2)On February 18, 2014, we entered into a new 2017 Term Loan with an aggregate principal amount of $400 million at a rate of interest of LIBOR plus2% with a floor of 0.75%.(3)On May 20, 2013, we issued $750 million aggregate principal amount of 3.75% Senior Unsecured Notes due 2018.(4)On November 27, 2013, we entered into the 2020 Term Loan for an aggregate principal amount of $400 million at a rate of interest of LIBOR plus2.5% with a floor of 0.75%. On June 2, 2015, we issued $600 million aggregate principal amount of 4.125% Senior Unsecured Notes due 2020. OnDecember 7, 2015, we entered into a new Term Loan B for an aggregate principal amount of $2,700 million at a rate of interest of LIBOR plus 3% witha floor of 0.75%.(5)On February 14, 2013, we issued $500 million aggregate principal amount of 5.75% Senior Unsecured Notes due 2021. On March 15, 2013, we issued$500 million aggregate principal amount of 5.75% Senior Unsecured Notes due 2023. On June 2, 2015, we issued $400 million aggregate principalamount of 4.625% Senior Unsecured Notes due 2022. On December 7, 2015, NXP entered into the Amended and Restated Indenture (“A&RIndenture”) governing the 2021 Freescale Notes, Freescale’s $500 million aggregate principal amount of 5.00% Senior Secured Notes due 2021 andinto the A&R Indenture governing the 2022 Freescale Notes, Freescale’s $960 million aggregate principal amount of 6.00% Senior Secured Notes due2022.(6)On November 24, 2014, we issued $1,150 million aggregate principal amount of 1.00% Cash Convertible Senior Notes due 2019.(7)The cash interest on the notes was determined on the basis of LIBOR interest rates for floating rate instruments and on the basis of contractual agreedinterest rates for other debt instruments.(8)As of December 31, 2015, we had reserves of $163 million recorded for uncertain tax positions, including interest and penalties. We are not includingthis amount in the long-term contractual obligations table presented because of the difficulty in making reasonably reliable estimates of the timing ofcash settlements, if any, with the respective taxing authorities.(9)Certain of these obligations are denominated in currencies other than U.S. dollars, and have been translated from foreign currencies into U.S. dollarsbased on an aggregate average rate of $1.1150 per €1.00, in effect at December 31, 2015. As a result, the actual payments will vary based on anychange in exchange rate.Our debt instruments had accrued interest of $46 million as of December 31, 2015 (December 31, 2014: $28 million).In addition to the above obligations, we enter into a variety of agreements in the normal course of business, containing provisions that certain penaltiesmay be charged if we do not fulfill our commitments. It is not possible to predict with certainty the maximum potential amount of future payments underthese or similar provisions due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular case.Historically, payments pursuant to such provisions have not been material and we believe that any future payments required pursuant to such provisionswould not have a material adverse effect on our consolidated financial condition. However, such payments may be material to our consolidated statement ofoperations for a specific period.We sponsor pension plans in many countries in accordance with legal requirements, customs and the local situation in the countries involved. Theseare defined-benefit pension plans, defined contribution pension plans and multi-employer plans. Contributions to funded pension plans are made asnecessary, to provide sufficient assets to meet future benefits payable to plan participants. These contributions are determined by various factors, includingfunded status, legal and tax considerations and local customs. The expected cash outflows in 2016 and subsequent years are uncertain and may change as aconsequence of statutory funding requirements as well as changes in actual versus currently assumed discount rates, estimations of compensation increasesand returns on pension plan assets. 47Table of ContentsG. Safe HarborThis Annual Report includes forward-looking statements. When used in this Annual Report, the words “anticipate”, “believe”, “estimate”, “forecast”,“expect”, “intend”, “plan” and “project” and similar expressions, as they relate to us, our management or third parties, identify forward-looking statements.Forward-looking statements include statements regarding our business strategy, financial condition, results of operations and market data, as well as anyother statements that are not historical facts. These statements reflect beliefs of our management, as well as assumptions made by our management andinformation currently available to us. Although we believe that these beliefs and assumptions are reasonable, these statements are subject to numerousfactors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks anduncertainties expressly qualify all subsequent oral and written forward-looking statements attributable to us or persons acting on our behalf and include, inaddition to those listed under Part I, Item 3D. Risk Factors and elsewhere in this Report, the following: • market demand and semiconductor industry conditions; • our ability to successfully introduce new technologies and products; • the demand for the goods into which our products are incorporated; • our ability to generate sufficient cash, raise sufficient capital or refinance our debt at or before maturity to meet both our debt service and research anddevelopment and capital investment requirements; • our ability to accurately estimate demand and match our production capacity accordingly; • our ability to obtain supplies from third-party producers; • our access to production from third-party outsourcing partners, and any events that might affect their business or our relationship with them; • our ability to secure adequate and timely supply of equipment and materials from suppliers; • our ability to avoid operational problems and product defects and, if such issues were to arise, to rectify them quickly; • our ability to form strategic partnerships and joint ventures and successfully cooperate with our alliance partners; • our ability to win competitive bid selection processes; • our ability to develop products for use in our customers’ equipment and products; • our ability to successfully hire and retain key management and senior product engineers; • our ability to maintain good relationships with our suppliers; • our ability to achieve the synergies and value creation contemplated by the merger with Freescale; • our ability to effectively integrate our business with Freescale; and • the diversion of management time on transaction-related issuesWe do not assume any obligation to update any forward-looking statements and disclaim any obligation to update our view of any risks oruncertainties described herein or to publicly announce the result of any revisions to the forward-looking statements made in this Report, except as requiredby law.In addition, this Report contains information concerning the semiconductor industry and business segments generally, which is forward-looking innature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our market and business segments will develop. Wehave based these assumptions on information currently available to us, including through the market research and industry reports referred to in this Report.Although we believe that this information is reliable, we have not independently verified and cannot guarantee its accuracy or completeness. If any one ormore of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any suchdifferences may have on our business, if there are such differences, they could have a material adverse effect on our future results of operations and financialcondition, and the trading price of our common stock.Item 6. Directors, Senior Management and EmployeesA. Directors and Senior ManagementThe following description sets forth certain information about management and management-related matters. We have a one-tier board structure. 48Table of ContentsBoard of DirectorsSet forth below are the names, ages and positions as of December 31, 2015, of the persons who serve as members of our board of directors. Name Age PositionRichard L. Clemmer 64 Executive director, president and chief executive officerSir Peter Bonfield 71 Non-executive director and chairman of the boardJohannes P. Huth 55 Non-executive director and vice-chairman of the boardKenneth A. Goldman 66 Non-executive directorDr. Marion Helmes 50 Non-executive directorJosef Kaeser 58 Non-executive directorIan Loring 49 Non-executive directorEric Meurice 59 Non-executive directorPeter Smitham 73 Non-executive directorJulie Southern 56 Non-executive directorGregory Summe 59 Non-executive directorRick Tsai 64 Non-executive director • Richard L. Clemmer (1951, American). Mr. Clemmer became executive director, president and chief executive officer on January 1, 2009. Prior tothat, from December 2007, Mr. Clemmer was a member of the supervisory board of NXP B.V. and a senior advisor of Kohlberg Kravis Roberts & Co.Prior to joining NXP, he was the President and CEO of Agere Systems, served as Chairman of u-Nav Microelectronics Corporation, and was executivevice president and chief financial officer at Quantum Corporation. Prior to that, Mr. Clemmer worked for Texas Instruments Incorporated as senior vicepresident and semiconductor group chief financial officer. Mr. Clemmer also serves on the board of NCR Corporation. • Sir Peter Bonfield CBE FREng (1944, British). Sir Peter has been appointed as a non-executive director and as the chairman of our board of directorsin August 2010. Prior to that, Sir Peter was the chairman of the supervisory board of NXP B.V. from September 29, 2006. Sir Peter served as chiefexecutive officer and chairman of the executive committee for British Telecom plc from 1996 to 2002 and prior to that was chairman and chiefexecutive officer of ICL plc (now Fujitsu Services Holdings Ltd.). Sir Peter also worked in the semiconductor industry during his tenure as a divisionaldirector at Texas Instruments Incorporated, for whom he held a variety of senior management positions around the world. Sir Peter currently holds non-executive directorships at Taiwan Semiconductor Manufacturing Company Limited, Mentor Graphics Corporation and serves as Chairman of GlobalLogic Inc. Sir Peter is Chair of Council and Senior Pro-Chancellor at Loughborough University, Senior Advisor to N M Rothschild in London andBoard Mentor at CMi in Belgium. He is also Advisor to Longreach LLP in Hong Kong, Alix Partners UK LLP in London and G3 Good Governance Ltdin London. • Johannes P. Huth (1960, German). Mr. Huth has been appointed as a non-executive director and vice-chairman of our board of directors in August2010. Prior to that, Mr. Huth was a member and chairman of our supervisory board and a member and vice-chairman of NXP B.V.’s supervisory boardfrom September 29, 2006. Mr. Huth joined Kohlberg Kravis Roberts & Co. LLP in May 1999 and is a Member of KKR and Head of KKR’s operations inEurope, the Middle East and Africa. He is also a member of the Firm’s Management Committee and several of the Firm’s Investment Committees. Priorto joining KKR, he was a member of the Management Committee of Investcorp and jointly responsible for Investcorp’s operations in Europe. From1986 to 1991, he worked at Salomon Brothers, where he was a Vice President in the Mergers and Acquisitions departments in London and New York.Mr. Huth currently is also Chairman of the Supervisory Board of WMF, member of the Supervisory Board of GEG German Estate Group AG, member ofthe Board of SoftwareOne AG and member of the Board of Cognita Ltd. He is the Chairman of the Trustees of Impetus – Private Equity Foundation, acharitable organization set up by the Private Equity industry focused on providing support to charities involved with young people not in education,employment or training. He is Vice-Chair of the Board of Trustees of the Design Museum, trustee of the Staedel Museum in Frankfurt and trustee of TheEducation Endowment Foundation. He is a Visiting Fellow of Oxford University and a Fellow of the Royal Society of Arts. He earned a BSc withHighest Honors from the London School of Economics and an MBA from the University of Chicago. Mr. Huth is also a member of the Global AdvisoryBoard of the Booth School of Business at the University of Chicago. • Kenneth A. Goldman (1949, American). Mr. Goldman has been appointed as a non-executive director of our board of directors effective August 6,2010. Mr. Goldman is chief financial officer of Yahoo!, Inc responsible for Yahoo!’s global finance functions including financial planning andanalysis, controllership, tax, treasury and investor relations since October 2012. Prior to that, Mr. Goldman served as senior vice president, finance andadministration, and chief financial officer of Fortinet, Inc, a provider of unified threat management solutions, from September 2007 to September 2012.From November 2006 to August 2007, Mr. Goldman served as executive vice president and chief financial officer of Dexterra, Inc. From August 2000until March 2006, Mr. Goldman served as senior vice president, finance and administration, and chief financial officer of Siebel Systems, Inc., and fromDecember 1999 to December 2003, Mr. Goldman served on the Financial Accounting Standards Board’s primary advisory group. Mr. Goldman alsoserves on the board of directors of Yahoo! Japan, Trinet, GoPro, Inc. and several private companies. Next to that, Mr. Goldman was in 2015 appointedto a three year term on the Standards Advisory Group which advises the PCAOB. Mr. Goldman was a member of board of trustees of Cornell Universityfrom 2005 to 2013 and was designated as Emeritus Trustee. He was formerly a member of the Treasury Advisory Committee on the Auditing Profession,a public committee that made recommendations in September 2008 to encourage a more sustainable auditing profession. Mr. Goldman holds a B.S. inElectrical Engineering from Cornell University and an M.B.A. from the Harvard Business School. 49Table of Contents• Dr. Marion Helmes (1965, German). Dr. Helmes has been appointed a non-executive director of our board of directors in October 2013. Dr. Helmeswas the Speaker of the Management Board of Celesio AG until July 2014; in addition she was CFO of Celesio from January 2012 until July 2014. Priorto joining Celesio, she was member of the board of management and CFO of Q-Cells SE and from 1997 until 2010 she held various management rolesat ThyssenKrupp, including CFO of ThyssenKrupp Stainless and CFO of ThyssenKrupp Elevator. Dr. Helmes is currently also non-executive director,Vice-Chairman, member of the Presiding Committee, member of the Compensation Committee and member of the Audit and Finance Committee ofProSiebenSat1 Media SE and member of the Central Advisory Board of Commerzbank AG. • Josef Kaeser (1957, German). Mr. Kaeser has been appointed as a non-executive director of our board of directors effective September 1, 2010.Mr. Kaeser is the president and chief executive officer of Siemens AG since August 2013. Prior to this, from May 2006 to August 2013, he wasexecutive vice president and chief financial officer of Siemens AG. From 2004 to 2006, Mr. Kaeser served as chief strategy officer for Siemens AG andas the chief financial officer for the mobile communications group from 2001 to 2004. Mr. Kaeser has additionally held various other positions withinthe Siemens group since he joined Siemens in 1980. Mr. Kaeser also serves on the managing board of Siemens AG and the board of directors of SiemensLtd., India, Daimler AG and Allianz Deutschland AG. • Ian Loring (1966, American). Mr. Loring has been appointed a non-executive director of our board of directors in August 2010. Mr. Loring became amember of our supervisory board and the supervisory board of NXP B.V. on September 29, 2006 and is a managing director of Bain Capital Partners,LLC. Prior to joining Bain Capital Partners in 1996, Mr. Loring worked at Berkshire Partners and has previously also worked at Drexel BurnhamLambert. He serves as a director of The Weather Company, iHeart Media (formerly Clear Channel Communication Inc.), BMC Software, Inc.,Viewpoint, Inc. and Blue Coat Systems, Inc. • Eric Meurice (1956, French). Mr. Meurice has been appointed as a non-executive director of the board of directors effective April 1, 2014.Mr. Meurice was the CEO and Chairman of the management board of ASML Holding NV (The Netherlands), a leading provider of manufacturingequipment and technology to the semiconductor industry from 2004 to 2013. Under his watch, ASML became the largest Lithography vendor in theworld, leading to a significant equity investment and funding commitment by its customers. Before Joining ASML, he was Executive Vice President ofThomson Television, where he completed the merger of his division with TCL Corporation, one of the largest Chinese consumer electronics company.Before 2001, he served as head of Dell Computers’ Western, Eastern Europe and EMEA emerging market businesses. He gained extensive technologyexperience in the semiconductor industry between 1984 and 1994, first at Intel, in the micro-controller group, and then at ITT Semiconductors, aprovider then of digital video and audio DSP integrated circuits. Mr. Meurice is an independent director of IPG Photonics, a US based Laser supplier,since June 2014 and of UMICORE, a Belgium based materials specialist, since April 2015. He served on the board of Verigy LTD (former HP testdivision), until its acquisition by Advantest in 2011. From July 1, 2013 to April 1, 2014 he was non-executive director of ARM Holdings plc (UK,semiconductor intellectual property supplier). • Peter Smitham (1942, British). Mr. Smitham has been appointed as a non-executive director of our board of directors effective December 7, 2015,Mr. Smitham retired from his position as a partner of the private equity firm Permira on December 31, 2009, but until August 1, 2015, he was a memberof Permira Advisers LLP, which he joined in 1985, the year the London office was founded. Mr. Smitham was the managing partner of the Londonoffice from 1994 until 1998 and led Permira’s European business from 1996 until 2000. He has worked on numerous transactions focusing ontechnology, including Memec Group Holdings Limited, The Roxboro Group, Solartron Group and Technology plc. Until its merger with NXP,Mr. Smitham was a director of Freescale; he joined the Freescale board in June 2007 and has been a member of the Compensation and LeadershipCommittee and the Nominating and Corporate Governance Committee of the Freescale board. He has a degree in Geography from Swansea University,Wales, and attended the Senior Executive Program at Stanford Business School. • Ms. Julie Southern (1959, British). Ms. Southern has been appointed a non-executive director of our board of directors in October 2013. She was withVirgin Atlantic Limited (UK) from 2000 to May 2013. From 2010 to 2013 Ms. Southern was chief commercial officer and from 2000 to 2010 she waschief financial officer of Virgin Atlantic. Prior to joining Virgin Atlantic, she was group finance director at Porsche Cars Great Britain and finance andoperations director at W H Smith – H J Chapman & Co Ltd. Prior to that, she was chartered accountant at Price Waterhouse Coopers. Ms. Southerncurrently holds non-executive directorships at Rentokil-Initial Plc, Cineworld PLC and DFS PLC and is Chair of the respective Audit Committees. Atthe same time, Ms. Southern is a non-executive director and Chair of the Nomination and Compensation Committee for Gategroup SW. • Gregory L. Summe (1956 American). Mr. Summe has been appointed as a non-executive director of our board of directors effective December 7,2015, Mr. Summe is the Managing Partner of Glen Capital Partners, an investment fund, which he founded in 2013. Mr. Summe was the managingdirector and vice chairman of Global Buyout at The Carlyle Group, a leading global private equity firm, from September 2009 to May 2014. Prior tojoining Carlyle, he was the chairman and chief executive officer of PerkinElmer, Inc., a designer, manufacturer and deliverer of advanced technologysolutions addressing health and safety concerns, a company he led from 1998 to September 2009. He also served as a senior advisor to Goldman SachsCapital Partners, from 2008 to 2009 and also was a director of Freescale from September 2010 until its merger with NXP in December 2015; Mr. Summeserved as Chairman of the Freescale board since May 2014 and was also Chairman of the Compensation and Leadership Committee of the Freescaleboard. Prior to joining PerkinElmer, Mr. Summe was with AlliedSignal, now Honeywell International, an inventor and manufacturer of technologiesaddressing global macro trend challenges such as safety, security, and energy, serving as the president of General Aviation Avionics, president of theAerospace Engines Group and president of the Automotive Products Group. Before joining AlliedSignal, he was the general manager of CommercialMotors at General Electric and was a partner with the consulting 50Table of Contents firm of McKinsey & Company, Inc. Mr. Summe holds B.S. and M.S. degrees in electrical engineering from the University of Kentucky and theUniversity of Cincinnati, and an M.B.A. with distinction from the Wharton School at the University of Pennsylvania. He is in the Engineering Hall ofDistinction at the University of Kentucky. Mr. Summe also serves on the boards of directors of LMI Aerospace, Inc. and the State Street Corporation.Mr. Summe previously served on the board of directors of Automatic Data Processing, Inc., Biomet Inc., Veyance Technologies, Inc., Export TradingGroup Ltd, Euromax Holdings Inc. and TRW Corp. • Dr. Rick Tsai (1951, Taiwan/Republic of China). Dr. Tsai has been appointed as a non-executive director of our board of directors effective July1,2014. Dr. Tsai is Chairman and Chief Executive Officer of Chunghwa Telecom Co., Ltd., integrated telecom service provider in Taiwan as ofJanuary 28, 2014, Prior to joining Chunghwa Telecom, Dr. Tsai served as the Chairman and Chief Executive Officer of TSMC Solar and TSMC: SolidState Lighting from 2011 to 2014. From 2001 to 2011, he held the following successive positions in TSMC: President and Chief Operation Officer,President and Chief Executive Officer and President of New Business. Prior to joining TSMC, Dr. Tsai was based in the United States and worked forHewlett-Packard for several years. He holds a Ph.D. in material science from Cornell University.Management TeamSet forth below are the names, ages as of December 31, 2015, and positions of the executive officers who together with our chief executive officer,Mr. Clemmer, constitute our management team. Name Age PositionRichard L. Clemmer 64 Executive director, president and chief executive officerDaniel Durn 49 Executive vice president and chief financial officerTareq Bustami 46 Senior Vice President and general manager Digital Networking businessGuido Dierick 56 Executive vice president and general counselPaul Hart 39 Senior Vice President and general manager Radio Frequency businessPeter Kelly 58 Executive vice president strategy, M&A and integrationSteve Owen 55 Executive vice president sales & marketingDavid Reed 57 Executive vice president and general manager operationsFrans Scheper 53 Executive vice president and general manager Standard ProductsKeith Shull 64 Executive vice president and chief human resources officerKurt Sievers 46 Executive vice president and general manager HPMS AutomotiveRuediger Stroh 53 Executive vice president and general manager HPMS Identification • Daniel Durn (1966, American). Mr. Durn is executive vice president and chief financial officer of NXP and member of the management team. Hejoined NXP in 2015, having served as CFO of Freescale up until the Merger. Prior to Freescale, he was CFO and executive vice president of finance andadministration at Globalfoundries, the industry’s second largest semiconductor foundry, head of M&A and strategy at Advanced TechnologyInvestment Company (ATIC) and also served as vice president in technology investment banking at Goldman, Sachs & Company and was a member oftheir merger leadership group. • Tareq Bustami (1969, American). Mr. Bustami is senior vice president and general manager of the Digital Networking business at NXP. He joinedNXP in 2015, having served as general manager at Freescale up until the merger with NXP. He has more than 20 years of semiconductor experiencefocused on the networking industry. He rejoined Freescale in 2012 to lead product strategy, product definition and marketing operations for DigitalNetworking. Previously, he ran product marketing for LSI’s networking multicore family of processors. He began his career at Freescale where he ledproduct marketing for the company’s PowerQUICC III family. • Guido Dierick (1959, Dutch). Mr. Dierick is executive vice president, general counsel, secretary of our board of directors and member of themanagement team. Since 2000 he has been responsible for legal and intellectual property matters at NXP. He previously was employed by Philips from1982 and worked in various legal positions. • Paul Hart (1976, American). Mr. Hart is senior vice president and general manager of the Radio Frequency business. He joined NXP in 2015, havingserved as general manager at Freescale up until the merger with NXP. He has 15 years of experience in the high power RF field, focusing on technologydevelopment and customer enablement. He joined Motorola Semiconductor as an RF engineer in 2001 and transferring to Freescale in 2006. • Peter Kelly (1957, American). Mr. Kelly is executive vice president and a member of the management team, focusing on Strategy, M&A, and theintegration with Freescale. He joined NXP in March, 2011. Mr. Kelly has over 30 years of applicable experience in the global technology industry andhas extensive financial expertise having worked in financial management positions in several other companies, including as CFO of UGI Corp. andAgere Systems Inc. Mr. Kelly also serves on the board of Plexus, Corp. 51Table of Contents• Steve Owen (1960, British). Mr. Owen is executive vice president, global sales & marketing and member of the management team. He has extensiveexperience in developing business internationally and served in various marketing and sales leadership positions at NXP and Philips since 1998. • David Reed (1958, American). Mr. Reed is executive vice president of Technology and Operations at NXP. He joined NXP in 2015, having served asgeneral manager at Freescale until the merger with NXP. He has 30 years of extensive international experience with global execution of fabs,assembly/test, packaging, R&D, foundries and joint ventures for Analog, Automotive, Logic and Wireless customers. He joined FreescaleSemiconductor in 2012 as Senior Vice President, Manufacturing Operations. Previously he was vice president and general manager atGLOBALFOUNDRIES. He began his career at Texas Instruments in 1984 where he held multiple overseas and leadership assignments. • Frans Scheper (1962, Dutch). Mr. Scheper has been executive vice president and general manager for the Standard Products business since November,2009, and has been a member of the management team since January, 2010. He has previously served as general manager of the general applications(discretes) business line within the multimarket business and served in various positions at Philips since 2000. • Keith Shull (1951, American). Mr. Shull is executive vice president and chief human resources officer for NXP. He joined NXP in 2015 and has over35 years of experience, having led global HR organizations in a range of industries worldwide, including Arrow Electronics, Visteon and WalterEnergy. • Kurt Sievers (1969, German). Mr. Sievers is executive vice president, member of the management team and general manager of the Automotivebusiness for NXP. He has previously managed our High Performance Mixed Signal businesses focused on the automotive application markets and theautomotive safety and comfort business line and served in various positions at Philips since 1995. • Ruediger Stroh (1962, German). Mr. Stroh is executive vice president, member of the management team and general manager of the Security &Connectivity business for NXP. Before joining NXP in May, 2009, he led LSI Corporation’s Storage Peripherals business, overseeing silicon solutionsfor hard disk and solid state drives addressing consumer and enterprise markets. Previously, he headed Agere System Inc’s storage division and servedas chief executive officer for a number of start-up companies. Mr. Stroh began his career at Siemens AG where he held multiple management positionsbefore joining Infineon Technologies AG.B. CompensationIn accordance with Dutch law, our stockholders have adopted a compensation policy for the board of directors. The remuneration of our executivedirectors is resolved upon by our board of directors, with due observance of our compensation policy. Our chief executive officer is our only executivedirector. The respective executive director does not participate in the discussions of our board of directors on his compensation, nor does the chief executiveofficer vote on such a matter. To the extent the stockholders at a future stockholder meeting do not adopt the proposal of the board, the board must prepare anew proposal. After adoption of a proposal, only subsequent amendments will require stockholder approval. Furthermore, any proposed share or option-baseddirector compensation (including any performance conditions relating to such compensation) must be submitted by our board to the general meeting ofstockholders for its approval, detailing the number of shares or options over shares that may be awarded to the directors and the criteria that apply to suchaward or any modification of such rights.Compensation Policy and ObjectivesThe objective in establishing the compensation policies for our chief executive officer, the other members of our management team and our otherexecutives, will be to provide a compensation package that is aligned with our strategic goals and that enables us to attract, motivate and retain highlyqualified professionals who will provide leadership for NXP’s success in dynamic and competitive markets. NXP seeks to accomplish this goal in a way thatrewards performance and is aligned with its shareholders’ long-term interests. We believe that the best way to achieve this is by linking executivecompensation to individual performance targets, on the one hand, and to NXP’s performance, on the other hand. Our executive compensation package willtherefore include a significant variable part, consisting of an annual cash incentive, shares and stock options. Executive performance targets will bedetermined annually, at the beginning of the year, and assessed at the end of the year by, respectively, our nominating and compensation committee, ourexecutive officers or the other members of our management team. The compensation package for our chief executive officer, the other members of ourmanagement team and our NXP executives is benchmarked on a regular basis against other companies in the high-tech and semiconductors industry.Base SalaryWe currently pay our chief executive officer an annual base salary of €1,142,000, the chairman of our board of directors an annual fixed fee of€275,000 and the other members of our board of directors an annual fixed fee of $85,000 gross. Members of our Audit Committee and the Nominating &Compensation Committee receive an additional annual fixed fee of $6,000 gross and the chairmen of both committees receive an additional annual fixed feeof $10,000 and $8,000 gross, respectively. For the year ended December 31, 2015, the current and former members of our management team as a group (intotal 19 members) received a total aggregate compensation of €9,192,379, compared to a total aggregate compensation of €8,233,052 (in total 14 members)in 2014. 52Table of ContentsOur chief executive officer has a contract of employment until December 31, 2017, and the other members of our management team and most of ourexecutives have a contract of employment for an indefinite term. The main elements of any new employment contract that we will enter into with a member ofthe board of directors will be made public no later than the date of the public notice convening the general meeting of stockholders at which the appointmentof such member of the board of directors will be proposed. Non-executive directors of our board do not have a contract of employment.Annual IncentiveEach year, our chief executive officer, the other members of our management team and our other executives can qualify to earn a variable cashincentive, subject to whether certain specific and challenging performance targets have been met. For our chief executive officer, the on-target cash incentivepercentage is set at 75% of the base salary, with the maximum cash incentive set at 150% of the annual base salary. The cash incentive pay-out in any yearrelates to the achievements of the preceding financial year in relation to agreed targets. In 2015, an amount of €1,324,720 has been paid to our chiefexecutive officer as annual incentive bonus for our performance in 2014. The total annual incentive bonus amount paid in 2015 to members of ourmanagement team, including our chief executive officer, is €5,518,340. In 2014, an amount of €5,047,102 has been paid to members of our managementteam, including our chief executive officer.Share Based Compensation PlansThe purpose of our share based compensation plans, is to align the interests of directors and management with those of our stockholders by providingadditional incentives to improve our medium and long term performance, by offering the participants an opportunity to share in the success of NXP.In the period from 2007 until our initial public offering in August 2010, we granted stock options to the members of our management team and toapproximately 135 of our other executives under the Management Equity Stock Option Plan (“MEP”). Under the MEP, the participants acquired the right topurchase a certain number of shares of common stock at a predetermined exercise price, provided that certain conditions are met. The stock options (“MEPOptions”) have a vesting schedule as specified upon the grant to the individuals. Pursuant to our MEP, members of our management team and certain otherexecutives will be allowed to exercise, from time to time, their vested MEP Options. The MEP Options became fully exercisable upon the Private EquityConsortium ceasing to hold 30% of our shares of common stock which was the case following the consummation of the secondary offering of shares onSeptember 18, 2013. Current employees owning MEP Options may exercise such MEP Options during the period of five years as of September 18, 2013,subject to these employees remaining employed by us and subject to the applicable laws and regulations. As of December 31, 2015, a total of 2,748,942 MEPOptions were granted and outstanding to a group of 16 (current) NXP executives (which includes our chief executive officer and other members of themanagement team). These MEP Options can be exercised at exercise prices which vary from €2.00 to €40.00 per stock option.In November 2010 and 2011, and in October 2012, 2013, 2014 and 2015 we introduced Long Term Incentive Plans 2010, 2011, 2012, 2013, 2014 and2015 respectively, under which performance stock, restricted stock and stock options may be granted to the members of our board of directors, managementteam, our other executives, selected other key employees/talents of NXP and selected new hires. Under these Long Term Incentive Plans, equity incentivesmay be granted on, or the day after, the dates NXP publishes its quarterly financials, beginning on November 2, 2010, November 1, 2011, October 25, 2012,October 24, 2013 and October 23, October 23, 2014 and October 29, 2015, respectively. In view of the merger with Freescale, a specific grant under theOctober 2015 plan was made to Freescale employees who joined NXP on December 7, 2015. Performance stock and restricted stock vest over a period of oneto four years, subject to relevant performance criteria relating to operating income being met, and stock options vest over four years. Beginning with the 2014LTIP plans, performance stock units granted to the members of our management team, including the CEO, vest over a period of four years.The size of the annual equity pool available for Long Term Incentive Plan 2010 awards from November 2, 2010 up to the fourth quarter of 2011 was foran aggregate of up to 7,200,000 common shares in our share capital. On December 31, 2015, grants to 107 participants were outstanding, in total representingsome 586,874 shares of common stock, consisting of 586,874 stock options.The size of the annual equity pool available for Long Term Incentive Plan 2011 awards from November 1, 2011 up to the fourth quarter of 2012 was foran aggregate of up to 8.6 million (including 1.4 million which remained from the 2010 LTIP pool) common shares in our share capital. On December 31,2015, grants to 484 participants were outstanding, in total representing 1,651,993 shares of common stock, consisting of 240,900 performance stock unitsand 1,411,093 stock options.The size of the annual equity pool available for Long Term Incentive Plan 2012 awards from October 25, 2012 up to the fourth quarter of 2013 was foran aggregate of up to 9.3 million (including 2.1 million which remained from the 2011 LTIP pool) common shares in our share capital. On December 31,2015, grants to 638 participants were outstanding, in total representing 3,547,204 shares of common stock, consisting of 1,530,000 performance stock units,32,029 restricted stock units and 1,985,175 stock options.The size of the annual equity pool available for Long Term Incentive Plan 2013 awards from October 24, 2013 up to the fourth quarter of 2014 is for anaggregate of up to 6.7 million (including 0.4 million which remained from the 2012 LTIP pool) common shares in our share capital. On December 31, 2015,grants to 1,357 participants were outstanding, in total representing 2,225,101 shares of common stock, consisting of 399,201 performance stock units,658,245 restricted stock units and 1,167,655 stock options. 53Table of ContentsThe size of the annual equity pool available for Long Term Incentive Plan 2014 awards from October 23, 2014 up to the fourth quarter of 2015 is for anaggregate of up to 7.5 million (including 2.2 million which remained from the 2013 LTIP pool) common share in our share capital. On December 31, 2015grants to 2,293 participants were outstanding, in total representing 2,185,675 shares of common stock, consisting of 284,661 performance stock units,1,083,277 restricted stock units and 817,737 stock options.The size of the annual equity pool available for Long Term Incentive Plan 2015 awards from October 29, 2015 up to the fourth quarter of 2016 is for anaggregate of up to 5.2 million (including 4.2 million which remained from the 2014 LTIP pool) common share in our share capital. On December 31, 2015grants to 6,652 participants were outstanding, in total representing 3,556,874 shares of common stock, consisting of 225,831 performance stock units,2,127,932 restricted stock units and 1,203,111 stock options.In view of the Merger, NXP exchanged on December 7, 2015 the outstanding Freescale equity into 4,924,043 restricted stock units and 2,871,861stock options. On December 31, 2015 grants to 4,565 participants were outstanding, in total representing 7,199,383 shares of common stock, consisting of4,336,648 restricted stock units and 2,862,735 stock options.As of December 31, 2015, under the above equity plans, a total amount of 12,783,592 stock options, 2,680,046 performance stock units, and 8,237,861restricted stock units were outstanding, in total representing 23,702,046 shares of common stock.Shares to be delivered under any equity program may be newly issued, for up to 10% of our share capital, or they may come out of treasury stock or bepurchased from time to time upon the decision of our board of directors.As of December 31, 2015, the following stock options, restricted stock, performance stock and shares of common stock were outstanding with membersof our board of directors:Richard L. Clemmer, CEO and presidentAs of December 31, 2015, our chief executive officer held 522,248 shares and had been granted the following (vested and unvested) stock options and(unvested) performance stock units, which were outstanding: Series Number of StockOptions ExercisePrice (in $) Number of Stock Options per vesting schedule 10/29/16 10/29/17 10/29/18 10/29/19 2015/October 165,877 73.00 41,469 41,469 41,469 41,470 Series Number of StockOptions Number of StockOptions Stock OptionsVested Number of Stock Options per vesting schedule 10/23/16 10/23/17 10/23/18 2014/October 161,675 64.18 40,418 40,419 40,419 40,419 Series Number of StockOptions ExercisePrice (in $) Stock OptionsVested Number of Stock Options pervesting schedule 10/24/16 10/24/17 2013/October 344,635 39.58 172,317 86,159 86,159 Series Number of StockOptions ExercisePrice (in $) Stock optionsVested Stock Options pervesting schedule 10/25/16 2012/October 410,000 23.49 307,500 102,500 Series Number of StockOptions (all vested) ExercisePrice (in $) 2011/November 410,000 16.84 Series Number of StockOptions (all vested) ExercisePrice (in $) 2010/November 360,252 13.27 Series Number of StockOptions (all vested) ExercisePrice (in €) 2009/1 51,400 2.00 2009/2 1,400,000 15.00 2009/3 234,000 30.00 2009/4 374,252 40.00 Total 2,059,652 54Table of ContentsSeries Number ofPerformanceStock Units Number of Performance Stock Units per vesting schedule 10/23/16 10/23/17 10/23/18 2015/October 52,587 Maximum17,529 Maximum35,038 Up to52,587 Series Number ofPerformanceStock Units Number of Performance Stock Units per vesting schedule 10/23/16 10/23/17 10/23/18 10/23/19 2014/October 52,587 Maximum17,529 Maximum35,038 Maximum52,587 Up to52,587 Series Number ofPerformanceStock Units Number of Performance Stock Units per vesting schedule 11/1/16 11/1/17 11/1/18 2014/October 50,639 Maximum1/3rd oftotal Maximum2/3rd oftotal Up to100% oftotal Series Number ofPerformanceStock Units Number of Performance Stock Units pervesting schedule 10/24/16 10/24/17 2013/October 53,262 Maximum53,262 Up to53,262 Series Number ofPerformanceStock Units Number of Performance StockUnits per vesting schedule 03/01/16 2013/March 315,000 315,000 Other members of our board of directorsAs of December 31, 2015, the other members of our board of directors held the following number of shares:Sir Peter Bonfield: 30,487 from vested stock unitsMr. Huth: 8,135 from vested stock unitsMr. Goldman: 33,526 from vested stock unitsDr. Helmes: 6,487 from vested stock unitsMr. Kaeser: 30,487 from vested stock unitsMr. Loring: 36,486 from vested stock unitsMs. Southern: 4,127 from vested stock unitsMr. Meurice: 3,117 from vested stock unitsDr. Tsai: 3,117 from vested stock unitsMr. Summe: 4,381To each of Sir Peter Bonfield, Messrs. Huth, Goldman, Kaeser and Loring, Dr. Helmes and Ms. Southern, all being members of our board of directors,the following restricted stock units had been granted and were outstanding as of December 31, 2015: Series Number ofRestrictedStock Units Number ofStock Units pervesting schedule 10/29/16 2015/October 2,740 2,740 55Table of ContentsSeries Number ofRestrictedStock Units Number ofStock Units pervesting schedule 10/24/16 2013/October 1,685 1,685 To each of Mr. Meurice and Dr. Tsai, in 2014 being appointed as member of our board of directors, the following restricted stock units had beengranted and were outstanding as of December 31, 2015: Series Number ofRestrictedStock Units Number ofStock Units pervesting schedule 10/29/16 2015/October 2,740 2,740 To Mr. Summe, in 2015 being appointed as member of our board of directors, the following restricted stock units had been granted in exchange for hisFreescale RSU’s and were outstanding as of December 31, 2015: Series Number ofRestrictedStock Units Number of Stock Unitsper vesting schedule 05/03/16 2015/December 1,947 1,947 PensionsOur chief executive officer and eligible members of the management team participate in the executives’ pension plan, which we established in theNetherlands and which consists of a combination of a career average and a defined-contribution plan. We paid for our chief executive officer a total pensionplan contribution of €12,491 in 2015 (2014: €589,262). We also made a total pension plan contribution in the aggregate of €270,235 (2014: €1,183,695) forthe members of our management team.Additional ArrangementsIn addition to the main conditions of employment, a number of additional arrangements apply to our chief executive officer and other members of themanagement team; these arrangements do not apply to the non-executive members of our board of directors. These additional arrangements, such as housingcompensation and relocation allowances, medical insurance, accident insurance, school fee compensation and company car arrangements are broadly in linewith those for the NXP executives globally. In the event of disablement, our chief executive officer and other members of the management team are entitledto benefits in line with those for other NXP executives. In the event of our chief executive officer’s death while in the service of NXP, any unvested equityawards (including any NXP stock options, performance stock units and restricted stock units) will vest. In line with regulatory requirements, the Company’spolicy forbids personal loans, guarantees or similar arrangements to members of our board, and consequently no loans, guarantees or similar arrangementswere granted to such members since 2010, nor were any such loans outstanding as of December 31, 2015.Unless the law provides otherwise, the members of our board of directors are expected to be reimbursed by us for various costs and expenses, such asreasonable costs of defending claims, as formalized in the articles of association. Under certain circumstances, described in the articles of association, such asan act or failure to act by a member of our board of directors that can be characterized as intentional (opzettelijk), intentionally reckless (bewust roekeloos) orseriously culpable (ernstig verwijtbaar), there will be no entitlement to this reimbursement. 56Table of ContentsSummary Compensation TableThe following table sets forth the annual compensation paid or granted during the year ended December 31, 2015 to the members of our board ofdirectors on an individual basis for services in all capacities. Salary and/or fees Performancerelatedcompensation(€) Number ofstock, stockoptions and stockunits granted Non-equityincentive plancompensationor benefits in kind(€) Pension,retirement orsimilar benefits(€) Richard L. Clemmer 1,142,000(1) 1,324,720 237,795 1,520,080 12,491 Sir Peter Bonfield 275,000(1) — 2,740 — — 6,000(2) — — — — Johannes P. Huth 91,000(2) — 2,740 — — Kenneth A. Goldman 101,000(2) — 2,740 — — Dr. Marion Helmes 91,000(2) — 2,740 — — Josef Kaeser 91,000(2) — 2,740 — — Ian Loring 85,000(2) — 2,740 — — Eric Meurice 99,000(2) — 2,740 — — Peter Smitham* — (2) — — — — Gregory L. Summe* — (2) — 1,947 — — Julie Southern 91,000(2) — 2,740 — — Rick Tsai 85,000(2) — 2,740 — — Total: 1,417,000(1) 1,324,720 264,402 1,520,080 12,491 740,000(2) 1)in €2)in $*Peter Smitham and Mr. Gregory L. Summe were appointed as non-executive director of the Company effective December 7, 2015. The first payment oftheir compensation will be made in January 2016.The following table sets forth the annual compensation paid or granted during the year ended December 31, 2014 to the members of our board ofdirectors on an individual basis for services in all capacities. Salary and/or fees Performancerelatedcompensation(€) Number ofstock, stockoptions and stockunits granted Non-equityincentive plancompensationor benefits in kind(€) Pension,retirement orsimilar benefits(€) Richard L. Clemmer 1,142,000(1) 1,575,960 282,430 1,007,751 589,262 Sir Peter Bonfield 275,000(1) — 3,117 — — 6,000(2) — — — — Johannes P. Huth 91,000(2) — 3,117 — — Kenneth A. Goldman 101,000(2) — 3,117 — — Dr. Marion Helmes 91,000(2) — 3,117 — — Josef Kaeser 91,000(2) — 3,117 — — Ian Loring 85,000(2) — 3,117 — — Eric Meurice* 69,914(2) — 3,117 — — Michel Plantevin* 36,438(2) — — — — Jean-Pierre Saad* 32,603(2) — — — — Julie Southern 91,000(2) — 3,117 — — Rick Tsai* 42,500(2) — 3,117 — — Total: 1,417,000(1) 1,575,960 310,483 1,007,751 589,262 737,455(2) 1)in €2)in $*Eric Meurice was appointed effective April 1, 2014 and Mr. Rick Tsai was appointed effective July 1, 2014. Mr. Michel Plantevin and Mr. Jean-PierreSaad resigned as non-executive director of the Company on May 20, 2014. 57Table of ContentsC. Board PracticesManagement StructureWe have a one-tier board structure, consisting of an executive director and non-executive directors.Powers, Composition and FunctionThe number of executive and non-executive directors is determined by the board of directors. The board of directors consists of one executive directorand nine non-executive directors. The executive director, Mr. Clemmer, has been appointed as our chief executive officer.The appointment of the directors will be made by our general meeting of stockholders upon a binding nomination of the board of directors. Aresolution to appoint a director nominated by the board of directors is adopted by a simple majority of the votes cast. The nomination shall state whether thedirector is proposed to be an executive or non-executive director. The general meeting of stockholders may at all times overrule the binding nature of such anomination by a resolution adopted by at least a two thirds majority of the votes cast, provided such majority represents more than half of our issued sharecapital. The board of directors may then make a new nomination. If a nomination has not been made or has not been made in due time, this shall be stated inthe notice and the general meeting of stockholders shall be free to appoint a director at its discretion. The latter resolution of the general meeting ofstockholders must also be adopted by at least two thirds majority of the votes cast, provided such majority represents more than half of our issued sharecapital.Under our articles of association and Dutch corporate law, the members of the board of directors are collectively responsible for the management,general and financial affairs and policy and strategy of our company. Our executive director will be responsible for the day-to-day management of theCompany and for the preparation and execution of board resolutions, to the extent these tasks are not delegated to a committee of the board of directors. Ourchief executive officer or all directors acting jointly may represent our company with third parties.A conflict of interest between the Company and one or more of our directors is not expected to have any impact on the authority of directors torepresent the Company. Under our board regulations, a conflict needs to be reported to the board of directors and the board of directors shall resolve on theconsequences, if any. Effective January 1, 2013, Dutch law, in case of a conflict, does not allow the directors concerned to participate in discussions or voteon such matters.Our non-executive directors will supervise the executive director and our general affairs and provide general advice to the executive director.Furthermore the non-executive directors will perform such acts that are delegated to them pursuant to our articles of association or by our board regulation.One of the non-executive directors has been appointed as chairman of the board and another non-executive director has been appointed as vice-chairman ofthe board of directors.Each director owes a duty to us to properly perform the duties assigned to him and to act in the corporate interest of our company. Under Dutch law, thecorporate interest extends to the interests of all corporate stakeholders, such as stockholders, creditors, employees, customers and suppliers.Our directors are appointed for one year and will be re-electable each year at the general meeting of stockholders. The members of our board ofdirectors may be suspended or dismissed at any time by the general meeting of stockholders. A resolution to suspend or dismiss a director will have to beadopted by at least a two thirds majority of the votes cast, provided such majority represents more than half of our issued share capital and unless the proposalto suspend or dismiss a member of the board of directors is made by the board of directors itself, in which case resolutions shall be adopted by a simplemajority of votes cast. Effective January 1, 2013, Dutch law facilitates the suspension of executive directors by the board.In the event that one or more directors are prevented from acting or in the case of a vacancy or vacancies for one or more directors, the board ofdirectors remains properly constituted. The board of directors is expected to have the power, without prejudice to its responsibility, to cause our company tobe represented by one or more attorneys. These attorneys shall have such powers as shall be assigned to them on or after their appointment and in conformitywith our articles of association, by the board of directors.The board of directors has adopted board regulations governing its performance, its decision making, its composition, the tasks and working procedureof the committees and other matters relating to the board of directors, the chief executive officer, the non-executive directors and the committees establishedby the board of directors. In accordance with our board regulations, resolutions of our board of directors will be adopted by a simple majority of votes cast ina meeting at which at least the majority of its members is present or represented. Each member of the board of directors has the right to cast one vote. In a tievote, the proposal will be rejected. 58Table of ContentsBoard CommitteesWhile retaining overall responsibility, our board of directors has assigned certain of its tasks to permanent committees. Members of the permanentcommittees will be appointed by the board of directors. The board of directors will also determine the tasks of each committee. Our board of directors hasestablished an audit committee and a nominating and compensation committee, each of which will have the responsibilities and composition describedbelow: • Audit Committee. Our audit committee consists of four independent non-executive directors, Messrs. Goldman and Kaeser and Dr. Helmes andMs. Southern. Mr. Goldman, who is appointed as chairman of the audit committee, qualifies as an “audit committee financial expert” as such term isdefined in Item 407(d)(5) of Regulation S-K and as determined by our board of directors. Our audit committee assists the board of directors insupervising, monitoring and advising the board of directors on financial reporting, risk management, compliance with relevant legislation andregulations and our business code of conduct. It will oversee the preparation of our financial statements, our financial reporting process, our system ofinternal business controls and risk management, our internal and external audit process and our internal and external auditor’s qualifications,independence and performance. Our audit committee also reviews our annual and interim financial statements and other public disclosures, prior topublication. At least once per year, the non-executive directors who are part of the audit committee reports their findings to the plenary board ofdirectors. Our audit committee also recommends to our stockholders the appointment of external auditors. The external auditor attends most meetingsof the audit committee. The findings of the external auditor, the audit approach and the risk analysis are also discussed at these meetings. • Nominating and Compensation Committee. Our nominating and compensation committee consists of three non-executive directors, Messrs. Huth,Meurice and Sir Peter Bonfield; all three members are independent directors under the Dutch corporate governance rules and under the NASDAQ andSEC compensation committee structure and membership requirements. Mr. Meurice is appointed as chairman of this committee. The nominating &compensation committee determines selection criteria and appointment procedures for members of our board of directors, periodically assesses thescope and composition of our board of directors and evaluates the performance of its individual members. It is responsible for recommending to theboard of directors the compensation package for our executive directors, with due observance of the remuneration policy adopted by the generalmeeting of stockholders. It reviews employment contracts entered into with our executive directors, makes recommendations to our board of directorswith respect to major employment-related policies and oversees compliance with our employment and compensation-related disclosure obligationsunder applicable laws.Limitation of Liability and Indemnification MattersUnless prohibited by law in a particular circumstance, our articles of association require us to reimburse the members of the board of directors and theformer members of the board of directors for damages and various costs and expenses related to claims brought against them in connection with the exerciseof their duties. However, there shall be no entitlement to reimbursement if and to the extent that (i) a Dutch court has established in a final and conclusivedecision that the act or failure to act of the person concerned may be characterized as willful (opzettelijk), intentionally reckless (bewust roekeloos) orseriously culpable (ernstig verwijtbaar) conduct, unless Dutch law provides otherwise or this would, in view of the circumstances of the case, beunacceptable according to standards of reasonableness and fairness, or (ii) the costs or financial loss of the person concerned are covered by an insurance andthe insurer has paid out the costs or financial loss. We may enter into indemnification agreements with the members of the board of directors and our officersto provide for further details on these matters. We have purchased directors’ and officers’ liability insurance for the members of the board of directors andcertain other officers, substantially in line with that purchased by similarly situated companies.At present, there is no pending litigation or proceeding involving any member of the board of directors, officer, employee or agent whereindemnification will be required or permitted. We are not aware of any threatened litigation or proceedings that might result in a claim for suchindemnification.Insofar as indemnification of liabilities arising under the Securities Act of 1933, as amended, may be permitted to members of the board of directors,officers or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification isagainst public policy as expressed in the Securities Act of 1933, as amended, and is therefore unenforceable.D. EmployeesAs of December 31, 2015 we had approximately 44,000 full-time equivalent employees. The following table indicates the % of full–time equivalentemployees per geographic area: % as of December 31, 2015 2014 Europe and Africa 20 23 Americas 16 2 Greater China 27 29 Asia Pacific 37 46 Total 100 100 59Table of ContentsWe have not experienced any material strikes or labor disputes in the past. A number of our employees are members of a labor union. In variouscountries, local law requires us to inform and consult with employee representatives on matters relating to labor conditions. We consider our employeerelations to be good.E. Share OwnershipInformation with respect to share ownership of members of our board of directors is included in Part I, Item 7. Major Shareholders and Related PartyTransactions and notes 17 and 19 to our Consolidated Financial Statements, which are incorporated herein by reference. Information with respect to the grantof shares and stock options to employees is included in note 8 to our Consolidated Financial Statements which are incorporated herein by reference. In orderto maintain a strong alignment between the interests of NXP’s management and our shareholders, we have adopted an equity ownership policy for thePresident/CEO and the other members of our management team. The number of shares to be maintained by the members of our management team increaseseach time our shares are being delivered upon the vesting of stock options or other rights to our shares. The management team members are required tomaintain a certain number of our shares until the time that he or she is no longer employed by us.Item 7. Major Shareholders and Related Party TransactionsA. Major ShareholdersThe following table shows the amount and percentage of our common stock beneficially owned as of December 31, 2015, December 31, 2014 andDecember 31, 2013 by (i) each person who is or was known by us to own beneficially more than 5% of our common stock, (ii) each current member of ourboard of directors, and (iii) all members of the board and named executive officers as a group. A person is a “beneficial owner” of a security if that person hasor shares voting or investment power over the security or if he has the right to acquire beneficial ownership within 60 days. Unless otherwise noted, thesepersons may be contacted at our executive offices and, unless otherwise noted, have to our knowledge sole voting and investment power over the shareslisted. Common Stock Beneficially Owned as of December 31 2015 2014 2013 Number %* Number %* Number %* Blackstone Funds(1) 33,275,028 9.62 — — — — Wellington Management Company, LLP — — 18,843,170 7.48 28,935,677 11.49 FMR LLC(2) 22,525,068 6.51 22,796,838 9.05 23,180,919 9.21 T. Rowe — — 1,715,115 0.68 18,606,181 7.39 Richard L. Clemmer 4,188,683 1.21 3,410,762 1.36 3,224,174 1.28 Sir Peter Bonfield 30,487 0.01 25,312 0.01 43,549 0.02 Johannes P. Huth 8,135 0.002 98,351 0.04 89,999 0.04 Kenneth Goldman 33,526 0.01 28,351 0.011 22,999 0.01 Dr. Marion Helmes 6,487 0.002 1,685 0.001 — — Josef Kaeser 30,487 0.01 25,312 0.01 19,999 0.01 Ian Loring(3) 36,486 0.01 28,351 0.011 7,764,240 3.08 Eric Meurice 3,117 0.001 — — — — Julie Southern 4,127 0.001 1,072 0.001 — — Rick Tsai 3,117 0.001 — — — — Peter Smitham — — — — — — Gregory L. Summe 4,381 0.001 — — — — All directors and named executive officers as a group(4) 4,349,033 1.26 3,619,196 1.44 11,184,959 4.45 *Percentage computations are based on 346,002,862 shares of our common stock issued and outstanding as of December 31, 2015, and 251,751,500 asof December 31, 2014 and December 31, 2013.(1)Blackstone Capital Partners (Cayman) V L.P. (“BCP V”) directly holds 4,156,503 common shares, Blackstone Capital Partners (Cayman) V-A L.P.(“BCP V-A”) directly holds 3,848,209 common shares, BCP (Cayman) V-S L.P. (“BCP V-S”) directly holds 3,296,062 common shares, BCP V Co-Investors (Cayman) L.P. (“Co-Investors”) directly holds 7,914,873 common shares, Blackstone Firestone Transaction Participation Partners (Cayman)L.P. (“BFTPP”) directly holds 6,248,154 common shares, Blackstone Firestone Principal Transaction Partners (Cayman) L.P. (“BFPTP”) directly holds7,350,770 common shares, Blackstone Family Investment Partnership (Cayman) V-SMD L.P. (“BFIP V-SMD”) directly holds 40,285 common shares,Blackstone Family Investment Partnership (Cayman) V L.P. (“BFIP V”) directly holds 392,641 common shares, and Blackstone ParticipationPartnership (Cayman) V L.P. (“BPP V” and, together with BCP V, BCP V-A, BCP V-S, Co-Investors, BFTPP, BFPTP, BFIP V-SMD and BFIP V, the“Blackstone Funds”) directly holds 27,531 common shares.The general partner of each of BCP V, BCP V-A, BCP V-S, Co-Investors, BFTPP and BFPTP is Blackstone Management Associates (Cayman) V L.P.(“BMA V”). The general partner of BFIP V-SMD is Blackstone Family GP L.L.C.Blackstone LR Associates (Cayman) V Ltd. (“BLRA”) and BCP V GP L.L.C. are the general partners of each of BMA V, BFIP V and BPP V. BlackstoneHoldings III L.P. is the sole member of BCP V GP L.L.C. and a shareholder of BLRA. The general partner of Blackstone Holdings III L.P. is BlackstoneHoldings III GP L.P. The general partner of Blackstone Holdings III GP L.P. is Blackstone Holdings III GP Management L.L.C. The sole member ofBlackstone Holdings III GP Management L.L.C. is The Blackstone Group L.P. The general partner of The Blackstone Group L.P. is Blackstone GroupManagement L.L.C. Blackstone Group Management L.L.C. is wholly owned by Blackstone’s senior managing directors and controlled by its founder,Stephen A. Schwarzman.The address of the Blackstone Funds is 345 Park Avenue, New York, NY 10154, United States. 60Table of Contents(2)Information about the number of common shares owned by FMR LLC (“FMR”) on December 31, 2015, is based solely on a Schedule 13G filed byFMR LLC and Abigail P. Johnson with the SEC on February 12, 2016, reporting share ownership as of December 31, 2015. The address of FMR is 245Summer Street, Boston, Massachusetts 02210. FMR, along with certain of its subsidiaries and affiliates, and other companies, beneficially owned anaggregate of 22,525,068 common shares, has sole power to vote 2,204,722 shares and the sole power to dispose of 22,525,068 shares of our commonstock. Abigail P. Johnson is a Director, the Vice Chairman, the Chief Executive Officer and the President of FMR. Members of the Johnson family,including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49%of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreementunder which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly,through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may bedeemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC.(3)Mr. Loring is a director of our Company, as well as a member of the investment committee of Bain Capital Investors, LLC. Amounts disclosed forMr. Loring include shares beneficially owned by the funds advised by Bain. Mr. Loring disclaims beneficial ownership of any shares owned directly orindirectly by funds advised by Bain.(4)Reflects shares that may be beneficially owned by our directors. However, each director disclaims beneficial ownership of such shares. In addition, as ofDecember 31, 2015, stock options and other rights to shares represented a total of 20,035,907 shares of common stock were outstanding.No shareholders held different voting rights.B. Related Party TransactionsThe transactions NXP has with related parties are not deemed to be material, individually or in the aggregate. See Part III, Item 18. FinancialStatements, note 19 Related-party Transactions.C. Interests of Experts and CounselNot applicable.Item 8. Financial InformationA. Consolidated Statements and Other Financial InformationConsolidated StatementsSee Part III, Item 18. Financial Statements.Dividend PolicyWe currently retain all of our earnings for use in the operation and expansion of our business, to repurchase or redeem capital stock, and in therepayment of our debt. We have never declared or paid any cash dividends on our common stock and may not pay any cash dividends in the foreseeablefuture. Whether or not dividends will be paid in the future will depend on, among other things, our results of operations, financial condition, level ofindebtedness, cash requirements, covenants in our financings, contractual restrictions and other factors that our board of directors and our stockholders maydeem relevant. If, in the future, our board of directors decides not to allocate profits to our reserves (making such profits available to be distributed asdividends), any decision to pay dividends on our common stock will be at the discretion of our stockholders.B. Significant ChangesNot applicable. 61Table of ContentsItem 9. The Offer and ListingA. Offer and Listing DetailsThe following table shows the high and low closing sales prices of the common stock on the stock market of NASDAQ as reported in the Official PriceList for the following periods: Most recent six monthsJanuary 2016 December 2015 November 2015 October 2015 September 2015 August 2015High Low High Low High Low High Low High Low High Low84.44 68.43 94.09 83.28 93.46 76.73 97.95 73.00 91.02 81.84 99.28 79.26On February 12, 2016, the closing sales price of the common stock on the stock market of NASDAQ was $67.30. 2015 2014 2013 High Low High Low High Low 1st quarter 108.03 72.38 59.91 42.94 32.80 26.55 2nd quarter 112.25 95.33 66.44 55.72 32.01 25.29 3rd quarter 99.28 79.26 73.01 60.50 39.11 31.18 4th quarter 97.95 73.00 77.85 53.90 45.95 36.03 B. Plan of DistributionNot applicable.C. MarketsThe shares of common stock of the Company are listed on the stock market of the NASDAQ Global Select Market in New York under the ticker symbol“NXPI”.D. Selling ShareholdersNot applicable.E. DilutionNot applicable.F. Expenses of the IssueNot applicable.Item 10. Additional InformationA. Share CapitalNot applicable.B. Memorandum and Articles of AssociationThe information required by this section is incorporated by reference to Exhibit 3.2 of Amendment No. 7 to the Company’s Registration Statement onForm F-1, filed on August 5, 2010 (File No. 333-166128).C. Material ContractsOther than the material contracts described below, we have not entered into any material contracts other than in the ordinary course of business. 62Table of Contents2015On March 1, 2015, we entered into a Merger Agreement, by and among the Company, Freescale and Nimble Acquisition Limited (“Merger Sub”), aBermuda exempted limited liability company and Sub, providing for the merger of Sub with and into Freescale (the “Merger”), with Freescale surviving theMerger as a wholly-owned, indirect subsidiary of the Company.Concurrently with the execution and delivery of the Merger Agreement, Freescale Holdings L.P. (“Freescale LP”), the largest holder of FreescaleCommon Shares, the Company and certain limited partners of Freescale LP, entered into a support agreement (the “Support Agreement”) whereby FreescaleLP committed, among other things, subject to the terms and conditions of the Support Agreement, to vote all of its Freescale Common Shares (representingapproximately 64% of the Freescale Common Shares outstanding as of the date of the Support Agreement) for the adoption of (and not to participate in anylitigation challenging) the Merger Agreement.On December 7, 2015, we entered into the Bermuda Merger Agreement, by and among the Company, Freescale and Merger Sub, consummating theMerger. As per the same date, we entered into Shareholders Agreements with certain former Freescale shareholders (“Sponsors”), containing transferrestrictions for the Sponsors in relation to NXP shares received in the Merger and the requirement for NXP to use its best efforts to cause to be declaredeffective by the SEC a registration statement on Form F-1 or Form F-3 or such other available form covering the NXP ordinary shares requested to be includedby certain of the Sponsors.In connection with the Merger, we also entered into the following financing agreements: • 2020 Senior Unsecured Notes and 2022 Senior Unsecured Notes: On June 2, 2015, NXP B.V. and NXP Funding LLC entered into an indenture inrelation to the $600 million aggregate principal amount of 2020 Senior Unsecured Notes and $400 million aggregate principal amount of 2022Senior Unsecured Notes that they issued. • New RCF Agreement: NXP B.V. and NXP Funding LLC, as Borrowers, the several lenders party thereto, the Collateral Agent, Morgan StanleySenior Funding Inc., as RCF Administrative Agent, the joint lead arrangers, the joint bookrunners and the co-managers, each as detailed therein,entered on December 7, 2015 into a $600 million New RCF Agreement. All present and future obligations of the Borrowers arising under andpursuant to the terms of the New RCF Agreement are guaranteed pursuant to RCF Guaranty Agreement by and among NXP B.V., NXP FundingLLC, NXP Semiconductors Netherlands B.V. and NXP Semiconductors Taiwan Ltd. (collectively, the “NXP Credit Guarantors”) and FreescaleSemiconductor Holdings V, Inc. and Freescale Semiconductor Inc. (collectively, the “Freescale Credit Guarantors”) dated as of December 7,2015; • Term Loan B: The Borrowers, the several lenders party thereto, Morgan Stanley Senior Funding LLC, as Collateral Agent, Credit Suisse AG, asTerm Loan Administrative Agent, the joint lead arrangers, the joint bookrunners and the co-managers, each as detailed therein, entered into a$2,700 million New Secured Term Credit Agreement. All present and future obligations of the Borrowers arising under and pursuant to the termsof the New Secured Term Credit Agreement are guaranteed pursuant to the Term Loan Guaranty Agreement by and among each of the NXPCredit Guarantors and each of the Freescale Credit Guarantors dated as of December 7, 2015; • Secured Bridge Term Credit Agreement: The Borrowers, the Collateral Agent, Credit Suisse AG, as Bridge Loan Administrative Agent, and thelenders party thereto, entered on December 7, 2015 into a Secured Bridge Term Credit Agreement. All present and future obligations of theBorrowers arising under and pursuant to the terms of the Secured Bridge Term Credit Agreement are guaranteed pursuant to the Bridge LoanGuaranty Agreement by and among each of the NXP Credit Guarantors and each of the Freescale Credit Guarantors dated as of December 7, 2015.Amounts outstanding under the Secured Bridge Term Credit Agreement were repaid in full on December 16, 2015; and • Secured Notes: NXP B.V., NXP Funding LLC, NXP Semiconductors Netherlands B.V., NXP Semiconductors UK Limited, NXP SemiconductorsUSA, Inc., NXP Semiconductors Germany GmbH, NXP Semiconductors Hong Kong Limited, NXP Semiconductors Philippines Inc., NXPSemiconductors Singapore Pte. Ltd., NXP Semiconductors Taiwan Ltd. and NXP Manufacturing (Thailand) Ltd. entered into and acceded to theA&R Freescale Indentures as additional guarantors.On May 28, 2015, we entered into an agreement to sell our RF Power business to JAC Capital, and on December 7, 2015 we completed this divestment.2014We entered into an indenture in relation to $1,150 million aggregate principal amount of U.S. Dollar-denominated 1.00% Cash Convertible SeniorNotes due 2019 on November 24, 2014.NXP B.V. and NXP Funding LLC entered into a Senior Secured Term Loan Facility on February 18, 2014 for an aggregate principal amount of $400million at a rate of interest of LIBOR plus 2% with a floor of 0.75% due 2017.D. Exchange ControlsCash dividends payable on our ordinary shares and cash interest payments to holders of our debt securities may be remitted from the Netherlands tononresidents without legal restrictions imposed by the laws of the Netherlands, except that (i) such payments must be reported to the Dutch Central Bank forstatistical purposes only and (ii) the transfer of funds to jurisdictions subject to general economic sanctions adopted in connection with policies of the UnitedNations, European Commission or similar measures imposed directly by the Government of the Netherlands may be restricted. 63Table of ContentsE. TaxationCertain Tax Considerations-Holder of Common StockSummary of Dutch Tax ConsiderationsThe following summary describes the material Dutch tax consequences of the ownership and disposition of our shares of common stock as of the datehereof and is intended as general information only. This summary does not contain a detailed description of all the Dutch tax law consequences applicable toyou as a holder of shares of common stock in the Company in light of your particular circumstances and does not address the effects of any non-Dutch taxlaws. For Dutch tax purposes, a holder of our shares may include an individual who or an entity that does not have the legal title of the shares, but to whomnevertheless the shares are attributed based either on such individual or entity holding a beneficial interest in the shares or based on specific statutoryprovisions, including statutory provisions pursuant to which shares are attributed to an individual who is, or who has directly or indirectly inherited from aperson who was, the settlor, grantor or similar originator of a trust, foundation or similar entity that holds the shares.If you are considering the purchase, ownership or disposition of our shares, you should consult your own tax advisors concerning the Dutch taxconsequences to you in light of your particular situation as well as any consequences arising under the laws of any other taxing jurisdiction.The following summary is based on the Dutch tax law as applied and interpreted by Dutch tax courts and as published and in effect on the date hereof,without prejudice to any amendments introduced at a later date and implemented with or without retroactive effect. For the purpose of this paragraph, “Dutchtaxes” means taxes of whatever nature levied by or on behalf of the Netherlands or any of its subdivisions or taxing authorities. The Netherlands means thepart of the Kingdom of the Netherlands located in Europe and does not include Bonaire, St. Eustatius and Saba. Any reference hereafter made to a treaty forthe avoidance of double taxation concluded by the Netherlands includes the Tax Regulation for the Kingdom of the Netherlands (Belastingregeling voor hetKoninkrijk), the Tax Regulation for the country of the Netherlands (Belastingregeling voor het land Nederland) and the Agreement between the TaipeiRepresentative Office in the Netherlands and the Netherlands Trade and Investment Office in Taipei for the avoidance of double taxation.Withholding TaxA stockholder is generally subject to Dutch dividend withholding tax at a rate of 15 percent on dividends distributed by us, if any. Generally, we areresponsible for the withholding of such dividend withholding tax at source; the dividend withholding tax is for the account of the stockholder.Dividends distributed by us include, but are not limited to: • distributions of profits in cash or in kind, whatever they be named or in whatever form; • proceeds from the liquidation of the Company, or proceeds from the repurchase of shares by the Company, in excess of the average paid-incapital recognized for Dutch dividend withholding tax purposes; • the par value of shares issued to a stockholder or an increase in the par value of shares, to the extent that no contribution, recognized for Dutchdividend withholding tax purposes, has been made or will be made; and • partial repayment of paid-in capital, that is (i) not recognized for Dutch dividend withholding tax purposes, or (ii) recognized for Dutch dividendwithholding tax purposes, to the extent that we have net profits (zuivere winst), unless (a) the general meeting of stockholders has resolved inadvance to make such repayment and (b) the par value of the shares concerned has been reduced with an equal amount by way of an amendmentto our articles of association. The term net profits includes anticipated profits that have yet to be realized.Notwithstanding the above, no withholding is required in the event of a repurchase of shares, if certain conditions are fulfilled.Furthermore, subject to certain exceptions under Dutch domestic law, we may not be required to transfer to the Dutch tax authorities the full amount ofDutch dividend withholding tax withheld in respect of dividends distributed by us, if we have received a profit distribution from a qualifying foreignsubsidiary (including a subsidiary resident on Bonaire, St. Eustatius or Saba), which distribution is exempt from Dutch corporate income tax and has beensubject to a foreign withholding tax of at least 5 percent. The amount that does not have to be transferred to the Dutch tax authorities can generally notexceed the lesser of (i) 3 percent of the dividends distributed by us and (ii) 3 percent of the profit distributions that we received from qualifying foreignsubsidiaries in the calendar year in which we distribute the dividends (up to the moment of such dividend distribution) and in the two previous calendaryears. Further limitations and conditions apply. We will, upon request, provide stockholders with information regarding the Dutch dividend withholding taxthat was retained by us.If a stockholder is resident in a country other than the Netherlands under the provisions of a treaty for the avoidance of double taxation between theNetherlands and such country, such stockholder may, depending on the terms of such treaty, be entitled to an exemption from, reduction in or refund ofDutch dividend withholding tax on dividends distributed by us.If a stockholder is subject to Dutch corporate income tax and is entitled to the participation exemption in relation to the benefits derived from theshares held by it and such shares are attributable to an enterprise carried out in the Netherlands, such stockholder will generally be entitled to an exemptionfrom Dutch dividend withholding tax on dividends distributed by us. 64Table of ContentsIf a stockholder (i) is resident in another member state of the European Union or an appointed state of the European Economic Area, i.e. Iceland,Norway and Liechtenstein, according to the tax laws of that state and, under the terms of a double taxation agreement concluded by that state with a thirdstate, is not considered to be resident for tax purposes outside the European Union, Iceland, Norway or Liechtenstein; and (ii) owns an interest in us to whichthe Dutch participation exemption would be applicable if the stockholder were resident in the Netherlands; such stockholder will generally be eligible for anexemption from Dutch dividend withholding tax on dividends distributed by us.Furthermore, if a stockholder: (a)is an entity which is resident for Dutch tax purposes in a member state of the European Union, Iceland, Norway or Liechtenstein or which is aqualifying stockholders resident elsewhere; (b)is not subject to a tax levied by reference to its profits in its country of residence; and (c)would not have been subject to Dutch corporate income tax had the stockholder been resident in the Netherlands for Dutch tax purposes;such stockholder will be eligible for a full refund of Dutch dividend withholding tax on dividends distributed by us, unless such stockholder iscomparable to an exempt investment institution (vrijgestelde beleggingsinstelling) or fiscal investment institution (fiscale beleggingsinstelling), asdescribed respectively in article 6a and 28 of the Dutch corporate income tax act 1969 (Wet op de vennootschapsbelasting 1969). For purposes of (a) above, aqualifying stockholder is an entity that (i) is resident for Dutch tax purposes in a jurisdiction which has an arrangement for the exchange of tax informationwith the Netherlands and (ii) holds its shares as a portfolio investment, i.e. such shares are not held with a view to the establishment or maintenance of lastingand direct economic links between the stockholder and the company and the shares do not allow the stockholder to participate effectively in the managementor control of the company.A stockholder who is considered to be resident in the United States and is entitled to the benefits of the convention between the United States and theNetherlands for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, dated December 18, 1992, as amendedmost recently by the Protocol signed March 8, 2004 (the “Treaty”), will be entitled to a reduction in the Dutch withholding tax by way of an exemption,reduction or refund, as follows: • if the U.S. stockholder is an exempt pension trust, as described in article 35 of the Treaty, or an exempt organization, as described in article 36 of theTreaty, the U.S. stockholder will be exempt from Dutch dividend withholding tax; • if the U.S. stockholder is a company which holds directly at least 10 percent of the voting power in the company, the U.S. stockholder will be subject toDutch withholding tax at a rate not exceeding 5 percent; • if the U.S. stockholder is a company which holds directly at least 80 percent of the voting power in the company and certain other conditions are met,the U.S. stockholder will be exempt from Dutch dividend withholding tax; and • in all other cases, the U.S. stockholder will be subject to Dutch dividend withholding tax at a rate of 15 percent.According to Dutch domestic anti-dividend stripping rules, no credit against Dutch (corporate) income tax, exemption from, reduction in or refund of,Dutch dividend withholding tax will be granted if the recipient of the dividend paid by us is not considered to be the beneficial owner (uiteindelijkgerechtigde) of such dividends as meant in these rules.Taxes on Income and Capital GainsThe description of taxation set out in this section of the Report does not apply to any stockholder who is an individual for whom the income or capitalgains derived from our shares of common stock are attributable to employment activities, the income from which is taxable in the Netherlands.A stockholder will not be subject to Dutch taxes on income or capital gains in respect of the ownership and disposal of our shares, other than Dutchdividend withholding tax as described above, except if: (i)the stockholder is, or is deemed to be, resident in the Netherlands for Dutch (corporate) income tax purposes; (ii)the stockholder derives profits from an enterprise, whether as entrepreneur (ondernemer) or pursuant to a co-entitlement to the net worth of suchenterprise other than as an entrepreneur or a stockholder, which enterprise is, in whole or in part, carried on through a permanent establishment(vaste inrichting) or a permanent representative (vaste vertegenwoordiger) in the Netherlands, to which permanent establishment or a permanentrepresentative the shares are attributable; (iii)the stockholder is an individual and derives benefits from miscellaneous activities (resultaat uit overige werkzaamheden ) carried out in theNetherlands in respect of the shares, including, without limitation, activities which are beyond the scope of active portfolio investmentactivities; (iv)the stockholder is an individual and has a substantial interest (aanmerkelijk belang) or a fictitious substantial interest (fictief aanmerkelijkbelang) in the company, which is not attributable to the assets of an enterprise; (v)the stockholder is not an individual and (a) the stockholder has a substantial interest or a fictitious substantial interest in the company, (b) themain purpose, or one of the main purposes of the shareholding is the avoidance of the levy of Dutch income tax or dividend withholding tax onsomeone other than the stockholder, and (c) there is an artificial arrangement or series of arrangements; 65Table of Contents (vi)the stockholder is not an individual and is entitled to a share in the profits of an enterprise or a co-entitlement to the net-worth of an enterprise,other than by way of the holding of securities, which enterprise is effectively managed in the Netherlands and to which enterprise the shares areattributable; or (vii)the stockholder is an individual and is entitled to a share in the profits of an enterprise, other than by way of the holding of securities, whichenterprise is effectively managed in the Netherlands and to which enterprise the shares are attributable.Generally, a stockholder has a substantial interest if such stockholder, alone or together with its partner, directly or indirectly (a) owns, or holds certainrights on, shares representing five percent or more of the total issued and outstanding capital of the company, or of the issued and outstanding capital of anyclass of shares of the company; (b) holds rights to, directly or indirectly, acquire shares, whether or not already issued, representing five percent or more of thetotal issued and outstanding capital of the company, or of the issued and outstanding capital of any class of shares of the company; or (c) owns, or holdscertain rights on, profit participating certificates that relate to five percent or more of the annual profit of the company or to five percent or more of theliquidation proceeds of the company. A stockholder will also have a substantial interest if its partner or one of certain relatives of the stockholder or of itspartner has a substantial interest.Generally, a stockholder has a fictitious substantial interest in the company if, without having an actual substantial interest in the company (i) anenterprise has been contributed to the company in exchange for shares on an elective non-recognition basis; (ii) the shares have been obtained underinheritance law or matrimonial law, on a non-recognition basis, while the disposing stockholder had a substantial interest in the company; (iii) the shareshave been acquired pursuant to a share merger, legal merger or legal demerger, on an elective non-recognition basis, while the stockholder prior to thistransaction had a substantial interest in an entity that was party thereto; or (iv) the shares held by the stockholder, prior to dilution, qualified as a substantialinterest and, by election, no gain was recognized upon disqualification of these shares.Gift Tax and Inheritance TaxNo Dutch gift or inheritance tax is due in respect of any gift of the shares by, or inheritance of the shares on the death of, a stockholder, except if: (i)at the time of the gift or death of the stockholder, the stockholder is resident, or is deemed to be resident, in the Netherlands; (ii)the stockholder passes away within 180 days after the date of the gift of the shares and is not, or not deemed to be, at the time of the gift, but is, ordeemed to be, at the time of its death, resident in the Netherlands; or (iii)the gift of the shares is made under a condition precedent and the stockholder is resident, or is deemed to be resident, in the Netherlands at thetime the condition is fulfilled.For purposes of Dutch gift or inheritance tax, an individual who is of Dutch nationality will be deemed to be resident in the Netherlands if theindividual has been resident in the Netherlands at any time during the ten years preceding the date of the gift or his/her death. For purposes of Dutch gift tax,any individual, irrespective of its nationality, will be deemed to be resident in the Netherlands if he has been resident in the Netherlands at any time duringthe 12 months preceding the date of the gift.Other Taxes and DutiesNo other Dutch taxes, including turnover tax and taxes of a documentary nature, such as capital tax, stamp or registration tax or duty, are payable by oron behalf of a stockholder by reason only of the purchase, ownership and disposal of the shares.ResidencyA stockholder will not become resident, or deemed resident in the Netherlands for tax purposes by reason only of holding the shares.United States Federal Income Tax ConsiderationsThe following summary describes the material United States federal income tax consequences of the ownership and disposition of our shares as of thedate hereof. The summary set forth below is applicable only to United States Holders (as defined below) (i) who are residents of the United States for purposesof the Treaty, (ii) whose shares do not, for purposes of the Treaty, form part of the business property of a permanent establishment, or pertain to a fixed base, inthe Netherlands, and (iii) who otherwise qualify for the full benefits of the Treaty. Except where noted, this summary deals only with shares held as capitalassets. As used herein, the term “United States Holder” means a beneficial owner of a share that is for United States federal income tax purposes: • an individual citizen or resident of the United States; • a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws ofthe United States, any state thereof or the District of Columbia; • an estate the income of which is subject to United States federal income taxation regardless of its source; or • a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authorityto control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to betreated as a United States person. 66Table of ContentsThis summary does not represent a detailed description of the United States federal income tax consequences applicable to you if you are subject tospecial treatment under the United States federal income tax laws, including if you are: • a dealer in securities or currencies; • a financial institution; • a regulated investment company; • a real estate investment trust; • an insurance company; • a tax-exempt organization; • a person holding our shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle; • a trader in securities that has elected the mark-to-market method of accounting for your securities; • a person liable for alternative minimum tax; • a person who owns or is deemed to own 10% or more of our voting stock; • a person holding our shares in connection with a trade or business conducted outside of the United States; • a partnership or other pass-through entity for United States federal income tax purposes; or • a person whose “functional currency” is not the United States dollar.The summary below is based upon the provisions of the United States Internal Revenue Code of 1986, as amended (the “Code”), and regulations,rulings and judicial decisions thereunder as of the date hereof, and such authorities may be replaced, revoked or modified, perhaps retroactively, so as toresult in United States federal income tax consequences different from those discussed below.If a partnership (or other entity treated as a partnership for United States federal income tax purposes) holds our shares, the tax treatment of a partnerwill generally depend upon the status of the partner and the activities of the partnership. If you are a partnership or a partner of a partnership holding ourshares, you should consult your tax advisors.This summary does not contain a detailed description of all the United States federal income tax consequences to you in light of your particularcircumstances and does not address the Medicare tax on net investment income or the effects of any state, local or non-United States tax laws. If you areconsidering the purchase, ownership or disposition of our shares, you should consult your own tax advisors concerning the United States federal income taxconsequences to you in light of your particular situation as well as any consequences arising under the laws of any other taxing jurisdiction.Taxation of DividendsThe gross amount of distributions on the shares (including any amounts withheld in respect of Dutch withholding taxes to the extent such amounts areactually transferred to the Dutch tax authorities, as described under “ Certain Tax Considerations—Holder of Common Stock—Summary of Dutch TaxConsiderations—Withholding Tax “ above) will be taxable as dividends to the extent paid out of our current or accumulated earnings and profits, asdetermined under United States federal income tax principles. Such amounts taxable as dividends (including any portion thereof withheld and paid over tothe Dutch tax authorities) will be includable in your gross income as ordinary income on the day actually received by you or on the day received by yournominee or agent that holds the shares on your behalf. Such dividends will not be eligible for the dividends received deduction allowed to corporationsunder the Code.With respect to non-corporate United States investors, certain dividends received from a qualified foreign corporation may be subject to reduced ratesof taxation. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with theUnited States which the United States Treasury Department determines to be satisfactory for these purposes and which includes an exchange of informationprovision. The United States Treasury Department has determined that the Treaty meets these requirements. We believe we are currently eligible for thebenefits of the Treaty. A foreign corporation is also treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares thatare readily tradable on an established securities market in the United States. United States Treasury Department guidance indicates that our shares, which arelisted on the NASDAQ Global Select Market, are considered readily tradable on an established securities market in the United States. There can be noassurance that our shares will be considered readily tradable on an established securities market in later years.Non-corporate holders that do not meet a minimum holding period requirement during which they are not protected from a risk of loss or that elect totreat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation regardless ofour status as a qualified foreign corporation. For this purpose, the minimum holding period requirement will not be met if a share has been held by a holderfor 60 days or less during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respectto such dividend, appropriately reduced by any period in which such holder is protected from risk of loss. In addition, the rate reduction will not apply todividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. Thisdisallowance applies even if the minimum holding period has been met. You should consult your own tax advisors regarding the application of these rules toyour particular circumstances. 67Table of ContentsThe maximum rate of withholding tax on dividends paid to you pursuant to the Treaty is 15 percent. You may be required to properly demonstrate tothe Company and the Dutch tax authorities your entitlement to the reduced rate of withholding under the Treaty. Subject to certain conditions andlimitations, Dutch withholding taxes on dividends may be treated as foreign taxes eligible for credit against your United States federal income tax liability.However, amounts withheld to reflect Dutch withholding taxes will not be creditable to the extent that we are allowed to reduce the amount of thewithholding tax that is actually transferred to the Dutch tax authorities, as described under “ Certain Tax Considerations—Holder of Common Stock—Summary of Dutch Tax Considerations—Withholding Tax “ above. For purposes of calculating the foreign tax credit, dividends paid on the shares will betreated as income from sources outside the United States and will generally constitute passive category income. Further, in certain circumstances, if you: • have held shares for less than a specified minimum period during which you are not protected from risk of loss, or • are obligated to make payments related to the dividends,you will not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on the shares. The rules governing the foreign tax credit arecomplex. You are urged to consult your tax advisors regarding the availability of the foreign tax credit under your particular circumstances.To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, as determined underUnited States federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of theshares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain recognized on a sale or exchange.However, we do not expect to determine earnings and profits in accordance with United States federal income tax principles. Therefore, you should expectthat a distribution will generally be treated as a dividend (as discussed above).Passive Foreign Investment CompanyBased on the composition of our income and valuation of our assets, including goodwill, we do not believe we were a passive foreign investmentcompany (a “PFIC”) for the 2015 taxable year, and we do not expect to become one in the future, although there can be no assurance in this regard. If,however, we are or become a PFIC, you could be subject to additional United States federal income taxes on gain recognized with respect to the shares and oncertain distributions, plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Non-corporate United States Holders willnot be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in thepreceding taxable year.Taxation of Capital GainsFor United States federal income tax purposes, you will recognize taxable gain or loss on any sale or exchange of a share in an amount equal to thedifference between the amount realized for the share and your tax basis in the share. Such gain or loss will generally be capital gain or loss. Capital gains ofnon-corporate United States Holders (including individuals) derived with respect to capital assets held for more than one year are eligible for reduced rates oftaxation. The deductibility of capital losses is subject to limitations. Any gain or loss recognized by you will generally be treated as United States sourcegain or loss.Information Reporting and Backup WithholdingIn general, information reporting will apply to dividends in respect of our shares and the proceeds from the sale, exchange or redemption of our sharesthat are paid to you within the United States (and in certain cases, outside the United States), unless you are an exempt recipient. Backup withholding mayapply to such payments if you fail to provide a taxpayer identification number or certification of other exempt status or fail to report in full dividend andinterest income.Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your United States federal income taxliability provided the required information is furnished to the Internal Revenue Service.F. Dividends and Paying AgentsNot applicable.G. Statement by ExpertsNot applicable.H. Documents on DisplayIt is possible to read and copy documents referred to in this Report on Form 20-F that have been filed with the SEC at the SEC’s public reference roomlocated at 450 Fifth Street, NW, Washington, D.C. 20549.Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges.The Company’s SEC filings are also publicly available through the SEC’s website at www.sec.gov. 68Table of ContentsI. Subsidiary InformationNot applicable.Item 11. Quantitative and Qualitative Disclosures about Market RiskWe are exposed to changes in interest rates and foreign currency exchange rates because we finance certain operations through fixed and variable ratedebt instruments and denominate our transactions in a variety of foreign currencies. Changes in these rates may have an impact on future cash flow andearnings. We manage these risks through normal operating and financing activities and, when deemed appropriate, through the use of derivative financialinstruments. We do not enter into financial instruments for trading or speculative purposes.By using derivative instruments, we are subject to credit and market risk. The fair market value of the derivative instruments is determined by usingvaluation models whose inputs are derived using market observable inputs, including interest rate yield curves, as well as foreign exchange and commodityspot and forward rates, and reflects the asset or liability position as of the end of each reporting period. When the fair value of a derivative contract is positive,the counterparty owes us, thus creating a receivable risk for us. We are exposed to counterparty credit risk in the event of non-performance by counterpartiesto our derivative agreements. We minimize counterparty credit (or repayment) risk by entering into transactions with major financial institutions ofinvestment grade credit rating. Our exposure to market risk is not hedged in a manner that completely eliminates the effects of changing market conditions onearnings or cash flow.Interest Rate RiskGiven the leveraged nature of our Company, we have inherent exposure to changes in interest rates. Our New RCF Agreement has a floating rateinterest. We have issued several Term Loans that have a floating rate interest and have issued several series of notes with maturities ranging from 1 to 7 yearswith fixed rates. From time to time, we may execute a variety of interest rate derivative instruments to manage interest rate risk. Consistent with our riskmanagement objective and strategy, we have no interest rate risk hedging transactions in place.Foreign Currency RisksWe are also exposed to market risk from changes in foreign currency exchange rates, which could affect operating results as well as our financialposition and cash flows. We monitor our exposures to these market risks and generally employ operating and financing activities to offset these exposureswhere appropriate. If we do not have operating or financing activities to sufficiently offset these exposures, from time to time, we may employ derivativefinancial instruments such as swaps, collars, forwards, options or other instruments to limit the volatility to earnings and cash flows generated by theseexposures. Derivative financial instruments are only used for hedging purposes and not for trading or speculative purposes. The Company measures allderivative financial instruments based on fair values derived from market prices of the instruments or from option pricing models, as appropriate and recordthese as assets or liabilities in the balance sheet. Changes in the fair values are recognized in the statement of operations immediately unless cash flow hedgeaccounting is applied.Our primary foreign currency exposure relates to the U.S. dollar to euro exchange rate. However, our foreign currency exposures also relate, but are notlimited, to the Chinese Yuan, the Japanese Yen, the Pound Sterling, the Malaysian Ringgit, the Singapore Dollar, the Taiwan Dollar and the Thailand Baht.Equity Price RiskCash Convertible Senior NotesOur Cash Convertible Senior Notes include conversion and settlement provisions that are based on the price of our common stock at conversion or atmaturity of the notes. In addition, the hedges and warrants associated with these convertible notes also include settlement provisions that are based on theprice of our common stock. The amount of cash we may be required to pay to the holders at conversion or maturity of the notes is determined by the price ofour common stock. The amount of cash that we may receive from hedge counterparties in connection with the related hedges and the number of shares thatwe may be required to provide warrant counterparties in connection with the related warrants are also determined by the price of our common stock.Item 12. Description of Securities Other than Equity SecuritiesNot applicable. 69Table of ContentsPART IIItem 13. Defaults, Dividend Arrearages and DelinquenciesNoneItem 14. Material Modifications to the Rights of Security Holders and Use of ProceedsNoneItem 15. Controls and ProceduresDisclosure Controls and ProceduresAs of the end of the period covered by this Report, our management, with the participation of our chief executive officer and chief financial officer,conducted an evaluation pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) of theeffectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our chief executive officer and chief financialofficer concluded that as of the end of the period covered by this Report such disclosure controls and procedures were effective to provide reasonableassurance that information required to be disclosed in reports we filed or submitted under the Exchange Act was recorded, processed, summarized andreported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and included controls and procedures designedto ensure that information required to be disclosed in such reports was accumulated and communicated to our management, including our chief executiveofficer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control over Financial ReportingThe Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules13a-15(f) and 15(d)-15(f) of the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance, notabsolute assurance, regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.generally accounting principles.Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Moreover, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015 based on the criteriaestablished in “Internal Control - Integrated Framework (2013)” by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Ourassessment of, and conclusion on, the effectiveness of internal control over financial reporting did not include the internal controls of FreescaleSemiconductor, acquired on December 7, 2015, which is included in our 2015 consolidated financial statements and represented approximately 10% of ourtotal assets (excluding any purchase price accounting effect) as of December 31, 2015, and approximately 6% of our total revenues for the year endedDecember 31, 2015. Based on that assessment our management concluded that our internal control over financial reporting was effective as of December 31,2015.During 2015, there have not been any changes in the Company’s internal controls over financial reporting that have materially affected, or arereasonably likely to materially affect, the Company’s internal controls over financial reporting.It should be noted that any control system, regardless of how well it is designed and operated, can provide only reasonable, not absolute, assurance thatits objectives will be met. Control systems can be circumvented by the individual acts of some persons, by collusion of two or more people, or bymanagement override of the control. In addition, controls may become inadequate because of changes in conditions, or the degree of compliance with thepolicies or procedures may deteriorate. Because of these and other inherent limitations of control systems, there can be no assurance that any design willsucceed in achieving its stated goals under all potential future conditions, regardless of how remote.Attestation Report of the Registered Public Accounting FirmFor the year ended December 31, 2015 an attestation report regarding internal control over financial reporting of the Company’s registered publicaccounting firm is required. The attestation is included in Part III, Item 18. Financial Statements.Item 16A. Audit Committee Financial ExpertMr. Goldman, chairman of our audit committee, qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) ofRegulation S-K and as determined by our board of directors. Our board of directors has determined that Mr. Goldman is an independent director under theNASDAQ Global Select Market Corporate Governance Rules. 70Table of ContentsItem 16B. Code of EthicsThe NXP Code of Conduct outlines our general commitment to be a responsible social partner and the way in which we attempt to interact with ourstakeholders, including stockholders, suppliers, customers, employees and the market. The Code of Conduct expresses our commitment to an economically,socially and ethically sustainable way of working. It covers our policy on a diverse array of subjects, including corporate gifts, child labor, InternationalLabor Organization conventions, working hours, sexual harassment, free-market competition, bribery and the integrity of financial reporting.The NXP Code of Conduct is available on our website at www.nxp.com/investor/governance. We will disclose on this website any amendments to, orwaivers from, our Code of Business Conduct and Ethics (to the extent applicable to any principal executive officer, principal financial officer, principalaccounting officer or controller, or persons performing similar functions). The information contained on our website or that can be accessed through ourwebsite neither constitutes part of this Report on Form 20-F nor is incorporated by reference herein.Item 16C. Principal Accountant Fees and ServicesThe Company has instituted a comprehensive auditor independence policy that regulates the relation between the Company and its external auditorsand is available on our website (www.nxp.com/investor). The policy includes rules for the pre-approval by the audit committee of all services to be providedby the external auditor. The policy also describes the prohibited services that may not be provided. Proposed services may be pre-approved at the beginningof the year by the audit committee (annual pre-approval) or may be pre-approved during the year by the audit committee in respect of a particularengagement (specific pre-approval). The annual pre-approval is based on a detailed, itemized list of services to be provided, designed to ensure that there isno management discretion in determining whether a service has been approved and to ensure the audit committee is informed of each service it is pre-approving. Unless pre-approval with respect to a specific service has been given at the beginning of the year, each proposed service requires specific pre-approval during the year. Any annually pre-approved services where the fee for the engagement is expected to exceed pre-approved cost levels or budgetedamounts will also require specific pre-approval. The term of any annual pre-approval is 12 months from the date of the pre-approval unless the auditcommittee states otherwise. During 2014, there were no services provided to the Company by the external auditors which were not pre-approved by the auditcommittee.The external auditor attends, in principle, all meetings of the audit committee. The findings of the external auditor, the audit approach and the riskanalysis are also discussed at these meetings. The external auditor attends the meeting of the board of directors at which the report of the external auditor withrespect to the audit of the annual accounts is discussed, and at which the annual accounts are approved. In its audit report on the annual accounts to the boardof directors, the external auditor refers to the financial reporting risks and issues that were identified during the audit, internal control matters, and any othermatters, as appropriate, requiring communication under the auditing standards generally accepted in the Netherlands and the United States.Our Consolidated Financial Statements included in this Report have been audited by KPMG Accountants N.V., an independent registered publicaccounting firm. These financial statements have been approved by the relevant boards.The aggregate fees billed for professional services rendered for the fiscal periods 2015 and 2014 were as follows:Aggregate fees KPMG ($ in millions) 2015 2014 Audit fees 4.9 3.2 Other fees 0.1 0.1 5.0 3.3 Audit fees consist of fees for the examination of both the consolidated and statutory financial statements and include fees paid by Freescale to KPMGprior to the acquisition. Audit fees also include fees that only our independent auditor can reasonably provide such as comfort letters and review ofdocuments filed with the SEC. Other fees consist of fees for professional services by our independent registered accounting firm for permissible non-auditservices.Item 16D. Exemptions from the Listing Standards for Audit CommitteesNot applicable. 