DEF 14A

DEF 14A 1 d202862ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:


☐		Preliminary Proxy Statement

☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒		Definitive Proxy Statement

☐		Definitive Additional Materials

☐		Soliciting Material under §240.14a-12

NXP Semiconductors N.V.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)


Payment of Filing Fee (Check the appropriate box):

☒		No fee required.

☐		Fee paid previously with preliminary materials.

☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

LOGO

NOTICE OF AND AGENDA FOR 2022

ANNUAL GENERAL MEETING OF SHAREHOLDERS

April 11, 2022

Dear Shareholders:

I invite you to attend the 2022 Annual General Meeting of Shareholders (the “Annual General Meeting” or “AGM”) of NXP Semiconductors N.V. (“we,” “us,” “our” or the “Company”), which will be held on Wednesday, June 1, 2022 at 9:00 a.m. Central European Time at the Head Office of the Company, High Tech Campus 60, 5656 AG, Eindhoven, The Netherlands. If meeting restrictions are implemented related to the coronavirus pandemic, we will publish updates on our website at http://investors.nxp.com and will issue a press release.

At the Annual General Meeting, we will discuss, and the Company’s shareholders will vote on, the following items of business:


Item 1		Adoption of the 2021 statutory annual accounts

Item 2		Discharge the members of the Company’s Board of Directors (the “Board”) for their responsibilities in the financial year ended December 31, 2021

Item 3		Re-appointment of nine current directors and appointment of one new director named in this proxy statement

Item 4		Authorization of the Board to issue ordinary shares of the Company (“ordinary shares”) and grant rights to acquire ordinary shares

Item 5		Authorization of the Board to restrict or exclude pre-emption rights accruing in connection with an issue of shares or grant of rights

Item 6		Authorization of the Board to repurchase ordinary shares

Item 7		Authorization of the Board to cancel ordinary shares held or to be acquired by the Company

Item 8		Non-binding, advisory vote to approve Named Executive Officer compensation

In addition to the above voting items we will have a discussion of the dividend and reservation policy and the implementation of the Company’s long-term strategy. We will also consider any other business that properly comes before the Annual General Meeting. None of the proposals require the approval of any other proposal to become effective. We intend that this notice of the Annual General Meeting and the accompanying proxy materials will first be made available on our website on or about April 11, 2022. In accordance with Dutch corporate law and our Articles of Association, the record date for determining those shareholders entitled to notice of, and to vote at, the Annual General Meeting has been set at May 4, 2022. We will begin mailing proxy materials to our shareholders on or about May 9, 2022.

At the Annual General Meeting we will also present the consolidated financial statements and independent auditors’ report for the fiscal year ended December 31, 2021. If any other matters properly come before the Annual General Meeting the persons named in the proxy card will vote in their discretion the shares represented by all properly executed proxies.

Messrs. Kaeser, Goldman and Smitham are retiring from our Board at the expiration of their terms as of the end of the Annual General Meeting and are not standing for re-election. Messrs. Kaeser and Goldman joined the Board in connection with NXP’s IPO in 2010 and Mr. Smitham served on the Board since NXP’s merger with Freescale Semiconductor in 2015. These individuals have guided NXP through pivotal milestones in our company’s history, and on behalf of the Board, we want to express our appreciation for their significant contributions to NXP throughout their tenure.

NOTICE OF AND AGENDA FOR 2022

ANNUAL GENERAL MEETING OF SHAREHOLDERS (continued)

YOUR VOTE IS VERY IMPORTANT. Please read this proxy statement and the accompanying proxy materials. Whether or not you plan to attend the Annual General Meeting, please submit your proxy card or voting instructions as soon as possible.

By order of the Board of Directors of NXP Semiconductors N.V.,

LOGO

Jennifer B. Wuamett

Secretary

Eindhoven, The Netherlands

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on June 1, 2022

This proxy statement and the accompanying proxy card are first being made available on or about April 11, 2022. This proxy statement, our 2021 Annual Report on Form 10-K and the 2021 Statutory Annual Report are available on our website at http://investors.nxp.com by clicking “Corporate Governance”, then “Annual Meeting”.

We Strongly Encourage You to Sign Up For Electronic Delivery of Proxy Materials

Shareholders may request proxy materials be delivered to them electronically by enrolling at https://enroll.icsdelivery.com/nxpi. Not only will this result in faster delivery of the documents but also allows our shareholders to join us in our efforts to support a sustainable future and mitigate our impact on the environment.

TABLE OF CONTENTS


GENERAL INFORMATION			1

VOTING PROCEDURES			2

Beneficial Owners			2

Shareholders of Record			2

Revocability of Proxy			2

General Matters			2

CORPORATE GOVERNANCE			3

ENVIRONMENTAL, SOCIAL AND GOVERNANCE			4

Environment			6

Human Capital Management			9

Social Responsibility			16

Health and Safety			18

ITEM 1: ADOPTION OF THE 2021 STATUTORY ANNUAL ACCOUNTS			19

ITEM 2: DISCHARGE OF THE BOARD OF DIRECTORS FOR THEIR RESPONSIBILITIES IN THE 2021 FINANCIAL YEAR			19

ITEM 3: (RE-) APPOINTMENT OF DIRECTORS			20

Nominees for Director			22

Nominee Skills and Experience			27

Director Independence			28

HOW OUR BOARD GOVERNS AND IS GOVERNED			29

Rules Governing the Board			29

Board Leadership and Role in Risk Oversight			29

Meetings of NXP’s Board			30

NXP’s Board Committees			30

Audit Committee			31

Human Resources and Compensation Committee			31

Nominating, Governance and Sustainability Committee			32

Setting and Overseeing Strategy			34

Risk Oversight			34

Board Education			36

HOW OUR DIRECTORS ARE SELECTED AND EVALUATED			37

Consideration of Director Nominees			37

Diversity			37

Board Refreshment			37

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			38

HOW OUR DIRECTORS ARE COMPENSATED			39

ITEM 4: AUTHORIZATION OF THE BOARD TO ISSUE ORDINARY SHARES AND GRANT RIGHTS TO ACQUIRE ORDINARY SHARES			40

TABLE OF CONTENTS (continued)


ITEM 5: AUTHORIZATION OF THE BOARD TO RESTRICT OR EXCLUDE PRE-EMPTION RIGHTS ACCRUING IN CONNECTION WITH AN ISSUE OF SHARES OR GRANT OF RIGHTS			40

ITEM 6: AUTHORIZATION OF THE BOARD TO REPURCHASE ORDINARY SHARES OF THE COMPANY			41

ITEM 7: AUTHORIZATION OF THE BOARD TO CANCEL THE COMPANY’S ORDINARY SHARES HELD OR TO BE ACQUIRED			41

ITEM 8: NON-BINDING, ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION			42

EXECUTIVE OFFICERS			42

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			44

EXECUTIVE COMPENSATION			46

Compensation Discussion & Analysis			46

Shareholder Engagement and Resutls of 2021 Advisory Vote on Executive Compensation			48

Compensation Philosophy			50

Key Practices in Determining Executive Compensation			50

Key Components of Our Executive Compensation Program			52

Peer Group Analysis and Benchmarking			53

2021 Compensation Decisions			54

Executive Share Ownership Guidelines			60

Other Practices & Guidelines			60

Employment Arrangements of Named Executive Officers			61

Key Policies and Practices			63

Compensation Practices and Risk			63

Governance			64

Human Resources and Compensation Committee Report			65

Summary Compensation Table			66

Grants of Plan-Based Awards Table			68

Outstanding Equity Awards at Year-End Table			69

Option Exercises and Stock Vested Table			71

Pension Benefits			71

Potential Payments upon Termination or Change of Control			72

CEO Pay Ratio Disclosure			74

Human Resources and Compensation Committee Interlocks and Insider Participation			74

Equity Compensation Plan Information			75

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			76

Related Party Transactions			76

REPORT OF THE AUDIT COMMITTEE			76

THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			77

Independent Registered Public Accounting Firm			77

Auditors’ Fees			77

Audit Committee Pre-Approval Policies			77

TABLE OF CONTENTS (continued)


DELINQUENT SECTION 16(A) REPORTS			77

FUTURE SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE 2023 ANNUAL GENERAL MEETING			78

OTHER MATTERS			78

APPENDIX A: Reconciliation of Non-GAAP Measures			A-1

Forward Looking Statements			A-2

iii

GENERAL INFORMATION

The Board of Directors (the “Board”) of NXP Semiconductors N.V. (“we”, “our”, “us”, “NXP” or the “Company”) is providing these proxy materials to you in connection with the Board’s solicitation of proxies to be voted on at NXP’s Annual General Meeting of Shareholders (the “Annual General Meeting” or the “AGM”) on Wednesday, June 1, 2022. We are requesting your vote on the proposals described in this proxy statement.

NXP will pay the entire cost of soliciting proxies. Our directors, officers and employees, without additional compensation, may solicit proxies or votes in person, by telephone or by electronic communication. We may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to beneficial owners of NXP’s common shares, €0.20 par value (the “common shares” or “ordinary shares”). In addition, we have retained Mackenzie Partners, Inc. to assist in the solicitation of proxies for a fee of $18,500 plus reasonable expenses.

All shareholders as of the close of business on May 4, 2022 (the “Record Date”) are authorized to attend the Annual General Meeting and all of NXP’s outstanding common shares owned as of the Record Date may be voted. As of March 24, 2022, there were 262,552,688 common shares issued and outstanding and there were no other voting securities outstanding. Persons that wish to attend the AGM must notify the Board of their intention to do so no later than May 25, 2022, one week prior to the date of the meeting, by submitting their name and the number of ordinary shares (beneficially) owned to NXP Semiconductors N.V., High Tech Campus 60, 5656 AG Eindhoven, The Netherlands, Attention: Secretary, or by sending an email with such information to nxp.agm@nxp.com. All attendees must be prepared to provide a valid proof of identity for admittance, such as a driver’s license or passport. The additional items that attendees must bring depends on whether they are shareholders of record, beneficial owners or proxy holders. Shareholders holding their shares through a broker must bring proof of beneficial ownership as of the Record Date, such as an account statement reflecting their share ownership on or prior to the Record Date, a copy of the voting instruction form provided by their broker or similar evidence of ownership in order to obtain admittance to the Annual General Meeting. No cameras or other recording equipment will be allowed in the meeting room. Failure to provide the requested documents at the door or failure to comply with the procedures for the AGM may prevent shareholders from being admitted to the AGM.

If meeting restrictions are implemented related to the coronavirus pandemic, we may determine to implement meeting restrictions or protocols or, if authorized by Dutch corporate law, hold a virtual general meeting of shareholders. If you are planning to attend the AGM, please check the http://investors.nxp.com website prior to the meeting date and note the attendance requirements in the paragraphs above. We encourage you to monitor http://investors.nxp.com for updated information, and please check this website in advance of the AGM to confirm the status of the meeting. As always, we encourage you to vote your shares prior to the AGM. We kindly refer to the section titled “Voting Procedures” below for more details on how to exercise your voting rights.

These proxy materials include this proxy statement and NXP’s 2021 Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission (“SEC”).

The Board recommends that you vote your shares as follows:

•

“For” the adoption of the 2021 statutory annual accounts as described in Item 1;

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“For” the discharge of members of the Board for their responsibilities in the financial year 2021 as described in Item 2;

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“For” the re-appointment of nine directors and appointment of one new director listed in Item 3 to the Board;

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“For” the authorization of the Board to issue ordinary shares of the Company and grant rights to acquire ordinary shares as described in Item 4;

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“For” the authorization of the Board to restrict or exclude pre-emption rights accruing in connection with an issue of shares or grant of rights as described in Item 5;

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“For” the authorization of the Board to repurchase ordinary shares as described in Item 6;

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“For” the authorization of the Board to cancel ordinary shares held or to be acquired by the Company as described in Item 7; and

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“For” the approval, on a non-binding, advisory basis, of the compensation of our Named Executive Officers as described in Item 8.

VOTING PROCEDURES

Beneficial Owners

If your shares are held in a stock brokerage account or by a bank, trustee or other nominee, which we refer to as your “broker,” you are considered to be the beneficial owner of these shares, and these proxy materials are being forwarded to you by your broker. As the beneficial owner, you have the right to direct your broker how to vote on your behalf, and you are also invited to attend the Annual General Meeting. Your broker will send you a voting instruction form to direct the broker how to vote your shares. Since you are not the shareholder of record, you may not vote these shares in person at the Annual General Meeting unless you obtain a legal proxy from your broker giving you the right to vote the shares at the Annual General Meeting. The majority of our shareholders are beneficial owners (i.e., hold their shares through a broker rather than directly in their own name). Please refer to the voting instruction form provided by your broker for specific voting procedures.

Shareholders of Record

If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Co., you are considered to be the shareholder of record with respect to those shares and these proxy materials are being sent to you by us. As the shareholder of record, you have the right to vote your proxy directly to NXP by submitting a written proxy or to vote in person at the Annual General Meeting. If you request printed copies of the proxy materials by mail, you will receive a proxy card. Please refer to the summary voting instructions and those included on your proxy card.

•

Internet—You may vote by proxy on the Internet until 4:00 p.m. Eastern Time (10:00 p.m. Central European Time) on May 31, 2022. The website for Internet voting is http://www.proxyvote.com. Easy-to-follow prompts allow you to vote your shares and confirm that your instructions have been properly recorded. If you vote on the Internet, you can request electronic delivery of future proxy materials.

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Telephone—You may vote by proxy until 4:00 p.m. Eastern Time (10:00 p.m. Central European Time) on May 31, 2022 by using the toll-free number listed on your proxy card. Easy-to-follow prompts allow you to vote your shares and confirm that your instructions have been properly recorded.

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Mail—Mark, sign and date your proxy card and mail it to the address listed on the card or NXP at High Tech Campus 60, 5656 AG, Eindhoven, The Netherlands, Attention: Secretary. In order for your vote to be counted, we must receive your proxy card no later than two days before the Annual General Meeting.

Revocability of Proxy

If you are a beneficial owner of shares, please refer to the instructions provided by your broker regarding how to change your vote.

If you are a shareholder of record, you may revoke a proxy given to a representative of NXP in any of the following ways:

•

by sending a written notice of revocation to NXP at High Tech Campus 60, 5656 AG Eindhoven, The Netherlands; Attention: Secretary, which notice must be received before shares of such shareholder are voted at the Annual General Meeting; or

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by properly submitting a later-dated, new proxy, which must be received before shares of such shareholder are voted at the Annual General Meeting (in which case only the later-dated proxy is counted and the earlier proxy is revoked); or

•

by attending the Annual General Meeting and voting in person. Attendance at the Annual General Meeting will not, however, in and of itself, constitute a vote or revocation of a prior proxy.

General Matters

Pursuant to Dutch law, (i) common shares which are represented by “broker non-votes” (i.e. common shares held by brokers which are represented at the Annual General Meeting but which brokers are not empowered to vote on a particular proposal) and (ii) common shares represented at the Annual General Meeting, but which abstain from voting on any matter, are not included in the determination of the common shares voting on such matter, and are only counted for quorum purposes.

If you do not submit specific voting instructions to your broker, your broker will not have the ability to vote your shares in connection with proposals which are considered “non-discretionary” items for which brokerage firms require your voting instructions to vote your shares.

VOTING PROCEDURES (continued)

Each share will be entitled to one vote. According to the Company’s Articles of Association, the chair of the Annual General Meeting determines the method of voting, establishes the outcome of the votes taken, and determines the existence of a quorum and validity of proxies and ballots, and certifies the results of the voting.

The adoption of resolutions at the Annual General Meeting shall require that at least the majority of the issued and outstanding shares of the Company’s issued share capital is present or represented, excluding shares for which no vote can be cast pursuant to article 29, paragraph 2 of the Company’s Articles of Association. Unless otherwise provided for in this proxy, resolutions can be adopted with a simple majority of votes cast.

Other than the proposals described in this proxy statement and matters incident to the conduct of the Annual General Meeting, we do not expect any matters to be presented for a vote at the Annual General Meeting. However, if you grant a proxy and additional matters are properly presented for a vote at the Annual General Meeting, the persons named as proxy holders, Jennifer B. Wuamett or Timothy Shelhamer, will have the discretion to vote your shares on these additional matters. If for any unforeseen reason one or more of our nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board and presented to the Annual General Meeting in accordance with Dutch law.

We expect to announce preliminary voting results at the Annual General Meeting. Final voting results will be published in a Current Report on Form 8-K filed with the SEC within four business days of the Annual General Meeting. If the final voting results are not available within four business days after the Annual General Meeting, we will provide the preliminary results in the Current Report on Form 8-K and the final results in an amendment to the Current Report on Form 8-K within four business days after the final voting results are known to us.

CORPORATE GOVERNANCE

NXP Semiconductors N.V. is the parent company of the NXP group. Our only material asset is our direct ownership of 100% of the share capital of NXP B.V., a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid).

We were incorporated in the Netherlands as a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under the name KASLION Acquisition B.V. on August 2, 2006. On May 21, 2010, we converted into a Dutch public company with limited liability (naamloze vennootschap) and changed our name to NXP Semiconductors N.V. In August 2010, we listed our common shares on the Nasdaq Global Select Market (“Nasdaq”).

We are subject to various corporate governance requirements and best practice codes, the most relevant being those in the Netherlands and the United States. The Dutch Corporate Governance Code (the “DCGC”) applies to all Dutch companies listed on a government-recognized stock exchange, whether in the Netherlands or elsewhere. The DCGC is based on a “comply or explain” principle. Accordingly, companies are required to disclose in their annual reports filed in the Netherlands whether or not they comply with the various rules of the DCGC and if they do not comply with those provisions, to give the reasons therefore. The DCGC contains principles and best practice provisions for boards, shareholders and general meetings of shareholders, financial reporting, auditors, disclosure, compliance and enforcement standards.

Our long-term strategy is to maximize value for our shareholders and other stakeholders and create strong cash flow generation by driving relative market share leadership with profitable growth at 1.5 times the semiconductor market and exceeding customer expectations. We are committed to innovating for a better tomorrow for our customers, team members, communities, and society as a whole. Our purpose is bringing together bright minds to create breakthrough technologies that make the connected world better, safer and more secure. The Board is committed to maintaining a dialogue with shareholders to ensure that they understand our differentiated strategy and business model and have an opportunity to discuss and engage on a broad range of topics, including our strategy. The Board will review the implementation of our strategy at the AGM.

We conduct our operations in accordance with internationally accepted principles of good governance and best practice, while ensuring compliance with the corporate governance requirements applicable in the countries in which we operate:

•

We have a transparent corporate structure, with approval rights of our general meeting of shareholders for any significant change in the identity or nature of our Company or business;

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Each share of our common stock confers the right to cast one vote at the general meeting of shareholders;

CORPORATE GOVERNANCE (continued)

•

Our directors are appointed for one year terms;

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We do not have a poison pill in place;

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We only have outstanding common stock, and no preference shares are issued, and such shares cannot be issued without majority shareholder approval;

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Our share capital only exists of common shares and preference shares, no priority or other shares with special voting rights are included in our share capital;

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Any issuance of common or preference shares, for any reason, is subject to the approval of the general meeting of shareholders; and

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We allow special meetings of our shareholders to be called upon the written request of shareholders holding at least 10% of our outstanding voting stock.

The Board, as well as the management team and the NXP Ethics Committee, promote openness and engagement through SpeakUp, a confidential reporting system described in more detail below. Furthermore, we maintain a Code of Conduct in order to promote a culture of good governance, excellence and consistency that applies to all of our directors, officers and employees and complies with the requirements of the Sarbanes-Oxley Act of 2002, and the rules thereunder, as well as applicable Nasdaq listing standards. A copy of the Code of Conduct is available on our Investor Relations website at http://investors.nxp.com under the “Corporate Governance” section. We will post any amendments to, or waivers from, our Code of Conduct (to the extent applicable to any director or any of our executive officers) on this website.

The Code of Conduct outlines our general commitment to be a responsible social partner and the way in which we attempt to interact with our stakeholders, including shareholders, suppliers, customers, employees and the market. It covers our policy on a diverse array of subjects, including corporate gifts, privacy, child labor, International Labor Organization conventions, trade compliance, working hours, sexual harassment, free-market competition, bribery and the integrity of financial reporting.

The Code of Conduct is built around the campaign “Know Right, Do Right” and consists of a framework of a variety of controls, a strict non-retaliation policy, a training program for employees, the SpeakUp telephone line where people can report potential issues in a confidential manner, a confidential investigation process, risk assessments, background checks and audits. Any reports related to the Code of Conduct are brought to the attention of our Ethics Committee to ensure that all reports are properly investigated and addressed. Each quarter the Ethics Committee communicates to the Audit Committee a summary of all reports and investigations.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)

Enabling a better, safer, more secure, and sustainable world

As a company focused on innovation, we are known for our ability to solve problems and address societal challenges, and we have continued to advance the scope of our ESG efforts to align with new challenges and opportunities. We recognize that stakeholder interest and expectations regarding our ESG efforts have evolved considerably over the last fifteen years. Today, we are focused on integrating ESG into our business and leveraging our technology to enable a more sustainable world.

In our view, the rapid pace of technological change is not without its challenges, but we look to the future with optimism. We believe in furthering our legacy of sustainable innovation and will continue to apply our technologies in ways that help advance global sustainability. We embrace the opportunity to inspire people and shape the future while also positioning ourselves for sustained success.