71Table of ContentsItem 16E. Purchases of Equity Securities by the Issuer and Affiliated PurchasersThe following table provides a summary of shares repurchased by the Company in 2015: Period begin Period end Period Total Numberof SharesPurchased Average PricePaid per Share Total Number ofShares Purchasedas Part of PubliclyAnnounced Plans orPrograms MaximumNumber of Sharesthat May Yet BePurchased Underthe Plans orPrograms January 1 February 8 January 8,277 78.39 8,277 3,819,330 February 9 March 8 February 41,384 81.79 41,384 3,777,946 March 9 April 5 March — — — 3,777,946 April 6 May 10 April 1,339,185 99.59 1,339,185 2,438,761 May 11 June 7 May 360,253 79.18 250,000 2,188,761 June 8 July 5 June — — — 2,188,761 July 6 August 9 July 490,108 95.37 490,108 1,698,653 August 10 September 6 August 1,210,000 86.64 1,210,000 488,653 September 7 October 4 September 70,000 88.28 70,000 20,418,653 October 5 November 8 October 1,579,851 82.59 1,579,851 18,838,802 November 9 December 6 November — — — 18,838,802 December 7 December 31 December 237,252 85.92 237,252 18,601,550 Total 2015 5,336,310 88.93 5,226,057 From time to time, last in September 2015, the General Meeting of Shareholders authorized the Board of Directors to repurchase shares of our commonstock. On that basis, the Board of Directors resolved to repurchase shares to cover in part employee stock options and equity rights under its long termincentive plans. The purchases identified in the table were all pursuant to this authorization.Item 16F. Change in Registrant’s Certifying AccountantNot applicable.Item 16G. Corporate GovernanceThe Dutch Corporate Governance CodeSince our initial public offering in August 2010, we have been required to comply with the Dutch corporate governance code. The Dutch corporategovernance code, as revised, became effective on January 1, 2009, and applies to all Dutch companies listed on a government-recognized stock exchange,whether in the Netherlands or elsewhere. The code is based on a “comply or explain” principle. Accordingly, companies are required to disclose in theirAnnual Reports filed in the Netherlands whether or not they are complying with the various rules of the Dutch corporate governance code that are addressedto the board of directors or, if any, the supervisory board of the company and, if they do not apply those provisions, to give the reasons for such non-application. The code contains principles and best practice provisions for managing boards, supervisory boards, stockholders and general meetings ofstockholders, financial reporting, auditors, disclosure, compliance and enforcement standards.The Dutch corporate governance code provides that if a company indicates to what extent it applies the best practice provisions, such company willdeemed to have applied the Dutch corporate governance code.The following discussion summarizes the primary differences between our corporate governance structure and best practice provisions of the Dutchcorporate governance code: • Best practice provisions II.2.4 and II.2.5 state that stock options granted to members of our board shall, in any event, not be exercised in the first threeyears after the date of granting and shares granted to board members without financial consideration shall be retained for a period of at least five yearsor until at least the end of the employment, if this period is shorter. Under our equity incentive schemes, part of the stock options granted to our chiefexecutive officer are exercisable one year after the date of grant, and members of our board who received restrictive shares and performance shares arenot required to retain these shares for at least five years. Although a deviation from the Corporate Governance Code, we hold the view that thecombination of equity incentives granted to our chief executive officer, in relation to his obligation—laid down in the NXP Executive EquityOwnership Policy of October 2013—to maintain at least 20% of the after tax number of NXP shares delivered upon the vesting of any performancestock units granted as of October 2013, as well as the applicable strict vesting and performance criteria, will enhance the goal of promoting long-terminvestments in the Company. The same is true for the equity grants made to other members of our board, which also have very strict vesting criteriawith the purpose of creating long-term commitment to the Company. 72Table of Contents• Pursuant to best practice provision IV.1.1, a general meeting of stockholders is empowered to cancel binding nominations of candidates for the board,and to dismiss members of the board by a simple majority of votes of those in attendance, although the company may require a quorum of at least onethird of the voting rights outstanding. If such quorum is not represented, but a majority of those in attendance vote in favor of the proposal, a secondmeeting may be convened and its vote will be binding, even without a one-third quorum. Our articles of association currently state that the generalmeeting of stockholders may at all times overrule a binding nomination by a resolution adopted by at least a two-thirds majority of the votes cast, ifsuch majority represents more than half of the issued share capital. Although a deviation from provision IV.1.1 of the Dutch Corporate GovernanceCode, we hold the view that these provisions will enhance the continuity of the Company’s management and policies.Effective January 1, 2012, Dutch law does not allow directors to vote on a matter with regard to which they have an interest.The NASDAQ Global Select Market Corporate Governance RulesWe are a foreign private issuer. As a result, in accordance with the listing requirements of the NASDAQ Global Select Market, we rely on home countrygovernance requirements and are exempt from certain corporate governance requirements that would otherwise apply in accordance with the listingrequirements of the NASDAQ Global Select Market. These exemptions and home country rules relied on by us are described below: • We are exempt from NASDAQ’s quorum requirements applicable to meetings of stockholders. Pursuant to Dutch corporate law, the validity of aresolution by the general meeting of stockholders does not depend on the proportion of the capital or stockholders represented at the meeting (i.e.quorum), unless the law or articles of association of a company provide otherwise. Our articles of association provide that a resolution proposed to thegeneral meeting of stockholders by the board of directors shall be adopted by a simple majority of votes cast, unless another majority of votes orquorum is required under Dutch law or our articles of association. All other resolutions shall be adopted by a two thirds majority of the votes cast,provided such majority represents at least half of the issued share capital, unless another majority of votes or quorum is required under Dutch law. Tothis extent, our practice varies from the requirement of Listing Rule 5620(c), which requires an issuer to provide in its bylaws for a quorum, and thatsuch quorum may not be less than one-third of the outstanding voting stock. • We are exempt from NASDAQ’s requirements regarding the solicitation of proxies and provision of proxy statements for meetings of stockholders. Weinform stockholders of meetings in a public notice. We prepare a proxy statement and solicit proxies from the holders of our listed stock. Our practicein this regard, however, differs from the typical practice of U.S. corporate issuers in that the advance record date for determining the holders of recordentitled to attend and vote at our stockholder meetings is determined by Dutch law (currently 28 days prior to the meeting). As an administrativenecessity, we establish a mailing record date in advance of each meeting of stockholders for purposes of determining the stockholders to which theproxy statement and form of proxy will be sent. However, only stockholders of record on the specified record date are entitled to attend and vote,directly or by proxy, at the meeting. • NASDAQ requires stockholder approval prior to the issuance of securities when a stock option or purchase plan is to be established or materiallyamended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors,employees or consultants. Under Dutch law and the Dutch corporate governance code, stockholder approval is only required for equity compensationplans (or changes thereto) for members of the board, and not for equity compensation plans for other groups of employees. However, we note that underDutch law, the stockholders have the power to issue shares or rights to subscribe for shares at the general meeting of the stockholders unless such powerhas been delegated to the board. On June 2, 2015, our general meeting of stockholders has empowered our board of directors to issue additional sharesand grant rights to subscribe for shares of common stock, up to 10% of the issued share capital which authorization can be used for general purposesand an additional 10% if the shares of common stock are issued or rights are granted in connection with an acquisition, merger or (strategic) alliance,and to restrict or exclude pre-emptive rights pertaining to (the right to subscribe for) shares for a period of 18 months from June 2, 2015 untilDecember 2, 2016. • As a foreign private issuer, we are exempt from NASDAQ’s requirement that compensation committees be comprised exclusively of independentdirectors provided that we describe the home country practice followed in lieu of such requirement and disclose the reasons for not having such anindependent compensation committee. Under Dutch law and the Dutch corporate governance code, the general meeting of stockholders must adopt apolicy in respect of the remuneration of the board. In accordance with our articles of association and our board rules, the remuneration of the executivedirectors is determined by the board of directors upon the recommendation of our nominating and compensation committee. Accordingly, applicablelaws, regulations and corporate governance rules and practices do not require independence of the members of our nominating and compensationcommittee. Currently, all three members of our nominating and compensation committee are independent directors under the Dutch corporategovernance rules and under the NASDAQ and SEC compensation committee structure and membership requirements. • We are exempt from NASDAQ’s requirement to have independent director oversight of director nominations. In accordance with Dutch law, our articlesof association require that our directors will be appointed by the general meeting of stockholders upon the binding nomination of the board. Inaccordance with our board rules, the nominating and compensation committee will recommend the nomination of directors to our board. 73Table of Contents• NASDAQ requires us to adopt a nominations committee charter or a board resolution addressing the nominations process. In accordance with the Dutchcorporate governance code, we have adopted the committee’s charter. However, the nominations process has been set out in our articles of associationand board rules.Moreover, we will not distribute Annual Reports to all of our stockholders in accordance with NASDAQ rules. Dutch law requires that the externalauditors be appointed at the general meeting of stockholders and not by the audit committee. Our audit committee, which consists of members of our board ofdirectors, shall only make a recommendation to the stockholders through the board of directors for the appointment and compensation of the independentregistered public accounting firm and shall oversee and evaluate the work of our independent registered public accounting firm.Item 16H. Mine Safety DisclosuresNot applicable. 74Table of ContentsPART IIIItem 17. Financial StatementsWe are furnishing the financial statements pursuant to the instructions of Part III, Item 18. Financial Statements of this Report.Item 18. Financial StatementsSee pages F-1 to F-42Item 19. Exhibits ExhibitNumber Description of Document2.1# Sale and Purchase Agreement, dated as of December 22, 2010, between NXP Semiconductors N.V., NXP B.V., the Dover Corporation, KnowlesElectronics, LLC and EFF Acht Beteiligungsverwaltung GmbH (incorporated by reference to Exhibit 2.1 of the Form 20-F of NXPSemiconductors N.V. filed on March 13, 2012)3.1 Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of Amendment No. 7 to the Registration Statement on Form F-1 of NXPSemiconductors N.V., filed on August 2, 2010 (File No. 333-166128))3.2 Articles of Association of NXP Semiconductors N.V. (incorporated by reference to Exhibit 3.2 of Amendment No. 7 to the RegistrationStatement on Form F-1 of NXP Semiconductors N.V., filed on August 2, 2010 (File No. 333-166128))4.1 Secured Term Credit Agreement dated March 4, 2011, as amended by (i) the Joinder and Amendment Agreement dated as of November 18,2011, (ii) the New Term Loan Joinder Agreement dated as of February 16, 2012, (iii) the New Term Loan Joinder Agreement dated as ofDecember 10, 2012, (iv) the 2013 New Term Loan Joinder Agreement dated as of November 27, 2013, and (v) the 2014 New Term LoanJoinder Agreement dated as of February 18, 2014, among NXP B.V. and NXP Funding LLC as borrowers, Barclays Bank PLC as AdministrativeAgent, Morgan Stanley Senior Funding, Inc. as Global Collateral Agent, Mizuho Corporate Bank, Ltd. as Taiwan Collateral Agent, and thelenders party thereto. (incorporated by reference to Exhibit 4.8 of the Form 20-F of NXP Semiconductors N.V. filed on March 13, 2012)4.2 Secured Revolving Credit Agreement dated April 27, 2012, as amended by an Incremental Joinder Agreement dated as of October 29, 2012,among NXP Semiconductors N.V., NXP B.V. and NXP Funding LLC as borrower, Morgan Stanley Senior Funding, Inc. as Global CollateralAgent and Administrative Agent, Mizuho Corporate Bank, Ltd. as Taiwan Collateral Agent and the lenders party thereto. (incorporated byreference to Exhibit 4.10 of the Form 20-F of NXP Semiconductors N.V. filed on March 1, 2013)4.3 Senior Unsecured Indenture dated as of February 14, 2013 among NXP B.V. and NXP Funding LLC as Issuers, each of the Guarantors named onthe signature page thereto as borrower and Deutsche Bank Trust Company Americas as Trustee (incorporated by reference to Exhibit 4.13 ofForm 20-F of NXP Semiconductors N.V. filed on March 13, 2012)4.4 Senior Unsecured Indenture dated as of March 12, 2013 among NXP B.V. and NXP Funding LLC as Issuers, each of the Guarantors named onthe signature pages thereto and Deutsche Bank Trust Company Americas as Trustee (incorporated by reference to Exhibit 4.7 of the Form-20Fof NXP Semiconductors N.V. filed on February 28, 2014)4.5 Senior Unsecured Indenture dated as of May 20, 2013 among NXP B.V. and NXP Funding LLC as Issuers, each of the Guarantors named on thesignature pages thereto and Deutsche Bank Trust Company Americas as Trustee (incorporated by reference to Exhibit 4.8 of the Form-20F ofNXP Semiconductors N.V. filed on February 28, 2014)4.6 Senior Unsecured Indenture dated as of September 24, 2013 among NXP B.V. and NXP Funding LLC as Issuers, each of the Guarantors namedon the signature page thereto and Deutsche Bank Trust Company Americas as Trustee (incorporated by reference to Exhibit 4.9 of the Form-20F of NXP Semiconductors N.V. filed on February 28, 2014)4.7 Senior Unsecured Indenture dated as of November 24, 2014 among NXP Semiconductors N.V. as Issuer and Deutsche Bank Trust CompanyAmericas as Trustee (incorporated by reference to Exhibit 4.7 of the Form 20-F of NXP Semiconductors N.V. filed on March 6, 2015)4.8 Support Agreement, dated as of March 1, 2015, by and among NXP Semiconductors N.V., Freescale Holdings L.P. and certain limited partnersof Freescale Holdings L.P. (incorporated by reference to Exhibit 2 of the Form 6-K of NXP Semiconductors N.V. filed on March 3, 2015)4.9 Commitment Letter, dated as of March 1, 2015, by and among NXP B.V., Credit Suisse Securities (USA) LLC and Credit Suisse AG, CaymanIslands Branch (incorporated by reference to Exhibit 3 of the Form 6-K of NXP Semiconductors N.V. filed on March 3, 2015)4.10 Senior Unsecured Indenture dated June 9, 2015 among NXP B.V. and NXP Funding LLC as Issuers, each of the Guarantors named on thesignature pages thereto and Deutsche Bank Trust Company Americas as Trustee 75Table of ContentsExhibitNumber Description of Document4.11 New Secured Term Credit Agreement dated as of December 7, 2015 among NXP B.V. and NXP Funding LLC as Borrowers, the several lendersfrom time to time parties thereto, Morgan Stanley Senior Funding, Inc. as Collateral Agent, Credit Suisse AG as Administrative Agent, CreditSuisse Securities (USA) LLC, Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Deutsche Bank Securities Inc. and Bank of America,N.A. as Joint Lead Arrangers and Joint Bookrunners, and Goldman Sachs Lending Partners LLC, Citigroup Global Markets Limited andCoöperative Centrale Raiffeisen-Boerenleenbank B.A. as Co-Managers (incorporated by reference to Exhibit 2 of the Form 6-K of NXPSemiconductors N.V. filed on December 7, 2015)4.12 Term Loan Guaranty Agreement dated as of December 7, 2015 among the guarantors listed on the signature pages thereto, Credit Suisse AG asAdministrative Agent and Morgan Stanley Senior Funding, Inc. as Collateral Agent (incorporated by reference to Exhibit 3 of the Form 6-K ofNXP Semiconductors N.V. filed on December 7, 2015)4.13 New RCF Agreement dated as of December 7, 2015 among NXP B.V. and NXP Funding LLC as Borrowers, the several lenders from time totime parties thereto, Morgan Stanley Senior Funding, Inc. as Collateral Agent, Morgan Stanley Senior Funding, Inc., as Administrative Agent,Citibank, N.A. as Letter of Credit Issuer, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding, Inc., Barclays Bank PLC,Deutsche Bank Securities Inc. and Bank of America N.A. as Joint Lead Arrangers and Joint Bookrunners, and Goldman Sachs Lending PartnersLLC, Citigroup Markets Limited and Coöperative Centrale Raiffeisen-Boerenleenbank B.A. as Co-Managers (incorporated by reference toExhibit 4 of the Form 6-K of NXP Semiconductors N.V. filed on December 7, 2015)4.14 RCF Guaranty Agreement dated as of December 7, 2015 among NXP B.V., NXP Funding LLC and each of the the subsidiary guarantors listedon the signature pages thereto, Morgan Stanley Senior Funding, Inc. as Collateral Agent and Morgan Stanley Senior Funding, Inc. asAdministrative Agent (incorporated by reference to Exhibit 5 of the Form 6-K of NXP Semiconductors N.V. filed on December 7, 2015)4.15 Secured Bridge Term Credit Agreement dated as of December 7, 2015 among NXP B.V. and NXP Funding LLC as Borrowers, the lenders fromtime to time parties thereto, Morgan Stanley Senior Funding, Inc. as Collateral Agent and Credit Suisse AG as Administrative Agent(incorporated by reference to Exhibit 6 of the Form 6-K of NXP Semiconductors N.V. filed on December 7, 2015)4.16 Bridge Loan Guaranty Agreement dated as of December 7, 2015 among NXP B.V., NXP Funding LLC and each of the subsidiary guarantorslisted on the signature pages thereto, Morgan Stanley Senior Funding, Inc. as Collateral Agent and Credit Suisse AG as Administrative Agent(incorporated by reference to Exhibit 7 of the Form 6-K of NXP Semiconductors N.V. filed on December 7, 2015)4.17 Supplemental Guaranty dated as of December 7, 2015 to the guarantee dated as of March 4, 2011 among NXP B.V., each of the Guarantorslisted on the signature pages thereto, Barclays Bank PLC as Administrative Agent, Morgan Stanley Senior Funding, Inc. as Global CollateralAgent and Mizuho Corporate Ban, Ltd. as Taiwan Collateral Agent (incorporated by reference to Exhibit 10.4 of the Form 8-K of FreescaleSemiconductor, Ltd. filed on December 7, 2015)4.18 Amended and Restated 2021 Freescale Indenture dated as of December 7, 2015 among Freescale Semiconductor, Inc., the Guarantors listed onthe signature pages thereto and the Bank of New York Mellon Trust Company, N.A. as Trustee (incorporated by reference to Exhibit 8 of theForm 6-K of NXP Semiconductors N.V. filed on December 7, 2015)4.19 Amended and Restated 2022 Freescale Indenture dated as of December 7, 2015 among Freescale Semiconductor, Inc., the Guarantors listed onthe signature pages thereto and Wells Fargo Bank, National Association as Trustee (incorporated by reference to Exhibit 9 of the Form 6-K ofNXP Semiconductors N.V. filed on December 7, 2015)10.1 Intellectual Property Transfer and License Agreement dated as of September 28, 2006 between Koninklijke Philips Electronics N.V. and NXPB.V. (incorporated by reference to Exhibit 10.1 of the Amendment No. 3 to the Registration Statement on Form F-1 of NXP SemiconductorsN.V. filed on June 30, 2010 (File No. 333-166128))10.2 Intellectual Property Transfer and License Agreement dated as of November 16, 2009 among NXP B.V., Virage Logic Corporation and VL C.V.(incorporated by reference to Exhibit 10.2 of the Amendment No. 3 to the Registration Statement on Form F-1 of NXP Semiconductors N.V.filed on June 30, 2010 (File No. 333-166128))10.3 Shareholders’ agreement dated as of March 30, 1999, as amended among EBD Investments Pte. Ltd., Koninklijke Philips Electronics N.V. andTaiwan Semiconductor Manufacturing Company Ltd. (incorporated by reference to Exhibit 10.4 of the Amendment No. 3 to the RegistrationStatement on Form F-1 of NXP Semiconductors N.V. filed on June 30, 2010 (File No. 333-166128))10.4 Lease Agreement dated as of December 23, 2004 between Jurong Town Corporation and Systems on Silicon Manufacturing Company Pte. Ltd.for the property at No. 70 Pasir Ris Drive 1, Singapore (incorporated by reference to Exhibit 10.8 of the Amendment No. 2 to the RegistrationStatement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128)) 76Table of ContentsExhibitNumber Description of Document10.5 Lease Agreement dated September 26, 2003 between Huangjiang Investment Development Company and NXP Semiconductors (Guangdong)Company Ltd. for the property at Tian Mei High Tech Industrial Park, Huang, Jiang Town, Dongguan City, China (incorporated by reference toExhibit 10.9 of the Amendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No.333-166128))10.6 Building Lease Contract dated as of May 12th, 2000 between the Export Processing Zone Administration (Ministry of Economic Affairs) andNXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.10 of the Amendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.7 Agreement with regard to the Lease of Standard Plant Basements dated as of July 1, 2011 between the Export Processing Zone Administration(Ministry of Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 4.8 of the Form-20F of NXPSemiconductors N.V. filed on February 28, 2014)10.8 Agreement with regard to the Lease of Additional Land dated as of July 1, 2008 between the Export Processing Zone Administration (Ministryof Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.14 of the Amendment No. 2 to theRegistration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.9 Agreement with regard to the Lease of a Dangerous Goods Warehouse dated as of November 27, 2009 between the Export Processing ZoneAdministration (Ministry of Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.15 of theAmendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.10 Agreement with regard to the Lease of Land at Property Number AL012 dated as of July 1, 2008 between the Export Processing ZoneAdministration (Ministry of Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.18 of theAmendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.11 Agreement with regard to the Lease of Land at Property Number AL020 dated as of July 1, 2008 between the Export Processing ZoneAdministration (Ministry of Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.19 of theAmendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.12 Agreement with regard to the Lease of Land at Property Number AL071 dated as of July 1, 2008 between the Export Processing ZoneAdministration (Ministry of Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.20 of theAmendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.13 Agreement with regard to the Lease of Land at Property Number CL102 dated as of July 1, 2008 between the Export Processing ZoneAdministration (Ministry of Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.21 of theAmendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.14 Agreement with regard to the Lease of Land dated as of September 30, 2008 between the Export Processing Zone Administration (Ministry ofEconomic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.22 of the Amendment No. 2 to theRegistration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.15 Agreement with regard to the Lease of Land at Property Number CL102 dated as of July 1, 2008 between the Export Processing ZoneAdministration (Ministry of Economic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.21 of theAmendment No. 2 to the Registration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.16 Agreement with regard to the Lease of Land dated as of September 30, 2008 between the Export Processing Zone Administration (Ministry ofEconomic Affairs) and NXP Semiconductors Taiwan Ltd. (incorporated by reference to Exhibit 10.22 of the Amendment No. 2 to theRegistration Statement on Form F-1 of NXP Semiconductors N.V. filed on June 10, 2010 (File No. 333-166128))10.17 Management Equity Stock Option Plan Terms and Conditions dated August 2010 (incorporated by reference to Exhibit 10.19 of the Form-20Fof NXP Semiconductors N.V. filed on March 13, 2012)10.18 Management Equity Stock Option Plan Terms and Conditions dated January 2011 (incorporated by reference to Exhibit 10.20 of the Form-20Fof NXP Semiconductors N.V. filed on March 13, 2012)10.19 Long Term Incentive Plan 2010 Terms and Conditions with regard to the Stock Option Plan, the Performance Stock Unit Plan, Restricted StockUnit Plan and Share Plan (incorporated by reference to Exhibit 10.21 of the Form-20F of NXP Semiconductors N.V. filed on March 13, 2012)10.20 NXP Global Equity Incentive Program (incorporated by reference to Exhibit 10.26 of the Amendment No. 3 to the Registration Statement onForm F-1 of NXP Semiconductors N.V. filed on June 30, 2010 (File No. 333-166128))10.21 Long Term Incentive Plan 2011 Terms and Conditions with regard to the Stock Option Plan, the Performance Stock Unit Plan, Restricted StockUnit Plan and Share Plan (incorporated by reference to Exhibit 4.8 of the Form-20F of NXP Semiconductors N.V. filed on March 13, 2012) 77Table of ContentsExhibitNumber Description of Document10.22 Long Term Incentive Plan 2012/3 Terms and Conditions with regard to the Stock Option Plan, the Performance Stock Unit Plan, RestrictedStock Unit Plan and Share Plan (incorporated by reference to Exhibit 10.22 of the Form-20F of NXP Semiconductors N.V. filed on March 1,2013). Long Term Incentive Plan 2013/4 Terms and Conditions with regard to the Stock Option Plan, the Performance Stock Unit Plan andRestricted Stock Unit Plan (incorporated by reference to Exhibit 10.22 of the Form-20F of NXP Semiconductors N.V. filed on February 28,2014). Long Term Incentive Plan 2014/5 Terms and Conditions with regard to the Stock Option Plan, the Performance Stock Unit Plan, theRestricted Stock Unit Plan and the Keep Restricted Stock Unit Plan (incorporated by reference to Exhibit 10.22 of the Form-20F of NXPSemiconductors N.V. filed on February 28, 2014) and Long Term Incentive Plan 2015/6 Terms and Conditions with regard to the Stock OptionPlan, the Performance Stock Unit Plan, the Restricted Stock Unit Plan and the Keep Restricted Stock Unit Plan.10.23 Employee Stock Purchase Plan Terms and Conditions (incorporated by reference to Exhibit 4.1 of the Form S-8 of NXP Semiconductors N.V.filed on August 8, 2013)10.24 Agreement and Plan of Merger, dated as of March 1, 2015, by and among NXP Semiconductors N.V., Freescale Semiconductor, Ltd. and NimbleAcquisition Limited (incorporated by reference to Exhibit 1 of the Form 6-K of NXP Semiconductors N.V. filed on March 3, 2015)10.25 Shareholders’ agreement dated as of December 7, 2015 among NXP Semiconductors N.V., P4 Sub L.P. 1, Permira IV L.P. 2, Permira InvestmentsLimited and P4 Co-Investment L.P.10.26 Shareholders’ agreement dated as of December 7, 2015 among NXP Semiconductors N.V., Carlyle Partners IV Cayman, L.P., CPIV CoinvestmentCayman, L.P., Carlyle Asia Partners II, L.P., CAP II Co-Investment, L.P., CEP II Participations S.a.r.l. SICAR, Carlyle Japan Partners, L.P. and CJPCo-Investment, L.P.10.27 Shareholders’ agreement dated as of December 7, 2015 among NXP Semiconductors N.V., Blackstone Capital Partners (Cayman) V L.P.,Blackstone Capital Partners (Cayman) V-A L.P., BCP (Cayman) V-S L.P., BCP V Co-Investors (Cayman) L.P., Blackstone Firestone TransactionParticipation Partners (Cayman) L.P., Blackstone Firestone Principal Transaction Partners (Cayman) L.P., Blackstone Family InvestmentPartnership (Cayman) V L.P., Blackstone Family Investment Partnership (Cayman) V-SMD L.P. and Blackstone Participation Partnership(Cayman) V L.P.10.28 Shareholders’ agreement dated as of December 7, 2015 among NXP Semiconductors N.V., TPG Partners IV — AIV, L.P., TPG Partners V — AIV,L.P., and TPG FOF V-B, L.P.12.1 Certification of R. Clemmer filed pursuant to 17 CFR 240. 13a-14(a)12.2 Certification of D. Durn filed pursuant to 17 CFR 240. 13a-14(a)13.1 Certification of R. Clemmer furnished pursuant to 17 CFR 240. 13a-14(b)13.2 Certification of D. Durn furnished pursuant to 17 CFR 240. 13a-14(b)21.1 List of Significant Subsidiaries of the Registrant23 Consent of KPMG Accountants N.V. #Confidential treatment previously requested and granted 78Table of ContentsGLOSSARY 32 bit ARM microcontrollers Microcontroller based on a 32-bit processor core developed and licensed by ARM Technologies.AC-DC Conversion of alternating current to direct current.Analog A form of transmission that is a continuous wave of an electrical signal that varies in frequency and/oramplitude in response to variations of physical phenomena such as human speech or music.Back-end The packaging, assembly and testing stages of the semiconductors manufacturing process, which takes placeafter electronic circuits are imprinted on silicon wafers in the front-end process.BiCMOS A process technology that combines bipolar and CMOS processes, typically by combining digital CMOScircuitry with higher voltage or higher speed bipolar circuitry.Bipolar A process technology used to create semiconductors for applications involving the use of higher power levelsthan are possible with a CMOS chip. Due to the geometry of a bipolar circuit, these devices are significantlylarger than CMOS devices. The speed of the most advanced bipolar devices exceeds those attainable withCMOS, but only at very large electrical currents. As a result, the number of bipolar devices that can beintegrated into a single product is limited.Bluetooth low energy Bluetooth low energy (BLE) is a wireless computer network technology that, in comparison with “classic”Bluetooth, requires considerably less power and provides a similar communication range. BLE has beenincluded in the majority of smart phones for the past couple of years, with its initial application as thecommunication between the smart phone and other personal devices like fitness trackers and head-sets.Recently also other applications like communication with light bulbs are emerging.CAN Controller Area Network. A network technology used in automotive network architecture.CATV An abbreviation for cable television.Car access and immobilizers An automobile technology segment focused on keyless entry and car immobilization applications. Anautomobile immobilizer is an electronic device fitted to an automobile which prevents the engine from runningunless the correct key (or other token) is present.Chip Semiconductor device.CMOS Complementary Metal Oxide Semiconductor. The most common integrated circuit fabrication technology inthe semiconductor industry. The technology is used to make integrated circuits where small size and high speedare important. As a result of the very small feature sizes that can be attained through CMOS technology,however, the ability of these integrated circuits to cope with high electrical currents and voltages is limited.Coolflux DSP A low power digital signal processor designed for mobile audio applications.Digital A form of transmission where data is represented by a series of bits or discrete values such as 0 and 1.Diode A semiconductor that allows currents to flow in one direction only.Discrete semiconductors Unlike integrated circuits, which contain up to tens of millions of transistors, discrete semiconductors are singledevices, usually with two terminals (diodes) or three terminals (transistors). These are either applied asperipheral components on printed circuit boards, or used for special purposes such as very high powerapplications.DMOS Diffused Metal on Silicon Oxide Semiconductor. A process technology used to manufacture integrated circuitsthat can operate at high voltage.DSP Digital signal processor. A specialized microprocessor optimized to process sequences of numbers or symbolswhich represent signals.EMI filtering Electromagnetic interference (or EMI, also called radio frequency interference or RFI when in high frequency orradio frequency) is disturbance that affects an electrical circuit due to either electromagnetic induction orelectromagnetic radiation emitted from an external source. 79Table of ContentseNVM Embedded non-volatile memory (eNVM) offers broad areas of applications for MCU(microcontroller) in Automotive, Mobility, and Security markets with key advantages such as dense boarddesigns with reduced number of parts, reduced system costs, reduced noise, higher system speed due to fastcode access, in-system on-board re-programmability of code and data storage, lower power dissipation,improved reliability, and real-time control application.e-passport A passport with secure data source chip used in providing personalized information.ESD Electrostatic discharge. The sudden and momentary electric current that flows between two objects caused bydirect contact or induced by an electrostatic field. This term is used in the context of electronics to describemomentary unwanted currents that may cause damage to electronic equipment.Fab (or wafer fab) A semiconductor fabrication facility in which front-end manufacturing processes take place.Fabless semiconductor company A semiconductor company that does not have any internal wafer fab manufacturing capacity but insteadfocuses on designing and marketing its products, while outsourcing manufacturing to an independent foundry.FlexRay A new communications protocol designed for the high data transmission rates required by advancedautomotive control systems.Foundry A semiconductor manufacturer that manufactures chips for third parties.Front-end The wafer processing stage of the semiconductors manufacturing process in which electronic circuits areimprinted onto raw silicon wafers. This stage is followed by the packaging, assembly and testing stages, whichtogether comprise the back-end process.HDMI High-Definition Multimedia Interface. A compact audio/video interface for transmitting uncompressed digitaldata.HDTMOS High cell density TMOS (HDTMOS) is an advancement in power MOSFET technology that reduces powerdissipation. This results in lower thermal generation and a reduction in the component’s total part count.HPRF power amplifier High power RF (HPRF) system mainly consists of RF power amplifiers and waveguide distribution system. RFpower amplifiers produce RF energy and waveguides transmit this RF energy to the accelerator modules.HSPA+ Evolved High-Speed Packet Access, or HSPA+, is a technical standard for wireless, broadbandtelecommunication with higher speeds for the end user that are comparable to the newer LTE networks.I2 C A multi-master serial single-ended computer bus that is used to attach low-speed peripherals to a motherboard,embedded system or mobile phone.IC Integrated Circuit. A miniaturized electronic circuit that has been manufactured in the surface of a thin substrateof semiconductor material.ICN 6,8 NXP wafer fab facilities located in Nijmegen, Netherlands, processing 6” or 8” diameter wafers. As of endDecember 2014, only ICN 8 is still in use.i.MX i.MX applications processors are multicore ARM-based solutions for multimedia and display applications withscalability, high performance and low power capabilities.In-process research and development The value allocated to incomplete research and development projects in acquisitions treated as purchases.IoT The Internet of Things (IoT) is the network of physical objects—devices, vehicles, buildings and other itemswhich are embedded with electronics, software, sensors and network connectivity, which enables these objectsto collect and exchange data. The Internet of Things allows objects to be sensed and controlled remotely acrossexisting network infrastructure, creating opportunities for more direct integration of the physical world intocomputer-based systems.LDMOS Laterally Diffused Metal Oxide Semiconductor. A transistor used in RF/microwave power amplifiers.LED Light Emitting Diode. A semiconductor device which converts electricity into light.LIBOR London Interbank Offered Rate. The benchmark rate at which interbank term deposits within the leadings banksin London would be charged if borrowing from other banks.LIN Local Interconnect Network. A network technology used in automotive network architecture. 80Table of ContentsLNA Low-Noise Amplifier. An electronic amplifier used to amplify very weak signals.LTE Long Term Evolution (LTE) is a 4G wireless broadband technology standard for wireless communication ofhigh-speed data for mobile phones and data terminals, increasing the capacity and speed using a different radiointerface together with core network improvements.Memory Any device that can store data in machine readable format. Usually used synonymously with random accessmemory and read only memory.Microcontroller A microprocessor combined with memory and interface integrated on a single circuit and intended to operate asan embedded system.Micron A metric unit of linear measure which equals one millionth of a meter. A human hair is about 100 microns indiameter.MIFARE Trademarked name, owned by NXP, for the most widely used contactless smart card, or proximity card,technology, for payment in transportation systems.Mixed-signal The mixed-signal part of an application solution refers to the devices and sub-system solutions that translatereal world analog signals and phenomena such as radio frequency communication and power signals, sound,light, temperature, pressure, acceleration, humidity and chemical characteristics into digital or power signalsthat can be fed into the central microprocessing or storage devices at the heart of an application systemsolution.MOS Metal Oxide Semiconductor. A metal insulator semiconductor structure in which the insulating layer is anoxide of the substrate material.MOSFET Metal Oxide Semiconductor Field Effect Transistor. A device used for amplifying or switching electronicsignals.Nanometer A metric unit of linear measure which equals one billionth of a meter. There are 1,000 nanometers in 1 micron.NFC Near field communication. A technology which allows devices to establish a secure point-to-point wirelessconnection at very close ranges (within several centimeters), and which is being increasingly adopted in mobiledevices and point-of-sale terminals or other devices.ODM Original Design Manufacturer. A company which manufactures a product which ultimately will be branded byanother firm for sale.OEM Original Equipment Manufacturer. A manufacturer that designs and manufactures its products for the endconsumer market.Power MOS A specific type of metal oxide semiconductor designed to handle large amounts of power.Process technologies The technologies used in front-end processes to convert raw silicon wafers into finished wafers containinghundreds or thousands of chips.QorIQ QorIQ processing platforms are complete system on chip (SoC) processors for networking applications acrosscarrier, enterprise, military and industrial markets.Rectifier An electrical device that converts alternating current to direct current.RF Radio Frequency. A high frequency used in telecommunications. The term radio frequency refers to alternatingcurrent having characteristics such that, if the current is input to an antenna, an electromagnetic (EM) field isgenerated suitable for wireless broadcasting and/or communications.Radio Frequency Identification An RF chip used for identification.Semiconductors Generic term for devices such as transistors and integrated circuits that control the flow of electrical signals. Themost common semiconductor material for use in integrated circuits is silicon.Silicon A type of semiconducting material used to make wafers. Silicon is widely used in the semiconductor industry asa base material.SoC A system on a chip or system on chip (SoC) is an integrated circuit (IC) that integrates all components of acomputer or other electronic system into a single chip. It may contain digital, analog, mixed-signal, and oftenradio-frequency functions—all on a single chip substrate. 81Table of ContentsSolid State Lighting A type of lighting that uses semiconductor light-emitting diodes (LEDs), organic light-emitting diodes (OLED),or polymer light-emitting diodes (PLED) as sources of illumination rather than electrical filaments, plasma orgas.SPI Serial Peripheral Interface Bus. A synchronous serial data link standard that operates in full duplex mode.SS MOS Small signal power discrete including a metal oxide semiconductor field effect transistor.SS Transistor A small signal transistor.Substrate The base material made from silicon on which an integrated circuit is printed.TD-LTE Time-division Long-Term Evolution (TD-LTE), is a 4G telecommunications technology and standard. It is oneof two variants of the Long Term Evolution (LTE) technology standard.TD-SCDMA Time Division Synchronous Code Division Multiple Access (TD-SCDMA) is a 3G format of choice for thenational standard of 3G mobile telecommunication in China.Telematics The science of sending, receiving and storing information via telecommunication devices.Thyristor A four-layer semiconductor that is often used for handling large amounts of electrical power.UART Universal Asynchronous Receiver/Transmitter. An integrated circuit used for serial communications over acomputer or peripheral device serial port.USB Universal Serial Bus. A standard that provides a serial bus standard for connecting devices, usually to acomputer.Wafer A disk made of a semiconducting material, such as silicon, usually either 100, 125, 150, 200 or 300 millimetersin diameter, used to form the substrate of a chip. A finished wafer may contain several thousand chips.White goods A term which refers to large household appliances such as refrigerators, stoves, dishwashers and other similaritems.Yield The ratio of the number of usable products to the total number of manufactured products.ZigBee ZigBee is a technology of data transfer in wireless networks. It has low energy consumption and is designed formulti-channel control systems, alarm systems, and lighting control. It also has other various home and industryapplications. 82Table of ContentsSIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned tosign this Annual Report on its behalf. NXP Semiconductors N.V.(Registrant)/s/ RICK CLEMMER /s/ DANIEL DURNRick Clemmer Daniel DurnChief Executive Officer(Principal Executive Officer) Chief Financial Officer(Principal Financial and Accounting Officer)Date: February 26, 2016 83Table of ContentsINDEX TO CONSOLIDATED FINANCIAL STATEMENTSThe following financial statements and related schedules, together with the report of independent registered public accounting firms thereon, are filedas part of this Annual Report:Consolidated Financial Statements Report of Independent Registered Public Accounting Firm, KPMG Accountants N.V. F-2 Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013 F-3 Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013 F-4 Consolidated Balance Sheets as of December 31, 2015 and 2014 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013 F-6 Consolidated Statements of Changes in Equity for the years ended December 31, 2015, 2014 and 2013 F-7 Notes to the Consolidated Financial Statements F-8 F-1Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and StockholdersNXP Semiconductors N.V.:We have audited the accompanying consolidated balance sheets of NXP Semiconductors N.V. and subsidiaries as of December 31, 2015 and 2014, and therelated consolidated statements of operations, comprehensive income, cash flows, and changes in equity for each of the years in the three-year period endedDecember 31, 2015. We also have audited NXP Semiconductors N.V.’s internal control over financial reporting as of December 31, 2015, based on criteriaestablished in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).NXP Semiconductors N.V.’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financialreporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report onInternal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on theCompany’s internal control over financial reporting based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effectiveinternal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtainingan understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessaryin the circumstances. We believe that our audits provide a reasonable basis for our opinions.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NXP SemiconductorsN.V. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year periodended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also in our opinion, NXP Semiconductors N.V. maintained, inall material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control – IntegratedFramework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).NXP Semiconductors N.V. acquired Freescale Semiconductor, Ltd. including subsidiaries (“Freescale”) in December 2015, and management excluded fromits assessment of the effectiveness of NXP Semiconductors N.V.’s internal control over financial reporting as of December 31, 2015, Freescale’s internalcontrol over financial reporting associated with approximately 10% of consolidated total assets (excluding any purchase price accounting effect) andapproximately 6% of consolidated revenues included in the consolidated financial statements of NXP Semiconductors N.V. and subsidiaries as of and for theyear ended December 31, 2015. Our audit of internal control over financial reporting of NXP Semiconductors N.V. also excluded an evaluation of the internalcontrol over financial reporting of Freescale. /s/ KPMG Accountants N.V.Amstelveen, the NetherlandsFebruary 26, 2016 F-2Table of ContentsNXP Semiconductors N.V.Consolidated Statements of Operations ($ in millions, unless otherwise stated) For the years ended December 31, 2015 2014 2013 Revenue 6,101 5,647 4,815 Cost of revenue (3,314) (3,007) (2,638) Gross profit 2,787 2,640 2,177 Research and development (890) (763) (639) Selling, general and administrative (922) (686) (664) Amortization of acquisition-related intangible assets (223) (152) (232) Other income (expense) 1,263 10 9 Operating income (loss) 2,015 1,049 651 Financial income (expense): Extinguishment of debt — (3) (114) Other financial income (expense) (529) (407) (160) Income (loss) before income taxes 1,486 639 377 Benefit (provision) for income taxes 104 (40) (20) Results relating to equity-accounted investees 9 8 58 Net income (loss) 1,599 607 415 Less: Net income (loss) attributable to non-controlling interests 73 68 67 Net income (loss) attributable to stockholders 1,526 539 348 Earnings per share data: Net income (loss) per common share attributable to stockholders in $: – Basic 6.36 2.27 1.40 – Diluted 6.10 2.17 1.36 Weighted average number of shares of common stock outstanding during the year (in thousands): – Basic 239,764 237,954 248,526 – Diluted 250,116 248,609 255,050 See accompanying notes to the consolidated financial statements. F-3Table of ContentsNXP Semiconductors N.V.Consolidated Statements of Comprehensive Income ($ in millions, unless otherwise stated) For the years ended December 31, 2015 2014 2013 Net income (loss) 1,599 607 415 Other comprehensive income (loss), net of tax: Change in net investment hedge (190) (214) 68 Change in fair value cash flow hedges * — 2 (4) Change in foreign currency translation adjustment 131 140 (27) Change in net actuarial gain (loss) 31 (66) 10 Change in net unrealized gains (losses) available-for-sale securities (1) 1 — Total other comprehensive income (loss) (29) (137) 47 Total comprehensive income (loss) 1,570 470 462 Less: Comprehensive income (loss) attributable to non-controlling interests 73 68 67 Total comprehensive income (loss) attributable to stockholders 1,497 402 395 *Reclassification adjustments included in Cost of revenue in the Consolidated Statements of Operations.See accompanying notes to the consolidated financial statements. F-4Table of ContentsNXP Semiconductors N.V.Consolidated Balance Sheets ($ in millions, unless otherwise stated) As of December 31, 2015 2014 Assets Current assets: Cash and cash equivalents 1,614 1,185 Receivables, net 1,130 593 Assets held for sale 15 — Inventories, net 1,879 755 Other current assets 174 97 Total current assets 4,812 2,630 Non-current assets: Other non-current assets 602 403 Property, plant and equipment, net 2,922 1,123 Identified intangible assets, net 8,790 573 Goodwill 9,228 2,121 Total non-current assets 21,542 4,220 Total assets 26,354 6,850 Liabilities and equity Current liabilities: Accounts payable 1,014 729 Restructuring liabilities - current 197 37 Accrued liabilities 781 534 Short-term debt 556 20 Total current liabilities 2,548 1,320 Non-current liabilities: Long-term debt 8,656 3,936 Restructuring liabilities 43 3 Deferred tax liabilities 2,293 76 Other non-current liabilities 1,011 714 Total non-current liabilities 12,003 4,729 Equity: Non-controlling interests 288 263 Stockholders’ equity: Preferred stock, par value €0.20 per share: Authorized: 645,754,500 (2014: 645,754,500 shares) Issued: none Common stock, par value €0.20 per share: Authorized: 430,503,000 shares (2014: 430,503,000 shares) Issued and fully paid: 346,002,862 shares (2014: 251,751,500 shares) 68 51 Capital in excess of par value 15,150 6,300 Treasury shares, at cost:3,998,982 shares (2014: 19,171,454 shares) (342) (1,219) Accumulated other comprehensive income (loss) 181 210 Accumulated deficit (3,542) (4,804) Total Stockholders’ equity 11,515 538 Total equity 11,803 801 Total liabilities and equity 26,354 6,850 See accompanying notes to the consolidated financial statements. F-5Table of ContentsNXP Semiconductors N.V.Consolidated Statements of Cash Flows ($ in millions, unless otherwise stated) For the years ended December 31, 2015 2014 2013 Cash flows from operating activities: Net income (loss) 1,599 607 415 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization 517 405 514 Share-based compensation 216 133 88 Change in fair value of warrant liability 31 2 — Amortization of discount on debt 39 3 — Amortization of debt issuance costs 11 13 32 Net (gain) loss on sale of assets (1,263) (10) (2) (Gain) loss on extinguishment of debt — 3 114 Results relating to equity-accounted investees (9) (8) (58) Changes in deferred taxes (168) 1 (7) Changes in operating assets and liabilities: (Increase) decrease in receivables and other current assets (78) (111) (37) (Increase) decrease in inventories 82 (42) (22) Increase (decrease) in accounts payable and accrued liabilities 127 222 (68) Decrease (increase) in other non-current assets 30 13 (18) Exchange differences 193 246 (62) Other items 3 (9) 2 Net cash provided by (used for) operating activities 1,330 1,468 891 Cash flows from investing activities: Purchase of identified intangible assets (12) (36) (35) Capital expenditures on property, plant and equipment (341) (329) (215) Proceeds from disposals of property, plant and equipment 7 4 6 Proceeds from disposals of assets held for sale — 6 — Purchase of interests in businesses, net of cash acquired (1,692) (8) (1) Proceeds from sale of interests in businesses, net of cash divested 1,605 1 3 Proceeds from return of equity investment 1 — 4 Other 2 (25) (2) Net cash provided by (used for) investing activities (430) (387) (240) Cash flows from financing activities: Net (repayments) borrowings of short-term debt (2) (17) (11) Amounts drawn under the revolving credit facility — 800 530 Repayments under the revolving credit facility — (950) (610) Repurchase of long-term debt (3,586) (92) (2,429) Principal payments on long-term debt (32) (15) (18) Proceeds from the issuance of long-term debt 3,680 1,150 2,251 Cash paid for debt issuance costs (32) (16) (23) Proceeds from the sale of warrants — 134 — Cash paid for Notes hedge derivatives — (208) — Dividends paid to non-controlling interests (51) (50) (48) Purchase of non-controlling interest shares — — (12) Cash proceeds from exercise of stock options 51 145 177 Purchase of treasury shares (475) (1,435) (405) Hold-back payment on prior acquisitions (2) — — Net cash provided by (used for) financing activities (449) (554) (598) Effect of changes in exchange rates on cash positions (22) (12) — Increase (decrease) in cash and cash equivalents 429 515 53 Cash and cash equivalents at beginning of period 1,185 670 617 Cash and cash equivalents at end of period 1,614 1,185 670 See accompanying notes to the consolidated financial statements. F-6Table of ContentsNXP Semiconductors N.V.Consolidated Statements of Changes in EquityFor the years ended December 31, 2015, 2014 and 2013 ($ in millions, unless otherwise stated) Outstandingnumber ofshares (inthousands) Commonstock Capital inexcess ofpar value Treasurysharesat cost Accumulatedothercomprehensiveincome (loss) Accumulateddeficit Totalstockholders’equity Non-controllinginterests Totalequity Balance as of December 31, 2012 249,026 51 6,090 (58) 300 (5,334) 1,049 235 1,284 Net income (loss) 348 348 67 415 Other comprehensive income 47 47 47 Share-based compensation plans 88 88 88 Treasury shares (11,072) (405) (405) (405) Shares issued pursuant to stock awards 9,627 296 (119) 177 177 Dividends non-controlling interests (48) (48) Purchase of non-controlling interestshares (3) (3) (9) (12) Balance as of December 31, 2013 247,581 51 6,175 (167) 347 (5,105) 1,301 245 1,546 Net income (loss) 539 539 68 607 Other comprehensive income (137) (137) (137) Share-based compensation plans 125 125 125 Treasury shares (23,246) (1,435) (1,435) (1,435) Shares issued pursuant to stock awards 8,245 383 (238) 145 145 Dividends non-controlling interests (50) (50) Balance as of December 31, 2014 232,580 51 6,300 (1,219) 210 (4,804) 538 263 801 Net income (loss) 1,526 1,526 73 1,599 Other comprehensive income (29) (29) (29) Share-based compensation plans 218 218 218 Treasury shares (5,336) (475) (475) (475) Shares issued pursuant to stock awards 5,008 315 (264) 51 51 Issuance of common stock for businesscombination, net of issuance costs 109,751 17 8,632 1,037 9,686 9,686 Dividends non-controlling interests (51) (51) Changes in participation 3 3 Balance as of December 31, 2015 342,003 68 15,150 (342) 181 (3,542) 11,515 288 11,803 See accompanying notes to the consolidated financial statements. F-7Table of ContentsNXP Semiconductors N.V.Notes to the Consolidated Financial StatementsAll amounts in millions of $ unless otherwise stated1 The CompanyNXP Semiconductors N.V. (including our subsidiaries, referred to collectively herein as “NXP”, “NXP Semiconductors”, “we”, “our”, “us” and the“Company”) is a global semiconductor company incorporated in the Netherlands as a Dutch public company with limited liability (naamloze vennootschap).We provide leading High Performance Mixed Signal and Standard Product solutions that leverage our deep application insight and our technology andmanufacturing expertise in radio frequency, analog, power management, interface, security and digital processing products. Our product solutions are used ina wide range of application areas including: automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer, computing andsoftware solutions for mobile phones.On December 7, 2015 we acquired Freescale Semiconductor, Ltd. (“Freescale”). The results presented in the Consolidated Financial Statements andNotes to the Consolidated Financial Statements include Freescale’s results of operations for the period of December 7, 2015 through December 31, 2015 (the“Post-Merger Period”).2 Significant Accounting PoliciesBasis of presentationThe Consolidated Financial Statements include the accounts of the Company together with its consolidated subsidiaries, including NXP B.V. and allentities in which the Company holds a direct or indirect controlling interest, in such a way that the Company would have the power to direct the activities ofthe entity that most significantly impact the entity’s economic performance and the obligation to absorb the losses or the right to receive benefits of theentity that could be potentially significant to the Company. Investments in companies in which the Company exercises significant influence but does notcontrol, are accounted for using the equity method. The Company’s share of the net income of these companies is included in results relating to equity-accounted investees in the consolidated statements of operations.All intercompany balances and transactions have been eliminated in the Consolidated Financial Statements. Net income (loss) includes the portion ofthe earnings of subsidiaries applicable to non-controlling interests. The income (loss) and equity attributable to non-controlling interests are disclosedseparately in the consolidated statements of operations and in the consolidated balance sheets under non-controlling interests.Certain items previously reported have been reclassified to conform to the current period presentation.Use of estimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenue and expenses during the reporting period. Actual results could differ from those estimates.Fair value measurementsFair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at themeasurement date. In the absence of active markets for an identical asset or liability, we develop assumptions based on market observable data and, in theabsence of such data, utilize internal information that we consider to be consistent with what market participants would use in a hypothetical transaction thatoccurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our marketassumptions. Priority is given to observable inputs. These two types of inputs form the basis for the following fair value hierarchy. • Level 1: Quoted prices for identical assets or liabilities in active markets. • Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets thatare not active; and valuations based on models where the inputs are observable or where the significant value drivers are observable. • Level 3: Significant inputs to the valuation model are unobservable.Foreign currenciesThe Company uses the U.S. dollar as its reporting currency. The functional currency of the holding company (defined as NXP SemiconductorsN.V. and NXP B.V.) is the euro. As a result of the acquisition of Freescale, NXP has concluded that the functional currency of the holding company willbecome the U.S. dollar from January 1, 2016 forward. For consolidation purposes, the financial statements of the entities within the Company with afunctional currency other than the U.S. dollar, are translated into U.S. dollars. Assets and liabilities are translated using the exchange rates on the applicablebalance sheet dates. Income and expense items in the statements of operations, statements of comprehensive income and statements of cash flows aretranslated at monthly exchange rates in the periods involved. F-8Table of ContentsThe effects of translating the financial position and results of operations from functional currencies to reporting currency are recognized in othercomprehensive income and presented as a separate component of accumulated other comprehensive income (loss) within stockholder’s equity. If theoperation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is recorded under non-controlling interests.The following table sets out the exchange rates for U.S. dollars into euros applicable for translation of NXP’s financial statements for the periodsspecified. $ per €1 period end average(1) high low 2015 1.0915 1.1150 1.0869 1.2155 2014 1.2155 1.3262 1.2155 1.3857 2013 1.3765 1.3285 1.2818 1.3765 (1)The average rates are the average rates based on monthly quotations.Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions orvaluation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of operations, except when theforeign exchange exposure is part of a qualifying cash flow or net investment hedge accounting relationship, in which case the related foreign exchangegains and losses are recognized directly in other comprehensive income to the extent that the hedge is effective and presented as a separate component ofaccumulated other comprehensive income (loss) within stockholders’ equity. To the extent that the hedge is ineffective, such differences are recognized inthe statement of operations. Currency gains and losses on intercompany loans that have the nature of a permanent investment are recognized as translationdifferences in other comprehensive income and are presented as a separate component of accumulated other comprehensive income (loss) within equity.Derivative financial instruments including hedge accountingThe Company uses derivative financial instruments in the management of its foreign currency risks and the input costs of gold for a portion ofour anticipated purchases within the next 12 months.The Company measures all derivative financial instruments based on fair values derived from market prices of the instruments or from optionpricing models, as appropriate, and records these as assets or liabilities in the balance sheet. Changes in the fair values are immediately recognized in thestatement of operations unless cash flow hedge accounting is applied.Changes in the fair value of a derivative that is highly effective and designated and qualifies as a cash flow hedge are recorded in accumulatedother comprehensive income (loss), until earnings are affected by the variability in cash flows of the designated hedged item. The application of cash flowhedge accounting for foreign currency risks is limited to transactions that represent a substantial currency risk that could materially affect the financialposition of the Company.Foreign currency gains or losses arising from the translation of a financial liability designated as a hedge of a net investment in a foreignoperation are recognized directly in other comprehensive income, to the extent that the hedge is effective, and are presented as a separate component ofaccumulated other comprehensive income (loss) within stockholders equity.To the extent that a hedge is ineffective, the ineffective portion of the fair value change is recognized in the consolidated statement ofoperations. When the hedged net investment is disposed of, the corresponding amount in the accumulated other comprehensive income is transferred to thestatement of operations as part of the profit or loss on disposal.On initial designation of the hedge relationship between the hedging instrument and hedged item, the Company documents this relationship,including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be usedto assess the effectiveness of the hedging relationship. The Company makes an assessment, both at the inception of the hedge relationship as well as on anongoing basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of therespective hedged items attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80-125 percent.When cash flow hedge accounting is discontinued because it is not probable that a forecasted transaction will occur within a period of twomonths from the originally forecasted transaction date, the Company continues to carry the derivative on the consolidated balance sheets at its fair value, andgains and losses that were accumulated in other comprehensive income are recognized immediately in earnings. In situations in which hedge accounting isdiscontinued, the Company continues to carry the derivative at its fair value on the consolidated balance sheets, and recognizes any changes in its fair valuein earnings. F-9Table of ContentsCash and cash equivalentsCash and cash equivalents include all cash balances and short-term highly liquid investments with a maturity of three months or less atacquisition that are readily convertible into known amounts of cash. Cash and cash equivalents are stated at face value which approximates fair value.ReceivablesReceivables are carried at amortized cost, net of allowances for doubtful accounts and net of rebates and other contingent discounts granted todistributors. When circumstances indicate a specific customer’s ability to meet its financial obligation to us is impaired, we record an allowance againstamounts due and value the receivable at the amount reasonably expected to be collected. For all other customers, we evaluate our trade accounts receivablefor collectability based on numerous factors including objective evidence about credit-risk concentration, collective debt risk based on average historicallosses, and specific circumstances such as serious adverse economic conditions in a specific country or region.InventoriesInventories are stated at the lower of cost or market, less advance payments on work in progress. The cost of inventories is determined using thefirst-in, first-out (FIFO) method. An allowance is made for the estimated losses due to obsolescence. This allowance is determined for groups of productsbased on purchases in the recent past and/or expected future demand and market conditions. Abnormal amounts of idle facility expense and waste are notcapitalized in inventory. The allocation of fixed production overheads to the inventory cost is based on the normal capacity of the production facilities.Property, plant and equipmentProperty, plant and equipment are stated at cost, less accumulated depreciation and impairment losses. Depreciation is calculated using thestraight-line method over the expected economic life of the asset. Depreciation of special tooling is also based on the straight-line method unless adepreciation method other than the straight-line method better represents the consumption pattern. Gains and losses on the sale of property, plant andequipment are included in other income and expense. Plant and equipment under capital leases are initially recorded at the lower of the fair value of theleased property or the present value of minimum lease payments. These assets and leasehold improvements are amortized using the straight-line method overthe shorter of the lease term or the estimated useful life of the asset.GoodwillWe record goodwill when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired.We assign the goodwill to our reporting units based on the relative expected fair value provided by the acquisition. We perform an annual impairmentassessment in the fourth quarter of each year, or more frequently if indicators of potential impairment exist, which includes evaluating qualitative andquantitative factors to assess the likelihood of an impairment of a reporting unit’s goodwill. We perform impairment tests using a fair value approach whennecessary. The reporting unit’s carrying value used in an impairment test represents the assignment of various assets and liabilities, excluding certaincorporate assets and liabilities, such as cash, investments and debt.Identified intangible assetsLicensed technology and patents are generally amortized on a straight-line basis over the periods of benefit. We amortize all acquisition-relatedintangible assets that are subject to amortization over their estimated useful life based on economic benefit. Acquisition-related in-process R&D assetsrepresent the fair value of incomplete R&D projects that had not reached technological feasibility as of the date of acquisition; initially, these assets are notsubject to amortization. Assets related to projects that have been completed are subject to amortization, while assets related to projects that have beenabandoned are impaired and expensed to R&D. In the quarter following the period in which identified intangible assets become fully amortized, we removethe fully amortized balances from the gross asset and accumulated amortization amounts.We perform a quarterly review of finite-lived identified intangible assets to determine whether facts and circumstances indicate that the usefullive is shorter than we had originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assessrecoverability by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives againsttheir respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If an asset’s usefullife is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life. Weperform an annual impairment assessment in the fourth quarter of each year for indefinite-lived intangible assets, or more frequently if indicators of potentialimpairment exist, to determine whether it is more likely than not that the carrying value of the assets may not be recoverable. If necessary, a quantitativeimpairment test is performed to compare the fair value of the indefinite-lived intangible asset with its carrying value. Impairments, if any, are based on theexcess of the carrying amount over the fair value of those assets. F-10Table of ContentsResearch and developmentCosts of research and development are expensed in the period in which they are incurred, except for in-process research and development assetsacquired in business combinations, which are capitalized and, after completion, are amortized over their estimated useful lives.AdvertisingAdvertising costs are expensed when incurred.Debt issuance costsDirect costs incurred to obtain financings are capitalized and subsequently amortized over the term of the debt using the effective interest ratemethod. Upon extinguishment of any related debt, any unamortized debt issuance costs are expensed immediately.Revenue recognitionThe Company’s revenue is derived from sales to distributors, made-to-order sales to Original Equipment Manufacturers (“OEMs”) and similarcustomers.Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or the service has been provided, the sales priceis fixed or determinable, and collection is reasonably assured, based on the terms and conditions of the sales contract. For made-to-order sales, these criteriaare met at the time the product is shipped and delivered to the customer and title and risk have passed to the customer. Acceptance of the product by thecustomer is generally not contractually required, since, for made-to-order customers, design approval occurs before manufacturing and subsequently deliveryfollows without further acceptance protocols. Payment terms used are those that are customary in the particular geographic market. When management hasestablished that all aforementioned conditions for revenue recognition have been met and no further post-shipment obligations exist, revenue is recognized.For sales to distributors, revenue is recognized upon sale to the distributor (sell-in accounting). The same recognition principles apply andsimilar terms and conditions as for sales to other customers are applied. However, for some distributors contractual arrangements are in place, which allowthese distributors to return products if certain conditions are met. These conditions generally relate to the time period during which a return is allowed andreflect customary conditions in the particular geographic market. Other return conditions relate to circumstances arising at the end of a product life cycle,when certain distributors are permitted to return products purchased during a pre-defined period after the Company has announced a product’s pendingdiscontinuance. However, long notice periods associated with these announcements prevent significant amounts of product from being returned. Repurchaseagreements with OEMs or distributors are not entered into by the Company.Distributor reserves estimate the impact of credits granted to distributors under certain programs common in the semiconductor industry wherebydistributors receive certain price adjustments to meet individual competitive opportunities, or are allowed to return or scrap a limited amount of product inaccordance with contractual terms agreed upon with the distributor, or receive price protection credits when our standard published prices are lowered fromthe price the distributor paid for product still in its inventory. The Company’s policy is to use a rolling historical experience rate, as well as a prospectiveview of products and pricing in the distribution channel for distributors who participate in our volume rebate incentive program, in order to estimate theproper provision for this program at the end of any given reporting period. We continually monitor the actual claimed allowances against our estimates, andwe adjust our estimates as appropriate to reflect trends in pricing environments and inventory levels. Distributor reserves are also adjusted when recenthistorical data does not represent anticipated future activity.For sales where return rights exist, the Company has determined, based on historical data, that only a very small percentage of the sales of thistype to distributors is actually returned. In accordance with this historical data, a pro rata portion of the sales to these distributors is not recognized butdeferred until the return period has lapsed or the other return conditions no longer apply.Revenue is recorded net of sales taxes, customer discounts, rebates and other contingent discounts granted to distributors. We include shippingcharges billed to customers in revenue and include the related shipping costs in cost of revenue.RestructuringThe provision for restructuring relates to the estimated costs of initiated restructurings that have been approved by Management. When suchplans require discontinuance and/or closure of lines of activities, the anticipated costs of closure or discontinuance are recorded at fair value when theliability has been incurred. The Company determines the fair value based on discounted projected cash flows in the absence of other observable inputs suchas quoted prices. The restructuring liability includes the estimated cost of termination benefits provided to former or inactive employees after employmentbut before retirement, costs to terminate leases and other contracts, and selling costs associated with assets held for sale and other costs related to the closureof facilities. One-time employee termination benefits are recognized ratably over the future service period when those employees are required to renderservices to the Company, if that period exceeds 60 days or a longer legal notification period. However, generally, employee termination benefits are coveredby a contract or an ongoing benefit arrangement and are recognized when it is probable that the employees will be entitled to the benefits and the amountscan be reasonably estimated. F-11Table of ContentsFinancial income and expenseFinancial income and expense is comprised of interest income on cash and cash equivalent balances, the interest expense on borrowings, themark-to-market of our warrant liability, foreign exchange results on our U.S. dollar denominated debt that resides in a Euro entity, the accretion of thediscount or premium on issued debt, the gain or loss on the disposal of financial assets, impairment losses on financial assets and gains or losses on hedginginstruments recognized in the statement of operations. As of January 1, 2016, as a result of the acquisition of Freescale, NXP has concluded that thefunctional currency of the holding company is USD. Beginning from January 1, 2016, the warrants will now be classified in stockholders’ equity, and mark-to-market accounting will no longer be applicable. In addition our U.S. dollar-denominated notes, term loans and New RCF agreements will no longer needto be re-measured.Borrowing costs that are not directly attributable to the acquisition, construction or production of property, plant and equipment are recognizedin the statement of operations using the effective interest method.Income taxesDeferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets andliabilities and their reported amounts. Measurement of deferred tax assets and liabilities is based upon the enacted tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities for income taxes or withholdingtaxes on dividends from subsidiaries are recognized in situations where the company does not consider the earnings indefinitely reinvested and to the extentthat the withholding taxes are not expected to be refundable.Deferred tax assets, including assets arising from loss carryforwards, are recognized, net of a valuation allowance, if based upon the availableevidence it is more likely than not that the asset will be realized.The income tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained uponexamination by the relevant taxing authorities. The income tax benefit recognized is measured based on the largest benefit that is more than 50 percent likelyto be realized upon resolution of the uncertainty. The liability for unrecognized tax benefits and the related interest and penalties is recorded under accruedliabilities and other non-current liabilities in the balance sheet based on the timing of the expected payment. Penalties are recorded as income tax expense,whereas interest is reported as financial expense in the statement of operations.Postretirement benefitsThe Company’s employees participate in pension and other postretirement benefit plans in many countries. The costs of pension and otherpostretirement benefits and related assets and liabilities with respect to the Company’s employees participating in the various plans are based upon actuarialvaluations.Some of the Company’s defined-benefit pension plans are funded with plan assets that have been segregated and restricted in a trust, foundationor insurance company to provide for the pension benefits to which the Company has committed itself.The net liability or asset recognized in the balance sheet in respect of the postretirement plans is the present value of the projected benefitobligation less the fair value of plan assets at the balance sheet date. Most of the Company’s plans are unfunded and result in a provision or a net liability.For the Company’s major plans, the discount rate is derived from market yields on high quality corporate bonds. Plans in countries without adeep corporate bond market use a discount rate based on the local government bond rates.Benefit plan costs primarily represent the increase in the actuarial present value of the obligation for benefits based on employee service duringthe year and the interest on this obligation in respect of employee service in previous years, net of the expected return on plan assets and net of employeecontributions.Actuarial gains and losses arise mainly from changes in actuarial assumptions and differences between actuarial assumptions and what hasactually occurred. They are recognized in the statement of operations, over the expected average remaining service periods of the employees only to theextent that their net cumulative amount exceeds 10% of the greater of the present value of the obligation or of the fair value of plan assets at the end of theprevious year (the corridor). Events which invoke a curtailment or a settlement of a benefit plan will be recognized in our statement of operations.In calculating obligation and expense, the Company is required to select actuarial assumptions. These assumptions include discount rate,expected long-term rate of return on plan assets, assumed health care trend rates and rates of increase in compensation costs determined based on currentmarket conditions, historical information and consultation with and input from our actuaries. Changes in the key assumptions can have a significant impactto the projected benefit obligations, funding requirements and periodic cost incurred.Unrecognized prior-service costs related to the plans are amortized to the statements of operations over the average remaining service period ofthe active employees. F-12Table of ContentsContributions to defined-contribution and multi-employer pension plans are recognized as an expense in the statements of operations asincurred.The Company determines the fair value of plan assets based on quoted prices or comparable prices for non-quoted assets. For a defined-benefitpension plan, the benefit obligation is the projected benefit obligation; for any other postretirement defined benefit plan it is the accumulated postretirementbenefit obligation.The Company recognizes as a component of other comprehensive income, net of taxes, the gains or losses and prior service costs that ariseduring the year but are not recognized as a component of net periodic benefit cost. Amounts recognized in accumulated other comprehensive income,including the gains or losses and the prior services costs are adjusted as they are subsequently recognized as components of net periodic benefit costs.For all of the Company’s postretirement benefit plans, the measurement date is December 31, our year-end.Share-based compensationWe recognize compensation expense for all share-based awards based on the grant-date estimated fair values, net of an estimated forfeiture rate.We use the Black-Scholes option pricing model to determine the estimated fair value for certain awards. Share-based compensation cost for restricted shareunits (“RSU”s) with time-based vesting is measured based on the closing fair market value of our common stock on the date of the grant, reduced by thepresent value of the estimated expected future dividends, and then multiplied by the number of RSUs granted. Share-based compensation cost forperformance-based share units (“PSU”s) granted with performance or market conditions is measured using a Monte Carlo simulation model on the date ofgrant.The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods in ourConsolidated Statements of Operations. For stock options and RSUs, the grant-date value, less estimated pre-vest forfeitures, is expensed on a straight-linebasis over the vesting period. PSUs are expensed using a graded vesting schedule. The vesting period for stock options is generally four years, for RSUs isgenerally three years and PSUs is one to three years.Earnings per shareBasic earnings per share attributable to stockholders is calculated by dividing net income or loss attributable to stockholders of the Company bythe weighted average number of common shares outstanding during the period.To determine diluted share count, we apply the treasury stock method to determine the dilutive effect of outstanding stock option shares, RSUs,PSUs and Employee Stock Purchase Plan (“ESPP”) shares. Under the treasury stock method, the amount the employee must pay for exercising share-basedawards, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of excess tax benefits that would berecorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.Concentration of riskFinancial instruments, including derivative financial instruments, that may potentially subject NXP to concentrations of credit risk, consistprincipally of cash and cash equivalents, short-term investments, long-term investments, accounts receivable and forward contracts.We sell our products to OEMs and to distributors in various markets, who resell these products to OEMs, or their subcontract manufacturers. Oneof our distributors accounted for 14% of our revenue in 2015, 13% in 2014 and 11% in 2013 and one other distributor accounted for 14% of our revenue in2015 and 13% in 2014 and less than 10% in 2013. No other distributor accounted for greater than 10% of our revenue for 2015, 2014 or 2013. No individualOEM for which we had direct sales to accounted for more than 10% of our revenue for 2015, 2014 or 2013.Credit exposure related to NXP’s foreign currency forward contracts is limited to the realized and unrealized gains on these contracts.NXP is party to certain hedge transactions related to its 2019 Cash Convertible Senior Notes. NXP is subject to the risk that the counterparties tothese transactions may not be able to fulfill their obligations under these hedge transactions.NXP purchased options and issued warrants to hedge potential cash payments in excess of the principal and contractual interest related to its2019 Cash Convertible Senior Notes, which were issued during fiscal 2014. The 2019 Cash Convertible Senior Note hedges and warrants are adjusted to fairvalue each reporting period and unrealized gains and losses are reflected in NXP’s Consolidated Statements of Operations. Because the fair value of the 2019Cash Convertible Senior Notes embedded conversion derivative and the 2019 Cash Convertible Senior Notes hedges are designed to have similar offsettingvalues, there was no impact to NXP’s Consolidated Statements of Operations relating to these adjustments to fair value, the fair value adjustment for thewarrant resulted in an unrealized loss of $31 million in the Consolidated Statements of Operations.The Company is using outside suppliers or foundries for a portion of its manufacturing capacity. F-13Table of ContentsWe have operations in Europe and Asia subject to collective bargaining agreements which could pose a risk to the Company in the near term butwe do not expect that our operations will be disrupted if such is the case.Accounting standards adopted in 2015In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which includes amendments that change therequirements for reporting discontinued operations and require additional disclosures about discontinued operations. Under the new guidance, only disposalsrepresenting a strategic shift in operations - that is, a major effect on the organization’s operations and financial results - should be presented as discontinuedoperations. Additionally, the ASU requires expanded disclosures about discontinued operations that will provide financial statement users with moreinformation about the assets, liabilities, income, and expenses of discontinued operations. The Company adopted this guidance in the first quarter of 2015.As a result of this guidance the Company anticipates future disposals of businesses which historically would have been classified as discontinued operationswill no longer qualify for presentation as discontinued operations in its consolidated financial statements.In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of DebtIssuance Costs. The new standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a directdeduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU No. 2015-15, Interest -Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,which clarified that debt issuance costs related to line-of-credit arrangements can be presented in the balance sheet as an asset and amortized over the term ofthe line-of-credit arrangement. We adopted these standards as of December 31, 2015 with retroactive application. The adoption of these standards did nothave a significant impact on our financial position or results of operations.New standards to be adopted after 2015In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), whichsupersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognizerevenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods orservices. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, whichdelayed the effective date of the new standard from January 1, 2017 to January 1, 2018. The FASB also agreed to allow entities to choose to adopt thestandard as of the original effective date. We are currently evaluating the method of adoption and the potential impact that Topic 606 may have on ourfinancial position and results of operations.In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’sAccounting for Fees Paid in a Cloud Computing Arrangement. Under this standard, if a cloud computing arrangement includes a software license, thesoftware license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computingarrangement does not include a software license, the arrangement should be accounted for as a service contract. The new standard will be effective for us onJanuary 1, 2016. The adoption of this standard is not expected to have a significant impact on our financial position or results of operations.In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The new standard appliesonly to inventory for which cost is determined by methods other than last-in, first-out and the retail inventory method, which includes inventory that ismeasured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizablevalue. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, andtransportation. The new standard will be effective for us on January 1, 2017. The adoption of this standard is not expected to have a significant impact on ourfinancial position or results of operations.In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The new standard requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurementperiod in the reporting period in which the adjustment amounts are determined and sets forth new disclosure requirements related to the adjustments. The newstandard will be effective for us on January 1, 2016. The adoption of this standard is not expected to have a significant impact on our financial position orresults of operations.In November 2015 the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740), which changes how deferredtaxes are classified on our balance sheets and is effective for financial statements issued for annual periods beginning after December 15, 2016, with earlyadoption permitted. ASU 2015-17 requires all deferred tax assets and liabilities to be classified as non-current. The Company will adopt this standard as ofJanuary 1, 2016 with retrospective application. The adoption of this standard is not expected to have a significant impact on our financial position or resultsof operations. F-14Table of ContentsIn January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets andFinancial Liabilities (Subtopic 825-10). The pronouncement requires equity investments (except those accounted for under the equity method of accounting,or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public businessentities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financialassets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose themethod(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost.The new standard will be effective for us on January 1, 2018. The expected adoption method of ASU 2016-01 is being evaluated by the Company and theadoption is not expected to have a significant impact on our financial position or results of operations.3 Acquisitions and Divestments2015On December 7, 2015, we acquired Freescale for a purchase price of $11,639 million. The consolidated financial statements include the results ofoperations of Freescale as of the acquisition date. Unaudited pro forma results of operations for the Freescale acquisition are presented below. Acquisitionrelated transaction costs ($42 million) such as legal, accounting and other related expenses were recorded as a component of selling, general andadministrative expense in our consolidated statements of operations.Under the terms of the merger agreement, each holder of Freescale common shares received (i) 0.3521 of an NXP ordinary share and (ii) $6.25 incash per such common share.The total purchase price amounts to $11,639 million and consisted of the following: Cash payment of $6.25 per Freescale common share 1,948 Total value of NXP ordinary shares delivered 9,449 Value of NXP restricted share units delivered to holders of Freescale restricted shareunits and performance-based restricted share units 157 Value of NXP stock options delivered to holders of Freescale stock options 85 Total purchase price 11,639 The total purchase price has been preliminarily allocated to the tangible and identified intangible assets acquired and liabilities assumed basedon their estimated fair values as of the date of the merger, December 7, 2015. The fair value of acquired tangible and identified intangible assets is determinedbased on inputs that are unobservable and significant to the overall fair value measurement. As such, acquired tangible and identified intangible assets areclassified as Level 3 assets. The measurement period remains open pending the completion of valuation procedures related to the acquired assets andassumed liabilities, included the related income tax effects. As we obtain additional information, we may further revise our preliminary purchase priceallocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes maybe material.The identified intangible assets consist of existing technology and platform technology, In-Process Research & Development (“IPR&D”), orderbacklog, trade name and customer relationships. The estimated useful lives range between one year and nineteen years.The preliminary allocation of the purchase price is as follows: Total purchase price 11,639 Estimated fair value of net tangible assets acquired and liabilities assumed: Cash and cash equivalents 427 Accounts receivable, net 511 Inventories, net 1,285 Other current assets 93 Property, plant and equipment 1,827 Other non-current assets 64 Accounts payable, accrued liabilities and other current liabilities (711) Deferred taxes (2,325) Other long-term liabilities (329) Long-term debt (5,091) (4,249) F-15Table of ContentsEstimated fair value (and estimated useful lives) of identified intangible assets acquired: Customer relationships (included in customer-related) (19 years) 764 Developed technology (included in technology-based) (5 years) 5,371 Sales order backlog (included in marketing-related) (1 year) 190 Trade name (included in marketing-related) (5 years) 81 In-process research and development* 2,017 Other 41 8,464 Estimated goodwill 7,424 *Acquired in-process research and development (“IPR&D”) is an intangible asset classified as an indefinite lived asset until the completion orabandonment of the associated research and development effort. IPR&D will be amortized over an estimated useful life to be determined at the date theassociated research and development effort is completed, or expensed immediately when, and if, the project is abandoned. Acquired IPR&D is notamortized during the period that it is considered indefinite lived, but rather is subject to annual testing for impairment or when there are indicators forimpairment.Goodwill is primarily attributable to the anticipated synergies and economies of scale expected from the operations of the combined companyand to the assembled workforce of Freescale. All of the goodwill has been allocated to NXP’s HPMS segment.Goodwill is not deductible for income tax purposes.Pro forma financial information (unaudited)The following unaudited pro forma financial information presents combined consolidated results of operations for each of the fiscal yearspresented, as if Freescale had been acquired as of January 1, 2014: 2015 2014 Revenue 9,850 9,904 Net income (loss) attributable to stockholders (84) (277) Net income (loss) per common share attributable to stockholders: - Basic (0.25) (0.81) - Diluted (0.25) (0.81) The pro forma information excludes results of operations of NXP’s RF Power business and includes adjustments to amortization and depreciationfor identified intangible assets and property, plant and equipment acquired, adjustments to share-based compensation expense and interest expense for theadditional indebtedness incurred to complete the acquisition. The pro forma results have been prepared for comparative purposes only and do not purport tobe indicative of the revenue or operating results that would have been achieved had the acquisition actually taken place as of January 1, 2014 or of theresults of future operations of the combined business. In addition, these results are not intended to be a projection of future results and do not reflect synergiesthat might be achieved from the combined operations.Other acquisitionsIn addition to the above mentioned acquisition of Freescale, we completed two other acquisitions qualifying as business combinations: theacquisition of Quintic’s Bluetooth Low Energy (“BTLE”) and Wearable businesses, located in China and the USA, and the acquisition of Athena SCS Ltd.