We report our progress annually in our corporate sustainability report, which includes more details about our commitment to sustainable practices, products that support a sustainable future, and transparency and accountability in our business and supply chain for focused ESG topics. Our corporate sustainability report is available on our website (http://www.nxp.com/CSR). The corporate sustainability report is expressly not part of this proxy statement.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

2021 ESG Highlights

LOGO

Our ESG Goals

Our ESG mission is to enable a better, safer, more secure, and sustainable world through innovation. That mission has given rise to a series of aspirational goals that inform our efforts and enable us to gauge our performance and celebrate our accomplishments.

LOGO

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

ESG Performance & Reward Program

Beginning in 2022, NXP has incorporated Sustainability goals into our annual incentive plan. We anticipate that including key sustainability goals as part of our annual incentive plan will enhance team member accountability regarding key aspects of our performance and our efforts to achieve continuous improvement.

Environment

Optimizing our resource use and consumption, minimizing waste, and continuously improving



Long-Term Ambitions
Carbon Neutral by 2035	Minimize Impact on Global Water Supplies	Develop Collaborative Circular Economy Solutions	Reduce Use of Targeted Chemicals of Concern	Collaborate with our Suppliers to Reduce their Environmental Footprint



2027 Mid-Term Goals
35% Reduction in Scope 1 & 2 Carbon Footprint (2021 Baseline)	50% Renewable Energy Use	60% of Wastewater Recycled	90% Waste Recycled	Work with Our Supply Chain to Reduce Impacts and Measure Our Portion of their Carbon Footprint



2021 Environmental Performance
11% Decrease in Normalized Scope 1 & 2 Emissions from 2020	31% Renewable Energy Use	11% Decrease in Normalized Water Consumption from 2020	76% Waste Recycled	Successfully Identified Alternatives to Using Phthalates in Dicing Tapes

As an environmentally responsible manufacturer committed to continuous improvement, we strive to optimize our use of natural resources, minimize releases to the environment, and achieve operational efficiencies. We maintain and implement an environmental management system and several programs to support these objectives. In accordance with criteria from the International Organization of Standardization (ISO), our environmental management system is certified to ISO 14001 at all of our manufacturing sites.

Emissions

Our manufacturing sites generate Scope 1 (direct) and Scope 2 (indirect) Greenhouse Gas (GHG) emissions. We measure our carbon footprint according to the GHG Protocol, a set of internationally recognized standards for quantifying and reporting GHG emissions. We report on all three of the protocol’s defined categories: Scope 1 (direct emissions), Scope 2 (indirect emissions, owned), and partial Scope 3 (business travel and product transportation).

Electricity, Perfluorinated Compounds (“PFCs”), and heat transfer fluids (“HTFs”) are essential to semiconductor manufacturing. We have set reduction goals for both Scope 1 & 2 because it is not currently feasible to eliminate these sources of emissions from our production processes. To keep ourselves accountable, our reduction goals are aligned with the Science Based Targets initiative, which accepted our application in March 2022.¹

¹	Science-based targets provide guidance to companies regarding their efforts to reduce emissions in line with goals of the Paris Agreement.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

In 2021, the demand for our products increased 22% compared to 2020. That meant our electricity, PFC², and HTF consumption increased, however, our normalized Scope 1 & 2 emissions decreased by 11% from 2020. Since 2011, we have lowered normalized emissions by 39% and absolute emissions by 28%.

LOGO

Market-based emissions reflect actual data directly from energy providers.

Energy

Primary sources of energy for our manufacturing, testing, and office sites come from the electrical grid, and purchase of renewable energy when available.

Electricity

Our product demand increased by 22% in 2021. As a result, our absolute electricity consumption increased by 5%, while our normalized electricity decreased by 14% compared to 2020. In 2021, 31% of our overall electricity use was from renewable energy sources. We continue to look for new ways to increase our use of renewable energy sources through power purchase agreements.

LOGO

²	We use Intergovernmental Panel on Climate Change (IPCC) 2006 for PFC reporting, but will transition to IPCC 2019 in 2022.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

Water

Since drastically reducing the amount of water used within our manufacturing processes is not currently feasible, we anticipate that our demand for water will increase in line with our increases in production. To reduce the amount of incoming water we consume, we focus on a mid-term goal of increasing our water recycling rate to 60% by 2027.

In 2021, the demand for our products increased 22% compared to 2020. As a result of this demand, our absolute water consumption increased by 9% compared to 2020, however, our normalized water consumption decreased by 11% from 2020. Our water conservation kept our absolute water-consumption level low and helped us achieve a 14% decrease in normalized water consumption compared to 2011. Our rate of water recycling has increased by 17 percentage points, and in 2021 we recycled 45% of our water.

LOGO

Waste

NXP continues to actively evolve our approach to the sourcing, consumption, and disposal of materials critical to the manufacturing and testing of our products. In 2021, our production increased by 22% from 2020 and, as a result, our total waste generation increased by 18%. In 2021, we recycled 76% of our total waste (non-hazardous and hazardous), an increase of 7 percentage points from 2020.

LOGO

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

Human Capital Management

Our Team Members: The Heart of NXP

At NXP, our diverse and talented team members drive the innovation that sets our company apart and fuels our success in the market.

Our Purpose

Bringing together bright minds to create breakthrough technologies that make the connected world better, safer, and more secure.

Our Values

Our values are our fundamental beliefs and guiding principles. They speak to how we operate, how we engage, develop, and value our team members, and push the boundaries of creativity and innovation. We hold ourselves accountable to our values by including them in our performance evaluation process.

LOGO

We have a long history of empowering our team members to develop their skill sets and expand their capabilities. When it comes to engagement and development, we want our team members to grow, progress, and advance across job types, functions, organizations, geographies, and levels at a pace that is unique to them.

Our Policies and Programs

Across the globe, we have policies and programs to find and retain the best talent possible. We focus on driving team member engagement; building thought leadership; embracing diversity, equality and inclusion; providing competitive and fair compensation and benefits; enabling talent development and growth opportunities; investing in future talent; focusing on team member retention; and giving back to our communities.

We monitor our talent pool, turnover trends, and analyze team member feedback. In addition, we are committed to having a diverse workforce, as evidenced by the many advancements we’ve made in this space over the last 18 months. We are progressing along our journey to further foster a progressive and inclusive culture for our talented team members across the world.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

Workforce Demographics

NXP’s workforce includes direct labor (“DL”) and indirect labor (“IDL”). DL are those team members directly involved in manufacturing our products and typically work in our factories, while IDL consists of individual contributors, managers, and executives in other functions such as research and development (“R&D”) and selling, general and administrative (“SG&A”). At December 31, 2021, we had approximately 31,000 employees, which includes approximately 1,500 employees in our joint venture. Our NXP global workforce spans three regions encompassing 30+ countries and includes approximately 9,300 team members dedicated to research and development of our products and solutions.

Focusing on Team Member Retention

In 2021, workplaces across the globe were met with the challenge of team member turnover, with terms like “The Great Resignation” and “The Big Quit” coming to life to describe the economic trend that showed itself via mass voluntary resignations.

While it’s true that NXP saw a year-over-year increase in team member turnover, we also saw voluntary turnover stabilize in March 2021, and has remained relatively flat, and since down over the second half of 2021 versus the first half of 2021.

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To address concern for retaining talent, we launched several initiatives and committed resources devoted to retention actions for strategic roles and top-performing talent, as well as programs targeting all team members, including global flexible work arrangements, continuous focus on well-being, consistent communications, and business updates. We also expanded our hiring practices and focused attention on our global manufacturing team members.

Driving Team Member Engagement

Engaging, developing, and valuing our team members is how we create long-term value for our stakeholders.

Engaging Team Members through Surveys

To assess and improve team member engagement, NXP regularly conducts our global Winning Culture Survey. We invite NXP team members to share their level of agreement on a variety of factors, including engagement, strategy, culture, leadership, continuous improvement, collaboration, execution, accountability, work environment, and support. Surveys are administered by a third party to ensure confidentiality.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

The results of our end of 2020 survey tell us that our team members are engaged, feel pride in the company, and believe that NXP is a great place to work, among other things:



Response Rate	Engagement	Great Place to Work	Proud	Valued

90%	84%	82%	89%	81%

Insights from our survey equip us to improve the team member experience and work on our policies and processes. We’ve converted some team member feedback into company and/or country-specific programs and made updates to our tools and resources. This includes focusing on the well-being of our team members and introducing global flexible work arrangements to help team members achieve greater work/life balance.

External Awards & Recognition

NXP is honored to have received external awards and recognition for our commitment to human capital development. Some of the honors received include:

•

Austria:

•

For the fourth year in a row (2022, 2021, 2020 and 2019), NXP received the Leading Employer Award in Austria – and was rated the number two semiconductor company in Austria by the Leading Employer Institute.

•

NXP was recognized for its strong mentoring efforts and active participation in the Business Cross Mentoring program in Austria, which supports women who are high-potential managers in technical domains with growing their skills and network.

•

The Netherlands: For the second year in a row (2021 and 2020), NXP has been awarded the title of Most Attractive Employer in the Netherlands by Randstad; in 2019, NXP was named a runner-up for the award.

•

Mainland China and Taiwan:

•

NXP was one of only seven companies to receive the 2021 Industrial Relations Excellence Award in Taiwan, recognizing our collaborative and healthy working relationship with the union representing our employees.

•

NXP received the 2021 Charity Award from the Economic Affairs Authority.

•

Thailand: NXP was recognized by the Thailand Ministry of Public Health for integrating additional measures of health and disease prevention in response to the COVID-19 pandemic.

•

United States:

•

NXP was named a 2021 Best Place to Work in Austin by Comparably, which is given to companies based on team member satisfaction ratings for leadership, diversity, meetings and more.

•

NXP was named a 2021 JUST Company by JUST Capital, which ranks the performance of Americas’ largest publicly traded companies on issues that matter most in defining just business behavior today. To finalize the list, JUST Capital tracked, analyzed, and ranked 954 companies, covering 20 issues and 330 unique data points. NXP ranked 115 of the total companies and 6^thof the 31 semiconductor and equipment companies.

Building Thought Leadership

Our talented, innovative team members accelerate breakthroughs that help advance our world.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

Investing in R&D

Through our innovations, NXP products help to build future advancements in automotive, communication infrastructure, industrial, mobile, smart city, and smart home technologies. We design purpose-built, rigorously tested technologies that enable devices to sense, think, connect and act intelligently to improve people’s daily lives.

Developing Thought Leaders

We are committed to building thought leaders, which is evidenced by nearly 9,300 team members (representing 31% of our IDL workforce) who are specifically dedicated to R&D. Through broad exposure to job-based development activities, we have been able to advance 11% of these team members in 2021 through internal promotions. In addition, we hired 1,523 new R&D team members, named 26 technical directors, seven program directors and four new fellows. Our consistent focus on R&D and innovation resulted in NXP being awarded more than 1,150 individual patents during 2021.

Embracing Diversity, Equality, and Inclusion

At NXP, we value diversity, equality and inclusion, and respect the unique talents, experiences, backgrounds, cultures, and ideas of our team members. We invite everyone to be their authentic selves at work, without exception. This is what makes us who we are at NXP. As an ongoing demonstration of our commitment, we invest in initiatives and resources to drive cultural awareness across the company, spearheaded by our Head of Diversity, Equality and Inclusion (“DE&I”).

NXP made significant progress on our DE&I journey in 2021. We started the year with increased transparency of our team member demographics by communicating our global gender and U.S. race and ethnicity representation data in our 2020 Corporate Sustainability Report, and defined internal goals to increase representation over time. Additionally, our Head of DE&I met with each member of our Management Team, as well as the Human Resources and Compensation Committee of our Board of Directors to discuss the 2021 DE&I strategy and plans. Our progress toward our representation goals was regularly reviewed with these leaders throughout the year.

To help define our aspirational and interim representation goals, we developed a tool to analyze our representation results in comparison to our hiring and attrition trends and developed internal dashboards to help track progress towards our goals.

When it comes to hiring, we began requiring diverse candidate slates for management roles and increased our Employee Referral Program award amounts when qualified women or, in the United States, under-represented minorities are hired via a referral for positions in specific countries.

To gain a better understanding of what’s contributing to the attrition of women globally and minority team members within the United States, we implemented an exit interview process where team members at specified job levels are given the opportunity to provide direct feedback to the Head of DE&I prior to exiting the company.

Additionally, we participated in the Bloomberg Gender Equality Index for the first time to demonstrate our commitment to promoting gender equality and an inclusive workplace, to help establish a comparable data set within our industry.

We also announced our global Diversity, Equality and Inclusion Policy, which outlines our key belief that every team member should be treated with respect. We do not tolerate discrimination based on race, national origin, social origin, color, gender, religion, age, pregnancy, sexual orientation, physical or mental disability, or political affiliation, among other things. Nor do we tolerate physical, verbal, sexual or psychological harassment, bullying, abuse, or threats of any kind. We have also increased our DE&I communications and programming, including the launch of Inclusion Insights – a new practice of starting our formal meetings with a brief discussion focused on inclusion, regular contributions to our weekly company-wide newsletter, and through our Inclusive Language Project and Employee Resource Group (ERG) engagement activities.

We increased our ERG footprint by establishing a new chapter of Equal—our LGBTQ ERG in Europe and created two new ERGs: No eXtra Planet (which focuses on environmental sustainability) and Interconnection (which supports team members in Europe from multicultural backgrounds). We now have eight primary ERGs, with representation in Asia, Europe, Mexico, and the United States.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

Approach

NXP’s approach to diversity, equality and inclusion is centered around leadership commitment and accountability; building and sustaining a qualified, diverse talent pipeline and equitable processes; and fostering an inclusive culture and a sense of belonging to attract and retain the best talent by welcoming and embracing our team members’ diversity and fostering respect for everyone’s differences, leveraging the diversity of thought and life experiences and cultivating a collaborative work environment where team members feel valued and are comfortable being their true selves.

We also support and adhere to all diversity-related legal and compliance requirements, which vary by country. In the United States, for example, we partner with an outside law firm to achieve these goals.

Representation Goals

To support our diversity, equality and inclusion approach and demonstrate our commitment to transparency and accountability, we have established aspirational 2025 DE&I goals to improve our gender representation globally and minority race and ethnicity representation in the United States.

We continue to focus on hiring, development, and retention across all global sites to meet our 2025 representation goals among our team member population:



2025 Diversity, Equality and Inclusion Goals

40% Women in Overall Global Workforce	30% Women in Global Indirect Labor Workforce	20% Women in Executive Positions	25% Women in R&D Positions	50% Minority Representation in the United States



2021 Diversity, Equality and Inclusion Performance

37%	24%	13%	17%	49%

In a competitive hiring market, our overall team member population grew by nearly 8% compared to 2020. Of this increased population, with the exception of the representation of women in executive positions, we saw a 1% increase for each of the goals in 2021 when compared to 2020. While we present gender representation headcount (HC) data by men and women, we acknowledge this is not fully encompassing of all gender identities.

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Gender Representation

At NXP, women represent 37% of our global workforce (up 1% year-over-year), and we continue to strive for noticeable improvements in hiring women across all global sites. Additionally, we are committed to increasing, developing, and promoting more women into technical and leadership positions within our organizations.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

To that end, we monitor gender statistics globally, across all roles, and look for continuous improvements, which include an evaluation of the practices at the country level. Each country leadership team focuses on how to ensure we are making improvements, where needed.

Race and Ethnicity Representation

In the United States, we monitor race and ethnicity representation to ensure we are attracting, retaining and developing diverse team members, acknowledging the unique nature of the United States workforce dynamics.

A breakdown of NXP’s United States population, as of December 31, 2021:


Race and Ethnicity (United States Only)	Representation
White (Not Hispanic or Latino)		51	%
Asian (Not Hispanic or Latino)		20	%
Hispanic or Latino		15	%
Undeclared		7	%
Black or African American (Not Hispanic or Latino)		5	%
Two or More Races (Not Hispanic or Latino)		1	%
Native American or Alaska Native (Not Hispanic or Latino)		0.6	%
Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino)		0.2	%

Providing Competitive and Fair Compensation and Benefits

NXP’s competitive compensation and benefits programs are designed to attract the best talent and drive the best performance across all areas of our diverse workforce.

Compensation

NXP provides team members with total rewards packages consisting of base salary, short-term incentives, and equity-based long-term incentives for some team members as well as competitive benefits aimed at supporting team members’ financial, physical, and mental well-being.

Rewarding performance is a critical foundation for our overall program. NXP is committed to managing all reward-based compensation programs, including merit increases, annual incentive program (AIP) payouts and long-term incentive awards, to deliver on our pay-for-performance philosophy.

NXP has policies and procedures in place to promote pay equity, and diligent reviews are performed twice a year alongside the rewards processes. We also developed a proactive process to evaluate each reward-based compensation program in real-time and provide leaders with feedback to ensure fair and equitable compensation while decisions are being made. We continue to use analytical tools to assess potential compensation recommendations that need further review prior to these recommendations becoming effective in order make appropriate adjustments and promote pay equity. We use this process globally to evaluate these compensation-related decisions based on a variety of factors, including gender and, in the United States, race and ethnicity.

NXP relies on third-party data to establish fair, equitable and competitive compensation and benefits programs. We then empower leaders to recognize both individual and team accomplishments through a variety of compensation programs. Rewards decisions are linked to a team member’s performance evaluation. A formal assessment of both specific achievements, and the individual’s demonstrated behaviors—consistent with our values—to deliver those achievements, is performed annually.

Benefits

NXP helps our team members maintain their health and financial well-being by supplying benefits that may include an employee stock purchase plan, life insurance, business travel accident insurance, personal accident insurance, paid maternity and paternal leave, personal time off, tuition reimbursement and other employee assistance programs.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

In addition, we offer a global Flexible Work Arrangement program, which offers eligible team members the ability to work a combination of on-site and remotely. Although our way of working focuses on meaningful face-to-face interactions, we have incorporated flexibility into our work arrangements in a way that allows us to maintain the focus on strong and effective teamwork, collaboration, and community.

In some countries, we also support part-time work schedules, helping to support the overall well-being—and greater work-life balance—for our team members.

Enabling Talent Development & Growth Opportunities

NXP has a long history of empowering our team members to develop their skill sets and expand their capabilities.

NXP is committed to continuous learning, including mechanisms for learning through on-the-job development experiences (70%), through others (20%), and through formal education (10%). By utilizing the 70/20/10 model, learning can achieve new levels through experience, collaboration, and education. Using a blend of internally designed and externally sourced courses and learning resources, we offer our team members around the globe a variety of training programs that provide real-time learning opportunities in support of key business processes, requirements, and initiatives. We also provide a library of on-demand skills development and microlearning resources to all our team members.

Investing in Future Talent

NXP’s strong commitment to our internship programs is a key contributor to developing the new generation of talent, including engineers, in our industry and company.

Interns

Our internship programs focus on the students’ technical advancement and skills development that are needed as they prepare to enter the professional workforce. In 2021, despite the challenges of the COVID-19 pandemic, we continued to welcome university students to NXP through a virtual internship program, allowing us to keep building the talent pipeline despite the global challenges we faced.

In 2021, NXP granted more than 800 internships to university students and converted 40% of our interns into an NXP team member.

New College Graduates

Our internship programs build a highly capable and energetic new college graduate pipeline. In 2021, we were pleased to welcome approximately 644 new college graduates, an increase over the 470 new college graduates we hired in 2020. These hires represent 24% of our overall IDL hiring activity, in which 30% of the new college graduate hires were women.

University Partnerships and Engagement

Through our partnerships with universities across the world, we fund and support advanced research programs and projects that demonstrate our commitment to investing in the future of not only technology, but also the students’ knowledge and skills. Quite often, these partnerships translate into new and exciting solutions for our customers and markets.

To drive deeper awareness and engagement with our university partnerships, NXP created a University Relations Council, whose goal is to drive a coherent and aligned approach towards university partnerships by linking recruitment, global sales and marketing, and R&D programs.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

Our 2021 university funding and commitment was diverse and allowed us to support advanced research programs and sponsorships, including the following:

•

Nearly 80 university projects: in countries across the globe, including Austria, Belgium, Czechia, France, Germany, Ireland, Netherlands, Poland, Romania, Sweden, Switzerland and the United Kingdom, among others, led by NXP, with support from most business lines and functions.

•

+70 projects with the Semiconductor Research Consortium (SRC): projects engaged NXP liaisons in Canada and the United States with university professors and students on advanced silicon design, production, and manufacturing processes. In addition, these programs provided students with a path for technology transfer and expertise for the industry.

•

EcoCar: a US Department of Energy program, allowed NXP to work with 12 universities across the United States to develop more economic, environmentally friendly, and connected vehicles. NXP looks forward to the final’s ceremony and the selection of winners in 2022.

•

2021 NXP Cup: invites participants to an autonomous robotics and automotive challenge. Participants design and build a car, design the software program, and race a pro-level autonomous car against other teams while aiming for the fastest time and precise maneuvering. The 2021 virtual event engaged more than 100 university teams in Europe. The virtual and live finals event drew more than 3,000 views on YouTube.

•

2021 NXP Hover Games 2 Challenge: incorporates NXP technology in drones to help others during an emergency. We engaged more than 630 participants, of which 30% were students, with strong participation from India and the United States.