(“Athena”), located in the United Kingdom. Both acquisitions were not significant to our consolidated results of operations.The aggregate purchase price consideration of $102 million was allocated to goodwill ($40 million), other intangible assets ($68 million) andnet liabilities assumed ($6 million). The other intangible assets relate to core technology ($29 million) with an amortization period varying up to 14 years,existing technology, ($17 million) with an amortization period varying up to 5 years and in-process R&D ($22 million).The results of BTLE are consolidated in the Secure Connected Devices business line. The results of Athena are consolidated in the SecureIdentification Solutions business line. Both business lines are part of the reportable segment HPMS. F-16Table of ContentsDivestmentsIn February 2015, we announced the establishment of a 49% owned joint venture (JV) with JianGuang Asset Management Co., Ltd. (JACCapital) in China to combine NXP’s advanced technology from its Bipolar Power business line with JAC Capital’s connections in the Chinese manufacturingnetwork and distribution channels. This transaction closed on November 9, 2015. The results of the Bipolar Power business were consolidated in thereportable segment SP.In May 2015, we announced an agreement with JianGuang Asset Management Co., Ltd. (JAC Capital) in China to sell NXP’s RF Power Business.This transaction closed on December 7, 2015. The results of the RF Power business were consolidated in the reportable segment HPMS.The gain on the sale of these businesses of $1,257 million is included in other income (expense).2014 and 2013There were no significant acquisitions or divestments in 2014 and 2013.4 Supplemental Financial InformationStatement of Operations InformationDepreciation, amortization and impairmentDepreciation and amortization, including impairment charges, are as follows: 2015 2014 2013 Depreciation of property, plant and equipment 262 219 246 Amortization of internal use software 26 31 32 Amortization of other identified intangible assets 229 155 236 517 405 514 Depreciation of property, plant and equipment is primarily included in cost of revenue.Change in accounting estimateIn December 2013, we determined that the estimated useful life of the machinery and equipment used in our Standard Products front-end andback-end manufacturing processes had increased to ten years, from the five to seven years previously estimated.We believe that the change in estimated useful life better reflects the future usage of this equipment. The effect of this change was recognizedprospectively as a change in accounting estimate beginning January 1, 2014. The change in estimate resulted in a decrease in depreciation expense ofapproximately $26 million for the year ending December 31, 2014.Other income (expense) 2015 2014 2013 Result on disposal of businesses 1,257 6 — Result on disposal of properties 6 3 2 Other income (expense) — 1 7 1,263 10 9 Financial income (expense) 2015 2014 2013 Interest income 6 3 3 Interest expense (227) (158) (214) Total interest expense, net (221) (155) (211) Net gain (loss) on extinguishment of debt — (3) (114) Foreign exchange rate results (193) (246) 62 Change in fair value of the warrant liability (31) (2) — Miscellaneous financing costs/income, net (84) (4) (11) Total other financial income (expense) (308) (255) (63) Total (529) (410) (274) F-17Table of ContentsThe Company has applied net investment hedging since May, 2011. The U.S. dollar exposure of the net investment in U.S. dollar functionalcurrency subsidiaries of $1.7 billion has been hedged by certain U.S. dollar-denominated notes. As a result in 2015 a charge of $190 million (2014: a chargeof $214 million; 2013: a benefit of $68 million) was recorded in other comprehensive income (loss) relating to the foreign currency result on the U.S. dollar-denominated notes that are recorded in a euro functional currency entity.Equity- accounted investeesResults related to equity-accounted investees at the end of each period were as follows: 2015 2014 2013 Company’s share in income (loss) 8 8 7 Other results 1 — 51 9 8 58 Other results relating to equity-accounted investees amounted to a gain of $51 million in 2013. The gain in 2013 primarily reflects a $46 millionrelease of the contingent liability related to an arbitration commenced by STMicroelectronics (“ST”). By ruling of April 2, 2013, the ICC arbitration tribunaldismissed all claims made by ST in this arbitration. No appeal is available to ST. Based on this award, the provision amounting to $46 million, established in2012, was released.The total carrying value of investments in equity-accounted investees is summarized as follows: 2015 2014 Shareholding % Amount Shareholding % Amount ASMC 27 21 27 20 ASEN 40 46 40 40 WeEn 49 59 — — Others 15 11 141 71 Investments in equity-accounted investees are included in Corporate and Other.The fair value of NXP’s shareholding in the publicly listed company ASMC based on the quoted market price at December 31, 2015 is $48million.Cash Flow Information 2015 2014 2013 Net cash paid during the period for: Interest 172 138 174 Income taxes 40 24 34 Net gain (loss) on sale of assets: Cash proceeds from the sale of assets 1,612 11 6 Book value of these assets (349) (10) (4) Non-cash gains (losses) — 9 — 1,263 10 2 Non-cash investing and financing information: Assets received in lieu of cash from the sale of businesses: Fair value of available-for-sale securities — 9 — Issuance of common stock for business combinations 9,686 — — Exchange of Term Loan A1 for Term Loan E — 400 — Exchange of Term Loan C for Term Loan D — — 400 Cash flows from financing activities in 2013 included $12 million in connection with the acquisition of the remaining 40% non-controllinginterest share from Jilin Sino-Microelectronics Co. Ltd. F-18Table of Contents5 Restructuring ChargesAt each reporting date, we evaluate our restructuring liabilities, which consist primarily of termination benefits, to ensure that our accruals arestill appropriate. In December 2015, we began the implementation of the planned restructuring and cost reduction activities in connection with theacquisition of Freescale. We recognized $216 million of employee severance costs and $23 million of other exit costs related to this plan in 2015.There were no material new restructuring projects in 2014 and 2013The following table presents the changes in the position of restructuring liabilities in 2015 by segment: BalanceJanuary 1,2015 Additions Utilized Released Otherchanges(1) BalanceDecember 31,2015 HPMS 14 226 (17) (1) 12 234 SP 5 8 (6) — (1) 6 Corporate and Other 21 5 (23) (1) (2) — 40 239 (46) (2) 9 240 (1)Other changes primarily related to translation differences and internal transfersThe total restructuring liability as of December 31, 2015 of $240 million is classified in the balance sheet under current liabilities ($197 million)and non-current liabilities ($43 million).The utilization of the restructuring liabilities mainly reflects the execution of ongoing restructuring programs the Company initiated in earlieryears.The following table presents the changes in the position of restructuring liabilities in 2014 by segment: BalanceJanuary 1,2014 Additions Utilized Released Otherchanges(1) BalanceDecember 31,2014 HPMS 46 6 (29) (4) (5) 14 SP 31 14 (35) (4) (1) 5 Corporate and Other 40 24 (34) (8) (1) 21 117 44 (98) (16) (7) 40 (1)Other changes primarily related to translation differences and internal transfersThe total restructuring liability as of December 31, 2014 of $40 million is classified in the balance sheet under current liabilities ($37 million)and non-current liabilities ($3 million).In 2014 the Company recorded $44 million of additional restructuring liabilities which largely consisted of workforce reduction charges as aresult of redundancy at our ICN 8 wafer fab in Nijmegen ($16 million) and our wafer fab in Hamburg ($5 million), workforce reduction charges of $4 millionfrom the closure of the product line Standard Linear in Hamburg and $4 million from the transfer of R&D activities of Smart Analog from Nijmegen to otherlocations.Releases of restructuring liabilities of $16 million were recorded in 2014. These releases related mainly to the earlier OPEX reduction programand the workforce reduction actions we took in 2014.The utilization of the restructuring liabilities mainly reflects the execution of ongoing restructuring programs the Company initiated in earlieryears.The components of restructuring charges less releases recorded in the liabilities in 2015, 2014 and 2013 are as follows: 2015 2014 2013 Personnel lay-off costs 239 43 10 Other exit costs 27 1 17 Release of provisions/accruals (2) (16) (21) Net restructuring charges 264 28 6 F-19Table of ContentsThe restructuring charges less releases recorded in operating income are included in the following line items in the statement of operations: 2015 2014 2013 Cost of revenue 18 16 — Selling, general and administrative 155 3 7 Research & development 91 9 (1) Net restructuring charges 264 28 6 6 Provision for Income TaxesIn 2015, NXP generated income before income taxes of $1,486 million (2014: $639 million; 2013: $377 million). The components of income(loss) before income taxes are as follows: 2015 2014 2013 Netherlands 1,528 398 205 Foreign (42) 241 172 1,486 639 377 The components of the benefit (provision) for income taxes are as follows: 2015 2014 2013 Current taxes: Netherlands (13) (7) (10) Foreign (51) (32) (17) (64) (39) (27) Deferred taxes: Netherlands (4) 2 1 Foreign 172 (3) 6 168 (1) 7 Total benefit (provision) for income taxes 104 (40) (20) A reconciliation of the statutory income tax rate in the Netherlands as a percentage of income (loss) before income taxes and the effective incometax rate is as follows: (in percentages) 2015 2014 2013 Statutory income tax in the Netherlands 25.0 25.0 25.0 Increase (reduction) in rate resulting from: Rate differential local statutory rates versus statutory rate of the Netherlands (4.3) (2.5) (3.4) Net change in valuation allowance (13.8) 2.4 5.3 Prior year adjustments — 0.5 (0.8) Non-taxable income (0.1) (0.3) (1.1) Non-deductible expenses/losses 4.0 5.6 6.6 Sale of non-deductible goodwill 2.7 — — Other taxes and tax rate changes 1.0 — 2.3 Tax effects of remitted and unremitted earnings and withholding taxes 0.1 1.3 0.8 Unrecognized tax benefits 0.1 0.6 0.8 Netherlands tax incentives – Innovation box and RDA (18.5) (21.5) (23.6) Foreign tax incentives (3.2) (4.8) (6.6) Effective tax rate (7.0%) 6.3% 5.3% The Company benefits from income tax holiday incentives in certain jurisdictions which provide that we pay reduced income taxes in thosejurisdictions for a fixed period of time that varies depending on the jurisdiction. The predominant income tax holiday is expected to expire at the end of2021. The impact of this tax holiday decreased foreign taxes by $29 million and $28 million for 2015 and 2014, respectively. The benefit of this tax holidayon net income per share (diluted) was $0.11 (2014: $0.11). F-20Table of ContentsDeferred tax assets and liabilitiesThe principal components of deferred tax assets and liabilities are presented below: 2015 2014 Assets Liabilities Assets Liabilities Intangible assets (including purchase accounting basis difference) 85 (3,037) 2 (120) Property, plant and equipment (including purchase accounting basis difference) 148 (374) 19 (35) Inventories (including purchase accounting basis difference) 49 (158) 2 — Receivables 16 (5) — — Other assets 9 — 1 (1) Liabilities: Pensions 88 (1) 51 — Restructuring 61 — 6 — Accrued interest 545 — — — Stock based compensation and other 222 (2) 25 — Long-term debt 179 — — — Undistributed earnings of foreign subsidiaries — (359) — (31) Operating loss and tax credit carryforwards 963 — 659 — Total gross deferred tax assets (liabilities) 2,365 (3,936) 765 (187) Net deferred tax position (1,571) 578 Valuation allowances (632) (627) Net deferred tax assets (liabilities) (2,203) (49) The classification of the deferred tax assets and liabilities in the Company’s consolidated balance sheets is as follows: 2015 2014 Deferred tax assets within other current assets 26 8 Deferred tax assets within other non-current assets 69 19 Deferred tax liabilities within accrued liabilities (5) — Deferred tax liabilities within non-current liabilities (2,293) (76) (2,203) (49) The Company has significant deferred tax assets resulting from net operating loss carryforwards, tax credit carryforwards and deductibletemporary differences that may reduce taxable income in future periods. Valuation allowances have been established for deferred tax assets based on a “morelikely than not” threshold. The realization of our deferred tax assets depends on our ability to generate sufficient taxable income within the carryback orcarryforward periods provided for in the tax law for each applicable tax jurisdiction. The valuation allowance increased by $5 million during 2015 (2014:$20 million increase), the main change in the valuation allowance during 2015 was driven by an increase of $135 million due to the acquisition of Freescale,an increase of $92 million due to a settlement of unrecognized tax benefits relating to prior periods which had a corresponding impact on the valuationallowance, offset by a reduction of $239 million mainly due to utilization of losses in the period which includes losses used against the gain of the sale of RFPower, and other net increases of $17 million. When the Company’s operating performance improves on a sustained basis, our conclusion regarding the needfor such valuation allowance could change.Subsequently recognized tax benefits related to the valuation allowance for deferred tax assets as of December 31, 2015, will be allocated asfollows: $625 million of income tax benefit that would be reported in the consolidated statement of comprehensive income, $7 million to additional paid-incapital.After the recognition of the valuation allowance against deferred tax assets, a net deferred tax liability of $2,203 million remains at December 31,2015 (2014: $49 million). The net deferred tax liability is the result of (a) the impact of purchase accounting related to the acquisition of Freescale, see note3, “Acquisitions and Divestments”, (b) deferred tax liabilities related to profitable entities, (c) deferred tax liabilities for withholding taxes on undistributedearnings of foreign subsidiaries and (d) certain taxable temporary differences reversing outside the tax loss carryforward periods.At December 31, 2015 tax loss carryforwards of $1,130 million will expire as follows: Balance Scheduled expiration December 31,2015 2016 2017 2018 2019 2020 2021-2025 later unlimited Tax loss carryforwards 1,130 19 35 12 23 12 116 266 647 F-21Table of ContentsThe Company also has tax credit carryforwards of $795 million (excluding the effect of unrecognized tax benefits), which are available to offsetfuture tax, if any, and which will expire as follows: Balance Scheduled expiration December 31,2015 2016 2017 2018 2019 2020 2021-2025 later unlimited Tax credit carryforwards 795 — 39 31 13 32 328 276 76 The net income tax payable (excluding the liability for unrecognized tax benefits) as of December 31, 2015 amounted to $26 million (2014: $9million) and includes amounts directly payable to or receivable from tax authorities.The Company intends to repatriate the undistributed earnings of subsidiaries. Consequently, the Company has recognized a deferred income taxliability of $359 million at December 31, 2015 (2014: $31 million) for the additional income taxes and withholding taxes payable upon the futureremittances of these earnings of foreign subsidiaries.A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2015 2014 2013 Balance as of January 1, 125 143 139 Assumed in the acquisition of Freescale 121 — — Increases from tax positions taken during prior periods 1 — 1 Decreases from tax positions taken during prior periods (111) (21) (4) Increases from tax positions taken during current period 15 3 7 Decreases relating to settlements with the tax authorities (2) — — Balance as of December 31, 149 125 143 Of the total unrecognized tax benefits at December 31, 2015, $126 million, if recognized, would impact the effective tax rate. All otherunrecognized tax benefits, if recognized, would not affect the effective tax rate as these would be offset by compensating adjustments in the Company’sdeferred tax assets that would be subject to valuation allowance based on conditions existing at the reporting date.The Company classifies interest related to unrecognized tax benefits as financial expense and penalties as income tax expense. The total relatedinterest and penalties recorded during the year 2015 amounted to $7 million (2014: $3 million; 2013: $1 million). As of December 31, 2015 the Companyhas recognized a liability for related interest and penalties of $14 million (2014: $7 million; 2013: $4 million). It is reasonably possible that the total amountof unrecognized tax benefits may significantly increase/decrease within the next 12 months of the reporting date due to, for example, completion of taxexaminations; however, an estimate of the range of reasonably possible change cannot be made.Tax years that remain subject to examination by major tax jurisdictions (the Netherlands, Germany, France, USA, China, Taiwan, Japan,Thailand, Malaysia, the Philippines and India) are 2004 through 2015. F-22Table of Contents7 Earnings per ShareThe computation of earnings per share (EPS) is presented in the following table: 2015 2014 2013 Net income (loss) 1,599 607 415 Less: Net income (loss) attributable to non-controlling interests 73 68 67 Net income (loss) attributable to stockholders 1,526 539 348 Weighted average number of shares outstanding (after deduction of treasury shares) during theyear (in thousands) 239,764 237,954 248,526 Plus incremental shares from assumed conversion of: Options 1) 6,194 6,753 5,004 Restricted Share Units, Performance Share Units and Equity Rights 2) 4,158 3,902 1,520 Warrants 3) — — — Dilutive potential common share 10,352 10,655 6,524 Adjusted weighted average number of shares outstanding (after deduction of treasury shares)during the year (in thousands) 1) 250,116 248,609 255,050 EPS attributable to stockholders in $: Basic net income (loss) 6.36 2.27 1.40 Diluted net income (loss) 6.10 2.17 1.36 1)Stock options to purchase up to 0.7 million shares of NXP’s common stock that were outstanding in 2015 (2014: 0.5 million shares; 2013: 5.0 millionshares) were anti-dilutive and were not included in the computation of diluted EPS because the exercise price was greater than the average fair marketvalue of the common stock or the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense and exerciseprices was greater than the weighted average number of shares underlying outstanding stock options.2)Unvested RSU’s, PSU’s and equity rights of 0.5 million shares that were outstanding in 2015 (2014: 1.2 million shares; 2013: 5.6 million shares) wereanti-dilutive and were not included in the computation of diluted EPS because the number of shares assumed to be repurchased using the proceeds ofunrecognized compensation expense was greater than the weighted average number of outstanding unvested RSU’s, PSU’s and equity rights.3)A warrant to purchase up to approximately 11.2 million shares of NXP’s common stock at a price of $133.32 per share was outstanding in 2015 (2014and 2013: nil). Upon exercise, the warrant will be net share settled. At the end of 2015, the warrant was not included in the computation of diluted EPSbecause the warrant’s exercise price was greater than the average fair market value of the common shares.8 Share-based CompensationShare-based compensation expense is included in the following line items in our statement of operations: 2015 2014 2013 Cost of revenue 15 10 8 Research and development 45 20 13 Selling, general and administrative 156 103 67 216 133 88 Long Term Incentive Plans (LTIP’s)The LTIP was introduced in 2010 and is a broad-based long-term retention program to attract, retain and motivate talented employees as well asalign stockholder and employee interests. The LTIP provides share-based compensation (“awards”) to both our eligible employees and non-employeedirectors. Awards that may be granted include performance shares, stock options and restricted shares. The number of shares authorized and available forawards at December 31, 2015 was approximately 1.7 million.A charge of $206 million was recorded in 2015 for the LTIP (2014: $123 million; 2013: $87 million).A summary of the activity for our LTIP’s during 2015 is presented below. F-23Table of ContentsStock optionsThe options have a strike price equal to the closing share price on the grant date. The fair value of the options has been calculated using theBlack-Scholes formula, using the following assumptions: • an expected life of 6.25 years, calculated in accordance with the guidance provided in SEC Staff bulletin No. 110 for plain vanillaoptions using the simplified method, since our equity shares have been publicly traded for only a limited period of time and we do nothave sufficient historical exercise data; • a risk-free interest rate varying from 0.8% to 2.8% (2014: 0.8% to 2.8%; 2013: 1.0% to 1.9%); • no expected dividend payments; and • a volatility of 40-50% based on the volatility of a set of peer companies. Peer company data has been used given the short period of timeour shares have been publicly traded.Changes in the assumptions can materially affect the fair value estimate. Stock options Weighted averageexerciseprice in USD Weighted averageremaining contractualterm Aggregate intrinsicvalue Outstanding at January 1, 2015 7,948,270 28.66 Granted 1,262,257 78.10 Assumed in Freescale acquisition 2,871,861 38.29 Exercised 1,681,024 23.03 Forfeited 366,714 29.80 Outstanding at December 31, 2015 10,034,650 38.53 6.7 437 Exercisable at December 31, 2015 5,096,894 26.24 5.9 295 The weighted average per share grant date fair value of stock options granted in 2015 was $34.05 (2014: $29.10; 2013: $17.83).The intrinsic value of the exercised options was $112 million (2014: $129 million; 2013: $41 million), whereas the amount received by NXPwas $39 million (2014: $55 million; 2013: $34 million).At December 31, 2015, there was a total of $110 million (2014: $62 million) of unrecognized compensation cost related to non-vested stockoptions. This cost is expected to be recognized over a weighted-average period of 1.8 years (2014: 1.8 years).Performance share unitsFinancial performance conditions Shares Weighted average grantdate fair valuein USD Outstanding at January 1, 2015 1,323,294 33.09 Granted 225,831 75.28 Vested 717,146 28.41 Forfeited 56,655 33.36 Outstanding at December 31, 2015 775,324 49.68 The weighted average grant date fair value of performance share units granted in 2015 was $75.28 (2014: $62.29; 2013: $39.59).Market performance conditions Shares Weighted average grantdate fair valuein USD Outstanding at January 1, 2015 1,951,049 23.27 Granted 21,720 64.28 Vested — — Forfeited 67,500 15.25 Outstanding at December 31, 2015 1,905,269 26.85 The weighted average grant date fair value of performance share units granted in 2015 was $64.28 (2014: $39.29; 2013: $17.54).The fair value of the performance share units at the time of vesting was $66 million (2014: $70 million; 2013: $27 million). At December 31,2015, there was a total of $32 million (2014: $42 million) of unrecognized compensation cost related to non-vested performance share units. This cost isexpected to be recognized over a weighted-average period of 1.9 years (2014: 1.8 years). F-24Table of ContentsRestricted share units Shares Weighted average grantdate fair value in USD Outstanding at January 1, 2015 3,557,737 47.86 Granted 2,253,263 79.22 Assumed in Freescale acquisition 4,924,043 86.09 Vested 2,247,072 53.56 Forfeited 250,110 48.98 Outstanding at December 31, 2015 8,237,861 78.03 The weighted average grant date fair value of restricted share units granted in 2015 was $79.22 (2014: $63.42; 2013: $39.23). The fair value ofthe restricted share units at the time of vesting was $209 million (2014: $110 million; 2013: $57 million).At December 31, 2015, there was a total of $432 million (2014: $140 million) of unrecognized compensation cost related to non-vestedrestricted share units. This cost is expected to be recognized over a weighted-average period of 1.6 years (2014: 1.8 years).Management Equity Stock Option Plan (“MEP”)Awards are no longer available under these plans. Current employees owning vested MEP Options may exercise such MEP Options during thefive year period subsequent to September 18, 2013, subject to these employees remaining employed by us and subject to the applicable laws and regulations.No charge was recorded in 2015 (2014: no charge, 2013: $1 million) for options granted under the MEP.The following table summarizes the information about NXP’s outstanding MEP Options and changes during 2015.Stock options Stock options Weighted averageexercise price in EUR Weighted averageremaining contractualterm Aggregate intrinsicvalue Outstanding at January 1, 2015 2,916,205 24.14 Granted — — Exercised 167,263 21.80 Forfeited — — Expired — — Outstanding at December 31, 2015 2,748,942 24.14 2.7 146 Exercisable at December 31, 2015 2,748,942 24.14 2.7 146 The intrinsic value of exercised options was $12 million (2014: $74 million; 2013: $71 million), whereas the amount received by NXP was $4million (2014: $86 million; 2013: $142 million).The number of vested options at December 31, 2015 was 2,748,942 (2014: 2,916,205 vested options) with a weighted average exercise price of€24.14 (2014: €24.00 weighted average exercise price).At December 31, 2015, there was no unrecognized compensation cost related to non-vested stock options.9 Receivables, netAccounts receivable are summarized as follows: 2015 2014 Accounts receivable from third parties 1,058 549 Allowance for doubtful accounts (1) (3) Other receivables 73 47 1,130 593 The current portion of income taxes receivable of $6 million (2014: $2 million) is included under other receivables.See note 3 for further information regarding the acquisition of Freescale. F-25Table of Contents10 Inventories, netInventories are summarized as follows: 2015 2014 Raw materials 66 50 Work in process 1,376 580 Finished goods 437 125 1,879 755 The portion of the finished goods stored at customer locations under consignment amounted to $69 million as of December 31, 2015 (2014: $19million).The amounts recorded above are net of an allowance for obsolescence of $84 million as of December 31, 2015 (2014: $64 million).See note 3 for further information regarding the acquisition of Freescale.11 Property, Plant and Equipment, netThe following table presents details of the Company’s property, plant and equipment, net of accumulated depreciation: Useful Life(in years) 2015 2014 Land 160 56 Buildings 9 to 50 854 686 Machinery and installations 2 to 10 4,156 2,549 Other Equipment 1 to 5 227 249 Prepayments and construction in progress 108 143 5,505 3,683 Less accumulated depreciation (2,583) (2,560) Property, plant and equipment, net of accumulated depreciation 2,922 1,123 Land with a book value of $160 million (2014: $56 million) is not depreciated.Property and equipment includes $14 million (2014: $15 million) related to assets acquired under capital leases. Accumulated depreciationrelated to these assets was $12 million (2014: $12 million). See note 16 for information regarding capital lease obligations.There was no significant construction in progress and therefore no related capitalized interest.See note 3 for further information regarding the acquisition of Freescale. F-26Table of Contents12 Identified Intangible AssetsThe changes in identified intangible assets were as follows: Total Other intangibleassets Software Balance as of January 1, 2014: Cost 2,697 2,560 137 Accumulated amortization/impairment (1,942) (1,848) (94) Book value 755 712 43 Changes in book value: Acquisitions/additions 58 58 Amortization and write-downs (186) (155) (31) Translation differences (54) (49) (5) Total changes (182) (204) 22 Balance as of December 31, 2014: Cost 1,866 1,715 151 Accumulated amortization/impairment (1,293) (1,207) (86) Book value 573 508 65 Changes in book value: Acquisitions/additions 8,551 8,543 8 Transfer to assets held for sale (38) (38) — Amortization and write-downs (255) (229) (26) Translation differences (41) (35) (6) Total changes 8,217 8,241 (24) Balance as of December 31, 2015: Cost 9,978 9,832 146 Accumulated amortization/impairment (1,188) (1,083) (105) Book value 8,790 8,749 41 Identified intangible assets as of December 31, 2015 and 2014 respectively were composed of the following: December 31, 2015 December 31, 2014 Gross carryingamount Accumulatedamortization Gross carryingamount Accumulatedamortization IPR&D 1) 2,016 — — — Marketing-related 119 (18) 17 (16) Customer-related 1,287 (224) 400 (223) Technology-based 6,410 (841) 1,298 (968) 9,832 (1,083) 1,715 (1,207) Software 2) 146 (105) 151 (86) Identified intangible assets 9,978 (1,188) 1,866 (1,293) 1)IPR&D is not subject to amortization until completion or abandonment of the associated research and development effort. The IPR&D acquired in theacquisition of Freescale encompasses a broad technology portfolio of product innovations. As of December 31, 2015 we are still obtaining informationrelative to the percent complete and remaining costs to complete for each project.2)Software includes $26 million (2014: $49 million) related to assets acquired under non-cancellable software licenses. The financial obligations fromthese contractor agreements are reflected in capital leases debt. Future payments are $14 million (2016) and $12 million (2017).The estimated amortization expense for these identified intangible assets, excluding software, for each of the five succeeding years is: 2016 1,436 2017 1,490 2018 1,482 2019 1,424 2020 1,174 All intangible assets, excluding goodwill, are subject to amortization and have no assumed residual value.The expected weighted average remaining life of identified intangibles is 7 years as of December 31, 2015. F-27Table of ContentsThe estimated amortization expense for software as of December 31, 2015 for each of the five succeeding years is: 2016 23 2017 16 2018 2 2019 — 2020 — The expected weighted average remaining lifetime of software is 3 years as of December 31, 2015.See note 3 for further information regarding the acquisition of Freescale.13 GoodwillThe changes in goodwill in 2015 and 2014 were as follows: 2015 2014 Balances as of January 1 Cost 2,328 2,593 Accumulated impairment (207) (235) Book value 2,121 2,358 Changes in book value: Acquisitions 7,464 — Transfer to assets held for sale (179) — Translation differences (178) (237) Total changes 7,107 (237) Balances as of December 31 Cost 9,414 2,328 Accumulated impairment (186) (207) Book value 9,228 2,121 No goodwill impairment charges were required to be recognized in 2015 or 2014.In 2015, goodwill includes the acquisitions of Freescale, Quintic’s Bluetooth Low Energy and Wearable businesses and Athena SCS Ltd.Transfer to assets held for sale in 2015 includes our RF Power Business and Bipolar Power business, which were subsequently divested.The fair value of the reporting units substantially exceeds the carrying value of the reporting units.See note 22, “Segment and Geographical Information”, for goodwill by segment and note 3, “Acquisitions and Divestments”.14 Postretirement Benefit PlansPensionsOur employees participate in employee pension plans in accordance with the legal requirements, customs and the local situation in therespective countries. These are defined-benefit pension plans, defined-contribution plans and multi-employer plans.The Company’s employees in The Netherlands participate in a multi-employer plan, implemented for the employees of the Metal and ElectricalEngineering Industry (“Bedrijfstakpensioenfonds Metalektro or PME”) in accordance with the mandatory affiliation to PME effective for the industry inwhich NXP operates. As this affiliation is a legal requirement for the Metal and Electrical Engineering Industry it has no expiration date. This PME multi-employer plan (a career average plan) covers approximately 1,300 companies and 624,000 participants. The plan monitors its risk on an aggregate basis, notby company or participant and can therefore not be accounted for as a defined benefit plan. The pension fund rules state that the only obligation for affiliatedcompanies will be to pay the annual plan contributions. There is no obligation for affiliated companies to fund plan deficits. Affiliated companies are alsonot entitled to any possible surpluses in the pension fund.Every participating company contributes the same fixed percentage of its total pension base, being pensionable salary minus an individualoffset. The Company’s pension cost for any period is the amount of contributions due for that period. F-28Table of ContentsThe contribution rate for the mandatory scheme will decrease from 26.6% (2015) to 26.1% (2016). PME multi-employer plan 2015 2014 2013 NXP’s contributions to the plan 37 48 51 (including employees’ contributions) 4 4 3 Average number of NXP’s active employees participating in the plan 2,668 2,881 3,133 NXP’s contribution to the plan exceeded more than 5 percent of the total contribution (as ofDecember 31 of the plan’s year end) No No No The amount for pension costs included in the statement of operations for the year 2015 was $69 million (2014: $77 million; 2013: $86 million)of which $21 million (2014: $21 million; 2013: $20 million) represents defined-contribution plans and $32 million (2014: $41 million; 2013: $45 million)represents the PME multi-employer plans.Defined-benefit plansThe benefits provided by defined-benefit plans are based on employees’ years of service and compensation levels. Contributions are made by theCompany, as necessary, to provide assets sufficient to meet the benefits payable to defined-benefit pension plan participants.These contributions are determined based upon various factors, including funded status, legal and tax considerations as well as local customs.The Company funds certain defined-benefit pension plans as claims are incurred.The total cost of defined-benefit plans amounted to $16 million in 2015 (2014: $15 million; 2013: $21 million) consisting of $20 millionongoing cost (2014: $15 million; 2013: $21 million) and a gain of $4 million from special events resulting from restructurings, curtailments and settlements(2014: nil; 2013: nil). F-29Table of ContentsThe table below provides a summary of the changes in the pension benefit obligations and defined-benefit pension plan assets for 2015 and2014, associated with the Company’s dedicated plans, and a reconciliation of the funded status of these plans to the amounts recognized in the consolidatedbalance sheets. 2015 2014 Projected benefit obligation Projected benefit obligation at beginning of year 447 406 Service cost 12 10 Interest cost 11 13 Actuarial (gains) and losses (18) 76 Curtailments and settlements (16) — Benefits paid (14) (15) Benefit obligation assumed in acquisitions 177 — Exchange rate differences (38) (43) Projected benefit obligation at end of year 561 447 Plan assets Fair value of plan assets at beginning of year 157 170 Actual return on plan assets 7 10 Employer contributions 10 11 Curtailments and settlements (12) — Benefits paid (14) (15) Plan assets acquired in acquisitions 56 — Exchange rate differences (14) (19) Fair value of plan assets at end of year 190 157 Funded status (371) (290) Classification of the funded status is as follows - Prepaid pension cost within other non-current assets 4 — - Accrued pension cost within other non-current liabilities (368) (282) - Accrued pension cost within accrued liabilities (7) (8) Total (371) (290) Accumulated benefit obligation Accumulated benefit obligation for all Company-dedicated benefit pension plans 518 416 Plans with assets less than accumulated benefit obligation Funded plans with assets less than accumulated benefit obligation - Fair value of plan assets 73 153 - Accumulated benefit obligations 209 204 - Projected benefit obligations 243 224 Unfunded plans - Accumulated benefit obligations 196 209 - Projected benefit obligations 204 218 Amounts recognized in accumulated other comprehensive income (before tax) Total AOCI at beginning of year 70 2 - Net actuarial loss (gain) (21) 74 - Exchange rate differences (7) (6) Total AOCI at end of year 42 70 The weighted average assumptions used to calculate the projected benefit obligations were as follows: 2015 2014 Discount rate 2.5% 2.6% Rate of compensation increase 2.2% 1.8% The weighted average assumptions used to calculate the net periodic pension cost were as follows: 2015 2014 2013 Discount rate 2.6% 3.7% 3.5% Expected returns on plan assets 4.2% 4.2% 4.0% Rate of compensation increase 1.8% 2.3% 2.4% For the Company’s major plans, the discount rate used is based on high quality corporate bonds (iBoxx Corporate Euro AA 10+).Plans in countries without a deep corporate bond market use a discount rate based on the local sovereign rate and the plans maturity (BloombergGovernment Bond Yields).Expected returns per asset class are based on the assumption that asset valuations tend to return to their respective long-term equilibria. TheExpected Return on Assets for any funded plan equals the average of the expected returns per asset class weighted by their portfolio weights in accordancewith the fund’s strategic asset allocation. F-30Table of ContentsThe components of net periodic pension costs were as follows: 2015 2014 2013 Service cost 12 10 12 Interest cost on the projected benefit obligation 11 13 15 Expected return on plan assets (6) (7) (7) Amortization of net (gain) loss 3 (1) 1 Curtailments & settlements (6) — — Other 2 — — Net periodic cost 16 15 21 A sensitivity analysis shows that if the discount rate increases by 1% from the level of December 31, 2015, with all other variables held constant,the net periodic pension cost would increase by $2 million. If the discount rate decreases by 1% from the level of December 31, 2015, with all other variablesheld constant, the net periodic pension cost would decrease by $2 million.The estimated net actuarial loss (gain) and prior service cost that will be amortized from accumulated other comprehensive income into netperiodic benefit cost over the next year (2016) are $1 million and nil respectively.Plan assetsThe actual pension plan asset allocation at December 31, 2015 and 2014 is as follows: 2015 2014 Asset category: Equity securities 29% 35% Debt securities 55% 54% Insurance contracts 6% — Other 10% 11% 100% 100% We met our target plan asset allocation. The investment objectives for the pension plan assets are designed to generate returns that, along withthe future contributions, will enable the pension plans to meet their future obligations. The investments in our major defined benefit plans largely consist ofgovernment bonds, “Level 2” Corporate Bonds and cash to mitigate the risk of interest fluctuations. The asset mix of equity, bonds, cash and other categoriesis evaluated by an asset-liability modeling study for our largest plan. The assets of funded plans in other countries mostly have a large proportion of fixedincome securities with return characteristics that are aligned with changes in the liabilities caused by discount rate volatility. Total pension plan assets of$190 million include $165 million related to the German and Japanese pension funds.The following table summarizes the classification of these assets. 2015 2014 Level I Level II Level III Level I Level II Level III Equity securities — 49 — 1 47 — Debt securities 7 81 — 15 61 — Insurance contracts — 12 — — — — Other 3 10 3 12 6 3 10 152 3 28 114 3 The Company currently expects to make $6 million of employer contributions to defined-benefit pension plans and $7 million of expected cashpayments in relation to unfunded pension plans.Estimated future pension benefit paymentsThe following benefit payments are expected to be made (including those for funded plans): 2016 21 2017 14 2018 17 2019 18 2020 19 Years 2021-2025 124 F-31Table of ContentsPostretirement health care benefitsIn addition to providing pension benefits, NXP provides retiree healthcare benefits in the US and the UK which are accounted for as defined-benefit plans.The accumulated postretirement benefit obligation at the end of 2015 equals $54 million (2014: $2 million).15 DebtShort-term debt 2015 2014 Short-term bank borrowings 6 8 Current portion of long-term debt (*) 550 12 Total 556 20 (*) Net of adjustment for debt issuance costs.At December 31, 2015, short-term bank borrowings of $6 million (2014: $8 million) consisted of a local bank borrowing by our Chinesesubsidiary. The applicable weighted average interest rate during 2015 was 2.5% (2014: 2.3%).Long-term debt Range ofinterest rates Averagerate ofinterest Principalamountoutstanding2015 Due in2016 Dueafter2016 Due after2020 Averageremainingterm(in years) Principalamountoutstanding2014 USD notes 2.8%-6.0% 4.3% 8,193 535 7,658 2,860 4.6 3,041 2019 Cash Convertible Senior Notes 1.0%-1.0% 1.0% 1,150 — 1,150 — 3.9 1,150 New Revolving Credit Facility (1) — — — — — — — — Bank borrowings — — — — — — — 3 Liabilities arising from capital lease transactions 2.5%-13.8% 2.8% 31 16 15 — 1.0 4 3.9% 9,374 551 8,823 2,860 4.5 4,198 (1) We do not have any borrowings under the $600 million New Revolving Credit Facility as of December 31, 2015.The following amounts of long-term debt at principal amount as of December 31, 2015 are due in the next 5 years: 2016 551 2017 434 2018 781 2019 1,180 2020 3,568 Due after 5 years 2,860 9,374 As of December 31, 2015, the book value of our outstanding long-term debt was $9,206 million, less debt issuance costs of $61 million, lessoriginal issuance/debt discount of $188 million and inclusive of the purchase price accounting step-up of 81 million.As of December 31, 2015, the fixed rate notes and floating rate notes represented 61% and 39% respectively of the total principal amount of thenotes outstanding at December 31, 2015. The remaining tenor of secured debt is on average 4.8 years.Accrued interest as of December 31, 2015 is $46 million (December 31, 2014: $28 million).2015 Financing ActivitiesNew RCF AgreementOn December 7, 2015, NXP B.V. and NXP Funding LLC, entered into a $600 million revolving credit facility agreement. There are currently noborrowings under this credit facility.Secured Bridge Term Credit AgreementOn December 7, 2015, NXP B.V. and NXP Funding LLC, entered into a $1,000 million secured bridge term credit facility agreement (the“Secured Bridge Term Credit Agreement”). The Secured Bridge Term Credit Agreement was repaid in full on December 16, 2015. F-32Table of Contents2020 Senior Unsecured Notes and 2022 Senior Unsecured NotesOn June 9, 2015 our subsidiary, NXP B.V., together with NXP Funding LLC, issued Senior Unsecured Notes in the aggregate principal amountsof $600 million, due June 15, 2020 and $400 million, due June 15, 2022. The Notes were issued at par and were recorded at their fair value of $600 millionand $400 million, respectively, on the accompanying Consolidated Balance Sheet.Term Loan BOn December 7, 2015 our subsidiary, NXP B.V., together with NXP Funding LLC, issued Senior Secured Term Loan Facility in the principalamount of $2,700 million, due December 7, 2020. The Term Loan was issued with an original issue discount at 99.25% of par and was recorded at its fairvalue of $2,680 million on the accompanying Consolidated Balance Sheet.The net proceeds of the 2020 Senior Unsecured Notes and 2022 Senior Unsecured Notes, together with the net proceeds of the Term Loan B, theSecured Bridge Term Credit Agreement, cash-on-hand and/or other available financing resources, were used to (i) pay the cash consideration in connectionwith the acquisition of Freescale, (ii) effect the repayment of certain amounts under Freescale’s outstanding credit facility and Secured Notes and (iii) paycertain transaction costs.At December 31, 2015 long-term debt increased to $8,656 million from $3,936 million at December 31, 2014. In 2015, the book value of ourlong-term debt increased by $4,720 million to $8,656 million, mainly due to the Term Loan B, the 2020 Senior Unsecured Notes and the 2022 SeniorUnsecured Notes issued and the former Freescale Senior Secured Notes taken over as part of the acquisition.U.S. dollar-denominated notesThe following table summarizes the outstanding notes as of December 31, 2015: Principalamount Fixed/floating Interestrate Current couponrate Maturitydate Term Loan 392 Floating LIBOR plus 2% with afloor of 0.75% 2.75% 2017 Term Loan 391 Floating LIBOR plus 2.50% with afloor of 0.75% 3.25% 2020 Term Loan 2,700 Floating LIBOR plus 3% with afloor of 0.75% 3.75% 2020 Senior Unsecured Notes 500 Fixed 3.5% 3.5% 2016 Senior Unsecured Notes 750 Fixed 3.75% 3.75% 2018 Senior Unsecured Notes 600 Fixed 4.125% 4.125% 2020 Senior Unsecured Notes 500 Fixed 5.75% 5.75% 2021 Senior Secured Notes 500 Fixed 5% 5% 2021 Senior Secured Notes 960 Fixed 6% 6% 2022 Senior Unsecured Notes 400 Fixed 4.625% 4.625% 2022 Senior Unsecured Notes 500 Fixed 5.75% 5.75% 2023 Cash Convertible Notes 1,150 Fixed 1% 1% 2019 Revolving Credit Facility — Floating — — 2020 Certain terms and Covenants of the U.S. dollar-denominated notesThe Company is not required to make mandatory redemption payments or sinking fund payments with respect to the notes. With respect to theTerm Loans, the Company is required to repay $35 million annually.The indentures governing the notes contain covenants that, among other things, limit the Company’s ability and that of restricted subsidiaries toincur additional indebtedness, create liens, pay dividends, redeem capital stock or make certain other restricted payments or investments; enter intoagreements that restrict dividends from restricted subsidiaries; sell assets, including capital stock of restricted subsidiaries; engage in transactions withaffiliates; and effect a consolidation or merger. The merger with Freescale has been in compliance with any such indentures and financing covenants.Certain portions of long-term and short-term debt as of December 31, 2015 in the principal amount of $4,943 million (2014: $791 million) havebeen secured by collateral on substantially all of the Company’s assets and of certain of its subsidiaries.Each series of the Senior Unsecured Notes are fully and unconditionally guaranteed jointly and severally, on a senior basis by certain of theCompany’s current and future material wholly owned subsidiaries (“Guarantors”). F-33Table of ContentsPursuant to various security documents related to the above mentioned term loans and the $600 million committed new revolving credit facility,the Company and each Guarantor has granted first priority liens and security interests in, amongst others, the following, subject to the grant of furtherpermitted collateral liens: (a)all present and future shares of capital stock of (or other ownership or profit interests in) each of its present and future direct subsidiaries, other thanSMST Unterstützungskasse GmbH, and material joint venture entities; (b)all present and future intercompany debt of the Company and each Guarantor; (c)all of the present and future property and assets, real and personal, of the Company, and each Guarantor, including, but not limited to, machinery andequipment, inventory and other goods, accounts receivable, owned real estate, leaseholds, fixtures, general intangibles, license rights, patents,trademarks, trade names, copyrights, chattel paper, insurance proceeds, contract rights, hedge agreements, documents, instruments, indemnificationrights, tax refunds, but excluding cash and bank accounts; and (d)all proceeds and products of the property and assets described above.Notwithstanding the foregoing, certain assets may not be pledged (or the liens not perfected) in accordance with agreed security principles,including: • if the cost of providing security is not proportionate to the benefit accruing to the holders; and • if providing such security requires consent of a third party and such consent cannot be obtained after the use of commercially reasonableefforts; and • if providing such security would be prohibited by applicable law, general statutory limitations, financial assistance, corporate benefit,fraudulent preference, “thin capitalization” rules or similar matters or providing security would be outside the applicable pledgor’scapacity or conflict with fiduciary duties of directors or cause material risk of personal or criminal liability after using commerciallyreasonable efforts to overcome such obstacles; and • if providing such security would have a material adverse effect (as reasonably determined in good faith by such subsidiary) on the abilityof such subsidiary to conduct its operations and business in the ordinary course as otherwise permitted by the indenture; and • if providing such security or perfecting liens thereon would require giving notice (i) in the case of receivables security, to customers or(ii) in the case of bank accounts, to the banks with whom the accounts are maintained. Such notice will only be provided after thesecured notes are accelerated.Subject to agreed security principles, if material property is acquired by the Company or a Guarantor that is not automatically subject to aperfected security interest under the security documents, then the Company or relevant Guarantor will within 60 days provide security over this property anddeliver certain certificates and opinions in respect thereof as specified in the indenture governing the notes.2019 Cash Convertible Senior NotesIn November 2014, NXP issued $1,150 million principal amount of its 2019 Cash Convertible Senior Notes (the “Notes”). The 2019 CashConvertible Senior Notes have a stated interest rate of 1.00%, matures on December 1, 2019 and may be settled only in cash. The indenture for the 2019 CashConvertible Senior Notes does not contain any financial covenants. Contractual interest payable on the 2019 Cash Convertible Senior Notes began accruingin December 2014 and is payable semi-annually each December 1st and June 1st. The initial purchasers’ transaction fees and expenses totaling $16 millionwere capitalized as deferred financing costs and are amortized over the term of the 2019 Cash Convertible Senior Notes using the effective interest method.Prior to September 1, 2019, holders may convert their 2019 Cash Convertible Senior Notes into cash upon the occurrence of one of the followingevents: • the price of NXP’s common stock reaches $102.84 during certain periods of time specified in the 2019 Cash Convertible Senior Notes; • specified corporate transactions occur; or • the trading price of the 2019 Cash Convertible Senior Notes falls below 98% of the product of (i) the last reported sales price of NXP’scommon stock and (ii) the conversion rate on the date.On or after September 1, 2019, until the close of business on the second scheduled trading day immediately preceding the maturity date, holdersmay convert their 2019 Cash Convertible Senior Notes into cash at any time, regardless of the foregoing circumstances. NXP may not redeem the 2019 CashConvertible Senior Notes prior to maturity.The initial cash conversion rate for the 2019 Cash Convertible Senior Notes is 9.7236 shares of NXP’s common stock per $1,000 principalamount of 2019 Cash Convertible Senior Notes, equivalent to a cash conversion price of approximately $102.84 per share of NXP’s common stock, with theamount due on conversion payable in cash. Upon cash conversion, a holder will receive the sum of the daily settlement amounts, calculated on aproportionate basis for each day, during a specified observation period following the cash conversion date. F-34Table of ContentsIf a “fundamental change” (as defined below in this section) occurs at any time, holders will have the right, at their option, to require us torepurchase for cash all of their 2019 Cash Convertible Senior Notes, or any portion of the principal thereof that is equal to $1,000 or a multiple of $1,000(provided that the portion of any global note or certified note, as applicable, not tendered for repurchase has a principal amount of at least $200,000, on thefundamental change repurchase date. A fundamental change is any transaction or event (whether by means of an exchange offer, change of common stock,liquidation, consolidation, merger, reclassification, recapitalization or otherwise) in which more than 50% of NXP’s common stock is exchanged for,converted into, acquired for or constitutes solely the right to receive, consideration. A transaction or transactions described above will not constitute afundamental change, however, if at least 90% of the consideration received or to be received by our common shareholders, excluding cash payments forfractional shares, in connection with such transaction or transactions consists of shares of common equity that are listed or quoted on any permitted exchangeor will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactionssuch consideration becomes the reference property for the 2019 Cash Convertible Senior Notes.As of December 31, 2015, none of the conditions allowing the holders of the 2019 Cash Convertible Senior Notes to convert the 2019 CashConvertible Senior Notes into cash had been met.The requirement that NXP must settle the conversion of the Notes in cash gives rise to a derivative instrument that must be bifurcated from thedebt host. The embedded cash conversion option within the Cash Convertible Notes is required to be separated from the Cash Convertible Notes andaccounted for separately as a derivative liability, with changes in fair value reported in our Consolidated Statements of Income in other (expense) income, netuntil the cash conversion option settles or expires. The initial fair value liability of the embedded cash conversion option simultaneously reduced thecarrying value of the Cash Convertible Notes (effectively an original issuance discount). The embedded cash conversion option is measured and reported atfair value on a recurring basis, within Level 2 of the fair value hierarchy. The fair value of the embedded cash conversion option at December 31,2015 was $241 million (2014: $203 million) which is recorded in other long-term liabilities in the accompanying balance sheet. For the yearended December 31, 2015, the change in the fair value of the embedded cash conversion option resulted in a loss of $38 million (2014: a loss of $4 million).Concurrently with the pricing of the 2019 Cash Convertible Senior Notes, NXP entered into hedge transactions, or the Notes Hedges, withvarious parties whereby NXP has the option to receive the cash amount that may be due to the Notes holders at maturity in excess of the $1,150 millionprincipal amount of the notes, subject to certain conversion rate adjustments in the Notes Indenture. These options expire on December 1, 2019, and must besettled in cash. The aggregate cost of the Notes Hedges was $208 million. The Notes Hedges are accounted for as derivative assets, and are included in Otherassets in NXP’s Consolidated Balance Sheet. As of December 31, 2015, the estimated fair value of the Notes Hedges was $241 million (2014: $203 million).The Notes Embedded Conversion Derivative and the Notes Hedges are adjusted to fair value each reported period and unrealized gains andlosses are reflected in NXP’s Consolidated Statements of Operations. Because the fair values of the Notes Embedded Conversion Derivative and the NotesHedges are designed to have similar offsetting values, there was no impact to NXP’s Consolidated Statements of Operations relating to these adjustments tofair value during fiscal 2015 (2014: no impact).In separate transactions, NXP also sold warrants, to various parties for the purchase of up to approximately 11.18 million shares of NXP’scommon stock at a price of $133.32 per share in a private placement pursuant to Section 4(2) of the Securities Act of 1933, as amended, or the Securities Act.The Warrants expire on various dates from March 2, 2020, through April 30, 2020, and will be net share settled. The fair value of the warrants is subject tochanges in currency exchange rates because the warrants’ strike price is denominated in U.S. dollars, which is different from our functional currency, which iseuros. As a result, the warrants are not considered indexed to our own stock, which in turn results in the warrants being classified as liabilities on our balancesheet with changes in the fair value of the warrants recognized in NXP’s Consolidated Statements of Operations. NXP received $134 million in cash proceedsfrom the sale of the Warrants, which has been recorded in Other non-current liabilities. Changes in the fair value of the Warrants will be recognized in NXP’sConsolidated Financial Statements. As of December 31, 2015 the estimated fair value of the Warrants was $168 million (2014: $136 million). The Warrantsare included in diluted earnings per share to the extent the impact is dilutive. As of December 31, 2015, the Warrants were not dilutive.The principal amount, unamortized debt discount and net carrying amount of the liability component of the 2019 Cash Convertible SeniorNotes as of December 31, 2015 and 2014 was as follows: (in millions) As of December 31 2015 2014 Principal amount of 2019 Cash Convertible Senior Notes 1,150 1,150 Unamortized debt discount of 2019 Cash Convertible Senior Notes 167 205 Net liability of 2019 Cash Convertible Senior Notes 983 945 F-35Table of ContentsThe effective interest rate, contractual interest expense and amortization of debt discount for the 2019 Cash Convertible Senior Notes for fiscal2015 and 2014 were as follows: (in millions, except percentage) 2015 2014 Effective interest rate 5.14% 5.14% Contractual interest expense 12 1 Amortization of debt discount 38 3 As of December 31, 2015, the if-converted value of the 2019 Cash Convertible Senior Notes exceeded the principal amount of the Notes. Thetotal fair value of the 2019 Cash Convertible Senior Notes was $1,260 million.Impact of Conversion Contingencies on Financial StatementsAt the end of each quarter until maturity of the 2019 Cash Convertible Senior Notes, NXP will reassess whether the stock price conversioncondition has been satisfied. If one of the early conversion conditions is satisfied in any future quarter, NXP would classify its net liability under the 2019Cash Convertible Senior Notes as a current liability on the Consolidated Balance Sheet as of the end of that fiscal quarter. If none of the early conversionconditions have been satisfied in a future quarter prior to the one-year period immediately preceding the maturity date, NXP would classify its net liabilityunder the 2019 Cash Convertible Senior Notes as a non-current liability on the Consolidated Balance Sheet as of the end of that fiscal quarter. If the holdersof the 2019 Cash Convertible Senior Notes elect to convert their 2019 Cash Convertible Senior Notes prior to maturity, any unamortized discount andtransaction fees will be expensed at the time of conversion.16 Commitments and ContingenciesLease CommitmentsProperty, plant and equipment includes $2 million as of December 31, 2015 (2014: $3 million) for capital leases and other beneficial rights ofuse, such as building rights and hire purchase agreements. Software includes $26 million (2014: $49 million) for assets acquired under non-cancellablesoftware licenses. The financial obligations arising from these contractual agreements are reflected in long-term debt. Long-term operating leasecommitments totaled $172 million as of December 31, 2015 (2014: $130 million). The long-term operating leases are mainly related to the rental ofbuildings and tools. These leases expire at various dates during the next 30 years. Future minimum lease payments under operating and capital leases are asfollows: Operating Leases Capital Leases 2016 50 17 2017 37 15 2018 24 — 2019 18 — 2020 13 — Thereafter 30 — Total future minimum leases payments 172 32 Less: amount representing interest 1 Present value of future minimum lease payments 31 Rent expense amounted to $70 million in 2015 (2014: $63 million; 2013: $65 million).Purchase CommitmentsThe Company maintains purchase commitments with certain suppliers, primarily for raw materials, semi finished goods and manufacturingservices and for some non-production items. Purchase commitments for inventory materials are generally restricted to a forecasted time-horizon as mutuallyagreed upon between the parties. This forecasted time-horizon can vary for different suppliers. As of December 31, 2015, the Company had purchasecommitments of $809 million, which are due through 2025.LitigationWe are regularly involved as plaintiffs or defendants in claims and litigation relating to a variety of matters such as contractual disputes,personal injury claims, employee grievances and intellectual property litigation. In addition, our acquisitions, divestments and financial transactionssometimes result in, or are followed by, claims or litigation. Although the ultimate disposition of asserted claims cannot be predicted with certainty, it is ourbelief that the outcome of any such claims, either individually or on a combined basis, will not have a material adverse effect on our consolidated financialposition. However, such outcomes may be material to our consolidated statement of operations for a particular period. The Company records an accrual forany claim that arises whenever it considers that it is probable that it is exposed to a loss contingency and the amount of the loss contingency can bereasonably estimated. F-36Table of ContentsBased on the most current information available to it and based on its best estimate, the Company also reevaluates at least on a quarterly basisthe claims that have arisen to determine whether any new accruals need to be made or whether any accruals made need to be adjusted. Based on theprocedures described above, the Company has an aggregate amount of approximately $28 million accrued for legal proceedings pending as of December 31,2015, compared to approximately $2 million as of December 31, 2014. The accruals are included in “Accrued liabilities” and “Other non-current liabilities”.There can be no assurance that the Company’s accruals will be sufficient to cover the extent of its potential exposure to losses, but historically, legal actionshave not had a material adverse effect on the Company’s business, results of operations or financial condition.The Company also estimates the aggregate range of reasonably possible losses in excess of the amount accrued based on currently availableinformation for those cases for which such estimate can be made. The estimated aggregate range requires significant judgment, given the varying stages of theproceedings (including the fact that many of them are currently in preliminary stages), the existence of multiple defendants (including the Company) in suchclaims whose share of liability has yet to be determined, the numerous yet-unresolved issues in many of the claims, and the attendant uncertainty of thevarious potential outcomes of such claims. Accordingly, the Company’s estimate will change from time to time, and actual losses may be more than thecurrent estimate. As at December 31, 2015, the Company believes that for all litigation pending its aggregate exposure to loss in excess of the amountaccrued could range between $0 and approximately $124 million.Intellectual property litigation and infringement claims could cause us to incur significant expenses or prevent us from selling our products. Theresolution of intellectual property litigation may require us to pay damages for past infringement or to obtain a license under the other party’s intellectualproperty rights that could require one-time license fees or ongoing royalties, require us to make material changes to our products and/or manufacturingprocesses, require us to cross-license certain of our patents and other intellectual property and/or prohibit us from manufacturing or selling one or moreproducts in certain jurisdictions, which could adversely impact our operating results in future periods.In addition, the Company is currently assisting Motorola in the defense of eight personal injury lawsuits due to indemnity obligations includedin the agreement that separated Freescale from Motorola in 2004. The multi-plaintiff lawsuits are pending in the Circuit Court of Cook County, Illinois.These claims allege a link between working in semiconductor manufacturing clean room facilities and birth defects in 56 individuals. The eight suits allegeexposures that occurred between 1965 and 2006. Each suit seeks an unspecified amount of damages in compensation for the alleged injuries; however, legalcounsel representing the plaintiffs has recently indicated they will seek substantial compensatory and punitive damages from Motorola for the entireinventory of claims which, if proven and recovered, the Company considers to be material. A portion of any indemnity due to Motorola will be reimbursed toNXP if Motorola receives an indemnification payment from its insurance coverage. Motorola has denied liability for these alleged injuries based onnumerous defenses. Motorola has potential insurance coverage for many of the years indicated above, but with differing types and levels of coverage, self-insurance retention amounts and deductibles. We are in discussions with Motorola and their insurers regarding the availability of applicable insurancecoverage for each of the individual cases.Environmental remediationIn each jurisdiction in which we operate, we are subject to many environmental, health and safety laws and regulations that govern, among otherthings, emissions of pollutants into the air, wastewater discharges, the use and handling of hazardous substances, waste disposal, the investigation andremediation of soil and ground water contamination and the health and safety of our employees. We are also required to obtain environmental permits fromgovernmental authorities for certain of our operations.As with other companies engaged in similar activities or that own or operate real property, the Company faces inherent risks of environmentalliability at our current and historical manufacturing facilities. Certain environmental laws impose liability on current or previous owners or operators of realproperty for the cost of removal or remediation of hazardous substances. Certain of these laws also assess liability on persons who arrange for hazardoussubstances to be sent to disposal or treatment facilities when such facilities are found to be contaminated.Soil and groundwater contamination has been identified at our properties in Hamburg, Germany and Nijmegen, the Netherlands and nearPhoenix, Arizona, United States. The remediation processes at these locations are expected to continue for many years.As of December 31, 2015 we have recorded $88 million for environmental remediation costs, which are primarily included in other non-currentliabilities in the accompanying Consolidated Balance Sheet. This amount represents the undiscounted future cash flows of our estimated share of costsincurred in environmental cleanup sites without considering recovery of costs from any other party or insurer, since in most cases potentially responsibleparties other than us may exist and be held responsible.17 Stockholders’ EquityThe share capital of the Company as of December 31, 2015 and 2014 consists of 1,076,257,500 authorized shares, including 430,503,000authorized shares of common stock, and 645,754,500 authorized but unissued shares of preferred stock.At December 31, 2015, the Company has issued and paid up 346,002,862 shares (2014: 251,751,500 shares) of common stock each having a parvalue of €0.20 or a nominal stock capital of €69 million. F-37Table of ContentsShare-based awardsThe Company has granted share-based awards to the members of our board of directors, management team, our other executives, selected otherkey employees/talents of NXP and selected new hires to receive the Company’s shares in the future. See note 8, “Share-based Compensation”.Treasury sharesIn connection with the Company’s share repurchase programs, which originally commenced in 2011, and which were extended effectiveAugust 1, 2013 and February 6, 2014, and in accordance with the Company’s policy to provide share-based awards from its treasury share inventory, shareswhich have been repurchased and are held in treasury for delivery upon exercise of options and under restricted and performance share programs, areaccounted for as a reduction of stockholders’ equity. Treasury shares are recorded at cost, representing the market price on the acquisition date. When issued,shares are removed from treasury shares on a first-in, first-out (FIFO) basis.Differences between the cost and the proceeds received when treasury shares are reissued, are recorded in capital in excess of par value.Deficiencies in excess of net gains arising from previous treasury share issuances are charged to retained earnings.The following transactions took place resulting from employee option and share plans in 2015: 2015 Total shares in treasury at beginning of year 19,171,454 Total cost 1,219 Shares acquired under repurchase program 5,336,310 Average price in $ per share 88.93 Amount paid 475 Shares delivered 5,008,782 Average price in $ per share 62.30 Amount received 51 Shares issued for the business combination 15,500,000 Total shares in treasury at end of year 3,998,982 Total cost 342 18 Accumulated Other Comprehensive Income (Loss), net of TaxThe changes in accumulated other comprehensive income (loss) by component and related tax effects for each period were as follows: 2015 2014 2013 Beforetax Tax Net oftax Beforetax Tax Net oftax Beforetax Tax Net oftax Change in net investment hedge (190) — (190) (214) — (214) 68 — 68 Change in fair value cash flow hedges (2) — (2) — — — (9) — (9) Less: adjustment for (gains) losses on fair value cash flow hedges 2 — 2 2 — 2 5 — 5 Change in foreign currency translation adjustment 131 — 131 140 — 140 (27) — (27) Change in net actuarial gain (loss) 28 3 31 (68) 2 (66) 20 (10) 10 Change in unrealized gains (losses) available-for-sale securities (1) — (1) 1 — 1 — — — Total other comprehensive income (loss) (32) 3 (29) (139) 2 (137) 57 (10) 47 19 Related-party TransactionsThe Company’s related parties are the members of the board of directors of NXP Semiconductors N.V., the members of the management team ofNXP Semiconductors N.V. and equity-accounted investees. F-38Table of ContentsOtherWe have a number of strategic alliances and joint ventures. We have relationships with certain of our alliance partners in the ordinary course ofbusiness whereby we enter into various sale and purchase transactions, generally on terms comparable to transactions with third parties. However, in certaininstances upon divestment of former businesses where we enter into supply arrangements with the former owned business, sales are conducted at cost.The following table presents the amounts related to revenue and expenses incurred in transactions with these related parties: 2015 2014 2013 Revenue 8 11 — Purchase of goods and services 85 103 102 The following table presents the amounts related to balances with these related parties: 2015 2014 Receivables 24 15 Payables 24 30 20 Fair Value of Financial Assets and LiabilitiesThe following table summarizes the estimated fair value and carrying amount of our financial instruments: December 31, 2015 December 31, 2014 Fair valuehierarchy(1) Carryingamount Estimatedfair value Carryingamount Estimatedfair value Assets: Notes hedges 2 241 241 203 203 Other financial assets 2 47 47 44 44 Derivative instruments-assets 2 2 2 2 2 Liabilities: Short-term debt 2 (22) (22) (12) (12) Short-term debt (bonds) 2 (534) (535) (8) (8) Long-term debt (bonds) 2 (7,669) (7,723) (3,003) (3,079) 2019 Cash Convertible Senior Notes 2 (972) (1,260) (930) (1,176) Other long-term debt 2 (15) (15) (3) (3) Notes Embedded Conversion Derivative 2 (241) (241) (203) (203) Warrants 2 (168) (168) (136) (136) Derivative instruments-liabilities 2 (4) (4) (4) (4) (1) Transfers between the levels of fair value hierarchy are recognized when a change in circumstances would require it.The following methods and assumptions were used to estimate the fair value of financial instruments:Other financial assets and derivativesFor other financial assets and derivatives the fair value is based upon significant other observable inputs depending on the nature of the otherfinancial asset and derivative.Notes hedgesThe Notes hedges are measured at fair value using level 2 inputs. The instrument is not actively traded and is valued using an option pricingmodel that uses observable market data for all inputs, such as implied volatility of NXP’s common stock, risk-free interest rate and other factors.DebtThe fair value is estimated on the basis of observable inputs other than quoted prices in active markets for identical liabilities for certain issues,or on the basis of discounted cash flow analyses. Accrued interest is included under accrued liabilities and not within the carrying amount or estimated fairvalue of debt. F-39Table of ContentsNotes Embedded Conversion Derivative and WarrantsThe Notes Embedded Conversion Derivative and Warrants are measured at fair value using level 2 inputs. These instruments are not activelytraded and are valued using an option pricing model that uses observable market data for all inputs, such as implied volatility of NXP’s common stock, risk-free interest rate and other factors.Assets and liabilities recorded at fair value on a non-recurring basisWe measure and record our non-marketable equity investments (non-marketable equity method and cost method investments) and non-financialassets, such as intangible assets and property, plant and equipment, at fair value when an impairment charge is required.21 Other Financial Instruments, Derivatives and Currency RiskWe conduct business in diverse markets around the world and employ a variety of risk management strategies and techniques to manage foreigncurrency exchange rate and interest rate risks. Our risk management program focuses on the unpredictability of financial markets and seeks to minimize thepotentially adverse effects that the volatility of these markets may have on our operating results. One way we achieve this is through the active hedging ofrisks through the selective use of derivative instruments.Derivatives are recorded on our Consolidated Balance Sheets at fair value which fluctuates based on changing market conditions.The Company does not purchase or hold financial derivative instruments for trading purposes.Currency riskThe Company’s transactions are denominated in a variety of currencies. The Company uses financial instruments to reduce its exposure to theeffects of currency fluctuations. Accordingly, the Company’s organizations identify and measure their exposures from transactions denominated in other thantheir own functional currency. We calculate our net exposure on a cash flow basis considering balance sheet items, actual orders received or made andanticipated revenue and expenses. The Company generally hedges foreign currency exposures in relation to transaction exposures, such asreceivables/payables resulting from such transactions and part of anticipated sales and purchases. The Company generally uses forwards to hedge theseexposures. In addition, the U.S. dollar-denominated debt held by our Dutch subsidiary which has a euro functional currency may generate adverse currencyresults in financial income and expenses depending on the exchange rate movement between the euro and the U.S. dollar. This exposure has been partiallymitigated by the application of net investment hedge accounting. In accordance with the provisions in ASC 815, “Derivatives and Hedging”, the Companyhas applied net investment hedging since May 2011. The U.S. dollar exposure of our net investment in U.S. dollar functional currency subsidiaries has beenhedged by certain of our U.S. dollar denominated debt for an amount of $1.7 billion. The hedging relationship is assumed to be highly effective. Foreigncurrency gains or losses on this U.S. dollar debt that is recorded in a euro functional currency entity that are designated as, and to the extent they are effectiveas, a hedge of the net investment in our U.S. dollar foreign entities, are reported as a translation adjustment in other comprehensive income within equity, andoffset in whole or in part the foreign currency changes to the net investment that are also reported in other comprehensive income. As a result, in 2015, acharge of $190 million (2014: a charge of $214 million) was recorded in other comprehensive income relating to the foreign currency result on the U.S.dollar-denominated notes that are recorded in a euro functional currency entity. Absent the application of net investment hedging, this amount would havebeen recorded as a loss (2014: loss) within financial income (expense) in the statement of operations. No amount resulting from ineffectiveness of netinvestment hedge accounting was recognized in the statement of operations in 2015 (2014: no amount). As of January 1, 2016, as a result of the acquisitionof Freescale, NXP has concluded that the functional currency of the holding company is USD. Beginning from January 1, 2016, our U.S. dollar-denominatednotes and short term loans will no longer need to be re-measured.22 Segments and Geographical InformationNXP is organized into two reportable segments, High Performance Mixed Signal (“HPMS”) and Standard Products (“SP”). Corporate and Otherrepresents the remaining portion to reconcile to the Consolidated Financial Statements. Effective with the Merger, the operations of Freescale wereincorporated into the HPMS reportable segment.Our HPMS business segment delivers high performance mixed signal solutions to our customers to satisfy their system and sub-systems needsacross eight application areas: automotive, identification, mobile, consumer, computing, wireless infrastructure, lighting and industrial, and softwaresolutions for mobile phones. Our SP business segment offers standard products for use across many application markets, as well as application-specificstandard products predominantly used in application areas such as mobile handsets, computing, consumer and automotive. The segments each includerevenue from the sale and licensing of intellectual property related to that segment. F-40Table of ContentsOur Chief Executive Officer, who is our CODM, regularly reviews financial information at the reporting segment level in order to make decisionsabout resources to be allocated to the segments and to assess their performance. Segment results that are reported to the CODM include items directlyattributable to a segment as well as those that can be allocated on a reasonable basis. Asset information by segment is not provided to our CODM as themajority of our assets are used jointly or managed at corporate level. Arithmetical allocation of these assets to the various businesses is not deemed to bemeaningful and as such total assets per segment has been omitted.Detailed information by segment for the years 2015, 2014 and 2013 is presented in the following tables. Revenue 2015 2014 2013 HPMS 4,720 4,208 3,533 SP 1,241 1,275 1,145 Corporate and Other (1) 140 164 137 6,101 5,647 4,815 Operating income (loss) 2015 2014 2013 HPMS 1,885 983 712 SP 264 120 39 Corporate and Other (1) (134) (54) (100) 2,015 1,049 651 (1) Corporate and Other is not a segment under ASC 280 “Segment Reporting”. Corporate and Other includes unallocated expenses not related to anyspecific business segment and corporate restructuring charges. Goodwill assigned to segments Cost at January 1,2015 Acquisitions Translationdifferences and otherchanges Cost at December 31,2015 HPMS 1,605 7,464 (300) 8,769 SP 424 — (51) 373 Corporate and Other (1) 299 — (27) 272 2,328 7,464 (378) 9,414 See note 3 for further information regarding the acquisition of Freescale. Accumulatedimpairment atJanuary 1, 2015 Translation differencesand other changes Accumulatedimpairment atDecember 31, 2015 HPMS (172) 18 (154) SP (35) 3 (32) Corporate and Other (1) — — — (207) 21 (186) (1) Corporate and Other is not a segment under ASC 280 “Segment Reporting”.Geographical Information Revenue (1) Property, plant and equipment 2015 2014 2013 2015 2014 2013 China 3,135 2,756 2,047 360 116 115 Netherlands 177 171 146 161 169 180 Taiwan 78 96 98 160 138 91 United States 415 396 365 1,115 5 6 Singapore 526 452 421 186 200 214 Germany 392 450 434 98 80 80 South Korea 268 287 294 1 1 1 Other countries 1,110 1,039 1,010 841 414 361 6,101 5,647 4,815 2,922 1,123 1,048 (1) Revenue attributed to geographic areas is based on the customer’s shipped-to location (except for intellectual property license revenue which isattributable to the Netherlands). F-41Table of Contents23 Subsequent EventsOn February 23, 2016, NXP B.V., together with NXP Funding LLC, issued redemption notices for an aggregate principal amount of $200 million of its $500million outstanding 3.5% senior notes due 2016. This partial redemption will be made as permitted under Article 3 of the indenture dated as of September 24,2013 and paragraph 5 of the Notes. The funds for this redemption will come from available surplus cash. F-42Exhibit 4.10Execution VersionNXP B.V.NXP FUNDING LLCas IssuersEACH OF THE GUARANTORS PARTY HERETOandDEUTSCHE BANK TRUST COMPANY AMERICAS,as Trustee$600,000,000 4.125% Senior Notes due 2020$400,000,000 4.625% Senior Notes due 2022 SENIOR INDENTUREDated as of June 9, 2015 TABLE OF CONTENTS Page ARTICLE 1 Definitions and Incorporation by Reference 1 SECTION 1.01. Definitions 1 SECTION 1.02. Other Definitions 19 SECTION 1.03. Incorporation by Reference of TIA 20 SECTION 1.04. Rules of Construction 21 ARTICLE 2 The Notes 21 SECTION 2.01. Issuable in Series 21 SECTION 2.02. Form and Dating 23 SECTION 2.03. Execution and Authentication 23 SECTION 2.04. Registrar, Transfer Agent and Paying Agent 24 SECTION 2.05. Paying Agent to Hold Money in Trust 25 SECTION 2.06. Holder Lists 25 SECTION 2.07. Transfer and Exchange 25 SECTION 2.08. Replacement Notes 26 SECTION 2.09. Outstanding Notes 27 SECTION 2.10. Temporary Notes 27 SECTION 2.11. Cancellation 27 SECTION 2.12. Common Codes, CUSIP and ISIN Numbers 27 SECTION 2.13. Currency 28 ARTICLE 3 Redemption 29 SECTION 3.01. Notices to Trustee 29 SECTION 3.02. Selection of Notes To Be Redeemed or Repurchased 29 SECTION 3.03. Notice of Redemption. 30 SECTION 3.04. Effect of Notice of Redemption 30 SECTION 3.05. Deposit of Redemption Price 30 SECTION 3.06. Notes Redeemed in Part 31 SECTION 3.07. Publication 31 ARTICLE 4 Covenants 31 SECTION 4.01. Payment of Notes 31 iSECTION 4.02. Withholding Taxes 32 SECTION 4.03. Offer to Repurchase upon Change of Control Triggering Event 34 SECTION 4.04. U.S. Federal Income Tax Treatment of the Co-Issuer 36 SECTION 4.05. Limitation on Liens 37 SECTION 4.06. Limitation on Sale and Leaseback Transactions 37 SECTION 4.07. Guarantees by Subsidiaries 37 SECTION 4.08. Compliance Certificate 38 SECTION 4.09. Further Instruments and Acts 38 ARTICLE 5 Successor Company 38 SECTION 5.01. Merger and Consolidation of the Company 38 SECTION 5.02. Merger and Consolidation of the Co-Issuer 40 SECTION 5.03. Merger and Consolidation of a Guarantor 40 ARTICLE 6 Defaults and Remedies 41 SECTION 6.01. Events of Default 41 SECTION 6.02. Acceleration 42 SECTION 6.03. Other Remedies 43 SECTION 6.04. Waiver of Past Defaults 43 SECTION 6.05. Control by Majority 43 SECTION 6.06. Limitation on Suits 43 SECTION 6.07. Rights of Holders to Receive Payment 44 SECTION 6.08. Collection Suit by Trustee 44 SECTION 6.09. Trustee May File Proofs of Claim 44 SECTION 6.10. Priorities 45 SECTION 6.11. Undertaking for Costs 45 SECTION 6.12. Waiver of Stay or Extension Laws 45 ARTICLE 7 Trustee 45 SECTION 7.01. Duties of Trustee 45 SECTION 7.02. Rights of Trustee. 47 SECTION 7.03. Individual Rights of Trustee 49 SECTION 7.04. Trustee’s Disclaimer 49 SECTION 7.05. Notice of Defaults 49 SECTION 7.06. [Reserved] 49 SECTION 7.07. Compensation and Indemnity 49 SECTION 7.08. Replacement of Trustee 51 iiSECTION 7.09. Successor Trustee by Merger 52 SECTION 7.10. Eligibility 53 SECTION 7.11. Certain Provisions 53 SECTION 7.12. Preferential Collection of Claims Against Issuer 53 ARTICLE 8 Discharge of Indenture; Defeasance 53 SECTION 8.01. Discharge of Liability on Notes; Defeasance 53 SECTION 8.02. Conditions to Defeasance 54 SECTION 8.03. Application of Trust Money 55 SECTION 8.04. Repayment to Issuers 55 SECTION 8.05. Indemnity for U.S. Government Obligations 56 SECTION 8.06. Reinstatement 56 ARTICLE 9 Amendments 56 SECTION 9.01. Without Consent of Holders 56 SECTION 9.02. With Consent of Holders 57 SECTION 9.03. Revocation and Effect of Consents and Waivers 58 SECTION 9.04. Notation on or Exchange of Notes 59 SECTION 9.05. Trustee to Sign Amendments 59 SECTION 9.06. Payment for Consent 59 ARTICLE 10 Note Guarantees 60 SECTION 10.01. Note Guarantees. 60 SECTION 10.02. Limitation on Liability 62 SECTION 10.03. Successors and Assigns 63 SECTION 10.04. No Waiver 63 SECTION 10.05. Modification 63 SECTION 10.06. Non-Impairment 63 ARTICLE 11 Miscellaneous 64 SECTION 11.01. Trust Indenture Act of 1939 64 SECTION 11.02. Noteholder Communications; Noteholder Actions 64 SECTION 11.03. Notices 65 SECTION 11.04. Certificate and Opinion as to Conditions Precedent 66 SECTION 11.05. Statements Required in Certificate or Opinion 66 SECTION 11.06. When Notes Disregarded 67 iiiSECTION 11.07. Rules by Trustee, Paying Agent and Registrar 67 SECTION 11.08. Legal Holidays 67 SECTION 11.09. Governing Law 67 SECTION 11.10. Consent to Jurisdiction and Service 67 SECTION 11.11. No Recourse Against Others 68 SECTION 11.12. Successors 68 SECTION 11.13. Multiple Originals 68 SECTION 11.14. Table of Contents; Headings 68 SECTION 11.15. Applicable Law; Provision of Information to Trustee 68 SECTION 11.16. Force Majeure 69 SECTION 11.17. Prescription. 69 Schedule 1 Agreed Security Principles Appendix A Provisions Relating to the Notes Exhibit A Form of Reg. S/144A Note Exhibit B Form of Certificate of Transfer Exhibit C Form of Officer’s Compliance Certificate ivINDENTURE dated as of June 9, 2015, among NXP B.V. (the “Company”), NXP Funding LLC (the “Co-Issuer” and, together with the Company,the “Issuers”), the Guarantors (as defined herein) and Deutsche Bank Trust Company Americas, as trustee (the “Trustee”).Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (a) the Issuers’ dollar-denominated 4.125% Senior Notes due 2020 issued on the date hereof (the “2020 Notes”) and the Issuers’ dollar-denominated 4.625% Senior Notes due2022 issued on the date hereof (the “2022 Notes”, and together with the 2020 Notes, the “Original Notes”) and (b) an unlimited principal amount ofadditional securities having identical terms and conditions as either the 2020 Notes or the 2022 Notes, except for any differences in the issue price, theinterest (whether accrued prior to the issue date of the Additional Notes or otherwise) or the maturity (the “Additional Notes”) that subject to the conditionsand in compliance with the covenants set forth herein may be issued on any later issue date. Unless the context otherwise requires, in this Indenture referencesto the “Notes” include the Original Notes and any Additional Notes that are actually issued.This Indenture is subject to, and will be governed by, the provisions of the TIA that are required to be a part of and govern indentures under theTIA, except as otherwise set forth herein.ARTICLE 1Definitions and Incorporation by ReferenceSECTION 1.01. Definitions“2020 Notes Applicable Premium” means, with respect to any Note on any redemption date, the greater of (A) 1% of the principal amount of such Noteon such redemption date and (B) the excess (to the extent positive) of:(a) the present value at such redemption date of (i) the outstanding principal amount of such Note being redeemed, plus (ii) any required interestpayments due on such Note through May 15, 2020 (the date one month prior to the maturity date of the Notes) that would be due after such redemption datebut for such redemption, computed using a discount rate equal to the Treasury Rate at such redemption date plus 50 basis points; over(b) the outstanding principal amount of such Note;in each case, as calculated by the Issuers or on behalf of the Issuers by such Person as the Issuers shall designate.“2022 Notes Applicable Premium” means, with respect to any Note on any redemption date, the greater of (A) 1% of the principal amount of such Noteon such redemption date and (B) the excess (to the extent positive) of:(a) the present value at such redemption date of (i) the outstanding principal amount of such Note being redeemed, plus (ii) any required interestpayments due on such Note throughMay 15, 2022 (the date one month prior to the maturity date of the Notes) that would be due after such redemption date but for such redemption, computedusing a discount rate equal to the Treasury Rate at such redemption date plus 50 basis points; over(b) the outstanding principal amount of such Note;in each case, as calculated by the Issuers or on behalf of the Issuers by such Person as the Issuers shall designate.“actual knowledge” of any Trustee shall be construed to mean that such Trustee shall not be charged with knowledge (actual or otherwise) of theexistence of facts that would impose an obligation on it to make any payment or prohibit it from making any payment unless a Responsible Officer of suchTrustee has received written notice that such payments are required or prohibited by this Indenture in which event the Trustee shall be deemed to have actualknowledge within one Business Day of receiving that notice.“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect commoncontrol with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct themanagement and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms“controlling” and “controlled” have meanings correlative to the foregoing.“Agreed Security Principles” means the Agreed Security Principles as set out in Schedule 1, as applied reasonably and in good faith by the Company.“Attributable Liens” means, in connection with any Sale and Leaseback Transaction, the lesser of (i) the fair market value of the assets subject to suchSale and Leaseback Transaction, as determined by an Officer or the Board of Directors in good faith, and (ii) the present value (discounted at a rate of7.5% per annum compounded monthly) of the obligations of the lessee for rental payments during the term of the related lease.“Board of Directors” means (1) with respect to the Company or any corporation, the board of directors or managers, as applicable, of the corporation, orany duly authorized committee thereof; (2) with respect to any partnership, the board of directors or other governing body of the general partner of thepartnership or any duly authorized committee thereof; and (3) with respect to any other Person, the board or any duly authorized committee of such Personserving a similar function. Whenever any provision requires any action or determination to be made by, or any approval of, a Board of Directors, such action,determination or approval shall be deemed to have been taken or made if approved by a majority of the directors (excluding employee representatives, if any)on any such Board of Directors (whether or not such action or approval is taken as part of a formal board meeting or as a formal board approval).“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in London, United Kingdom, or New York,New York, United States are authorized or required by law to close; provided, however, that for any payments to be made under this Indenture, such day shallalso be a day on which the second generation Trans-European Automated Real-time Gross Settlement Express Transfer (“TARGET2”) payment system is openfor the settlement of payments. 2“Capital Stock” of any Person means any and all shares of, rights to purchase, warrants or options for, or other equivalents of or partnership or otherinterests in (however designated), equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.“Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reportingpurposes on the basis of GAAP. The amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time anydetermination thereof is to be made as determined on the basis of GAAP, and the Stated Maturity thereof will be the date of the last payment of rent or anyother amount due under such lease prior to the first date such lease may be terminated without penalty.“Change of Control” means: (1)the Issuers become aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice orotherwise) that any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other thanone or more Permitted Holders, is or has become the “beneficial owner” (as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act)of more than 50% of the Voting Stock of the Company (or its successor); provided, however, that (x) for purposes of this clause (1) such person orgroup shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right isexercisable immediately or only after the passage of time, directly or indirectly; (y) a transaction will not be deemed to involve a Change ofControl under this clause (1) if (a) the Company becomes a direct or indirect wholly owned subsidiary of a holding company (including theParent) and (b)(i) the direct or indirect holders of the Voting Stock of such holding company (including the Parent) immediately following thattransaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (ii) immediatelyfollowing that transaction no “person” or “group” of related persons (other than a holding company (including the Parent) satisfying therequirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company(including the Parent); and (z) any Voting Stock of which any Permitted Holder is the “beneficial owner” (as such term is used in Rules 13d-3and 13d-5 under the Exchange Act) shall not be included in any Voting Stock of which any such “person” or “group” of related persons is the“beneficial owner” (as so defined), unless that person or group of related persons is not an affiliate of a Permitted Holder and has greater votingpower with respect to that Voting Stock; or; (2)the sale, lease, transfer, conveyance or other disposition, in one transaction or a series of related transactions, of all or substantially all of theassets of the Company and its Subsidiaries taken as a whole to a Person, other than (w) where the 3 Company is the surviving entity following such sale, lease, transfer, conveyance or other disposition, (x) a Subsidiary, (y) any such sale, lease,transfer, conveyance or other disposition where the shares of the Company’s Voting Stock outstanding immediately prior to such transactionconstitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving Person or parent entity thereof immediatelyafter giving effect to such transaction or (z) one or more Permitted Holders.“Change of Control Triggering Event” means, with respect to the Notes, the occurrence of (1) a Change of Control that is accompanied or followed bya downgrade of the relevant Notes within the Ratings Decline Period for such Change of Control by each of Moody’s and S&P (or, in the event Moody’s orS&P or both shall cease rating the Notes (for reasons outside the control of the Company), the Company shall select any other “nationally recognizedstatistical rating organisation” within the meaning of Section 3(a)(62) of the Exchange Act, the equivalent of such ratings by such other nationallyrecognized rating agency) and (2) the rating of the Notes on any day during such Ratings Decline Period is below the lower of the rating by such nationallyrecognized rating agency in effect (a) immediately preceding the first public announcement of the Change of Control (or occurrence thereof if such Changeof Control occurs prior to public announcement) and (b) on the Issue Date; provided that a Change of Control Trigger Event will not be deemed to haveoccurred in respect of a particular Change of Control if such nationally recognized rating agency making the reduction in rating does not publicly announceor confirm or inform the Trustee at our request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as aresult of, or in respect of or in connection with the Change of Control. For the avoidance of doubt, no Change of Control Triggering Event will be deemed tohave occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.“Consolidated EBITDA” for any period means: (1)the consolidated net income (loss) of the Company determined on the basis of GAAP, excluding: (a)any extraordinary, exceptional, unusual or nonrecurring gain, loss or charge (as determined in good faith by an Officer or the Board of Directorsof the Company) or any charges or reserves in respect of any restructuring, redundancy or severance expense; (b)any non-cash compensation charge or expense arising from any grant of stock, stock options or other equity based awards and any non-cashdeemed finance charges in respect of any pension liabilities or other provisions; and (c)any purchase accounting effects including, but not limited to, adjustments to inventory, property and equipment, software and other intangibleassets and deferred revenue in component amounts required or permitted by GAAP and related authoritative pronouncements (including theeffects of such adjustments pushed down to the Company and the Subsidiaries), as a result of any consummated acquisition; 4 (2)before: (a)(x) consolidated interest expense of the Company and its Subsidiaries for such period, to the extent such expense was deducted (and not addedback) in computing consolidated net income (loss) of the Company (including (i) amortization of original issue discount resulting from theissuance of Indebtedness at less than par, (ii) all commissions, discounts and other fees and charges owed with respect to letters of credit orbankers acceptances, (iii) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark tomarket valuation of hedging obligations or other derivative instruments pursuant to GAAP), (iv) the interest component of Capitalized LeaseObligations, and (v) net payments, if any, pursuant to interest rate hedging obligations with respect to Indebtedness, and excluding (vi) accretionor accrual of discounted liabilities other than Indebtedness, (vii) any expense resulting from the discounting of any Indebtedness in connectionwith the application of purchase accounting in connection with any acquisition, (viii) amortization of deferred financing fees, debt issuancecosts, commissions, fees and expenses and (ix) any expensing of bridge, commitment and other financing fees), plus (y) consolidated capitalizedinterest of the Company for such period, whether paid or accrued; less (z) interest income for such period; (b)Taxes or other payments, including deferred Taxes, based on income, profits or capital (including without limitation withholding taxes) andfranchise taxes of any of the Company and its Subsidiaries whether or not paid, estimated, accrued or required to be remitted to anyGovernmental Authority; (c)consolidated depreciation expense and consolidated amortization or impairment expense, including (i) any expenses, charges or other costsrelated to any equity offering, investment, acquisition (including one-time amounts paid in connection with the acquisition or retention of oneor more individuals comprising part of a management team retained to manage the acquired business; provided that such payments are made inconnection with such acquisition and are consistent with the customary practice in the industry at the time of such acquisition), disposition,recapitalization or the Incurrence of any Indebtedness permitted by this Indenture (in each case whether or not successful) in each case, asdetermined in good faith by an Officer or the Board of Directors of the Company; (ii) any minority interest expense (whether paid or not)consisting of income attributable to minority equity interests of third parties in such period; and (iii) other non-cash charges, write-downs oritems reducing consolidated net income (loss) of the Company (excluding any such non-cash charge, write-down or item to the extent itrepresents an accrual of or reserve for cash charges in any future period) or other items classified by the Company as special items less other non-cash items of income increasing consolidated net income (loss) of the Company (excluding any such non-cash item of income to the extent itrepresents a receipt of cash in any future period). 5“Consolidated Net Tangible Assets” means, at any date, the total assets appearing on the Company’s most recent consolidated balance sheet, preparedin accordance with GAAP, less all current liabilities as shown on such balance sheet, and Intangible Assets.“Consolidated Secured Leverage Ratio” means, as of any date of determination, the ratio of (x) the sum of the aggregate outstanding SecuredIndebtedness of the Company and its Subsidiaries (excluding hedging obligations), minus the cash and cash equivalents of the Company and its Subsidiariesat such date to (y) the aggregate amount of Consolidated EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date ofsuch determination for which internal consolidated financial statements of the Issuer are available; provided, however, that for the purposes of calculatingConsolidated EBITDA for such period, if, as of such date of determination: (1)since the beginning of such period the Company or any Subsidiary has disposed of any company, any business, or any group of assetsconstituting an operating unit of a business (any such disposition, a “Sale”) or if the transaction giving rise to the need to calculate theConsolidated Secured Leverage Ratio is such a Sale, Consolidated EBITDA for such period will be reduced by an amount equal to theConsolidated EBITDA (if positive) attributable to the assets which are the subject of such Sale for such period or increased by an amount equalto the Consolidated EBITDA (if negative) attributable thereto for such period; provided that if any such sale constitutes “discontinuedoperations” in accordance with the then applicable GAAP, Consolidated EBITDA shall be reduced by an amount equal to the ConsolidatedEBITDA (if positive) attributable to such operations for such period or increased by an amount equal to the Consolidated EBITDA (if negative)attributable thereto for such period; (2)since the beginning of such period, the Company or any Subsidiary (by merger or otherwise) has made an investment in any Person that therebybecomes a Subsidiary, or otherwise has acquired any company, any business, or any group of assets constituting an operating unit of a business(any such investment or acquisition, a “Purchase”), including any such Purchase occurring in connection with a transaction causing acalculation to be made hereunder, Consolidated EBITDA for such period will be calculated after giving pro forma effect thereto as if suchPurchase occurred on the first day of such period, including anticipated cost savings and synergies; and (3)since the beginning of such period, any Person (that became a Subsidiary or was merged or otherwise combined with or into the Company or anySubsidiary since the beginning of such period) will have made any Sale or any Purchase that would have required an adjustment pursuant toclause (1) or (2) above if made by the Company or a Subsidiary since the beginning of such period, Consolidated EBITDA for such period willbe calculated after giving pro forma effect thereto as if such Sale or Purchase occurred on the first day of such period.For the purposes of this definition and the definition of Consolidated EBITDA, (a) calculations will be as determined in good faith by an Officer or theBoard of Directors of the 6Company (including in respect of cost savings and synergies and anticipated cost savings and synergies) and (b) in determining the amount of SecuredIndebtedness outstanding on any date of determination, pro forma effect shall be given to any Incurrence, repayment, repurchase, defeasance or otheracquisition, retirement or discharge of Secured Indebtedness as if such transaction had occurred on the first day of the relevant period.“Credit Facility” means, with respect to the Company or any of its Subsidiaries, one or more debt facilities, indentures or other arrangements(including the Revolving Credit Agreement or commercial paper facilities and overdraft facilities) with banks, other financial institutions or investorsproviding for revolving credit loans, term loans, notes, receivables financing (including through the sale of receivables to such institutions or to specialpurpose entities formed to borrow from such institutions against such receivables), letters of credit or other Indebtedness, in each case, as amended, restated,modified, renewed, refunded, replaced, restructured, refinanced, repaid, increased or extended in whole or in part from time to time (and whether in whole orin part and whether or not with the original administrative agent and lenders or another administrative agent or agents or other banks or institutions andwhether provided under the original Revolving Credit Agreement or one or more other credit or other agreements, indentures, financing agreements orotherwise) and in each case including all agreements, instruments and documents executed and delivered pursuant to or in connection with the foregoing(including any notes and letters of credit issued pursuant thereto and any Guarantee and collateral agreement, patent and trademark security agreement,mortgages or letter of credit applications and other Guarantees, pledges, agreements, security agreements and collateral documents). Without limiting thegenerality of the foregoing, the term “Credit Facility” shall include any agreement or instrument (1) changing the maturity of any Indebtedness Incurredthereunder or contemplated thereby, (2) adding Subsidiaries of the Company as additional borrowers or guarantors thereunder, (3) increasing the amount ofIndebtedness Incurred thereunder or available to be borrowed thereunder or (4) otherwise altering the terms and conditions thereof.“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for thebenefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicablejurisdictions from time to time in effect and affecting the rights of creditors generally (including, in the case of any Guarantor incorporated or organized inEngland or Wales, administration, administrative receivership, voluntary arrangement and schemes of arrangement).“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which by its terms (or by the terms of any security into whichit is convertible or for which it is exchangeable) or upon the happening of any event:(1) matures or is mandatorily redeemable for cash or in exchange for Indebtedness pursuant to a sinking fund obligation or otherwise; 7(2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock which is convertible or exchangeablesolely at the option of the Company or a Subsidiary); or(3) is or may become (in accordance with its terms) upon the occurrence of certain events or otherwise redeemable or repurchasable forcash or in exchange for Indebtedness at the option of the holder of the Capital Stock in whole or in part,in each case on or prior to the earlier of (a) the Stated Maturity of the Notes or (b) the date on which there are no Notes outstanding; provided, however, thatonly the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of theholder thereof prior to such date will be deemed to be Disqualified Stock.“DTC” means The Depository Trust Company or any successor securities clearing agency.“Euro Equivalent” means, with respect to any monetary amount in a currency other than euro, at any time of determination thereof by the Company orthe Trustee, the amount of euro obtained by converting such currency other than euro involved in such computation into euro at the spot rate for the purchaseof euro with the applicable currency other than euro as published in The Financial Times in the “Currency Rates” section (or, if The Financial Times is nolonger published, or if such information is no longer available in The Financial Times, such source as may be selected in good faith by an Officer or theBoard of Directors) on the date of such determination.“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, asamended.“fair market value” may be conclusively established by means of an Officer’s Certificate or a resolution of the Board of Directors of the Companysetting out such fair market value as determined by such Officer or such Board of Directors in good faith.“GAAP” means generally accepted accounting principles in the United States of America as in effect on the date of any calculation or determinationrequired hereunder. Except as otherwise set forth in this Indenture, all ratios and calculations based on GAAP contained in this Indenture shall be computedin accordance with GAAP. At any time after the Issue Date, the Company may elect to establish that GAAP shall mean the GAAP as in effect on or prior to thedate of such election, provided that any such election, once made, shall be irrevocable. At any time after the Issue Date, the Company may elect to applyInternational Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shallthereafter be construed to mean IFRS (except as otherwise provided elsewhere in this Indenture), including as to the ability of the Company to make anelection pursuant to the previous sentence; provided that any such election, once made, shall be irrevocable; provided, further, that any calculation ordetermination in this Indenture that require the application of GAAP for periods that include fiscal quarters ended prior to the Company’s election to applyIFRS shall remain as previously calculated or determined in accordance with GAAP; provided, further again, that the Company may only make such electionif it also elects to report any subsequent financial reports 8required to be made by the Company, including pursuant to Section 13 or Section 15(d) of the Exchange Act, in IFRS. The Company shall give notice of anysuch election made in accordance with this definition to the Trustee and the Holders.“Governmental Authority” means any nation, sovereign or government, any state, province, territory or other political subdivision thereof, and anyentity or authority exercising executive, legislative, judicial, regulatory, self-regulatory or administrative functions of or pertaining to government, includinga central bank or stock exchange.“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person,including any such obligation, direct or indirect, contingent or otherwise, of such Person:(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arisingby virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintainfinancial statement conditions or otherwise); or(2) entered into primarily for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or toprotect such obligee against loss in respect thereof (in whole or in part);provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term“Guarantee” used as a verb has a corresponding meaning.“Guarantor” means any Subsidiary that Guarantees the Notes.“Holder” means each Person in whose name the Notes are registered on the Registrar’s books, which shall initially be the respective nominee of DTC.“Incur” means issue, create, assume, enter into any Guarantee of, incur, extend or otherwise become liable for; and the terms “Incurred” and“Incurrence” have meanings correlative to the foregoing and any Indebtedness pursuant to any revolving credit or similar facility shall only be “Incurred” atthe time any funds are borrowed thereunder.“Indebtedness” means, with respect to any Person on any date of determination (without duplication):(1) the principal of indebtedness of such Person for borrowed money;(2) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;(3) all reimbursement obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (theamount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters 9of credit or other instruments plus the aggregate amount of drawings thereunder that have not been reimbursed) (except to the extent suchreimbursement obligations relate to trade payables and such obligations are satisfied within 30 days of Incurrence), in each case only to the extent thatthe underlying obligation in respect of which the instrument was issued would be treated as Indebtedness;(4) the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except tradepayables), where the deferred payment is arranged primarily as a means of raising finance, which purchase price is due more than one year after the dateof placing such property in service or taking final delivery and title thereto;(5) Capitalized Lease Obligations of such Person;(6) the principal component of all obligations, or liquidation preference, of such Person with respect to any Disqualified Stock (butexcluding any accrued dividends);(7) the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not suchIndebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the fair market value of suchasset at such date of determination (as determined by an Officer or the Board of Directors in good faith) and (b) the amount of such Indebtedness ofsuch other Persons;(8) Guarantees by such Person of the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person; and(9) to the extent not otherwise included in this definition, net obligations of such Person under any hedging obligations (the amount ofany such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would bepayable by such Person at such time).The term “Indebtedness” shall not include any lease, concession or license of property (or Guarantee thereof) which would be considered an operatinglease under GAAP as in effect on the Issue Date, any asset retirement obligations, any prepayments of deposits received from clients or customers in theordinary course of business, or obligations under any license, permit or other approval (or Guarantees given in respect of such obligations) Incurred prior tothe Issue Date or in the ordinary course of business.The amount of Indebtedness of any Person at any time in the case of a revolving credit or similar facility shall be the total amounts of funds borrowedand then outstanding. The amount of Indebtedness of any Person at any date shall be determined as set forth above or otherwise provided in this Indenture,and (other than with respect to letters of credit or Guarantees of Indebtedness specified in clause (7) or (8) above) shall equal the amount thereof that wouldappear on a balance sheet of such Person (excluding any notes thereto) prepared on the basis of GAAP. 10Notwithstanding the above provisions, in no event shall the following constitute Indebtedness: (i)contingent obligations Incurred in the ordinary course of business; (ii)in connection with the purchase by the Company of any business, any post-closing payment adjustments to which the seller may becomeentitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such businessafter the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent suchpayment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter; or (iii)for the avoidance of doubt, any obligations in respect of workers’ compensation claims, early retirement or termination obligations, pension fundobligations or contributions or similar claims, obligations or contributions or social security or wage Taxes.“Intangible Assets” means the value (net of applicable reserves), as shown on or reflected in the Company’s most recent consolidated balance sheet, of(i) all trade names, trademarks, licenses, patents, copyrights and goodwill, (ii) organizational and development costs, (iii) deferred charges (other than prepaiditems such as insurance, taxes, interest, commissions, rents and similar items and tangible assets being amortized) and (iv) unamortized debt discount andexpenses, less unamortized premium.“Investors” means The Blackstone Group, The Carlyle Group, Permira funds advised by Permira Advisers LLC, Texas Pacific Group and, if applicable,each of their respective Affiliates and funds or partnerships managed by any of them or their respective Affiliates but not including, however, any portfoliocompanies of any of the foregoing.“Issue Date” means June 9, 2015.“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retentionagreement or lease in the nature thereof).“Merger” means the merger of the Parent, Nimble Acquisition Limited and Freescale Semiconductor, Ltd. contemplated by the agreement and plan ofmerger, dated March 1, 2015, pursuant to which Freescale Semiconductor, Ltd. will become a wholly owned, indirect subsidiary of the Parent.“Merger Date” means the closing date of the Merger.“Merger Financing Arrangements” means any secured term credit agreements, secured indentures, secured revolving credit agreement or other securedfinancing arrangements that will be entered into by the Company or any of its Subsidiaries in relation to the completion of the Merger. 11“Moody’s” means Moody’s Investors Service, Inc. or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization.“Nationally Recognized Statistical Rating Organization” means a nationally recognized statistical rating organization within the meaning ofSection 3(a)(62) of the Exchange Act.“Note Documents” means the Notes (including Additional Notes) and this Indenture.“Note Guarantee” has the meaning given to such term in Section 10.01.“Offering Memorandum” means the offering memorandum of the Issuers dated as of June 2, 2015 in connection with the offering and sale of the Notes.“Officer” means, with respect to any Person, (1) the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief FinancialOfficer, any Vice President, the Treasurer, any Managing Director or the Secretary (a) of such Person or (b) if such Person is owned or managed by a singleentity, of such entity, or (2) any other individual designated as an “Officer” for the purposes of this Indenture by the Board of Directors of such Person.“Officer’s Certificate” means, with respect to any Person, a certificate signed by one Officer of such Person.“Opinion of Counsel” means a written opinion from legal counsel reasonably satisfactory to the Trustee. The legal counsel may be an employee of orcounsel to the Company or its Subsidiaries.“Parent” means NXP Semiconductors N.V. or any successor thereto.“Permitted Liens” means, with respect to any Person: (1)pledges, deposits or Liens under workmen’s compensation laws, unemployment insurance laws, social security laws or similar legislation, orinsurance related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurancearrangements), or in connection with bids, tenders, completion guarantees, contracts (other than for borrowed money) or leases, or to secureutilities, licenses, public or statutory obligations, or to secure surety, indemnity, judgment, appeal or performance bonds, guarantees ofgovernment contracts (or other similar bonds, instruments or obligations), or as security for contested Taxes or import or customs duties or for thepayment of rent, or other obligations of like nature, in each case Incurred in the ordinary course of business; (2)Liens imposed by law, including carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s and repairmen’s or other like Liens, in eachcase for sums not yet overdue for a period of more than 60 days or that are bonded or being contested in good faith by appropriate proceedings; 12 (3)Liens for Taxes, assessments or other governmental charges not yet delinquent or which are being contested in good faith by appropriateproceedings; provided that appropriate reserves required pursuant to GAAP have been made in respect thereof; (4)Liens in favor of issuers of surety, performance or other bonds, guarantees or letters of credit or bankers’ acceptances (not issued to supportIndebtedness for borrowed money) issued pursuant to the request of and for the account of the Company or any Subsidiary in the ordinary courseof its business; (5)encumbrances, ground leases, easements (including reciprocal easement agreements), survey exceptions, or reservations of, or rights of others for,licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or otherrestrictions (including minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to theconduct of the business of the Company and its Subsidiaries or to the ownership of its properties which do not in the aggregate materiallyadversely affect the value of said properties or materially impair their use in the operation of the business of the Company and its Subsidiaries; (6)Liens on assets or property of the Company or any Subsidiary securing hedging obligations; (7)leases, licenses, subleases and sublicenses of assets (including real property and intellectual property rights), in each case entered into in theordinary course of business; (8)Liens arising out of judgments, decrees, orders or awards not giving rise to an Event of Default so long as any appropriate legal proceedingswhich may have been duly initiated for the review of such judgment, decree, order or award have not been finally terminated or the period withinwhich such proceedings may be initiated has not expired; (9)Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as todeposit accounts or other funds maintained with a depositary or financial institution; (10)Liens arising from Uniform Commercial Code financing statement filings (or similar filings in other applicable jurisdictions) regarding operatingleases entered into by the Company and its Subsidiaries in the ordinary course of business; (11)Liens on property, other assets or shares of stock of a Person at the time such Person becomes a Subsidiary (or at the time the Company or aSubsidiary acquires such property, other assets or shares of stock, including any acquisition by means of a merger, consolidation or otherbusiness combination transaction with or into the Company or any Subsidiary); provided, however, that such Liens are not created, Incurred orassumed in anticipation of or in connection with such other Person becoming a Subsidiary (or such acquisition of such property, other assets orstock); provided, further, that such Liens are limited to all or part of the same property, 13 other assets or stock (plus improvements, accession, proceeds or dividends or distributions in connection with the original property, other assetsor stock) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate; (12)Liens on assets or property of the Company or any Subsidiary securing Indebtedness or other obligations of the Company or such Subsidiaryowing to the Company or another Subsidiary, or Liens in favor of the Company or any Subsidiary; (13)Liens securing Refinancing Indebtedness Incurred to refinance Indebtedness that was previously permitted to be secured under this Indenture; (14)any interest or title of a lessor under any Capitalized Lease Obligation or operating lease; (15)(a) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any government,statutory or regulatory authority, developer, landlord or other third party on property over which the Company or any Subsidiary of theCompany has easement rights or on any leased property and subordination or similar arrangements relating thereto and (b) any condemnation oreminent domain proceedings affecting any real property; (16)any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangementpursuant to any joint venture or similar agreement; (17)Liens on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partialpayments by a third party relating to such property or assets; (18)Liens securing or arising by reason of any netting or set-off arrangement entered into in the ordinary course of banking or other trading activities,or liens over cash accounts securing cash pooling or cash management arrangements; (19)Liens arising out of conditional sale, title retention, hire purchase, consignment or similar arrangements for the sale of goods entered into in theordinary course of business; and (20)other Liens (including successive extensions, renewals, alterations or replacements thereof) not excepted by clauses (1) through (19) above,provided that after giving effect thereto the aggregate principal amount of the Secured Indebtedness of the Company and its SignificantSubsidiaries secured by such Liens does not exceed the greater of (A) the Post Merger Amount, (B) the amount that would cause theConsolidated Secured Leverage Ratio to exceed 2.5 to 1.0 and (C) 15% of the Consolidated Net Tangible Assets, in each case after giving effectto such Incurrence and the application of the proceeds therefrom. 14“Permitted Holders” means each of the Investors and members of management of the Company or its direct or indirect parent companies (including theParent) on the Merger Date who are holders of equity interests of the Company (or any of its direct or indirect parent companies) and any group (within themeaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided, that,in the case of such group and without giving effect to the existence of such group or any other group, such Investors and members of management,collectively, have beneficial ownership of more than 50% of the total voting power of the Voting Stock of the Company or any of its direct or indirect parentcompanies.“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limitedliability company, government or any agency or political subdivision thereof or any other entity.“Post Merger Amount” means an amount equal to the aggregate principal amount of Secured Indebtedness (i) that the Company or any of itsSubsidiaries will Incur under any Merger Financing Arrangements, not to exceed $4.64 billion, (ii) that has been, or is available to be, drawn under theRevolving Credit Agreement, (iii) that the Company or any of its Subsidiaries have outstanding as of the Issue Date (including, without limitation, the TermLoans and the Notes), plus (iv) that will remain outstanding at Freescale or any of its Subsidiaries upon completion of the Merger.“Preferred Stock” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred asto the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares ofCapital Stock of any other class of such Person.“Principal Property” means our property, plants and equipment owned by us or any of our Significant Subsidiaries, except as determined by an Officeror the Board of Directors in good faith (taking into account, among other things, the importance of such property, plants and equipment to our business,financial condition and earnings taken as a whole) not to be of material importance to the business of us and our Significant Subsidiaries, taken as a whole.“Public Debt” means any Indebtedness consisting of bonds, debentures, notes or other similar debt securities issued in (1) a public offering registeredunder the Securities Act or (2) a private placement to institutional investors that is purchased for resale in accordance with Rule 144A or Regulation S underthe Securities Act, whether or not it includes registration rights entitling the holders of such debt securities to registration thereof with the SEC for publicresale.“Ratings Decline Period” means, with respect to any Change of Control, the period that (1) begins on the earlier of (a) the date of the first publicannouncement of the occurrence of such Change of Control or of the intention by the Company or a stockholder of the Company, as applicable, to effectsuch Change of Control or (b) the occurrence of such Change of Control and (2) ends on the 60th day following consummation of such Change of Control;provided, however, that such period shall be extended for so long as the rating of the Notes of a series, as noted by the applicable rating agency, is underpublicly announced consideration for downgrade by the applicable rating agency. 15“Refinance” means refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell, extend or increase (includingpursuant to any defeasance or discharge mechanism) and the terms “refinances,” “refinanced” and “refinancing” as used for any purpose in this Indentureshall have a correlative meaning.“Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant toany defeasance or discharge mechanism) any Indebtedness existing on the date of this Indenture or Incurred in compliance with this Indenture (includingIndebtedness of the Company that refinances Indebtedness of any Subsidiary and Indebtedness of any Subsidiary that refinances Indebtedness of theCompany or another Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; provided, however, that: (1)if the Indebtedness being refinanced constitutes Subordinated Indebtedness, the Refinancing Indebtedness has a final Stated Maturity at the timesuch Refinancing Indebtedness is Incurred that is the same as or later than the final Stated Maturity of the Indebtedness being refinanced or, ifshorter, the Notes; (2)such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price)that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value)then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay interest orpremiums required by the instruments governing such existing Indebtedness and costs, expenses and fees Incurred in connection therewith); and (3)if the Indebtedness being refinanced is expressly subordinated to the Notes, such Refinancing Indebtedness is subordinated to the Notes on termsat least as favorable to the Holders as those contained in the documentation governing the Indebtedness being refinanced;provided, however, that Refinancing Indebtedness in respect of any Credit Facility or any other Indebtedness may be Incurred from time to time after thetermination, discharge or repayment of any such Credit Facility or other Indebtedness.“Responsible Officer” means, when used with respect to the Trustee, any officer within the Corporate Trust Administration of the Trustee (or anysuccessor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designatedofficers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such individual’sknowledge of and familiarity with the particular subject.“Revolving Credit Agreement” means the senior secured revolving credit facility agreement dated April 27, 2012 among the Company and certain ofthe Company’s Subsidiaries, as borrowers and guarantors, the senior lenders (as named therein), and Morgan Stanley Senior Funding Inc., as facility agentand collateral agent, as amended by the joinder agreement dated October 24, 2012, and as may be further amended, supplemented or otherwise modified fromtime to time, and any Refinancing Indebtedness in respect thereto. 16“S&P” means Standard & Poor’s Investors Ratings Services or any of its successors or assigns that is a Nationally Recognized Statistical RatingOrganization.“Sale and Leaseback Transaction” means an arrangement relating to any Principal Property owned by the Company or a Significant Subsidiary on theIssue Date or thereafter acquired by the Company or a Significant Subsidiary whereby the Company or a Significant Subsidiary transfers such property to aPerson and the Company or a Significant Subsidiary leases it from such Person.“SEC” means the U.S. Securities and Exchange Commission or any successor thereto.“Secured Indebtedness” means any Indebtedness secured by a Lien and any Attributable Lien.“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended.“Significant Subsidiary” means any Subsidiary that meets any of the following conditions: (1)the Company’s and its Subsidiaries’ investments in and advances to the Subsidiary exceed 10% of the Total Assets of the Company and itsSubsidiaries on a consolidated basis as of the end of the most recently completed fiscal year; (2)the Company’s and its Subsidiaries’ proportionate share of the Total Assets (after intercompany eliminations) of the Subsidiary exceeds 10% ofthe Total Assets of the Company and its Subsidiaries on a consolidated basis as of the end of the most recently completed fiscal year; or (3)the Company’s and its Subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and cumulativeeffect of a change in accounting principle of the Subsidiary exceeds 10% of such income of the Company and its Subsidiaries on a consolidatedbasis for the most recently completed fiscal year.“Stated Maturity” means, with respect to any indebtedness or security, the date specified in such indebtedness or security as the fixed date on whichthe payment of principal of such indebtedness or security is due and payable, including pursuant to any mandatory redemption provision, but shall notinclude any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.“Subordinated Indebtedness” means, with respect to any Person, any Indebtedness (whether outstanding on the Issue Date or thereafter Incurred) whichis expressly subordinated in right of payment to the Notes pursuant to a written agreement. 17“Subsidiary” means, with respect to any Person: (1)any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) ofwhich more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to votein the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Personor one or more of the other Subsidiaries of that Person or a combination thereof; or (2)any partnership, joint venture, limited liability company or similar entity of which: (a)more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, asapplicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or acombination thereof whether in the form of membership, general, special or limited partnership interests or otherwise; and (b)such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.“Taxes” means all present and future taxes, levies, imposts, deductions, charges, duties, assessments and withholdings and any charges of a similarnature (including interest, penalties and other liabilities with respect thereto) that are imposed or levied by any government or other taxing authority.“Term Loans” means the secured term credit agreement entered into on March 4, 2011, as amended and supplemented by the joinder and amendmentagreement entered into on November 18, 2011, the new term loan joinder agreement entered into on February 16, 2012, the new term loan joinder agreemententered into on December 10, 2012, the 2013 new term loan joinder agreement entered into on November 27, 2013 and the 2014 new term loan joinderagreement entered into on February 18, 2014, and as may be further amended, supplemented or otherwise modified from time to time.“TIA” means the Trust Indenture Act of 1939, as amended.“Total Assets” means the consolidated total assets of the Company and its Subsidiaries in accordance with GAAP as shown on the most recent balancesheet of such Person.“Treasury Rate” means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled andpublished in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days (but not morethan five Business Days) prior to the redemption date (or, if such statistical release is not so published or available, any publicly available source of similarmarket data selected by an Officer or the Board of Directors in good faith)) most nearly equal to the period from the redemption date to May 15, 2020 (thedate one month prior to the maturity date of the Notes), with regard to the 2020 Notes, or May 15, 2022 (the date one month prior to the maturity date of theNotes), with regard to the 2022 Notes; provided, however, that if the period from the redemption date to May 15, 2020 (the date one month prior to thematurity date of the Notes), with 18regard to the 2020 Notes, or May 15, 2022 (the date one month prior to the maturity date of the Notes), with regard to the 2022 Notes is not equal to theconstant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation(calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, exceptthat if the period from the redemption date to such applicable date is less than one year, the weekly average yield on actually traded United States Treasurysecurities adjusted to a constant maturity of one year shall be used.“Uniform Commercial Code” means the New York Uniform Commercial Code.“U.S. Government Obligations” means securities that are (1) direct obligations of the United States of America for the timely payment of which its fullfaith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States ofAmerica the timely payment of which is unconditionally Guaranteed as a full faith and credit obligation of the United States of America, which, in eithercase, are not callable or redeemable at the option of the Company thereof, and shall also include a depositary receipt issued by a bank (as defined inSection 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest onany such U.S. Government Obligations held by such custodian for the account of the holder of such depositary receipt, provided that (except as required bylaw) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received bythe custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidencedby such depositary receipt.“Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors.“Wholly Owned Subsidiary” means a Subsidiary of the Company, all of the Capital Stock of which (other than directors’ qualifying shares or sharesrequired by any applicable law or regulation to be held by a Person other than the Company or another Wholly Owned Subsidiary) is owned by the Companyor another Wholly Owned Subsidiary. 19SECTION 1.02. Other Definitions Term Defined inSection“2020 Notes” Preamble“2022 Notes” Preamble“Additional Amounts” 4.02(a)“Additional Notes” Preamble“Agent Members” Appendix A“Applicable Law” 11.15“Applicable Procedures” Appendix A“Authorized Agent” 11.10“Co-Issuer” Preamble“Company” Preamble“covenant defeasance option” 8.01(b)“defeasance trust” 8.02(a)(1)“Definitive Note” Appendix A“Event of Default” 6.01(a)“Global Note Legend” Appendix A“Guaranteed Obligations” 10.01(a)“Interest Amount” 2.04(d)“Issuers” Preamble“legal defeasance option” 8.01(b)“Notes” Preamble“Notes Custodian” Appendix A“Offer to Purchase” 4.03(a)“Offer Expiration Date” 4.03(c)“Original Notes” Preamble“Paying Agent” 2.04(a)“Payor” 4.02(a)“Permitted Payments” 4.06(c)“protected purchaser” 2.08“purchase date” 4.03(c)“Purchase Price” 4.03(c)“QIB” Appendix A“Qualified Institutional Buyer” Appendix A“Regulation S” Appendix A“Regulation S Notes” Appendix A“Relevant Taxing Jurisdiction” 4.02(a)(3)“Registrar” 2.04(a)“Restricted Period” Appendix A“Restricted Notes Legend” Appendix A“Rule 144A” Appendix A“Rule 144A Notes” Appendix A“Securities Act” Appendix A“Successor Company” 5.01(a)(1)“Transfer Agent” 2.04(a)“Transfer Restricted Notes” Appendix A“Trustee” PreambleSECTION 1.03. Incorporation by Reference of TIAThis Indenture is subject to the provisions of the TIA which are elsewhere in this Indenture incorporated by reference in and made a part of thisIndenture. The following TIA terms have the following meanings:“Commission” means the SEC. 20“indenture securities” means the Securities and the Note Guarantees.“indenture security holder” means a Holder.“indenture to be qualified” means this Indenture.“indenture trustee” or “institutional trustee” means the Trustee.“obligor” on the indenture securities means the Company, the Note Guarantors and any other obligor on the indenture securities.All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule havethe meanings assigned to them by such definitions.SECTION 1.04. Rules of ConstructionUnless the context otherwise requires:(a) a term has the meaning assigned to it;(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;(c) “or” is not exclusive;(d) “including” means including without limitation;(e) words in the singular include the plural and words in the plural include the singular; and(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to secured Indebtedness merely by virtue of its nature asunsecured Indebtedness.ARTICLE 2The NotesSECTION 2.01. Issuable in SeriesThe 2020 Notes are a single series and shall be substantially identical except as to denomination. The 2022 Notes are a single series and shall besubstantially identical except as to denomination. Additional Notes issued after the Issue Date may be issued in one or more series. The Issuers may, withoutthe consent of the Holders, increase the principal amount of the 2020 Notes and/or 2022 Notes by issuing Additional Notes in the future on the same termsand conditions, except for any differences in the issue price, the interest (whether accrued prior to the issue date of the Additional Notes or otherwise) or thematurity. The Additional Notes will have the same CUSIP number as the 2020 Notes or the 2022 Notes, as applicable, provided that any Additional Notesthat are not fungible with the 2020 Notes or the 2022 Notes, as applicable for U.S. federal income tax purposes will be issued under a separate CUSIP number. 21With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, orin exchange for, or in lieu of, other Notes pursuant to Sections 2.07, 2.08, 2.09, 2.10 or 3.06 or Appendix A), there shall be (a) established in or pursuant to aresolution of the Board of Directors of the Company and (b)(i) set forth or determined in the manner provided in an Officer’s Certificate of the Company or(ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:(1) whether such Additional Notes shall be issued as part of a new or existing series of Notes and the title of such Additional Notes(which shall distinguish the Additional Notes of the series from Notes of any other series);(2) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture (except forNotes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes of the same series pursuant to Sections 2.07,2.08, 2.09, 2.10 or 3.06 or Appendix A and except for Notes which, pursuant to Section 2.03, are deemed never to have been authenticated and deliveredhereunder);(3) the date or dates on which the principal of any such Additional Notes is payable, or the method by which such date or dates shall bedetermined or extended;(4) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shallaccrue, the rate or rates at which such Additional Notes shall bear interest, if any, or the method by which such rate or rates shall be determined, the date ordates on which such interest shall be payable and the record date, if any, for the interest payable on any interest payment date; provided, however, that (to theextent such Additional Notes are to be part of the same series as the Original Notes) such Additional Notes must be fungible with the Original Notes for U.S.federal income tax purposes;(5) the period or period within the date or dates on which, the price or prices at which and the terms and conditions upon which any suchAdditional Notes may be redeemed, in whole or in part, at the option of the Issuers; and(6) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in suchcase, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieuof those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.3 of Appendix A in which any such GlobalNote may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in thename or names of Persons other than the depositary for such Global Note or a nominee thereof.If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of anappropriate record of such action shall be certified by an Officer’s Certificate and delivered to the Trustee at or prior to the delivery of the Officer’s Certificateof the Company or the indenture supplemental hereto setting forth the terms of the Additional Notes. 22This Indenture is unlimited in aggregate principal amount. The Original Notes and, if issued, any Additional Notes will be treated as a singleclass for all purposes under this Indenture, including with respect to voting, waivers, amendments, redemptions and offers to purchase, except as otherwisespecified with respect to a new series of Additional Notes.SECTION 2.02. Form and DatingProvisions relating to the Notes are set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The(a) Original Notes and (b) any Additional Notes (if issued as Transfer Restricted Notes) shall each be substantially in the form of Exhibit A (in the event ofAdditional Notes, with such changes as may be required to reflect any differing terms), which is hereby incorporated in and expressly made a part of thisIndenture. Any Additional Notes issued other than as Transfer Restricted Notes shall each be substantially in the form of Exhibit A (without the RestrictedNotes Legend), which is hereby incorporated in and expressly made part of this Indenture. The Notes may have notations, legends or endorsements requiredby law, stock exchange rule, agreements to which the Issuers are subject, if any, or usage, provided that any such notation, legend or endorsement is in a formacceptable to the Company and the Trustee. Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered formwithout interest coupons and only in minimum denominations of $200,000 and whole multiples of $1,000 in excess thereof.SECTION 2.03. Execution and AuthenticationOne Officer shall sign the Notes for each Issuer by manual or facsimile signature.If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be validnevertheless.A Note shall not be valid until an authorized signatory of the Trustee or an authentication agent manually signs the certificate of authenticationon the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.The Trustee or an authentication agent shall authenticate and make available for delivery Notes as set forth in Appendix A following receipt ofan authentication order signed by an Officer of each Issuer directing the Trustee or an authentication agent to authenticate such Notes.The Trustee may appoint an authentication agent reasonably acceptable to the Issuers to authenticate the Notes. Any such appointment shall beevidenced by an instrument signed by a Responsible Officer, a copy of which shall be furnished to the Issuers. Unless limited by the terms of suchappointment, an authentication agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by theTrustee includes authentication by such agent. An authentication agent has the same rights as any Registrar, Paying Agent or agent for service of notices anddemands. 23SECTION 2.04. Registrar, Transfer Agent and Paying Agent(a) The Issuers shall maintain a registrar (the “Registrar”) and a transfer agent in the Borough of Manhattan, City of New York where Notes maybe presented for transfer or exchange (the “Transfer Agent”) and for payment (the “Paying Agent”). The Registrar shall keep a register of the Notes of theirtransfer and exchange. The Issuers initially appoint Deutsche Bank Trust Company Americas, in the Borough of Manhattan, City of New York, who hasaccepted such appointment, as Paying Agent for the Notes. The Issuers initially appoint Deutsche Bank Trust Company Americas, in the Borough ofManhattan, City of New York, who has accepted such appointment, as Registrar and Transfer Agent. In addition, the Issuers undertake to the extent possible,to use reasonable efforts to maintain a Paying Agent in a member state of the European Union that is not obliged to withhold or deduct tax pursuant toEuropean Council Directive 2003/48/EC regarding the taxation of savings income or any other directive implementing the conclusions of the ECOFINCouncil meeting of November 26 and 27, 2000 on the taxation of savings income, or any law implementing, or complying with or introduced in order toconform to, such directive (the “Directive”). Deutsche Bank Trust Company Americas will act as Registrar, Transfer Agent and Paying Agent in connectionwith the Global Notes with respect to the Notes settled through DTC.(b) The Issuers shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to or appointed under thisIndenture. Such agreement shall implement the provisions of this Indenture that relate to such agent, including applicable terms of the TIA that areincorporated into this Indenture. Any Registrar or Paying Agent appointed hereunder shall be entitled to the benefits of this Indenture as though a partyhereto. The Issuers shall notify the Trustee of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trusteeshall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. Either Issuer or any Subsidiary may act as Paying Agentor Registrar.(c) The Issuers may change any Registrar, Paying Agent or Transfer Agent upon written notice to such Registrar, Paying Agent or Transfer Agentand to the Trustee, without prior notice to the Holders; provided, however, that no such removal shall become effective until (i) acceptance of an appointmentby a successor as evidenced by an appropriate agreement entered into by the Issuers and such successor Registrar, Paying Agent, or Transfer Agent, as thecase may be, and delivered to the Trustee or (ii) written notification to the Trustee that the Trustee shall, to the extent that it determines that it is able, serve asRegistrar or Paying Agent or Transfer Agent until the appointment of a successor in accordance with clause (i) above; provided, further, that in no event maythe Issuers appoint a Paying Agent in any member state of the European Union where the Paying Agent would be obliged to withhold or deduct tax inconnection with any payment made by it in relation to the Notes unless the Paying Agent would be so obliged if it were located in all other member states.The Registrar, Paying Agent or Transfer Agent may resign by providing 30 days’ written notice to the Issuers and the Trustee.(d) The Interest Amount shall be calculated by applying the applicable rate to the principal amount of each Note outstanding at thecommencement of the interest period, computed on the basis of a 360-day year comprised of twelve 30-day months and rounding the resultant figure upwardsto the nearest available currency unit. The determination of the Interest Amount by the Paying Agent shall, in the absence of willful default, bad faith ormanifest error, be final and binding on all parties. 24SECTION 2.05. Paying Agent to Hold Money in TrustNo later than 10:00 a.m. New York time on each due date of the principal of, interest and premium (if any) on any Note, the Issuers shall depositwith the Paying Agent (or if either Issuer or a Restricted Subsidiary of either Issuer is acting as Paying Agent, segregate and hold in trust for the benefit of thePersons entitled thereto) a sum sufficient to pay such principal, interest and premium (if any) when so becoming due and subject to receipt of such monies,the Paying Agent shall make payment on the Notes in accordance with this Indenture. The Issuers shall require each Paying Agent to agree in writing (andeach Paying Agent party to this Indenture agrees) that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by thePaying Agent for the payment of principal, interest and premium (if any) on the Notes, but such Paying Agent may use such monies as banker in the ordinarycourse of business without accounting for profits (other than in the case of Article 8), and shall notify the Trustee of any default by the Issuers in making anysuch payment. If either Issuer or a Restricted Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separatetrust fund. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the PayingAgent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. For the avoidance of doubt,the Paying Agent and the Trustee shall be held harmless and have no liability with respect to payments or disbursements to be made by the Paying Agent andTrustee for which payment instructions are not made or that are not otherwise deposited by the respective times set forth in this Section 2.05.SECTION 2.06. Holder ListsThe Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses ofHolders. If the Trustee is not the Registrar, the Issuers shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Daysbefore each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee mayreasonably require of the names and addresses of Holders.SECTION 2.07. Transfer and ExchangeThe Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and incompliance with Appendix A. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer asrequested if its requirements therefor are met. When Notes are presented to the Registrar with a written request to exchange them for an equal principalamount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration oftransfers and exchanges, the Issuers shall execute and the Trustee or an authentication agent shall authenticate Notes at the Registrar’s request. The Issuersmay require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant tothis Section. 25The Issuers are not required to register the transfer or exchange of any Notes (i) for a period of 15 days prior to any date fixed for the redemption of any Notes,(ii) for a period of 15 days immediately prior to the date fixed for selection of Notes to be redeemed in part or (iii) which the Holder has tendered (and notwithdrawn) for repurchase in connection with a Change of Control Triggering Event.Prior to the due presentation for registration of transfer of any Note, the Issuers, the Trustee, the Paying Agent, and the Registrar may deem andtreat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal and (subject toSection 2 of the Notes) interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of either Issuer, theTrustee, the Paying Agent, or the Registrar shall be affected by notice to the contrary.Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interest in such Global Note may beeffected only through a book-entry system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial interest in suchGlobal Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to thesame benefits under this Indenture as the Notes surrendered upon such transfer or exchange.SECTION 2.08. Replacement NotesIf a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, theIssuers shall issue and the Trustee or an authentication agent shall authenticate a replacement Note if the requirements of Section 8-405 of the UniformCommercial Code are met, such that the Holder (a) notifies the Issuers or the Trustee within a reasonable time after such Holder has notice of such loss,destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuers or theTrustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and(c) satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Issuers, such Holder shall furnish an indemnity bond sufficientin the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, the Paying Agent and the Registrar from any loss that any of them may sufferif a Note is replaced. The Issuers and the Trustee may charge the Holder for their expenses in replacing a Note including reasonable fees and expenses ofcounsel. In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuers in theirdiscretion may pay such Note instead of issuing a new Note in replacement thereof.Every replacement Note is an additional obligation of the Issuers.The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to thereplacement or payment of mutilated, lost, destroyed or wrongfully taken Notes. 26SECTION 2.09. Outstanding NotesNotes outstanding at any time are all Notes authenticated by the Trustee or an authentication agent except for those canceled by it, thosedelivered to it for cancellation and those described in this Section 2.09 as not outstanding. Subject to Section 11.06, a Note does not cease to be outstandingbecause the Issuers or an Affiliate of either Issuer holds the Note.If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them thatthe replaced Note is held by a protected purchaser.If the Paying Agent receives (or if either Issuer or a Restricted Subsidiary of either Issuer is acting as Paying Agent and such Paying Agentsegregates and holds in trust) in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest andpremium, if any, payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent isnot prohibited from paying such amount to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portionsthereof) cease to be outstanding and interest on them ceases to accrue.SECTION 2.10. Temporary NotesIn the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Issuersmay prepare and the Trustee or an authentication agent shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of DefinitiveNotes but may have variations that the Issuers consider appropriate for temporary Notes. Without unreasonable delay, the Issuers shall prepare and the Trusteeor an authentication agent shall authenticate Definitive Notes and deliver them in exchange for temporary Notes upon surrender of such temporary Notes atthe office or agency of the Issuers, without charge to the Holder.SECTION 2.11. CancellationThe Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee anyNotes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration oftransfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures or deliver canceled Notes to theIssuers pursuant to written direction by an Officer of either Issuer. Certification of the destruction of all canceled Notes shall be delivered to the Issuers. TheIssuers may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation. Neither the Trustee nor an authenticationagent shall authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.SECTION 2.12. Common Codes, CUSIP and ISIN NumbersThe Issuers in issuing the Notes may use Common Codes, CUSIP and ISIN numbers (if then generally in use) and, if so, the Trustee shall useCommon Codes, CUSIP and 27ISIN numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as tothe correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the otheridentification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers willpromptly notify the Trustee and the Paying Agent of any change in the Common Code, CUSIP or ISIN numbers.SECTION 2.13. CurrencyThe U.S. dollar, is the sole currency of account and payment for all sums payable by the Issuers under or in connection with the Notes, includingdamages. Any amount received or recovered in a currency other than the U.S. dollar, whether as a result of, or the enforcement of, a judgment or order of acourt of any jurisdiction, in the winding-up or dissolution of the Issuer or otherwise by any Holder of a Note, as the case may be, or by the Trustee, in respectof any sum expressed to be due to it from the Issuers will only constitute a discharge to the Issuers to the extent of the U.S. dollar amount which the recipientis able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to makethat purchase on that date, on the first date on which it is practicable to do so).If that U.S. dollar amount is less than the U.S. dollar amount expressed to be due to the recipient or the Trustee under any Note, the Issuers willindemnify them against any loss sustained by such recipient or the Trustee as a result. In any event, the Issuers will indemnify the recipient or the Trusteeagainst the cost of making any such purchase. For the purposes of this currency indemnity provision, it will be prima facie evidence of the matter statedtherein for the Holder of a Note or the Trustee to certify in a manner reasonably satisfactory to the Issuers (indicating the sources of information used) the lossit incurred in making any such purchase. These indemnities constitute a separate and independent obligation from the Issuers’ other obligations, will giverise to a separate and independent cause of action, will apply irrespective of any waiver granted by any Holder of a Note or the Trustee (other than a waiver ofthe indemnities set out herein) and will continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect ofany sum due under any Note or to the Trustee.Except as otherwise specifically set forth herein, for purposes of determining compliance with any euro-denominated restriction herein, the EuroEquivalent amount for purposes hereof that is denominated in a non-euro currency shall be calculated based on the relevant currency exchange rate in effecton the date such non-euro amount is Incurred or made, as the case may be.The Company may elect irrevocably to convert all euro-denominated restrictions into U.S. dollar-denominated restrictions at the applicable spotrate of exchange prevailing on the date of such election, and all references in this Indenture to determining Euro Equivalents and euro amounts shall applymutatis mutandis as though referring to U.S. dollars. 28ARTICLE 3RedemptionSECTION 3.01. Notices to TrusteeIf the Issuers elect to redeem Notes pursuant to Sections 5 or 6 of the Notes, they shall notify the Trustee and the relevant Paying Agent in writingof the redemption date and the principal amount of Notes to be redeemed and the section of the Note pursuant to which the redemption will occur.The Issuers shall give each written notice to the Trustee and the relevant Paying Agent provided for in this Article 3 at least 15 days, but notmore than 60 days, before the redemption date unless the Trustee or the relevant Paying Agent (as the case may be) consents to a shorter period. In the case ofa redemption pursuant to Section 5 of the Notes, such notice shall be accompanied by an Officer’s Certificate from the Issuers to the effect that suchredemption will comply with the conditions herein.In the case of a redemption provided for by Section 6 of the Note, prior to the publication or mailing of any notice of redemption of the Notespursuant to the foregoing, the Issuers will deliver to the Trustee and the relevant Paying Agent (a) an Officer’s Certificate stating that they are entitled toeffect such redemption and setting forth a statement of facts showing that the conditions precedent to their right so to redeem have been satisfied and (b) anopinion of an independent tax counsel of recognized standing to the effect that the circumstances referred to above exist. The Trustee will accept suchOfficer’s Certificate and opinion as sufficient existence of the satisfaction of the conditions precedent described above, in which event it will be conclusiveand binding on the Holders. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby bevoid and of no effect.SECTION 3.02. Selection of Notes To Be Redeemed or RepurchasedIf less than all of the Notes are to be redeemed at any time, the Trustee or the Registrar, as applicable, will select the Notes for redemption incompliance with the requirements of the principal securities exchange, if any, on which the Notes are listed, as certified to the Trustee or the Registrar, asapplicable, by the Issuers, and in compliance with the requirements of DTC, or if the Notes are not so listed or such exchange prescribes no method ofselection and the Notes are not held through DTC, or DTC prescribes no method of selection, on a pro rata basis; provided, however, that no Note of$200,000 in aggregate principal amount or less shall be redeemed in part and only Notes in integral multiples of $1,000 will be redeemed. Neither the Trusteenor the Registrar will be liable for any selections made by it in accordance with this Section. Provisions of this Indenture that apply to Notes called forredemption also apply to portions of Notes called for redemption. The Trustee or the Registrar, as applicable, shall notify the Issuers promptly of the Notes orportions of Notes to be redeemed. 29SECTION 3.03. Notice of Redemption.(a) At least 15 days but not more than 60 days before a date for redemption of Notes, the Issuers shall transmit a notice of redemption inaccordance with Section 11.03 and as provided below to each Holder of Notes to be redeemed at such Holder’s registered address; provided, however, thatany notice of a redemption provided for by Section 6 of the Notes shall not be given earlier than 90 days prior to the earliest date on which the Payor wouldbe obligated to make a payment of Additional Amounts unless at the time such notice is given, the obligation to pay Additional Amounts remains in effect.The notice shall identify the Notes to be redeemed and shall state:(1) the redemption date;(2) the redemption price, and, if applicable, the appropriate calculation of such redemption price and the amount of accrued interest tothe redemption date;(3) the name and address of the Paying Agent;(4) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;(5) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to beredeemed;(6) that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such paymentpursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;(7) the Common Codes, CUSIP or ISIN number, as applicable, if any, printed on the Notes being redeemed; and(8) that no representation is made as to the correctness or accuracy of the Common Codes, CUSIP or ISIN number, as applicable, if any,listed in such notice or printed on the Notes.(b) At the Issuers’ request, the Trustee shall give the notice of redemption in the Issuers’ name and at the Issuers’ expense. In such event,the Issuers shall provide the Trustee and the Paying Agent with the information required and within the time periods specified by this Section 3.03.SECTION 3.04. Effect of Notice of RedemptionOnce notice of redemption is delivered, Notes called for redemption cease to accrue interest, become due and payable on the redemption dateand at the redemption price stated in the notice, provided, however, that any redemption notice given in respect of the redemption referred to in Section 5 ofthe Notes may, at the Issuers’ discretion, be subject to the satisfaction of one or more conditions precedent to the extent permitted under such Section 5. Uponsurrender to the Paying Agent, the Notes shall be paid at the redemption price stated in the 30notice, plus accrued interest, if any, to the redemption date; provided, however, that if the redemption date is after a regular record date and on or prior to theinterest payment date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Failure to give noticeor any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.SECTION 3.05. Deposit of Redemption PriceNo later than 10:00 a.m. New York time on the redemption date, the Issuers shall deposit with the relevant Paying Agent (or, if either Issuer or aRestricted Subsidiary of either Issuer is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accruedinterest on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered bythe Issuers to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemptionso long as the Issuers have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest, if any, on, the Notes tobe redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture. For the avoidance of doubt, thePaying Agent and the Trustee shall be held harmless and have no liability with respect to payments or disbursements to be made by the Paying Agent andTrustee for which payment instructions are not made or that are not otherwise deposited by the respective times set forth in this Section 3.05.SECTION 3.06. Notes Redeemed in PartSubject to the terms hereof, upon surrender of a Note that is redeemed in part, the Issuers shall execute, and the Trustee or an authentication agentshall authenticate, for the Holder (at the Issuers’ expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.SECTION 3.07. PublicationWhere any notice is required to be published or delivered to DTC pursuant to this Indenture, the Issuers must provide the form of such notice tothe Trustee and the Paying Agents at least 8 Business Days prior to the final date for publication unless the Trustee agrees to a shorter period.ARTICLE 4CovenantsSECTION 4.01. Payment of NotesThe Issuers shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in thisIndenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with thisIndenture money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from payingsuch money to the Holders on that date pursuant to the terms of this Indenture. 31SECTION 4.02. Withholding Taxes(a) All payments made by or on behalf of either Issuer, a Successor Company or a Guarantor (a “Payor”) on the Notes or the Note Guarantees willbe made free and clear of and without withholding or deduction for, or on account of, any Taxes unless the withholding or deduction of such Taxes is thenrequired by law. If any deduction or withholding for, or on account of, any Taxes imposed or levied by or on behalf of:(1) The Netherlands or any political subdivision or Governmental Authority thereof or therein having power to tax;(2) any jurisdiction from or through which payment on any such Note or Note Guarantee is made by the Issuers, Successor Company,Guarantor or their agents, or any political subdivision or Governmental Authority thereof or therein having the power to tax; or(3) any other jurisdiction in which the Payor is incorporated or organized, engaged in business for tax purposes, resident for tax purposes,or any political subdivision or Governmental Authority thereof or therein having the power to tax (each of clause (1), (2) and (3), a “Relevant TaxingJurisdiction”),will at any time be required from any payments made with respect to any Note or Note Guarantee, including payments of principal, redemption price,premium, if any, or interest, the Payor will pay (together with such payments) such additional amounts (the “Additional Amounts”) as may be necessary inorder that the net amounts received in respect of such payments by the Holders or the Trustee, as the case may be, after such withholding or deduction(including any such deduction or withholding from such Additional Amounts), will not be less than the amounts which would have been received in respectof such payments on any such Note or Note Guarantee in the absence of such withholding or deduction; provided, however, that no such Additional Amountswill be payable for or on account of:(1) any Taxes that would not have been so imposed but for the existence of any present or former connection between the relevant Holder or thebeneficial owner of a Note (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over the relevant Holder or beneficialowner, if the relevant Holder or beneficial owner is an estate, nominee, trust, partnership, limited liability company or corporation) and the Relevant TaxingJurisdiction (including being a citizen or resident or national of, or carrying on a business or maintaining a permanent establishment or a dependent agent in,or being physically present in, the Relevant Taxing Jurisdiction) but excluding, in each case, any connection arising solely from the acquisition, ownershipor holding of such Note or the receipt of any payment in respect thereof;(2) any Taxes that are imposed or withheld by reason of the failure by the Holder or the beneficial owner of the Note to comply with a writtenrequest of the Payor addressed to the Holder, after reasonable notice, to provide certification, information, documents or other evidence concerning thenationality, residence, identity or connection with the Relevant 32Taxing Jurisdiction of the Holder or such beneficial owner or to make any declaration or similar claim or satisfy any other reporting requirement relating tosuch matters, which is required by a statute, regulation or administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from allor part of such Taxes;(3) any Taxes that are payable otherwise than by deduction or withholding from a payment of the principal of, premium, if any, or interest, if any,on the Notes;(4) any estate, inheritance, gift, value added, sales, use, excise, transfer, personal property or similar Taxes;(5) any Taxes that are required to be deducted or withheld on a payment to a Holder or beneficial owner and that are required to be madepursuant to the European Council Directive 2003/48/EC or any other directive implementing the conclusions of the ECOFIN Council meeting ofNovember 26 and 27, 2000 on taxation of savings income or any law implementing or complying with, or introduced in order to conform to such directives;(6) any Taxes imposed in connection with a Note presented for payment (where presentation is required for payment) by or on behalf of a Holderor beneficial owner who would have been able to avoid such Tax by presenting the relevant Note to, or otherwise accepting payment from, another payingagent; or(7) any combination of the above.Such Additional Amounts will also not be payable (x) if the payment could have been made without such deduction or withholding if thebeneficiary of the payment had presented the Note for payment (where presentation is required for payment) within 15 days after the relevant payment wasfirst made available for payment to the Holder or (y) where, had the beneficial owner of the Note been the Holder, such beneficial owner would not have beenentitled to payment of Additional Amounts by reason of clauses (1) to (7) inclusive above.(b) The Payor will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the Relevant TaxingJurisdiction in accordance with applicable law. The Payor will use all reasonable efforts to obtain certified copies of tax receipts evidencing the payment ofany Taxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes, in such form as provided in the ordinary course by theRelevant Taxing Jurisdiction and as is reasonably available to the Company and will provide such certified copies to the Trustee. Such copies shall be madeavailable to the Holders upon request. The Payor will attach to each certified copy a certificate stating (x) that the amount of withholding Taxes evidenced bythe certified copy was paid in connection with payments in respect of the principal amount of Notes then outstanding and (y) the amount of such withholdingTaxes paid per $1,000 principal amount of the Notes.(c) If any Payor will be obligated to pay Additional Amounts under or with respect to any payment made on any Note or Note Guarantee, at least30 days prior to the date of such payment, the Payor will deliver to the Trustee an Officer’s Certificate stating the fact that Additional Amounts will bepayable and the amount so payable and such other information necessary to enable the Paying Agent to pay Additional Amounts to Holders on the relevant 33payment date (unless such obligation to pay Additional Amounts arises less than 45 days prior to the relevant payment date, in which case the Payor maydeliver such Officer’s Certificate as promptly as practicable after the date that is 30 days prior to the payment date). The Trustee shall be entitled to rely solelyon such Officer’s Certificate as conclusive proof that such payments are necessary.(d) Wherever in this Indenture or the Note Guarantees there are mentioned, in any context:(1) the payment of principal,(2) purchase prices in connection with a purchase of Notes,(3) interest, or(4) any other amount payable on or with respect to any of the Notes,such reference shall be deemed to include payment of Additional Amounts as described under this heading to the extent that, in such context, AdditionalAmounts are, were or would be payable in respect thereof.The Payor will pay any present or future stamp, court or documentary taxes, or any other excise, property or similar Taxes that arise in anyjurisdiction from the execution, delivery, registration or enforcement of any Notes, any Note Guarantees, this Indenture or any other document or instrumentin relation thereto (other than a transfer or exchange of the Notes) excluding any such Taxes imposed by any jurisdiction that is not a Relevant TaxingJurisdiction, and the Payor agrees to indemnify the Holders for any such taxes paid by such Holders. The foregoing obligations of this Section will surviveany termination, defeasance or discharge of this Indenture and will apply mutatis mutandis to any subsequent Relevant Taxing Jurisdiction.SECTION 4.03. Offer to Repurchase upon Change of Control Triggering Event(a) Not later than 60 days following a Change of Control Triggering Event, unless the Issuers have exercised their right to redeem all of theNotes as described under Section 5 of the Notes, the Issuers will make an Offer to Purchase all of the outstanding Notes at a purchase price in cash equalto 101% of the principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the purchase date. Notwithstanding anything to thecontrary herein, an Offer to Purchase may be made in advance of a Change of Control Triggering Event, conditional upon the applicable Change ofControl or Change of Control Triggering Event.(b) An “Offer to Purchase” means an offer by the Company, the Co-Issuer or both Issuers to purchase Notes as required by this Indenture.An Offer to Purchase must be made by written offer (the “offer”) sent to the Holders. The Issuers will notify the Trustee, at least 5 Business Days (or suchshorter period as is acceptable to the Trustee) prior to sending the offer to Holders, of their obligation to make an Offer to Purchase, and the offer will besent by the Company, the Co-Issuer or the Issuers or, at their written request, by the Trustee in their name and at their expense. 34(c) The offer must include or state the following, which shall (where applicable) be the terms of the Offer to Purchase:(1) the provision of this Indenture pursuant to which the Offer to Purchase is being made;(2) the aggregate principal amount of the outstanding Notes offered to be purchased pursuant to the Offer to Purchase (the“purchase amount”);(3) the purchase price, including the portion thereof representing accrued and unpaid interest (the “Purchase Price”);(4) an expiration date not less than 30 days or more than 60 days after the date of the offer (the “Offer Expiration Date”) and asettlement date for purchase (the “purchase date”) not more than five Business Days after the Offer Expiration Date;(5) that a Holder may tender all or any portion of its Notes pursuant to an Offer to Purchase, subject to the requirement that anyportion of a Note tendered must be in denominations of $200,000 principal amount and integral multiples of $1,000 in excess thereof;(6) the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase;(7) that each Holder electing to tender a Note pursuant to the offer will be required to surrender such Note at the place or placesspecified in the offer prior to the close of business on the Offer Expiration Date (such Note being, if the Issuers or the Trustee so requires, duly endorsedor accompanied by a duly executed written instrument of transfer);(8) that interest on any Note not tendered, or tendered but not purchased by the Company, the Co-Issuer or the Issuers, asapplicable, pursuant to the Offer to Purchase, will continue to accrue;(9) on the purchase date the Purchase Price will become due and payable on each Note accepted for purchase pursuant to the Offerto Purchase, and interest on Notes purchased will cease to accrue on and after the purchase date;(10) a statement that, if Notes in an aggregate principal amount less than or equal to the purchase amount are duly tendered andnot withdrawn pursuant to the Offer to Purchase, the Company, the Co-Issuer or the Issuers will purchase all such Notes;(11) a statement that if any Note is purchased in part, new Notes equal in principal amount to the unpurchased portion of the Notewill be issued; 35(12) a statement that if any Note contains a CUSIP number, no representation is being made as to the correctness of the CUSIPnumber either as printed on the Notes or as contained in the offer and that the Holder should rely only on the other identification numbers printed onthe Notes; and(13) a statement that, if the Notes are held in book entry form, Holders must comply with the applicable procedures of theDepositary.(d) Prior to the purchase date, the Company, the Co-Issuers, or the Issuers, as applicable, will accept tendered Notes for purchase asrequired by the Offer to Purchase and deliver to the Trustee all Notes so accepted together with an Officers’ Certificate specifying which Notes havebeen accepted for purchase. On the purchase date the Purchase Price will become due and payable on each Note accepted for purchase, and interest onNotes purchased will cease to accrue on and after the purchase date. The Trustee will promptly return to Holders any Notes not accepted for purchaseand send to Holders new Notes equal in principal amount to any unpurchased portion of any Notes accepted for purchase in part.(e) The Issuers will not be required to make an Offer to Purchase upon a Change of Control Triggering Event, with respect to the Notes of aseries if (i) a third party makes the offer to purchase in the manner, at the times and otherwise in compliance with the requirements set forth pursuant tothis Section 4.03 and purchases all such Notes validly tendered and not withdrawn under such Offer to Purchase or (ii) a notice of redemption has beengiven pursuant to Section 5 of the Notes.(f) The Issuers will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securitieslaws or regulations (or rules of any exchange on which the Notes are then listed) in connection with the repurchase of Notes pursuant to thisSection 4.03. To the extent that the provisions of any securities laws or regulations (or exchange rules) conflict with provisions of this Indenture, theIssuers will comply with the applicable securities laws and regulations (or exchange rules) and will not be deemed to have breached their obligations,or require a repurchase of the Notes, under the Change of Control Triggering Event provisions of this Indenture by virtue of the conflict.SECTION 4.04. U.S. Federal Income Tax Treatment of the Co-IssuerThe Co-Issuer may not hold any material assets, become liable for any material obligations or engage in any business activities, provided that itmay be a co-obligor or Guarantor with respect to the Notes or any other Indebtedness issued by the Company or a Guarantor, and may engage in anyactivities directly related thereto or necessary in connection therewith. The Co-Issuer is treated as a disregarded entity of the Company for U.S. federal incometax purposes, and for so long as any of the Notes remain outstanding, the Issuers will not take any action that is inconsistent with the Co-Issuer being treatedas a disregarded entity of the Company for U.S. federal income tax purposes. 36SECTION 4.05. Limitation on LiensThe Issuers will not, and will not permit any Significant Subsidiary to, issue or assume any Indebtedness if such Indebtedness is secured by aLien, other than a Permitted Lien, upon any Principal Property of the Issuers or any Significant Subsidiary without:(a) at the same time providing that the Notes and the obligations hereunder are directly, equally and ratably secured with (or prior to, in the caseof Liens with respect to Subordinated Indebtedness) the Indebtedness secured by such Lien for so long as such Indebtedness is so secured; or(b) providing such other Lien for the Notes and the obligations hereunder as may be approved by a majority in aggregate principal amount ofHolders of Notes of such series.SECTION 4.06. Limitation on Sale and Leaseback TransactionsThe Issuers will not, and will not permit any Significant Subsidiary to, enter into any Sale and Leaseback Transaction with respect to anyPrincipal Property unless:(a) the Company or such Significant Subsidiary would be entitled to incur Indebtedness secured by a mortgage on the property to be leased in anamount equal to Attributable Liens with respect to such Sale and Leaseback Transaction without equally and ratably securing the Notes of such seriespursuant to Section 4.05 of this Indenture;(b) the net proceeds of the sale of the Principal Property to be leased are applied within 365 days of the effective date of the Sale and LeasebackTransaction to (i) the purchase, construction, development or acquisition of another Principal Property or (ii) the repayment of (x) any series of Notes,(y) Indebtedness of the Issuers that ranks equally with, or is senior to, the Notes or (z) any Indebtedness of one or more Significant Subsidiaries; provided, ineach case, that in lieu of applying such amount to such retirement, the Issuers may deliver Notes to the Trustee for cancellation, such Notes to be credited atthe cost thereof to the Issuers;(c) such Sale and Leaseback Transaction was entered into prior to the Issue Date or will be entered into in relation to the Merger;(d) such Sale and Leaseback Transaction involves a lease for not more than three years (or which may be terminated by the Company or aSignificant Subsidiary within a period of not more than three years); or(e) such Sale and Leaseback Transaction with respect to any Principal Property was between only the Company and a Subsidiary of the Companyor only between Subsidiaries of the Company.SECTION 4.07. Guarantees by SubsidiariesThe following Subsidiaries will, subject to the Agreed Security Principles, jointly and severally, guarantee the Notes on a senior unsecured basison the Issue Date in accordance with Article 10: NXP Semiconductors Netherlands B.V. and NXP Semiconductors USA, Inc. 37SECTION 4.08. Compliance CertificateThe Company shall deliver to the Trustee within 120 days after the end of each fiscal year, an Officer’s Certificate in substantially the form ofExhibit C hereto stating that a review of the activities of the Company during the preceding fiscal year has been made under the supervision of the signingOfficer with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating,as to the Officer signing such Officer’s Certificate, that to the best of his or her knowledge, the Company has kept, observed, performed and fulfilled each andevery covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of thisIndenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledgeand what action the Issuers are taking or propose to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remainsin existence by reason of which payments on account of the principal of or interest or Additional Amounts, if any, on the Notes is prohibited or if such eventhas occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto, and reciting the details of suchaction. Within 30 days after the occurrence of a Default, the Company shall deliver to the Trustee a written notice of any events of which it is aware wouldconstitute certain Defaults their status and what action the Company is taking or proposes to take with respect thereto.The Trustee shall not be deemed to have knowledge of any Default or Event of Default except any Default or Event of Default of which itsResponsible Officer shall have received written notification in accordance with Section 11.03 or obtained actual knowledge.SECTION 4.09. Further Instruments and ActsUpon request of the Trustee, the Issuers shall execute and deliver such further instruments and do such further acts as may be reasonablynecessary or proper to carry out more effectively the purpose of this Indenture.ARTICLE 5Successor CompanySECTION 5.01. Merger and Consolidation of the Company(a) The Company will not consolidate with or merge with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all orsubstantially all its assets, as an entirety or substantially as an entirety, in one transaction or a series of related transactions, to any Person, or permit anyPerson to consolidate with or merge with or into it, unless:(1) either (a) the Company will be the surviving Person of any such consolidation or merger or any such sale, assignment, conveyance,lease, transfer or other disposition or (b) the resulting, surviving or transferee Person of any such consolidation or merger or any such sale, assignment,conveyance, lease, transfer or other disposition will be a Person organized and existing under the laws of any member state of the European Union onJanuary 1, 382004, the United States of America, any state thereof or the District of Columbia, Canada or any province of Canada, Norway or Switzerland (or, a Person notorganized under such laws which agrees (i) to submit to the jurisdiction of the United States district court for the Southern District of New York, and (ii) toindemnify and hold harmless the Holders against certain Taxes and expenses due as a result of such transaction, if any), and such Person expressly assumes,by supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company underthe Notes and this Indenture (any such Person under (a) or (b), a “Successor Company”)(2) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the SuccessorCompany or any Subsidiary of the Successor Company as a result of such transaction as having been Incurred by the Successor Company or such Subsidiaryat the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and(3) the Company shall have delivered to the Trustee (i) an Officer’s Certificate and an Opinion of Counsel, each to the effect that suchtransaction and such supplemental indenture (if any) comply with this Indenture and (ii) an Opinion of Counsel to the effect that such supplementalindenture (if any) has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the Successor Company(in each case, in form and substance reasonably satisfactory to the Trustee), provided that, in each case in giving an Opinion of Counsel, counsel may rely onan Officer’s Certificate as to any matters of fact, including as to satisfaction of Sections 5.01(a)(2).The restriction in Section 5.01(a)(3) shall not be applicable to (A) the consolidation with or merger with or into the Company, or the sale,assignment, conveyance, lease, transfer or other disposition of the all or substantially all the Company’s assets to an Affiliate, if an Officer or our Board ofDirectors determines in good faith that the purpose of such transaction is principally to change the Company’s state of incorporation or convert theCompany’s form of organization to another form; or (B) the consolidation with or merger with or into the Company, or the sale, assignment, conveyance,lease, transfer or other disposition of the all or substantially all the Company’s assets to a single Wholly Owned Subsidiary in accordance with applicablelaw, provided that, if no supplemental indenture needs to be executed in relation to such transaction, the Company will notify the Trustee of such transaction(but no Officer’s Certificate or Opinion of Counsel shall need to be delivered to the Trustee in relation thereto).(b) If any consolidation or merger or any sale, assignment, conveyance, lease, transfer or other disposition of all or substantially all of theCompany’s assets occurs in accordance with this Indenture, the Successor Company (if other than the Company) will succeed to, and be substituted for theCompany and may exercise every right and power under this Indenture and the Notes with the same effect as if such Successor Company had been named inthe Company’s place in this Indenture, and the Company will be released from all its obligations and covenants under this Indenture and the Notes. 39SECTION 5.02. Merger and Consolidation of the Co-Issuer(a) The Co-Issuer may not consolidate with, merge with or into any Person or permit any Person to merge with or into the Co-Issuer unlessconcurrently therewith, a Subsidiary of the Company that is a limited liability company or corporation organized under the laws of the United States ofAmerica, any state thereof or the District of Columbia (which may be the Co-Issuer or the continuing Person as a result of such transaction) expressly assumesall the obligations of the Co-Issuer under the Notes and this Indenture.(b) Upon the consummation of any transaction effected in accordance with Section 5.02(a), the resulting, surviving Co-Issuer will succeedto, and be substituted for the Co-Issuer and may exercise every right and power under this Indenture and the Notes with the same effect as if suchsuccessor Person had been named in the Co-Issuer’s place in this Indenture and the Co-Issuer will be released from all its obligations and covenantsunder this Indenture and the Notes.(c) Any such surviving or transferee Co-Issuer must be a disregarded entity for U.S. federal income tax purposes, which is either a directWholly Owned Subsidiary of the Company, or held through one or more Subsidiaries of the Company that are treated as disregarded entities for U.S. federalincome tax purposes.SECTION 5.03. Merger and Consolidation of a Guarantor(a) No Guarantor may:(1) consolidate with or merge with or into any Person, or(2) sell, convey, transfer or dispose of all or substantially all its assets, as an entirety or substantially as an entirety, in one transaction or aseries of related transactions, to any Person, or(3) permit any Person to merge with or into the Guarantorunless(A) the other Person is the Company or a Guarantor (or becomes a Guarantor concurrently with the transaction); or(B) (1) either (x) a Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes all ofthe obligations of the Guarantor under its Note Guarantee; and (2) immediately after giving effect to the transaction, no Default has occurred and iscontinuing; or(C) the transaction constitutes a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the saleor disposition of all or substantially all the assets of the Guarantor otherwise permitted by this Indenture. 40ARTICLE 6Defaults and RemediesSECTION 6.01. Events of Default(a) An “Event of Default” occurs if or upon:(1) default in any payment of interest or Additional Amounts, if any, on any Note when due and payable, if that default continues for aperiod of 30 days, or failure to comply for 30 days with the notice provisions in connection with a Change of Control Triggering Event;(2) default in the payment of the principal amount of or premium, if any, on any Note issued under this Indenture when due at its StatedMaturity or upon optional redemption or otherwise (including the failure to pay the repurchase price for such Notes tendered pursuant to an Offer toPurchase), if that default or failure continues for a period of two days;(3) failure to comply for 90 days after written notice by the Trustee on behalf of the Holders or by the Holders of 30% in aggregateprincipal amount of the outstanding Notes with any of the Issuers’ obligations under Article 4 or 5 (in each case, other than an Event of Default underSection 6.01 (a)(1) or 6.01(a)(2));(4) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidencedany Indebtedness for money borrowed by either Issuer or any of its Significant Subsidiaries (or the payment of which is Guaranteed by either Issuer or any ofits Significant Subsidiaries) other than Indebtedness owed to either Issuer or a Significant Subsidiary whether such Indebtedness or Guarantee now exists, oris created after the Issue Date, which default:(a) is caused by a failure to pay principal at Stated Maturity on such Indebtedness, immediately upon the expiration of the graceperiod provided in such Indebtedness; or(b) results in the acceleration of such Indebtedness prior to its maturity;and, in each case, the aggregate principal amount of any such Indebtedness, together with the aggregate principal amount of any other suchIndebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates €200.0 million or more;(5) either Issuer or a Significant Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, ormakes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,rehabilitator, administrator, administrative receiver or similar office is appointed without the application or consent of such Person and the appointment 41continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any materialpart of its property or assets is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for reliefis entered in any such proceeding;(6) failure by the Issuers or any Significant Subsidiary to pay final judgments aggregating in excess of €200.0 million (exclusive of anyamounts that a solvent insurance company has acknowledged liability for), which judgments are not paid, discharged or stayed for a period of 60 days afterthe judgment becomes final and non-appealable; and(7) any Guarantee ceases to be in full force and effect, other than in accordance with the terms of this Indenture or a Guarantor denies ordisaffirms in writing its obligations under its Guarantee, other than in accordance with the terms thereof or upon release of the Guarantee in accordance withthis Indenture.(b) A default under Sections 6.01(a)(3), or 6.01(a)(6) will not constitute an Event of Default until the Trustee or the Holders of 30% inaggregate principal amount of the outstanding Notes under this Indenture notify the Issuers of the default and the Issuers do not cure such defaultwithin the time specified in Sections 6.01(a)(3), or 6.01(a)(6), as applicable, after receipt of such notice.SECTION 6.02. Acceleration(a) If an Event of Default (other than an Event of Default described in Section 6.01(a)(5) above) occurs and is continuing the Trustee by notice toeither Issuer or the Holders of at least 30% in aggregate principal amount of the outstanding Notes under this Indenture by written notice to either Issuer andthe Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, includingAdditional Amounts, if any, on all the Notes under this Indenture to be due and payable. Upon such a declaration, such principal, premium and accrued andunpaid interest, including Additional Amounts, if any, will be due and payable immediately. In the event of a declaration of acceleration of the Notesbecause an Event of Default described in Section 6.01(a)(4) has occurred and is continuing, the declaration of acceleration of the Notes shall be automaticallyannulled if the event of default or payment default triggering such Event of Default pursuant to Section 6.01(a)(4) shall be remedied or cured, or waived bythe holders of the Indebtedness, or the Indebtedness that gave rise to such Event of Default shall have been discharged in full, within 30 days after thedeclaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of acourt of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest, including Additional Amounts, ifany, on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.(b) If an Event of Default described in Section 6.01(a)(5) above occurs and is continuing, the principal of, premium, if any, and accrued andunpaid interest, including Additional Amounts, if any, on all the Notes will become and be immediately due and payable without any declaration or other acton the part of the Trustee or any Holders. 42SECTION 6.03. Other RemediesSubject to the duties of the Trustee as provided for in Article 7, if an Event of Default occurs and is continuing, the Trustee may pursue anyavailable remedy to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delayor omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy orconstitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to theextent permitted by law.SECTION 6.04. Waiver of Past DefaultsHolders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may, on behalf of the Holders of allthe Notes, waive all past or existing Defaults or Events of Default except a continuing Default in the payment of the principal, premium or interest, andAdditional Amounts, if any, on the Notes and rescind any acceleration with respect to the Notes and its consequences if rescission would not conflict withany judgment or decree of a court of competent jurisdiction. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequentor other Default or impair any consequent right.SECTION 6.05. Control by MajorityThe Holders of a majority in aggregate principal amount of the Notes then outstanding may direct in writing the time, method and place ofconducting any proceeding for exercising any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, theTrustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is undulyprejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other actiondeemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled toindemnification or other security reasonably satisfactory to it against all losses, liabilities and expenses caused by taking or not taking such action.SECTION 6.06. Limitation on Suits(a) Except to enforce the right to receive payment of principal or interest when due on the Notes, no Holder may pursue any remedy with respectto this Indenture or the Notes unless:(1) such Holder has previously given to the Trustee written notice that an Event of Default is continuing; 43(2) Holders of at least 30% in aggregate principal amount of the outstanding Notes have requested in writing the Trustee to pursue theremedy;(3) such Holders have offered in writing to the Trustee reasonable security or indemnity against any loss, liability or expense;(4) the Trustee has not complied with such request within 60 days after the receipt of the written request and the offer of security orindemnity; and(5) the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a written direction that,in the opinion of the Trustee, is inconsistent with such request within such 60-day period.(b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.SECTION 6.07. Rights of Holders to Receive PaymentNotwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Notes heldby such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or aftersuch respective dates, shall not be impaired or affected without the consent of such Holder.SECTION 6.08. Collection Suit by TrusteeIf an Event of Default specified in Sections 6.01(a)(1) or 6.01(a)(2) occurs and is continuing, the Trustee may recover judgment in its own nameand as trustee of an express trust against the Issuers or any other obligor on the Notes for the whole amount then due and owing (together with interest on anyunpaid interest to the extent lawful) and the amounts provided for in Section 7.07.SECTION 6.09. Trustee May File Proofs of ClaimThe Trustee may file such proofs of claim and other papers or documents and take such actions as may be necessary or advisable in order to havethe claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Issuers, their creditors or their property and, unless prohibited bylaw or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, andany Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shallconsent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. 44SECTION 6.10. PrioritiesIf the Trustee collects any money or property pursuant to this Article 6, including upon enforcement of any Liens, it shall pay out the money orproperty in the following order:FIRST: to the Trustee, the Registrar, the Transfer Agent and the Paying Agents for amounts due under Section 7.07;SECOND: to Holders for amounts due and unpaid on the Notes for principal and interest, ratably, without preference or priority of any kind,according to the amounts due and payable on the Notes for principal and interest, respectively; andTHIRD: to the Issuers.The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such recorddate, the Trustee shall mail to each Holder and the Issuers a notice that states the record date, the payment date and amount to be paid.SECTION 6.11. Undertaking for CostsIn any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by itas the Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in itsdiscretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and goodfaith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee or a Paying Agent, a suit by a Holderpursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Notes then outstanding.SECTION 6.12. Waiver of Stay or Extension LawsThe Issuers (to the extent they may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take thebenefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performanceof this Indenture; and the Issuers (to the extent that they may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall nothinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though nosuch law had been enacted.ARTICLE 7TrusteeSECTION 7.01. Duties of Trustee(a) The duties and responsibilities of the Trustee are as provided by the TIA and as set forth herein. If an Event of Default has occurred and iscontinuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as aprudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. 45(b) Except during the continuance of an Event of Default:(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no impliedcovenants or obligations shall be read into this Indenture against the Trustee; and(ii) in the absence of wilfull misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and thecorrectness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.However, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but neednot confirm or investigate the accuracy of mathematical calculations or other facts stated therein).(c) The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act or its ownwillful misconduct, except that:(i) this Section 7.01(c) does not limit the effect of Section 7.01(b);(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that theTrustee was negligent in ascertaining the pertinent facts; and(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a directionreceived by it pursuant to Sections 6.02 or 6.05;(d) Every provision of this Indenture that in any way relates to the Trustee is subject to Sections 7.01(a), 7.01(b) and 7.01(c) and the TIA.(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur liability in the performance ofany of its duties hereunder to take or omit to take any action under this Indenture or take any action at the request or direction of Holders, if it hasreasonable grounds for believing that repayment of such funds is not assured to it or it does not receive indemnity reasonably satisfactory to it in itsdiscretion against any loss, liability or expense which might reasonably be incurred by it in compliance with such request or direction nor shall theTrustee be required to do anything which is illegal or contrary to applicable laws. The Trustee will not be liable to the Holders if prevented or delayedin performing any of its obligations or discretionary functions under this Indenture by reason of any present or future law applicable to it, by anygovernmental or regulatory authority or by any circumstances beyond its control. 46(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers.(g) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.SECTION 7.02. Rights of Trustee.Subject to TIA Sections 315(a) through (d):(a) The Trustee may refrain from taking any action in any jurisdiction if the taking of such action in that jurisdiction would, in its opinion,based upon legal advice in the relevant jurisdiction, be contrary to any law of that jurisdiction or, to the extent applicable, the State of New York.Furthermore, the Trustee may also refrain from taking such action if it would otherwise render it liable to any person in that jurisdiction, or, to theextent applicable, the State of New York or if it is determined by any court or other competent authority in that jurisdiction, or, to the extentapplicable, in the State of New York, that it does not have such power.(b) The Trustee may conclusively rely and shall be fully protected in relying on any document believed by it to be genuine and to havebeen signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.(c) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trusteeshall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.(d) The Trustee may act through attorneys and agents and shall not be responsible for the misconduct or negligence of any agentappointed with due care.(e) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within itsrights or powers conferred upon it by this Indenture; provided, however, that the Trustee’s conduct does not constitute willful misconduct ornegligence.(f) The Trustee may retain professional advisers to assist it in performing its duties under this Indenture. The Trustee may consult withcounsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and completeauthorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with theadvice or opinion of such counsel.(g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any Officer’s Certificate, Opinion ofCounsel, or any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note,other evidence of indebtedness or other paper or 47document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if theTrustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer,personally or by agent or attorney at the sole cost of the Issuers.(h) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order ordirection of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee indemnity or othersecurity reasonably satisfactory to the Trustee against the costs, expenses and liabilities which may be incurred by it in compliance with such request,order or direction.In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders, each representing lessthan the requisite majority in aggregate principal amount of the Notes then outstanding, pursuant to the provisions of this Indenture, the Trustee, in its solediscretion, may determine what action, if any, shall be taken and shall be held harmless and shall not incur any liability for its failure to act until suchinconsistency or conflict is, in its reasonable opinion, resolved.(i) Except with respect to Section 4.01, the Trustee shall have no duty to inquire as to the performance of the Issuers with respect to thecovenants contained in Article 4.(j) The Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible orliable for compliance with restrictions on transfer, exchange, redemption, purchase or repurchase, as applicable, of minimum denominations imposedunder this Indenture or under applicable law or regulation with respect to any transfer, exchange, redemption, purchase or repurchase, as applicable, ofany interest in any Notes.(k) If any Note Guarantor is substituted to make payments on behalf of the Issuers pursuant to Article 10, the Issuers shall promptly notifythe Trustee of such substitution.(l) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to,and shall be enforceable by the Trustee in its capacity hereunder and by each agent (including Deutsche Bank Trust Company Americas) and custodianand other Person employed with due care to act as agent hereunder (including without limitation each Transfer Agent and Paying Agent). Each PayingAgent and Transfer Agent shall not be liable for acting in good faith on instructions believed by it to be genuine and from the proper party.(m) The Trustee shall not be required to give any bond or surety with respect to the performance of its duties or the exercise of its powersunder this Indenture.(n) The permissive right of the Trustee to take the actions permitted by this Indenture will not be construed as an obligation or duty to doso. 48(o) Anything in this Indenture to the contrary notwithstanding, in no event shall the Trustee be liable for special, indirect or consequentialloss or damage of any kind whatsoever (including but no limited to lost profits), even if the Trustee has been advised of the likelihood of such loss ordamage and regardless of the form of action(p) The Trustee may assume without inquiry in the absence of actual knowledge that the Issuers are each duly complying with theirobligations contained in this Indenture required to be performed and observed by them, and that no Default or Event of Default or other event whichwould require repayment of the Notes has occurred.SECTION 7.03. Individual Rights of TrusteeThe Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or theirAffiliates with the same rights it would have if it were not Trustee. For the avoidance of doubt, any Paying Agent, Transfer Agent or Registrar may do thesame with like rights.SECTION 7.04. Trustee’s DisclaimerThe Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not beaccountable for the Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any provision of thisIndenture, and it shall not be responsible for any statement of the Issuers in this Indenture or in any document issued in connection with the sale of the Notesor in the Notes other than the Trustee’s certificate of authentication. The Trustee shall not be charged with knowledge of the identity of any SignificantSubsidiary unless either (a) a Responsible Officer shall have actual knowledge thereof or (b) the Trustee shall have received notice thereof in accordance withSection 11.03 hereof from the Issuers or any Holder.SECTION 7.05. Notice of DefaultsIf a Default or Event of Default occurs and is continuing and the Trustee is informed of such occurrence by either Issuer, the Trustee must givenotice of the Default to the Holders within 60 days after the Trustee is informed of such occurrence. Except in the case of a Default in payment of principal ofor interest or premium, if any, on any Note, the Trustee may withhold the notice if and so long as a committee of its trust officers of the Trustee in good faithdetermines that withholding the notice is in the interests of Holders. Notice to Holders under this Section will be given in the manner and to the extentprovided in TIA Section 313(c).SECTION 7.06. [Reserved]SECTION 7.07. Compensation and IndemnityThe Issuers, or, upon the failure of the Issuers to pay, each Note Guarantor (if any), jointly and severally, shall pay to the Trustee from time totime such compensation as the Issuers and Trustee may from time to time agree for its acceptance of this Indenture and services hereunder and under theNotes. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. 49In the event of the occurrence of an Event of Default or the Trustee considering it expedient or necessary or being requested by the Issuers toundertake duties which the Trustee and the Issuers agree to be of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee, theIssuers shall pay to the Trustee such additional remuneration as shall be agreed between them.The Issuers and each Note Guarantor (if any), jointly and severally, shall reimburse the Trustee promptly upon request for all reasonabledisbursements, advances and expenses incurred or made by it (as evidenced in an invoice from the Trustee), including costs of collection, in addition to thecompensation for its services. Such expenses shall include the properly incurred compensation and expenses, disbursements and advances of the Trustee’sagents, counsel, accountants and experts. The Issuers and each Note Guarantor (if any), jointly and severally shall indemnify the Trustee and the PayingAgents and their respective officers, directors, agents and employers against any and all loss, liability, taxes or expenses (including reasonable attorneys’fees) incurred by or in connection with the acceptance or administration of its duties this Indenture and the Notes including the costs and expenses ofenforcing under this Indenture against the Issuers (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuers or anyHolder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder.The Trustee shall notify the Issuers of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided,however, that any failure so to notify the Issuers shall not relieve the Issuers or any Note Guarantor of its indemnity obligations hereunder. Except in caseswhere the interests of the Issuers and the Trustee may be adverse, the Issuers shall defend the claim and the indemnified party shall provide reasonablecooperation at the Issuers’ and any Note Guarantor’s expense in the defense. Notwithstanding the foregoing, such indemnified party may, in its solediscretion, assume the defense of the claim against it and the Issuers and any Note Guarantor shall, jointly and severally, pay the reasonable fees and expensesof the indemnified party’s defense (as evidenced in an invoice from the Trustee). Such indemnified parties may have separate counsel of their choosing andthe Issuers and any Note Guarantor, jointly and severally, shall pay the reasonable fees and expenses of such counsel (as evidenced in an invoice from theTrustee); provided, however, that the Issuers shall not be required to pay such fees and expenses if it assumes such indemnified parties’ defense and, in suchindemnified parties’ reasonable judgment, there is no conflict of interest between the Issuers and any Note Guarantor, as applicable, and such parties inconnection with such defense. The Issuers need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. TheIssuers need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such party’s own willfulmisconduct, negligence or bad faith.To secure the Issuers’ and any Note Guarantor’s payment obligations in this Section 7.07, the Trustee and the Paying Agents have a lien prior tothe Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particularNotes. 50The Issuers’ and any Note Guarantor’s payment obligations pursuant to this Section and any lien arising thereunder shall survive the satisfactionor discharge of this Indenture, any rejection or termination of this Indenture under any Debtor Relief Law or the resignation or removal of the Trustee and thePaying Agents. Without prejudice to any other rights available to the Trustee and the Paying Agents under applicable law, when the Trustee and the PayingAgents incur expenses after the occurrence of a Default specified in Section 6.01(a)(6) with respect to the Issuers, the expenses are intended to constituteexpenses of administration under the Debtor Relief Law.In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever(including, but not limited to, loss of profit) irrespective of whether such Trustee has been advised of the likelihood of such loss or damage and regardless ofthe form of action.For the avoidance of doubt, the rights, privileges, protections, immunities and benefits given to the Trustee in this Section 7.07, including itsright to be indemnified, are extended to, and shall be enforceable by the Trustee in each of its capacities hereunder including, without limitation, as Registrar,Transfer Agent and Paying Agent, and by each agent (including Deutsche Bank Trust Company Americas), custodian and other Person employed with duecare to act as agent hereunder.SECTION 7.08. Replacement of Trustee(a) The Trustee may resign at any time by so notifying the Issuers. If the Trustee is no longer eligible under Section 7.10 or in the circumstancesdescribed in TIA Section 310(b), any Holder that satisfies the requirements of TIA Section 310(b) may petition any court of competent jurisdiction for theremoval of the Trustee in writing and the appointment of a successor Trustee. The Holders of a majority in principal amount of the Notes then outstandingmay remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuers shall be entitled to remove the Trustee or any Holderwho has been a bona fide Holder for not less than six months may petition any court for removal of the Trustee and appointment of a successor Trustee, if:(i) the Trustee has or acquires a conflict of interest that is not eliminated;(ii) the Trustee is adjudged bankrupt or insolvent;(iii) a receiver or other public officer takes charge of the Trustee or its property; or;(iv) the Trustee otherwise becomes incapable of acting as Trustee hereunder.(b) If the Trustee resigns, is removed pursuant to Section 7.08(a)or if a vacancy exists in the office of Trustee for any reason (the Trustee insuch event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee. 51(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon theresignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of theTrustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer allproperty held by it as Trustee to the successor Trustee, provided, that all sums owing to the Trustee hereunder have been paid and subject to the lienprovided for in Section 7.07 and the recognition of the retiring Trustee’s lien thereto by the successor Trustee.(d) If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or theHolders of 10% in principal amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.(e) If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in Section 310(b) of the TIA,any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.(f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuers’ obligations under Section 7.07 shall continue forthe benefit of the retiring Trustee.(g) For the avoidance of doubt, the rights, privileges, protections, immunities and benefits given to the Trustee in this Section 7.08,including its right to be indemnified, are extended to, and shall be enforceable by each Paying Agent, Transfer Agent and Registrar employed to acthereunder.(h) The Trustee agrees to give the notices provided for in, and otherwise comply with, TIA Section 310(b).SECTION 7.09. Successor Trustee by MergerIf the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, anothercorporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by thisIndenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication ofany predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor tothe Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such casessuch certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have. 52SECTION 7.10. EligibilityThe Indenture must always have a Trustee that satisfies the requirements of TIA Section 310(b) and has a combined capital and surplus of at least$25,000,000 as set forth in its most recent published annual report of condition.SECTION 7.11. Certain ProvisionsEach Holder by accepting a Note authorizes and directs on his or her behalf the Trustee to enter into and to take such actions and to make suchacknowledgements as are set forth in this Indenture or other documents entered into in connection therewith. The Trustee shall not be responsible for thelegality, validity, effectiveness, suitability, adequacy or enforceability of any obligation or rights created or purported to be created thereby or pursuantthereto, nor shall it be responsible or liable to any person because of any invalidity of any provision of such documents or the unenforceability thereof,whether arising from statute, law or decision of any court.SECTION 7.12. Preferential Collection of Claims Against IssuerThe Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee whohas resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.ARTICLE 8Discharge of Indenture; DefeasanceSECTION 8.01. Discharge of Liability on Notes; Defeasance(a) Any Note Guarantees and this Indenture will be discharged and cease to be of further effect (except as to surviving rights of conversionor transfer or exchange of the Notes, as expressly provided for in this Indenture) as to all outstanding Notes when (1) either (a) all the Notes previouslyauthenticated and delivered (other than certain lost, stolen or destroyed Notes and certain Notes for which provision for payment was previously madeand thereafter the funds have been released to the Issuers) have been delivered to the Trustee for cancellation; or (b) all Notes not previously deliveredto the Trustee for cancellation (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) are tobe called for redemption within one year under arrangements reasonably satisfactory to the Trustee for the giving of notice of redemption by theTrustee in the name, and at the expense, of the Issuers; (2) the Issuers have deposited or caused to be deposited with the Trustee (or such entitydesignated by the Trustee for this purpose) money, U.S. Government Obligations, or a combination thereof, as applicable, in an amount sufficient topay and discharge the entire indebtedness on the Notes not previously delivered to the Trustee for cancellation, for principal, premium, if any, andinterest to the date of deposit (in the case of Notes that have become due and payable), or to the Stated Maturity or redemption date, as the case may be;(3) the Issuers have paid or caused to be paid all other sums payable under this 53Indenture; and (4) the Issuers have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel each to the effect that all conditionsprecedent under this Section 8.01 have been complied with, provided that any such counsel may rely on any Officer’s Certificate as to matters of fact(including as to compliance with the foregoing clauses (1), (2) and (3)).(b) Subject to Sections 8.01(c) and 8.02, either Issuer at any time may terminate (i) all of its obligations and all obligations of each NoteGuarantor (if any) under the Notes, any Note Guarantees and this Indenture (“legal defeasance option”) or (ii) its obligations under Article 4 (other thanSections 4.01, 4.02 and 4.04) and under Article 5 (other than Sections 5.01(a)(1) and 5.01(a)(2)), and thereafter any omission to comply with suchobligations shall not constitute a Default or an Event of Default with respect to the Notes, and the operation of Sections 6.01(a)(3) (other than withrespect to Sections 5.01(a)(1) and 5.01(a)(2)), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (with respect to the Issuers and Significant Subsidiaries) and 6.01(a)(7)(“covenant defeasance option”). The Issuers at their option at any time may exercise their legal defeasance option notwithstanding their prior exerciseof their covenant defeasance option. In the event that the Issuers terminate all of their obligations under the Notes and this Indenture by exercising itslegal defeasance option, the obligations under any Note Guarantees shall each be terminated simultaneously with the termination of such obligations.If the Issuers exercise their legal defeasance option or its covenant defeasance option, each Note Guarantor (if any) will be released from all itsobligations under its Note Guarantee.Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge ofthose obligations that the Issuers terminate.(c) Notwithstanding Sections 8.01(a) and (b) above, the Issuers’ and any Note Guarantors’ obligations in Sections 2.04, 2.05, 2.06, 2.07,2.08, 2.09, 2.10, 2.11, 7.01, 7.02, 7.03, 7.07, 7.08 and this Article 8, as applicable, shall survive until the Notes have been paid in full. Thereafter, theIssuers’ and any Note Guarantors’ obligations in Sections 7.07, 8.05 and 8.06, as applicable, shall survive.SECTION 8.02. Conditions to Defeasance(a) The Issuers may exercise their legal defeasance option or their covenant defeasance option only if:(1) an Issuer has irrevocably deposited in trust (the “defeasance trust”) with the Trustee (or such entity designated by the Trustee for thispurpose) cash in U.S. dollars or U.S. Government Obligations or a combination thereof for the payment of principal, premium, if any, and interest on the Notesto redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of:(A) an Opinion of Counsel in the United States to the effect that the beneficial owners of the Notes will not recognize income, gain orloss for U.S. federal income 54tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at thesame times as would have been the case if such deposit and defeasance had not occurred (and in the case of legal defeasance only, such Opinion of Counselin the United States must be based on a ruling of the U.S. Internal Revenue Service or other change in applicable U.S. federal income tax law since theissuance of the Notes);(B) an Officer’s Certificate stating that the deposit was not made by the Issuers with the intent of defeating, hindering, delaying,defrauding or preferring any creditors of the Issuers;(C) an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions andexclusions), each stating that all conditions precedent provided for or relating to legal defeasance or covenant defeasance, as the case may be, have beencomplied with;(D) an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulatedinvestment company under the U.S. Investment Company Act of 1940; and(E) the Issuers deliver to the Trustee all other documents or other information that the Trustee may reasonably require in connection witheither defeasance option.(b) Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date inaccordance with Article 3.SECTION 8.03. Application of Trust MoneyThe Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the depositedmoney and the money from the Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of andinterest on the Notes.SECTION 8.04. Repayment to IssuersThe Trustee and the Paying Agent shall promptly turn over to the Issuers upon request any money or U.S. Government Obligations held by it asprovided in this Article which, in the written opinion of an internationally recognized firm of independent public accountants delivered to the Trustee (whichdelivery shall only be required if U.S.Government Obligations have been so deposited), are in excess of the amount thereof which would then be required tobe deposited to effect an equivalent discharge or defeasance in accordance with this Article 8.Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Issuers upon written request any moneyheld by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to theIssuers for payment as general creditors, and the Trustee and the Paying Agent shall have no further liability with respect to such monies. 55SECTION 8.05. Indemnity for U.S. Government ObligationsThe Issuers and any Note Guarantor, jointly and severally, shall pay and shall indemnify the Trustee against any tax, fee or other charge imposedon or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.SECTION 8.06. ReinstatementIf the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of anylegal proceeding or by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting suchapplication, the Issuers’ obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to thisArticle 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article8; provided, however, that if the Issuers have made any payment of principal of or interest on any Notes because of the reinstatement of its obligations, theIssuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by theTrustee or Paying Agent.ARTICLE 9AmendmentsSECTION 9.01. Without Consent of HoldersThe Issuers, the Trustee and the other parties thereto may amend or supplement any Note Documents without notice to or consent of any Holderto:(1) cure any ambiguity, omission, defect, error or inconsistency, conform any provision to the “Description of the Notes” in the OfferingMemorandum, or reduce the minimum denomination of the Notes;(2) provide for the assumption by a Successor Company of the obligations of the Issuers under any Note Document, as permitted by thisIndenture;(3) provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued inregistered form for U.S. federal income tax purposes;(4) add to the covenants or provide for a Guarantee for the benefit of the Holders or surrender any right or power conferred upon theIssuers;(5) make any change that does not adversely affect the rights of any Holder in any material respect; 56(6) at the Issuers’ election, comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA,if such qualification is required;(7) make such provisions as necessary (as determined by an Officer or the Board of Directors in good faith) for the issuance of AdditionalNotes;(8) to add Guarantees with respect to the Notes, or to confirm and evidence the release, termination, discharge or retaking of anyGuarantee with respect to the Notes when such release, termination, discharge or retaking is provided for under this Indenture or the Agreed SecurityPrinciples; or(9) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee pursuant to the requirementsthereof or to provide for the accession by the Trustee to any Note Document.SECTION 9.02. With Consent of Holders(a) The Issuers, the Trustee and the other parties thereto, as applicable, may amend, supplement or otherwise modify the Note Documents with theconsent of the holders of a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchaseof, or tender offer or exchange offer for, Notes) and, subject to certain exceptions, any default or compliance with any provisions thereof may be waived withthe consent of the holders of a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with apurchase of, or tender offer or exchange offer for, the Notes). However, without the consent of Holders holding not less than 100% (or, in the case of clauses(7) and (10), 90%; and in the case of clause (8), 75%) of the then outstanding aggregate principal amount of the Notes), an amendment or waiver may not,with respect to any Notes held by a non-consenting Holder:(1) reduce the principal amount of Notes whose Holders must consent to an amendment;(2) reduce the stated rate of or extend the stated time for payment of interest on any Note;(3) reduce the principal of or extend the Stated Maturity of any Note;(4) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed, in each case asdescribed in Section 5 of the Notes;(5) make any Note payable in money other than that stated in the Note;(6) impair the right of any Holder to receive payment of principal of and interest on such Holder’s Notes on or after the due dates thereforor to institute suit for the enforcement of any such payment on or with respect to such Holder’s Notes; 57(7) make any change to Section 4.02 that adversely affects the right of any Holder of such Notes in any material respect or amends theterms of such Notes in a way that would result in a loss of an exemption from any of the Taxes described thereunder or an exemption from any obligation towithhold or deduct Taxes so described thereunder unless the Payor agrees to pay Additional Amounts, if any, in respect thereof;(8) release any Note Guarantee other than pursuant to the terms of this Indenture and the Agreed Security Principles;(9) waive a Default or Event of Default with respect to the nonpayment of principal, premium or interest (except pursuant to a rescissionof acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of such Notes and a waiver of the payment default thatresulted from such acceleration); or(10) make any change in this Section 9.02(a) which require the Holders’ consent described in this sentence.(b) It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposedamendment of the Note Documents, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment or waiverunder this Indenture by any Holder of Notes given in connection with a tender of such Holder’s Notes will not be rendered invalid by such tender.After an amendment under this Section 9.02 becomes effective, in case of Holders of Definitive Notes, the Issuers shall mail to the Holders anotice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of anamendment under this Section 9.02.The Notes issued on the Issue Date, and any Additional Notes part of the same series, will be treated as a single class for all purposes under thisIndenture, including with respect to waivers and amendments, except as the relevant amendment, waiver, consent, modification or similar action affects therights of the Holders of the different series of Notes dissimilarly. For the purposes of calculating the aggregate principal amount of Notes that have consentedto or voted in favor of any amendment, waiver, consent, modifications or other similar action, the Issuers (acting reasonably and in good faith) shall beentitled to select a record date as of which the principal amount of any Notes shall be calculated in such consent or voting process.SECTION 9.03. Revocation and Effect of Consents and Waivers(a) A written consent to an amendment or a waiver by a Holder shall bind the Holder and every subsequent Holder of that Note or portion of theNotes that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is not made on the Note. However, any suchHolder or subsequent Holder may revoke the written consent or waiver as to such Holder’s Note or portion of the Note if the Trustee receives the notice ofrevocation before the date on which the Trustee receives an Officer’s Certificate from the Company certifying that the requisite number of consents have beenreceived. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver 58becomes effective upon the (i) receipt by the Issuers or the Trustee of the requisite number of consents, (ii) satisfaction of conditions to effectiveness as setforth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (orsupplemental indenture) by the Issuers and the Trustee.(b) The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their writtenconsent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, thennotwithstanding Section 9.03(a), those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shallbe entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to beHolders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.SECTION 9.04. Notation on or Exchange of NotesIf an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may placean appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuers or the Trustee so determine, theIssuers in exchange for the Note shall issue and the Trustee or an authentication agent shall authenticate a new Note that reflects the changed terms. Failure tomake the appropriate notation or to issue a new Note shall not affect the validity of such amendment.SECTION 9.05. Trustee to Sign AmendmentsThe Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not impose any personal obligations on theTrustee or adversely affect the rights, duties, liabilities or immunities of the Trustee under this Indenture. If it does, the Trustee may, but need not sign it. Insigning such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.01) shall befully protected in relying upon, an Officer’s Certificate and an Opinion of Counsel stating that such amendment complies with this Indenture and that suchamendment has been duly authorized, executed and delivered and is the legal, valid and binding obligation of the Issuers and the Note Guarantors (if any)enforceable against them in accordance with its terms, subject to customary exceptions.SECTION 9.06. Payment for ConsentNeither the Issuers nor any Affiliate of either Issuer shall, directly or indirectly, pay or cause to be paid any consideration, whether by way ofinterest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Note Documents(or the appointment of any proxy in relation to any of the foregoing) unless such consideration is offered (subject to limitations of applicable law) to be paidto all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement orproxies in relation thereto. 59ARTICLE 10Note GuaranteesSECTION 10.01. Note Guarantees.(a) Subject to the limitations set forth in Schedule 10.1, each Guarantor hereof hereby irrevocably Guarantees (collectively, the “NoteGuarantees”), as primary obligor and not merely as surety, on a senior unsecured basis to each Holder and to the Trustee and its successors and assigns(i) the full and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all payment obligations of the Issuers underthis Indenture and the Notes, whether for payment of principal of, premium, or interest and all other monetary obligations of the Issuers under thisIndenture or in respect of the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuerswhether for payment obligations resulting from a Change of Control Triggering Event, fees, expenses, indemnification or otherwise under thisIndenture and the Notes (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”). Any such Note Guarantor further agreesthat the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from such Note Guarantor, and thatsuch Note Guarantor shall remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.(b) Each Note Guarantor waives presentation to, demand of payment from and protest to the Issuers of any of the Guaranteed Obligationsand also waives notice of protest for nonpayment. Each Note Guarantor waives notice of any default under the Notes or the Guaranteed Obligations.The obligations of each Note Guarantor hereunder shall not be affected by (i) the failure of any Holder, or the Trustee to assert any claim or demand orto enforce any right or remedy against the Issuers or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) anyextension or renewal of any thereof; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, theNotes or any other agreement; (iv) the release of any Notes held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (v) thefailure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in theownership of such Note Guarantor, except as provided in Section 10.02(c).(c) Each Note Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the NoteGuarantors, such that such Note Guarantor’s obligations would be less than the full amount claimed. Each Note Guarantor hereby waives any right towhich it may be entitled to have the assets of the Issuers first be used and depleted as payment of the Issuers’ or such Note Guarantor’s 60obligations hereunder prior to any amounts being claimed from or paid by such Note Guarantor hereunder. Each Note Guarantor hereby waives anyright to which it may be entitled to require that the Issuers be sued prior to an action being initiated against such Note Guarantor.(d) Each Note Guarantor further agrees that its Note Guarantee herein constitutes a guarantee of payment when due (and not a guarantee ofcollection) and waives any right to require that any resort be had by any Holder or the Trustee to any Note held for payment of the GuaranteedObligations.(e) If any Note Guarantor makes payments under its Note Guarantee, each Note Guarantor must contribute its share of such payments. EachNote Guarantor’s share of such payment will be computed based on the proportion that the net worth of the relevant Note Guarantor represents relativeto the aggregate net worth of all the Note Guarantors combined.(f) Each Note Guarantor agrees that its Note Guarantee shall remain in full force and effect until payment in full of the GuaranteedObligations. Except as expressly set forth in Sections 8.01(b) and 10.02 the obligations of each Note Guarantor hereunder shall not be subject to anyreduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shallnot be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality orunenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Note Guarantorherein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforceany remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay,willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may ormight in any manner or to any extent vary the risk of such Note Guarantor or would otherwise operate as a discharge of such Note Guarantor as a matterof law or equity.(g) Each Note Guarantor agrees that its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at anytime payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder orthe Trustee upon the bankruptcy or reorganization of the Issuers or otherwise unless such Note Guarantee has been released in accordance with thisIndenture.(h) Subject to the limitations set forth in Schedule 10.1, in furtherance of the foregoing and not in limitation of any other right which anyHolder or the Trustee has at law or in equity against any Note Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal of orinterest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or toperform or comply with any other Guaranteed Obligation, each Note Guarantor 61hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee anamount equal to the sum of (i) the unpaid principal amount of the Notes, (ii) accrued and unpaid interest on the Notes and (iii) all other monetaryobligations of the Issuers to the Holders and the Trustee, including any other unpaid principal amount of such Guaranteed Obligations, accrued andunpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by law) and any Additional Amounts.