•

2021 NXP Smart Car Race Design Challenge: the Indian engineering student community focused two days on artificial intelligence in mobility, where students were invited to showcase and race their driverless car prototypes on a virtual racetrack, using skills in the areas of coding, AI algorithms, sign recognition, sensor, motion detection camera vision, image processing and more. More than 620 students registered for the event from more than 24 states and 87 universities. Seventeen teams of 57 students were short-listed for the two-day grand finale of live races, with an in-depth evaluation from external judges.

Giving Back to our Communities

At NXP, we believe in making a positive difference in the communities in which we live and work. We are committed to supporting these efforts across the globe and encourage our team members to give generously of their time, resources, and talents to impact our communities. Many major NXP sites have their own volunteer and donation programs that focus on education, poverty, hunger, health, and well-being within their respective communities.

Social Responsibility

NXP recognizes that our operations can impact the human rights of our team members, workers in our supply chain, and the people in our host communities. We endeavor to demonstrate respect for human rights through our everyday activities and decision-making as we aim to identify and address adverse human-rights impacts.

To identify potentially adverse human-rights impacts, we use input from internal and external resources to inform our approach and responses, which is an integral part of our business decision-making and risk-management systems.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

Supply Chain Due Diligence

NXP works with suppliers to help them achieve and maintain our standards and expectations. Our preference is to work with suppliers to address potential deficiencies, develop, and implement a corrective action plan. In 2021, our due-diligence supplier audits identified 160 nonconformances, in which we closed 143, resulting in an 89% closure rate. We began our supplier audit program in 2013 and have since audited 156 suppliers.

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The number of audits naturally increases the overall total number of nonconformances. Our approach is to divide the number of nonconformances per number of audits, as well as the number of priority violations per number of audits. While the number of nonconformances increased compared to 2020, we saw a decrease in 2021 compared to 2020, for both ratios.

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ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) (continued)

In 2018, we set a goal to close 80% of our supplier nonconformances within the 90-day timeframe. In 2021, we set a new goal at an 85% closure rate. We chose this 5% increase after reviewing improvements in closure-rate performance from audits performed in 2019 and 2020. The closure rate for 2021 was 89%, compared to 97% in 2020. The 8% drop was primarily due to almost double the number of audits completed in 2021 compared to 2020. The lower closure rate is also attributable to the demand on the supply-chain during the ongoing pandemic and production ramp up to overcome the semiconductor shortage. These two trends created challenges in working hours and labor supply at our suppliers in 2021.

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Health & Safety

NXP is committed to ensuring a safe and healthy workplace for our team members, partners, and visitors. We ensure the health and safety of our team members by using advanced management systems and certifications. All manufacturing sites, and our corporate headquarters, are certified to the ISO 45001 standard for Occupational Health and Safety and are audited both externally and internally for third-party certification.

We maintained our historic low injury rate (TCIR) of 0.08 in 2021, which remains well below the semiconductor-industry averages published by the Semiconductor Industry Association (SIA) and the European Semiconductor Industry Association (ESIA), which ranges from 0.35 to 0.89. NXP’s low injury rate is attributed to the robust Health & Safety programs we have in place at all of our manufacturing sites.

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AGM PROPOSALS

ITEM 1: ADOPTION OF THE 2021 STATUTORY ANNUAL ACCOUNTS

The Company has prepared two sets of financial statements, one based on accounting principles generally accepted in the United States of America (“US GAAP”) and filed with the SEC in the 2021 Annual Report on Form 10-K, and one based on Dutch law and International Financial Reporting Standards as adopted by the European Union (the “Statutory Annual Accounts”).

For internal and external reporting purposes, the Company prepares financial statements based on US GAAP. However, as a public limited liability company incorporated under the laws of the Netherlands, the Company is required by Dutch law to prepare the 2021 Statutory Annual Accounts and submit them to the Annual General Meeting for adoption. The report of Ernst & Young Accountants LLP (“E&Y”) for the fiscal year ended December 31, 2021, and the 2021 Statutory Annual Accounts is included in the 2021 statutory annual report (the “Statutory Annual Report”), is published on the Company’s website (http://investors.nxp.com) and also is available at the principal offices of the Company.

THE BOARD RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE 2021 STATUTORY ANNUAL ACCOUNTS.

ITEM 2: DISCHARGE OF THE BOARD OF DIRECTORS FOR THEIR RESPONSIBILITIES IN THE 2021 FINANCIAL YEAR

It is proposed to discharge the members of the Board, in accordance with Dutch law, for the performance of their respective duties in the financial year 2021. The proposed discharge only covers the matters that are disclosed in the Statutory Annual Report or otherwise publicly disclosed at the time the resolution to discharge is adopted.

THE BOARD RECOMMENDS A VOTE “FOR” THE PROPOSAL TO DISCHARGE THE BOARD FOR THEIR RESPONSIBILITIES IN THE FINANCIAL YEAR ENDED DECEMBER 31, 2021.

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS

The Company has a one-tier board structure, consisting of one or more executive directors and non-executive directors. The Board currently consists of twelve directors, one executive director and eleven non-executive directors. The number of executive and non-executive directors is determined by the Board.

Messrs. Kaeser, Goldman and Smitham are retiring from our Board at the expiration of their terms as of the end of the Annual General Meeting and are not standing for re-election. If each nominated director discussed below is appointed at the AGM, the Board will consist of ten directors.

Under our Articles of Association and Dutch corporate law, the directors are collectively responsible for the management, general and financial affairs and policy and strategy of our Company. Our executive director (who serves as our President and Chief Executive Officer) is responsible for the day-to-day management of the Company and for the preparation and execution of Board resolutions, to the extent these tasks are not delegated to a committee of the Board. Our Chief Executive Officer or all directors acting jointly may represent the Company with third parties.

Consistent with our Articles of Association and Dutch law, the executive director and non-executive directors are appointed by the general meeting of shareholders upon a binding nomination by the Board. The Board has nominated the nine directors listed below for re-appointment and one new director listed below for appointment to be elected to serve until their term expires at the end of the 2023 Annual General Meeting of Shareholders, or until their appointment is terminated in accordance with the Articles of Association. The binding nominations by the Board are made in accordance with Section 14.4 of the Articles of Association. The shareholders at an annual general meeting may at all times overrule the binding nature of such a nomination 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 and outstanding share capital. If the nomination is not overruled, the nominated member of the Board shall be appointed. If the nomination is overruled, the Board 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 in the notice and the general meeting of shareholders shall be free to appoint a member of the Board at its discretion. The latter resolution of the general meeting of shareholders must also be adopted by at least two thirds majority of the votes cast, provided such majority represents more than half of our issued share capital.

Our directors are appointed for one year and will be, if nominated by the Board, re-electable each year at a general meeting of shareholders. Our directors may be suspended or dismissed at any time by the general meeting of shareholders. A resolution to suspend or dismiss a director must be adopted by at least a two thirds majority of the votes cast, provided such majority represents more than half of our issued share capital unless the proposal to suspend or dismiss a director is made by the Board, in which case resolutions shall be adopted by a simple majority of votes cast. An executive director can also be suspended by the Board.

If appointed, each director’s term begins at the annual general meeting at which he or she is appointed and, unless such director resigns or is dismissed at an earlier date, his or her term of office ends immediately after the next annual general meeting held after his or her appointment.

The Board and the Nominating, Governance and Sustainability Committee have carefully considered the experience, structure, culture, diversity, operation, interactions, collaboration and performance of the current Board; the talents, expertise and contributions of individual directors; the growth and creation of shareholder and other stakeholder value under the Board’s leadership; the continued evolution of the Company; the Board’s critical role in continuing to develop and lead the strategic direction of the Company; the continued change and consolidation in the semiconductor industry; anticipated future challenges and opportunities facing the Company; and the Board’s ongoing commitment to ensuring the long-term sustainability of the Company to the benefit of shareholders and other stakeholders.

The Board and the Nominating, Governance and Sustainability Committee also believe that, at the current time, fostering continuity on the Board by nominating our Chair of the Board and eight other current directors for re-appointment and one new director for appointment is instrumental to the ongoing execution of our mission and strategy as well as the delivery of sustainable long-term value to shareholders while also serving the interests of our other stakeholders. Based on these considerations, among others, NXP’s Board recommends a vote “FOR” the appointment of each director. The persons named as proxies intend to vote the proxies for the election of these nominees to the Board.

Each of the proposed appointments is considered a separate voting item under Dutch law. Information concerning each of the ten nominated directors is set forth below. All nominees consented to act as directors if appointed at the AGM. This Item 3 comprises the “explanatory notes” to the agenda of the Annual General Meeting as referred to in Section 25.5 of the Articles of Association.

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

In accordance with the recommendation of the Nominating, Governance and Sustainability Committee, the Board has unanimously adopted resolutions to nominate the persons set forth below for director. Our nominees for director, their ages, principal occupations or positions, experience and the year first elected as a director, are described below. As part of our board refreshment process, a third party search firm provided a pool of candidates to the Nominating, Governance and Sustainability Committee for consideration. From this pool of candidates the Nominating, Governance and Sustainability Committee determined, according to the process described below, that the new nominee for director had the appropriate qualifications and experience and would positively contribute to the mix of talent, experience and perspective on the Board. None of the nominees are related by blood, marriage or adoption to each other or to any other director or to any executive officer of NXP or its subsidiaries. Except for Mr. Kurt Sievers, who is currently executive director, President and Chief Executive Officer, no nominee for director has been an employee of the Company within the past five years.

Board Diversity Matrix

(As of April 11, 2022)



Country of Principal Executive Offices:		The Netherlands

Foreign Private Issuer		No

Disclosure Prohibited under Home Country Law		No

Total Number of Directors		12

	Female		Male		Non-Binary		Did Not Disclose Gender

Part I: Gender Identity

Directors		4		8		0		0

Part II: Demographic Background

African American or Black		0		1		0		0

White		4		7		0		0

Note that the table above, in accordance with NASDAQ disclosure requirements, describes the board diversity characteristics of the members of the Board as of the date of this proxy statement, including the current members of the Board who will depart the Board at this year’s Annual General Meeting and excluding the new director nominee.

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

THE BOARD RECOMMENDS A VOTE “FOR” THE APPOINTMENT OF EACH NOMINEE FOR DIRECTOR LISTED BELOW.

Nominees for Director

Kurt Sievers

Executive Director, President & CEO of NXP

Kurt Sievers (1969, German) is executive director, president and chief executive officer since May 2020, after a successful track record as the president of NXP, overseeing all the company’s business lines, since 2018. Mr. Sievers joined NXP in 1995, and rapidly moved through a series of Marketing & Sales, Product Definition & Development, Strategy and General Management leadership positions across a broad number of market segments. He has been a member of the executive management team since 2009, where he has been instrumental in the definition and implementation of the NXP High-Performance Mixed Signal strategy. In 2015, Mr. Sievers was influential in the merger of NXP and Freescale Semiconductor.