(i) Each Note Guarantor agrees that it shall not be entitled to exercise any right of subrogation in relation to the Holders in respect of anyGuaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Note Guarantor further agrees that, as between it,on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may beaccelerated as provided in Article 6 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventingsuch acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of suchGuaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due andpayable by such Note Guarantor for the purposes of this Section 10.01.(j) Each Note Guarantor also agrees to pay any and all reasonable costs and expenses (including reasonable attorneys’ fees and expenses)incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.(k) Upon request of the Trustee, each Note Guarantor shall execute and deliver such further instruments and do such further acts as theTrustee may reasonably require to carry out more effectively the purpose of this Indenture.SECTION 10.02. Limitation on Liability(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligationsguaranteed hereunder by any Note Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Note Guarantor withoutrendering the Note Guarantee, as it relates to such Note Guarantor, voidable under applicable law relating to fraudulent conveyance, fraudulent transfer,corporate benefit, financial assistance or similar laws affecting the rights of creditors generally.(b) A Note Guarantee as to any Note Guarantor shall terminate and release and be of no further force or effect and such Note Guarantor shall bedeemed to be released from all obligations under this Article 10 upon:(1) a sale or other disposition (including by way of consolidation or merger) of the Capital Stock of such Guarantor or of a Person whoholds all of the Capital Stock of such Guarantor, such that the Guarantor does not remain a Subsidiary, or the sale or disposition of all or substantially all theassets of the Guarantor, in each case, otherwise permitted by this Indenture,(2) defeasance or discharge of the Notes, as provided in Article 8, 62(3) in accordance with the provisions of the Agreed Security Principles, or(4) so long as no Event of Default has occurred and is continuing, to the extent that such Guarantor (i) is unconditionally released anddischarged from its liability with respect to the Revolving Credit Agreement (other than pursuant to the repayment and discharge thereof) and (ii) does notguarantee any other Credit Facility or Public Debt.In all cases, the Issuers and such Note Guarantors that are to be released from their Note Guarantees shall deliver to the Trustee an Officer’sCertificate and an Opinion of Counsel certifying compliance with this Section 10.02(b). At the request of the Issuers, the Trustee shall execute and deliver anappropriate instrument evidencing such release (in the form provided by the Issuers).SECTION 10.03. Successors and AssignsThis Article 10 shall be binding upon each Note Guarantor and its successors and assigns and shall inure to the benefit of the successors andassigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privilegesconferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the termsand conditions of this Indenture.SECTION 10.04. No WaiverNeither a failure nor a delay on the part of, the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shalloperate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights,remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefitswhich either may have under this Article 10 at law, in equity, by statute or otherwise.SECTION 10.05. ModificationNo modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Note Guarantor therefrom,shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in thespecific instance and for the purpose for which given. No notice to or demand on any Note Guarantor in any case shall entitle such Note Guarantor to anyother or further notice or demand in the same, similar or other circumstances.SECTION 10.06. Non-ImpairmentThe failure to endorse a Note Guarantee on any Note shall not affect or impair the validity thereof. 63ARTICLE 11MiscellaneousSECTION 11.01. Trust Indenture Act of 1939The Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualifiedunder the TIA, except that the following provisions of the TIA will not be incorporated by or govern this Indenture: Sections 310(a), 312, 313 (other than asprovided in Section 7.05 of this Indenture), 314(a), 314(b) and 314(d). For the avoidance of doubt, this Indenture will not be qualified under the TIA.SECTION 11.02. Noteholder Communications; Noteholder Actions(a) The rights of Holders to communicate with other Holders with respect to this Indenture or the Notes are as provided by the TIA. Neither theCompany nor the Trustee will be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the TIA.(b) (1) Any request, demand, authorization, direction, notice, consent to amendment, supplement or waiver or other action provided by thisIndenture to be given or taken by a Holder (an “act”) may be evidenced by an instrument signed by the Holder delivered to the Trustee. The fact anddate of the execution of the instrument, or the authority of the person executing it, may be proved in any manner that the Trustee deems sufficient.(2) The Trustee may make reasonable rules for action by or at a meeting of Holders, which will be binding on all the Holders.(c) Any act by the Holder of any Note binds that Holder and every subsequent Holder of a Note that evidences the same debt as the Note ofthe acting Holder, even if no notation thereof appears on the Note. Subject to paragraph (d), a Holder may revoke an act as to its Notes, but only if theTrustee receives the notice of revocation before the date the amendment or waiver or other consequence of the act becomes effective.(d) The Company may, but is not obligated to, fix a record date (which need not be within the time limits otherwise prescribed by TIASection 316(c)) for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard, except thatduring the continuance of an Event of Default, only the Trustee may set a record date as to notices of default, any declaration or acceleration or anyother remedies or other consequences of the Event of Default. If a record date is fixed, those Persons that were Holders at such record date and onlythose Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date. No act willbe valid or effective for more than 90 days after the record date. 64SECTION 11.03. NoticesAny notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows:if to the Issuers:NXP B.V.High Tech Campus 605656 AG EindhovenThe NetherlandsAttention of: Guido DierickFax: +(31) 40 272 4005with a copy to:NXP Semiconductors N.V.High Tech Campus 605656 AG EindhovenThe NetherlandsAttention of: Erik ThyssenFax: +(31) 20 5407500if to the Trustee, Paying Agent, Registrar or Transfer Agent:Deutsche Bank Trust Company Americas60 Wall Street16th FloorMS: NYC60-1630New York, New York 10005United StatesAttention of:Trust and Agency Services – NXP B.V.Fax: +(1) 732 578 4635with a copy to:Deutsche Bank National Trust Company for Deutsche Bank Trust Company AmericasMS: JCY03-0699100 Plaza One – 6th FloorJersey City, New Jersey 07311United StatesAttention of:Trust and Agency Services – NXP B.V.Fax: +(1) 732 578 4635 65Each of the Issuers or the Trustee by notice to the others may designate additional or different addresses for subsequent notices orcommunications.Any notice or communication sent to a Holder of Definitive Notes shall be in writing and shall be made by first-class mail, postage prepaid, or byhand delivery to the Holder at the Holder’s address as it appears on the registration books of the Registrar, with a copy to the Trustee.If and so long as any Notes are represented by one or more Global Notes and ownership of book-entry interests therein are shown on the recordsof DTC or any successor securities clearing agency appointed by the Depositary at the request of the Issuers, notices will be delivered to such securitiesclearing agency for communication to the owners of such book-entry interests, delivery of which shall be deemed to satisfy the notice requirements of thisSection 11.03.Notices given by first-class mail, postage prepaid, will be deemed given seven calendar days after mailing. Notices given by publication will bedeemed given on the first date on which any of the required publications is made, or if published more than once on different dates, on the first date on whichpublication is made; provided that, if notices are mailed, such notice shall be deemed to have been given on the later of such publication and the seventhcalendar day after being so mailed. Failure to mail, cause to be delivered or otherwise transmit a notice or communication to a Holder or any defect in it shallnot affect its sufficiency with respect to other Holders. If a notice or communication is mailed or sent in the manner provided above, it is duly given, whetheror not the addressee receives it.SECTION 11.04. Certificate and Opinion as to Conditions PrecedentUpon any request or application by the Issuers to the Trustee to take or refrain from taking any action under this Indenture, the Issuers shallfurnish to the Trustee:(a) an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, allconditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and any other matters that theTrustee may reasonably request; and(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all suchconditions precedent have been complied with and any other matters that the Trustee may reasonably request.SECTION 11.05. Statements Required in Certificate or OpinionEach certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant toSection 8) shall include:(a) a statement that the Person making such certificate or opinion has read such covenant or condition; 66(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained insuch certificate or opinion are based;(c) a statement that, in the opinion of such Person, such Person has made such examination or investigation as is necessary to enable himto express an informed opinion as to whether or not such covenant or condition has been complied with; and(d) a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with.SECTION 11.06. When Notes DisregardedIn determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes ownedby the Issuers, any Note Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with theIssuers or any Note Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall beprotected in relying on any such direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so disregarded. Subject to theforegoing, only Notes outstanding at the time shall be considered in any such determination.SECTION 11.07. Rules by Trustee, Paying Agent and RegistrarThe Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable rules fortheir functions.SECTION 11.08. Legal HolidaysIf a payment date is a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue forthe intervening period. If a regular record date is not a Business Day, the record date shall not be affected.SECTION 11.09. Governing LawThis Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.SECTION 11.10. Consent to Jurisdiction and ServiceThe Issuers and each Note Guarantor (if any) irrevocably (i) agree that any legal suit, action or proceeding against the Issuers or any NoteGuarantor arising out of or based upon this Indenture, the Notes or any Note Guarantee or the transactions contemplated hereby may be instituted in any U.S.Federal or state court in the Borough of Manhattan, The City of New York court and (ii) waive, to the fullest extent they may effectively do so, any objectionwhich they may now or hereafter have to the laying of venue of any such proceeding. The Company and each Note Guarantor have appointed (and anySubsidiary becoming a Note Guarantor shall appoint) NXP Funding LLC, as their authorized agent (the “Authorized Agent”) upon whom 67process may be served in any such action arising out of or based on this Indenture, the Notes or the transactions contemplated hereby which may be institutedin any New York court, expressly consent to the jurisdiction of any such court in respect of any such action, and waive any other requirements of orobjections to personal jurisdiction with respect thereto. Such appointment shall be irrevocable. The Issuers represent and warrant that the Authorized Agenthas agreed to act as such agent for service of process and agrees to take any and all action, including the filing of any and all documents and instruments, thatmay be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of suchservice to the Issuers and each Note Guarantor shall be deemed, in every respect, effective service of process upon the Issuers and each Note Guarantor.SECTION 11.11. No Recourse Against OthersNo director, officer, employee, incorporator or shareholder of the Issuers or any of their respective Subsidiaries or Affiliates as such, will have anyliability for any obligations of the Issuers under the Note Documents, or for any claim based on, in respect of, or by reason of, such obligations or theircreation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.SECTION 11.12. SuccessorsAll agreements of the Issuers and each Note Guarantor in this Indenture and the Notes shall bind its successors. All agreements of the Trustee inthis Indenture shall bind its successors.SECTION 11.13. Multiple OriginalsThe parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the sameagreement. One signed copy is enough to prove this Indenture.SECTION 11.14. Table of Contents; HeadingsThe table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience ofreference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.SECTION 11.15. Applicable Law; Provision of Information to TrusteeIn order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including,without limitation, those relating to the funding of terrorist activities and money laundering, including Section 326 of the USA PATRIOT Act of the UnitedStates (“Applicable Law”), the Trustee is required to obtain, verify, record and update certain information relating to individuals and entities which maintaina business relationship with the Trustee. Accordingly, each of the parties agree to provide to the Trustee, upon their request from time to time suchidentifying information and documentation as may be available for such party in order to enable the Trustee to comply with Applicable Law. 68SECTION 11.16. Force MajeureThe Trustee, Registrar, Paying Agent and Transfer Agent shall not incur any liability for not performing any act or fulfilling any duty, obligationor responsibility hereunder by reason of any occurrence beyond the control of the Trustee (including but not limited to any act or provision of any present orfuture law or regulation or governmental authority, any act of God or war, civil unrest, local or national disturbance or disaster, any act of terrorism, or theunavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility).SECTION 11.17. Prescription.Claims against the Issuer or any Guarantor for the payment of principal, or premium, if any, on the Notes will be prescribed five years after theapplicable due date for payment thereof. Claims against the Issuer or any Guarantor for the payment of interest on the Notes will be prescribed three yearsafter the applicable due date for payment of interest. 69IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.NXP B.V.by /s/ Jean SchreursName: Jean SchreursTitle: Authorized SignatoryNXP FUNDING LLCby /s/ Jean SchreursName: Jean SchreursTitle: Authorized Signatory [Signature Page to Indenture]DEUTSCHE BANK TRUST COMPANY AMERICAS, asTrusteeBy Deutsche Bank National Trust Companyby /s/ Robert S. PeschlerName: Robert S. PeschlerTitle: Vice Presidentby /s/ Linda RealeName: Linda RealeTitle: Vice President [Signature Page to Indenture]NXP SEMICONDUCTORS NETHERLANDS B.V.by /s/ Jean SchreursName: Jean SchreursTitle: Authorized Signatory [Signature Page to Indenture]NXP SEMICONDUCTORS USA INC.by /s/ James W. CaseyName: James W. CaseyTitle: V.P. and General Counsel [Signature Page to Indenture]SCHEDULE 1AGREED SECURITY PRINCIPLES 1.Agreed Security Principles 1.1The Guarantees to be provided by the Issuers and the Guarantors will be given in accordance with certain agreed security principles (the “AgreedSecurity Principles”). This Schedule 1 identifies the Agreed Security Principles and addresses the manner in which the Agreed Security Principles willimpact on or be determinant of the Guarantees to be taken in relation to this Indenture, and of any future Liens or security, if any, to be taken as of thedate such Liens are granted. 1.2The Agreed Security Principles embody a recognition by all parties that there may be certain legal, commercial and practical difficulties in obtainingeffective security from the Company and each of its Restricted Subsidiaries in every jurisdiction in which the Company and its Restricted Subsidiariesare located. In particular: (a)general statutory or other legal limitations or requirements, financial assistance, corporate benefit, fraudulent preference, “thin capitalization”rules, retention of title claims and similar matters may limit the ability of the Company or any of its Restricted Subsidiaries to provide aGuarantee or may require that it be limited as to amount or otherwise, and if so the same shall be limited accordingly, provided that the Companyor the relevant Restricted Subsidiary shall use reasonable endeavors to overcome such obstacle. The Company will use reasonable endeavors toassist in demonstrating that adequate corporate benefit accrues to each of the Restricted Subsidiary; (b)the Company and its Restricted Subsidiaries will not be required to give Guarantees or enter into security document if (or to the extent) it is notwithin the legal capacity of the Company or its relevant Restricted Subsidiary or if the same would conflict with the fiduciary duties of theirdirectors or contravene any legal prohibition or regulatory condition or result in, or could reasonably be expected to result in, a material risk ofpersonal or criminal liability for any officer or director of the Company or any of the Restricted Subsidiaries, provided that the Company andeach of its Restricted Subsidiaries shall use reasonable endeavors to overcome any such obstacle; (c)a key factor in determining whether or not security shall be taken is the applicable cost (including adverse effects on interest deductibility,registration taxes and notarial costs) which shall not be disproportionate to the benefit to the Holders of obtaining such security; 1 (d)where there is material incremental cost involved in creating security over all assets owned by any of the Issuers or a Guarantor in a particularcategory (e.g. real estate), regard shall be had to the principle stated at paragraph 1.2(c) of this Schedule 1 which shall apply to the immaterialassets and, subject to the Agreed Security Principles, only the material assets in that category (e.g. real estate of material economic value) shall besubject to security; (e)it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets in which eventsecurity will not be taken over such assets; (f)any assets subject to contracts, leases, licenses or other arrangements with a third party that exist concurrently or are not prohibited by thisAgreement and which (subject to override by the Uniform Commercial Code and other relevant provisions of applicable law), effectively preventthose assets from being charged will be excluded from any relevant security document; provided that reasonable endeavors to obtain consent tocreating Liens in any such assets shall be used by the Company and each of its Restricted Subsidiaries to avoid or overcome such restrictions ifeither collateral agent reasonably determines that the relevant asset is material (which endeavors shall not include the payment of any consentfees), but unless effectively prohibited by contracts, leases, licenses or other arrangements with a third party that exist concurrently or are notprohibited by this Indenture, this shall not prevent security being given over any receipt or recovery under such contract, lease or license; (g)the giving of a Guarantee, the granting of security or the perfection of the security granted will not be required if it would have a material adverseeffect (as reasonably determined in good faith by management of the relevant obligor) on the ability of the relevant obligor to conduct itsoperations and business in the ordinary course as otherwise permitted by this Indenture; (h)in the case of accounts receivable, a material adverse effect on either Issuer’s or a Guarantor’s relationship with or sales to the customergenerating such receivables or material legal or commercial difficulties (as reasonably determined by management of the relevant obligor ingood faith) provided that none of the Issuers and the Guarantors may utilize this exception unless, after giving effect thereto no less than amajority of the book value of the accounts receivable of the Company and its Subsidiaries on a consolidated basis (as measured at the end ofeach fiscal quarter) is subject to perfected liens, and provided further that any accounts receivable of the Issuers and the Guarantors excludedfrom Collateral by virtue of this clause (except where prohibited by law and subject to the remainder of these Agreed Security Principles) shall besubject to perfected Liens promptly if and when the corporate credit of the Company is downgraded to “B” or lower from S&P and “B2” or lowerfrom Moody’s; 2 (i)security will be limited so that the aggregate of notarial costs and all registration and like taxes relating to the provision of security shall notexceed an amount to be agreed. Any additional costs may be paid by the Holders at their option; and (j)all security shall be given in favor of a single security trustee or collateral agent and not the secured parties individually. “Parallel debt”provisions and other similar structural options will be used where necessary and such provisions will be contained in the intercreditor agreementand not the individual security documents unless required under local law. No action will be required to be taken in relation to the guarantees orsecurity when any lender assigns or transfers any of its participation in this Indenture to a new lender. 2.Terms of security documentsThe following principles will be reflected in the terms of any security document to be executed and delivered: (a)subject to Permitted Liens and these Agreed Security Principles the security will be first ranking and the perfection of security (when required)and other legal formalities will be completed as soon as practicable and, in any event, within the time periods specified in the Note Documentsor, if earlier or to the extent no such time period is specified in the Note Documents, within the time periods specified by applicable law in orderto ensure due perfection; (b)the security will not be enforceable until an Event of Default has occurred and notice of acceleration of the Notes has been given by the Trusteeor the Notes have otherwise become due and payable prior to the scheduled maturity thereof (an “Enforcement Event”); (c)prior to the Maturity Date, notification of any Liens over bank accounts will be given (subject to legal advice) to the banks with whom theaccounts are maintained only if an Enforcement Event has occurred; (d)notification of receivables security to debtors who are not members of the Company or its Subsidiaries will only be given if an EnforcementEvent has occurred; (e)notification of any security interest over insurance policies will be served on any insurer of the Company’s or any Restricted Subsidiaries’ assets; (f)the security documents should only operate to create security rather than to impose new commercial obligations. Accordingly, they should notcontain material additional representations, undertakings or indemnities (such as in respect of insurance, information or the payment of costs)unless these are the same as or consistent with those contained in this Indenture or are necessary for the creation or perfection of the security; 3 (g)in respect of the share pledges and pledges of intra-group receivables, until an Enforcement Event has occurred, the pledgors will be permitted toretain and to exercise voting rights to any shares pledged by them in a manner which does not materially adversely affect the value of thesecurity (taken as a whole) or the validity or enforceability of the security or cause an Event of Default to occur, and the pledgors will bepermitted to receive dividends on pledged shares and payment of intra-group receivables and retain the proceeds and/or make the proceedsavailable to Holdings and its Subsidiaries to the extent not prohibited under this Indenture; (h)the Collateral Agents will only be able to exercise a power of attorney in any security document following the occurrence of an EnforcementEvent or with respect to perfection or further assurance obligations that following request, the relevant obligor has failed to satisfy; (i)no obligor shall be required to provide surveys on real property (unless such surveys already exist in which case there shall be no requirementthat such surveys be certified to the Holders) or to remove any encumbrances on title that are reflected in any title insurance or any other existingencumbrances on real property (not including Liens securing Indebtedness of the Company or any of its Restricted Subsidiaries); (j)no obligor shall be required to protect any Liens in the United States prior to the occurrence of an Enforcement Event by means other thancustomary filings (including UCC-1s, mortgage or deed of trust filings and patent and trademark filings) and delivery of share certificates(accompanied by powers of attorney executed in blank) and any intercompany promissory notes; and (k)information, such as lists of assets, will be provided if, and only to the extent, required by local law to be provided to protect or create, perfect orregister the security and, to the extent so required will be provided annually (unless required to be provided by local law more frequently, butnot more frequently than quarterly) and following the occurrence and during the continuance of an Event of Default, on the Collateral Agents’reasonable request. 4APPENDIX APROVISIONS RELATING TO THE NOTES1. Definitions.Capitalized terms used but not otherwise defined in this Appendix A shall have the meanings assigned to them in the Indenture. For the purposesof this Appendix A the following terms shall have the meanings indicated below:“Applicable Procedures” means, with respect to any transfer or transaction involving a Regulation S Global Note or beneficial interest therein,the rules and procedures of the Depositary for such Global Note, DTC, in each case to the extent applicable to such transaction and as in effect from time totime.“Definitive Note” means a certificated Note that does not include the Global Note Legend.“Depositary” means DTC.“DTC” means The Depository Trust Company, its nominees and their respective successors.“Global Note Legend” means the legend set forth under that caption in Exhibit A to the Indenture.“Notes Custodian” means the custodian with respect to a Global Note (as appointed by the applicable Depositary) or any successor personthereto.“QIB” means a “qualified institutional buyer” as defined in Rule 144A.“Regulation S” means Regulation S under the Securities Act.“Regulation S Notes” means all Notes offered and sold outside the United States in reliance on Regulation S.“Restricted Period”, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day onwhich such Notes are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, noticeof which day shall be promptly given by the Issuer to the Trustee, and (b) the Issue Date with respect to such Notes.“Restricted Notes Legend” means the legend set forth under that caption in Exhibit A to the Indenture.“Rule 144A” means Rule 144A under the Securities Act.“Rule 144A Notes” means all Notes offered and sold to QIBs in reliance on Rule 144A. A-1“Securities Act” means the Securities Act of 1933.“Transfer Restricted Notes” means Definitive Notes and any other Notes that bear or are required to bear the Restricted Notes Legend.2. The Notes.2.1 Form and Dating.(a) The Notes issued on the date hereof will be (i) offered and sold by the Issuers pursuant to a Purchase Agreement dated as of June 2, 2015among the Issuers and the initial purchasers named therein and (ii) resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S.Persons (as defined in Regulation S) in reliance on Regulation S. Such Notes may thereafter be transferred to, among others, QIBs and purchasers in relianceon Regulation S. Additional Notes offered after the date hereof may be offered and sold by the Issuers from time to time pursuant to one or more PurchaseAgreements in accordance with applicable law.(b) Notes issued in global form will be substantially in the form of Exhibit A to the Indenture (including the Global Note Legend thereon and the“Schedule of Increases or Decreases in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A to theIndenture (but without the Global Note Legend thereon and without the “Schedule of Increases or Decreases in the Global Note” attached thereto). EachGlobal Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amountof outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time totime be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase ordecrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of theTrustee, in accordance with instructions given by the Holder thereof as required by Section 2 hereof.(c) [Reserved].(d) [Reserved].(e) [Reserved].(f) Book-Entry Provisions. This Section 2.1(f) shall apply only to a Global Note deposited with or on behalf of the Depositary.The Issuers shall execute and the Trustee or an authentication agent shall, in accordance with this Section 2.1(f) and Section 2.2 andpursuant to an order of the Issuers signed by one Officer, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name ofthe Depositary for such Global Note or Global Notes or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary orpursuant to such Depositary’s instructions or held by the Notes Custodian. A-2Members of, or participants in, DTC (“Agent Members’) shall have no rights under the Indenture with respect to any Global Note held ontheir behalf by the Depositary or by the Notes Custodian or under such Global Note, and the Depositary may be treated by the Issuers, the Trustee and anyagent of the Issuers or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shallprevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnishedby DTC or impair, as between DTC and their respective Agent Members, the operation of customary practices thereof governing the exercise of the rights of aholder of a beneficial interest in any Global Note.(g) Definitive Notes. Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes will not be entitled to receivephysical delivery of certificated Notes.2.2 Authentication. The Trustee or an authentication agent shall authenticate and make available for delivery upon a written order of theCompany signed by one of its Officers (a) Original Notes for original issue on the date hereof in an aggregate principal amount of $1,000,000,000 and(b) subject to the terms of the Indenture, Additional Notes. Such order shall (a) specify the amount of the Notes to be authenticated, the date on which theoriginal issue of Notes is to be authenticated, (b) direct the Trustee or an authentication agent to authenticate such Notes and (c) certify that all conditionsprecedent to the issuance of such Notes have been complied with in accordance with the terms hereof.2.3 Transfer and Exchange of Global Notes. (a) A Global Note may not be transferred except as a whole by the Depositary to a nominee of theDepositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to asuccessor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if:(1) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that itis no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within120 days after the date of such notice from the Depositary;(2) the Company, in its sole discretion, determines that the Global Notes (in whole but not in part) should be exchanged for DefinitiveNotes and delivers a written notice to such effect to the Trustee; or(3) there has occurred and is continuing a Default or Event of Default with respect to the Notes and Holders have requested DefinitiveNotes. A-3Upon the occurrence of any of the preceding events in (1),(2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shallinstruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.10 of the Indenture. Every Noteauthenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section or Section 2.08 or 2.10 of theIndenture, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other thanas provided in this Section, however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.3(b), (c) or (f) hereofupon prior written notice given to the Trustee by or on behalf of the Depositary.(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will beeffected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the RestrictedGlobal Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficialinterests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the otherfollowing subparagraphs, as applicable:(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons whotake delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in thePrivate Placement Legend. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of abeneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect thetransfers described in this Section.(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficialinterests that are not subject to Section 2.3(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:(A) both:(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the ApplicableProcedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal tothe beneficial interest to be transferred or exchanged; and(ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account tobe credited with such increase; or A-4(B) both:(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the ApplicableProcedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferredor exchanged; and(ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name suchDefinitive Note shall be registered to effect the transfer or exchange referred to in Section 2.3(b)(1) above.Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes orotherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.3(h) hereof.(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to aPerson who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements ofSection 2.3(b)(2) above and the Registrar receives the following:(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver acertificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver acertificate in the form of Exhibit B hereto, including the certifications in item (2) thereof.(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. Abeneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note ortransferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complieswith the requirements of Section 2.3(b)(2) above and:(A) [Reserved.](B) [Reserved.] A-5(C) the Registrar receives the following:(i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficialinterest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item(3) thereof; or(ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person whoshall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form ofExhibit B hereto, including the certifications in item (4) thereof;and, in each such case set forth in this subparagraph (C), if the Registrar so requests or if the Applicable Procedures so require, an Opinionof Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the SecuritiesAct and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintaincompliance with the Securities Act.If any such transfer is effected pursuant to subparagraph (B) or (C) above at a time when an Unrestricted Global Note has not yet been issued, theIssuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.2 hereof, the Trustee shall authenticate one or more UnrestrictedGlobal Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or(C) above.Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, abeneficial interest in a Restricted Global Note.(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Noteproposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes deliverythereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:(A) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit Bhereto, including the certifications in item (1) thereof;(B) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904,a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; A-6(C) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act inaccordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (4) thereof; or(D) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit Bhereto, including the certifications in item (3) thereof,the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.3(h) hereof, and theCompany shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriateprincipal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.3(c) shall beregistered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrarthrough instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whosenames such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.3(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.(2) [Reserved.](3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Notemay exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereofin the form of an Unrestricted Definitive Note only if:(A) [Reserved.](B) [Reserved.](C) the Registrar receives the following:(i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for anUnrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item(3) thereof; or(ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to aPerson who shall take delivery thereof in the A-7form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certificationsin item (4) thereof;and, in each such case set forth in this subparagraph (C), if the Registrar so requests or if the Applicable Procedures so require, an Opinionof Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the SecuritiesAct and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintaincompliance with the Securities Act.(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in anUnrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Personwho takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.3(b)(2) hereof, theTrustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.3(h) hereof, andthe Issuers will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in theappropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.3(c)(4) will beregistered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requeststhrough instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver suchDefinitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interestpursuant to this Section 2.3(c)(4) will not bear the Private Placement Legend.(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes toexchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takesdelivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the followingdocumentation:(A) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth inExhibit B hereto, including the certifications in item (1) thereof; A-8(B) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 orRule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; or(C) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Actin accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item 4 thereof;the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of subparagraph(A) above, the 144A Global Note, and in the case of subparagraphs (B) and (C) above, the Regulation S Global Note.(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note mayexchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takesdelivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:(A) [Reserved.](B) [Reserved.](C) the Registrar receives the following:(i) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted GlobalNote, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (3) thereof; or(ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in theform of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto,including the certifications in item (4) thereof;and, in each such case set forth in this subparagraph (C), if the Registrar so requests or if the Applicable Procedures so require, an Opinionof Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the SecuritiesAct and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintaincompliance with the Securities Act. A-9Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.3(d)(2), the Trustee will cancel the Definitive Notes andincrease or cause to be increased the aggregate principal amount of the Unrestricted Global Note.(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note mayexchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes deliverythereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer,the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one ofthe Unrestricted Global Notes.If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to Section 2.3(d)(1), (d)(2) or (d)(3) above at a timewhen an Unrestricted Global Note has not yet been issued, the Issuers will issue and, upon receipt of an Authentication Order in accordance with Section 2.2hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of DefinitiveNotes so transferred.(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance withthe provisions of this Section 2.3(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange,the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in formsatisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide anyadditional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.3(e).(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in thename of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:(A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto,including the certifications in item (1) thereof;(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit Bhereto, including the certifications in item (2) thereof; and(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor A-10must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item(3) thereof, if applicable.(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereoffor an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Noteif:(A) [Reserved.](B) [Reserved.](C) the Registrar receives the following:(i) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, acertificate from such Holder in the form of Exhibit B hereto, including the certifications in item 3 thereof; or(ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take deliverythereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including thecertifications in item (4) thereof;and, in each such case set forth in this subparagraph (C), if the Registrar so requests, an Opinion of Counsel in form reasonablyacceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions ontransfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the SecuritiesAct.(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to aPerson who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, theRegistrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.(f) [Reserved.] A-11(g) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specificallystated otherwise in this subsection (g) or the applicable provisions of this Indenture.(1) Private Placement Legend.(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange thereforor substitution thereof) shall bear the legend in substantially the following formTHIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATIONHEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OFSUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THISSECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HASPURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTIONTERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THELATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THEOWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATIONSTATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLEFOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIEDINSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THEACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION SUNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR(7) UNDER THE SECURITIES ACT THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER AND THAT IS ACQUIRING THE SECURITY FOR ITS OWNACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNTOF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITHANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE A-12REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCHOFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. [IN THE CASE OF REGULATION S NOTES: BY ITSACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF AU.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THESECURITIES ACT.](B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3),(e)(2), (e)(3) or (f) of this Section 2.3 (and all Notes issued in exchange therefor or substitution thereof), any Regulation S Global Note and anyAdditional Notes issued in transactions registered with the SEC will not bear the Private Placement Legend.(2) Global Note Legend. Each Global Note will bear a legend in substantially the following form:“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODYFOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCESEXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO APPENDIX A OF THEINDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO APPENDIX A OF THE INDENTURE,(3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND(4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERREDEXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THEDEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARYOR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OFTHE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FORREGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. ORSUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.OR A-13SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USEHEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,HAS AN INTEREST HEREIN.”(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged forDefinitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned toor retained and canceled by the Trustee in accordance with Section 2.11 of the Indenture. At any time prior to such cancellation, if any beneficial interest in aGlobal Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or forDefinitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on suchGlobal Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged foror transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increasedaccordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.(i) General Provisions Relating to Transfers and Exchanges.(1) To permit registrations of transfers and exchanges, the Issuers will execute and the Trustee will authenticate Global Notes andDefinitive Notes upon receipt of an Authentication Order in accordance with Section 2.2 hereof or at the Registrar’s request.(2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for anyregistration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmentalcharge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transferpursuant to the Indenture).(3) The Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, exceptthe unredeemed portion of any Note being redeemed in part.(4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will bethe valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under the Indenture, as the Global Notes orDefinitive Notes surrendered upon such registration of transfer or exchange. A-14(5) Neither the Registrar nor the Issuers will be required:(A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 daysbefore the day of any selection of Notes for redemption under Section 3.02 of the Indenture and ending at the close of business on theday of selection;(B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion ofany Note being redeemed in part; or(C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.(6) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuers may deem and treat thePerson in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and intereston such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuers shall be affected by notice to the contrary.(7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.2 hereof.(8) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.3 to effect aregistration of transfer or exchange may be submitted by facsimile. A-15EXHIBIT A[FORM OF NOTE][●]% Senior Notes due 20[●]UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY(“DTC”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED ISREGISTERED IN THE NAME OF THEIR AUTHORIZED NOMINEE, OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO ITS AUTHORIZED NOMINEE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BYAN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANYPERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, ITS AUTHORIZED NOMINEE, HAS AN INTEREST HEREIN.[[FOR GLOBAL NOTES ONLY] TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT INPART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THISGLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTUREREFERRED TO ON THE REVERSE HEREOF.][[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE CLOSING OF THE OFFERING, AN OFFER OR SALE OFSECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE U.S. SECURITIES ACT) MAY VIOLATE THE REGISTRATIONREQUIREMENTS OF THE U.S. SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144ATHEREUNDER.][Restricted Note Legend]THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST ORPARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF INTHE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THEHOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNTFOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE“RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION SNOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANYAFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OFSUCH SECURITY), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVEUNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THESECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THESECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOMNOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUROUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS NOT A QUALIFIEDINSTITUTIONAL BUYER AND THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH ANINSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FORINVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OFTHE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THESECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TOCLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATIONSATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALERESTRICTION TERMINATION DATE. [IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOFREPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THISSECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.]BY ACCEPTANCE OF A NOTE, EACH HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (A) NOPORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THE NOTES CONSTITUTES THE ASSETS OF ANY EMPLOYEEBENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), APLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUECODE OF 1986, AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS, RULESOR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE “SIMILAR LAWS”), OR ENTITY WHOSE UNDERLYINGASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT OR (B) THE PURCHASE ANDHOLDING OF THE NOTES BY SUCH HOLDER WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OFERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.[Each Definitive Note shall bear the following additional legend:]IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCHCERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFERCOMPLIES WITH THE FOREGOING RESTRICTIONS.Common Code. [ ]ISIN No. [ ]CUSIP [ ][●]% Senior Notes due 20[●]No. NXP B.V.NXP FUNDING LLCNXP B.V., a company organized under the laws of The Netherlands, and NXP Funding LLC, a limited liability company organized under the laws ofDelaware, jointly and severally promise to pay to Cede & Co. or its registered assigns, the principal sum [set forth on the Schedule of Increases or Decreases inGlobal Note attached hereto, subject to the adjustments listed therein]1 [of $[ ]], on June 15, 20[●].Interest Payment Dates: June 15 and December 15, commencing on December 15, 2015.Record Dates: December 1 and June 1.Additional provisions of this Note are set forth on the other side of this Note.(Signature page to follow.) 1 Use the Schedule of Increases and Decreases language if Note is in Global Form.IN WITNESS WHEREOF, NXP B.V. and NXP Funding LLC have caused this Note to be signed manually or by facsimile by their duly authorized officers. Dated: NXP B.V. By: Name: Title: NXP FUNDING LLC By: Name: Title: This is one of the Notes referred to in the Indenture.DEUTSCHE BANK TRUST COMPANY AMERICAS, asTrusteeBy: Deutsche Bank National Trust CompanyBy: (Authorized Signatory)By: (Authorized Signatory)[Signature Page to Note][FORM OF BACK OF NOTE][●]% SENIOR NOTES DUE 20[●]1. InterestNXP B.V., a company organized under the laws of The Netherlands, and NXP Funding LLC, a limited liability company organized under thelaws of Delaware (together with NXP B.V. and their respective successors and assigns under the Indenture hereinafter referred to, being herein called “theIssuers”), jointly and severally promise to pay interest on the principal amount of this Note at the rate of [●]% per annum. The Issuers shall pay interest semi-annually on December 15 and June 15 of each year commencing on December 15, 2015. The Issuers will make each interest payment to Holders of record ofthe Notes on the immediately preceding December 1 and June 1, respectively. Interest on the Notes shall accrue from the most recent date to which interesthas been paid or duly provided for or, if no interest has been paid or duly provided for, from June 9, 2015 until the principal hereof is due. Interest shall becomputed on the basis of a 360-day year comprised of twelve 30-day months. Each interest period shall end on (but not include) the relevant interestpayment date.2. Method of PaymentHolders must surrender Notes to the relevant Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any,Additional Amounts, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public andprivate debts. Principal, premium, if any, Additional Amounts, if any, and interest on the Global Notes will be payable at the specified office or agency of oneor more Paying Agents; provided that all such payments with respect to Notes represented by one or more Global Notes registered in the name of or held by anominee of DTC will be made by wire transfer of immediately available funds to the account specified by the Holder or Holders thereof.Principal, premium, if any, Additional Amounts, if any, and interest on any Definitive Notes will be payable at the specified office or agency ofone or more Paying Agents in New York, maintained for such purposes. In addition, interest on the Definitive Notes may be paid by check mailed to theperson entitled thereto as shown on the register for the Definitive Notes; provided, however, that cash payments on the Notes may also be made, in the case ofa Holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a dollar account maintained by the payee with a bank in the UnitedStates of America if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating suchaccount no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).If the due date for any payment in respect of any Note is not a Business Day at the place in which such payment is due to be paid, the Holderthereof will not be entitled to payment of the amount due until the next succeeding Business Day at such place, and will not be entitled to any further interestor other payment as a result of any such delay.3. Registrar, Paying Agent and Transfer AgentInitially, Deutsche Bank Trust Company Americas will act as Registrar, Paying Agent and Transfer Agent. The Issuers may appoint and changeany Registrar, Paying Agent and Transfer Agent. The Issuers or any of its Restricted Subsidiaries may act as Registrar, Paying Agent and Transfer Agent.4. IndentureThe Issuers issued the Notes under the Indenture dated as of June 9, 2015 (the “Indenture”), among the Issuers, the Guarantors party thereto andDeutsche Bank Trust Company Americas, as Trustee (the “Trustee”). The terms of the Notes include those stated in the Indenture. Terms defined in theIndenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all terms and provisions of the Indenture, andHolders (as defined in the Indenture) are referred to the Indenture for a statement of such terms and provisions. In the event of a conflict, the terms of theIndenture control.The Notes are senior obligations of the Issuers. This Note is one of the Notes referred to in the Indenture. The Notes and the Additional Notes aretreated as a single class under the Indenture. The Indenture imposes certain limitations on the ability of the Issuers and their Restricted Subsidiaries to, amongother things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness and layer Indebtedness,enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stockof such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens, make asset sales, impair certain securityinterests, issue certain guarantees and designate Restricted and Unrestricted Subsidiaries. The Indenture also imposes limitations on the ability of the Issuersto consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all its property.5. Optional Redemption(a) At any time prior to May 15, 20[●] (the date one month prior to the maturity date of the 20[●] Notes), the Issuers may redeem such Notes inwhole or in part, at their option, upon not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount ofsuch Notes plus the relevant 20[●] Notes Applicable Premium as of, and accrued and unpaid interest and Additional Amounts, if any, to the redemption date(subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). At any time on or afterMay 15, 20[●] (the date one month prior to the maturity date of the 20[●] Notes), the Issuers may redeem such Notes, in whole or in part, at any time and fromtime to time, at the Company’s option, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued interest thereonto the date of redemption.(b) [Reserved](c) [Reserved](d) Any redemption and notice of redemption may, at the Company’s discretion, be subject to the satisfaction of one or more conditionsprecedent.6. Optional Tax RedemptionThe Issuers or Successor Company may redeem the Notes in whole, but not in part, at any time upon giving not less than 15 nor more than 60days’ notice to the Holders (which notice will be irrevocable) at a redemption price equal to 100% of the principal amount thereof, together with accrued andunpaid interest, if any, to, but excluding. the date fixed for redemption (a “Tax Redemption Date”) (subject to the right of holders of record on the relevantrecord date to receive interest due on the relevant interest payment date) and all Additional Amounts, if any, then due and which will become due on the TaxRedemption Date as a result of the redemption or otherwise, if any, if the Issuers, Successor Company or Guarantors determine in good faith that, as a resultof:(1) any change in, or amendment to, the law (or any regulations or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction affectingtaxation; or(2) any change in, or amendment to, or the introduction of, an official position regarding the application, administration or interpretation of suchlaws, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) of a Relevant Taxing Jurisdiction (each of theforegoing in clauses (1) and (2), a “Change in Tax Law”),the Issuers, Successor Company or Guarantors are, or on the next interest payment date in respect of the Notes would be, required to pay any AdditionalAmounts, and such obligation cannot be avoided by taking reasonable measures available to the Issuers, Successor Company or Guarantors (including, forthe avoidance of doubt, the appointment of a new Paying Agent where this would be reasonable but not including assignment of the obligation to makepayment with respect to the Notes). In the case of redemption due to withholding as a result of a Change in Tax Law in a jurisdiction that is a RelevantTaxing Jurisdiction at June 2, 2015, such Change in Tax Law must become effective on or after June 2, 2015. In the case of redemption due to withholding asa result of a Change in Tax Law in a jurisdiction that becomes a Relevant Taxing Jurisdiction after June 2, 2015, such Change in Tax Law must becomeeffective on or after the date the jurisdiction becomes a Relevant Taxing Jurisdiction, unless the Change in Tax Law would have applied to the priorRelevant Taxing Jurisdiction. Notice of redemption for taxation reasons will be published in accordance with the procedures described in paragraph 8.Notwithstanding the foregoing, no such notice of redemption will be given (a) earlier than 90 days prior to the earliest date on which the Payor would beobliged to make such payment of Additional Amounts if a payment in respect of the Notes were then due and (b) unless at the time such notice is given, suchobligation to pay such Additional Amounts remains in effect. Prior to the publication or mailing of any notice of redemption of the Notes pursuant to theforegoing, the Issuers or Successor Company will deliver to the Trustee (a) an Officer’s Certificate stating that it is entitled to effect such redemption andsetting forth a statement of facts showing that the conditions precedent to its right so to redeem have been satisfied and that it would not be able to avoid theobligation to pay Additional Amounts by taking reasonable measures available to it and (b) an opinion of an independent tax counsel of recognized standingto the effect that the Issuers Successor Company or Guarantors has or have been or will become obligated to payAdditional Amounts as a result of a Change in Tax Law. The Trustee will accept such Officer’s Certificate and opinion as sufficient evidence of thesatisfaction of the conditions precedent described above, without further inquiry, in which event it will be conclusive and binding on the Holders.7. Sinking FundThe Issuers are not required to make any mandatory redemption or sinking fund payments with respect to the Notes.8. Notice of RedemptionAt least 15 days but not more than 60 days before a date for redemption of Notes, the Issuers shall transmit a notice of redemption in accordancewith Section 11.03 of the Indenture and as provided below.If less than all of the Notes are to be redeemed at any time, the Trustee or the Registrar, as applicable, will select the Notes for redemption incompliance with the requirements of the principal securities exchange, if any, on which the Notes are listed, as certified to the Trustee or the Registrar, asapplicable, by the Issuers, and in compliance with the requirements of DTC, or if the Notes are not so listed or such exchange prescribes no method ofselection and the Notes are not held through DTC, or DTC prescribes no method of selection, on a pro rata basis; provided, however, that no Note of$200,000 in aggregate principal amount or less shall be redeemed in part and only Notes in integral multiples of $1,000 will be redeemed. Neither the Trusteenor the Registrar will be liable for any selections made by it in accordance with this Section.If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereofto be redeemed, in which case a portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. In thecase of a Global Note, an appropriate notation will be made on such Note to decrease the principal amount thereof to an amount equal to the unredeemedportion thereof. Subject to the terms of the applicable redemption notice (including any conditions contained therein), Notes called for redemption becomedue on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption, unlessthe redemption price is not paid on the redemption date.9. Additional AmountsThe Issuers are required to make all payments under or with respect to the Notes or the Note Guarantees free and clear of and without withholdingor deduction for or on account of any present or future Taxes in accordance with Section 4.02 of the Indenture.10. Repurchase of Notes at the Option of Holders upon a Change of Control Triggering EventIf we experience a Change of Control Triggering Event, each Holder will have the right, subject to certain conditions specified in the Indenture,to require the Issuers to repurchase all of the Notes of such Holder at a purchase price equal to 101% of the principal amount of the Notes to be repurchasedplus accrued and unpaid interest, if any, to but excluding the date of repurchase as provided in, and subject to the terms of, the Indenture.11. [Reserved]12. Denominations; Transfer; ExchangeThe Notes are in registered form without interest coupons in minimum denominations of $200,000 and multiples of $1,000 in excess thereof. AHolder may transfer or exchange Notes in accordance with the Indenture. In connection with any such transfer or exchange, the Indenture will require thetransferring or exchanging Holder to, among other things, furnish appropriate endorsements and transfer documents, to furnish information regarding theaccount of the transferee at DTC, where appropriate, to furnish certain certificates and opinions, and to pay any taxes, duties and governmental charges inconnection with such transfer or exchange. Any such transfer or exchange will be made without charge to the Holder, other than any taxes, duties andgovernmental charges payable in connection with such transfer.13. Persons Deemed OwnersExcept as provided in paragraph 2 of this Note, the registered Holder of this Note will be treated as the owner of it for all purposes.14. Unclaimed MoneyIf money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to theIssuers at their written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must lookto the Issuers for payment as general creditors and the Trustee and the Paying Agent shall have no further liability with respect to such monies.15. Discharge and DefeasanceSubject to certain conditions, the Issuers at any time may terminate some of or all their obligations under the Notes and the Indenture if theIssuers, among other things, deposit or cause to be deposited with the Trustee money or U.S. Government Obligations denominated in U.S. dollars in suchamounts as will be sufficient for the payment of the entire Indebtedness including principal of, premium, if any, and interest on the Notes to the date ofredemption or maturity, as the case may be.16. Amendment, WaiverThe Indenture and the Notes may be amended as set forth in the Indenture.17. Defaults and Remedies(a) The following events constitute “Events of Default” under the Indenture: An “Event of Default” occurs if or upon:(1) default in any payment of interest or Additional Amounts, if any, on any Note issued under the Indenture when due and payable, ifthat default continues for a period of 30 days, or failure to comply for 30 days with the notice provisions in connection with a Change of Control TriggeringEvent;(2) default in the payment of the principal amount of or premium, if any, on any Note issued under the Indenture when due at its StatedMaturity or upon optional redemption or otherwise (including the failure to pay the repurchase price for such Notes tendered pursuant to an Offer toPurchase), if that default or failure continues for a period of two days;(3) failure to comply for 90 days after written notice by the Trustee on behalf of the Holders or by the Holders of 30% in aggregateprincipal amount of the outstanding Notes with any of the Issuers’ obligations under Article 4 or 5 of the Indenture (in each case, other than an Event ofDefault under Section 6.01 (a)(1) or 6.01(a)(2) of the Indenture);(4) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidencedany Indebtedness for money borrowed by either Issuer or any of its Significant Subsidiaries (or the payment of which is Guaranteed by either Issuer or any ofits Significant Subsidiaries) other than Indebtedness owed to either Issuer or a Significant Subsidiary whether such Indebtedness or Guarantee now exists, oris created after the Issue Date, which default:(a) is caused by a failure to pay principal at Stated Maturity on such Indebtedness, immediately upon the expiration of the graceperiod provided in such Indebtedness; or(b) results in the acceleration of such Indebtedness prior to its maturity;and, in each case, the aggregate principal amount of any such Indebtedness, together with the aggregate principal amount of any other suchIndebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates €200.0 million or more;(5) either Issuer or a Significant Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, ormakes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,rehabilitator, administrator, administrative receiver or similar office is appointed without the application or consent of such Person and the appointmentcontinues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or anymaterial part of its property or assets is instituted without the consent of such Person and continues undismissed or unstayed for (60) calendar days, or anorder for relief is entered in any such proceeding;(6) failure by the Issuers or any Significant Subsidiary to pay final judgments aggregating in excess of €200.0 million (exclusive of anyamounts that a solvent insurance company has acknowledged liability for), which judgments are not paid, discharged or stayed for a period of 60 days afterthe judgment becomes final and non-appealable; and(7) any Guarantee ceases to be in full force and effect, other than in accordance with the terms of the Indenture or a Guarantor denies ordisaffirms in writing its obligations under its Guarantee, other than in accordance with the terms thereof or upon release of the Guarantee in accordance withthe Indenture.(b) A default under Sections 6.01(a)(3), or 6.01(a)(6) of the Indenture will not constitute an Event of Default until the Trustee or theHolders of 30% in aggregate principal amount of the outstanding Notes under the Indenture notify the Issuers of the default and the Issuers do not curesuch default within the time specified in Sections 6.01(a)(3), or 6.01(a)(6) of the Indenture, as applicable, after receipt of such notice.(c) If an Event of Default (other than an Event of Default described in Section 6.01(a)(5) of the Indenture) occurs and is continuing theTrustee by notice to either Issuer or the Holders of at least 30% in aggregate principal amount of the outstanding Notes under the Indenture by written noticeto either Issuer and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaidinterest, including Additional Amounts, if any, on all the Notes under the Indenture to be due and payable. Notwithstanding the foregoing, in the case of anEvent of Default arising from certain events of bankruptcy or insolvency, the principal of, premium, if any, and accrued and unpaid interest, includingAdditional Amounts, if any, on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trusteeor any Holders.18. Trustee Dealings with the IssuersThe Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal withand collect obligations owed to it by the Issuers or their Affiliates and may otherwise deal with the Issuers or their Affiliates with the same rights it wouldhave if it were not Trustee.19. No Recourse Against OthersNo director, manager, officer, employee, incorporator or shareholder of either Issuer or any of its Subsidiaries or any parent company of eitherIssuer shall have any liability for any obligations of either Issuer or any Subsidiary with respect to the Notes or the Indenture, or for any claim based on, inrespect of, or by reason of such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and releaseare part of the consideration for issuance of the Notes.20. AuthenticationThis Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent acting on its behalf) manually signs thecertificate of authentication on the other side of this Note. The signature shall be conclusive evidence that the security has been authenticated under theIndenture.21. AbbreviationsCustomary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants bythe entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to MinorsAct).22. Governing LawTHIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.23. CUSIP Numbers, Common Codes and ISIN NumbersThe Issuers in issuing the Notes may use CUSIP Numbers, Common Codes and ISIN numbers (if then generally in use) and, if so, the Trustee shalluse CUSIP Numbers, Common Codes and ISIN numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice maystate that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and thatreliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in oromission of such numbers.The Issuers will furnish to any Holder of Notes upon written request and without charge to the Holder a copy of the Indenture which has in itthe text of this Note.[FORM OF ASSIGNMENT FORM]To assign this Note, fill in the form below:I or we assign and transfer this Note to: (Print or type assignee’s legal name) (Insert assignee’s soc. sec. or tax I.D. No.) (Insert assignee’s name, address and zip code)and irrevocably appoint to transfer this Note on the books of the Issuers. The agent may substitute another to act for him. Date: Your Signature: Sign exactly as your name appears on the other side of this Note.Signature Guarantee*: *(Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee)[FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE ORREGISTRATION OF TRANSFER RESTRICTED NOTES]This certificate relates to $ principal amount of Notes held in (check applicable box) ¨ book-entry or ¨ definitive registered form by theundersigned.The undersigned (check one box below): ¨has requested the Trustee by written order to deliver, in exchange for its beneficial interest in the Global Note held by the Depositary, aDefinitive Note in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficialinterest in such Global Note (or the portion thereof indicated above); ¨has requested the Trustee by written order to exchange or register the transfer of a Note.In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 underthe Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms:CHECK ONE BOX BELOW (1)¨ to the Issuers; or (2)¨ to the Registrar for registration in the name of the Holder, without transfer; or (3)¨ pursuant to an effective registration statement under the U.S. Securities Act of 1933; or (4)¨ inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchasesfor its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made inreliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or (5)¨ outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance withRule 904 under the Securities Act of 1933 and such Note shall be held immediately after the transfer through DTC until the expiration ofthe Restricted Period (as defined in the Indenture); or (6)¨ pursuant to Rule 144 under the U.S. Securities Act of 1933 or another available exemption from registration.Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person otherthan the registered Holder thereof, provided, however, that if box (5) or (6) is checked, the Trustee may require, prior to registeringany such transfer of the Notes, such legal opinions, certifications and other information as the Trustee or the Issuers have reasonably requested to confirm thatsuch transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933. Date: Your Signature: Sign exactly as your name appears on the other side of this Note.Signature Guarantee*: *(Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee)TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises soleinvestment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the U.S. Securities Act of1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers asthe undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying uponthe undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A. Date: Signature: (to be executed by an executive officer of purchaser)[TO BE ATTACHED TO GLOBAL NOTES][FORM OF SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE]The initial principal amount of this Global Note is $[●]. The following increases or decreases in this Global Note have been made: Date ofIncrease/Decrease Amount of Decrease inPrincipal Amount ofthis Global Note Amount of Increase inPrincipal Amount ofthis Global Note Principal amount ofthis Global Notefollowing suchdecrease or increase Signature of authorizedsignatory of Trustee [FORM OF OPTION OF HOLDER TO ELECT PURCHASE]If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.03 (Offer to Repurchase upon Change of Control TriggeringEvent) of the Indenture, check the box:Change of Control ¨If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.03 of the Indenture, state the amount (minimumamount of $200,000): $ Date: Your Signature: (Sign exactly as your name appears on the other side of the Note)Signature Guarantee*: *(Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee)EXHIBIT B[FORM OF CERTIFICATE OF TRANSFER]Deutsche Bank Trust Company AmericasTrust and Agency Services60 Wall Street16th FloorNew York, NY 10005USARe: [●]% Senior Notes due 20[●] NXP B.V. and NXP Funding LLC (the “Notes”)Reference is hereby made to the Senior Indenture dated June 9, 2015 among NXP B.V. and NXP Funding LLC, as Issuers, the guarantors party theretoand Deutsche Bank Trust Company Americas, as Trustee (the “Indenture”). Capitalized terms used but not defined herein shall have the meanings given tothem in the Indenture. (the “Transferor”) owns and proposes to transfer the Note/Notes or interest in such Note/Notes (the “Book-Entry Interest”) specified inAnnex A hereto, in the principal amount of $ in such Note/Notes or interests (the “Transfer”), to (the “Transferee”), as further specified inAnnex A hereto. In connection with the Transfer, the Transferor hereby certifies that:[CHECK ALL THAT APPLY]1. ¨ Check if Transfer is Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the U.S. Securities Actof 1933 (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the Book-Entry Interest or Definitive Note is being transferred to aPerson that the Transferor reasonably believed and believes is purchasing the Book-Entry Interest or Definitive Note for its own account, or for one or moreaccounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer”within the meaning of Rule 144A to whom notice was given that the Transfer was being made in reliance on Rule 144A and such Transfer is in compliancewith any applicable securities laws of any state of the United States or any other jurisdiction. Upon consummation of the proposed Transfer in accordancewith the terms of the Indenture, the transferred Book-Entry Interest or Definitive Note will be subject to the restrictions on transfer enumerated in theRestricted Notes Legend printed on the Rule 144A Global Note and/or the Rule 144A Definitive Note and in the Indenture and the Securities Act.2. ¨ Check if Transfer is pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Regulation S under the Securities Actand, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (A) at the time the buyorder was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believesthat the Transferee was outside the United States or (B) the transaction was executed in, on or through E-B-1the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction wasprearranged with a buyer in the United States; (ii) no directed selling efforts have been made in contravention of the requirements of Regulation S under theSecurities Act; (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the U.S. Securities Act; and (iv) the transfer is notbeing made to a U.S. Person or for the account or benefit of a U.S. Person. Upon consummation of the proposed transfer in accordance with the terms of theIndenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer printed on the Regulation S Global Note and/orthe Regulation S Definitive Note and contained in the Securities Act, the Indenture and any applicable securities laws of any state of the United States or anyother jurisdiction.3. ¨ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from theregistration requirements of the Securities Act other than Rule 144 or Regulation S and in compliance with the transfer restrictions contained in the Indentureand any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the RestrictedNotes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with theterms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the RestrictedNotes Legend.4. ¨ Check if Transfer is Pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act andin compliance with the transfer restrictions contained in the Indenture and any applicable securities laws of any state of the United States or any otherjurisdiction; (ii) the Transferor is not (and during the three months preceding the Transfer was not) an Affiliate of the Issuer, (iii) at least one year has elapsedsince such Transferor (or any previous transferor of such Book-Entry Interest or Definitive Note that was not an Affiliate of the Issuers) acquired such Book-Entry Interest or Definitive Note from the Issuers or an Affiliate of the Issuers, and (iv) the restrictions on transfer contained in the Indenture and the RestrictedNotes Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with theterms of the Indenture, the transferred Book-Entry Interest or Rule 144A Definitive Note will no longer be subject to the restrictions on transfer enumerated inthe Restricted Notes Legend printed on the Rule 144A Global Note and/or the Rule 144A Definitive Note and in the Indenture.This certificate and the statements contained herein are made for your benefit and the benefit of the Issuers and the Trustee. [Insert Name of Transferor]By: Name: Title: Dated: E-B-2ANNEX A TO CERTIFICATE OF TRANSFER 1.The Transferor owns and proposes to transfer the following: CHECK ONE](a) ¨ a Book-Entry Interest held through DTC Account No. , in the:(i) ¨ Rule 144A Global Note ([CUSIP/ISIN/COMMON CODE] ); or(ii) ¨ Regulation S Global Note ([CUSIP/ISIN/COMMON CODE];. or(b) ¨ a Rule 144A Definitive Note; or(c) ¨ a Regulation S Definitive Note. 2.After the Transfer the Transferee will hold:[CHECK ONE](a) ¨ a Book-Entry Interest through DTC Account No. in the:(i) ¨ Rule 144A Global Note ([CUSIP/ISIN/COMMON CODE] ); or(ii) ¨ Regulation S Global Note ([CUSIP/ISIN/COMMON CODE] or(b) ¨ a Rule 144A Definitive Note; or(c) ¨ a Regulation S Definitive Note. E-B-3EXHIBIT C[FORM OF OFFICER’S COMPLIANCE CERTIFICATE DELIVERED PURSUANT TOSECTION 4.08 OF THE INDENTURE]OFFICER’S COMPLIANCE CERTIFICATE OF NXP B.V.Pursuant to Section 4.08 of the Senior Indenture dated June 9, 2015 (the “Indenture”) among NXP B.V. (the “Company”) and NXPFunding LLC, as Issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as Trustee, the undersigned, [●], [officer], of theCompany, do hereby certify on behalf of the Company that: 1.a review of the activities of the Company during the preceding fiscal year has been made under my supervision with a view to determiningwhether the Company has kept, observed, performed and fulfilled its obligations under the Indenture; and 2.as to the best of my knowledge, the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indentureand is not in default in the performance or observance of any of the terms, provisions and conditions of the Indenture [or, if a Default or Event ofDefault shall have occurred, describe all such Defaults or Events of Default of which you have knowledge and what action the Company istaking or proposes to take with respect thereto] and to the best of my knowledge no event has occurred and remains in existence by reason ofwhich payments on account of the principal of or interest or Additional Amounts, if any, on the Notes is prohibited [or if such event hasoccurred, give a description of the event and what action the Company is taking or proposes to take with respect thereto]. E-C-1IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate this [ ] day of [ ], 20[ ]. NXP B.V. by Name: Title: E-C-2Exhibit 10.22Annex Global NXP Stock Option Program 2015/16 Page 1 of 11 NXP Stock Option Program October 29, 2015 TERMS AND CONDITIONSOFGLOBAL NXP STOCK OPTION PROGRAM 2015/16Article 1DefinitionsIn this Global NXP Stock Option Program the following definitions shall apply: 1. Board: The board of directors of NXP.2. Change of Control: a transaction or series of transactions or the conclusion of an agreement, which alone or taken togetherhas the effect that as a result thereof a third party, or third parties acting in concert obtains, whetherdirectly or indirectly, Control of NXP.3. Closing Price: the price of a Share listed at the NASDAQ Global Select Market (“NASDAQ”) with dividend, if any, atclosing of NASDAQ . If on the date of receipt of an Exercise Notice, Shares have not been traded atNASDAQ, the Closing Price will be the opening price of the first subsequent trading day at NASDAQ.4. Control: (i) the ownership, whether direct or indirect, of a party or parties acting in concert, of more than 50.1%percent of (a) the issued Share capital and/or (b) the voting rights in the general meeting of shareholders;or (ii) the right, whether direct or indirect, of a party or parties acting in concert to control thecomposition of the majority of the Board of NXP, or the majority of its voting rights, by contract orotherwise.5. Custody Account: a custody account maintained in the name of an Option Holder.6. Date of Grant: the date at which the Options shall be deemed granted to the Option Holder pursuant to this Program. TheDates of Grant shall be the same dates as the dates of publication of NXP annual and/or quarterly results.As an exception, under this Program Options also may be granted at the date of completion of the mergertransaction between NXP and Freescale Semiconductor, Ltd. The relevant Date of Grant with respect toany grant hereunder shall be determined by NXP.7. Eligible Individual: means an employee of the group of which NXP forms part or such other person as determined by or onbehalf of the Board.8. Employing Company: any company within the group of which NXP forms part and such other company as designated by or onbehalf of the Board. Page 2 of 11 NXP Stock Option Program October 29, 2015 9. Exercise Notice: a notice in which an Option Holder indicates that he will exercise his vested Options.10. Exercise Period: the term during which an Option can be exercised.11. Exercise Price: the price to be paid by the Option Holder to acquire a Share upon exercising an Option. Such price willbe equal to the Closing Price on the applicable Date of Grant.12. Good Reason: If the Option Holder does not have an employment agreement with the Employing Company in whichGood Reason is defined, “Good Reason” means, in the absence of the Option Holder’s written consent,any of the following: (i) a material reduction by the Employing Company in the Option Holder’s basesalary or target bonus unless the base salary or target bonus of other NXP employees or officers in asimilar position is reduced by a similar percentage or amount as part of company-wide cost reductions; or(ii) a material diminution in the Option Holder’s duties or responsibilities (other than as a result of theOption Holder’s physical or mental incapacity which impairs his or her ability to materially perform hisor her duties or responsibilities as confirmed by a doctor reasonably acceptable to the Option Holder orhis or her representative and such diminution lasts only for so long as such doctor determines suchincapacity impairs the Option Holder’s ability to materially perform his or her duties or responsibilities).A lateral job change that does not materially diminish the Option Holder’s duties or responsibilities anddoes not affect the Option Holder’s reporting relationship will not constitute Good Reason.13. Grant: a grant of an Option to any Eligible Individual by NXP.14. Grant Letter the letter in which Options are granted to an Eligible Individual.15. NXP: NXP Semiconductors N.V.16. Option: a right granted by NXP under this Program to acquire one Share or the value in cash thereof, subject tothis Program.17. Option Holder: a person holding any Options under this Program.18. Program: this Global NXP Stock Option Program.19. Share: a common share in the share capital of NXP. Page 3 of 11 NXP Stock Option Program October 29, 2015 Article 2Grant of Options 1.Any Options may be granted by or on behalf of the Board to an Eligible Individual, subject to the terms and conditions of this Program and any otherNXP policies or guidelines that may apply to such individual. Any Options granted to any such individual and the terms and conditions governingsuch Options shall be deemed accepted by such individual with effect from the applicable Date of Grant in case NXP has not received, in accordancewith a procedure established by NXP, a notice of rejection of such Options within fourteen (14) days following the Grant Letter or such later date asmay be determined by NXP. 2.The Grant Letter shall reflect, inter alia, the Date of Grant, the number of Options awarded, the Exercise Price and the vesting schedule.Article 3VestingOptions will vest over a vesting period of up to four years as specified in the Grant Letter, whereby any 1/4 of the Options will vest at each anniversary of theDate of Grant, subject to Article 9 (Termination of Employment) and subject to any specifications in the Grant Letter. In the event that the Option Holder’semployment is terminated by the Employing Company without the Option Holder being a Bad Leaver (as defined in Article 9(4)) or by the Option Holder forGood Reason, in either case within twelve months following a Change of Control, all unvested Options shall become immediately vested (for 100%accelerated vesting), unless the Grant Letter stipulates differently.Article 4Exercise of Options 1.Vested Options can only be exercised during the Exercise Period. Unvested or lapsed Options cannot be exercised. 2.The Exercise Period commences on the vesting of the relevant Options and terminates on the tenth anniversary of the Date of Grant, subject to Article8(2)(e). 3.Vested Options can only be exercised by (i) submitting an Exercise Notice, and (ii) payment of the Exercise Price. Vested Options may in principleonly be exercised subject to a minimum of ten (10) units. 4.The Exercise Notice should contain (i) the Date of Grant of the Options an Option Holder wishes to exercise and (ii) the number of Options to beexercised and whether Shares to be obtained upon such exercise: a.be sold, on behalf of the Option Holder as soon as possible. Upon such sale, the aggregate revenue of the Shares sold upon exercise of theOptions less the Exercise Price multiplied by the number of such Options, and further costs and Taxes, will be paid to the Option Holder inaccordance with a procedure determined by NXP; or b.be delivered to the Option Holder as provided for in 0. In case the Option Holder elects to have the Shares to be delivered to him, the ExerciseNotice shall contain the details of the Custody Account to which the Shares shall be delivered, and shall be Page 4 of 11 NXP Stock Option Program October 29, 2015  accompanied by the payment in full of the Exercise Price, multiplied by the number of Options so being exercised, and further costs and Taxes.Such payment shall be made: (a) in cash, (b) through simultaneous sale through a broker of Shares acquired on exercise, subject to it beingpermitted under the applicable regulations, (c) through additional methods prescribed by NXP or (d) by a combination of any such method. Page 5 of 11 NXP Stock Option Program October 29, 2015 Article 5Cash AlternativeIn exceptional circumstances, at the sole discretion of the Board, upon receipt of an Exercise Notice NXP may advise an Option Holder resident outside theNetherlands to request in writing an amount in cash as an alternative to Shares. Upon such request the Option Holder is entitled to receive an amount in U.S.Dollars, equal to the Closing Price minus the Exercise Price, multiplied by the number Options being exercised. Any costs to be paid and any applicableTaxes due shall be deducted from the amount to be received by the Option Holder.Article 6Non-transferabilityThe Options are strictly personal, and may not be assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of in any manner normay any transaction be entered into with the same effect. For the avoidance of doubt, in case of death of the Option Holder during the Exercise Period, allvested Options held by such Option Holder at the date of his death shall pass to such Option Holder’s heirs or legatees in accordance with applicableinheritance laws. The Option Holder may not engage in any transactions on any exchange on the basis of any Options.Article 7Capital Adjustments in corporate eventsNXP may make any equitable adjustment or substitution of (a) the number or kind of Shares subject to the Options, and/or (b) the Exercise Price, as it, in itssole discretion, deems equitable to reflect any significant corporate event of or by NXP, for example a change in the outstanding Shares by reason of anystock dividend or split, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate change, or any distribution toholders of Shares other than regular cash dividends.The effect of the adjustment or substitution shall be to preserve both the aggregate difference and the aggregate ratio between the Exercise Price and the fairmarket value of the Shares to be acquired upon exercise of the Options. The Option Holder shall be notified promptly of such adjustment or substitution.Article 8Costs and Taxes 1.All costs of delivering any Shares under this Program to an Option Holder’s Custody Account and any other costs connected with the Shares shall beborne by the Option Holder. 2.Any and all taxes, duties, levies, charges or social security contributions (“Taxes”) which arise under any applicable national, state, local or supra-national laws, rules or regulations, whether already effective on the Date of Grant of any Options or becoming effective thereafter, and any changes ormodifications therein and termination thereof which may result for the Option Holder in connection with this Program (including, but not limited to,the grant, the ownership and/or the exercise of the Options, and/or the delivery, ownership and/or the sale of any Shares acquired under this Program)shall be for the sole risk and account of the Option Holder. Page 6 of 11 NXP Stock Option Program October 29, 2015 3.NXP and its subsidiaries shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment or other sums due byNXP or any of its subsidiaries to an Option Holder, or requiring the Option Holder or beneficiary of the Option Holder, to pay to NXP or any of itssubsidiaries as indicated by NXP an amount necessary to settle any Taxes and any costs determined by NXP necessary to be withheld in connectionwith this Program (including, but not limited to, the grant of the Options or the delivery of any Shares under this Program). 4.NXP shall not be required to deliver any Shares and NXP may delay (or cause to be delayed) the transfer of any Shares to a Custody Account, until NXPhas received an amount, or the Option Holder has made such arrangements, required by NXP necessary to satisfy any withholding of any Taxes and anycosts to be borne by the Option Holder in connection with this Program as determined by NXP.Article 9Lapse of Options at termination of employment 1.Unvested Options shall lapse, on the earliest of the following occasions, without notice and without any compensation: a.if an Option Holder’s employment terminates and such Option Holder is no longer employed by any Employing Company; b.upon violation by the Option Holder of any provision of this Program or the Grant Letter in which case the Options shall lapse on the date ofsuch violation (rather than the date on which such violation comes to the attention of NXP). 2.Vested Options shall lapse on the earliest of the following occasions, without notice and without any compensation: a.the tenth anniversary of the Date of Grant, subject to Article 9(2)(e); b.if an Option Holder becomes a Bad Leaver (as defined in Article 9(4); c.if an Option Holder becomes a Good Leaver (as defined in Article 9(0), in which case the Options lapse on the earlier of (i) 10 years of the Date ofGrant, or (ii) 5 years from the date on which the Option Holder’s employment terminates; d.If an Option Holder becomes an Ordinary Leaver, in which case the Options lapse after 6 months from the date on which the Option Holder’semployment terminates; e.If an Option Holder becomes a Good Leaver by reason of death or legal incapability, and the remaining Exercise Period with respect to therelevant Options is less than 12 months, the Options shall remain exercisable for a period of 12 months as of the date the Option Holder dies orbecomes legal incapable; f.if an Option Holder is a Good Leaver or an Ordinary Leaver and after termination of his employment breaches any of the covenants of hisemployment or service contract or the termination thereof, in each case relating to non-competition, confidentiality, non-solicitation or anyother provision of his employment or the aforementioned agreements that survive the termination of his employment, in which case the Optionslapse on the date of such breach (rather than the date on which such breach comes to the attention of NXP). In any event, if an Option Holder is aGood Leaver or an Ordinary Leaver and - directly or indirectly and in any capacity whatsoever - personally actively solicits or personallyactively endeavors to entice away or personally actively recruits any NXP employees, the Options lapse with immediate effect (rather than thedate on which such breach comes to the attention of NXP); Page 7 of 11 NXP Stock Option Program October 29, 2015  g.upon violation by the Option Holder of any provision of this Program or the Grant Letter, in which case the Options shall lapse on the date ofsuch violation (rather than the date on which such violation comes to the attention of NXP); Page 8 of 11 NXP Stock Option Program October 29, 2015  h.when an Option is exercised in accordance with this Program; and, i.at the end of the Exercise Period. 3.For purposes of this Program, a “Good Leaver” shall be an Option Holder whose employment with NXP or an Employing Company is terminated dueto: a.death; b.disability (i.e., the incapacity to continue employment due to ill health or disability under applicable local employment and social securitylegislation and regulations); c.retirement in accordance with Article 9(6); or d.legal incapability. 4.For purposes of this Program, a “Bad Leaver” shall be an Option Holder whose employment with NXP or an Employing Company is terminated(i) following the Option Holder committing an act of theft, fraud or deliberate falsification of records in relation to his duties for NXP or the EmployingCompany, (ii) following the Option Holder being convicted of or pleading guilty to a serious criminal offence (misdrijf) relating to his duties for NXPor the Employing Company (excluding any motoring or non-duty related minor offence), which act or criminal offence referred to in (i) and/or (ii) has amaterial adverse effect upon NXP or the Employing Company, (iii) with immediate effect because of an urgent cause (dringende reden) as referred to inarticle 7:678 of the Dutch Civil Code for cause, or (iv) an Option Holder twelve (12) months period following the termination of employment, directlyor indirectly and in any capacity whatsoever engage in any activities in competition with the activities of any member of the NXP group, including theOption Holder personally actively soliciting or personally actively endeavoring to entice away or personally actively recruiting any NXP employees insaid period. 5.For purposes of this Program, an “Ordinary Leaver” shall be an Option Holder whose employment with NXP or an Employing Company is terminatedand who is not a Bad Leaver or a Good Leaver. 6.For purposes of Article 9(0)(c), an Option Holder’s is deemed to be retired if his employment is terminated and he is eligible to receive an immediate(early) retirement benefit under an (early) retirement plan of an Employing Company under which such Option Holder was covered, provided thatpayment of such (early) retirement benefit commences immediately following such termination and subject to the terms, conditions or guidelines thatNXP may apply to such Option Holder. In case no retirement plan is provided by NXP in the country where the Option Holder resides, retirement willbe determined in the context of local practice, including, but not limited to, eligibility to a state retirement plan. With respect to an Option Holder whois eligible to participate in a U.S. retirement or pension plan and who is a not a party to a contract governing employment conditions or benefits withan entity which is domiciled outside of the United States, the Option Holder’s employment shall be deemed terminated as a result of retirement if suchOption Holder’s employment is terminated and, at the time of his or her termination of employment the Option Holder has at least five (5) years ofservice with an U.S. Employing Company and has attained the age of fifty-five (55) years. Page 9 of 11 NXP Stock Option Program October 29, 2015 Article 10Delivery and Custody Account 1.NXP may require an Option Holder to maintain a Custody Account in connection with this Program. Nothing contained in this Program shall obligateNXP to establish or maintain or cause to establish or maintain a Custody Account for any Option Holder. The Option Holder will provide NXP with thedetails thereof. 2.Shares obtained upon exercise of Options, will be delivered by NXP, as soon as reasonably practical after the exercise, to the Option Holder’s CustodyAccount. 3.In case the Option Holder has failed to notify NXP with de details of his Custody Account, the Option Holder shall be deemed to have requested NXPto sell or cause to sell such corresponding Shares in accordance with Article 4(4)(a).Article 11General ProvisionsInsider trading rules 1.Each Option Holder shall comply with any applicable “insider trading” laws and regulations, including the “NXP Semiconductor N.V. rules on holdingand trading in NXP Securities”.Authority for this Program 2.NXP shall have the authority to interpret this Program, to establish, amend, and rescind any rules and regulations relating to this Program, to determineand - if deemed necessary or advisable - amend the terms and conditions of any agreements entered into hereunder, to make all other determinationsnecessary or advisable for the administration of this Program. To the extent required by law, the general meeting of shareholders of NXP will berequested to adopt or approve such changes. 3.The terms and conditions in force from time to time are published on the NXP’ intranet and on the website of the administrator of this Program andapply to all Options granted and the Shares obtained under this Program. NXP may delegate the authority to perform administrative and operationalfunctions with respect to this Program to officers or employees of subsidiaries of NXP and to service providers.Shareholder rights 4.No Option Holder shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to bedelivered pursuant to the exercise of any Options until such Shares are actually delivered to him in accordance with 0 of this Program.Non-recurring discretionary grant 5.Eligibility and participation shall be at the sole discretion of NXP or the Employing Company and as such do not qualify as terms and conditions ofemployment. The Grant in one year does not create rights for future years. Page 10 of 11 NXP Stock Option Program October 29, 2015 6.Options granted, Shares obtained or cash received under this Program shall not be considered as compensation in determining an Option Holder’sbenefits under any benefit plan of an Employing Company, including but not limited to, group life insurance, long-term disability, family survivors, orany retirement, pension or savings plan. 7.Nothing contained in this Program, Grant Letter or any agreement entered into pursuant hereto shall confer upon any Option Holder any right to beretained employed with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Program or interfere with orlimit in any way with the right of any Employing Company or any of its subsidiaries to terminate such Option Holder’s employment or to discharge orretire any Option Holder at any time.Miscellaneous 8.If a provision of this Program is deemed illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Program, this Programshall be construed as if the illegal or invalid provisions had not been included in this Program. 9.Where the context requires, words in either gender shall include also the other gender.Choice of law and forum 10.This Program shall be governed by and construed in accordance with the laws of The Netherlands, without regard to its principles of conflict of laws.Any dispute arising under or in connection with this Program shall be settled by the competent courts in Amsterdam, The Netherlands. ● ● ● ● ● Page 11 of 11 NXP Stock Option Program October 29, 2015  NXP Performance Stock Units Plan 2015/16 PAGE 1 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015 TERMS AND CONDITIONSOFNXP PERFORMANCE STOCK UNITS PLAN 2015/16Article 1DefinitionsIn this NXP Performance Stock Units Plan the following definitions shall apply: 1. Board: the board of directors of NXP.2. Change of Control: a transaction or series of transactions or the conclusion of an agreement, which alone or taken togetherhas the effect that as a result thereof a third party, or third parties acting in concert, obtains, whetherdirectly or indirectly, Control of NXP.3. Control: (i) the ownership, whether direct or indirect, of a party or parties acting in concert, of more than 50.1%percent of (a) the issued Share capital and/or (b) the voting rights in the general meeting of shareholders;or (ii) the right, whether direct or indirect, of a party or parties acting in concert to control thecomposition of the majority of the Board of NXP, or the majority of its voting rights, by contract orotherwise.4. Custody Account: a custody account maintained in the name of a Participant.5. Date of Grant: the date at which a Performance Stock Unit is granted pursuant to this Plan. The Dates of Grant of anyPerformance Stock Units shall be the same dates as the dates of publication of the NXP’ annual and/orquarterly results. As an exception, under this Program Performance Stock Units also may be granted at thedate of completion of the merger transaction between NXP and Freescale Semiconductor, Ltd. Therelevant Date of Grant and categorization of any Performance Stock Unit with respect to any granthereunder shall be determined by NXP.6. Date of Vesting: The date at which the relevant performance conditions and requisite service period, if any, as indicated inthe Grant Letter, for the relevant Performance Stock Unit is met, subject to confirmation by NXP inaccordance with a procedure established by NXP. In case performance conditions are combined with arequisite service period, the Date of Vesting will be the date at which both the performance conditionsand the requisite service period have been met,7. Eligible Individual: means an employee of the group of which NXP forms part or such other person as determined by or onbehalf of the Board. PAGE 2 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015 8. Employing Company: any company within the group of which NXP forms part and such other company as designated by or onbehalf of the Board.9. Good Reason: If the Participant does not have an employment agreement with the Employing Company in which GoodReason is defined, “Good Reason” means, in the absence of the Participant’s written consent, any of thefollowing: (i) a material reduction by the Employing Company in the Participant’s base salary or targetbonus unless the base salary or target bonus of other NXP employees or officers in a similar position isreduced by a similar percentage or amount as part of company-wide cost reductions; or (ii) a materialdiminution in the Participant’s duties or responsibilities (other than as a result of the Participant’sphysical or mental incapacity which impairs his or her ability to materially perform his or her duties orresponsibilities as confirmed by a doctor reasonably acceptable to the Participant or his or herrepresentative and such diminution lasts only for so long as such doctor determines such incapacityimpairs the Participant’s ability to materially perform his or her duties or responsibilities). A lateral jobchange that does not materially diminish the Participant’s duties or responsibilities and does not affectthe Participant’s reporting relationship will not constitute Good Reason.10. Grant Letter: the letter in which Performance Stock Units are granted to an Eligible Individual.11. NXP: NXP Semiconductors N.V.12. Participant: an individual who has accepted any Performance Stock Units under this Plan.13. Performance Stock Unit: the conditional right granted to a Participant to receive one Share, subject to the terms and conditions ofthis Plan.14. Plan: this NXP Performance Stock Units Plan.15. Share: a common share in the share capital of NXP (to be) delivered under this Plan. PAGE 3 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015 Article 2Grant of Performance Stock Units 1.Any Performance Stock Units may be granted by or on behalf of the Board to an Eligible Individual, subject to the terms and conditions of this Planand any other NXP policies or guidelines that may apply to such individual. Any Performance Stock Units offered to any such individual and the termsand conditions governing such rights shall be deemed accepted by such individual with effect from the applicable Date of Grant in case NXP has notreceived, in accordance with a procedure established by NXP, a notice of rejection of such rights within fourteen (14) days of the Grant Letter or suchlater date as may be determined by NXP. 2.The Grant Letter shall reflect, inter alia, the Date of Grant, the number and category of Performance Stock Units awarded, the vesting schedule, theperformance conditions and requisite service period, if any.Article 3Vesting of a Performance Stock Unit 1.A Performance Stock Unit will vest (i.e. become unconditional and the corresponding Shares will be delivered to the relevant Participant) on orimmediately following the relevant Date of Vesting subject to (i) any relevant performance conditions, if and when indicated in the Grant Letter, beingmet, (ii) any specifications in the Grant Letter, (iii) the relevant Participant still being employed by any Employing Company upon expiration of therelevant vesting period (at the time the corresponding Shares be delivered to the relevant Participant), and (iv) Article 4 (Termination of Employment).In the event that the Participant’s employment is terminated by the Employing Company without the Participant being a Bad Leaver (as defined inArticle 4(2)) or by the Participant for Good Reason, in either case within twelve months following a Change of Control, all unvested Performance StockUnits shall become immediately vested (for 100%, accelerated vesting), unless the Grant Letter stipulates differently. 2.Whether any performance conditions are met, and whether the relevant Participant is still employed by an Employing Company at the relevant time,will be established by NXP in accordance with a procedure established by NXP.Article 4Termination of Employment 1.Unvested Performance Stock Units shall lapse, on the earliest of the following occasions, without notice and without any compensation: a.if a Participant’s employment terminates and such Participant is no longer employed by any Employing Company; b.upon violation by the Participant of any provision of this Plan or the Grant Letter in which case the Performance Stock Units shall lapse on thedate of such violation (rather than the date on which such violation comes to the attention of NXP). 2.For purposes of this Program, a “Bad Leaver” shall be a Participant whose employment with NXP or an Employing Company is terminated (i) followingthe Participant committing an act of theft, fraud or deliberate falsification of records in relation to his duties for NXP or the Employing PAGE 4 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015  Company, (ii) following the Participant being convicted of or pleading guilty to a serious criminal offence (misdrijf) relating to his duties for NXP orthe Employing Company (excluding any motoring or non-duty related minor offence), which act or criminal offence referred to in (i) and/or (ii) has amaterial adverse effect upon NXP or the Employing Company, (iii) with immediate effect because of an urgent cause (dringende reden) as referred to inarticle 7:678 of the Dutch Civil Code for cause, or (iv) a Participant twelve (12) months period following the termination of employment, directly orindirectly and in any capacity whatsoever engage in any activities in competition with the activities of any member of the NXP group, including theParticipant personally actively soliciting or personally actively endeavoring to entice away or personally actively recruiting any NXP employees insaid period. PAGE 5 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015 Article 5Non-transferabilityThe Performance Stock Units are strictly personal, and may not be assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of inany manner nor may any transaction be entered into with the same effect. The Participant may not engage in any transactions on any exchange on the basis ofany Performance Stock Units.Article 6Delivery and Holding of Shares 1.NXP may require a Participant to maintain a Custody Account in connection with this Plan. Nothing contained in this Plan shall obligate NXP toestablish or maintain or cause to establish or maintain a Custody Account for any Participant. The Participant will provide NXP with the details thereof. 2.Subject to the terms and conditions of this Plan and the Grant Letter, and further to the Participants election via the website, NXP will deliver a Share toa Participant on or as soon as reasonably practicable, and in any event within 2.5 months, after the relevant Date of Vesting. In no event shall NXP haveany obligation to deliver any Shares to a Participant prior to the relevant Date of Vesting. 3.Any Shares to be delivered pursuant to Article 6 (2) will be credited to the Custody Account.Article 7Capital DilutionNXP may make any equitable adjustment or substitution of the number or kind of Shares subject to the Performance Stock Units, as it, in its sole discretion,deems equitable to reflect any significant corporate event of or by NXP, for example a change in the outstanding Shares by reason of any stock dividend orsplit, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate change, or any distribution to holders of Sharesother than regular cash dividends.Article 8Costs and Taxes 1.All costs of delivering any Shares under this Plan to a Participant’s Custody Account and any other costs connected with the Shares shall be borne bythe Participant. 2.Any and all taxes, duties, levies, charges or social security contributions (“Taxes”) which arise under any applicable national, state, local or supra-national laws, rules or regulations, whether already effective on the Date of Grant of any Performance Stock Units or becoming effective thereafter, andany changes or modifications therein and termination thereof which may result for the Participant in connection with this Plan (including, but notlimited to, the grant of the Performance Stock Units, the ownership of the Performance Stock Units and/or the delivery of any Shares under this Plan,the ownership and/or the sale of any Shares acquired under this Plan) shall be for the sole risk and account of the Participant. PAGE 6 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015 3.NXP and any other Employing Company shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment orother sums due by NXP or any other Employing Company to Participant, or requiring the Participant or beneficiary of the Participant, to pay to NXP anamount necessary to settle any Taxes and any costs determined by NXP necessary to be withheld in connection with this Plan (including, but notlimited to, the grant of the Performance Stock Units or the delivery of any Shares under this Plan).Article 9Cash AlternativeIn exceptional circumstances, at the sole discretion of the Board, upon the Date of Vesting, NXP may advise a Participant resident outside the Netherlands torequest in writing an amount in cash as an alternative to Shares. Upon such request the Participant is entitled to receive an amount in U.S. Dollars, equal tothe price of a Share listed at the NASDAQ Global Select Market with dividend, if any, at closing of NASDAQ, multiplied by the relevant number of vestedPerformance Stock Units. If on the date of receipt of the request from the Participant, Shares have not been traded at NASDAQ, the price of a Share will be theopening price of the first subsequent trading day at NASDAQ. Any costs to be paid and any applicable Taxes due shall be deducted from the amount to bereceived by the Participant.Article 10General ProvisionsInsider trading rules 1.Each Participant shall comply with any applicable “insider trading” laws and regulations, including the “NXP Semiconductor N.V. rules on holdingand trading in NXP Securities”.Authority for this Plan 2.NXP shall have the authority to interpret this Plan, to establish, amend, and rescind any rules and regulations relating to this Plan, to determine and - ifdeemed necessary or advisable - amend the terms and conditions of any agreements entered into hereunder, to make all other determinations necessaryor advisable for the administration of this Plan. To the extent required by law, the general meeting of shareholders of NXP will be requested to adopt orapprove such changes. 3.The terms and conditions in force from time to time are published on the NXP’ intranet and on the website of the administrator of this Plan and apply toall Performance Stock Units granted and the Shares obtained under this Plan. NXP may delegate the authority to perform administrative andoperational functions with respect to this Plan to officers or employees of subsidiaries of NXP and to service providers.Shareholder rights 4.No Participant shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to bedelivered pursuant to the Performance Stock PAGE 7 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015  Units until such Shares are actually delivered to him in accordance with Article 6 of this Plan. The Shares delivered shall carry the same rights ascommon shares of NXP traded at NASDAQ on the day on which these Shares are delivered.Non-recurring discretionary grant 5.Eligibility and participation shall be at the sole discretion of NXP or the Employing Company and as such do not qualify as terms and conditions ofemployment. The Grant in one year does not create rights for future years. 6.The (value of) Performance Stock Units granted to, or Shares acquired by a Participant pursuant to such Performance Stock Unit under this Plan shallnot be considered as compensation in determining a Participant’s benefits under any benefit plan of an Employing Company, including but not limitedto, group life insurance, long-term disability, family survivors, or any retirement, pension or savings plan. 7.Nothing contained in this Plan, Grant Letter or any agreement entered into pursuant hereto shall confer upon any Participant any right to be retainedemployed with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Plan or interfere with or limit in any waywith the right of any Employing Company or any of its subsidiaries to terminate such Participant’s employment or to discharge or retire any Participantat any time.Miscellaneous 8.If a provision of this Plan is deemed illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan, this Plan shall beconstrued as if the illegal or invalid provisions had not been included in this Plan. 9.Where the context requires, words in either gender shall include also the other gender.Choice of law and forum 10.This Plan shall be governed by and construed in accordance with the laws of The Netherlands, without regard to its principles of conflict of laws. Anydispute arising under or in connection with this Plan shall be settled by the competent courts in Amsterdam, The Netherlands. ● ● ● ● ● PAGE 8 OF 8 NXP Performance Stock Units Plan OCTOBER 29, 2015  NXP Restricted Stock Units Plan 2015/16 Page 1 of 8 NXP Restricted Stock Units Plan October 29, 2015TERMS AND CONDITIONSOFNXP RESTRICTED STOCK UNITS PLAN 2015/16Article 1DefinitionsIn this NXP Restricted Stock Units Plan the following definitions shall apply: 1. Board: the board of directors of NXP.2. Change of Control: a transaction or series of transactions or the conclusion of an agreement, which alone or taken together hasthe effect that as a result thereof a third party, or third parties acting in concert, obtains, whether directly orindirectly, Control of NXP.3. Control: (i) the ownership, whether direct or indirect, of a party or parties acting in concert, of more than 50.1%percent of (a) the issued Share capital and/or (b) the voting rights in the general meeting of shareholders; or(ii) the right, whether direct or indirect, of a party or parties acting in concert to control the composition ofthe majority of the Board of NXP, or the majority of its voting rights, by contract or otherwise.4. Custody Account: a custody account maintained in the name of a Participant.5. Date of Grant: the date at which a Restricted Stock Unit is granted pursuant to this Plan. The Dates of Grant of anyRestricted Stock Units shall be the same dates as the dates of publication of the NXP’ annual and/orquarterly results. As an exception, under this Program Restricted Stock Units also may be granted at thedate of completion of the merger transaction between NXP and Freescale Semiconductor, Ltd. The relevantDate of Grant and categorization of any Restricted Stock Unit with respect to any grant hereunder shall bedetermined by NXP.6. Date of Vesting: the date of vesting shall be the first, second or third anniversary of the Date of Grant of such RestrictedStock Unit as specified in the Grant Letter. For this purpose, Restricted Stock Units may be categorized as“1 Year Term Restricted Stock Units”, “2 Year Term Restricted Stock Units” or “3 Year Term RestrictedStock Units”.7. Eligible Individual: means an employee of the group of which NXP forms part or such other person as determined by or onbehalf of the Board.8. Employing Company: any company within the group of which NXP forms part and such other company as designated by or onbehalf of the Board. Page 2 of 8 NXP Restricted Stock Units Plan October 29, 20159. Good Reason: If the Participant does not have an employment agreement with the Employing Company in which GoodReason is defined, “Good Reason” means, in the absence of the Participant’s written consent, any of thefollowing: (i) a material reduction by the Employing Company in the Participant’s base salary or targetbonus unless the base salary or target bonus of other NXP employees or officers in a similar position isreduced by a similar percentage or amount as part of company-wide cost reductions; or (ii) a materialdiminution in the Participant’s duties or responsibilities (other than as a result of the Participant’s physicalor mental incapacity which impairs his or her ability to materially perform his or her duties orresponsibilities as confirmed by a doctor reasonably acceptable to the Participant or his or herrepresentative and such diminution lasts only for so long as such doctor determines such incapacityimpairs the Participant’s ability to materially perform his or her duties or responsibilities). A lateral jobchange that does not materially diminish the Participant’s duties or responsibilities and does not affect theParticipant’s reporting relationship will not constitute Good Reason.10. Grant Letter: the letter in which Restricted Stock Units are granted to an Eligible Individual.11. NXP: NXP Semiconductors N.V.12. Participant: an individual who has accepted any Restricted Stock Units under this Plan.13. Plan: this NXP Restricted Stock Units Plan.14. Restricted Stock Unit: the conditional right granted to a Participant to receive one Share, subject to the terms and conditions ofthis Plan. Restricted Stock Units may be categorized as “1 Year Term Restricted Stock Units”, “2 YearTerm Restricted Stock Units” or “3 Year Term Restricted Stock Units”, as applicable.15. Share: a common share in the share capital of NXP (to be) delivered under this Plan. Page 3 of 8 NXP Restricted Stock Units Plan October 29, 2015Article 2Grant of Restricted Stock Units 1.Any Restricted Stock Units may be granted by or on behalf of the Board to an Eligible Individual, subject to the terms and conditions of this Plan andany other NXP policies or guidelines that may apply to such individual. Any Restricted Stock Units offered to any such individual and the terms andconditions governing such rights shall be deemed accepted by such individual with effect from the applicable Date of Grant in case NXP has notreceived, in accordance with a procedure established by NXP, a notice of rejection of such rights within fourteen (14) days of the Grant Letter or suchlater date as may be determined by NXP. 2.The Grant Letter shall reflect, inter alia, the Date of Grant, the number and category of Restricted Stock Units awarded, the vesting schedule and theperformance conditions, if any. Page 4 of 8 NXP Restricted Stock Units Plan October 29, 2015Article 3Vesting of a Restricted Stock Unit 1.A Restricted Stock Unit will vest (i.e. become unconditional and the corresponding Shares will be delivered to the relevant Participant) on orimmediately following the relevant Date of Vesting subject to (i) any relevant performance conditions, if and when indicated in the Grant Letter, beingmet, (ii) any specifications in the Grant Letter, and (iii) Article 4 (Termination of Employment). In the event that the Participant’s employment isterminated by the Employing Company without the Participant being a Bad Leaver (as defined in Article 4(2)) or by the Participant for Good Reason,in either case within twelve months following a Change of Control, all unvested Restricted Stock Units shall become immediately vested ((for 100%,accelerated vesting), unless the Grant Letter stipulates differently. 2.Whether any performance conditions are met, and whether the relevant Participant is still employed by an Employing Company at the relevant time,will be established by NXP in accordance with a procedure established by NXP.Article 4Termination of Employment 1.Unvested Restricted Stock Units shall lapse, on the earliest of the following occasions, without notice and without any compensation: a.if a Participant’s employment terminates and such Participant is no longer employed by any Employing Company; b.upon violation by the Participant of any provision of this Plan or the Grant Letter in which case the Restricted Stock Units shall lapse on the dateof such violation (rather than the date on which such violation comes to the attention of NXP). 2.For purposes of this Program, a “Bad Leaver” shall be a Participant whose employment with NXP or an Employing Company is terminated (i) followingthe Participant committing an act of theft, fraud or deliberate falsification of records in relation to his duties for NXP or the Employing Company,(ii) following the Participant being convicted of or pleading guilty to a serious criminal offence (misdrijf) relating to his duties for NXP or theEmploying Company (excluding any motoring or non-duty related minor offence), which act or criminal offence referred to in (i) and/or (ii) has amaterial adverse effect upon NXP or the Employing Company, (iii) with immediate effect because of an urgent cause (dringende reden) as referred to inarticle 7:678 of the Dutch Civil Code for cause, or (iv) a Participant twelve (12) months period following the termination of employment, directly orindirectly and in any capacity whatsoever engage in any activities in competition with the activities of any member of the NXP group, including theParticipant personally actively soliciting or personally actively endeavoring to entice away or personally actively recruiting any NXP employees insaid period.Article 5Non-transferabilityThe Restricted Stock Units are strictly personal, and may not be assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of in anymanner nor may any transaction be entered into with the same effect. The Participant may not engage in any transactions on any exchange on the basis of anyRestricted Stock Units. Page 5 of 8 NXP Restricted Stock Units Plan October 29, 2015Article 6Delivery and Holding of Shares 1.NXP may require a Participant to maintain a Custody Account in connection with this Plan. Nothing contained in this Plan shall obligate NXP toestablish or maintain or cause to establish or maintain a Custody Account for any Participant. The Participant will provide NXP with the details thereof. 2.Subject to the terms and conditions of this Plan and the Grant Letter, and further to the Participants election via the website, NXP will deliver a Share toa Participant on or as soon as reasonably practicable, and in any event within 2.5 months, after the relevant Date of Vesting. In no event shall NXP haveany obligation to deliver any Shares to a Participant prior to the relevant Date of Vesting. 3.Any Shares to be delivered pursuant to Article 6( 2) will be credited to the Custody Account.Article 7Capital DilutionNXP may make any equitable adjustment or substitution of the number or kind of Shares subject to the Restricted Stock Units, as it, in its sole discretion,deems equitable to reflect any significant corporate event of or by NXP, for example a change in the outstanding Shares by reason of any stock dividend orsplit, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate change, or any distribution to holders of Sharesother than regular cash dividends.Costs and Taxes 1.All costs of delivering any Shares under this Plan to a Participant’s Custody Account and any other costs connected with the Shares shall be borne bythe Participant. 2.Any and all taxes, duties, levies, charges or social security contributions (“Taxes”) which arise under any applicable national, state, local or supra-national laws, rules or regulations, whether already effective on the Date of Grant of any Restricted Stock Units or becoming effective thereafter, andany changes or modifications therein and termination thereof which may result for the Participant in connection with this Plan (including, but notlimited to, the grant of the Restricted Stock Units, the ownership of the Restricted Stock Units and/or the delivery of any Shares under this Plan, theownership and/or the sale of any Shares acquired under this Plan) shall be for the sole risk and account of the Participant. 3.NXP and any other Employing Company shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment orother sums due by NXP or any other Employing Company to Participant, or requiring the Participant or beneficiary of the Participant, to pay to NXP anamount necessary to settle any Taxes and any costs determined by NXP necessary to be withheld in connection with this Plan (including, but notlimited to, the grant of the Restricted Stock Units or the delivery of any Shares under this Plan). Page 6 of 8 NXP Restricted Stock Units Plan October 29, 2015Article 8Cash AlternativeIn exceptional circumstances, at the sole discretion of the Board, upon the Date of Vesting, NXP may advise a Participant resident outside the Netherlands torequest in writing an amount in cash as an alternative to Shares. Upon such request the Participant is entitled to receive an amount in U.S. Dollars, equal tothe price of a Share listed at the NASDAQ Global Select Market with dividend, if any, at closing of NASDAQ, multiplied by the relevant number of vestedRestricted Stock Units. If on the date of receipt of the request from the Participant, Shares have not been traded at NASDAQ, the price of a Share will be theopening price of the first subsequent trading day at NASDAQ. Any costs to be paid and any applicable Taxes due shall be deducted from the amount to bereceived by the Participant.General ProvisionsInsider trading rules 1.Each Participant shall comply with any applicable “insider trading” laws and regulations, including the “NXP Semiconductor N.V. rules on holdingand trading in NXP Securities”.Authority for this Plan 2.NXP shall have the authority to interpret this Plan, to establish, amend, and rescind any rules and regulations relating to this Plan, to determine and - ifdeemed necessary or advisable - amend the terms and conditions of any agreements entered into hereunder, to make all other determinations necessaryor advisable for the administration of this Plan. To the extent required by law, the general meeting of shareholders of NXP will be requested to adopt orapprove such changes. 3.The terms and conditions in force from time to time are published on the NXP’ intranet and on the website of the administrator of this Plan and apply toall Restricted Stock Units granted and the Shares obtained under this Plan. NXP may delegate the authority to perform administrative and operationalfunctions with respect to this Plan to officers or employees of subsidiaries of NXP and to service providers.Shareholder rights 4.No Participant shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to bedelivered pursuant to the Restricted Stock Units until such Shares are actually delivered to him in accordance with Article 6 of this Plan. The Sharesdelivered shall carry the same rights as common shares of NXP traded at NASDAQ on the day on which these Shares are delivered.Non-recurring discretionary grant 5.Eligibility and participation shall be at the sole discretion of NXP or the Employing Company and as such do not qualify as terms and conditions ofemployment. The Grant in one year does not create rights for future years. Page 7 of 8 NXP Restricted Stock Units Plan October 29, 20156.The (value of) Restricted Stock Units granted to, or Shares acquired by a Participant pursuant to such Restricted Stock Unit under this Plan shall not beconsidered as compensation in determining a Participant’s benefits under any benefit plan of an Employing Company, including but not limited to,group life insurance, long-term disability, family survivors, or any retirement, pension or savings plan. 7.Nothing contained in this Plan, Grant Letter or any agreement entered into pursuant hereto shall confer upon any Participant any right to be retainedemployed with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Plan or interfere with or limit in any waywith the right of any Employing Company or any of its subsidiaries to terminate such Participant’s employment or to discharge or retire any Participantat any time.Miscellaneous 8.If a provision of this Plan is deemed illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan, this Plan shall beconstrued as if the illegal or invalid provisions had not been included in this Plan. 9.Where the context requires, words in either gender shall include also the other gender.Choice of law and forum 10.This Plan shall be governed by and construed in accordance with the laws of The Netherlands, without regard to its principles of conflict of laws. Anydispute arising under or in connection with this Plan shall be settled by the competent courts in Amsterdam, The Netherlands. ● ● ● ● ● Page 8 of 8 NXP Restricted Stock Units Plan October 29, 2015Exhibit 10.25EXECUTION VERSION NXP SEMICONDUCTORS N.V. SHAREHOLDERS AGREEMENTDated as of December 7, 2015 TABLE OF CONTENTS Page ARTICLE I TRANSFERS 1.1 Transfer Restrictions 2 ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties of the Investor 3 2.2 Representations and Warranties of the Company 4 ARTICLE III REGISTRATION 3.1 Registration Statement 5 3.2 Withdrawal Rights 6 3.3 Holdback Agreements 6 3.4 Registration Procedures 7 3.5 Registration Expenses 12 3.6 Information to be Furnished by Investor 12 3.7 Registration Indemnification 13 ARTICLE IV CONFIDENTIALITY 4.1 Confidentiality 15 ARTICLE V DEFINITIONS 5.1 Defined Terms 17 5.2 Interpretation 21 ARTICLE VI MISCELLANEOUS 6.1 Term 22 6.2 Notices 22 6.3 Amendments and Waivers 23 6.4 Successors and Assigns 23 6.5 Severability 24 6.6 Counterparts 24 6.7 Entire Agreement 24 6.8 Governing Law; Jurisdiction 24 6.9 WAIVER OF JURY TRIAL 25 6.10 Specific Performance 25 6.11 No Third Party Beneficiaries 25 6.12 No Recourse 25 6.13 Scope of Agreement 26 - i -Exhibits Exhibit A Form of Joinder - ii -SHAREHOLDERS AGREEMENT, dated as of December 7, 2015 (this “Agreement”), among NXP Semiconductors N.V., a public company with limitedliability (naamloze vennootschap) incorporated under the laws of The Netherlands, registered with the Dutch Chamber of Commerce under number34253298 and having its corporate seat (statutaire zetel) in Eindhoven (the “Company”), and the shareholders of the Company whose names appear on thesignature pages hereto (such shareholders, together with any Permitted Transferee of such shareholders who becomes a party pursuant to Section 1.1 hereof,collectively, the “Investor”).W I T N E S S E T H:WHEREAS, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 1, 2015, by and among the Company,Freescale Semiconductor, Ltd., a Bermuda exempted company (“Freescale”), and Nimble Acquisition Limited, a Bermuda exempted company and a whollyowned subsidiary of the Company (“Merger Sub”), Merger Sub merged with and into Freescale (the “Merger”), and Freescale has continued as the survivingcompany and a wholly owned indirect subsidiary of the Company, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, each common share of Freescale, $0.01 par value, issued andoutstanding immediately prior to the Effective Time (other certain such shares as set forth in the Merger Agreement) shall be converted into one commonshare, par value $0.01 per share of the surviving corporation following the Merger (a “Surviving Corporation Share”), and each of the resulting SurvivingCorporation Shares shall automatically be exchanged for (subject to the terms and conditions in the Merger Agreement) the right to receive (i) 0.3521 of aduly authorized, validly issued and fully paid ordinary share (gewoon aandeel) of Parent, par value EUR 0.20 per share (a “Company Common Share”), and(ii) $6.25 in cash, without interest, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, in connection with the Merger, the shareholders of theCompany whose names appear on the signature pages hereto received Company Common Shares (the “Shares”) representing, in the aggregate, approximately3.19% of the outstanding Company Common Shares, after giving effect to the issuance of Company Common Shares in the Merger; andWHEREAS, each of the parties hereto wishes to set forth in this Agreement certain terms and conditions regarding the Investor’s ownership of theShares and to establish certain rights, restrictions and obligations of the Investor with respect to the Shares. - 1 -NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agreeas follows:ARTICLE ITRANSFERS1.1 Transfer Restrictions.(a) Other than solely in the case of Permitted Transfers, the Investor shall not Transfer any Shares prior to the date that is three (3) months after theClosing (such period, the “Restricted Period”).(b) “Permitted Transfers” mean, in each case, so long as such Transfer is in accordance with Applicable Law:(i) a Transfer to a Permitted Transferee of the Investor, so long as such Permitted Transferee, in connection with such Transfer, executes ajoinder to this Agreement in the form attached as Exhibit A hereto; or(ii) a Transfer solely to tender into a tender or exchange offer commenced by a third party (for the avoidance of doubt, not in violation ofthis Agreement) or by the Company; provided, that with respect to an unsolicited tender or exchange offer commenced by a third party, such Transfershall be permitted only if (A) such tender or exchange offer includes an irrevocable minimum tender condition of no less than a majority of the then-outstanding Company Common Shares and (B) as of the expiration of such offer (x) no shareholder rights plan or analogous “poison pill” of theCompany is in effect or (y) the Board of Directors of the Company (the “Board”) has affirmatively publicly recommended to the Company’sshareholders that such shareholders tender into such offer and has not publicly withdrawn or changed such recommendation.(c) Notwithstanding anything to the contrary contained herein, the Investor shall not Transfer any Shares:(i) other than in accordance with all Applicable Laws and the other terms and conditions of this Agreement;(ii) except in a Permitted Transfer, in one or more transactions in which any Person or Group, to the Investor’s knowledge, after givingeffect to such Transfer, would Beneficially Own 5% or more of the Total Voting Power or the Total Economic Interest; provided that the restriction inthis clause (ii) shall not apply to Transfers effected solely through a bona fide Underwritten Offering pursuant to an exercise of the registration rightsprovided in this Agreement;(iii) except in a Permitted Transfer, in each 90-day period following the Restricted Period in an amount for the Investor (together with itsAffiliates), in excess of 33 1/3% of the Shares held by the Investor (together with its Affiliates), as applicable, as of immediately following the Merger(the “Volume Limitation”); provided, that the Volume Limitation shall not apply to Transfers effected solely through an offering pursuant to anexercise of the registration rights provided in this Agreement. - 2 -(d) With respect to the Investor, any certificates for Shares shall bear a legend or legends (and appropriate comparable notations or otherarrangements will be made with respect to any uncertificated shares) referencing restrictions on Transfer of such Shares under the Securities Act and under thisAgreement, which legend shall state in substance:“The securities evidenced by this certificate may not be offered or sold, transferred, pledged, hypothecated or otherwise disposed ofexcept (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), (ii) to theextent applicable, pursuant to Rule 144 under the Securities Act (or any similar rule under the Securities Act relating to the disposition ofsecurities), or (iii) pursuant to an available exemption from registration under the Securities Act.The securities evidenced by this certificate are subject to restrictions on transfer set forth in a Shareholders Agreement dated as ofDecember 7, 2015 among the Company and certain other parties thereto (a copy of which is on file with the Secretary of the Company).”(e) Notwithstanding the foregoing subsection (d), the Investor shall be entitled to receive from the Company new certificates for a like number ofShares not bearing such legend (or the elimination or termination of such notations or arrangements) upon the request of the Investor (i) at such time as suchrestrictions are no longer applicable, and (ii) with respect to the restriction on Transfer of such Shares under the Securities Act or any other Applicable Law,unless such Shares are sold pursuant to a registration statement, subject to delivery of an opinion of counsel to the Investor, which opinion is reasonablysatisfactory in form and substance to the Company and its counsel, that the restriction referenced in such legend (or such notations or arrangements) is nolonger required in order to ensure compliance with the Securities Act or any such other Applicable Law.ARTICLE IIREPRESENTATIONS AND WARRANTIES2.1 Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Company as follows:(a) The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. It has allrequisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.(b) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement do notand will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals whichhave been obtained) under, (x) Applicable Law, (y) its organizational documents or (z) any Contract or agreement to which it is a party. - 3 -(c) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement havebeen duly authorized by all necessary limited partnership or other analogous action on its part. This Agreement has been duly executed and deliveredby the Investor and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and bindingobligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relatingto or affecting creditors’ rights and to general principles of equity.(d) The Investor does not Beneficially Own any Voting Securities as of the date hereof, other than any Voting Securities acquired in theMerger.2.2 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor as follows:(a) The Company is a public company with limited liability (naamloze vennootschap) duly incorporated under the laws of TheNetherlands. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under thisAgreement.(b) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consentsor approvals which have been obtained) under, (x) Applicable Law, (y) the organizational documents of the Company or (z) any Contract or agreementto which the Company is a party.(c) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed anddelivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid andbinding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency and other lawsof general applicability relating to or affecting creditors’ rights and to general principles of equity.(d) The Company is not a party to any agreement or understanding whereby any Person, other than as set forth herein or in the OtherShareholder Agreements, has any registration rights with respect to the Company’s securities. - 4 -ARTICLE IIIREGISTRATION3.1 Registration Statement.(a)(i) If, from and after the expiration of the Restricted Period, the Company has registered or has determined to register any CompanyCommon Shares for its own account or for the account of other securityholders of the Company, including the Blackstone Investor, on any registrationform (other than Form F-4 or S-8) which permits the inclusion of the Registrable Securities, including as a supplement to a Shelf Registration Statementto be filed pursuant to Rule 424(b)(7) under the Securities Act (a “Piggyback Registration”), the Company will give the Investor written notice thereofpromptly (but in no event less than ten (10) Business Days prior to the anticipated filing date) and, subject to Section 3.1(a)(i), shall include in suchregistration all Registrable Securities requested to be included therein pursuant to the written request of the Investor received on or before the secondBusiness Day prior to the anticipated filing date. If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Companyand the lead managing underwriter(s) advise the Company and the Investor that, in its reasonable opinion, the inclusion of all of the CompanyCommon Shares proposed to be included in such registration would adversely affect the success of such offering, the Company shall include in suchregistration: (i) first, the number of Company Common Shares that the Company proposes to sell; and (ii) second, the number of Company CommonShares requested to be included therein by the Investor and Other Holders, pro rata among all such holders on the basis of the number of CompanyCommon Shares requested to be included therein by all such holders or as such holders and the Company may otherwise agree.(ii) If a Piggyback Registration is initiated as an underwritten offering on behalf of another securityholder of the Company, including theBlackstone Investor, and the lead managing underwriter(s) advise the Company that, in its reasonable opinion, the inclusion of all of the CompanyCommon Shares proposed to be included in such registration would adversely affect the success of such offering, then the Company shall include insuch registration: (i) first, the number of Company Common Shares requested to be included therein by such other securityholder, the Investor and theOther Holders, pro rata among all such holders on the basis of the number of Company Common Shares requested to be included therein by all suchholders or as such holders and the Company may otherwise agree; and (ii) second, the number of Company Common Shares that the Companyproposes to sell.(iii) If any Piggyback Registration is a primary underwritten offering, the Company shall have the right to select the managing underwriteror underwriters to administer any such offering. - 5 -(b) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providingwritten notice to the Investor, to require the Investor to suspend sales of Registrable Securities under a Piggyback Registration during any Blackout Period.The Investor may recommence effecting sales of the Registrable Securities pursuant to a Piggyback Registration (or such filings) following further notice tosuch effect from the Company, which shall be given by the Company promptly following the expiration of any Blackout Period. After the expiration of anyBlackout Period and without any further request from the Investor, the Company to the extent necessary shall as promptly as reasonably practicable prepare apost-effective amendment or supplement to the Piggyback Registration or the Prospectus, or any document incorporated therein by reference, or file anyother required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untruestatement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they weremade, not misleading.3.2 Withdrawal Rights. The Investor having notified or directed the Company to include any or all of its Registrable Securities in a registrationstatement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securitiesdesignated by it for registration by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the eventof any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shallcontinue to be Registrable Securities for all purposes of this Agreement (subject to the other terms and conditions of this Agreement). No such withdrawalshall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn.3.3 Holdback Agreements. In connection with any Underwritten Offering, the Investor agrees to enter into customary “lock-up” agreements restrictingthe public sale or distribution of equity securities of the Company (including sales pursuant to Rule 144 under the Securities Act) to the extent required inwriting by the lead managing underwriter(s) with respect to an applicable Underwritten Offering for a period of not more than ninety (90) days after the dateof the “final” prospectus (or “final” prospectus supplement if the Underwritten Offering is made pursuant to a Shelf Registration Statement), pursuant towhich such Underwritten Offering shall be made, plus, if applicable, an extension period, as may be proposed by the lead managing underwriter(s) to addressFINRA regulations regarding the publishing of research, or such other period as is required by the lead managing underwriter(s); provided, however, theInvestor shall not be subject to a lock-up period longer than the lock-up period to which the officers and directors of the Company are subject.In the event of any Marketed Underwritten Shelf Offering, the Company will not effect any public sale or distribution of any common equity (orsecurities convertible into or exchangeable or exercisable for common equity) (other than a registration statement on Form F-4, Form S-8 or any comparableor successor forms thereto) for its own account, within sixty (60) days, after the effective date of such registration except as may otherwise be agreed betweenthe Company and the lead managing underwriter(s) of such Marketed Underwritten Shelf Offering. - 6 -3.4 Registration Procedures.(a) If and whenever the Company is required to use commercially reasonable efforts to effect the registration of any Registrable Securities underthe Securities Act as provided in Section 3.1, including the Shelf Registration Statement and a Piggyback Registration, the Company shall as expeditiouslyas reasonably practicable:(i) prepare and file with the Commission a registration statement to effect such registration in accordance with the intended method ormethods of distribution of such securities and thereafter use commercially reasonable efforts to cause such registration statement to become and remaineffective pursuant to the terms of this Article III; provided, however, that the Company may discontinue any registration of its securities which are notRegistrable Securities at any time prior to the effective date of the registration statement relating thereto; provided, further, that before filing suchregistration statement or any amendments thereto, the Company will furnish to the Investor and the Other Holders (if they are including CompanyCommon Shares in such registration) (“Selling Shareholder”), its counsel and the lead managing underwriter(s), if any, copies of all such documentsproposed to be filed, which documents will be subject to the review and reasonable comment of such counsel, and other documents reasonablyrequested by such counsel, including any comment letter from the Commission, and, if requested by such counsel, provide such counsel reasonableopportunity to participate in the preparation of such registration statement and each prospectus included therein and such other opportunities toconduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers,accountants and other advisors;(ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used inconnection therewith as may be necessary to keep such registration statement effective pursuant to the terms of this Article III or necessary to facilitatethe disposition of the Registrable Securities covered by such registration statement and prospectus (including causing the prospectus contained in suchregistration statement to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 or anysimilar rule that may be adopted under the Securities Act), and comply in all material respects with the provisions of the Securities Act with respect tothe disposition of all securities, including the Registrable Securities, covered by such registration statement;(iii) if requested by the lead managing underwriter(s), if any, or the Investor in connection with an Underwritten Offering, promptly includein a prospectus supplement or post-effective amendment, such information as the lead managing underwriter(s), if any, and the Investor may reasonablyrequest in order to permit the intended method of distribution of such securities and make all required filings of such prospectus supplement or suchpost-effective amendment as soon as reasonably practicable after the Company has received such request; provided, however, that the Company shallnot be required to take any actions under this Section 3.4(a)(iii) that are not, based on the advice of counsel for the Company, in compliance withApplicable Law; - 7 -(iv) furnish to the Selling Shareholder and each underwriter, if any, of the securities being sold by the Selling Shareholder such number ofconformed copies of such registration statement and of each amendment and supplement thereto, such number of copies of the prospectus contained insuch registration statement (including each preliminary prospectus and any summary prospectus) and each free writing prospectus (as defined in Rule405 of the Securities Act) (a “Free Writing Prospectus”) utilized in connection therewith and any other prospectus filed under Rule 424 under theSecurities Act, in conformity with the requirements of the Securities Act, and such other documents as the Selling Shareholder and underwriter, if any,may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Selling Shareholder;(v) use commercially reasonable efforts to register or qualify or cooperate with the Selling Shareholder, the underwriters, if any, and theirrespective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such RegistrableSecurities covered by such registration statement under such other securities laws or “blue sky” laws of such jurisdictions as the Selling Shareholderand any underwriter of the securities being sold by the Selling Shareholder shall reasonably request, and to keep each such registration or qualification(or exemption therefrom) effective during the period such registration statement is required to be kept effective and take any other action which may benecessary or reasonably advisable to enable the Selling Shareholder and underwriters to consummate the disposition in such jurisdictions of theRegistrable Securities owned by the Selling Shareholder, except that the Company shall not for any such purpose be required to (A) qualify generallyto do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (v) be obligated to be soqualified, (B) subject itself to taxation in any such jurisdiction where it would not otherwise be obligated to do so, but for this clause (v), or (C) file ageneral consent to service of process in any such jurisdiction;(vi) use commercially reasonable efforts (including seeking to cure in the Company’s listing or inclusion application any deficienciescited by the exchange or market) to list or include all Registrable Securities on each securities exchange on which similar securities issued by theCompany are then listed or included;(vii) use commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered withor approved by such other governmental agencies or authorities as may be reasonably necessary to enable the Selling Shareholder to consummate thedisposition of such Registrable Securities;(viii) use commercially reasonable efforts to provide and cause to be maintained a transfer agent and registrar for all Registrable Securitiescovered by such registration statement from and after a date not later than the effective date of such registration statement;(ix) use commercially reasonable efforts to prepare and file in a timely manner all documents and reports required by the Exchange Act; - 8 -(x) use commercially reasonable efforts to make generally available to its stockholders, as soon as reasonably practicable, earningsstatements (which need not be audited) covering at least 12 months that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158thereunder;(xi) enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwrittenofferings) and use commercially reasonable efforts to take all such other actions reasonably requested by the Investor in connection therewith(including those reasonably requested by the lead managing underwriter(s), if any) to expedite or facilitate the disposition of such RegistrableSecurities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an UnderwrittenOffering (A) make such representations and warranties to the Investor and the underwriters, if any, with respect to the business of the Company and itssubsidiaries, and the registration statement, prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in eachcase, in form, substance and scope as are customarily made by issuers in underwritten offerings, and, if true, confirm the same if and when requested,(B) if an underwriting agreement has been entered into, the same shall contain indemnification provisions and procedures substantially to the effect setforth in Section 3.9 hereof with respect to all parties to be indemnified pursuant to said Section except as otherwise agreed by the Selling Shareholderand (C) deliver such documents and certificates as reasonably requested by the Selling Shareholder, its counsel and the lead managing underwriters(s),if any, to evidence the continued validity of the representations and warranties made pursuant to sub-clause (A) above and to evidence compliancewith any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done ateach closing under such underwriting or similar agreement, or as and to the extent required thereunder;(xii) in connection with an Underwritten Offering or otherwise required in connection with the disposition of the Registrable Securities,use commercially reasonable efforts to obtain for the Selling Shareholder and underwriter(s) (A) opinions of counsel for the Company, covering thematters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the SellingShareholder and underwriters and (B) “comfort” letters and updates thereof (or, in the case of any such Person which does not satisfy the conditions forreceipt of a “comfort” letter specified in Statement on Auditing Standards No. 72 or any successor accounting standard thereto, an “agreed uponprocedures” letter) signed by the independent public accountants who have certified the Company’s financial statements and, to the extent required,any other financial statements included or incorporated by reference in such registration statement, covering the matters customarily covered in“comfort” letters in connection with underwritten offerings;(xiii) make available for inspection by the Selling Shareholder, any underwriter participating in any disposition pursuant to anyregistration statement, and any attorney, accountant or other agent or representative retained in connection with such offering by the SellingShareholder or underwriter (collectively, the “Inspectors”), financial and other records, pertinent corporate documents and instruments of the - 9 -Company (collectively, the “Records”), as shall be reasonably necessary, or as shall otherwise be reasonably requested, to enable them to exercise theirdue diligence responsibility, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each casereasonably requested by any such representative, underwriter, attorney, agent or accountant in connection with such registration statement (in eachcase subject to the Selling Shareholder and/or Inspectors entering into customary confidentiality agreement on terms and conditions reasonablyacceptable to the Company as may be reasonably requested by the Company); provided, further, that the Selling Shareholder agrees that it will, uponreceipt of a written request to disclose such Records from a court of competent jurisdiction or by another Governmental Authority, give notice to theCompany and allow the Company, at its expense, to undertake appropriate action seeking to prevent disclosure of the Records deemed confidential;(xiv) as promptly as practicable notify in writing the Selling Shareholder and the underwriters, if any, of the following events: (A) thefiling of the registration statement, any amendment thereto, the prospectus or any prospectus supplement related thereto or post-effective amendmentto the registration statement or any Free Writing Prospectus utilized in connection therewith, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (B) any request by the Commission or any other U.S. or state governmentalauthority for amendments or supplements to the registration statement or the prospectus or for additional information; (C) the issuance by theCommission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for thatpurpose; (D) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for saleunder the securities or “blue sky” laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (E) if at any time therepresentations and warranties of the Company contained in any mutual agreement (including any underwriting agreement) contemplated bySection 3.4(a)(xi) cease to be true and correct in any material respect; and (F) upon the happening of any event that makes any statement made in suchregistration statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any materialrespect or that requires the making of any changes in such registration statement, prospectus or documents so that, in the case of the registrationstatement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to makethe statements therein not misleading, and that in the case of the prospectus, it will not contain any untrue statement of a material fact or omit to stateany material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and,at the request of any Selling Shareholder, promptly prepare and furnish to the Selling Shareholder a reasonable number of copies of a supplement to oran amendment of such registration statement or prospectus as may be necessary so that, as thereafter delivered to the purchasers of such RegistrableSecurities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; - 10 -(xv) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement,or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction atthe earliest reasonable practicable date, except that, subject to the requirements of Section 3.4(a)(v), the Company shall not for any such purpose berequired to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause(xiii) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction wherein it would not be obligated to do so but for therequirements of this clause (xiii) or (C) file a general consent to service of process in any such jurisdiction;(xvi) cooperate with the Selling Shareholder and the lead managing underwriter(s) to facilitate the timely preparation and delivery ofcertificates (which shall not bear any restrictive legends unless required under Applicable Law) representing securities sold under any registrationstatement, and enable such securities to be in such denominations and registered in such names as the lead managing underwriter(s) or the SellingShareholder may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registrationstatement a supply of such certificates;(xvii) cooperate with the Selling Shareholder and each underwriter or agent participating in the disposition of any Registrable Securitiesand their respective counsel in connection with any filings required to be made with FINRA; and(xviii) have appropriate officers of the Company prepare and make presentations at a reasonable number of “road shows” and beforeanalysts and rating agencies, as the case may be, and other information meetings reasonably organized by the underwriters and otherwise usecommercially reasonable efforts to cooperate as reasonably requested by the Selling Shareholder and the underwriters in the offering, marketing orselling of the Registrable Securities.(b) The Company may require the Selling Shareholder and each underwriter, if any, to furnish the Company in writing such informationregarding the Selling Shareholder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably requestin writing to complete or amend the information required by such registration statement.(c) The Selling Shareholder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described inclauses (B), (C), (D), (E) and (F) of Section 3.4(a)(xiv), the Selling Shareholder shall forthwith discontinue its disposition of Registrable Securities pursuant tothe applicable registration statement and prospectus relating thereto until receipt of the copies of the supplemented or amended prospectus contemplated bySection 3.4(a)(xiii), or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and has received copies of anyadditional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus. - 11 -(d) With a view to making available to the Investor the benefits of Rule 144 under the Securities Act and any other rule or regulation of theCommission that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a registration statement,the Company shall:(i) use commercially reasonable efforts to make and keep public information available, as those terms are understood and defined in Rule144 under the Securities Act;(ii) use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of theCompany under the Exchange Act, at any time when the Company is subject to such reporting requirements; and(iii) furnish to the Investor so long as it owns Registrable Securities, promptly upon request, a written statement by the Company as to itscompliance with the reporting requirements of Rule 144 under the Securities Act and of the Exchange Act, a copy of the most recent annual orquarterly report of the Company, and such other reports and documents so filed or furnished by the Company with the Commission as the Investor mayreasonably request in connection with the sale of Registrable Securities without registration (in each case to the extent not readily publicly available).3.5 Registration Expenses. The Company shall pay all fees and expenses incident to the Company’s performance of its obligations under this ArticleIII, including (a) all registration and filing fees, including all fees and expenses of compliance with securities and “blue sky” laws (including the reasonableand documented fees and disbursements of counsel for the underwriters in connection with “blue sky” qualifications of the Registrable Securities pursuant toSection 3.4(a)(v)) and all fees and expenses associated with filings required to be made with FINRA (including, if applicable, the fees and expenses of any“qualified independent underwriter” as such term is defined in FINRA Rule 5121), (b) all printing (including expenses of printing certificates for theRegistrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses if the printing of prospectuses isrequested by the Investor) and copying expenses, (c) all messenger, telephone and delivery expenses, (d) expenses of the Company incurred in connectionwith any “road show”, (e) except as provided in this Section 3.5, any fees and disbursements customarily paid in issues and sales of securities (including thefees and expenses of any experts retained by the Company in connection with any registration statement), and (f) all fees and expenses of the Company’sindependent certified public accountants and counsel (including with respect to “comfort” letters and opinions). The Investor shall pay the fees and expensesof its own counsel and the Investor’s portion of all underwriting discounts and commissions and transfer taxes, if any, relating to the sale of its RegistrableSecurities pursuant to any registration.3.6 Information to be Furnished by Investor. Not less than seven (7) Business Days before the expected filing date of each registration statementpursuant to this Agreement, the Company shall notify the Investor (if it has timely provided the requisite notice hereunder entitling it to register RegistrableSecurities in such registration statement) of the information, documents and instruments from it that the Company or any underwriter reasonably requests in - 12 -connection with such registration statement, including, if applicable, a questionnaire, custody agreement, power of attorney, lock-up letter and underwritingagreement (the “Requested Information”). If the Company has not received, on or before the second Business Day before the expected filing date, theRequested Information from the Investor, the Company may file the registration statement without including Registrable Securities of the Investor. Thefailure to so include in any registration statement the Registrable Securities of the Investor (with regard to that registration statement) shall not result in anyliability on the part of the Company to the Investor.3.7 Registration Indemnification.(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by Law, the Selling Shareholder and its Affiliates andtheir respective officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each Person who controls(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Selling Shareholder or such other indemnified Person andthe officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controlling Person, eachunderwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) suchunderwriter, from and against all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonableattorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, the “Losses”), as incurred, arising out of,caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement,prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto or any omission (or alleged omission) of a materialfact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and(without limitation of the preceding portions of this Section 3.7(a)) will reimburse the Selling Shareholder, each of its Affiliates, and each of their respectiveofficers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each such Person who controls the SellingShareholder and the officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controllingPerson, each such underwriter and each such Person who controls any such underwriter, for any legal and any other expenses reasonably incurred inconnection with investigating and defending or settling any such claim, Loss, damage, liability or action, except that, with respect to a Selling Shareholder,the Company will not be liable to the extent that any such claim, Loss, damage, liability or action arises out of or is based upon an untrue statement oralleged untrue statement in or omission or alleged omission from any such registration statement, prospectus or preliminary prospectus or Free WritingProspectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by such SellingShareholder expressly for use therein.(b) In connection with any registration statement in which the Selling Shareholder is participating, the Selling Shareholder shall indemnify theCompany, its directors and officers, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the ExchangeAct) the Company, from and against all Losses, as incurred, arising out of, caused by, resulting from or relating to any untrue statement (or alleged untrue - 13 -statement) of material fact contained in the registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment orsupplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in lightof the circumstances under which they were made, not misleading, and (without limitation of the preceding portions of this Section 3.7(b)) will reimburse theCompany, its directors and officers and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of theExchange Act) for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss,damage, liability or action, in each case solely to the extent, but only to the extent, that such untrue statement or omission is made in such registrationstatement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto in reliance upon and in conformity withwritten information furnished to the Company by the Selling Shareholder expressly for inclusion in such registration statement, prospectus or preliminaryprospectus or Free Writing Prospectus or any amendment or supplement thereto. Notwithstanding the foregoing, the Selling Shareholder shall not be liableunder this Section 3.7(b) for amounts in excess of the net proceeds received by it in the offering giving rise to such liability.(c) Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect towhich it seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to theextent that the indemnifying party has been actually and materially prejudiced by such failure to provide such notice on a timely basis.(d) In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencementthereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, to assume the defense thereof, with counselreasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume thedefense thereof and acknowledging the obligations of the indemnifying party with respect to such proceeding, the indemnifying party will not (so long as itshall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnifiedparty hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonablecosts of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may bedefenses available to it which are different from or in addition to the defenses available to such indemnifying party and, as a result, a conflict of interest existsor (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or would reasonably beexpected to be materially prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for theexpenses incurred in connection with retaining one separate legal counsel (for the avoidance of doubt, for all indemnified parties in connection therewith)).For the avoidance of doubt, notwithstanding any such assumption by an indemnifying party, the indemnified party shall have the right to employ separatecounsel in any such matter and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified partyexcept as provided in the previous sentence. An indemnifying party shall not be liable for any settlement of an action or claim effected without its - 14 -consent (which consent shall not be unreasonably withheld, conditioned or delayed). No matter shall be settled by an indemnifying party without the consentof the indemnified party (which consent shall not be unreasonably withheld, conditioned or delayed), unless such settlement (x) includes as an unconditionalterm thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation, and (y) doesnot include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.(e) The indemnification provided for under this Agreement shall survive the Transfer of the Registrable Securities and the termination of thisAgreement.(f) If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, anyPerson who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses withrespect to which such Person would be entitled to such indemnification but for such reason or reasons, in such proportion as is appropriate to reflect therelative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements oromissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of theindemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission tostate a material fact relates to information supplied by the indemnifying party or by the indemnified party, the Persons’ relative knowledge and access toinformation concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and otherequitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contributionwere determined by pro rata or per capita allocation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the SecuritiesAct) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, theSelling Shareholder shall not be required to make a contribution in excess of the net proceeds received by it from its sale of Registrable Securities inconnection with the offering that gave rise to the contribution obligation.ARTICLE IVCONFIDENTIALITY4.1 Confidentiality. The Investor hereby agrees that all Confidential Information with respect to the Company, its Subsidiaries and its and theirbusinesses, finances and operations shall be kept confidential by it and shall not be disclosed by it in any manner whatsoever, except as expressly permittedby this Section 4.1. Any Confidential Information may be disclosed:(a) by the Investor (x) to any of its Affiliates (other than any portfolio companies thereof), (y) to its or such Affiliate’s respective directors,managers, members, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors thereof)and (z) in the case of any Investor that is a limited partnership, limited liability company or other investment vehicle, to any current or prospective - 15 -direct or indirect general partner, limited partner, member, equityholder or management company of such Investor or any former direct or indirect generalpartner, limited partner, member, equityholder or management company which retains an economic interest in such Investor (or any employee, attorney,accountant, consultant, banker or financial advisor or representative of any of the foregoing) (each of the Persons described in clauses (x), (y) and (z),collectively, for purposes of this Section 4.1 and the definition of Confidential Information, “Representatives”), in each case, solely if and to the extent anyRepresentative needs to be provided such Confidential Information to assist such Investor or its Affiliates in evaluating or reviewing its direct or indirectinvestment in the Company, including in connection with the disposition thereof, and each Representative of the Investor shall be deemed to be bound bythe provisions of this Section 4.1 and such Investor shall be responsible for any breach of this Section 4.1 by any such Representative to the same extent as ifsuch breach had been committed by the Investor; provided, further, that the Investor hereby acknowledges that it is aware, and it will advise itsRepresentatives to whom it provides Confidential Information, that such Confidential Information may include material non-public information and thatapplicable securities laws impose restrictions on trading securities when in possession of such information and on communicating such information to anyother person under circumstances in which it is reasonably foreseeable that such person is likely to trade in such securities;(b) by the Investor or any of its Representatives to the extent the Company consents in writing;(c) by the Investor or any of its Representatives to a potential Transferee (so long as such Transfer is permitted hereunder); provided, that suchTransferee agrees to be bound by the provisions of this Section 4.1 (or a confidentiality agreement with the Company having restrictions substantially similarto (and no less restrictive than) this Section 4.1) and such Investor shall be responsible for any breach of this Section 4.1 (or such confidentiality agreement)by any such potential Transferee to the same extent as if such breach had been committed by the Investor; and(d) by the Investor or any of its Representatives to the extent that such Investor or Representative has received advice from its counsel that it islegally compelled to do so or is required to do so to comply with Applicable Law or legal process or Governmental Authority request or the rules of anysecurities exchange on which its securities are listed or the rules and regulations of any SRO; provided, that prior to making such disclosure, such Investor orRepresentative, as the case may be, uses commercially reasonable efforts to preserve the confidentiality of the Confidential Information to the extentreasonably practicable and permitted by Applicable Law, including, to the extent permitted by Applicable Law, (A) consulting with the Company regardingsuch disclosure and (B) if requested by the Company, assisting the Company, at the Company’s expense, in seeking a protective order to prevent therequested disclosure; provided, further, that such Investor or Representative, as the case may be, uses reasonable best efforts to disclose only that portion ofthe Confidential Information as is requested by the applicable Governmental Authority or as is, based on the advice of its counsel, legally required orcompelled. - 16 -ARTICLE VDEFINITIONS5.1 Defined Terms. Capitalized terms when used in this Agreement have the following meanings:“Affiliate” means, with respect to any Person, an “affiliate” as defined in Rule 405 of the regulations promulgated under the Securities Act and withrespect to each Investor, an “affiliate” of such Investor as defined in Rule 405 of the regulations promulgated under the Securities Act and any InvestmentFund, investment vehicle or holding company of which such Investor or an Affiliate of such Investor serves as the general partner, managing member ordiscretionary manager or advisor; provided, however, that notwithstanding the foregoing, an Affiliate of an Investor shall not include (x) any portfoliocompany of any such Person or of such Investor or any Investment Fund, vehicle or holding company, (y) any limited partners of such Investor, or (z) any ofthe Other Holders or any of their respective Affiliates.“Agreement” has the meaning set forth in the preamble.“Applicable Law” means, with respect to any Person, any Law applicable to such Person, its assets, properties, operations or business.“Beneficial Owner” or “Beneficially Own” has the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and a Person’s beneficialownership of securities shall be calculated in accordance with the provisions of such Rule (in each case, irrespective of whether or not such Rule is actuallyapplicable in such circumstance).“Blackout Period” means (i) any regular quarterly period during which directors and executive officers of the Company are not permitted to trade underthe insider trading policy of the Company then in effect, provided, that if the Investor proposes to sell Registrable Securities during such period, theCompany shall consider in good faith facilitating such sale during such period, and (ii) in the event that the Company determines in good faith that theregistration would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of the Company or anymaterial transaction under consideration by the Company or would require disclosure of information that has not been, and is not otherwise required to be,disclosed to the public, a period of no more than 30 days in any 90-day period or 90 days in any 365-day period.“Blackstone Investor” means Blackstone Capital Partners (Cayman) V L.P., Blackstone Capital Partners (Cayman) V-A L.P., BCP (Cayman) V-S L.P.,Blackstone Family Investment Partnership (Cayman) V L.P., Blackstone Family Investment Partnership (Cayman) V-A L.P., Blackstone ParticipationPartnership (Cayman) V L.P. and any of their “Permitted Transferees” (as such term is defined in the Shareholders Agreement, dated as of the date hereof, byand among the Company and the foregoing).“Board” has the meaning set forth in Section 1.1(b)(ii). - 17 -“Business Day” means a day other than a Saturday, a Sunday or another day on which commercial banking institutions in New York, New York orEindhoven, the Netherlands are authorized or required by Law to be closed.“Closing” shall have the meaning set forth in the Merger Agreement.“Closing Date” shall have the meaning set forth in the Merger Agreement.“Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act.“Company” has the meaning set forth in the preamble.“Company Common Shares” has the meaning set forth in the recitals.“Confidential Information” means all information (irrespective of the form of communication, and irrespective of whether obtained prior to or after thedate hereof) obtained by or on behalf of the Investor or its Representatives from the Company or its Representatives, through the Shares Beneficially Ownedor through the rights granted pursuant hereto, other than information which (i) was or becomes generally available to the public other than as a result of abreach of this Agreement by the Investor or such Representatives, (ii) was or becomes available to the Investor or such Representatives on a non-confidentialbasis from a source other than the Company or its Representatives, provided, that the source thereof is not known by the Investor or such Representatives tobe bound by an obligation of confidentiality to the Company, or (iii) is independently developed by the Investor or such Representatives without the use ofor reference to any such information that would otherwise be Confidential Information hereunder. Subject to clauses (i)-(iii) above, Confidential Informationalso includes all non-public information previously provided by the Company or its Representatives to the Investor or its Representatives pursuant to theConfidentiality Agreement, including all information, documents and reports referred to thereunder, or otherwise.“Confidentiality Agreement” means the letter agreement, dated as of December 22, 2014, between Freescale and the Company and any amendmentsthereto or side letters entered into in connection therewith.“Contract” means any contract, lease, license, indenture, loan, note, agreement or other legally binding commitment, arrangement or undertaking(whether written or oral and whether express or implied).“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whetherthrough the ownership of voting securities, by contract or otherwise.“Controlled Affiliate” means any Affiliate of the specified Person that is, directly or indirectly, Controlled by the specified Person.“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. - 18 -“Freescale” has the meaning set forth in the recitals.“FINRA” means the Financial Industry Regulatory Authority.“Free Writing Prospectus” has the meaning set forth in Section 3.4(a)(iv).“Governmental Authority” means any federal, national, state, local, cantonal, municipal, international or multinational government or politicalsubdivision thereof, governmental department, commission, board, bureau, agency, taxing or regulatory authority, instrumentality or judicial oradministrative body, or arbitrator or SRO, having jurisdiction over the matter or matters in question.“Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.“Inspectors” has the meaning set forth in Section 3.4(a)(xiii).“Investment Fund” means, with respect to an Investor, any investment fund, investment vehicle or other account that is, directly or indirectly, managedor advised by such Investor or any of its Controlled Affiliates.“Investor” has the meaning set forth in the preamble.“Law” has the meaning set forth in the Merger Agreement.“Losses” has the meaning set forth in Section 3.7(a).“Merger” has the meaning set forth in the recitals.“Merger Agreement” has the meaning set forth in the recitals.“Merger Sub” has the meaning set forth in the recitals.“Non-Liable Person” has the meaning set forth in Section 6.12.“Other Holder” means any Person that has registration rights under any Other Shareholder Agreement.“Other Shareholder Agreements” mean the shareholders agreements (other than this Agreement) entered into at the closing of the Merger with certainformer equityholders of Freescale Holdings L.P. in accordance with the Merger Agreement.“Permitted Transferee” means, with respect to any Person, any Affiliate of such Person.“Permitted Transfers” has the meaning set forth in Section 1.1(b).“Person” has the meaning set forth in the Merger Agreement.“Piggyback Registration” has the meaning set forth in Section 3.1(a)(i). - 19 -“Prospectus” means the prospectus included in any Shelf Registration Statement or a Piggyback Registration (including a prospectus that disclosesinformation previously omitted from a prospectus filed as part of an effective Shelf Registration Statement or Piggyback Registration in reliance upon Rule430A or Rule 430B promulgated under the Securities Act), as amended or supplemented by any prospectus supplement or any issuer free writing prospectus(as defined in Rule 433 under the Securities Act), with respect to the offering of any portion of the Registrable Securities covered by such Shelf RegistrationStatement or Piggyback Registration, and all other amendments and supplements to the prospectus, including post-effective amendments, and all materialincorporated by reference or deemed to be incorporated by reference in such prospectus.“Records” has the meaning set forth in Section 3.4(a)(xiii).“Registrable Securities” means, with respect to the Investor, (1) the Shares issued in connection with the Merger, and (2) any additional securitiesissued or issuable as a dividend or distribution or in exchange for, or in respect of such Shares; provided, that any such Shares shall cease to be RegistrableSecurities when (i) they are sold pursuant to an effective registration statement under the Securities Act, (ii) they are sold pursuant to Rule 144 under theSecurities Act or (iii) they shall have ceased to be outstanding.“Representatives” has the meaning set forth in Section 5.1(a).“Requested Information” has the meaning set forth in Section 3.6.“Restricted Period” has the meaning set forth in Section 1.1(a).“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.“Selling Shareholder” has the meaning set forth in Section 3.4(a)(i).“Shares” has the meaning set forth in the recitals.“Shelf Registration Statement” has the meaning set forth in the Other Shareholder Agreement entered into at the closing of the Merger with theBlackstone Investor (the “Blackstone Shareholder Agreement”).“SRO” means (i) any “self regulatory organization” as defined in Section 3(a)(26) of the Exchange Act, (ii) any other United States or foreign securitiesexchange, futures exchange, commodities exchange or contract market, or (iii) any other securities exchange.“Subsidiary” shall have the meaning set forth in the Merger Agreement.“Total Economic Interest” means, as of any date of determination, the total economic interests of all Voting Securities then outstanding. Thepercentage of the Total Economic Interest Beneficially Owned by any Person as of any date of determination is the percentage of the Total Economic Interestthen Beneficially Owned by such Person, including pursuant to any swaps or any other agreements, transactions or series of transactions, whether any suchswap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise. - 20 -“Total Voting Power” means, as of any date of determination, the total number of votes that may be cast in the election of directors of the Company ifall Voting Securities then outstanding were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power BeneficiallyOwned by any Person as of any date of determination is the percentage of the Total Voting Power of the Company that is represented by the total number ofvotes that may be cast in the election of directors of the Company by Voting Securities then Beneficially Owned by such Person.“Transfer” means (i) any direct or indirect offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operationof law or otherwise), either voluntary or involuntary, or entry into any Contract, option or other arrangement or understanding with respect to any offer, sale,lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any capital stock or interest in anycapital stock or (ii) in respect of any capital stock or interest in any capital stock, to enter into any swap or any other agreement, transaction or series oftransactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of such capital stock or interest incapital stock, whether any such swap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise.“Transferor” means a Person that Transfers or proposes to Transfer; and “Transferee” means a Person to whom a Transfer is made or is proposed to be made.“Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.“Volume Limitation” has the meaning set forth in Section 1.1(c)(iii).“Voting Securities” means Company Common Shares and any other securities of the Company entitled to vote generally in the election of directors ofthe Company.5.2 Interpretation. Whenever used: the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”,and the words “hereof” and “herein” and similar words shall be construed as references to this Agreement as a whole and not limited to the particular Article,Section, Annex, Exhibit or Schedule in which the reference appears. Unless the context otherwise requires, references herein: (x) to Articles, Sections,Annexes, Exhibits and Schedules mean the Articles, Sections and Annexes of, and Exhibits and Schedules attached to, this Agreement; (y) to an agreement,instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extentpermitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto andany regulations promulgated thereunder. References to “$” or “dollars” means United States dollars. Any reference in this Agreement to any gender shallinclude all genders. The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. The Annexes, Exhibits andSchedules referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The - 21 -headings of the Articles and Sections are for convenience of reference only and do not affect the interpretation of any of the provisions hereof. If, and as oftenas, there is any change in the outstanding Company Common Shares by reason of share dividends, splits, reverse splits, spin-offs, split-ups, mergers,reclassifications, reorganizations, recapitalizations, combinations or exchanges of shares and the like, appropriate adjustment shall be made in the provisionsof this Agreement so as to fairly and equitably preserve, as far as practicable, the rights and obligations set forth herein that continue to be applicable on thedate of such change. No rule of construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement,as this Agreement is the product of negotiation between sophisticated parties advised by counsel.ARTICLE VIMISCELLANEOUS6.1 Term. This Agreement shall automatically terminate upon the earlier of (i) the termination of the Blackstone Shareholder Agreement and (ii) thedate that the Investor Beneficially Owns less than 5% of the Shares Beneficially Owned by the Investor as of immediately following the Closing (as definedin the Merger Agreement). If this Agreement is terminated pursuant to this Section 6.1, this Agreement shall immediately then be terminated and of no furtherforce and effect, except for the provisions set forth in this Article VI, which shall survive in accordance with their terms. Notwithstanding anything to thecontrary in this Agreement, Section 4.1 shall terminate upon the three month anniversary of the Closing.6.2 Notices. All notices, consents and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been dulygiven upon receipt) by hand delivery, by prepaid overnight courier (providing written proof of delivery), by confirmed e-mail transmission or by certified orregistered mail (return receipt requested and first class postage prepaid), addressed as follows: (i) if to the Company, to: Name: NXP Semiconductors N.V. Address: General Counsel High Tech Campus 60 5656 AG Eindhoven The Netherlands Email: guido.dierick@nxp.com Attention: Guido Dierick with a copy to (which shall not be considered notice): Name: Simpson Thacher & Bartlett LLP Address: 425 Lexington Avenue New York, New York 10017 Fax: (212) 455-2502 Email: ghorowitz@stblaw.com ecooper@stblaw.com Attention: Gary Horowitz Elizabeth Cooper - 22 -(ii) if to the Investor, to: Name: Permira Advisers LLC Address: 320 Park Avenue 33rd Floor New York, NY 10022 Fax: (212) 386-7481 Email: Tom.Lister@permira.com Attention: Tom Lister with a copy to (which shall not be considered notice): Name: Skadden, Arps, Slate, Meagher & Flom LLP Address: Four Times Square New York, New York 10036 Fax: (212) 735-2000 Email: Kenton.King@skadden.com Allison.Schneirov@skadden.com Amr.Razzak@skadden.com Attention: Kenton J. King Allison R. Schneirov Amr Razzakor to such other address (i.e., e-mail address) for a party as shall be specified in a notice given in accordance with this Section 6.2; provided that any noticereceived by email transmission or otherwise at the addressee’s location on any Business Day after 5:00 P.M. (addressee’s local time) shall be deemed to havebeen received at 9:00 A.M. (addressee’s local time) on the next Business Day; provided, further that notice of any change to the address or any of the otherdetails specified in or pursuant to this Section 6.2 shall not be deemed to have been received until, and shall be deemed to have been received upon, the laterof the date specified in such notice or the date that is five (5) Business Days after such notice would otherwise be deemed to have been received pursuant tothis Section 6.2.6.3 Amendments and Waivers. Each of the parties hereto agrees that no provision of this Agreement may be amended or modified unless suchamendment or modification is in writing and signed by all parties hereto. No failure or delay by any party in exercising any right, power or privilegehereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided byApplicable Law.6.4 Successors and Assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto withoutthe prior written - 23 -consent of the other parties, provided that any proposed assignment by the Investor of any of its rights herein to any party other than to an Affiliate of theInvestor may be granted or withheld in the Company’s sole and absolute discretion, it being understood that it is the intention of the parties hereto that therights afforded to the Investor are personal to the Investor and are not transferable except as expressly provided herein. Subject to the preceding sentence, thisAgreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Any attemptedassignment in violation of this Section 6.4 shall be void.6.5 Severability. If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any ApplicableLaw or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term orother provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect theoriginal intent of the parties as closely as possible to the fullest extent permitted by Applicable Law in an acceptable manner to the end that the transactionscontemplated hereby are fulfilled to the extent possible.6.6 Counterparts. This Agreement may be executed in multiple counterparts, each of which when executed and delivered shall be deemed to be anoriginal but all of which taken together shall constitute one and the same agreement.6.7 Entire Agreement. This Agreement (including the documents and the instruments referred to in this Agreement), together with the ConfidentialityAgreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respectto the subject matter of this Agreement.6.8 Governing Law; Jurisdiction. This Agreement and all litigation, claims, actions, suits, hearings or proceedings (whether civil, criminal oradministrative and whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Agreement, any of the transactionscontemplated by this Agreement or the actions of the Company or the Investor in the negotiation, administration, performance and enforcement hereof orthereof, shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to any choice or conflict of Lawsprovision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than theState of New York. Each of the parties hereto hereby (a) expressly and irrevocably submits to the exclusive personal jurisdiction of any United States federalcourt located in the Southern District of the State of New York or any New York state court located in Manhattan in the event any dispute arises out of thisAgreement or any of the transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction bymotion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Agreement or any of the transactionscontemplated by this Agreement in any court other than the courts as described in (a) above; provided that each of the parties shall have the right to bringany action or proceeding for enforcement of a judgment entered by any United States federal court located in the State of New York or any New York statecourt in any other court or jurisdiction. Each party irrevocably consents to the service of - 24 -process outside the territorial jurisdiction of the courts referred to herein in any such action or proceeding in connection with this Agreement or thetransactions contemplated hereby by mailing copies thereof by registered United States mail, postage prepaid, return receipt requested, to its address asspecified in or pursuant to Section 6.2. However, the foregoing shall not limit the right of a party to effect service of process on the other party by any otherlegally available method.6.9 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THISAGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.EACH OF THE PARTIES HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHERPARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TOENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,(C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THISAGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.6.10 Specific Performance. The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunderwill cause irreparable injury to the non-breaching parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each partyhereby consents to the granting of injunctive relief by any court of competent jurisdiction to prevent breaches of this Agreement, to enforce specifically theterms and provisions hereof and to compel performance of such party’s obligations, this being in addition to any other remedy to which any party is entitledunder this Agreement. The parties further agree to waive any requirement for the securing or posting of any bond in connection with any such remedy, andthat such remedy shall be in addition to any other remedy to which a party is entitled at law or in equity.6.11 No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and each suchparty’s respective heirs, successors and permitted assigns; provided, that the Persons indemnified under Section 3.9 are intended third party beneficiaries ofSection 3.9, and Non-Liable Persons are intended third party beneficiaries of Section 6.12.6.12 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that any party heretomay be a partnership or limited liability company, each party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledgesthat no Persons other than the named parties hereto shall have any obligation hereunder and that it has no rights of recovery hereunder against, and norecourse hereunder or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any former,current or future director, officer, agent, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, - 25 -representative or employee of any Investor (or any of their heirs, successors or permitted assigns), or against any former, current or future director, officer,agent, employee, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative, general or limited partner, shareholder, manager ormember of any of the foregoing Persons, but in each case not including the named parties hereto (each, a “Non-Liable Person”), whether by or throughattempted piercing of the corporate veil, by or through a claim (whether in tort, contract or otherwise) by or on behalf of such party against any Non-LiablePerson, by the enforcement of any assignment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other Applicable Law orotherwise; it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by anyNon-Liable Person, as such, for any obligations of the applicable party under this Agreement or the transactions contemplated hereby, in respect of any oralrepresentations made or alleged to have been made in connection herewith or therewith or for any claim (whether in tort, contract or otherwise) based on, inrespect of or by reason of, such obligations or their creation.6.13 Scope of Agreement. Notwithstanding anything to the contrary provided elsewhere herein, none of the provisions of this Agreement shall in anyway limit the activities of Permira Advisers LLC and its affiliates in their businesses distinct from the private equity business of Permira Advisers LLC,provided that the Confidential Information is not made available to Representatives of Permira Advisers LLC and its affiliates who are not involved in theprivate equity business of Permira Advisers LLC. Should any Confidential Information be made available to a Representative of Permira Advisers LLC andits affiliates who is not involved in the private equity business of Permira Advisers LLC, such Representative shall be bound by this Agreement in accordancewith its terms. In addition, none of the provisions of this Agreement shall in any way apply to any portfolio company of an affiliate of Permira Advisers LLC,provided, however, that should the Confidential Information be made available to a Representative of any portfolio company of an affiliate of PermiraAdvisers LLC, such Representative shall be bound by this Agreement in accordance with its terms.[Signature page follows] - 26 -IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their authorized representatives as of the date first above written. NXP Semiconductors N.V.By: /s/ Guido DierickName: Guido DierickTitle: Executive Vice President and General Counsel - 27 - P4 SUB L.P. 1 By: Permira IV Managers L.P., its manager By: Permira IV Managers Limited, its general partner By: /s/ David Emery Name: David Emery Title: Alternate Director - 28 - PERMIRA IV L.P. 2 By: Permira IV Managers L.P., its manager By: Permira IV Managers Limited, its general partner By: /s/ David Emery Name: David Emery Title: Alternate Director - 29 - PERMIRA INVESTMENTS LIMITED By: Permira Nominees Limited, as nominee By: /s/ David Emery Name: David Emery Title: Alternate Director - 30 - P4 CO-INVESTMENT L.P. By: Permira IV G.P. L.P., its manager By: Permira IV GP Limited, its general partner By: /s/ David Emery Name: David Emery Title: Alternate Director - 31 -EXHIBIT AFORM OF JOINDERThe undersigned is executing and delivering this Joinder Agreement pursuant to that certain NXP Semiconductors N.V. Shareholders Agreement,dated as of December 7, 2015 (as amended, restated, supplemented or otherwise modified in accordance with the terms thereof, the “ShareholdersAgreement”) by and among NXP Semiconductors N.V., a public company with limited liability (naamloze vennootschap) incorporated under the laws of TheNetherlands, registered with the Dutch Chamber of Commerce under number 34253298 and having its corporate seat (statutaire zetel) in Eindhoven, theshareholder of the Company whose name appears on the signature pages thereto (the “Investor”), and any other Persons who become a party thereto inaccordance with the terms thereof. Capitalized terms used but not defined in this Joinder Agreement shall have the respective meanings ascribed to suchterms in the Shareholders Agreement.By executing and delivering this Joinder Agreement to the Shareholders Agreement, the undersigned hereby adopts and approves theShareholders Agreement and agrees, effective commencing on the date hereof and as a condition to the undersigned’s becoming the Transferee of Shares, tobecome a party to, and to be bound by and comply with the provisions of, the Shareholders Agreement applicable to the Investor, in the same manner as if theundersigned were an original signatory to the Shareholders Agreement.The undersigned hereby represents and warrants that, pursuant to this Joinder Agreement and the Shareholders Agreement, it is a PermittedTransferee of the Investor and will be the lawful Beneficial Owner of [●] Shares as of the date hereof.The undersigned acknowledges and agrees that Section 6.2 through Section 6.12 of the Shareholders Agreement are incorporated herein byreference, mutatis mutandis.[Signature page follows] - 32 -Accordingly, the undersigned have executed and delivered this Joinder Agreement as of the day of , . TRANSFEREE Print Name: Address: Telephone: Facsimile: Email: - 33 -AGREED AND ACCEPTED as of the day of , . NXP Semiconductors N.V. By: Name: Title: [TRANSFEROR By: Name: Title: ] - 34 -Exhibit 10.26EXECUTION VERSION NXP SEMICONDUCTORS N.V. SHAREHOLDERS AGREEMENTDated as of December 7, 2015 TABLE OF CONTENTS Page ARTICLE I TRANSFERS 1.1 Transfer Restrictions 2 ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties of the Investor 3 2.2 Representations and Warranties of the Company 4 ARTICLE III REGISTRATION 3.1 Registration Statement 5 3.2 Withdrawal Rights 6 3.3 Holdback Agreements 6 3.4 Registration Procedures 7 3.5 Registration Expenses 12 3.6 Information to be Furnished by Investor 12 3.7 Registration Indemnification 13 ARTICLE IV CONFIDENTIALITY 4.1 Confidentiality 15 ARTICLE V DEFINITIONS 5.1 Defined Terms 17 5.2 Interpretation 21 ARTICLE VI MISCELLANEOUS 6.1 Term 22 6.2 Notices 22 6.3 Amendments and Waivers 23 6.4 Successors and Assigns 23 6.5 Severability 24 6.6 Counterparts 24 6.7 Entire Agreement 24 6.8 Governing Law; Jurisdiction 24 6.9 WAIVER OF JURY TRIAL 25 6.10 Specific Performance 25 6.11 No Third Party Beneficiaries 25 6.12 No Recourse 25 6.13 Scope of Agreement 26 - i -Exhibits Exhibit A Form of Joinder - ii -SHAREHOLDERS AGREEMENT, dated as of December 7, 2015 (this “Agreement”), among NXP Semiconductors N.V., a public company with limitedliability (naamloze vennootschap) incorporated under the laws of The Netherlands, registered with the Dutch Chamber of Commerce under number34253298 and having its corporate seat (statutaire zetel) in Eindhoven (the “Company”), and the shareholders of the Company whose names appear on thesignature pages hereto (such shareholders, together with any Permitted Transferee of such shareholders who becomes a party pursuant to Section 1.1 hereof,collectively, the “Investor”).W I T N E S S E T H:WHEREAS, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 1, 2015, by and among the Company,Freescale Semiconductor, Ltd., a Bermuda exempted company (“Freescale”), and Nimble Acquisition Limited, a Bermuda exempted company and a whollyowned subsidiary of the Company (“Merger Sub”), Merger Sub merged with and into Freescale (the “Merger”), and Freescale has continued as the survivingcompany and a wholly owned indirect subsidiary of the Company, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, each common share of Freescale, $0.01 par value, issued andoutstanding immediately prior to the Effective Time (other certain such shares as set forth in the Merger Agreement) shall be converted into one commonshare, par value $0.01 per share of the surviving corporation following the Merger (a “Surviving Corporation Share”), and each of the resulting SurvivingCorporation Shares shall automatically be exchanged for (subject to the terms and conditions in the Merger Agreement) the right to receive (i) 0.3521 of aduly authorized, validly issued and fully paid ordinary share (gewoon aandeel) of Parent, par value EUR 0.20 per share (a “Company Common Share”), and(ii) $6.25 in cash, without interest, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, in connection with the Merger, the shareholders of theCompany whose names appear on the signature pages hereto received Company Common Shares (the “Shares”) representing, in the aggregate, approximately3.19% of the outstanding Company Common Shares, after giving effect to the issuance of Company Common Shares in the Merger; andWHEREAS, each of the parties hereto wishes to set forth in this Agreement certain terms and conditions regarding the Investor’s ownership of theShares and to establish certain rights, restrictions and obligations of the Investor with respect to the Shares. - 1 -NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agreeas follows:ARTICLE ITRANSFERS1.1 Transfer Restrictions.(a) Other than solely in the case of Permitted Transfers, the Investor shall not Transfer any Shares prior to the date that is three (3) months after theClosing (such period, the “Restricted Period”).(b) “Permitted Transfers” mean, in each case, so long as such Transfer is in accordance with Applicable Law:(i) a Transfer to a Permitted Transferee of the Investor, so long as such Permitted Transferee, in connection with such Transfer, executes ajoinder to this Agreement in the form attached as Exhibit A hereto; or(ii) a Transfer solely to tender into a tender or exchange offer commenced by a third party (for the avoidance of doubt, not in violation ofthis Agreement) or by the Company; provided, that with respect to an unsolicited tender or exchange offer commenced by a third party, such Transfershall be permitted only if (A) such tender or exchange offer includes an irrevocable minimum tender condition of no less than a majority of the then-outstanding Company Common Shares and (B) as of the expiration of such offer (x) no shareholder rights plan or analogous “poison pill” of theCompany is in effect or (y) the Board of Directors of the Company (the “Board”) has affirmatively publicly recommended to the Company’sshareholders that such shareholders tender into such offer and has not publicly withdrawn or changed such recommendation.(c) Notwithstanding anything to the contrary contained herein, the Investor shall not Transfer any Shares:(i) other than in accordance with all Applicable Laws and the other terms and conditions of this Agreement;(ii) except in a Permitted Transfer, in one or more transactions in which any Person or Group, to the Investor’s knowledge, after givingeffect to such Transfer, would Beneficially Own 5% or more of the Total Voting Power or the Total Economic Interest; provided that the restriction inthis clause (ii) shall not apply to Transfers effected solely through a bona fide Underwritten Offering pursuant to an exercise of the registration rightsprovided in this Agreement;(iii) except in a Permitted Transfer, in each 90-day period following the Restricted Period in an amount for the Investor (together with itsAffiliates), in excess of 33 1/3% of the Shares held by the Investor (together with its Affiliates), as applicable, as of immediately following the Merger(the “Volume Limitation”); provided, that the Volume Limitation shall not apply to Transfers effected solely through an offering pursuant to anexercise of the registration rights provided in this Agreement. - 2 -(d) With respect to the Investor, any certificates for Shares shall bear a legend or legends (and appropriate comparable notations or otherarrangements will be made with respect to any uncertificated shares) referencing restrictions on Transfer of such Shares under the Securities Act and under thisAgreement, which legend shall state in substance:“The securities evidenced by this certificate may not be offered or sold, transferred, pledged, hypothecated or otherwise disposed ofexcept (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), (ii) to theextent applicable, pursuant to Rule 144 under the Securities Act (or any similar rule under the Securities Act relating to the disposition ofsecurities), or (iii) pursuant to an available exemption from registration under the Securities Act.The securities evidenced by this certificate are subject to restrictions on transfer set forth in a Shareholders Agreement dated as ofDecember 7, 2015 among the Company and certain other parties thereto (a copy of which is on file with the Secretary of the Company).”(e) Notwithstanding the foregoing subsection (d), the Investor shall be entitled to receive from the Company new certificates for a like number ofShares not bearing such legend (or the elimination or termination of such notations or arrangements) upon the request of the Investor (i) at such time as suchrestrictions are no longer applicable, and (ii) with respect to the restriction on Transfer of such Shares under the Securities Act or any other Applicable Law,unless such Shares are sold pursuant to a registration statement, subject to delivery of an opinion of counsel to the Investor, which opinion is reasonablysatisfactory in form and substance to the Company and its counsel, that the restriction referenced in such legend (or such notations or arrangements) is nolonger required in order to ensure compliance with the Securities Act or any such other Applicable Law.ARTICLE IIREPRESENTATIONS AND WARRANTIES2.1 Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Company as follows:(a) The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. It has allrequisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.(b) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement do notand will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals whichhave been obtained) under, (x) Applicable Law, (y) its organizational documents or (z) any Contract or agreement to which it is a party. - 3 -(c) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement havebeen duly authorized by all necessary limited partnership or other analogous action on its part. This Agreement has been duly executed and deliveredby the Investor and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and bindingobligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relatingto or affecting creditors’ rights and to general principles of equity.(d) The Investor does not Beneficially Own any Voting Securities as of the date hereof, other than any Voting Securities acquired in theMerger.2.2 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor as follows:(a) The Company is a public company with limited liability (naamloze vennootschap) duly incorporated under the laws of TheNetherlands. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under thisAgreement.(b) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consentsor approvals which have been obtained) under, (x) Applicable Law, (y) the organizational documents of the Company or (z) any Contract or agreementto which the Company is a party.(c) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed anddelivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid andbinding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency and other lawsof general applicability relating to or affecting creditors’ rights and to general principles of equity.(d) The Company is not a party to any agreement or understanding whereby any Person, other than as set forth herein or in the OtherShareholder Agreements, has any registration rights with respect to the Company’s securities. - 4 -ARTICLE IIIREGISTRATION3.1 Registration Statement.(a)(i) If, from and after the expiration of the Restricted Period, the Company has registered or has determined to register any CompanyCommon Shares for its own account or for the account of other securityholders of the Company, including the Blackstone Investor, on any registrationform (other than Form F-4 or S-8) which permits the inclusion of the Registrable Securities, including as a supplement to a Shelf Registration Statementto be filed pursuant to Rule 424(b)(7) under the Securities Act (a “Piggyback Registration”), the Company will give the Investor written notice thereofpromptly (but in no event less than ten (10) Business Days prior to the anticipated filing date) and, subject to Section 3.1(a)(i), shall include in suchregistration all Registrable Securities requested to be included therein pursuant to the written request of the Investor received on or before the secondBusiness Day prior to the anticipated filing date. If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Companyand the lead managing underwriter(s) advise the Company and the Investor that, in its reasonable opinion, the inclusion of all of the CompanyCommon Shares proposed to be included in such registration would adversely affect the success of such offering, the Company shall include in suchregistration: (i) first, the number of Company Common Shares that the Company proposes to sell; and (ii) second, the number of Company CommonShares requested to be included therein by the Investor and Other Holders, pro rata among all such holders on the basis of the number of CompanyCommon Shares requested to be included therein by all such holders or as such holders and the Company may otherwise agree.(ii) If a Piggyback Registration is initiated as an underwritten offering on behalf of another securityholder of the Company, including theBlackstone Investor, and the lead managing underwriter(s) advise the Company that, in its reasonable opinion, the inclusion of all of the CompanyCommon Shares proposed to be included in such registration would adversely affect the success of such offering, then the Company shall include insuch registration: (i) first, the number of Company Common Shares requested to be included therein by such other securityholder, the Investor and theOther Holders, pro rata among all such holders on the basis of the number of Company Common Shares requested to be included therein by all suchholders or as such holders and the Company may otherwise agree; and (ii) second, the number of Company Common Shares that the Companyproposes to sell.(iii) If any Piggyback Registration is a primary underwritten offering, the Company shall have the right to select the managing underwriteror underwriters to administer any such offering. - 5 -(b) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providingwritten notice to the Investor, to require the Investor to suspend sales of Registrable Securities under a Piggyback Registration during any Blackout Period.The Investor may recommence effecting sales of the Registrable Securities pursuant to a Piggyback Registration (or such filings) following further notice tosuch effect from the Company, which shall be given by the Company promptly following the expiration of any Blackout Period. After the expiration of anyBlackout Period and without any further request from the Investor, the Company to the extent necessary shall as promptly as reasonably practicable prepare apost-effective amendment or supplement to the Piggyback Registration or the Prospectus, or any document incorporated therein by reference, or file anyother required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untruestatement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they weremade, not misleading.3.2 Withdrawal Rights. The Investor having notified or directed the Company to include any or all of its Registrable Securities in a registrationstatement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securitiesdesignated by it for registration by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the eventof any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shallcontinue to be Registrable Securities for all purposes of this Agreement (subject to the other terms and conditions of this Agreement). No such withdrawalshall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn.3.3 Holdback Agreements. In connection with any Underwritten Offering, the Investor agrees to enter into customary “lock-up” agreements restrictingthe public sale or distribution of equity securities of the Company (including sales pursuant to Rule 144 under the Securities Act) to the extent required inwriting by the lead managing underwriter(s) with respect to an applicable Underwritten Offering for a period of not more than ninety (90) days after the dateof the “final” prospectus (or “final” prospectus supplement if the Underwritten Offering is made pursuant to a Shelf Registration Statement), pursuant towhich such Underwritten Offering shall be made, plus, if applicable, an extension period, as may be proposed by the lead managing underwriter(s) to addressFINRA regulations regarding the publishing of research, or such other period as is required by the lead managing underwriter(s); provided, however, theInvestor shall not be subject to a lock-up period longer than the lock-up period to which the officers and directors of the Company are subject.In the event of any Marketed Underwritten Shelf Offering, the Company will not effect any public sale or distribution of any common equity (orsecurities convertible into or exchangeable or exercisable for common equity) (other than a registration statement on Form F-4, Form S-8 or any comparableor successor forms thereto) for its own account, within sixty (60) days, after the effective date of such registration except as may otherwise be agreed betweenthe Company and the lead managing underwriter(s) of such Marketed Underwritten Shelf Offering. - 6 -3.4 Registration Procedures.