Mr. Sievers serves on the board of the German National Electrical and Electronics Industry Association (ZVEI), the Global Semiconductor Alliance (GSA) and Capgemini S.E. Mr. Sievers is president of ESIA (European Semiconductor Industry Association). He chaired the advisory board of the international trade-fair Electronica until June 2021. He also serves as a board member of AENEAS, an industrial association for application and technology research in Europe on nano-electronics. Mr. Sievers serves as a member of the Asia-Pacific-Committee of German Business (APA) and as a member of the Board at the German Asia-Pacific Business Association (OAV), acting as the spokesperson for the Republic of Korea.

Mr. Sievers earned a master’s degree in physics and information technology from Augsburg University, Germany.

Executive Director

Director since 2020

Age 53

Other Current Public Boards:

• Capgemini S.E.

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Manufacturing and Operations

• Human Capital/Talent Development

• IT and Cybersecurity

Sir Peter Bonfield CBE FREng

Sir Peter Bonfield (1944, British) was appointed a non-executive director and chair of our board of directors in August 2010. Prior to that, Sir Peter was the chair of the supervisory board of NXP B.V. from September 29, 2006. Sir Peter served as chief executive officer and chair of the executive committee for British Telecom plc from 1996 to 2002 and prior to that was chair and chief executive officer of ICL plc (now Fujitsu Services Holdings Ltd.). Sir Peter also worked in the semiconductor industry during his tenure as a divisional director at Texas Instruments Incorporated, for whom he held a variety of senior management positions around the world. In addition, Sir Peter has served as a director of twelve large technology companies. Sir Peter currently holds non-executive directorships at Taiwan Semiconductor Manufacturing Company Limited, Darktrace plc and Imagination Technologies, is board Mentor at CMi in London and formerly served on the board of directors of Mentor Graphics Corporation. He is advisor to Longreach LLP in Hong Kong, Alix Partners UK LLP in London and is a fellow of The Royal Academy of Engineering. Sir Peter was named Outstanding Director for 2019 by the Financial Times.

Chair of the Board

Independent Director

Director since 2010; Director of an NXP affiliated entity since September 2006*

Age 77

Board Committees:

• Human Resources and Compensation Committee

• Nominating, Governance and Sustainability Committee

Other Current Public Boards:

• Taiwan Semiconductor Manufacturing Company Limited

• Darktrace plc

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Corporate Governance, Legal, Global Compliance Experience

• Human Capital/Talent Development

Until August 2010, when NXP Semiconductors N.V. became a publicly listed Nasdaq, company, Sir Peter Bonfield (since September 2006) was a director of certain NXP subsidiaries. According to the Dutch corporate governance code and EC Recommendation 2005/162/EC, the tenure of Sir Peter Bonfield, calculated as from August 2010 when the current NXP Semiconductors N.V. became listed on Nasdaq, would be 11.9 years.

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

Annette Clayton

Chief Executive Officer and President, Schneider Electric North America

Annette Clayton (1964, American) was appointed a non-executive director of our board of directors effective May 26, 2021. Ms. Clayton is the chief executive officer and president of Schneider Electric North America, a region of Schneider Electric, a multinational firm specializing in energy management and automation solutions. Through December 2018, Ms. Clayton also held the title of chief supply chain officer for the Group and led the transformation of its $13 billion global supply chain operation for seven years and from 2011 to 2016 led the environmental and social governance function. She is also a member of the company’s executive committee. From 2006 to 2011, Ms. Clayton led Dell Inc.’s supply chain transformation and oversaw the global manufacturing and fulfillment operation. She was also responsible for the Americas’ commercial order management and customer care operations. From 1983 to 2006 Ms. Clayton worked at General Motors Corporation in senior management roles in engineering and production, including president, Saturn Corporation. Ms. Clayton chairs the National Electrical Manufacturers Association and is a member of the board of directors of the National Association of Manufacturers. She serves on the board of Duke Energy Corporation and the Schneider Ventures boards of AlphaStruxure, Uplight Inc., QMerit, EnergySage, and previously served on the board of Polaris Inc until April 2021.

Independent Director

Director since 2021

Age 58

Board Committees:

• Human Resources and Compensation Committee

Other Current Public Boards:

• Duke Energy Corporation

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Corporate Governance, Legal, Global Compliance Experience

• Manufacturing and Operations

• Risk Management

• Human Capital/Talent Development

• IT and Cybersecurity

• ESG Expertise

Anthony Foxx

Anthony Foxx (1971, American) was appointed a non-executive director of our board of directors effective May 26, 2021. From October 2018 to January 2022, Mr. Foxx served as the chief policy officer and senior advisor to the president and chief executive officer of Lyft. Prior to joining Lyft, Inc., Mr. Foxx served as a managing partner of related infrastructure, the infrastructure development group of Related Companies, a real estate firm, from December 2017 to October 2018. From July 2013 to January 2017, Mr. Foxx served as the seventeenth United States Secretary of Transportation. Mr. Foxx served as the mayor of Charlotte, North Carolina from 2009 to 2013 and as a Charlotte City council member at-large representative from 2005 to 2009. Mr. Foxx also has held a variety of legal positions in the public and private sectors. Mr. Foxx serves on the board of directors of Martin Marietta Materials, Inc., CDW Corporation and Shelter Acquisition Corporation I. He holds a Doctor of Law (J.D.) from New York University School of Law, and a Bachelor of Arts (B.A.), History, from Davidson College.

Independent Director

Director since 2021

Age 50

Board Committees:

• Nominating, Governance and Sustainability Committee

Other Current Public Boards:

• CDW Corporation

• Martin Marietta Materials Inc.

• Shelter Acquisition Corporation I

Key Qualifications and Expertise:

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Financial, Audit & Accounting Expertise

• Risk Management

• ESG Expertise

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

Chunyuan Gu

President of Asia, the Middle East and Africa regions of ABB Ltd (retired)

Chunyuan Gu (1958, Swedish) is nominated as a non-executive director of our board of directors. Mr. Gu has over 30 years of experience working at ABB Ltd, a global pioneering technology leader in electrification and automation serving customers in utility, industry, transportation and infrastructure. Mr. Gu began his career at ABB Corporate Research in Sweden in 1989, and has held various roles and functions in R&D, manufacturing operations and general management. Since 2020, Mr. Gu serves in an advisory capacity as chair of the board of ABB (China) Ltd. From 2017-2019, Mr. Gu was a member of the ABB group executive committee and president of the Asia, the Middle East and Africa region. From 2014-2017, Mr. Gu served as president and CEO of ABB China. Since 2020, Mr. Gu has served as a non-executive director of CLP Holdings Limited. Since 2021, Mr. Gu has served as senior advisor at Blackstone Ltd. Mr. Gu holds a bachelor of engineering from Shanghai Jiao Tong University and a PhD, school of aeronautics from the Royal Institute of Technology, Stockholm. He is a fellow of IVA, the Royal Swedish Academy of Engineering Sciences.

Independent Director Nominee

Age 63

Other Current Public Boards:

• CLP Holdings Limited

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Manufacturing and Operations

• Risk Management

• Human Capital/Talent Development

• ESG Expertise

Lena Olving

President and CEO of Mycronic AB (retired)

Lena Olving (1956, Swedish) was appointed a non-executive director of our board of directors in June 2019. She served as president and CEO of Mycronic AB (listed on Nasdaq OMX Stockholm) from 2013 and 2019, a Swedish high-tech equipment company serving the electronics industry. Before that Ms. Olving worked at Saab AB, a listed Defence and Security company, as deputy CEO and chief operating officer. Her earlier career also includes various managerial positions within Volvo Car Corporation, in total 25 years, of which 5 years in Asia Pacific and 7 years in the executive management team.

Ms. Olving is a board member of Assa Abloy AB, Vestas Wind Systems A/S Investment AB Latour, Munters Group AB, chair of Academic Work Holding AB, chair of the board at the Royal Swedish Opera and ScandiNova Systems AB and board member of Stena Metall AB. Ms. Olving has declined re-election as board member at Munters Group AB, and her current board service will end in May 2022. She is a fellow of IVA, the Royal Swedish Academy of Engineering Sciences. She holds a Master of Science in Mechanical Engineering from Chalmers in Gothenburg, Sweden.

In January 2018, Ms. Olving was presented H.M., The King’s Medal of the 12th size with blue ribbon for outstanding efforts within Swedish business sector. In October 2019, she was awarded IVA’s Gold Medal for pioneering and outstanding leadership within the tech sector.

Independent Director

Director since 2019

Age 65

Board Committees:

• Human Resources and Compensation Committee

Other Current Public Boards:

• Assa Abloy AB

• Investment AB Latour

• Vestas Wind Systems A/S

• Munters Group AB (ending May 2022)

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Financial, Audit & Accounting Expertise

• Manufacturing and Operations

• Risk Management

• Human Capital/Talent Development

• IT and Cybersecurity

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

Julie Southern

Chief Commercial Officer, Virgin Atlantic Airways Ltd. (retired)

Ms. Julie Southern (1959, British) was appointed a non-executive director of our board of directors in October 2013. She was with Virgin Atlantic Limited (UK) from 2000 to May 2013. From 2010 to 2013 Ms. Southern was chief commercial officer and from 2000 to 2010 she was chief financial officer of Virgin Atlantic. Prior to joining Virgin Atlantic, she was group finance director at Porsche Cars Great Britain and finance and operations director at W H Smith—H J Chapman & Co Ltd. Prior to that, she was a chartered accountant at Price Waterhouse Coopers. Ms. Southern currently holds non-executive directorships at Rentokil-Initial plc, Ocado Group plc and easyJet plc, and is chair of the respective audit committees. Ms. Southern is a member of the remuneration committees at Rentokil-Initial, Ocado and easyJet, and is the senior independent director at easyJet. Previously, Ms. Southern held directorships at Stagecoach Group plc (2016-2018), DFS Furniture plc (2015-2019) and Cineworld Group plc (2015-2019).

Independent Director

Director since 2013

Age 62

Board Committees:

• Audit Committee (Chair)

Other Current Public Boards:

• Rentokil-Initial Plc

• easyJet plc

• Ocado Group plc

Key Qualifications and Expertise:

• Executive Leadership

• Strategic Planning, Growth, Mergers & Acquisition

• Financial, Audit & Accounting Expertise

• Human Capital/Talent Development

Jasmin Staiblin

Chief Executive Officer of Alpiq (retired)

Jasmin Staiblin (1970, German) was appointed a non-executive director of our board of directors in June 2019. She served between 2013 and 2018 as chief executive officer of Alpiq, a leading Swiss energy services provider and power producer in Europe. She successfully led the company through a major transformation in a fundamentally changing energy market. She began her career in 1997 at the ABB Group, the Swedish-Swiss global technology company, starting in ABB’s group research center. From 1999 to 2005 she served in various global functions and as a member of the management team for ABB’s power technologies division. She held the position of chief executive officer of ABB Switzerland from 2006 to 2012. Ms. Staiblin is a board member of Georg Fischer AG, Schaffhausen and Zurich Insurance Group Ltd and chair of the supervisory board of Rolls-Royce Power Systems AG and MTU Friedrichshafen GmbH. She formerly served on the board of Rolls-Royce plc. Ms. Staiblin studied Physics and Electrical Engineering at the Karlsruhe Institute of Technology, Germany and the Royal Institute of Technology in Stockholm, Sweden. She completed her studies with a Degree in Physics and has a Master of Science in electrical engineering.

Independent Director

Director since 2019

Age 52

Board Committees:

• Audit Committee

Other Current Public Boards:

• Georg Fischer AG

• Zurich Insurance Group Ltd.

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Corporate Governance, Legal, Global Compliance Experience

• Financial, Audit & Accounting Expertise

• Manufacturing and Operations

• Risk Management

• Human Capital/Talent Development

• IT and Cybersecurity

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

Gregory Summe

Managing Partner of Glen Capital Partners

Gregory L. Summe (1956, American) was appointed 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. Recently, he was the co-chair and co-founder of NextGen Acquisition Corp. I & II. Previously, Mr. Summe was the managing director and vice chair of Global Buyout at The Carlyle Group, a leading global private equity firm, from 2009 to 2014. Prior to joining Carlyle, he was the chair and chief executive officer of PerkinElmer, Inc., a global leader in Health Sciences, a company he led from 1998 to May 2009. He also served as a senior advisor to Goldman Sachs Capital Partners, from 2008 to 2009. He was a director of Freescale Semiconductor from 2010 until its merger with NXP in 2015 and served as chair of the Freescale board from 2014-2015. Prior to PerkinElmer, Mr. Summe was with AlliedSignal, now Honeywell International, serving as the president of General Aviation Avionics, president of the Aerospace Engines Group and president of the Automotive Products Group. Before joining AlliedSignal, he was the general manager of Commercial Motors at General Electric and was a partner with the consulting firm of McKinsey & Company, Inc. Mr. Summe holds B.S. and M.S. degrees in electrical engineering from the University of Kentucky and the University of Cincinnati, and an M.B.A. with distinction from the Wharton School at the University of Pennsylvania. He is in the University of Kentucky’s Hall of Distinction. Mr. Summe also serves on the board of directors of the State Street Corporation, Avantor Corporation and Virgin Orbit Holdings. and formerly served on the boards of directors of NextGen Acquisition Corp. I and NextGen Acquisition Corp II.

Independent Director

Director since 2015

Age 65

Board Committees:

• Nominating, Governance and Sustainability Committee (Chair)

Other Current Public Boards:

• State Street Corporation

• Virgin Orbit Holdings, Inc.

• Avantor Corporation

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Corporate Governance, Legal, Global Compliance Experience

• Financial, Audit & Accounting Expertise

• Manufacturing and Operations

• Risk Management

• Human Capital/Talent Development

Karl-Henrik Sundström

CEO of Stora Enso (retired)

Karl-Henrik Sundström (1960, Swedish) was appointed a non-executive director of our board of directors in June 2019. He served as CEO of Stora Enso from 2014 until his retirement in 2019. He joined Stora Enso in August 2012 as CFO and member of the group leadership team. In June 2013 he took on the role as executive vice president for division Paper and Wood Products. Prior to joining Stora Enso, Mr. Sundström held the role of CFO of NXP Semiconductors N.V. (2008-2012). Before that, he held several managerial positions in Ericsson, including CFO. He is a member of the board of Vestas AS, Mölnlycke AB and vice chair of Boliden AB, chair of the tax delegation for Swedish Business and Commerce, chair of the Climate Leadership Coalition and member of the board of the Marcus Wallenberg Foundation. Mr. Sundström participated in an Advanced Management Program at Harvard Business School in 1997 and holds a degree in Business Administration, Finance and Accounting from the Uppsala University, Sweden.

Independent Director

Director since 2019

Age 62

Board Committees:

• Audit Committee

• Human Resources and Compensation Committee

Other Current Public Boards:

• Boliden AB

• Vestas Wind Systems A/S

Key Qualifications and Expertise:

• International Experience

• Executive Leadership

• Industry and Technology Experience

• Strategic Planning, Growth, Mergers & Acquisition

• Corporate Governance, Legal, Global Compliance Experience

• Manufacturing and Operations

• Financial, Audit & Accounting Expertise

• Risk Management

• IT and Cybersecurity

• ESG Expertise

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

Nominee Skills and Experience

Our director nominees have a wide variety of relevant skills, professional experience and backgrounds, and collectively bring to our Board diverse viewpoints and perspectives that strengthen its ability to represent the interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers. The chart below illustrates broad categories of skills and expertise that our non-executive director nominees offer which we believe contribute to the effective leadership and exercise of oversight responsibilities by the Board.

LOGO

International Experience: living and working in various regions, in the USA, Europe and/or Asia, and/or experience with businesses with substantial international operations

Executive Leadership: executive management experience with large or international organizations

Industry and Technology Experience: experience with and understanding of the technology industry, including the semiconductor and automotive industries

Strategic Planning, Growth, Mergers & Acquisition: planning knowledge of corporate strategy and strategic planning, and experience with mergers, acquisitions, and other strategic transactions

Corporate Governance, Legal, Global Compliance Experience: knowledge of corporate governance issues applicable to SEC registered companies listed on the Nasdaq, and experience within international regulatory affairs or legal sectors

Financial, Audit & Accounting Expertise: financial, audit & accounting expertise and experience with corporate finance, including financial experts as named in the company filings and experience as a CFO, Auditor, and Corporate Treasurer and public company CEO

Manufacturing and Operations: experience with sophisticated large-scale international manufacturing operations

Risk Management: experience in assessing and managing enterprise risks

Human Capital/Talent Development: experience with human resources management and culture development in large international organizations, in particular in overseeing succession planning, talent development and executive compensation programs

IT and Cybersecurity: experience in understanding and managing information technology and cybersecurity threats

ESG Expertise: experience in understanding and addressing strategic environmental, social and governance issues

ITEM 3: (RE-)APPOINTMENT OF DIRECTORS (continued)

Director Independence

NXP’s Board has determined that all non-executive director nominees, as well as our current directors who are not standing for re-election, are independent under the applicable Nasdaq listing standards, the Rules of Procedure (as defined below), as well as practice 2.1.8 of the DCGC. The current executive director, Mr. Sievers, as our President and Chief Executive Officer, is not an independent director under the above standards. If each nominated director is appointed at the AGM, the full Board (including both non-executive directors and our executive director) will consist of 90% independent directors.

As of April 11, 2022, our non-executive director nominees who are nominated for re-appointment have an average tenure of 4.6 years, and six of our independent nominees, including our new independent nominee for director, have been members of the Board for four years or less.

HOW OUR BOARD GOVERNS AND IS GOVERNED

Rules Governing the Board

The Board has adopted written Rules Governing the Board (the “Rules of Procedure”) governing its performance, its decision making, its composition, the tasks and working procedures of the committees and other matters relating to the Board, the Chief Executive Officer, the non-executive directors and the committees established by the Board. In accordance with our Rules of Procedure, resolutions of our Board will be adopted by a simple majority of votes cast in a meeting at which at least the majority of its members is present or represented. Each director has the right to cast one vote. In a tie vote, the proposal will be rejected.

In addition to the Rules of Procedure, the Board has adopted charters of its committees, to which the plenary Board, while retaining overall responsibility, has assigned certain tasks: the Audit Committee, the Nominating, Governance and Sustainability Committee, and the Human Resources and Compensation Committee. Each committee reports to the plenary Board. The Articles of Association, Rules of Procedure and the committee charters are posted on our Investor Relations website at http://investors.nxp.com under the “Corporate Governance” section. Copies of our corporate governance materials are also available to shareholders who request them. Requests must be in writing and sent to: NXP Semiconductors N.V., High Tech Campus 60, 5656 AG, Eindhoven, The Netherlands, Attention: Secretary.

The Board is assisted by the Secretary. The Secretary sees to it that correct procedures are followed and that the Board acts in accordance with its statutory obligations and its obligations under the Articles of Association. Furthermore, the Secretary assists the Chair of the Board (the “Chair”) in the functioning of Board business (information, agenda, evaluation, introductory program). The Secretary, in this capacity, is appointed and dismissed by the Board. Shareholders or other interested parties who wish to communicate with the Board, including the Chair and the non-executive directors individually or as a group, may send correspondence in care of the Secretary at NXP’s principal offices at High Tech Campus 60, 5656 AG, Eindhoven, The Netherlands. Our Secretary will receive all communications sent to this address, and will provide all substantive communications to the Chair, excluding simple administrative requests that are appropriately addressed by the Secretary.

Our non-executive directors oversee the general affairs of the Company and supervise and provide general advice to the executive director. Furthermore, the non-executive directors perform such acts that are delegated to them pursuant to our Articles of Association or by our board regulations. One of the non-executive directors has been appointed Chair and another non-executive director has been appointed Vice-Chair of the Board.

Under the Rules of Procedure, Board members must comply with any provisions on the maximum number of directorships and board memberships as decided by the Nominating, Governance and Sustainability Committee. Currently, the Nominating, Governance and Sustainability Committee has determined that members of the Board shall have no more than four board memberships in public companies in addition to service on the Board of NXP, and not more than two of such board memberships if they are an executive officer.

Each director owes a duty to us to properly perform the duties assigned to him or her and to act in the corporate interest of our Company. Under Dutch law, the corporate interest extends to the interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers.

Board Leadership and Role in Risk Oversight

Our Chair works closely with our Chief Executive Officer to set the agenda for Board meetings and to facilitate information flow between the Board and management. Sir Peter Bonfield currently serves as the Chair. The Chair presides at the Board meetings, as well as regularly scheduled executive sessions of the non-executive directors.

Our independent directors regularly meet in executive session without executive directors or management present. Additionally, the Board and each committee have the power to hire, at the expense of the Company, independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Company in advance.