(a) If and whenever the Company is required to use commercially reasonable efforts to effect the registration of any Registrable Securities underthe Securities Act as provided in Section 3.1, including the Shelf Registration Statement and a Piggyback Registration, the Company shall as expeditiouslyas reasonably practicable:(i) prepare and file with the Commission a registration statement to effect such registration in accordance with the intended method ormethods of distribution of such securities and thereafter use commercially reasonable efforts to cause such registration statement to become and remaineffective pursuant to the terms of this Article III; provided, however, that the Company may discontinue any registration of its securities which are notRegistrable Securities at any time prior to the effective date of the registration statement relating thereto; provided, further, that before filing suchregistration statement or any amendments thereto, the Company will furnish to the Investor and the Other Holders (if they are including CompanyCommon Shares in such registration) (“Selling Shareholder”), its counsel and the lead managing underwriter(s), if any, copies of all such documentsproposed to be filed, which documents will be subject to the review and reasonable comment of such counsel, and other documents reasonablyrequested by such counsel, including any comment letter from the Commission, and, if requested by such counsel, provide such counsel reasonableopportunity to participate in the preparation of such registration statement and each prospectus included therein and such other opportunities toconduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers,accountants and other advisors;(ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used inconnection therewith as may be necessary to keep such registration statement effective pursuant to the terms of this Article III or necessary to facilitatethe disposition of the Registrable Securities covered by such registration statement and prospectus (including causing the prospectus contained in suchregistration statement to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 or anysimilar rule that may be adopted under the Securities Act), and comply in all material respects with the provisions of the Securities Act with respect tothe disposition of all securities, including the Registrable Securities, covered by such registration statement;(iii) if requested by the lead managing underwriter(s), if any, or the Investor in connection with an Underwritten Offering, promptly includein a prospectus supplement or post-effective amendment, such information as the lead managing underwriter(s), if any, and the Investor may reasonablyrequest in order to permit the intended method of distribution of such securities and make all required filings of such prospectus supplement or suchpost-effective amendment as soon as reasonably practicable after the Company has received such request; provided, however, that the Company shallnot be required to take any actions under this Section 3.4(a)(iii) that are not, based on the advice of counsel for the Company, in compliance withApplicable Law; - 7 -(iv) furnish to the Selling Shareholder and each underwriter, if any, of the securities being sold by the Selling Shareholder such number ofconformed copies of such registration statement and of each amendment and supplement thereto, such number of copies of the prospectus contained insuch registration statement (including each preliminary prospectus and any summary prospectus) and each free writing prospectus (as defined in Rule405 of the Securities Act) (a “Free Writing Prospectus”) utilized in connection therewith and any other prospectus filed under Rule 424 under theSecurities Act, in conformity with the requirements of the Securities Act, and such other documents as the Selling Shareholder and underwriter, if any,may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Selling Shareholder;(v) use commercially reasonable efforts to register or qualify or cooperate with the Selling Shareholder, the underwriters, if any, and theirrespective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such RegistrableSecurities covered by such registration statement under such other securities laws or “blue sky” laws of such jurisdictions as the Selling Shareholderand any underwriter of the securities being sold by the Selling Shareholder shall reasonably request, and to keep each such registration or qualification(or exemption therefrom) effective during the period such registration statement is required to be kept effective and take any other action which may benecessary or reasonably advisable to enable the Selling Shareholder and underwriters to consummate the disposition in such jurisdictions of theRegistrable Securities owned by the Selling Shareholder, except that the Company shall not for any such purpose be required to (A) qualify generallyto do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (v) be obligated to be soqualified, (B) subject itself to taxation in any such jurisdiction where it would not otherwise be obligated to do so, but for this clause (v), or (C) file ageneral consent to service of process in any such jurisdiction;(vi) use commercially reasonable efforts (including seeking to cure in the Company’s listing or inclusion application any deficienciescited by the exchange or market) to list or include all Registrable Securities on each securities exchange on which similar securities issued by theCompany are then listed or included;(vii) use commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered withor approved by such other governmental agencies or authorities as may be reasonably necessary to enable the Selling Shareholder to consummate thedisposition of such Registrable Securities;(viii) use commercially reasonable efforts to provide and cause to be maintained a transfer agent and registrar for all Registrable Securitiescovered by such registration statement from and after a date not later than the effective date of such registration statement;(ix) use commercially reasonable efforts to prepare and file in a timely manner all documents and reports required by the Exchange Act; - 8 -(x) use commercially reasonable efforts to make generally available to its stockholders, as soon as reasonably practicable, earningsstatements (which need not be audited) covering at least 12 months that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158thereunder;(xi) enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwrittenofferings) and use commercially reasonable efforts to take all such other actions reasonably requested by the Investor in connection therewith(including those reasonably requested by the lead managing underwriter(s), if any) to expedite or facilitate the disposition of such RegistrableSecurities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an UnderwrittenOffering (A) make such representations and warranties to the Investor and the underwriters, if any, with respect to the business of the Company and itssubsidiaries, and the registration statement, prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in eachcase, in form, substance and scope as are customarily made by issuers in underwritten offerings, and, if true, confirm the same if and when requested,(B) if an underwriting agreement has been entered into, the same shall contain indemnification provisions and procedures substantially to the effect setforth in Section 3.9 hereof with respect to all parties to be indemnified pursuant to said Section except as otherwise agreed by the Selling Shareholderand (C) deliver such documents and certificates as reasonably requested by the Selling Shareholder, its counsel and the lead managing underwriters(s),if any, to evidence the continued validity of the representations and warranties made pursuant to sub-clause (A) above and to evidence compliancewith any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done ateach closing under such underwriting or similar agreement, or as and to the extent required thereunder;(xii) in connection with an Underwritten Offering or otherwise required in connection with the disposition of the Registrable Securities,use commercially reasonable efforts to obtain for the Selling Shareholder and underwriter(s) (A) opinions of counsel for the Company, covering thematters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the SellingShareholder and underwriters and (B) “comfort” letters and updates thereof (or, in the case of any such Person which does not satisfy the conditions forreceipt of a “comfort” letter specified in Statement on Auditing Standards No. 72 or any successor accounting standard thereto, an “agreed uponprocedures” letter) signed by the independent public accountants who have certified the Company’s financial statements and, to the extent required,any other financial statements included or incorporated by reference in such registration statement, covering the matters customarily covered in“comfort” letters in connection with underwritten offerings;(xiii) make available for inspection by the Selling Shareholder, any underwriter participating in any disposition pursuant to anyregistration statement, and any attorney, accountant or other agent or representative retained in connection with such offering by the SellingShareholder or underwriter (collectively, the “Inspectors”), financial and other records, pertinent corporate documents and instruments of the - 9 -Company (collectively, the “Records”), as shall be reasonably necessary, or as shall otherwise be reasonably requested, to enable them to exercise theirdue diligence responsibility, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each casereasonably requested by any such representative, underwriter, attorney, agent or accountant in connection with such registration statement (in eachcase subject to the Selling Shareholder and/or Inspectors entering into customary confidentiality agreement on terms and conditions reasonablyacceptable to the Company as may be reasonably requested by the Company); provided, further, that the Selling Shareholder agrees that it will, uponreceipt of a written request to disclose such Records from a court of competent jurisdiction or by another Governmental Authority, give notice to theCompany and allow the Company, at its expense, to undertake appropriate action seeking to prevent disclosure of the Records deemed confidential;(xiv) as promptly as practicable notify in writing the Selling Shareholder and the underwriters, if any, of the following events: (A) thefiling of the registration statement, any amendment thereto, the prospectus or any prospectus supplement related thereto or post-effective amendmentto the registration statement or any Free Writing Prospectus utilized in connection therewith, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (B) any request by the Commission or any other U.S. or state governmentalauthority for amendments or supplements to the registration statement or the prospectus or for additional information; (C) the issuance by theCommission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for thatpurpose; (D) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for saleunder the securities or “blue sky” laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (E) if at any time therepresentations and warranties of the Company contained in any mutual agreement (including any underwriting agreement) contemplated bySection 3.4(a)(xi) cease to be true and correct in any material respect; and (F) upon the happening of any event that makes any statement made in suchregistration statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any materialrespect or that requires the making of any changes in such registration statement, prospectus or documents so that, in the case of the registrationstatement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to makethe statements therein not misleading, and that in the case of the prospectus, it will not contain any untrue statement of a material fact or omit to stateany material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and,at the request of any Selling Shareholder, promptly prepare and furnish to the Selling Shareholder a reasonable number of copies of a supplement to oran amendment of such registration statement or prospectus as may be necessary so that, as thereafter delivered to the purchasers of such RegistrableSecurities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; - 10 -(xv) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement,or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction atthe earliest reasonable practicable date, except that, subject to the requirements of Section 3.4(a)(v), the Company shall not for any such purpose berequired to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause(xiii) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction wherein it would not be obligated to do so but for therequirements of this clause (xiii) or (C) file a general consent to service of process in any such jurisdiction;(xvi) cooperate with the Selling Shareholder and the lead managing underwriter(s) to facilitate the timely preparation and delivery ofcertificates (which shall not bear any restrictive legends unless required under Applicable Law) representing securities sold under any registrationstatement, and enable such securities to be in such denominations and registered in such names as the lead managing underwriter(s) or the SellingShareholder may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registrationstatement a supply of such certificates;(xvii) cooperate with the Selling Shareholder and each underwriter or agent participating in the disposition of any Registrable Securitiesand their respective counsel in connection with any filings required to be made with FINRA; and(xviii) have appropriate officers of the Company prepare and make presentations at a reasonable number of “road shows” and beforeanalysts and rating agencies, as the case may be, and other information meetings reasonably organized by the underwriters and otherwise usecommercially reasonable efforts to cooperate as reasonably requested by the Selling Shareholder and the underwriters in the offering, marketing orselling of the Registrable Securities.(b) The Company may require the Selling Shareholder and each underwriter, if any, to furnish the Company in writing such informationregarding the Selling Shareholder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably requestin writing to complete or amend the information required by such registration statement.(c) The Selling Shareholder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described inclauses (B), (C), (D), (E) and (F) of Section 3.4(a)(xiv), the Selling Shareholder shall forthwith discontinue its disposition of Registrable Securities pursuant tothe applicable registration statement and prospectus relating thereto until receipt of the copies of the supplemented or amended prospectus contemplated bySection 3.4(a)(xiii), or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and has received copies of anyadditional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus. - 11 -(d) With a view to making available to the Investor the benefits of Rule 144 under the Securities Act and any other rule or regulation of theCommission that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a registration statement,the Company shall:(i) use commercially reasonable efforts to make and keep public information available, as those terms are understood and defined in Rule144 under the Securities Act;(ii) use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of theCompany under the Exchange Act, at any time when the Company is subject to such reporting requirements; and(iii) furnish to the Investor so long as it owns Registrable Securities, promptly upon request, a written statement by the Company as to itscompliance with the reporting requirements of Rule 144 under the Securities Act and of the Exchange Act, a copy of the most recent annual orquarterly report of the Company, and such other reports and documents so filed or furnished by the Company with the Commission as the Investor mayreasonably request in connection with the sale of Registrable Securities without registration (in each case to the extent not readily publicly available).3.5 Registration Expenses. The Company shall pay all fees and expenses incident to the Company’s performance of its obligations under this ArticleIII, including (a) all registration and filing fees, including all fees and expenses of compliance with securities and “blue sky” laws (including the reasonableand documented fees and disbursements of counsel for the underwriters in connection with “blue sky” qualifications of the Registrable Securities pursuant toSection 3.4(a)(v)) and all fees and expenses associated with filings required to be made with FINRA (including, if applicable, the fees and expenses of any“qualified independent underwriter” as such term is defined in FINRA Rule 5121), (b) all printing (including expenses of printing certificates for theRegistrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses if the printing of prospectuses isrequested by the Investor) and copying expenses, (c) all messenger, telephone and delivery expenses, (d) expenses of the Company incurred in connectionwith any “road show”, (e) except as provided in this Section 3.5, any fees and disbursements customarily paid in issues and sales of securities (including thefees and expenses of any experts retained by the Company in connection with any registration statement), and (f) all fees and expenses of the Company’sindependent certified public accountants and counsel (including with respect to “comfort” letters and opinions). The Investor shall pay the fees and expensesof its own counsel and the Investor’s portion of all underwriting discounts and commissions and transfer taxes, if any, relating to the sale of its RegistrableSecurities pursuant to any registration.3.6 Information to be Furnished by Investor. Not less than seven (7) Business Days before the expected filing date of each registration statementpursuant to this Agreement, the Company shall notify the Investor (if it has timely provided the requisite notice hereunder entitling it to register RegistrableSecurities in such registration statement) of the information, documents and instruments from it that the Company or any underwriter reasonably requests in - 12 -connection with such registration statement, including, if applicable, a questionnaire, custody agreement, power of attorney, lock-up letter and underwritingagreement (the “Requested Information”). If the Company has not received, on or before the second Business Day before the expected filing date, theRequested Information from the Investor, the Company may file the registration statement without including Registrable Securities of the Investor. Thefailure to so include in any registration statement the Registrable Securities of the Investor (with regard to that registration statement) shall not result in anyliability on the part of the Company to the Investor.3.7 Registration Indemnification.(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by Law, the Selling Shareholder and its Affiliates andtheir respective officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each Person who controls(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Selling Shareholder or such other indemnified Person andthe officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controlling Person, eachunderwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) suchunderwriter, from and against all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonableattorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, the “Losses”), as incurred, arising out of,caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement,prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto or any omission (or alleged omission) of a materialfact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and(without limitation of the preceding portions of this Section 3.7(a)) will reimburse the Selling Shareholder, each of its Affiliates, and each of their respectiveofficers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each such Person who controls the SellingShareholder and the officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controllingPerson, each such underwriter and each such Person who controls any such underwriter, for any legal and any other expenses reasonably incurred inconnection with investigating and defending or settling any such claim, Loss, damage, liability or action, except that, with respect to a Selling Shareholder,the Company will not be liable to the extent that any such claim, Loss, damage, liability or action arises out of or is based upon an untrue statement oralleged untrue statement in or omission or alleged omission from any such registration statement, prospectus or preliminary prospectus or Free WritingProspectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by such SellingShareholder expressly for use therein.(b) In connection with any registration statement in which the Selling Shareholder is participating, the Selling Shareholder shall indemnify theCompany, its directors and officers, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the ExchangeAct) the Company, from and against all Losses, as incurred, arising out of, caused by, resulting from or relating to any untrue statement (or alleged untrue - 13 -statement) of material fact contained in the registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment orsupplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in lightof the circumstances under which they were made, not misleading, and (without limitation of the preceding portions of this Section 3.7(b)) will reimburse theCompany, its directors and officers and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of theExchange Act) for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss,damage, liability or action, in each case solely to the extent, but only to the extent, that such untrue statement or omission is made in such registrationstatement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto in reliance upon and in conformity withwritten information furnished to the Company by the Selling Shareholder expressly for inclusion in such registration statement, prospectus or preliminaryprospectus or Free Writing Prospectus or any amendment or supplement thereto. Notwithstanding the foregoing, the Selling Shareholder shall not be liableunder this Section 3.7(b) for amounts in excess of the net proceeds received by it in the offering giving rise to such liability.(c) Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect towhich it seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to theextent that the indemnifying party has been actually and materially prejudiced by such failure to provide such notice on a timely basis.(d) In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencementthereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, to assume the defense thereof, with counselreasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume thedefense thereof and acknowledging the obligations of the indemnifying party with respect to such proceeding, the indemnifying party will not (so long as itshall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnifiedparty hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonablecosts of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may bedefenses available to it which are different from or in addition to the defenses available to such indemnifying party and, as a result, a conflict of interest existsor (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or would reasonably beexpected to be materially prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for theexpenses incurred in connection with retaining one separate legal counsel (for the avoidance of doubt, for all indemnified parties in connection therewith)).For the avoidance of doubt, notwithstanding any such assumption by an indemnifying party, the indemnified party shall have the right to employ separatecounsel in any such matter and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified partyexcept as provided in the previous sentence. An indemnifying party shall not be liable for any settlement of an action or claim effected without its - 14 -consent (which consent shall not be unreasonably withheld, conditioned or delayed). No matter shall be settled by an indemnifying party without the consentof the indemnified party (which consent shall not be unreasonably withheld, conditioned or delayed), unless such settlement (x) includes as an unconditionalterm thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation, and (y) doesnot include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.(e) The indemnification provided for under this Agreement shall survive the Transfer of the Registrable Securities and the termination of thisAgreement.(f) If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, anyPerson who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses withrespect to which such Person would be entitled to such indemnification but for such reason or reasons, in such proportion as is appropriate to reflect therelative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements oromissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of theindemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission tostate a material fact relates to information supplied by the indemnifying party or by the indemnified party, the Persons’ relative knowledge and access toinformation concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and otherequitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contributionwere determined by pro rata or per capita allocation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the SecuritiesAct) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, theSelling Shareholder shall not be required to make a contribution in excess of the net proceeds received by it from its sale of Registrable Securities inconnection with the offering that gave rise to the contribution obligation.ARTICLE IVCONFIDENTIALITY4.1 Confidentiality. The Investor hereby agrees that all Confidential Information with respect to the Company, its Subsidiaries and its and theirbusinesses, finances and operations shall be kept confidential by it and shall not be disclosed by it in any manner whatsoever, except as expressly permittedby this Section 4.1. Any Confidential Information may be disclosed:(a) by the Investor (x) to any of its Affiliates (other than any portfolio companies thereof), (y) to its or such Affiliate’s respective directors,managers, members, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors thereof)and (z) in the case of any Investor that is a limited partnership, limited liability company or other investment vehicle, to any current or prospective - 15 -direct or indirect general partner, limited partner, member, equityholder or management company of such Investor or any former direct or indirect generalpartner, limited partner, member, equityholder or management company which retains an economic interest in such Investor (or any employee, attorney,accountant, consultant, banker or financial advisor or representative of any of the foregoing) (each of the Persons described in clauses (x), (y) and (z),collectively, for purposes of this Section 4.1 and the definition of Confidential Information, “Representatives”), in each case, solely if and to the extent anyRepresentative needs to be provided such Confidential Information to assist such Investor or its Affiliates in evaluating or reviewing its direct or indirectinvestment in the Company, including in connection with the disposition thereof, and each Representative of the Investor shall be deemed to be bound bythe provisions of this Section 4.1 and such Investor shall be responsible for any breach of this Section 4.1 by any such Representative to the same extent as ifsuch breach had been committed by the Investor; provided, further, that the Investor hereby acknowledges that it is aware, and it will advise itsRepresentatives to whom it provides Confidential Information, that such Confidential Information may include material non-public information and thatapplicable securities laws impose restrictions on trading securities when in possession of such information and on communicating such information to anyother person under circumstances in which it is reasonably foreseeable that such person is likely to trade in such securities;(b) by the Investor or any of its Representatives to the extent the Company consents in writing;(c) by the Investor or any of its Representatives to a potential Transferee (so long as such Transfer is permitted hereunder); provided, that suchTransferee agrees to be bound by the provisions of this Section 4.1 (or a confidentiality agreement with the Company having restrictions substantially similarto (and no less restrictive than) this Section 4.1) and such Investor shall be responsible for any breach of this Section 4.1 (or such confidentiality agreement)by any such potential Transferee to the same extent as if such breach had been committed by the Investor; and(d) by the Investor or any of its Representatives to the extent that such Investor or Representative has received advice from its counsel that it islegally compelled to do so or is required to do so to comply with Applicable Law or legal process or Governmental Authority request or the rules of anysecurities exchange on which its securities are listed or the rules and regulations of any SRO; provided, that prior to making such disclosure, such Investor orRepresentative, as the case may be, uses commercially reasonable efforts to preserve the confidentiality of the Confidential Information to the extentreasonably practicable and permitted by Applicable Law, including, to the extent permitted by Applicable Law, (A) consulting with the Company regardingsuch disclosure and (B) if requested by the Company, assisting the Company, at the Company’s expense, in seeking a protective order to prevent therequested disclosure; provided, further, that such Investor or Representative, as the case may be, uses reasonable best efforts to disclose only that portion ofthe Confidential Information as is requested by the applicable Governmental Authority or as is, based on the advice of its counsel, legally required orcompelled. - 16 -ARTICLE VDEFINITIONS5.1 Defined Terms. Capitalized terms when used in this Agreement have the following meanings:“Affiliate” means, with respect to any Person, an “affiliate” as defined in Rule 405 of the regulations promulgated under the Securities Act and withrespect to each Investor, an “affiliate” of such Investor as defined in Rule 405 of the regulations promulgated under the Securities Act and any InvestmentFund, investment vehicle or holding company of which such Investor or an Affiliate of such Investor serves as the general partner, managing member ordiscretionary manager or advisor; provided, however, that notwithstanding the foregoing, an Affiliate of an Investor shall not include (x) any portfoliocompany of any such Person or of such Investor or any Investment Fund, vehicle or holding company, (y) any limited partners of such Investor, or (z) any ofthe Other Holders or any of their respective Affiliates.“Agreement” has the meaning set forth in the preamble.“Applicable Law” means, with respect to any Person, any Law applicable to such Person, its assets, properties, operations or business.“Beneficial Owner” or “Beneficially Own” has the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and a Person’s beneficialownership of securities shall be calculated in accordance with the provisions of such Rule (in each case, irrespective of whether or not such Rule is actuallyapplicable in such circumstance).“Blackout Period” means (i) any regular quarterly period during which directors and executive officers of the Company are not permitted to trade underthe insider trading policy of the Company then in effect, provided, that if the Investor proposes to sell Registrable Securities during such period, theCompany shall consider in good faith facilitating such sale during such period, and (ii) in the event that the Company determines in good faith that theregistration would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of the Company or anymaterial transaction under consideration by the Company or would require disclosure of information that has not been, and is not otherwise required to be,disclosed to the public, a period of no more than 30 days in any 90-day period or 90 days in any 365-day period.“Blackstone Investor” means Blackstone Capital Partners (Cayman) V L.P., Blackstone Capital Partners (Cayman) V-A L.P., BCP (Cayman) V-S L.P.,Blackstone Family Investment Partnership (Cayman) V L.P., Blackstone Family Investment Partnership (Cayman) V-A L.P., Blackstone ParticipationPartnership (Cayman) V L.P. and any of their “Permitted Transferees” (as such term is defined in the Shareholders Agreement, dated as of the date hereof, byand among the Company and the foregoing).“Board” has the meaning set forth in Section 1.1(b)(ii). - 17 -“Business Day” means a day other than a Saturday, a Sunday or another day on which commercial banking institutions in New York, New York orEindhoven, the Netherlands are authorized or required by Law to be closed.“Closing” shall have the meaning set forth in the Merger Agreement.“Closing Date” shall have the meaning set forth in the Merger Agreement.“Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act.“Company” has the meaning set forth in the preamble.“Company Common Shares” has the meaning set forth in the recitals.“Confidential Information” means all information (irrespective of the form of communication, and irrespective of whether obtained prior to or after thedate hereof) obtained by or on behalf of the Investor or its Representatives from the Company or its Representatives, through the Shares Beneficially Ownedor through the rights granted pursuant hereto, other than information which (i) was or becomes generally available to the public other than as a result of abreach of this Agreement by the Investor or such Representatives, (ii) was or becomes available to the Investor or such Representatives on a non-confidentialbasis from a source other than the Company or its Representatives, provided, that the source thereof is not known by the Investor or such Representatives tobe bound by an obligation of confidentiality to the Company, or (iii) is independently developed by the Investor or such Representatives without the use ofor reference to any such information that would otherwise be Confidential Information hereunder. Subject to clauses (i)-(iii) above, Confidential Informationalso includes all non-public information previously provided by the Company or its Representatives to the Investor or its Representatives pursuant to theConfidentiality Agreement, including all information, documents and reports referred to thereunder, or otherwise.“Confidentiality Agreement” means the letter agreement, dated as of December 22, 2014, between Freescale and the Company and any amendmentsthereto or side letters entered into in connection therewith.“Contract” means any contract, lease, license, indenture, loan, note, agreement or other legally binding commitment, arrangement or undertaking(whether written or oral and whether express or implied).“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whetherthrough the ownership of voting securities, by contract or otherwise.“Controlled Affiliate” means any Affiliate of the specified Person that is, directly or indirectly, Controlled by the specified Person.“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. - 18 -“Freescale” has the meaning set forth in the recitals.“FINRA” means the Financial Industry Regulatory Authority.“Free Writing Prospectus” has the meaning set forth in Section 3.4(a)(iv).“Governmental Authority” means any federal, national, state, local, cantonal, municipal, international or multinational government or politicalsubdivision thereof, governmental department, commission, board, bureau, agency, taxing or regulatory authority, instrumentality or judicial oradministrative body, or arbitrator or SRO, having jurisdiction over the matter or matters in question.“Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.“Inspectors” has the meaning set forth in Section 3.4(a)(xiii).“Investment Fund” means, with respect to an Investor, any investment fund, investment vehicle or other account that is, directly or indirectly, managedor advised by such Investor or any of its Controlled Affiliates.“Investor” has the meaning set forth in the preamble.“Law” has the meaning set forth in the Merger Agreement.“Losses” has the meaning set forth in Section 3.7(a).“Merger” has the meaning set forth in the recitals.“Merger Agreement” has the meaning set forth in the recitals.“Merger Sub” has the meaning set forth in the recitals.“Non-Liable Person” has the meaning set forth in Section 6.12.“Other Holder” means any Person that has registration rights under any Other Shareholder Agreement.“Other Shareholder Agreements” mean the shareholders agreements (other than this Agreement) entered into at the closing of the Merger with certainformer equityholders of Freescale Holdings L.P. in accordance with the Merger Agreement.“Permitted Transferee” means, with respect to any Person, any Affiliate of such Person.“Permitted Transfers” has the meaning set forth in Section 1.1(b).“Person” has the meaning set forth in the Merger Agreement.“Piggyback Registration” has the meaning set forth in Section 3.1(a)(i). - 19 -“Prospectus” means the prospectus included in any Shelf Registration Statement or a Piggyback Registration (including a prospectus that disclosesinformation previously omitted from a prospectus filed as part of an effective Shelf Registration Statement or Piggyback Registration in reliance upon Rule430A or Rule 430B promulgated under the Securities Act), as amended or supplemented by any prospectus supplement or any issuer free writing prospectus(as defined in Rule 433 under the Securities Act), with respect to the offering of any portion of the Registrable Securities covered by such Shelf RegistrationStatement or Piggyback Registration, and all other amendments and supplements to the prospectus, including post-effective amendments, and all materialincorporated by reference or deemed to be incorporated by reference in such prospectus.“Records” has the meaning set forth in Section 3.4(a)(xiii).“Registrable Securities” means, with respect to the Investor, (1) the Shares issued in connection with the Merger, and (2) any additional securitiesissued or issuable as a dividend or distribution or in exchange for, or in respect of such Shares; provided, that any such Shares shall cease to be RegistrableSecurities when (i) they are sold pursuant to an effective registration statement under the Securities Act, (ii) they are sold pursuant to Rule 144 under theSecurities Act or (iii) they shall have ceased to be outstanding.“Representatives” has the meaning set forth in Section 5.1(a).“Requested Information” has the meaning set forth in Section 3.6.“Restricted Period” has the meaning set forth in Section 1.1(a).“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.“Selling Shareholder” has the meaning set forth in Section 3.4(a)(i).“Shares” has the meaning set forth in the recitals.“Shelf Registration Statement” has the meaning set forth in the Other Shareholder Agreement entered into at the closing of the Merger with theBlackstone Investor (the “Blackstone Shareholder Agreement”).“SRO” means (i) any “self regulatory organization” as defined in Section 3(a)(26) of the Exchange Act, (ii) any other United States or foreign securitiesexchange, futures exchange, commodities exchange or contract market, or (iii) any other securities exchange.“Subsidiary” shall have the meaning set forth in the Merger Agreement.“Total Economic Interest” means, as of any date of determination, the total economic interests of all Voting Securities then outstanding. Thepercentage of the Total Economic Interest Beneficially Owned by any Person as of any date of determination is the percentage of the Total Economic Interestthen Beneficially Owned by such Person, including pursuant to any swaps or any other agreements, transactions or series of transactions, whether any suchswap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise. - 20 -“Total Voting Power” means, as of any date of determination, the total number of votes that may be cast in the election of directors of the Company ifall Voting Securities then outstanding were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power BeneficiallyOwned by any Person as of any date of determination is the percentage of the Total Voting Power of the Company that is represented by the total number ofvotes that may be cast in the election of directors of the Company by Voting Securities then Beneficially Owned by such Person.“Transfer” means (i) any direct or indirect offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operationof law or otherwise), either voluntary or involuntary, or entry into any Contract, option or other arrangement or understanding with respect to any offer, sale,lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any capital stock or interest in anycapital stock or (ii) in respect of any capital stock or interest in any capital stock, to enter into any swap or any other agreement, transaction or series oftransactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of such capital stock or interest incapital stock, whether any such swap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise.“Transferor” means a Person that Transfers or proposes to Transfer; and “Transferee” means a Person to whom a Transfer is made or is proposed to be made.“Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.“Volume Limitation” has the meaning set forth in Section 1.1(c)(iii).“Voting Securities” means Company Common Shares and any other securities of the Company entitled to vote generally in the election of directors ofthe Company.5.2 Interpretation. Whenever used: the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”,and the words “hereof” and “herein” and similar words shall be construed as references to this Agreement as a whole and not limited to the particular Article,Section, Annex, Exhibit or Schedule in which the reference appears. Unless the context otherwise requires, references herein: (x) to Articles, Sections,Annexes, Exhibits and Schedules mean the Articles, Sections and Annexes of, and Exhibits and Schedules attached to, this Agreement; (y) to an agreement,instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extentpermitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto andany regulations promulgated thereunder. References to “$” or “dollars” means United States dollars. Any reference in this Agreement to any gender shallinclude all genders. The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. The Annexes, Exhibits andSchedules referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The - 21 -headings of the Articles and Sections are for convenience of reference only and do not affect the interpretation of any of the provisions hereof. If, and as oftenas, there is any change in the outstanding Company Common Shares by reason of share dividends, splits, reverse splits, spin-offs, split-ups, mergers,reclassifications, reorganizations, recapitalizations, combinations or exchanges of shares and the like, appropriate adjustment shall be made in the provisionsof this Agreement so as to fairly and equitably preserve, as far as practicable, the rights and obligations set forth herein that continue to be applicable on thedate of such change. No rule of construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement,as this Agreement is the product of negotiation between sophisticated parties advised by counsel.ARTICLE VIMISCELLANEOUS6.1 Term. This Agreement shall automatically terminate upon the earlier of (i) the termination of the Blackstone Shareholder Agreement and (ii) thedate that the Investor Beneficially Owns less than 5% of the Shares Beneficially Owned by the Investor as of immediately following the Closing (as definedin the Merger Agreement). If this Agreement is terminated pursuant to this Section 6.1, this Agreement shall immediately then be terminated and of no furtherforce and effect, except for the provisions set forth in this Article VI, which shall survive in accordance with their terms. Notwithstanding anything to thecontrary in this Agreement, Section 4.1 shall terminate upon the three month anniversary of the Closing.6.2 Notices. All notices, consents and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been dulygiven upon receipt) by hand delivery, by prepaid overnight courier (providing written proof of delivery), by confirmed e-mail transmission or by certified orregistered mail (return receipt requested and first class postage prepaid), addressed as follows: (i) if to the Company, to: Name: NXP Semiconductors N.V. Address: General Counsel High Tech Campus 60 5656 AG Eindhoven The Netherlands Email: guido.dierick@nxp.com Attention: Guido Dierick with a copy to (which shall not be considered notice): Name: Simpson Thacher & Bartlett LLP Address: 425 Lexington Avenue New York, New York 10017 Fax: (212) 455-2502 Email: ghorowitz@stblaw.com ecooper@stblaw.com Attention: Gary Horowitz Elizabeth Cooper - 22 -(ii) if to the Investor, to: Name: The Carlyle Group LP Address: 128 South Tryon Street Suite 1550 Charlotte, NC 28202 Fax: (704) 632-0201 Email: Bud.Watts@carlyle.com Attention: Claudius E. Watts IV with a copy to (which shall not be considered notice): Name: Skadden, Arps, Slate, Meagher & Flom LLP Address: Four Times Square New York, New York 10036 Fax: (212) 735-2000 Email: Kenton.King@skadden.com Allison.Schneirov@skadden.com Amr.Razzak@skadden.com Attention: Kenton J. King Allison R. Schneirov Amr Razzakor to such other address (i.e., e-mail address) for a party as shall be specified in a notice given in accordance with this Section 6.2; provided that any noticereceived by email transmission or otherwise at the addressee’s location on any Business Day after 5:00 P.M. (addressee’s local time) shall be deemed to havebeen received at 9:00 A.M. (addressee’s local time) on the next Business Day; provided, further that notice of any change to the address or any of the otherdetails specified in or pursuant to this Section 6.2 shall not be deemed to have been received until, and shall be deemed to have been received upon, the laterof the date specified in such notice or the date that is five (5) Business Days after such notice would otherwise be deemed to have been received pursuant tothis Section 6.2.6.3 Amendments and Waivers. Each of the parties hereto agrees that no provision of this Agreement may be amended or modified unless suchamendment or modification is in writing and signed by all parties hereto. No failure or delay by any party in exercising any right, power or privilegehereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided byApplicable Law.6.4 Successors and Assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto withoutthe prior written - 23 -consent of the other parties, provided that any proposed assignment by the Investor of any of its rights herein to any party other than to an Affiliate of theInvestor may be granted or withheld in the Company’s sole and absolute discretion, it being understood that it is the intention of the parties hereto that therights afforded to the Investor are personal to the Investor and are not transferable except as expressly provided herein. Subject to the preceding sentence, thisAgreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Any attemptedassignment in violation of this Section 6.4 shall be void.6.5 Severability. If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any ApplicableLaw or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term orother provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect theoriginal intent of the parties as closely as possible to the fullest extent permitted by Applicable Law in an acceptable manner to the end that the transactionscontemplated hereby are fulfilled to the extent possible.6.6 Counterparts. This Agreement may be executed in multiple counterparts, each of which when executed and delivered shall be deemed to be anoriginal but all of which taken together shall constitute one and the same agreement.6.7 Entire Agreement. This Agreement (including the documents and the instruments referred to in this Agreement), together with the ConfidentialityAgreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respectto the subject matter of this Agreement.6.8 Governing Law; Jurisdiction. This Agreement and all litigation, claims, actions, suits, hearings or proceedings (whether civil, criminal oradministrative and whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Agreement, any of the transactionscontemplated by this Agreement or the actions of the Company or the Investor in the negotiation, administration, performance and enforcement hereof orthereof, shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to any choice or conflict of Lawsprovision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than theState of New York. Each of the parties hereto hereby (a) expressly and irrevocably submits to the exclusive personal jurisdiction of any United States federalcourt located in the Southern District of the State of New York or any New York state court located in Manhattan in the event any dispute arises out of thisAgreement or any of the transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction bymotion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Agreement or any of the transactionscontemplated by this Agreement in any court other than the courts as described in (a) above; provided that each of the parties shall have the right to bringany action or proceeding for enforcement of a judgment entered by any United States federal court located in the State of New York or any New York statecourt in any other court or jurisdiction. Each party irrevocably consents to the service of - 24 -process outside the territorial jurisdiction of the courts referred to herein in any such action or proceeding in connection with this Agreement or thetransactions contemplated hereby by mailing copies thereof by registered United States mail, postage prepaid, return receipt requested, to its address asspecified in or pursuant to Section 6.2. However, the foregoing shall not limit the right of a party to effect service of process on the other party by any otherlegally available method.6.9 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THISAGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.EACH OF THE PARTIES HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHERPARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TOENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,(C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THISAGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.6.10 Specific Performance. The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunderwill cause irreparable injury to the non-breaching parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each partyhereby consents to the granting of injunctive relief by any court of competent jurisdiction to prevent breaches of this Agreement, to enforce specifically theterms and provisions hereof and to compel performance of such party’s obligations, this being in addition to any other remedy to which any party is entitledunder this Agreement. The parties further agree to waive any requirement for the securing or posting of any bond in connection with any such remedy, andthat such remedy shall be in addition to any other remedy to which a party is entitled at law or in equity.6.11 No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and each suchparty’s respective heirs, successors and permitted assigns; provided, that the Persons indemnified under Section 3.9 are intended third party beneficiaries ofSection 3.9, and Non-Liable Persons are intended third party beneficiaries of Section 6.12.6.12 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that any party heretomay be a partnership or limited liability company, each party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledgesthat no Persons other than the named parties hereto shall have any obligation hereunder and that it has no rights of recovery hereunder against, and norecourse hereunder or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any former,current or future director, officer, agent, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, - 25 -representative or employee of any Investor (or any of their heirs, successors or permitted assigns), or against any former, current or future director, officer,agent, employee, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative, general or limited partner, shareholder, manager ormember of any of the foregoing Persons, but in each case not including the named parties hereto (each, a “Non-Liable Person”), whether by or throughattempted piercing of the corporate veil, by or through a claim (whether in tort, contract or otherwise) by or on behalf of such party against any Non-LiablePerson, by the enforcement of any assignment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other Applicable Law orotherwise; it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by anyNon-Liable Person, as such, for any obligations of the applicable party under this Agreement or the transactions contemplated hereby, in respect of any oralrepresentations made or alleged to have been made in connection herewith or therewith or for any claim (whether in tort, contract or otherwise) based on, inrespect of or by reason of, such obligations or their creation.6.13 Scope of Agreement. Notwithstanding anything to the contrary provided elsewhere herein, none of the provisions of this Agreement shall in anyway limit the activities of The Carlyle Group LP and its affiliates in their businesses distinct from the private equity business of The Carlyle Group LP,provided that the Confidential Information is not made available to Representatives of The Carlyle Group LP and its affiliates who are not involved in theprivate equity business of The Carlyle Group LP. Should any Confidential Information be made available to a Representative of The Carlyle Group LP andits affiliates who is not involved in the private equity business of The Carlyle Group LP, such Representative shall be bound by this Agreement in accordancewith its terms. In addition, none of the provisions of this Agreement shall in any way apply to any portfolio company of an affiliate of The Carlyle Group LP,provided, however, that should the Confidential Information be made available to a Representative of any portfolio company of an affiliate of The CarlyleGroup LP, such Representative shall be bound by this Agreement in accordance with its terms.[Signature page follows] - 26 -IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their authorized representatives as of the date first above written. NXP Semiconductors N.V.By: /s/ Guido DierickName: Guido DierickTitle: Executive Vice President and General Counsel - 27 - CARLYLE PARTNERS IV CAYMAN, L.P. By: TC Group IV Cayman, L.P., its general partner By: CP IV GP, Ltd., its general partner By: /s/ Daniel A. D’Aniello Name: Daniel A. D’Aniello Title: Managing Director - 28 - CPIV COINVESTMENT CAYMAN, L.P. By: TC Group IV Cayman, L.P., its general partner By: CP IV GP, Ltd., its general partner By: /s/ Daniel A. D’Aniello Name: Daniel A. D’Aniello Title: Managing Director - 29 - CARLYLE ASIA PARTNERS II, L.P. By: CAP II General Partner, L.P., its general partner By: CAP II, Ltd., its general partner By: /s/ Daniel A. D’Aniello Name: Daniel A. D’Aniello Title: Managing Director - 30 - CAP II CO-INVESTMENT, L.P. By: CAP II General Partner, L.P., its general partner By: CAP II, Ltd., its general partner By: /s/ Daniel A. D’Aniello Name: Daniel A. D’Aniello Title: Managing Director - 31 - CEP II PARTICIPATIONS S.A.R.L SICAR By: /s/ Andrew Howlett-Bolton Name: Andrew Howlett-Bolton Title: Manager By: /s/ Andrew Howlett-Bolton Name: CEP II Managing GP Holdings, Ltd. Title: Manager, represented by Andrew Howlett-Bolton,Authorized Representative - 32 - CARLYLE JAPAN PARTNERS, L.P. By: CJP General Partner, L.P., its general partner By: Carlyle Japan Ltd., its general partner By: /s/ Daniel A. D’Aniello Name: Daniel A. D’Aniello Title: Managing Director - 33 - CJP CO-INVESTMENT, L.P. By: CJP General Partner, L.P., its general partner By: Carlyle Japan Ltd., its general partner By: /s/ Daniel A. Daniello Name: Daniel A. Daniello Title: Managing Director - 34 -EXHIBIT AFORM OF JOINDERThe undersigned is executing and delivering this Joinder Agreement pursuant to that certain NXP Semiconductors N.V. Shareholders Agreement,dated as of December 7, 2015 (as amended, restated, supplemented or otherwise modified in accordance with the terms thereof, the “ShareholdersAgreement”) by and among NXP Semiconductors N.V., a public company with limited liability (naamloze vennootschap) incorporated under the laws of TheNetherlands, registered with the Dutch Chamber of Commerce under number 34253298 and having its corporate seat (statutaire zetel) in Eindhoven, theshareholder of the Company whose name appears on the signature pages thereto (the “Investor”), and any other Persons who become a party thereto inaccordance with the terms thereof. Capitalized terms used but not defined in this Joinder Agreement shall have the respective meanings ascribed to suchterms in the Shareholders Agreement.By executing and delivering this Joinder Agreement to the Shareholders Agreement, the undersigned hereby adopts and approves theShareholders Agreement and agrees, effective commencing on the date hereof and as a condition to the undersigned’s becoming the Transferee of Shares, tobecome a party to, and to be bound by and comply with the provisions of, the Shareholders Agreement applicable to the Investor, in the same manner as if theundersigned were an original signatory to the Shareholders Agreement.The undersigned hereby represents and warrants that, pursuant to this Joinder Agreement and the Shareholders Agreement, it is a PermittedTransferee of the Investor and will be the lawful Beneficial Owner of [●] Shares as of the date hereof.The undersigned acknowledges and agrees that Section 6.2 through Section 6.12 of the Shareholders Agreement are incorporated herein byreference, mutatis mutandis.[Signature page follows] - 35 -Accordingly, the undersigned have executed and delivered this Joinder Agreement as of the day of , . TRANSFEREE Print Name: Address: Telephone: Facsimile: Email: - 36 -AGREED AND ACCEPTED as of the day of , . NXP Semiconductors N.V. By: Name: Title: [TRANSFEROR By: Name: Title: ] - 37 -Exhibit 10.27EXECUTION VERSION NXP SEMICONDUCTORS N.V. SHAREHOLDERS AGREEMENTDated as of December 7, 2015 TABLE OF CONTENTS Page ARTICLE I TRANSFERS; STANDSTILL PROVISIONS 1.1 Transfer Restrictions 2 1.2 Standstill Provisions 3 ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties of the Investor 4 2.2 Representations and Warranties of the Company 5 ARTICLE III REGISTRATION 3.1 Registration Statements 5 3.2 Withdrawal Rights 8 3.3 Holdback Agreements 8 3.4 Registration Procedures 8 3.5 Registration Expenses 14 3.6 Information to be Furnished by Investor 14 3.7 Registration Indemnification 15 ARTICLE IV CONFIDENTIALITY 4.1 Confidentiality 17 ARTICLE V DEFINITIONS 5.1 Defined Terms 19 5.2 Interpretation 23 ARTICLE VI MISCELLANEOUS 6.1 Term 24 6.2 Notices 24 6.3 Amendments and Waivers 26 6.4 Successors and Assigns 26 6.5 Severability 26 6.6 Counterparts 26 6.7 Entire Agreement 26 6.8 Governing Law; Jurisdiction 26 6.9 WAIVER OF JURY TRIAL 27 6.10 Specific Performance 27 6.11 No Third Party Beneficiaries 27 6.12 No Recourse 28 6.13 Scope of Agreement 28 - i -Exhibits Exhibit A Form of Joinder - ii -SHAREHOLDERS AGREEMENT, dated as of December 7, 2015, (this “Agreement”), among NXP Semiconductors N.V., a public company withlimited liability (naamloze vennootschap) incorporated under the laws of The Netherlands, registered with the Dutch Chamber of Commerce under number34253298 and having its corporate seat (statutaire zetel) in Eindhoven (the “Company”), and the shareholders of the Company whose names appear on thesignature pages hereto (such shareholders, together with any Permitted Transferee of such shareholders who becomes a party pursuant to Section 1.1 hereof,collectively, the “Investor”).W I T N E S S E T H:WHEREAS, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 1, 2015, by and among the Company,Freescale Semiconductor, Ltd., a Bermuda exempted company (“Freescale”), and Nimble Acquisition Limited, a Bermuda exempted company and a whollyowned subsidiary of the Company (“Merger Sub”), Merger Sub merged with and into Freescale (the “Merger”), and Freescale has continued as the survivingcompany and a wholly owned indirect subsidiary of the Company, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, each common share of Freescale, $0.01 par value, issued andoutstanding immediately prior to the Effective Time (other certain such shares as set forth in the Merger Agreement) shall be converted into one commonshare, par value $0.01 per share of the surviving corporation following the Merger (a “Surviving Corporation Share”), and each of the resulting SurvivingCorporation Shares shall automatically be exchanged for (subject to the terms and conditions in the Merger Agreement) the right to receive (i) 0.3521 of aduly authorized, validly issued and fully paid ordinary share (gewoon aandeel) of Parent, par value EUR 0.20 per share (a “Company Common Share”), and(ii) $6.25 in cash, without interest, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, in connection with the Merger, the shareholders of theCompany whose names appear on the signature pages hereto received Company Common Shares (the “Shares”) representing, in the aggregate, approximately9.62% of the outstanding Company Common Shares, after giving effect to the issuance of Company Common Shares in the Merger; andWHEREAS, each of the parties hereto wishes to set forth in this Agreement certain terms and conditions regarding the Investor’s ownership of theShares and to establish certain rights, restrictions and obligations of the Investor with respect to the Shares. - 1 -NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agreeas follows:ARTICLE ITRANSFERS; STANDSTILL PROVISIONS1.1 Transfer Restrictions.(a) Other than solely in the case of Permitted Transfers, the Investor shall not Transfer any Shares prior to the date that is three (3) months after theClosing (such period, the “Restricted Period”).(b) “Permitted Transfers” mean, in each case, so long as such Transfer is in accordance with Applicable Law:(i) a Transfer to a Permitted Transferee of the Investor, so long as such Permitted Transferee, in connection with such Transfer, executes ajoinder to this Agreement in the form attached as Exhibit A hereto; or(ii) a Transfer solely to tender into a tender or exchange offer commenced by a third party (for the avoidance of doubt, not in violation ofthis Agreement) or by the Company; provided, that with respect to an unsolicited tender or exchange offer commenced by a third party, such Transfershall be permitted only if (A) such tender or exchange offer includes an irrevocable minimum tender condition of no less than a majority of the then-outstanding Company Common Shares and (B) as of the expiration of such offer (x) no shareholder rights plan or analogous “poison pill” of theCompany is in effect or (y) the Board of Directors of the Company (the “Board”) has affirmatively publicly recommended to the Company’sshareholders that such shareholders tender into such offer and has not publicly withdrawn or changed such recommendation.(c) Notwithstanding anything to the contrary contained herein, the Investor shall not Transfer any Shares:(i) other than in accordance with all Applicable Laws and the other terms and conditions of this Agreement;(ii) except in a Permitted Transfer, in one or more transactions in which any Person or Group, to the Investor’s knowledge, after givingeffect to such Transfer, would Beneficially Own 5% or more of the Total Voting Power or the Total Economic Interest; provided that the restriction inthis clause (ii) shall not apply to Transfers effected solely through a bona fide Underwritten Offering pursuant to an exercise of the registration rightsprovided in this Agreement;(iii) except in a Permitted Transfer, in each 90-day period following the Restricted Period in an amount for the Investor (together with itsAffiliates), in excess of 33 1/3% of the Shares held by the Investor (together with its Affiliates), as applicable, as of immediately following the Merger(the “Volume Limitation”); provided, that the Volume Limitation shall not apply to Transfers effected solely through an offering pursuant to anexercise of the registration rights provided in this Agreement. - 2 -(d) With respect to the Investor, any certificates for Shares shall bear a legend or legends (and appropriate comparable notations or otherarrangements will be made with respect to any uncertificated shares) referencing restrictions on Transfer of such Shares under the Securities Act and under thisAgreement, which legend shall state in substance:“The securities evidenced by this certificate may not be offered or sold, transferred, pledged, hypothecated or otherwise disposed ofexcept (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), (ii) to theextent applicable, pursuant to Rule 144 under the Securities Act (or any similar rule under the Securities Act relating to the disposition ofsecurities), or (iii) pursuant to an available exemption from registration under the Securities Act.The securities evidenced by this certificate are subject to restrictions on transfer set forth in a Shareholders Agreement dated as ofDecember 7, 2015, among the Company and certain other parties thereto (a copy of which is on file with the Secretary of the Company).”(e) Notwithstanding the foregoing subsection (d), the Investor shall be entitled to receive from the Company new certificates for a like number ofShares not bearing such legend (or the elimination or termination of such notations or arrangements) upon the request of the Investor (i) at such time as suchrestrictions are no longer applicable, and (ii) with respect to the restriction on Transfer of such Shares under the Securities Act or any other Applicable Law,unless such Shares are sold pursuant to a registration statement, subject to delivery of an opinion of counsel to the Investor, which opinion is reasonablysatisfactory in form and substance to the Company and its counsel, that the restriction referenced in such legend (or such notations or arrangements) is nolonger required in order to ensure compliance with the Securities Act or any such other Applicable Law.1.2 Standstill Provisions.(a) During the Standstill Period, the Investor shall not, directly or indirectly, shall not permit any of its Controlled Affiliates, directly orindirectly, to, and shall not permit any of its respective Investment Funds, directly or indirectly, to (i) acquire, agree to acquire, propose or offer to acquire, orfacilitate the acquisition or ownership of, Voting Securities, or securities of the Company that are convertible, exchangeable or exercisable into VotingSecurities, other than (A) as a result of any share split, share dividend or subdivision of Voting Securities or (B) any acquisition of Company Common Sharesby any Non-Private Equity Business, (ii) deposit any Voting Securities into a voting trust or similar Contract or subject any Voting Securities to any votingagreement, pooling arrangement or similar arrangement or other Contract (other than the organizational documents of the Investor), or grant any proxy withrespect to any Voting Securities (other than to the Company or a Person specified by the Company in a proxy card provided to shareholders of the Companyby or on behalf of the Company), (iii) enter, agree to enter, propose or offer to enter into or facilitate any merger, business combination, recapitalization,restructuring, change in control transaction or other similar extraordinary transaction involving the Company or any of its Subsidiaries (unless suchtransaction is affirmatively publicly recommended by the Board and there has otherwise been no breach of this - 3 -Section 1.2 in connection with or relating to such transaction), (iv) make, or in any way participate or engage in, any “solicitation” of “proxies” (as suchterms are used in the proxy rules of the Commission) to vote, or advise or knowingly influence any Person with respect to the voting of, any VotingSecurities, (v) call, or seek to call, a meeting of the shareholders of the Company or initiate any shareholder proposal for action by shareholders of theCompany, (vi) form, join or in any way participate in a Group (other than with its Permitted Transferee that is bound by the restrictions of this Section 1.2(a)),with respect to any Voting Securities, (vii) otherwise act, alone or in concert with others, to seek to Control or influence the management or the policies of theCompany, (viii) publicly disclose any intention, plan, arrangement or other Contract prohibited by, or inconsistent with, the foregoing, (ix) advise or assist orknowingly encourage or enter into any discussions, negotiations, agreements, or arrangements or other Contracts with any other Persons in connection withthe foregoing, (x) request the Company to amend or waive any provision of this Section 1.2 (including this clause (x)) or (xi) take any action that wouldreasonably be expected to require the Company to make a public announcement regarding the possibility of a business combination, merger or other type oftransaction or matter described in this Section 1.2.(b) “Standstill Period” shall mean, from the date hereof until the date that is twelve (12) months following the date hereof.ARTICLE IIREPRESENTATIONS AND WARRANTIES2.1 Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Company as follows:(a) The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. It has allrequisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.(b) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement do notand will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals whichhave been obtained) under, (x) Applicable Law, (y) its organizational documents or (z) any Contract or agreement to which it is a party.(c) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement havebeen duly authorized by all necessary limited partnership or other analogous action on its part. This Agreement has been duly executed and deliveredby the Investor and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and bindingobligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relatingto or affecting creditors’ rights and to general principles of equity. - 4 -(d) The Investor does not Beneficially Own any Voting Securities as of the date hereof, other than any Voting Securities acquired in theMerger.2.2 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor as follows:(a) The Company is a public company with limited liability (naamloze vennootschap) duly incorporated under the laws of TheNetherlands. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under thisAgreement.(b) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consentsor approvals which have been obtained) under, (x) Applicable Law, (y) the organizational documents of the Company or (z) any Contract or agreementto which the Company is a party.(c) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed anddelivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid andbinding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency and other lawsof general applicability relating to or affecting creditors’ rights and to general principles of equity.(d) The Company is not a party to any agreement or understanding whereby any Person, other than as set forth herein or in the OtherShareholder Agreements, has any registration rights with respect to the Company’s securities.ARTICLE IIIREGISTRATION3.1 Registration Statements.(a) Subject to the terms and conditions hereof, the Company shall file with the Commission and shall use reasonable best efforts to cause to bedeclared effective by the Commission upon the expiration of the Restricted Period, a registration statement on Form F-1, Form F-3 or such other form underthe Securities Act then available to the Company (the “Shelf Registration Statement”), covering an amount of Registrable Securities requested by theInvestor that equals or is greater than the Registrable Amount and providing for the resale by the Investor from time to time on a delayed or continuous basispursuant to Rule 415 under the Securities Act of any or all of the Registrable Securities then held by the Investor. - 5 -(b)(i) If, from and after the expiration of the Restricted Period, the Company has registered or has determined to register any CompanyCommon Shares for its own account or for the account of other securityholders of the Company on any registration form (other than Form F-4 or S-8)which permits the inclusion of the Registrable Securities, including as a supplement to a Shelf Registration Statement to be filed pursuant to Rule424(b)(7) under the Securities Act (a “Piggyback Registration”), the Company will give the Investor written notice thereof promptly (but in no eventless than ten (10) Business Days prior to the anticipated filing date) and, subject to Section 3.1(b)(i), shall include in such registration all RegistrableSecurities requested to be included therein pursuant to the written request of the Investor received on or before the second Business Day prior to theanticipated filing date. If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company and the lead managingunderwriter(s) advise the Company and the Investor that, in its reasonable opinion, the inclusion of all of the Company Common Shares proposed to beincluded in such registration would adversely affect the success of such offering, the Company shall include in such registration: (i) first, the number ofCompany Common Shares that the Company proposes to sell; and (ii) second, the number of Company Common Shares requested to be includedtherein by the Investor and Other Holders, pro rata among all such holders on the basis of the number of Company Common Shares requested to beincluded therein by all such holders or as such holders and the Company may otherwise agree.(ii) If a Piggyback Registration is initiated as an underwritten offering on behalf of another securityholder of the Company, and the leadmanaging underwriter(s) advise the Company that, in its reasonable opinion, the inclusion of all of the Company Common Shares proposed to beincluded in such registration would adversely affect the success of such offering, then the Company shall include in such registration: (i) first, thenumber of Company Common Shares requested to be included therein by such other securityholder, the Investor and the Other Holders, pro rata amongall such holders on the basis of the number of Company Common Shares requested to be included therein by all such holders or as such holders and theCompany may otherwise agree; and (ii) second, the number of Company Common Shares that the Company proposes to sell.(iii) If any Piggyback Registration is a primary underwritten offering, the Company shall have the right to select the managing underwriteror underwriters to administer any such offering.(c) Subject to Section 3.1(d), the Company will use commercially reasonable efforts to keep the Shelf Registration Statement continuouslyeffective until the earlier of (i) three (3) years after the Shelf Registration Statement has been declared effective; (ii) the date on which all RegistrableSecurities covered by the Shelf Registration Statement have been sold thereunder, or otherwise cease to be Registrable Securities; and (iii) the date on whichthis agreement terminates pursuant to Section 6.1.(d) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providingwritten notice to the Investor, to - 6 -require the Investor to suspend sales of Registrable Securities under the Shelf Registration Statement during any Blackout Period. The Investor mayrecommence effecting sales of the Registrable Securities pursuant to the Shelf Registration Statement (or such filings) following further notice to such effectfrom the Company, which shall be given by the Company promptly following the expiration of any Blackout Period. After the expiration of any BlackoutPeriod and without any further request from the Investor, the Company to the extent necessary shall as promptly as reasonably practicable prepare a post-effective amendment or supplement to the Shelf Registration Statement or the Prospectus, or any document incorporated therein by reference, or file anyother required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untruestatement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they weremade, not misleading.(e) At any time that a Shelf Registration Statement is effective, but subject to a limit of two (2) times only, the Investor may deliver a notice (a“Take-Down Notice”) to the Company that it intends to sell all or part of its Registrable Securities in an Underwritten Offering (including any UnderwrittenOffering where the plan of distribution set forth in the applicable Take-Down Notice includes a customary “road show” (including an “electronic road show”)or other substantial marketing effort by the Company and the underwriters (a “Marketed Underwritten Shelf Offering”)); provided, that the Investor may notdeliver a Take-Down Notice prior to six (6) months after the Closing; provided, further, that the Investor may not deliver a Take-Down Notice for aUnderwritten Offering or a Marketed Underwritten Shelf Offering unless the Registrable Securities requested to be sold in such offering have an aggregateoffering price (based on the last reported sale price per share on the most recent trading day prior to such date on the principal securities exchange or marketon which they are traded or, if the Company Common Shares are no longer so traded, the fair value thereof as determined in good faith by the Investorseeking registration of such Registrable Securities) of at least $500,000,000; provided, further, that if the lead managing underwriter(s) advises the Companyand the Investor that, in its reasonable opinion, the inclusion of all of the securities sought to be sold in connection with such offering would adversely affectthe success thereof, then the Company shall include in such offering only such securities as the Company is advised by such lead managing underwriter(s)can be sold without such adverse effect as follows and in the following order of priority: (i) first, up to the number of Company Common Shares requested tobe included by the Investor in its Take-Down Notice and the Other Holders, pro rata among all such holders on the basis of the number of Company CommonShares requested to be included therein by all such holders, (ii) second, securities the Company proposes to sell and (iii) three, all other securities of theCompany duly requested to be included in such offering, pro rata on the basis of the amount of such other securities requested to be included or such otherallocation method determined by the Company.(f) The Company shall not be obligated to effect any Marketed Underwritten Shelf Offering within four (4) months of a prior MarketedUnderwritten Shelf Offering. The Company shall be entitled to postpone (upon written notice to the Investor) the filing or the effectiveness of anyUnderwritten Offering in the event of a Blackout Period until the expiration of the applicable Blackout Period. - 7 -(g) The Company and the Investor shall mutually agree upon the selection of all investment banker(s) and manager(s) (who shall be a lenderunder the Company’s credit facilities at the time of such offering) that will serve as managing underwriters (including which such managing underwriters willserve as lead or co-lead) and underwriters with respect to any Marketed Underwritten Shelf Offering.3.2 Withdrawal Rights. The Investor having notified or directed the Company to include any or all of its Registrable Securities in a registrationstatement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securitiesdesignated by it for registration by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the eventof any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shallcontinue to be Registrable Securities for all purposes of this Agreement (subject to the other terms and conditions of this Agreement). No such withdrawalshall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn, unless such withdrawal shall reduce the number ofRegistrable Securities sought to be included in any registration below the Registrable Amount.3.3 Holdback Agreements. In connection with any Underwritten Offering, the Investor agrees to enter into customary “lock-up” agreements restrictingthe public sale or distribution of equity securities of the Company (including sales pursuant to Rule 144 under the Securities Act) to the extent required inwriting by the lead managing underwriter(s) with respect to an applicable Underwritten Offering for a period of not more than ninety (90) days after the dateof the “final” prospectus (or “final” prospectus supplement if the Underwritten Offering is made pursuant to a Shelf Registration Statement), pursuant towhich such Underwritten Offering shall be made, plus, if applicable, an extension period, as may be proposed by the lead managing underwriter(s) to addressFINRA regulations regarding the publishing of research, or such other period as is required by the lead managing underwriter(s); provided, however, theInvestor shall not be subject to a lock-up period longer than the lock-up period to which the officers and directors of the Company are subject.In the event of any Marketed Underwritten Shelf Offering, the Company will not effect any public sale or distribution of any common equity (orsecurities convertible into or exchangeable or exercisable for common equity) (other than a registration statement on Form F-4, Form S-8 or any comparableor successor forms thereto) for its own account, within sixty (60) days, after the effective date of such registration except as may otherwise be agreed betweenthe Company and the lead managing underwriter(s) of such Marketed Underwritten Shelf Offering.3.4 Registration Procedures.(a) If and whenever the Company is required to use commercially reasonable efforts to effect the registration of any Registrable Securities underthe Securities Act as provided in Section 3.1, including the Shelf Registration Statement and a Piggyback Registration, the Company shall as expeditiouslyas reasonably practicable:(i) prepare and file with the Commission a registration statement to effect such registration in accordance with the intended method ormethods of - 8 -distribution of such securities and thereafter use commercially reasonable efforts to cause such registration statement to become and remain effectivepursuant to the terms of this Article III; provided, however, that the Company may discontinue any registration of its securities which are notRegistrable Securities at any time prior to the effective date of the registration statement relating thereto; provided, further, that before filing suchregistration statement or any amendments thereto, the Company will furnish to the Investor and the Other Holders (if they are including CompanyCommon Shares in such registration) (“Selling Shareholder”), its counsel and the lead managing underwriter(s), if any, copies of all such documentsproposed to be filed, which documents will be subject to the review and reasonable comment of such counsel, and other documents reasonablyrequested by such counsel, including any comment letter from the Commission, and, if requested by such counsel, provide such counsel reasonableopportunity to participate in the preparation of such registration statement and each prospectus included therein and such other opportunities toconduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers,accountants and other advisors;(ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used inconnection therewith as may be necessary to keep such registration statement effective pursuant to the terms of this Article III or necessary to facilitatethe disposition of the Registrable Securities covered by such registration statement and prospectus (including causing the prospectus contained in suchregistration statement to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 or anysimilar rule that may be adopted under the Securities Act), and comply in all material respects with the provisions of the Securities Act with respect tothe disposition of all securities, including the Registrable Securities, covered by such registration statement;(iii) if requested by the lead managing underwriter(s), if any, or the Investor in connection with an Underwritten Offering, promptly includein a prospectus supplement or post-effective amendment, such information as the lead managing underwriter(s), if any, and the Investor may reasonablyrequest in order to permit the intended method of distribution of such securities and make all required filings of such prospectus supplement or suchpost-effective amendment as soon as reasonably practicable after the Company has received such request; provided, however, that the Company shallnot be required to take any actions under this Section 3.4(a)(iii) that are not, based on the advice of counsel for the Company, in compliance withApplicable Law;(iv) furnish to the Selling Shareholder and each underwriter, if any, of the securities being sold by the Selling Shareholder such number ofconformed copies of such registration statement and of each amendment and supplement thereto, such number of copies of the prospectus contained insuch registration statement (including each preliminary prospectus and any summary prospectus) and each free writing prospectus (as defined in Rule405 of the Securities Act) (a “Free Writing Prospectus”) utilized in connection therewith and any other prospectus filed under Rule 424 under theSecurities Act, in conformity with the requirements of the Securities Act, and such other documents as the Selling Shareholder and underwriter, if any,may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Selling Shareholder; - 9 -(v) use commercially reasonable efforts to register or qualify or cooperate with the Selling Shareholder, the underwriters, if any, and theirrespective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such RegistrableSecurities covered by such registration statement under such other securities laws or “blue sky” laws of such jurisdictions as the Selling Shareholderand any underwriter of the securities being sold by the Selling Shareholder shall reasonably request, and to keep each such registration or qualification(or exemption therefrom) effective during the period such registration statement is required to be kept effective and take any other action which may benecessary or reasonably advisable to enable the Selling Shareholder and underwriters to consummate the disposition in such jurisdictions of theRegistrable Securities owned by the Selling Shareholder, except that the Company shall not for any such purpose be required to (A) qualify generallyto do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (v) be obligated to be soqualified, (B) subject itself to taxation in any such jurisdiction where it would not otherwise be obligated to do so, but for this clause (v), or (C) file ageneral consent to service of process in any such jurisdiction;(vi) use commercially reasonable efforts (including seeking to cure in the Company’s listing or inclusion application any deficienciescited by the exchange or market) to list or include all Registrable Securities on each securities exchange on which similar securities issued by theCompany are then listed or included;(vii) use commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered withor approved by such other governmental agencies or authorities as may be reasonably necessary to enable the Selling Shareholder to consummate thedisposition of such Registrable Securities;(viii) use commercially reasonable efforts to provide and cause to be maintained a transfer agent and registrar for all Registrable Securitiescovered by such registration statement from and after a date not later than the effective date of such registration statement;(ix) use commercially reasonable efforts to prepare and file in a timely manner all documents and reports required by the Exchange Act;(x) use commercially reasonable efforts to make generally available to its stockholders, as soon as reasonably practicable, earningsstatements (which need not be audited) covering at least 12 months that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158thereunder;(xi) enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwrittenofferings) and use - 10 -commercially reasonable efforts to take all such other actions reasonably requested by the Investor in connection therewith (including thosereasonably requested by the lead managing underwriter(s), if any) to expedite or facilitate the disposition of such Registrable Securities, and in suchconnection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Offering (A) make suchrepresentations and warranties to the Investor and the underwriters, if any, with respect to the business of the Company and its subsidiaries, and theregistration statement, prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form,substance and scope as are customarily made by issuers in underwritten offerings, and, if true, confirm the same if and when requested, (B) if anunderwriting agreement has been entered into, the same shall contain indemnification provisions and procedures substantially to the effect set forth inSection 3.9 hereof with respect to all parties to be indemnified pursuant to said Section except as otherwise agreed by the Selling Shareholder and(C) deliver such documents and certificates as reasonably requested by the Selling Shareholder, its counsel and the lead managing underwriters(s), ifany, to evidence the continued validity of the representations and warranties made pursuant to sub-clause (A) above and to evidence compliance withany customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at eachclosing under such underwriting or similar agreement, or as and to the extent required thereunder;(xii) in connection with an Underwritten Offering or otherwise required in connection with the disposition of the Registrable Securities,use commercially reasonable efforts to obtain for the Selling Shareholder and underwriter(s) (A) opinions of counsel for the Company, covering thematters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the SellingShareholder and underwriters and (B) “comfort” letters and updates thereof (or, in the case of any such Person which does not satisfy the conditions forreceipt of a “comfort” letter specified in Statement on Auditing Standards No. 72 or any successor accounting standard thereto, an “agreed uponprocedures” letter) signed by the independent public accountants who have certified the Company’s financial statements and, to the extent required,any other financial statements included or incorporated by reference in such registration statement, covering the matters customarily covered in“comfort” letters in connection with underwritten offerings;(xiii) make available for inspection by the Selling Shareholder, any underwriter participating in any disposition pursuant to anyregistration statement, and any attorney, accountant or other agent or representative retained in connection with such offering by the SellingShareholder or underwriter (collectively, the “Inspectors”), financial and other records, pertinent corporate documents and instruments of the Company(collectively, the “Records”), as shall be reasonably necessary, or as shall otherwise be reasonably requested, to enable them to exercise their duediligence responsibility, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each casereasonably requested by any such representative, underwriter, attorney, agent or accountant in connection with such registration statement (in eachcase subject to the Selling Shareholder and/or Inspectors entering into customary confidentiality agreement on terms and conditions reasonably - 11 -acceptable to the Company as may be reasonably requested by the Company); provided, further, that the Selling Shareholder agrees that it will, uponreceipt of a written request to disclose such Records from a court of competent jurisdiction or by another Governmental Authority, give notice to theCompany and allow the Company, at its expense, to undertake appropriate action seeking to prevent disclosure of the Records deemed confidential;(xiv) as promptly as practicable notify in writing the Selling Shareholder and the underwriters, if any, of the following events: (A) thefiling of the registration statement, any amendment thereto, the prospectus or any prospectus supplement related thereto or post-effective amendmentto the registration statement or any Free Writing Prospectus utilized in connection therewith, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (B) any request by the Commission or any other U.S. or state governmentalauthority for amendments or supplements to the registration statement or the prospectus or for additional information; (C) the issuance by theCommission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for thatpurpose; (D) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for saleunder the securities or “blue sky” laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (E) if at any time therepresentations and warranties of the Company contained in any mutual agreement (including any underwriting agreement) contemplated bySection 3.4(a)(xi) cease to be true and correct in any material respect; and (F) upon the happening of any event that makes any statement made in suchregistration statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any materialrespect or that requires the making of any changes in such registration statement, prospectus or documents so that, in the case of the registrationstatement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to makethe statements therein not misleading, and that in the case of the prospectus, it will not contain any untrue statement of a material fact or omit to stateany material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and,at the request of any Selling Shareholder, promptly prepare and furnish to the Selling Shareholder a reasonable number of copies of a supplement to oran amendment of such registration statement or prospectus as may be necessary so that, as thereafter delivered to the purchasers of such RegistrableSecurities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;(xv) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement,or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction atthe earliest reasonable practicable date, except that, subject to the requirements of Section 3.4(a)(v), the Company shall not for any such purpose berequired to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this - 12 -clause (xiii) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction wherein it would not be obligated to do so but for therequirements of this clause (xiii) or (C) file a general consent to service of process in any such jurisdiction;(xvi) cooperate with the Selling Shareholder and the lead managing underwriter(s) to facilitate the timely preparation and delivery ofcertificates (which shall not bear any restrictive legends unless required under Applicable Law) representing securities sold under any registrationstatement, and enable such securities to be in such denominations and registered in such names as the lead managing underwriter(s) or the SellingShareholder may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registrationstatement a supply of such certificates;(xvii) cooperate with the Selling Shareholder and each underwriter or agent participating in the disposition of any Registrable Securitiesand their respective counsel in connection with any filings required to be made with FINRA; and(xviii) have appropriate officers of the Company prepare and make presentations at a reasonable number of “road shows” and beforeanalysts and rating agencies, as the case may be, and other information meetings reasonably organized by the underwriters and otherwise usecommercially reasonable efforts to cooperate as reasonably requested by the Selling Shareholder and the underwriters in the offering, marketing orselling of the Registrable Securities.(b) The Company may require the Selling Shareholder and each underwriter, if any, to furnish the Company in writing such informationregarding the Selling Shareholder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably requestin writing to complete or amend the information required by such registration statement.(c) The Selling Shareholder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described inclauses (B), (C), (D), (E) and (F) of Section 3.4(a)(xiv), the Selling Shareholder shall forthwith discontinue its disposition of Registrable Securities pursuant tothe applicable registration statement and prospectus relating thereto until receipt of the copies of the supplemented or amended prospectus contemplated bySection 3.4(a)(xiii), or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and has received copies of anyadditional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus; provided, however, that the Companyshall extend the time periods under Section 3.1(c) with respect to the length of time that the effectiveness of a registration statement must be maintained bythe amount of time the holder is required to discontinue disposition of such securities.(d) With a view to making available to the Investor the benefits of Rule 144 under the Securities Act and any other rule or regulation of theCommission that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a registration statement,the Company shall:(i) use commercially reasonable efforts to make and keep public information available, as those terms are understood and defined in Rule144 under the Securities Act; - 13 -(ii) use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of theCompany under the Exchange Act, at any time when the Company is subject to such reporting requirements; and(iii) furnish to the Investor so long as it owns Registrable Securities, promptly upon request, a written statement by the Company as to itscompliance with the reporting requirements of Rule 144 under the Securities Act and of the Exchange Act, a copy of the most recent annual orquarterly report of the Company, and such other reports and documents so filed or furnished by the Company with the Commission as the Investor mayreasonably request in connection with the sale of Registrable Securities without registration (in each case to the extent not readily publicly available).3.5 Registration Expenses. The Company shall pay all fees and expenses incident to the Company’s performance of its obligations under this ArticleIII, including (a) all registration and filing fees, including all fees and expenses of compliance with securities and “blue sky” laws (including the reasonableand documented fees and disbursements of counsel for the underwriters in connection with “blue sky” qualifications of the Registrable Securities pursuant toSection 3.4(a)(v)) and all fees and expenses associated with filings required to be made with FINRA (including, if applicable, the fees and expenses of any“qualified independent underwriter” as such term is defined in FINRA Rule 5121), (b) all printing (including expenses of printing certificates for theRegistrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses if the printing of prospectuses isrequested by the Investor) and copying expenses, (c) all messenger, telephone and delivery expenses, (d) expenses of the Company incurred in connectionwith any “road show”, (e) except as provided in this Section 3.5, any fees and disbursements customarily paid in issues and sales of securities (including thefees and expenses of any experts retained by the Company in connection with any registration statement), and (f) all fees and expenses of the Company’sindependent certified public accountants and counsel (including with respect to “comfort” letters and opinions). The Investor shall pay the fees and expensesof its own counsel and the Investor’s portion of all underwriting discounts and commissions and transfer taxes, if any, relating to the sale of its RegistrableSecurities pursuant to any registration.3.6 Information to be Furnished by Investor. Not less than seven (7) Business Days before the expected filing date of each registration statementpursuant to this Agreement, the Company shall notify the Investor (if it has timely provided the requisite notice hereunder entitling it to register RegistrableSecurities in such registration statement) of the information, documents and instruments from it that the Company or any underwriter reasonably requests inconnection with such registration statement, including, if applicable, a questionnaire, custody agreement, power of attorney, lock-up letter and underwritingagreement (the “Requested Information”). If the Company has not received, on or before the second Business Day before the expected filing date, theRequested Information from the Investor, the Company may file the registration statement without including Registrable Securities of the Investor. Thefailure to so include in any registration statement the Registrable Securities of the Investor (with regard to that registration statement) shall not result in anyliability on the part of the Company to the Investor. - 14 -3.7 Registration Indemnification.(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by Law, the Selling Shareholder and its Affiliates andtheir respective officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each Person who controls(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Selling Shareholder or such other indemnified Person andthe officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controlling Person, eachunderwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) suchunderwriter, from and against all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonableattorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, the “Losses”), as incurred, arising out of,caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement,prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto or any omission (or alleged omission) of a materialfact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and(without limitation of the preceding portions of this Section 3.7(a)) will reimburse the Selling Shareholder, each of its Affiliates, and each of their respectiveofficers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each such Person who controls the SellingShareholder and the officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controllingPerson, each such underwriter and each such Person who controls any such underwriter, for any legal and any other expenses reasonably incurred inconnection with investigating and defending or settling any such claim, Loss, damage, liability or action, except that, with respect to a Selling Shareholder,the Company will not be liable to the extent that any such claim, Loss, damage, liability or action arises out of or is based upon an untrue statement oralleged untrue statement in or omission or alleged omission from any such registration statement, prospectus or preliminary prospectus or Free WritingProspectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by such SellingShareholder expressly for use therein.(b) In connection with any registration statement in which the Selling Shareholder is participating, the Selling Shareholder shall indemnify theCompany, its directors and officers, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the ExchangeAct) the Company, from and against all Losses, as incurred, arising out of, caused by, resulting from or relating to any untrue statement (or alleged untruestatement) of material fact contained in the registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment orsupplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in lightof the circumstances under which they were made, not misleading, and (without limitation of the preceding portions of this Section 3.7(b)) will reimburse the - 15 -Company, its directors and officers and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of theExchange Act) for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss,damage, liability or action, in each case solely to the extent, but only to the extent, that such untrue statement or omission is made in such registrationstatement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto in reliance upon and in conformity withwritten information furnished to the Company by the Selling Shareholder expressly for inclusion in such registration statement, prospectus or preliminaryprospectus or Free Writing Prospectus or any amendment or supplement thereto. Notwithstanding the foregoing, the Selling Shareholder shall not be liableunder this Section 3.7(b) for amounts in excess of the net proceeds received by it in the offering giving rise to such liability.(c) Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect towhich it seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to theextent that the indemnifying party has been actually and materially prejudiced by such failure to provide such notice on a timely basis.(d) In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencementthereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, to assume the defense thereof, with counselreasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume thedefense thereof and acknowledging the obligations of the indemnifying party with respect to such proceeding, the indemnifying party will not (so long as itshall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnifiedparty hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonablecosts of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may bedefenses available to it which are different from or in addition to the defenses available to such indemnifying party and, as a result, a conflict of interest existsor (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or would reasonably beexpected to be materially prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for theexpenses incurred in connection with retaining one separate legal counsel (for the avoidance of doubt, for all indemnified parties in connection therewith)).For the avoidance of doubt, notwithstanding any such assumption by an indemnifying party, the indemnified party shall have the right to employ separatecounsel in any such matter and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified partyexcept as provided in the previous sentence. An indemnifying party shall not be liable for any settlement of an action or claim effected without its consent(which consent shall not be unreasonably withheld, conditioned or delayed). No matter shall be settled by an indemnifying party without the consent of theindemnified party (which consent shall not be unreasonably withheld, conditioned or delayed), unless such settlement (x) includes as an unconditional termthereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation, and (y) does notinclude any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party. - 16 -(e) The indemnification provided for under this Agreement shall survive the Transfer of the Registrable Securities and the termination of thisAgreement.(f) If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, anyPerson who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses withrespect to which such Person would be entitled to such indemnification but for such reason or reasons, in such proportion as is appropriate to reflect therelative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements oromissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of theindemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission tostate a material fact relates to information supplied by the indemnifying party or by the indemnified party, the Persons’ relative knowledge and access toinformation concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and otherequitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contributionwere determined by pro rata or per capita allocation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the SecuritiesAct) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, theSelling Shareholder shall not be required to make a contribution in excess of the net proceeds received by it from its sale of Registrable Securities inconnection with the offering that gave rise to the contribution obligation.ARTICLE IVCONFIDENTIALITY4.1 Confidentiality. The Investor hereby agrees that all Confidential Information with respect to the Company, its Subsidiaries and its and theirbusinesses, finances and operations shall be kept confidential by it and shall not be disclosed by it in any manner whatsoever, except as expressly permittedby this Section 4.1. Any Confidential Information may be disclosed:(a) by the Investor (x) to any of its Affiliates (other than any portfolio companies thereof), (y) to its or such Affiliate’s respective directors,managers, members, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors thereof)and (z) in the case of any Investor that is a limited partnership, limited liability company or other investment vehicle, to any current or prospective direct orindirect general partner, limited partner, member, equityholder or management company of such Investor or any former direct or indirect general partner,limited partner, member, equityholder or management company which retains an economic interest in such Investor (or any employee, attorney, accountant,consultant, banker or financial advisor or representative of any of the foregoing) (each of the Persons described in clauses (x), (y) and (z), - 17 -collectively, for purposes of this Section 4.1 and the definition of Confidential Information, “Representatives”), in each case, solely if and to the extent anyRepresentative needs to be provided such Confidential Information to assist such Investor or its Affiliates in evaluating or reviewing its direct or indirectinvestment in the Company, including in connection with the disposition thereof, and each Representative of the Investor shall be deemed to be bound bythe provisions of this Section 4.1 and such Investor shall be responsible for any breach of this Section 4.1 by any such Representative to the same extent as ifsuch breach had been committed by the Investor; provided, further, that the Investor hereby acknowledges that it is aware, and it will advise itsRepresentatives to whom it provides Confidential Information, that such Confidential Information may include material non-public information and thatapplicable securities laws impose restrictions on trading securities when in possession of such information and on communicating such information to anyother person under circumstances in which it is reasonably foreseeable that such person is likely to trade in such securities;(b) by the Investor or any of its Representatives to the extent the Company consents in writing;(c) by the Investor or any of its Representatives to a potential Transferee (so long as such Transfer is permitted hereunder); provided, that suchTransferee agrees to be bound by the provisions of this Section 4.1 (or a confidentiality agreement with the Company having restrictions substantially similarto (and no less restrictive than) this Section 4.1) and such Investor shall be responsible for any breach of this Section 4.1 (or such confidentiality agreement)by any such potential Transferee to the same extent as if such breach had been committed by the Investor; and(d) by the Investor or any of its Representatives to the extent that such Investor or Representative has received advice from its counsel that it islegally compelled to do so or is required to do so to comply with Applicable Law or legal process or Governmental Authority request or the rules of anysecurities exchange on which its securities are listed or the rules and regulations of any SRO; provided, that prior to making such disclosure, such Investor orRepresentative, as the case may be, uses commercially reasonable efforts to preserve the confidentiality of the Confidential Information to the extentreasonably practicable and permitted by Applicable Law, including, to the extent permitted by Applicable Law, (A) consulting with the Company regardingsuch disclosure and (B) if requested by the Company, assisting the Company, at the Company’s expense, in seeking a protective order to prevent therequested disclosure; provided, further, that such Investor or Representative, as the case may be, uses reasonable best efforts to disclose only that portion ofthe Confidential Information as is requested by the applicable Governmental Authority or as is, based on the advice of its counsel, legally required orcompelled. - 18 -ARTICLE VDEFINITIONS5.1 Defined Terms. Capitalized terms when used in this Agreement have the following meanings:“Affiliate” means, with respect to any Person, an “affiliate” as defined in Rule 405 of the regulations promulgated under the Securities Act and withrespect to each Investor, an “affiliate” of such Investor as defined in Rule 405 of the regulations promulgated under the Securities Act and any InvestmentFund, investment vehicle or holding company of which such Investor or an Affiliate of such Investor serves as the general partner, managing member ordiscretionary manager or advisor; provided, however, that notwithstanding the foregoing, an Affiliate of an Investor shall not include (x) any portfoliocompany of any such Person or of such Investor or any Investment Fund, vehicle or holding company, (y) any limited partners of such Investor, or (z) any ofthe Other Holders or any of their respective Affiliates.“Agreement” has the meaning set forth in the preamble.“Applicable Law” means, with respect to any Person, any Law applicable to such Person, its assets, properties, operations or business.“Beneficial Owner” or “Beneficially Own” has the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and a Person’s beneficialownership of securities shall be calculated in accordance with the provisions of such Rule (in each case, irrespective of whether or not such Rule is actuallyapplicable in such circumstance).“Blackout Period” means (i) any regular quarterly period during which directors and executive officers of the Company are not permitted to trade underthe insider trading policy of the Company then in effect, provided, that if the Investor proposes to sell Registrable Securities during such period, theCompany shall consider in good faith facilitating such sale during such period, and (ii) in the event that the Company determines in good faith that theregistration would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of the Company or anymaterial transaction under consideration by the Company or would require disclosure of information that has not been, and is not otherwise required to be,disclosed to the public, a period of no more than 30 days in any 90-day period or 90 days in any 365-day period.“Board” has the meaning set forth in Section 1.1(b)(ii).“Business Day” means a day other than a Saturday, a Sunday or another day on which commercial banking institutions in New York, New York orEindhoven, the Netherlands are authorized or required by Law to be closed.“Closing” shall have the meaning set forth in the Merger Agreement.“Closing Date” shall have the meaning set forth in the Merger Agreement.“Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act.“Company” has the meaning set forth in the preamble.“Company Common Shares” has the meaning set forth in the recitals. - 19 -“Confidential Information” means all information (irrespective of the form of communication, and irrespective of whether obtained prior to or after thedate hereof) obtained by or on behalf of the Investor or its Representatives from the Company or its Representatives, through the Shares Beneficially Ownedor through the rights granted pursuant hereto, other than information which (i) was or becomes generally available to the public other than as a result of abreach of this Agreement by the Investor or such Representatives, (ii) was or becomes available to the Investor or such Representatives on a non-confidentialbasis from a source other than the Company or its Representatives, provided, that the source thereof is not known by the Investor or such Representatives tobe bound by an obligation of confidentiality to the Company, or (iii) is independently developed by the Investor or such Representatives without the use ofor reference to any such information that would otherwise be Confidential Information hereunder. Subject to clauses (i)-(iii) above, Confidential Informationalso includes all non-public information previously provided by the Company or its Representatives to the Investor or its Representatives pursuant to theConfidentiality Agreement, including all information, documents and reports referred to thereunder, or otherwise.“Confidentiality Agreement” means the letter agreement, dated as of December 22, 2014, between Freescale and the Company and any amendmentsthereto or side letters entered into in connection therewith.“Contract” means any contract, lease, license, indenture, loan, note, agreement or other legally binding commitment, arrangement or undertaking(whether written or oral and whether express or implied).“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whetherthrough the ownership of voting securities, by contract or otherwise.“Controlled Affiliate” means any Affiliate of the specified Person that is, directly or indirectly, Controlled by the specified Person.“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.“Freescale” has the meaning set forth in the recitals.“FINRA” means the Financial Industry Regulatory Authority.“Free Writing Prospectus” has the meaning set forth in Section 3.4(a)(iv).“Governmental Authority” means any federal, national, state, local, cantonal, municipal, international or multinational government or politicalsubdivision thereof, governmental department, commission, board, bureau, agency, taxing or regulatory authority, instrumentality or judicial oradministrative body, or arbitrator or SRO, having jurisdiction over the matter or matters in question.“Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act. - 20 -“Inspectors” has the meaning set forth in Section 3.4(a)(xiii).“Investment Fund” means, with respect to a Sponsor, any investment fund, investment vehicle or other account that is, directly or indirectly, managedor advised by such Sponsor or any of its Controlled Affiliates.“Investor” has the meaning set forth in the preamble.“Law” has the meaning set forth in the Merger Agreement.“Losses” has the meaning set forth in Section 3.7(a).“Marketed Underwritten Shelf Offering” has the meaning set forth in Section 3.1(e).“Merger” has the meaning set forth in the recitals.“Merger Agreement” has the meaning set forth in the recitals.“Merger Sub” has the meaning set forth in the recitals.“Non-Liable Person” has the meaning set forth in Section 6.12.“Non-Private Equity Business” means, with any business or investment of the Investor and its Affiliates distinct from the private equity business of theInvestor and its Affiliates; provided, that such business or investment shall not be deemed to be distinct from such private equity business if and at such timethat (i) any Confidential Information is made available to investment professionals of the Investor and its Affiliates who are not involved in the private equitybusiness and who are involved in such other business or investment or (ii) the Investor and its Affiliates instructs or encourages any such business orinvestment to take any action that would violate any provision of this Agreement that would be applicable to such business or investment were it to bedeemed to be the Investor hereunder.“Other Holder” means any Person that has registration rights under any Other Shareholder Agreement.“Other Shareholder Agreements” mean the shareholders agreements (other than this Agreement) entered into at the closing of the Merger with certainformer equityholders of Freescale Holdings L.P. in accordance with the Merger Agreement.“Permitted Transferee” means, with respect to any Person, any Affiliate of such Person.“Permitted Transfers” has the meaning set forth in Section 1.1(b).“Person” has the meaning set forth in the Merger Agreement.“Piggyback Registration” has the meaning set forth in Section 3.1(b)(i).“Prospectus” means the prospectus included in any Shelf Registration Statement or a Piggyback Registration (including a prospectus that disclosesinformation previously omitted - 21 -from a prospectus filed as part of an effective Shelf Registration Statement or Piggyback Registration in reliance upon Rule 430A or Rule 430B promulgatedunder the Securities Act), as amended or supplemented by any prospectus supplement or any issuer free writing prospectus (as defined in Rule 433 under theSecurities Act), with respect to the offering of any portion of the Registrable Securities covered by such Shelf Registration Statement or PiggybackRegistration, and all other amendments and supplements to the prospectus, including post-effective amendments, and all material incorporated by referenceor deemed to be incorporated by reference in such prospectus.“Records” has the meaning set forth in Section 3.4(a)(xiii).“Registrable Amount” means an amount of Registrable Securities having an aggregate offering price of at least $500,000,000 (based on the lastreported sale price per share on the most recent trading day prior to such date on the principal securities exchange or market on which they are traded or, if theCompany Common Shares are no longer so traded, the fair value thereof as determined in good faith by the Investor seeking registration of such RegistrableSecurities), without regard to any underwriting discount or commission, or such lesser amount of Registrable Securities as would result in the disposition ofall of the Registrable Securities Beneficially Owned by the Investor.“Registrable Securities” means, with respect to the Investor, (1) the Shares issued in connection with the Merger, and (2) any additional securitiesissued or issuable as a dividend or distribution or in exchange for, or in respect of such Shares; provided, that any such Shares shall cease to be RegistrableSecurities when (i) they are sold pursuant to an effective registration statement under the Securities Act, (ii) they are sold pursuant to Rule 144 under theSecurities Act or (iii) they shall have ceased to be outstanding.“Representatives” has the meaning set forth in Section 5.1(a).“Requested Information” has the meaning set forth in Section 3.6.“Restricted Period” has the meaning set forth in Section 1.1(a).“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.“Selling Shareholder” has the meaning set forth in Section 3.4(a)(i).“Shares” has the meaning set forth in the recitals.“Shelf Registration Statement” has the meaning set forth in Section 3.1(a).“SRO” means (i) any “self regulatory organization” as defined in Section 3(a)(26) of the Exchange Act, (ii) any other United States or foreign securitiesexchange, futures exchange, commodities exchange or contract market, or (iii) any other securities exchange.“Standstill Period” has the meaning set forth in Section 1.2(b). - 22 -“Subsidiary” shall have the meaning set forth in the Merger Agreement.“Take-Down Notice” has the meaning set forth in Section 3.1(e).“Total Economic Interest” means, as of any date of determination, the total economic interests of all Voting Securities then outstanding. Thepercentage of the Total Economic Interest Beneficially Owned by any Person as of any date of determination is the percentage of the Total Economic Interestthen Beneficially Owned by such Person, including pursuant to any swaps or any other agreements, transactions or series of transactions, whether any suchswap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise.“Total Voting Power” means, as of any date of determination, the total number of votes that may be cast in the election of directors of the Company ifall Voting Securities then outstanding were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power BeneficiallyOwned by any Person as of any date of determination is the percentage of the Total Voting Power of the Company that is represented by the total number ofvotes that may be cast in the election of directors of the Company by Voting Securities then Beneficially Owned by such Person.“Transfer” means (i) any direct or indirect offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operationof law or otherwise), either voluntary or involuntary, or entry into any Contract, option or other arrangement or understanding with respect to any offer, sale,lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any capital stock or interest in anycapital stock or (ii) in respect of any capital stock or interest in any capital stock, to enter into any swap or any other agreement, transaction or series oftransactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of such capital stock or interest incapital stock, whether any such swap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise.“Transferor” means a Person that Transfers or proposes to Transfer; and “Transferee” means a Person to whom a Transfer is made or is proposed to be made.“Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.“Volume Limitation” has the meaning set forth in Section 1.1(c)(iii).“Voting Securities” means Company Common Shares and any other securities of the Company entitled to vote generally in the election of directors ofthe Company.5.2 Interpretation. Whenever used: the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”,and the words “hereof” and “herein” and similar words shall be construed as references to this Agreement as a whole and not limited to the particular Article,Section, Annex, Exhibit or Schedule in which the reference appears. Unless the context otherwise requires, references herein: (x) to Articles, Sections,Annexes, Exhibits and Schedules mean the Articles, Sections and Annexes of, and Exhibits and Schedules attached to, this Agreement; (y) to an agreement,instrument or other document means - 23 -such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereofand (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgatedthereunder. References to “$” or “dollars” means United States dollars. Any reference in this Agreement to any gender shall include all genders. Themeanings of defined terms are equally applicable to the singular and plural forms of the defined terms. The Annexes, Exhibits and Schedules referred toherein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The headings of theArticles and Sections are for convenience of reference only and do not affect the interpretation of any of the provisions hereof. If, and as often as, there is anychange in the outstanding Company Common Shares by reason of share dividends, splits, reverse splits, spin-offs, split-ups, mergers, reclassifications,reorganizations, recapitalizations, combinations or exchanges of shares and the like, appropriate adjustment shall be made in the provisions of thisAgreement so as to fairly and equitably preserve, as far as practicable, the rights and obligations set forth herein that continue to be applicable on the date ofsuch change. No rule of construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement, as thisAgreement is the product of negotiation between sophisticated parties advised by counsel.ARTICLE VIMISCELLANEOUS6.1 Term. This Agreement shall automatically terminate upon the date that the Investor Beneficially Owns less than 5% of the Shares BeneficiallyOwned by the Investor as of immediately following the Closing (as defined in the Merger Agreement). If this Agreement is terminated pursuant to thisSection 6.1, this Agreement shall immediately then be terminated and of no further force and effect, except for the provisions set forth in this Article VI,which shall survive in accordance with their terms. Notwithstanding anything to the contrary in this Agreement, Section 4.1 shall terminate upon the sixthmonth anniversary of the Closing.6.2 Notices. All notices, consents and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been dulygiven upon receipt) by hand delivery, by prepaid overnight courier (providing written proof of delivery), by confirmed e-mail transmission or by certified orregistered mail (return receipt requested and first class postage prepaid), addressed as follows: (i) if to the Company, to: Name: NXP Semiconductors N.V. Address: General Counsel High Tech Campus 60 5656 AG Eindhoven The Netherlands Email: guido.dierick@nxp.com Attention: Guido Dierick - 24 - with a copy to (which shall not be considered notice): Name: Simpson Thacher & Bartlett LLP Address: 425 Lexington Avenue New York, New York 10017 Fax: (212) 455-2502 Email: ghorowitz@stblaw.com ecooper@stblaw.com Attention: Gary Horowitz Elizabeth Cooper(ii) if to the Investor, to: Name: The Blackstone Group L.P. Address: 345 Park Avenue New York, NY 10154 Fax: (212) 583-5692 (646) 253-8902 Email: laxcon.chan@blackstone.com blank@blackstone.com Attention: Laxcon Chan Greg Blank with a copy to (which shall not be considered notice): Name: Skadden, Arps, Slate, Meagher & Flom LLP Address: Four Times Square New York, New York 10036 Fax: (212) 735-2000 Email: Kenton.King@skadden.com Allison.Schneirov@skadden.com Amr.Razzak@skadden.com Attention: Kenton J. King Allison R. Schneirov Amr Razzakor to such other address (i.e., e-mail address) for a party as shall be specified in a notice given in accordance with this Section 6.2; provided that any noticereceived by email transmission or otherwise at the addressee’s location on any Business Day after 5:00 P.M. (addressee’s local time) shall be deemed to havebeen received at 9:00 A.M. (addressee’s local time) on the next Business Day; provided, further that notice of any change to the address or any of the otherdetails specified in or pursuant to this Section 6.2 shall not be deemed to have been received until, and shall be deemed to have been received upon, the laterof the date specified in such notice or the date that is five (5) Business Days after such notice would otherwise be deemed to have been received pursuant tothis Section 6.2. - 25 -6.3 Amendments and Waivers. Each of the parties hereto agrees that no provision of this Agreement may be amended or modified unless suchamendment or modification is in writing and signed by all parties hereto. No failure or delay by any party in exercising any right, power or privilegehereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided byApplicable Law.6.4 Successors and Assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto withoutthe prior written consent of the other parties, provided that any proposed assignment by the Investor of any of its rights herein to any party other than to anAffiliate of the Investor may be granted or withheld in the Company’s sole and absolute discretion, it being understood that it is the intention of the partieshereto that the rights afforded to the Investor are personal to the Investor and are not transferable except as expressly provided herein. Subject to thepreceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.Any attempted assignment in violation of this Section 6.4 shall be void.6.5 Severability. If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any ApplicableLaw or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term orother provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect theoriginal intent of the parties as closely as possible to the fullest extent permitted by Applicable Law in an acceptable manner to the end that the transactionscontemplated hereby are fulfilled to the extent possible.6.6 Counterparts. This Agreement may be executed in multiple counterparts, each of which when executed and delivered shall be deemed to be anoriginal but all of which taken together shall constitute one and the same agreement.6.7 Entire Agreement. This Agreement (including the documents and the instruments referred to in this Agreement), together with the ConfidentialityAgreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respectto the subject matter of this Agreement.6.8 Governing Law; Jurisdiction. This Agreement and all litigation, claims, actions, suits, hearings or proceedings (whether civil, criminal oradministrative and whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Agreement, any of the transactionscontemplated by this Agreement or the actions of the Company or the Investor in the negotiation, administration, performance and enforcement hereof orthereof, shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to any choice or conflict of Lawsprovision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than theState of New York. Each of the parties hereto hereby (a) expressly and - 26 -irrevocably submits to the exclusive personal jurisdiction of any United States federal court located in the Southern District of the State of New York or anyNew York state court located in Manhattan in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement,(b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that itwill not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the courts as describedin (a) above; provided that each of the parties shall have the right to bring any action or proceeding for enforcement of a judgment entered by any UnitedStates federal court located in the State of New York or any New York state court in any other court or jurisdiction. Each party irrevocably consents to theservice of process outside the territorial jurisdiction of the courts referred to herein in any such action or proceeding in connection with this Agreement or thetransactions contemplated hereby by mailing copies thereof by registered United States mail, postage prepaid, return receipt requested, to its address asspecified in or pursuant to Section 6.2. However, the foregoing shall not limit the right of a party to effect service of process on the other party by any otherlegally available method.6.9 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THISAGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.EACH OF THE PARTIES HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHERPARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TOENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,(C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THISAGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.6.10 Specific Performance. The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunderwill cause irreparable injury to the non-breaching parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each partyhereby consents to the granting of injunctive relief by any court of competent jurisdiction to prevent breaches of this Agreement, to enforce specifically theterms and provisions hereof and to compel performance of such party’s obligations, this being in addition to any other remedy to which any party is entitledunder this Agreement. The parties further agree to waive any requirement for the securing or posting of any bond in connection with any such remedy, andthat such remedy shall be in addition to any other remedy to which a party is entitled at law or in equity.6.11 No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and each suchparty’s respective heirs, successors and permitted assigns; provided, that the Persons indemnified under Section 3.9 are intended third party beneficiaries ofSection 3.9, and Non-Liable Persons are intended third party beneficiaries of Section 6.12. - 27 -6.12 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that any party heretomay be a partnership or limited liability company, each party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledgesthat no Persons other than the named parties hereto shall have any obligation hereunder and that it has no rights of recovery hereunder against, and norecourse hereunder or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any former,current or future director, officer, agent, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative or employee of any Investor(or any of their heirs, successors or permitted assigns), or against any former, current or future director, officer, agent, employee, Affiliate, manager, assignee,incorporator, controlling Person, fiduciary, representative, general or limited partner, shareholder, manager or member of any of the foregoing Persons, but ineach case not including the named parties hereto (each, a “Non-Liable Person”), whether by or through attempted piercing of the corporate veil, by or througha claim (whether in tort, contract or otherwise) by or on behalf of such party against any Non-Liable Person, by the enforcement of any assignment or by anylegal or equitable proceeding, or by virtue of any statute, regulation or other Applicable Law or otherwise; it being expressly agreed and acknowledged thatno personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any Non-Liable Person, as such, for any obligations of theapplicable party under this Agreement or the transactions contemplated hereby, in respect of any oral representations made or alleged to have been made inconnection herewith or therewith or for any claim (whether in tort, contract or otherwise) based on, in respect of or by reason of, such obligations or theircreation.6.13 Scope of Agreement. Notwithstanding anything to the contrary provided elsewhere herein, none of the provisions of this Agreement shall in anyway limit the activities of The Blackstone Group L.P. and its affiliates in their businesses distinct from the private equity business of The Blackstone GroupL.P., provided that the Confidential Information is not made available to Representatives of The Blackstone Group L.P. and its affiliates who are not involvedin the private equity business of The Blackstone Group L.P. Should any Confidential Information be made available to a Representative of The BlackstoneGroup L.P. and its affiliates who is not involved in the private equity business of The Blackstone Group L.P., such Representative shall be bound by thisAgreement in accordance with its terms. In addition, none of the provisions of this Agreement shall in any way apply to any portfolio company of an affiliateof The Blackstone Group L.P., provided, however, that should the Confidential Information be made available to a Representative of any portfolio companyof an affiliate of The Blackstone Group L.P., such Representative shall be bound by this Agreement in accordance with its terms.[Signature page follows] - 28 -IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their authorized representatives as of the date first above written. NXP Semiconductors N.V. By: /s/ Guido Dierick Name: Guido Dierick Title: Executive Vice President and General Counsel - 29 - BLACKSTONE CAPITAL PARTNERS (CAYMAN) V L.P. By: Blackstone Management Associates (Cayman) V L.P., itsgeneral partner By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 30 - BLACKSTONE CAPITAL PARTNERS (CAYMAN) V-A L.P. By: Blackstone Management Associates (Cayman) V L.P., itsgeneral partner By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 31 - BCP (CAYMAN) V-S L.P. By: Blackstone Management Associates (Cayman) V L.P., itsgeneral partner By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 32 - BCP V CO-INVESTORS (CAYMAN) L.P. By: Blackstone Management Associates (Cayman) V L.P., itsgeneral partner By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 33 - BLACKSTONE FIRESTONE TRANSACTION PARTICIPATIONPARTNERS (CAYMAN) L.P. By: Blackstone Management Associates (Cayman) V L.P., itsgeneral partner By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 34 - BLACKSTONE FIRESTONE PRINCIPAL TRANSACTIONPARTNERS (CAYMAN) L.P. By: Blackstone Management Associates (Cayman) V L.P., itsgeneral partner By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 35 - BLACKSTONE FAMILY INVESTMENT PARTNERSHIP (CAYMAN)V L.P. By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 36 - BLACKSTONE FAMILY INVESTMENT PARTNERSHIP (CAYMAN)V-SMD L.P. By: Blackstone Family GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 37 - BLACKSTONE PARTICIPATION PARTNERSHIP (CAYMAN) V L.P. By: BCP V GP L.L.C., its general partner By: /s/ Chinh Chu Name: Chinh Chu Title: Senior Managing Director - 38 -EXHIBIT AFORM OF JOINDERThe undersigned is executing and delivering this Joinder Agreement pursuant to that certain NXP Semiconductors N.V. Shareholders Agreement,dated as of December 7, 2015 (as amended, restated, supplemented or otherwise modified in accordance with the terms thereof, the “ShareholdersAgreement”) by and among NXP Semiconductors N.V., a public company with limited liability (naamloze vennootschap) incorporated under the laws of TheNetherlands, registered with the Dutch Chamber of Commerce under number 34253298 and having its corporate seat (statutaire zetel) in Eindhoven, theshareholder of the Company whose name appears on the signature pages thereto (the “Investor”), and any other Persons who become a party thereto inaccordance with the terms thereof. Capitalized terms used but not defined in this Joinder Agreement shall have the respective meanings ascribed to suchterms in the Shareholders Agreement.By executing and delivering this Joinder Agreement to the Shareholders Agreement, the undersigned hereby adopts and approves theShareholders Agreement and agrees, effective commencing on the date hereof and as a condition to the undersigned’s becoming the Transferee of Shares, tobecome a party to, and to be bound by and comply with the provisions of, the Shareholders Agreement applicable to the Investor, in the same manner as if theundersigned were an original signatory to the Shareholders Agreement.The undersigned hereby represents and warrants that, pursuant to this Joinder Agreement and the Shareholders Agreement, it is a PermittedTransferee of the Investor and will be the lawful Beneficial Owner of [●] Shares as of the date hereof.The undersigned acknowledges and agrees that Section 6.2 through Section 6.12 of the Shareholders Agreement are incorporated herein byreference, mutatis mutandis.[Signature page follows] - 39 -Accordingly, the undersigned have executed and delivered this Joinder Agreement as of the day of , . TRANSFEREE Print Name: Address: Telephone: Facsimile: Email: - 40 -AGREED AND ACCEPTED as of the day of , . NXP Semiconductors N.V. By: Name: Title: [TRANSFEROR By: Name: Title: ] - 41 -Exhibit 10.28EXECUTION VERSION NXP SEMICONDUCTORS N.V. SHAREHOLDERS AGREEMENTDated as of December 7, 2015 TABLE OF CONTENTS Page ARTICLE I TRANSFERS 1.1 Transfer Restrictions 2 ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties of the Investor 3 2.2 Representations and Warranties of the Company 4 ARTICLE III REGISTRATION 3.1 Registration Statement 5 3.2 Withdrawal Rights 6 3.3 Holdback Agreements 6 3.4 Registration Procedures 7 3.5 Registration Expenses 12 3.6 Information to be Furnished by Investor 12 3.7 Registration Indemnification 13 ARTICLE IV CONFIDENTIALITY 4.1 Confidentiality 15 ARTICLE V DEFINITIONS 5.1 Defined Terms 17 5.2 Interpretation 21 ARTICLE VI MISCELLANEOUS 6.1 Term 22 6.2 Notices 22 6.3 Amendments and Waivers 23 6.4 Successors and Assigns 24 6.5 Severability 24 6.6 Counterparts 24 6.7 Entire Agreement 24 6.8 Governing Law; Jurisdiction 24 6.9 WAIVER OF JURY TRIAL 25 6.10 Specific Performance 25 6.11 No Third Party Beneficiaries 25 6.12 No Recourse 25 6.13 Scope of Agreement 26 - i -Exhibits Exhibit A Form of Joinder - ii -SHAREHOLDERS AGREEMENT, dated as of December 7, 2015, (this “Agreement”), among NXP Semiconductors N.V., a public company withlimited liability (naamloze vennootschap) incorporated under the laws of The Netherlands, registered with the Dutch Chamber of Commerce under number34253298 and having its corporate seat (statutaire zetel) in Eindhoven (the “Company”), and the shareholders of the Company whose names appear on thesignature pages hereto (such shareholders, together with any Permitted Transferee of such shareholders who becomes a party pursuant to Section 1.1 hereof,collectively, the “Investor”).W I T N E S S E T H:WHEREAS, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 1, 2015, by and among the Company,Freescale Semiconductor, Ltd., a Bermuda exempted company (“Freescale”), and Nimble Acquisition Limited, a Bermuda exempted company and a whollyowned subsidiary of the Company (“Merger Sub”), Merger Sub merged with and into Freescale (the “Merger”), and Freescale has continued as the survivingcompany and a wholly owned indirect subsidiary of the Company, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, each common share of Freescale, $0.01 par value, issued andoutstanding immediately prior to the Effective Time (other certain such shares as set forth in the Merger Agreement) shall be converted into one commonshare, par value $0.01 per share of the surviving corporation following the Merger (a “Surviving Corporation Share”), and each of the resulting SurvivingCorporation Shares shall automatically be exchanged for (subject to the terms and conditions in the Merger Agreement) the right to receive (i) 0.3521 of aduly authorized, validly issued and fully paid ordinary share (gewoon aandeel) of Parent, par value EUR 0.20 per share (a “Company Common Share”), and(ii) $6.25 in cash, without interest, on the terms and subject to the conditions set forth in the Merger Agreement;WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, in connection with the Merger, the shareholders of theCompany whose names appear on the signature pages hereto received Company Common Shares (the “Shares”) representing, in the aggregate, approximately2.83% of the outstanding Company Common Shares, after giving effect to the issuance of Company Common Shares in the Merger; andWHEREAS, each of the parties hereto wishes to set forth in this Agreement certain terms and conditions regarding the Investor’s ownership of theShares and to establish certain rights, restrictions and obligations of the Investor with respect to the Shares. - 1 -NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agreeas follows:ARTICLE ITRANSFERS1.1 Transfer Restrictions.(a) Other than solely in the case of Permitted Transfers, the Investor shall not Transfer any Shares prior to the date that is three (3) months after theClosing (such period, the “Restricted Period”).(b) “Permitted Transfers” mean, in each case, so long as such Transfer is in accordance with Applicable Law:(i) a Transfer to a Permitted Transferee of the Investor, so long as such Permitted Transferee, in connection with such Transfer, executes ajoinder to this Agreement in the form attached as Exhibit A hereto; or(ii) a Transfer solely to tender into a tender or exchange offer commenced by a third party (for the avoidance of doubt, not in violation ofthis Agreement) or by the Company; provided, that with respect to an unsolicited tender or exchange offer commenced by a third party, such Transfershall be permitted only if (A) such tender or exchange offer includes an irrevocable minimum tender condition of no less than a majority of the then-outstanding Company Common Shares and (B) as of the expiration of such offer (x) no shareholder rights plan or analogous “poison pill” of theCompany is in effect or (y) the Board of Directors of the Company (the “Board”) has affirmatively publicly recommended to the Company’sshareholders that such shareholders tender into such offer and has not publicly withdrawn or changed such recommendation.(c) Notwithstanding anything to the contrary contained herein, the Investor shall not Transfer any Shares:(i) other than in accordance with all Applicable Laws and the other terms and conditions of this Agreement;(ii) except in a Permitted Transfer, in one or more transactions in which any Person or Group, to the Investor’s knowledge, after givingeffect to such Transfer, would Beneficially Own 5% or more of the Total Voting Power or the Total Economic Interest; provided that the restriction inthis clause (ii) shall not apply to Transfers effected solely through a bona fide Underwritten Offering pursuant to an exercise of the registration rightsprovided in this Agreement;(iii) except in a Permitted Transfer, in each 90-day period following the Restricted Period in an amount for the Investor (together with itsAffiliates), in excess of 33 1/3% of the Shares held by the Investor (together with its Affiliates), as applicable, as of immediately following the Merger(the “Volume Limitation”); provided, that the Volume Limitation shall not apply to Transfers effected solely through an offering pursuant to anexercise of the registration rights provided in this Agreement. - 2 -(d) With respect to the Investor, any certificates for Shares shall bear a legend or legends (and appropriate comparable notations or otherarrangements will be made with respect to any uncertificated shares) referencing restrictions on Transfer of such Shares under the Securities Act and under thisAgreement, which legend shall state in substance:“The securities evidenced by this certificate may not be offered or sold, transferred, pledged, hypothecated or otherwise disposed ofexcept (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), (ii) to theextent applicable, pursuant to Rule 144 under the Securities Act (or any similar rule under the Securities Act relating to the disposition ofsecurities), or (iii) pursuant to an available exemption from registration under the Securities Act.The securities evidenced by this certificate are subject to restrictions on transfer set forth in a Shareholders Agreement dated as ofDecember 7, 2015, among the Company and certain other parties thereto (a copy of which is on file with the Secretary of the Company).”(e) Notwithstanding the foregoing subsection (d), the Investor shall be entitled to receive from the Company new certificates for a like number ofShares not bearing such legend (or the elimination or termination of such notations or arrangements) upon the request of the Investor (i) at such time as suchrestrictions are no longer applicable, and (ii) with respect to the restriction on Transfer of such Shares under the Securities Act or any other Applicable Law,unless such Shares are sold pursuant to a registration statement, subject to delivery of an opinion of counsel to the Investor, which opinion is reasonablysatisfactory in form and substance to the Company and its counsel, that the restriction referenced in such legend (or such notations or arrangements) is nolonger required in order to ensure compliance with the Securities Act or any such other Applicable Law.ARTICLE IIREPRESENTATIONS AND WARRANTIES2.1 Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Company as follows:(a) The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. It has allrequisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.(b) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement do notand will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals whichhave been obtained) under, (x) Applicable Law, (y) its organizational documents or (z) any Contract or agreement to which it is a party. - 3 -(c) The execution and delivery by the Investor of this Agreement and the performance by it of its obligations under this Agreement havebeen duly authorized by all necessary limited partnership or other analogous action on its part. This Agreement has been duly executed and deliveredby the Investor and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and bindingobligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relatingto or affecting creditors’ rights and to general principles of equity.(d) The Investor does not Beneficially Own any Voting Securities as of the date hereof, other than any Voting Securities acquired in theMerger.2.2 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor as follows:(a) The Company is a public company with limited liability (naamloze vennootschap) duly incorporated under the laws of TheNetherlands. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under thisAgreement.(b) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consentsor approvals which have been obtained) under, (x) Applicable Law, (y) the organizational documents of the Company or (z) any Contract or agreementto which the Company is a party.(c) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under thisAgreement have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed anddelivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid andbinding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency and other lawsof general applicability relating to or affecting creditors’ rights and to general principles of equity.(d) The Company is not a party to any agreement or understanding whereby any Person, other than as set forth herein or in the OtherShareholder Agreements, has any registration rights with respect to the Company’s securities. - 4 -ARTICLE IIIREGISTRATION3.1 Registration Statement.(a)(i) If, from and after the expiration of the Restricted Period, the Company has registered or has determined to register any CompanyCommon Shares for its own account or for the account of other securityholders of the Company, including the Blackstone Investor, on any registrationform (other than Form F-4 or S-8) which permits the inclusion of the Registrable Securities, including as a supplement to a Shelf Registration Statementto be filed pursuant to Rule 424(b)(7) under the Securities Act (a “Piggyback Registration”), the Company will give the Investor written notice thereofpromptly (but in no event less than ten (10) Business Days prior to the anticipated filing date) and, subject to Section 3.1(a)(i), shall include in suchregistration all Registrable Securities requested to be included therein pursuant to the written request of the Investor received on or before the secondBusiness Day prior to the anticipated filing date. If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Companyand the lead managing underwriter(s) advise the Company and the Investor that, in its reasonable opinion, the inclusion of all of the CompanyCommon Shares proposed to be included in such registration would adversely affect the success of such offering, the Company shall include in suchregistration: (i) first, the number of Company Common Shares that the Company proposes to sell; and (ii) second, the number of Company CommonShares requested to be included therein by the Investor and Other Holders, pro rata among all such holders on the basis of the number of CompanyCommon Shares requested to be included therein by all such holders or as such holders and the Company may otherwise agree.(ii) If a Piggyback Registration is initiated as an underwritten offering on behalf of another securityholder of the Company, including theBlackstone Investor, and the lead managing underwriter(s) advise the Company that, in its reasonable opinion, the inclusion of all of the CompanyCommon Shares proposed to be included in such registration would adversely affect the success of such offering, then the Company shall include insuch registration: (i) first, the number of Company Common Shares requested to be included therein by such other securityholder, the Investor and theOther Holders, pro rata among all such holders on the basis of the number of Company Common Shares requested to be included therein by all suchholders or as such holders and the Company may otherwise agree; and (ii) second, the number of Company Common Shares that the Companyproposes to sell.(iii) If any Piggyback Registration is a primary underwritten offering, the Company shall have the right to select the managing underwriteror underwriters to administer any such offering. - 5 -(b) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providingwritten notice to the Investor, to require the Investor to suspend sales of Registrable Securities under a Piggyback Registration during any Blackout Period.The Investor may recommence effecting sales of the Registrable Securities pursuant to a Piggyback Registration (or such filings) following further notice tosuch effect from the Company, which shall be given by the Company promptly following the expiration of any Blackout Period. After the expiration of anyBlackout Period and without any further request from the Investor, the Company to the extent necessary shall as promptly as reasonably practicable prepare apost-effective amendment or supplement to the Piggyback Registration or the Prospectus, or any document incorporated therein by reference, or file anyother required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untruestatement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they weremade, not misleading.3.2 Withdrawal Rights. The Investor having notified or directed the Company to include any or all of its Registrable Securities in a registrationstatement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securitiesdesignated by it for registration by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the eventof any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shallcontinue to be Registrable Securities for all purposes of this Agreement (subject to the other terms and conditions of this Agreement). No such withdrawalshall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn.3.3 Holdback Agreements. In connection with any Underwritten Offering, the Investor agrees to enter into customary “lock-up” agreements restrictingthe public sale or distribution of equity securities of the Company (including sales pursuant to Rule 144 under the Securities Act) to the extent required inwriting by the lead managing underwriter(s) with respect to an applicable Underwritten Offering for a period of not more than ninety (90) days after the dateof the “final” prospectus (or “final” prospectus supplement if the Underwritten Offering is made pursuant to a Shelf Registration Statement), pursuant towhich such Underwritten Offering shall be made, plus, if applicable, an extension period, as may be proposed by the lead managing underwriter(s) to addressFINRA regulations regarding the publishing of research, or such other period as is required by the lead managing underwriter(s); provided, however, theInvestor shall not be subject to a lock-up period longer than the lock-up period to which the officers and directors of the Company are subject.In the event of any Marketed Underwritten Shelf Offering, the Company will not effect any public sale or distribution of any common equity (orsecurities convertible into or exchangeable or exercisable for common equity) (other than a registration statement on Form F-4, Form S-8 or any comparableor successor forms thereto) for its own account, within sixty (60) days, after the effective date of such registration except as may otherwise be agreed betweenthe Company and the lead managing underwriter(s) of such Marketed Underwritten Shelf Offering. - 6 -3.4 Registration Procedures.(a) If and whenever the Company is required to use commercially reasonable efforts to effect the registration of any Registrable Securities underthe Securities Act as provided in Section 3.1, including the Shelf Registration Statement and a Piggyback Registration, the Company shall as expeditiouslyas reasonably practicable:(i) prepare and file with the Commission a registration statement to effect such registration in accordance with the intended method ormethods of distribution of such securities and thereafter use commercially reasonable efforts to cause such registration statement to become and remaineffective pursuant to the terms of this Article III; provided, however, that the Company may discontinue any registration of its securities which are notRegistrable Securities at any time prior to the effective date of the registration statement relating thereto; provided, further, that before filing suchregistration statement or any amendments thereto, the Company will furnish to the Investor and the Other Holders (if they are including CompanyCommon Shares in such registration) (“Selling Shareholder”), its counsel and the lead managing underwriter(s), if any, copies of all such documentsproposed to be filed, which documents will be subject to the review and reasonable comment of such counsel, and other documents reasonablyrequested by such counsel, including any comment letter from the Commission, and, if requested by such counsel, provide such counsel reasonableopportunity to participate in the preparation of such registration statement and each prospectus included therein and such other opportunities toconduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers,accountants and other advisors;(ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used inconnection therewith as may be necessary to keep such registration statement effective pursuant to the terms of this Article III or necessary to facilitatethe disposition of the Registrable Securities covered by such registration statement and prospectus (including causing the prospectus contained in suchregistration statement to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 or anysimilar rule that may be adopted under the Securities Act), and comply in all material respects with the provisions of the Securities Act with respect tothe disposition of all securities, including the Registrable Securities, covered by such registration statement;(iii) if requested by the lead managing underwriter(s), if any, or the Investor in connection with an Underwritten Offering, promptly includein a prospectus supplement or post-effective amendment, such information as the lead managing underwriter(s), if any, and the Investor may reasonablyrequest in order to permit the intended method of distribution of such securities and make all required filings of such prospectus supplement or suchpost-effective amendment as soon as reasonably practicable after the Company has received such request; provided, however, that the Company shallnot be required to take any actions under this Section 3.4(a)(iii) that are not, based on the advice of counsel for the Company, in compliance withApplicable Law; - 7 -(iv) furnish to the Selling Shareholder and each underwriter, if any, of the securities being sold by the Selling Shareholder such number ofconformed copies of such registration statement and of each amendment and supplement thereto, such number of copies of the prospectus contained insuch registration statement (including each preliminary prospectus and any summary prospectus) and each free writing prospectus (as defined in Rule405 of the Securities Act) (a “Free Writing Prospectus”) utilized in connection therewith and any other prospectus filed under Rule 424 under theSecurities Act, in conformity with the requirements of the Securities Act, and such other documents as the Selling Shareholder and underwriter, if any,may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Selling Shareholder;(v) use commercially reasonable efforts to register or qualify or cooperate with the Selling Shareholder, the underwriters, if any, and theirrespective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such RegistrableSecurities covered by such registration statement under such other securities laws or “blue sky” laws of such jurisdictions as the Selling Shareholderand any underwriter of the securities being sold by the Selling Shareholder shall reasonably request, and to keep each such registration or qualification(or exemption therefrom) effective during the period such registration statement is required to be kept effective and take any other action which may benecessary or reasonably advisable to enable the Selling Shareholder and underwriters to consummate the disposition in such jurisdictions of theRegistrable Securities owned by the Selling Shareholder, except that the Company shall not for any such purpose be required to (A) qualify generallyto do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (v) be obligated to be soqualified, (B) subject itself to taxation in any such jurisdiction where it would not otherwise be obligated to do so, but for this clause (v), or (C) file ageneral consent to service of process in any such jurisdiction;(vi) use commercially reasonable efforts (including seeking to cure in the Company’s listing or inclusion application any deficienciescited by the exchange or market) to list or include all Registrable Securities on each securities exchange on which similar securities issued by theCompany are then listed or included;(vii) use commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered withor approved by such other governmental agencies or authorities as may be reasonably necessary to enable the Selling Shareholder to consummate thedisposition of such Registrable Securities;(viii) use commercially reasonable efforts to provide and cause to be maintained a transfer agent and registrar for all Registrable Securitiescovered by such registration statement from and after a date not later than the effective date of such registration statement;(ix) use commercially reasonable efforts to prepare and file in a timely manner all documents and reports required by the Exchange Act; - 8 -(x) use commercially reasonable efforts to make generally available to its stockholders, as soon as reasonably practicable, earningsstatements (which need not be audited) covering at least 12 months that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158thereunder;(xi) enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwrittenofferings) and use commercially reasonable efforts to take all such other actions reasonably requested by the Investor in connection therewith(including those reasonably requested by the lead managing underwriter(s), if any) to expedite or facilitate the disposition of such RegistrableSecurities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an UnderwrittenOffering (A) make such representations and warranties to the Investor and the underwriters, if any, with respect to the business of the Company and itssubsidiaries, and the registration statement, prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in eachcase, in form, substance and scope as are customarily made by issuers in underwritten offerings, and, if true, confirm the same if and when requested,(B) if an underwriting agreement has been entered into, the same shall contain indemnification provisions and procedures substantially to the effect setforth in Section 3.9 hereof with respect to all parties to be indemnified pursuant to said Section except as otherwise agreed by the Selling Shareholderand (C) deliver such documents and certificates as reasonably requested by the Selling Shareholder, its counsel and the lead managing underwriters(s),if any, to evidence the continued validity of the representations and warranties made pursuant to sub-clause (A) above and to evidence compliancewith any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done ateach closing under such underwriting or similar agreement, or as and to the extent required thereunder;(xii) in connection with an Underwritten Offering or otherwise required in connection with the disposition of the Registrable Securities,use commercially reasonable efforts to obtain for the Selling Shareholder and underwriter(s) (A) opinions of counsel for the Company, covering thematters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the SellingShareholder and underwriters and (B) “comfort” letters and updates thereof (or, in the case of any such Person which does not satisfy the conditions forreceipt of a “comfort” letter specified in Statement on Auditing Standards No. 72 or any successor accounting standard thereto, an “agreed uponprocedures” letter) signed by the independent public accountants who have certified the Company’s financial statements and, to the extent required,any other financial statements included or incorporated by reference in such registration statement, covering the matters customarily covered in“comfort” letters in connection with underwritten offerings;(xiii) make available for inspection by the Selling Shareholder, any underwriter participating in any disposition pursuant to anyregistration statement, and any attorney, accountant or other agent or representative retained in connection with such offering by the SellingShareholder or underwriter (collectively, the “Inspectors”), financial and other records, pertinent corporate documents and instruments of the - 9 -Company (collectively, the “Records”), as shall be reasonably necessary, or as shall otherwise be reasonably requested, to enable them to exercise theirdue diligence responsibility, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each casereasonably requested by any such representative, underwriter, attorney, agent or accountant in connection with such registration statement (in eachcase subject to the Selling Shareholder and/or Inspectors entering into customary confidentiality agreement on terms and conditions reasonablyacceptable to the Company as may be reasonably requested by the Company); provided, further, that the Selling Shareholder agrees that it will, uponreceipt of a written request to disclose such Records from a court of competent jurisdiction or by another Governmental Authority, give notice to theCompany and allow the Company, at its expense, to undertake appropriate action seeking to prevent disclosure of the Records deemed confidential;(xiv) as promptly as practicable notify in writing the Selling Shareholder and the underwriters, if any, of the following events: (A) thefiling of the registration statement, any amendment thereto, the prospectus or any prospectus supplement related thereto or post-effective amendmentto the registration statement or any Free Writing Prospectus utilized in connection therewith, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (B) any request by the Commission or any other U.S. or state governmentalauthority for amendments or supplements to the registration statement or the prospectus or for additional information; (C) the issuance by theCommission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for thatpurpose; (D) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for saleunder the securities or “blue sky” laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (E) if at any time therepresentations and warranties of the Company contained in any mutual agreement (including any underwriting agreement) contemplated bySection 3.4(a)(xi) cease to be true and correct in any material respect; and (F) upon the happening of any event that makes any statement made in suchregistration statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any materialrespect or that requires the making of any changes in such registration statement, prospectus or documents so that, in the case of the registrationstatement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to makethe statements therein not misleading, and that in the case of the prospectus, it will not contain any untrue statement of a material fact or omit to stateany material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and,at the request of any Selling Shareholder, promptly prepare and furnish to the Selling Shareholder a reasonable number of copies of a supplement to oran amendment of such registration statement or prospectus as may be necessary so that, as thereafter delivered to the purchasers of such RegistrableSecurities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; - 10 -(xv) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement,or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction atthe earliest reasonable practicable date, except that, subject to the requirements of Section 3.4(a)(v), the Company shall not for any such purpose berequired to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause(xiii) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction wherein it would not be obligated to do so but for therequirements of this clause (xiii) or (C) file a general consent to service of process in any such jurisdiction;(xvi) cooperate with the Selling Shareholder and the lead managing underwriter(s) to facilitate the timely preparation and delivery ofcertificates (which shall not bear any restrictive legends unless required under Applicable Law) representing securities sold under any registrationstatement, and enable such securities to be in such denominations and registered in such names as the lead managing underwriter(s) or the SellingShareholder may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registrationstatement a supply of such certificates;(xvii) cooperate with the Selling Shareholder and each underwriter or agent participating in the disposition of any Registrable Securitiesand their respective counsel in connection with any filings required to be made with FINRA; and(xviii) have appropriate officers of the Company prepare and make presentations at a reasonable number of “road shows” and beforeanalysts and rating agencies, as the case may be, and other information meetings reasonably organized by the underwriters and otherwise usecommercially reasonable efforts to cooperate as reasonably requested by the Selling Shareholder and the underwriters in the offering, marketing orselling of the Registrable Securities.(b) The Company may require the Selling Shareholder and each underwriter, if any, to furnish the Company in writing such informationregarding the Selling Shareholder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably requestin writing to complete or amend the information required by such registration statement.(c) The Selling Shareholder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described inclauses (B), (C), (D), (E) and (F) of Section 3.4(a)(xiv), the Selling Shareholder shall forthwith discontinue its disposition of Registrable Securities pursuant tothe applicable registration statement and prospectus relating thereto until receipt of the copies of the supplemented or amended prospectus contemplated bySection 3.4(a)(xiii), or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and has received copies of anyadditional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus. - 11 -(d) With a view to making available to the Investor the benefits of Rule 144 under the Securities Act and any other rule or regulation of theCommission that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a registration statement,the Company shall:(i) use commercially reasonable efforts to make and keep public information available, as those terms are understood and defined in Rule144 under the Securities Act;(ii) use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of theCompany under the Exchange Act, at any time when the Company is subject to such reporting requirements; and(iii) furnish to the Investor so long as it owns Registrable Securities, promptly upon request, a written statement by the Company as to itscompliance with the reporting requirements of Rule 144 under the Securities Act and of the Exchange Act, a copy of the most recent annual orquarterly report of the Company, and such other reports and documents so filed or furnished by the Company with the Commission as the Investor mayreasonably request in connection with the sale of Registrable Securities without registration (in each case to the extent not readily publicly available).3.5 Registration Expenses. The Company shall pay all fees and expenses incident to the Company’s performance of its obligations under this ArticleIII, including (a) all registration and filing fees, including all fees and expenses of compliance with securities and “blue sky” laws (including the reasonableand documented fees and disbursements of counsel for the underwriters in connection with “blue sky” qualifications of the Registrable Securities pursuant toSection 3.4(a)(v)) and all fees and expenses associated with filings required to be made with FINRA (including, if applicable, the fees and expenses of any“qualified independent underwriter” as such term is defined in FINRA Rule 5121), (b) all printing (including expenses of printing certificates for theRegistrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses if the printing of prospectuses isrequested by the Investor) and copying expenses, (c) all messenger, telephone and delivery expenses, (d) expenses of the Company incurred in connectionwith any “road show”, (e) except as provided in this Section 3.5, any fees and disbursements customarily paid in issues and sales of securities (including thefees and expenses of any experts retained by the Company in connection with any registration statement), and (f) all fees and expenses of the Company’sindependent certified public accountants and counsel (including with respect to “comfort” letters and opinions). The Investor shall pay the fees and expensesof its own counsel and the Investor’s portion of all underwriting discounts and commissions and transfer taxes, if any, relating to the sale of its RegistrableSecurities pursuant to any registration.3.6 Information to be Furnished by Investor. Not less than seven (7) Business Days before the expected filing date of each registration statementpursuant to this Agreement, the Company shall notify the Investor (if it has timely provided the requisite notice hereunder entitling it to register RegistrableSecurities in such registration statement) of the information, documents and instruments from it that the Company or any underwriter reasonably requests in - 12 -connection with such registration statement, including, if applicable, a questionnaire, custody agreement, power of attorney, lock-up letter and underwritingagreement (the “Requested Information”). If the Company has not received, on or before the second Business Day before the expected filing date, theRequested Information from the Investor, the Company may file the registration statement without including Registrable Securities of the Investor. Thefailure to so include in any registration statement the Registrable Securities of the Investor (with regard to that registration statement) shall not result in anyliability on the part of the Company to the Investor.3.7 Registration Indemnification.(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by Law, the Selling Shareholder and its Affiliates andtheir respective officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each Person who controls(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Selling Shareholder or such other indemnified Person andthe officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controlling Person, eachunderwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) suchunderwriter, from and against all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonableattorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, the “Losses”), as incurred, arising out of,caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement,prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto or any omission (or alleged omission) of a materialfact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and(without limitation of the preceding portions of this Section 3.7(a)) will reimburse the Selling Shareholder, each of its Affiliates, and each of their respectiveofficers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents and each such Person who controls the SellingShareholder and the officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys and agents of each such controllingPerson, each such underwriter and each such Person who controls any such underwriter, for any legal and any other expenses reasonably incurred inconnection with investigating and defending or settling any such claim, Loss, damage, liability or action, except that, with respect to a Selling Shareholder,the Company will not be liable to the extent that any such claim, Loss, damage, liability or action arises out of or is based upon an untrue statement oralleged untrue statement in or omission or alleged omission from any such registration statement, prospectus or preliminary prospectus or Free WritingProspectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by such SellingShareholder expressly for use therein.(b) In connection with any registration statement in which the Selling Shareholder is participating, the Selling Shareholder shall indemnify theCompany, its directors and officers, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the ExchangeAct) the Company, from and against all Losses, as incurred, arising out of, caused by, resulting from or relating to any untrue statement (or alleged untrue - 13 -statement) of material fact contained in the registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment orsupplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in lightof the circumstances under which they were made, not misleading, and (without limitation of the preceding portions of this Section 3.7(b)) will reimburse theCompany, its directors and officers and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of theExchange Act) for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss,damage, liability or action, in each case solely to the extent, but only to the extent, that such untrue statement or omission is made in such registrationstatement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto in reliance upon and in conformity withwritten information furnished to the Company by the Selling Shareholder expressly for inclusion in such registration statement, prospectus or preliminaryprospectus or Free Writing Prospectus or any amendment or supplement thereto. Notwithstanding the foregoing, the Selling Shareholder shall not be liableunder this Section 3.7(b) for amounts in excess of the net proceeds received by it in the offering giving rise to such liability.(c) Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect towhich it seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to theextent that the indemnifying party has been actually and materially prejudiced by such failure to provide such notice on a timely basis.(d) In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencementthereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, to assume the defense thereof, with counselreasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume thedefense thereof and acknowledging the obligations of the indemnifying party with respect to such proceeding, the indemnifying party will not (so long as itshall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnifiedparty hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonablecosts of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may bedefenses available to it which are different from or in addition to the defenses available to such indemnifying party and, as a result, a conflict of interest existsor (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or would reasonably beexpected to be materially prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for theexpenses incurred in connection with retaining one separate legal counsel (for the avoidance of doubt, for all indemnified parties in connection therewith)).For the avoidance of doubt, notwithstanding any such assumption by an indemnifying party, the indemnified party shall have the right to employ separatecounsel in any such matter and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified partyexcept as provided in the previous sentence. An indemnifying party shall not be liable for any settlement of an action or claim effected without its - 14 -consent (which consent shall not be unreasonably withheld, conditioned or delayed). No matter shall be settled by an indemnifying party without the consentof the indemnified party (which consent shall not be unreasonably withheld, conditioned or delayed), unless such settlement (x) includes as an unconditionalterm thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation, and (y) doesnot include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.(e) The indemnification provided for under this Agreement shall survive the Transfer of the Registrable Securities and the termination of thisAgreement.(f) If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, anyPerson who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses withrespect to which such Person would be entitled to such indemnification but for such reason or reasons, in such proportion as is appropriate to reflect therelative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements oromissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of theindemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission tostate a material fact relates to information supplied by the indemnifying party or by the indemnified party, the Persons’ relative knowledge and access toinformation concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and otherequitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contributionwere determined by pro rata or per capita allocation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the SecuritiesAct) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, theSelling Shareholder shall not be required to make a contribution in excess of the net proceeds received by it from its sale of Registrable Securities inconnection with the offering that gave rise to the contribution obligation.ARTICLE IVCONFIDENTIALITY4.1 Confidentiality. The Investor hereby agrees that all Confidential Information with respect to the Company, its Subsidiaries and its and theirbusinesses, finances and operations shall be kept confidential by it and shall not be disclosed by it in any manner whatsoever, except as expressly permittedby this Section 4.1. Any Confidential Information may be disclosed:(a) by the Investor (x) to any of its Affiliates (other than any portfolio companies thereof), (y) to its or such Affiliate’s respective directors,managers, members, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors thereof)and (z) in the case of any Investor that is a limited partnership, limited liability company or other investment vehicle, to any current or prospective - 15 -direct or indirect general partner, limited partner, member, equityholder or management company of such Investor or any former direct or indirect generalpartner, limited partner, member, equityholder or management company which retains an economic interest in such Investor (or any employee, attorney,accountant, consultant, banker or financial advisor or representative of any of the foregoing) (each of the Persons described in clauses (x), (y) and (z),collectively, for purposes of this Section 4.1 and the definition of Confidential Information, “Representatives”), in each case, solely if and to the extent anyRepresentative needs to be provided such Confidential Information to assist such Investor or its Affiliates in evaluating or reviewing its direct or indirectinvestment in the Company, including in connection with the disposition thereof, and each Representative of the Investor shall be deemed to be bound bythe provisions of this Section 4.1 and such Investor shall be responsible for any breach of this Section 4.1 by any such Representative to the same extent as ifsuch breach had been committed by the Investor; provided, further, that the Investor hereby acknowledges that it is aware, and it will advise itsRepresentatives to whom it provides Confidential Information, that such Confidential Information may include material non-public information and thatapplicable securities laws impose restrictions on trading securities when in possession of such information and on communicating such information to anyother person under circumstances in which it is reasonably foreseeable that such person is likely to trade in such securities;(b) by the Investor or any of its Representatives to the extent the Company consents in writing;(c) by the Investor or any of its Representatives to a potential Transferee (so long as such Transfer is permitted hereunder); provided, that suchTransferee agrees to be bound by the provisions of this Section 4.1 (or a confidentiality agreement with the Company having restrictions substantially similarto (and no less restrictive than) this Section 4.1) and such Investor shall be responsible for any breach of this Section 4.1 (or such confidentiality agreement)by any such potential Transferee to the same extent as if such breach had been committed by the Investor; and(d) by the Investor or any of its Representatives to the extent that such Investor or Representative has received advice from its counsel that it islegally compelled to do so or is required to do so to comply with Applicable Law or legal process or Governmental Authority request or the rules of anysecurities exchange on which its securities are listed or the rules and regulations of any SRO; provided, that prior to making such disclosure, such Investor orRepresentative, as the case may be, uses commercially reasonable efforts to preserve the confidentiality of the Confidential Information to the extentreasonably practicable and permitted by Applicable Law, including, to the extent permitted by Applicable Law, (A) consulting with the Company regardingsuch disclosure and (B) if requested by the Company, assisting the Company, at the Company’s expense, in seeking a protective order to prevent therequested disclosure; provided, further, that such Investor or Representative, as the case may be, uses reasonable best efforts to disclose only that portion ofthe Confidential Information as is requested by the applicable Governmental Authority or as is, based on the advice of its counsel, legally required orcompelled. - 16 -ARTICLE VDEFINITIONS5.1 Defined Terms. Capitalized terms when used in this Agreement have the following meanings:“Affiliate” means, with respect to any Person, an “affiliate” as defined in Rule 405 of the regulations promulgated under the Securities Act and withrespect to each Investor, an “affiliate” of such Investor as defined in Rule 405 of the regulations promulgated under the Securities Act and any InvestmentFund, investment vehicle or holding company of which such Investor or an Affiliate of such Investor serves as the general partner, managing member ordiscretionary manager or advisor; provided, however, that notwithstanding the foregoing, an Affiliate of an Investor shall not include (x) any portfoliocompany of any such Person or of such Investor or any Investment Fund, vehicle or holding company, (y) any limited partners of such Investor, or (z) any ofthe Other Holders or any of their respective Affiliates.“Agreement” has the meaning set forth in the preamble.“Applicable Law” means, with respect to any Person, any Law applicable to such Person, its assets, properties, operations or business.“Beneficial Owner” or “Beneficially Own” has the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and a Person’s beneficialownership of securities shall be calculated in accordance with the provisions of such Rule (in each case, irrespective of whether or not such Rule is actuallyapplicable in such circumstance).“Blackout Period” means (i) any regular quarterly period during which directors and executive officers of the Company are not permitted to trade underthe insider trading policy of the Company then in effect, provided, that if the Investor proposes to sell Registrable Securities during such period, theCompany shall consider in good faith facilitating such sale during such period, and (ii) in the event that the Company determines in good faith that theregistration would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of the Company or anymaterial transaction under consideration by the Company or would require disclosure of information that has not been, and is not otherwise required to be,disclosed to the public, a period of no more than 30 days in any 90-day period or 90 days in any 365-day period.“Blackstone Investor” means Blackstone Capital Partners (Cayman) V L.P., Blackstone Capital Partners (Cayman) V-A L.P., BCP (Cayman) V-S L.P.,Blackstone Family Investment Partnership (Cayman) V L.P., Blackstone Family Investment Partnership (Cayman) V-A L.P., Blackstone ParticipationPartnership (Cayman) V L.P. and any of their “Permitted Transferees” (as such term is defined in the Shareholders Agreement, dated as of the date hereof, byand among the Company and the foregoing).“Board” has the meaning set forth in Section 1.1(b)(ii). - 17 -“Business Day” means a day other than a Saturday, a Sunday or another day on which commercial banking institutions in New York, New York orEindhoven, the Netherlands are authorized or required by Law to be closed.“Closing” shall have the meaning set forth in the Merger Agreement.“Closing Date” shall have the meaning set forth in the Merger Agreement.“Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act.“Company” has the meaning set forth in the preamble.“Company Common Shares” has the meaning set forth in the recitals.“Confidential Information” means all information (irrespective of the form of communication, and irrespective of whether obtained prior to or after thedate hereof) obtained by or on behalf of the Investor or its Representatives from the Company or its Representatives, through the Shares Beneficially Ownedor through the rights granted pursuant hereto, other than information which (i) was or becomes generally available to the public other than as a result of abreach of this Agreement by the Investor or such Representatives, (ii) was or becomes available to the Investor or such Representatives on a non-confidentialbasis from a source other than the Company or its Representatives, provided, that the source thereof is not known by the Investor or such Representatives tobe bound by an obligation of confidentiality to the Company, or (iii) is independently developed by the Investor or such Representatives without the use ofor reference to any such information that would otherwise be Confidential Information hereunder. Subject to clauses (i)-(iii) above, Confidential Informationalso includes all non-public information previously provided by the Company or its Representatives to the Investor or its Representatives pursuant to theConfidentiality Agreement, including all information, documents and reports referred to thereunder, or otherwise.“Confidentiality Agreement” means the letter agreement, dated as of December 22, 2014, between Freescale and the Company and any amendmentsthereto or side letters entered into in connection therewith.“Contract” means any contract, lease, license, indenture, loan, note, agreement or other legally binding commitment, arrangement or undertaking(whether written or oral and whether express or implied).“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whetherthrough the ownership of voting securities, by contract or otherwise.“Controlled Affiliate” means any Affiliate of the specified Person that is, directly or indirectly, Controlled by the specified Person.“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. - 18 -“Freescale” has the meaning set forth in the recitals.“FINRA” means the Financial Industry Regulatory Authority.“Free Writing Prospectus” has the meaning set forth in Section 3.4(a)(iv).“Governmental Authority” means any federal, national, state, local, cantonal, municipal, international or multinational government or politicalsubdivision thereof, governmental department, commission, board, bureau, agency, taxing or regulatory authority, instrumentality or judicial oradministrative body, or arbitrator or SRO, having jurisdiction over the matter or matters in question.“Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.“Inspectors” has the meaning set forth in Section 3.4(a)(xiii).“Investment Fund” means, with respect to an Investor, any investment fund, investment vehicle or other account that is, directly or indirectly, managedor advised by such Investor or any of its Controlled Affiliates.“Investor” has the meaning set forth in the preamble.“Law” has the meaning set forth in the Merger Agreement.“Losses” has the meaning set forth in Section 3.7(a).“Merger” has the meaning set forth in the recitals.“Merger Agreement” has the meaning set forth in the recitals.“Merger Sub” has the meaning set forth in the recitals.“Non-Liable Person” has the meaning set forth in Section 6.12.“Other Holder” means any Person that has registration rights under any Other Shareholder Agreement.“Other Shareholder Agreements” mean the shareholders agreements (other than this Agreement) entered into at the closing of the Merger with certainformer equityholders of Freescale Holdings L.P. in accordance with the Merger Agreement.“Permitted Transferee” means, with respect to any Person, any Affiliate of such Person.“Permitted Transfers” has the meaning set forth in Section 1.1(b).“Person” has the meaning set forth in the Merger Agreement.“Piggyback Registration” has the meaning set forth in Section 3.1(a)(i). - 19 -“Prospectus” means the prospectus included in any Shelf Registration Statement or a Piggyback Registration (including a prospectus that disclosesinformation previously omitted from a prospectus filed as part of an effective Shelf Registration Statement or Piggyback Registration in reliance upon Rule430A or Rule 430B promulgated under the Securities Act), as amended or supplemented by any prospectus supplement or any issuer free writing prospectus(as defined in Rule 433 under the Securities Act), with respect to the offering of any portion of the Registrable Securities covered by such Shelf RegistrationStatement or Piggyback Registration, and all other amendments and supplements to the prospectus, including post-effective amendments, and all materialincorporated by reference or deemed to be incorporated by reference in such prospectus.“Records” has the meaning set forth in Section 3.4(a)(xiii).“Registrable Securities” means, with respect to the Investor, (1) the Shares issued in connection with the Merger, and (2) any additional securitiesissued or issuable as a dividend or distribution or in exchange for, or in respect of such Shares; provided, that any such Shares shall cease to be RegistrableSecurities when (i) they are sold pursuant to an effective registration statement under the Securities Act, (ii) they are sold pursuant to Rule 144 under theSecurities Act or (iii) they shall have ceased to be outstanding.“Representatives” has the meaning set forth in Section 5.1(a).“Requested Information” has the meaning set forth in Section 3.6.“Restricted Period” has the meaning set forth in Section 1.1(a).“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.“Selling Shareholder” has the meaning set forth in Section 3.4(a)(i).“Shares” has the meaning set forth in the recitals.“Shelf Registration Statement” has the meaning set forth in the Other Shareholder Agreement entered into at the closing of the Merger with theBlackstone Investor (the “Blackstone Shareholder Agreement”).“SRO” means (i) any “self regulatory organization” as defined in Section 3(a)(26) of the Exchange Act, (ii) any other United States or foreign securitiesexchange, futures exchange, commodities exchange or contract market, or (iii) any other securities exchange.“Subsidiary” shall have the meaning set forth in the Merger Agreement.“Total Economic Interest” means, as of any date of determination, the total economic interests of all Voting Securities then outstanding. Thepercentage of the Total Economic Interest Beneficially Owned by any Person as of any date of determination is the percentage of the Total Economic Interestthen Beneficially Owned by such Person, including pursuant to any swaps or any other agreements, transactions or series of transactions, whether any suchswap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise. - 20 -“Total Voting Power” means, as of any date of determination, the total number of votes that may be cast in the election of directors of the Company ifall Voting Securities then outstanding were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power BeneficiallyOwned by any Person as of any date of determination is the percentage of the Total Voting Power of the Company that is represented by the total number ofvotes that may be cast in the election of directors of the Company by Voting Securities then Beneficially Owned by such Person.“Transfer” means (i) any direct or indirect offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operationof law or otherwise), either voluntary or involuntary, or entry into any Contract, option or other arrangement or understanding with respect to any offer, sale,lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any capital stock or interest in anycapital stock or (ii) in respect of any capital stock or interest in any capital stock, to enter into any swap or any other agreement, transaction or series oftransactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of such capital stock or interest incapital stock, whether any such swap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise.“Transferor” means a Person that Transfers or proposes to Transfer; and “Transferee” means a Person to whom a Transfer is made or is proposed to be made.“Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.“Volume Limitation” has the meaning set forth in Section 1.1(c)(iii).“Voting Securities” means Company Common Shares and any other securities of the Company entitled to vote generally in the election of directors ofthe Company.5.2 Interpretation. Whenever used: the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”,and the words “hereof” and “herein” and similar words shall be construed as references to this Agreement as a whole and not limited to the particular Article,Section, Annex, Exhibit or Schedule in which the reference appears. Unless the context otherwise requires, references herein: (x) to Articles, Sections,Annexes, Exhibits and Schedules mean the Articles, Sections and Annexes of, and Exhibits and Schedules attached to, this Agreement; (y) to an agreement,instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extentpermitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto andany regulations promulgated thereunder. References to “$” or “dollars” means United States dollars. Any reference in this Agreement to any gender shallinclude all genders. The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. The Annexes, Exhibits andSchedules referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The - 21 -headings of the Articles and Sections are for convenience of reference only and do not affect the interpretation of any of the provisions hereof. If, and as oftenas, there is any change in the outstanding Company Common Shares by reason of share dividends, splits, reverse splits, spin-offs, split-ups, mergers,reclassifications, reorganizations, recapitalizations, combinations or exchanges of shares and the like, appropriate adjustment shall be made in the provisionsof this Agreement so as to fairly and equitably preserve, as far as practicable, the rights and obligations set forth herein that continue to be applicable on thedate of such change. No rule of construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement,as this Agreement is the product of negotiation between sophisticated parties advised by counsel.ARTICLE VIMISCELLANEOUS6.1 Term. This Agreement shall automatically terminate upon the earlier of (i) the termination of the Blackstone Agreement and (ii) the date that theInvestor Beneficially Owns less than 5% of the Shares Beneficially Owned by the Investor as of immediately following the Closing (as defined in the MergerAgreement). If this Agreement is terminated pursuant to this Section 6.1, this Agreement shall immediately then be terminated and of no further force andeffect, except for the provisions set forth in this Article VI, which shall survive in accordance with their terms. Notwithstanding anything to the contrary inthis Agreement, Section 4.1 shall terminate upon the three month anniversary of the Closing.6.2 Notices. All notices, consents and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been dulygiven upon receipt) by hand delivery, by prepaid overnight courier (providing written proof of delivery), by confirmed e-mail transmission or by certified orregistered mail (return receipt requested and first class postage prepaid), addressed as follows: (i) if to the Company, to: Name: NXP Semiconductors N.V. Address: General Counsel High Tech Campus 60 5656 AG Eindhoven The Netherlands Email: guido.dierick@nxp.com Attention: Guido Dierick with a copy to (which shall not be considered notice): Name: Simpson Thacher & Bartlett LLP Address: 425 Lexington Avenue New York, New York 10017 Fax: (212) 455-2502 Email: ghorowitz@stblaw.com ecooper@stblaw.com Attention: Gary Horowitz Elizabeth Cooper - 22 -(ii) if to the Investor, to: Name: TPG Partners IV – AIV, L.P. TPG Partners V – AIV, L.P. TPG FOF V-A, L.P. TPG FOF V-B, L.P. Address: 301 Commerce Street, Suite 3300 Fort Worth, TX 76102 Fax: (817) 871-4001 Attention: General Counsel with a copy to (which shall not be considered notice): Name: Skadden, Arps, Slate, Meagher & Flom LLP Address: Four Times Square New York, New York 10036 Fax: (212) 735-2000 Email: Kenton.King@skadden.com Allison.Schneirov@skadden.com Amr.Razzak@skadden.com Attention: Kenton J. King Allison R. Schneirov Amr Razzakor to such other address (i.e., e-mail address) for a party as shall be specified in a notice given in accordance with this Section 6.2; provided that any noticereceived by email transmission or otherwise at the addressee’s location on any Business Day after 5:00 P.M. (addressee’s local time) shall be deemed to havebeen received at 9:00 A.M. (addressee’s local time) on the next Business Day; provided, further that notice of any change to the address or any of the otherdetails specified in or pursuant to this Section 6.2 shall not be deemed to have been received until, and shall be deemed to have been received upon, the laterof the date specified in such notice or the date that is five (5) Business Days after such notice would otherwise be deemed to have been received pursuant tothis Section 6.2.6.3 Amendments and Waivers. Each of the parties hereto agrees that no provision of this Agreement may be amended or modified unless suchamendment or modification is in writing and signed by all parties hereto. No failure or delay by any party in exercising any right, power or privilegehereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided byApplicable Law. - 23 -6.4 Successors and Assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto withoutthe prior written consent of the other parties, provided that any proposed assignment by the Investor of any of its rights herein to any party other than to anAffiliate of the Investor may be granted or withheld in the Company’s sole and absolute discretion, it being understood that it is the intention of the partieshereto that the rights afforded to the Investor are personal to the Investor and are not transferable except as expressly provided herein. Subject to thepreceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.Any attempted assignment in violation of this Section 6.4 shall be void.6.5 Severability. If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any ApplicableLaw or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term orother provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect theoriginal intent of the parties as closely as possible to the fullest extent permitted by Applicable Law in an acceptable manner to the end that the transactionscontemplated hereby are fulfilled to the extent possible.6.6 Counterparts. This Agreement may be executed in multiple counterparts, each of which when executed and delivered shall be deemed to be anoriginal but all of which taken together shall constitute one and the same agreement.6.7 Entire Agreement. This Agreement (including the documents and the instruments referred to in this Agreement), together with the ConfidentialityAgreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respectto the subject matter of this Agreement.6.8 Governing Law; Jurisdiction. This Agreement and all litigation, claims, actions, suits, hearings or proceedings (whether civil, criminal oradministrative and whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Agreement, any of the transactionscontemplated by this Agreement or the actions of the Company or the Investor in the negotiation, administration, performance and enforcement hereof orthereof, shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to any choice or conflict of Lawsprovision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than theState of New York. Each of the parties hereto hereby (a) expressly and irrevocably submits to the exclusive personal jurisdiction of any United States federalcourt located in the Southern District of the State of New York or any New York state court located in Manhattan in the event any dispute arises out of thisAgreement or any of the transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction bymotion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Agreement or any of the transactionscontemplated by this Agreement in any court other than the courts as described in (a) above; provided that each of the parties shall have the right to bringany action or proceeding for enforcement of a judgment - 24 -entered by any United States federal court located in the State of New York or any New York state court in any other court or jurisdiction. Each partyirrevocably consents to the service of process outside the territorial jurisdiction of the courts referred to herein in any such action or proceeding in connectionwith this Agreement or the transactions contemplated hereby by mailing copies thereof by registered United States mail, postage prepaid, return receiptrequested, to its address as specified in or pursuant to Section 6.2. However, the foregoing shall not limit the right of a party to effect service of process on theother party by any other legally available method.6.9 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THISAGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.EACH OF THE PARTIES HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHERPARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TOENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,(C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THISAGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.6.10 Specific Performance. The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunderwill cause irreparable injury to the non-breaching parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each partyhereby consents to the granting of injunctive relief by any court of competent jurisdiction to prevent breaches of this Agreement, to enforce specifically theterms and provisions hereof and to compel performance of such party’s obligations, this being in addition to any other remedy to which any party is entitledunder this Agreement. The parties further agree to waive any requirement for the securing or posting of any bond in connection with any such remedy, andthat such remedy shall be in addition to any other remedy to which a party is entitled at law or in equity.6.11 No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and each suchparty’s respective heirs, successors and permitted assigns; provided, that the Persons indemnified under Section 3.9 are intended third party beneficiaries ofSection 3.9, and Non-Liable Persons are intended third party beneficiaries of Section 6.12.6.12 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that any party heretomay be a partnership or limited liability company, each party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledgesthat no Persons other than the named parties hereto shall have any obligation hereunder and that it has no rights of recovery hereunder against, and norecourse hereunder or in respect of any oral representations made or alleged to be made in - 25 -connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager, assignee, incorporator,controlling Person, fiduciary, representative or employee of any Investor (or any of their heirs, successors or permitted assigns), or against any former, currentor future director, officer, agent, employee, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative, general or limited partner,shareholder, manager or member of any of the foregoing Persons, but in each case not including the named parties hereto (each, a “Non-Liable Person”),whether by or through attempted piercing of the corporate veil, by or through a claim (whether in tort, contract or otherwise) by or on behalf of such partyagainst any Non-Liable Person, by the enforcement of any assignment or by any legal or equitable proceeding, or by virtue of any statute, regulation or otherApplicable Law or otherwise; it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwisebe incurred by any Non-Liable Person, as such, for any obligations of the applicable party under this Agreement or the transactions contemplated hereby, inrespect of any oral representations made or alleged to have been made in connection herewith or therewith or for any claim (whether in tort, contract orotherwise) based on, in respect of or by reason of, such obligations or their creation.6.13 Scope of Agreement. Notwithstanding anything to the contrary provided elsewhere herein, none of the provisions of this Agreement shall in anyway limit the activities of TPG Capital, L.P. and its affiliates in their businesses distinct from the private equity business of TPG Capital, L.P., provided thatthe Confidential Information is not made available to Representatives of TPG Capital, L.P. and its affiliates who are not involved in the private equitybusiness of TPG Capital, L.P. Should any Confidential Information be made available to a Representative of TPG Capital, L.P. and its affiliates who is notinvolved in the private equity business of TPG Capital, L.P., such Representative shall be bound by this Agreement in accordance with its terms. In addition,none of the provisions of this Agreement shall in any way apply to any portfolio company of an affiliate of TPG Capital, L.P., provided, however, that shouldthe Confidential Information be made available to a Representative of any portfolio company of an affiliate of TPG Capital, L.P., such Representative shallbe bound by this Agreement in accordance with its terms.[Signature page follows] - 26 -IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their authorized representatives as of the date first above written. NXP Semiconductors N.V.By: /s/ Guido DierickName: Guido DierickTitle: Executive Vice President and General Counsel - 27 - TPG PARTNERS IV — AIV, L.P. By: TPG GenPar IV-AIV, L.P., its general partner By: TPG Advisors IV-AIV, Inc., its general partner By: /s/ Clive Bode Name: Clive Bode Title: Vice President - 28 - TPG PARTNERS V — AIV, L.P. By: TPG GenPar V-AIV, L.P., its general partner By: TPG Advisors V-AIV, Inc., its general partner By: /s/ Clive Bode Name: Clive Bode Title: Vice President - 29 - TPG FOF V-A, L.P. By: TPG GenPar V L.P., its general partner By: TPG GenPar V Advisors, LLC, its general partner By: /s/ Clive Bode Name: Clive Bode Title: Vice President - 30 - TPG FOF V-B, L.P. By: TPG GenPar V L.P., its general partner By: TPG GenPar V Advisors, LLC, its general partner By: /s/ Clive Bode Name: Clive Bode Title: Vice President - 31 -EXHIBIT AFORM OF JOINDERThe undersigned is executing and delivering this Joinder Agreement pursuant to that certain NXP Semiconductors N.V. Shareholders Agreement,dated as of December 7, 2015 (as amended, restated, supplemented or otherwise modified in accordance with the terms thereof, the “ShareholdersAgreement”) by and among NXP Semiconductors N.V., a public company with limited liability (naamloze vennootschap) incorporated under the laws of TheNetherlands, registered with the Dutch Chamber of Commerce under number 34253298 and having its corporate seat (statutaire zetel) in Eindhoven, theshareholder of the Company whose name appears on the signature pages thereto (the “Investor”), and any other Persons who become a party thereto inaccordance with the terms thereof. Capitalized terms used but not defined in this Joinder Agreement shall have the respective meanings ascribed to suchterms in the Shareholders Agreement.By executing and delivering this Joinder Agreement to the Shareholders Agreement, the undersigned hereby adopts and approves theShareholders Agreement and agrees, effective commencing on the date hereof and as a condition to the undersigned’s becoming the Transferee of Shares, tobecome a party to, and to be bound by and comply with the provisions of, the Shareholders Agreement applicable to the Investor, in the same manner as if theundersigned were an original signatory to the Shareholders Agreement.The undersigned hereby represents and warrants that, pursuant to this Joinder Agreement and the Shareholders Agreement, it is a PermittedTransferee of the Investor and will be the lawful Beneficial Owner of [●] Shares as of the date hereof.The undersigned acknowledges and agrees that Section 6.2 through Section 6.12 of the Shareholders Agreement are incorporated herein byreference, mutatis mutandis.[Signature page follows] - 32 -Accordingly, the undersigned have executed and delivered this Joinder Agreement as of the day of , . TRANSFEREE Print Name: Address: Telephone: Facsimile: Email: - 33 -AGREED AND ACCEPTEDas of the day of , . NXP Semiconductors N.V. By: Name: Title: [TRANSFEROR By: Name: Title: ] - 34 -Exhibit 12.1Certification of R. Clemmer filed pursuant to 17 CFR 240. 13a-14(a)CERTIFICATIONI, Richard L. Clemmer, certify that:1. I have reviewed this annual report on Form 20-F of NXP Semiconductors N.V.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the company as of, and for, the periods presented in this report;4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the companyand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annualreport that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to thecompany’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the company’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal controlover financial reporting.Dated: February 26, 2016Richard L. ClemmerExecutive Director, President and Chief Executive OfficerExhibit 12.2Certification of D. Durn filed pursuant to 17 CFR 240. 13a-14(a)CERTIFICATIONI, Dan Durn, certify that:1. I have reviewed this annual report on Form 20-F of NXP Semiconductors N.V.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the company as of, and for, the periods presented in this report;4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the companyand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annualreport that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and 5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to thecompany’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the company’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal controlover financial reporting.Date: February 26, 2016Dan DurnExecutive Vice President and Chief Financial Officer Exhibit 13.1Certification of R. Clemmer filed pursuant to 17 CFR 240. 13a-14(b)CERTIFICATIONPursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), theundersigned officer of NXP Semiconductors N.V. (the “Company”), hereby certifies, to such officer’s knowledge, that:The Annual Report on Form 20-F for the year ended December 31, 2015 (the “Report”) of the Company fully complies with the requirements of section 13(a)or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company.Dated: February 26, 2016Richard L. ClemmerExecutive Director, President and Chief Executive OfficerThe foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350,chapter 63 of title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure document.Exhibit 13.2Certification of D. Durn filed pursuant to 17 CFR 240. 13a-14(b)CERTIFICATIONPursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), theundersigned officer of NXP Semiconductors N.V. (the “Company”), hereby certifies, to such officer’s knowledge, that:The Annual Report on Form 20-F for the year ended December 31, 2015 (the “Report”) of the Company fully complies with the requirements of section 13(a)or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company.Date: February 26, 2016Dan DurnExecutive Vice President and Chief Financial OfficerThe foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350,chapter 63 of title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure document.Exhibit 21.1LIST OF SIGNIFICANT SUBSIDIARIES OF THE REGISTRANT.List of direct and indirect subsidiaries as of December 31, 2015 Country ofincorporation Name legal entityAustralia Cohda Wireless Pty Ltd. (23.1%)Austria NXP Semiconductors Austria GmbHAustria Catena DSP GmbHBelgium NXP Semiconductors Belgium N.V.Brazil Freescale Semicondutores Brasil Ltda.British Virgin Islands Freescale Semiconductor Holding LimitedCanada NXP Semiconductors Canada Inc.Canada Freescale Semiconductor Canada Inc.Cayman Islands Freescale Semiconductor Cayman Holdings Ltd.China NXP Semiconductors Guangdong Ltd.China NXP (China) Management Ltd.China Suzhou ASEN Semiconductors Co., Ltd. (40%)*China Advanced Semiconductor Manufacturing Corporation Ltd (27.47%)*China Datang NXP Semiconductors Co., Ltd (49%)*China WeEn Semiconductor Co., Ltd (49%)*China WeEn Semiconductor (Shanghai) Co., Ltd.China Jilin WeEn Semiconductors Co., Ltd.China Freescale Qiangxin (Tianjin) IC Design Co. Ltd. (75%)*China Freescale Semiconductor (China) Ltd.Czech Republic Freescale Polovodice Ceska republika s.r.o.Denmark Freescale Semiconductors Danmark A/SFinland NXP Semiconductors Finland OyFrance NXP Semiconductors France SASFrance Freescale Semiconducteurs France SASGermany SMST Unterstützungskasse GmbHGermany NXP Semiconductors Germany GmbHGermany NXP Stresemannallee 101 Dritte Verwaltungs GmbHGermany Freescale Halbleiter Deutschland GmbHGermany Catena Germany GmbHHong Kong NXP Semiconductors Hong Kong Ltd.Hong Kong Semiconductors NXP Ltd.Hong Kong WeEn Semiconductors (Hong Kong)Hong Kong Freescale Semiconductor Hong Kong LimitedHong Kong Freescale Semiconductor Asia Enablement LimitedHungary NXP Semiconductors Hungary Ltd.Hungary Providence Holdings Befektetési Korlátolt Felelősségű TársaságIndia NXP Semiconductors India Pvt. Ltd.India Freescale Semiconductor India Pvt. Ltd.India Intoto Software India Private LimitedIndia Zenverge India Technologies Private LimitedIreland GloNav Ltd.Israel Athena Smartcard Solutions LimitedIsrael Freescale Semiconductor Israel LimitedItaly Freescale Semiconduttori Italia S.r.lJapan NXP Semiconductors Japan Ltd.Japan Freescale Semiconductor Japan LimitedKorea NXP Semiconductors Korea Ltd.Korea Freescale Semiconductor Korea, Inc.Luxembourg Freescale Semiconductor Luxembourg Investing Services S.à.r.l.Luxembourg Freescale Semiconductor Luxembourg Treasury Services S.à.r.l.Malaysia NXP Semiconductors Malaysia Sdn. Bhd.Malaysia Freescale Asia Fulfillment Centre Sdn Bhd.Malaysia Freescale Semiconductor Malaysia Sdn Bhd.Mexico Freescale Semiconductors México, S. de R.L. de C.V.Netherlands NXP B.V.Netherlands NXP Semiconductors Netherlands B.V.Netherlands NXP Software B.V.Netherlands Catena Holding B.V.Netherlands Catena Microelectronics B.V.Netherlands Catena Radio Design B.V.Philippines NXP Semiconductors Philippines, Inc.Philippines NXP Semiconductors Cabuyao, Inc.Philippines Laguna Ventures, Inc. (39.9%)*Poland NXP Semiconductors Poland Sp.z.o.o.Romania Freescale Semiconductor Romania SrlRussia NXP Semiconductors Russia O.O.O.Russia Freescale Semiconductor LLCSingapore NXP Semiconductors Singapore Pte. Ltd.Singapore Systems on Silicon Manufacturing Company Pte Ltd (61.2%)*Singapore Freescale Semiconductor Singapore Pte. Ltd.Sweden NXP Semiconductors Sweden ABSweden Catena Wireless Electronics ABSweden Freescale Semiconductor Nordic ABSwitzerland NXP Semiconductors Switzerland AGSwitzerland Freescale Semiconductor EME&A SASwitzerland Freescale Semiconductor S.ATaiwan NXP Semiconductors Taiwan Ltd.Taiwan Freescale Semiconductor Taiwan Ltd.Thailand NXP Manufacturing (Thailand) Co., Ltd.Thailand NXP Semiconductors (Thailand) Co., Ltd.Turkey NXP Semiconductors Elektonik Ticaret A.S.United Kingdom NXP Semiconductors UK Ltd.United Kingdom NXP Laboratories UK Holding Ltd.United Kingdom NXP Laboratories UK Ltd.United Kingdom Athena SCS LimitedUnited Kingdom Athena Smartcard LimitedUnited Kingdom WeEn Semiconductors (United Kingdom) LimitedUnited Kingdom Freescale Semiconductor Holding UK LimitedUnited Kingdom Freescale Semiconductor UK LimitedUSA NXP Semiconductors USA, Inc.USA NXP Funding LLCUSA Athena Smartcard Inc.USA Intoto LLCUSA Freescale Semiconductor International CorporationUSA SigmaTel, LLCUSA Zenverge LLCUSA Freescale Semiconductor Holdings V, Inc.USA Freescale Semiconductor, Inc. *= joint ventureExhibit 23Consent of Independent Registered Public Accounting FirmThe Board of DirectorsNXP Semiconductors N.V.We consent to the incorporation by reference in the registration statements on Form S-8 (No. 333-203192, No. 333-190472 and No. 333-172711) of NXPSemiconductors N.V. of our report dated February 26, 2016, with respect to the consolidated balance sheets of NXP Semiconductors N.V. and subsidiaries asof December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each ofthe years in the three-year period ended December 31, 2015, and the effectiveness of internal control over financial reporting as of December 31, 2015, whichreport appears in the December 31, 2015 Annual Report on Form 20-F of NXP Semiconductors N.V.Our report dated February 26, 2016 contains an explanatory paragraph that states that our audit of internal control over financial reporting of NXPSemiconductors N.V. excluded an evaluation of the internal control over financial reporting of Freescale Semiconductor, Ltd. including subsidiaries, whichwas acquired in December 2015./s/ KPMG Accountants N.V.Amstelveen, The NetherlandsFebruary 26, 2016

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