HOW OUR BOARD GOVERNS AND IS GOVERNED (continued)

The Board believes that its current structure continues to provide robust and highly effective oversight based on, among other factors:

•

The nine non-executive directors nominated for (re-) appointment are independent; the sole board member who is not independent is the executive director (the President and CEO);

•

Robust Corporate Governance principles, which are reviewed annually;

•

A Chair with deep experience in and knowledge of our business and industry with a demonstrated unique and successful strategic vision, including leading our Board during our successful transformation from a mid-size specialty semiconductor supplier to a top 10 global supplier (non-memory or foundry), with clear market share leadership in the Automotive semiconductor market. Our Chair continues to be actively focused on his role of providing the overall strategic leadership for the Company, consistent with Dutch law and the Company’s organizational documents—a role that the Board believes remains critically important as our industry continues to experience significant change and disruption at a rapid rate;

•

The Audit, Human Resources and Compensation, and Nominating, Governance and Sustainability Committees all are composed entirely of independent directors (as defined in the applicable Nasdaq listing standards and within the meaning of the DCGC);

•

Approval of any appointment of members to the Audit, Human Resources and Compensation, and Nominating, Governance and Sustainability Committees must include at least a majority of the independent directors;

•

All Board committees operate pursuant to written charters and conduct annual self-assessments;

•

The independent directors of the Board and its committees receive extensive information and input from multiple layers of management and external advisors, engage in detailed discussion and analysis regarding matters brought before them (including in executive session) and consistently and actively engage in the development and approval of significant corporate strategies;

•

The Board and its committees have unrestricted access to management;

•

The Board and its committees can retain, at Company expense, any advisors they deem necessary with respect to any matter brought before them; and

•

In 2021, the Board held four executive sessions of non-management members, and its committees collectively held 21 sessions.

Meetings of NXP’s Board

The Board met 5 times in 2021. In addition to these meetings, directors attended meetings of individual Board committees of which they were members. Each of the directors attended at least 75% of the aggregate of the Board meetings and meetings of committees of which they were a member during the periods for which they served in 2021. NXP does not have a formal policy regarding Board members’ attendance at annual general meetings, but all of our Board members are invited to attend the Annual General Meeting. In 2021, Sir Peter Bonfield, Chair of the Board, as well as Kurt Sievers participated in the Annual General Meeting via teleconference due to restrictions on in person attendance because of COVID-19.

The Rules of Procedure require the independent directors to meet in executive session from time to time, and at least twice annually, without any members of management present. During 2021, the independent directors of the Board met in executive session 4 times.

NXP’s Board Committees

The standing committees of the Board are the Audit Committee, the Human Resources and Compensation Committee, and the Nominating, Governance and Sustainability Committee.

All members of the Audit, Human Resources and Compensation, and Nominating, Governance and Sustainability Committees are independent directors, as defined in the applicable Nasdaq listing standards, applicable SEC rules and the Rules of Procedure, which includes the requirements of the DCGC. Board approval of any director appointment to the Audit, Human Resources and Compensation, and Nominating, Governance and Sustainability Committees must include at least a majority of the independent directors, as defined in the applicable Nasdaq listing standards.

HOW OUR BOARD GOVERNS AND IS GOVERNED (continued)

Audit Committee

Our Audit Committee is a separately-designated standing committee established in accordance with Section 3(a)(58)(A) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and currently consists of Ms. Southern (Chair), Ms. Staiblin and Mr. Sundström, each of whom are independent for purposes of the Nasdaq listing standards, our Rules of Procedure and Rule 10A-3 of the Exchange Act.

Subject to the requirement under Dutch law that independent auditors be appointed by the shareholders at a general meeting of shareholders, the Audit Committee has ultimate authority and direct responsibility to appoint, compensate, retain, oversee, evaluate and, where appropriate, replace the independent auditors. In addition, the Audit Committee reviews the performance and independence of the independent auditors and also oversees internal audit activities, compliance with the Code of Conduct, related-party transactions and legal matters, including litigation and intellectual property disputes.

Our Audit Committee reviews our annual audited financial statements and quarterly unaudited financial statements and certain other public disclosures prior to publication. The Audit Committee also meets periodically with senior management to discuss risk assessment and risk management policies.

The Board has determined that all Audit Committee members are able to read and understand fundamental financial statements in accordance with Nasdaq listing standards and that all three current members of the Audit Committee meet the SEC’s definition of “audit committee financial expert” as that term is defined in Item 407(d) of Regulation S-K. As noted above, all Audit Committee members are independent for purposes of Nasdaq listing standards, our Rules of Procedure, and Rule 10A-3 of the Exchange Act. For a description of the education and experience of each of the members of the Board’s Audit Committee please refer to the “Nominees for Director” section above.

The Audit Committee meets at least quarterly, and as often as it deems necessary to fulfill its responsibilities.

Number of meetings in 2021: 10.

This committee operates under a written charter adopted by our Board. The charter complies with SEC regulations and Nasdaq listing standards. The charter is reviewed and reassessed regularly to ensure continued compliance with these requirements. The charter is available for public viewing on our website at http://investors.nxp.com, under the “Corporate Governance” section.

Human Resources and Compensation Committee

Our Human Resources and Compensation Committee currently consists of Mr. Smitham (Chair), Sir Peter Bonfield, Mses. Clayton and Olving and Mr. Sundström. As previously noted, Mr. Smitham is retiring from our Board at the expiration of his term at the end of the AGM and his service on the Human Resources and Compensation Committee will cease after the AGM. Our Board has determined that all of the members of the Human Resources and Compensation Committee are independent for purposes of Nasdaq listing standards, our Rules of Procedure and Rule 10C-1 of the Exchange Act. Pursuant to its charter and the authority delegated to it by our Board, the Human Resources and Compensation Committee is responsible for overseeing our compensation and employee benefit plans and practices, including formulating, evaluating and approving the compensation of our executive officers, including the compensation of our Chief Executive Officer, and for overseeing all compensation programs involving the issuance of our equity securities. In addition, the Human Resources and Compensation Committee is responsible for overseeing the Company’s strategy, initiatives and programs related to the Company’s culture, talent management and talent development, including but not limited to talent acquisition, talent retention, talent development and succession, employee engagement, diversity, equality and inclusion. For more information regarding the Human Resources and Compensation Committee and the determination of executive compensation, see the “Executive Compensation” section below. The Human Resources and Compensation Committee meets as often as it deems necessary, but not less than four times a year.

Number of meetings in 2021: 7.

HOW OUR BOARD GOVERNS AND IS GOVERNED (continued)

Nominating, Governance and Sustainability Committee

Our Nominating, Governance and Sustainability Committee currently consists of Mr. Summe (Chair), Sir Peter Bonfield, Messrs. Foxx, Goldman and Kaeser. As previously noted, Messrs. Goldman and Kaeser are retiring from our Board at the expiration of their terms at the end of the AGM and their service on the Nominating, Governance and Sustainability Committee will cease after the AGM. Our Board has determined that all of the members of the Nominating, Governance and Sustainability Committee are independent for purposes of Nasdaq listing standards and our Rules of Procedure. Pursuant to its charter and the authority delegated to it by our Board, the Nominating, Governance and Sustainability Committee is responsible for determining selection criteria and appointment procedures for members of our Board, periodically assessing the scope and composition of our Board and evaluating the performance of its individual members. In addition, the Nominating, Governance and Sustainability Committee oversees the Company’s corporate sustainability policies and programs.

The Nominating, Governance and Sustainability Committee will consider timely written proposals for nomination from shareholders and will evaluate a shareholder’s prospective board nominee in the same manner that it evaluates other nominees, but only if it receives the request to consider such matter no later than on the 60^th day prior to the day of the Annual General Meeting. The Nominating, Governance and Sustainability Committee from time to time engages consultants or third-party search firms to assist in identifying and evaluating potential nominees. A shareholder who wishes to recommend a prospective Board nominee for the committee’s consideration may write to us at NXP Semiconductors N.V., High Tech Campus 60, 5656 AG, Eindhoven, The Netherlands, Attention: Secretary. For more information regarding shareholder proposals and nominations see “Future Shareholder Proposals and Nominations for the 2023 Annual General Meeting.” The Nominating, Governance and Sustainability Committee meets as often as it deems necessary to fulfill its responsibilities, but not less than four times a year.

Number of meetings in 2021: 4.

Information about each of the standing committees is provided on the following page and pages 34-36 provide an additional discussion of committee responsibilities in relation to risk oversight.

HOW OUR BOARD GOVERNS AND IS GOVERNED (continued)



AUDIT COMMITTEE
Members Ms. Southern (Chair) Ms. Staiblin Mr. Sundström		KEY OVERSIGHT RESPONSIBILITIES INCLUDE, BUT ARE NOT LIMITED TO: • The integrity of the Company’s financial statements and its accounting and financial reporting processes • The effectiveness of the Company’s internal control over financial reporting • Compliance with applicable legal and regulatory requirements • Oversight of information technology risks, including cybersecurity • The qualifications, independence and performance of the independent registered public accounting firm for U.S. public reporting purposes and the Company’s external auditor for purposes of Dutch law • The Internal Audit group • The Company’s processes and procedures related to risk assessment and risk management • Related party transactions
Number of meetings during 2021:		10



HUMAN RESOURCES AND COMPENSATION COMMITTEE

Members Mr. Smitham (Chair) Sir Peter Bonfield Ms. Clayton Ms. Olving Mr. Sundström		KEY OVERSIGHT RESPONSIBILITIES INCLUDE, BUT ARE NOT LIMITED TO: • CEO and senior management compensation, including the corporate goals and objectives relevant to such compensation and evaluating performance in light of those goals and objectives • Board and committee compensation • Relationship between the Company’s compensation policies and practices and risk management • Management Team succession plans • Compensation and benefits-related disclosures and equity compensation plans in which executives participate • Various human capital management topics, including diversity, equality and inclusion, workforce trends and surveys, as well as University Relations Program
Number of meetings during 2021:		7



NOMINATING, GOVERNANCE AND SUSTAINABILITY COMMITTEE

Members Mr. Summe (Chair) Sir Peter Bonfield Mr. Foxx Mr. Goldman Mr. Kaeser		KEY OVERSIGHT RESPONSIBILITIES INCLUDE, BUT ARE NOT LIMITED TO: • Corporate governance matters • Nomination or re-nomination of director candidates and approval of other annual shareholders meeting agenda items • The annual self-evaluation of the Board and its committees • Review NXP top identified risks and make proposals to the Board on oversight • Initiatives and reporting on Environment, Social and Governance
Number of meetings during 2021:		4

HOW OUR BOARD GOVERNS AND IS GOVERNED (continued)

Setting and Overseeing Strategy

The Board actively determines the Company’s strategy and continues to focus on those strategies designed to ensure the continued durability and sustainability of the Company, while creating long-term value for our shareholders, and serving the interests of our other stakeholders. The Board and its committees regularly and extensively reviewed during their meetings throughout 2021 the Company’s strategy, the Company’s primary risks as well as the design and operation of the internal control systems to ensure it supports the long-term growth and sustainability of the Company and reflects, among other considerations, market challenges and opportunities, and the interests of shareholders and other stakeholders. This has substantially impacted the long-term value creation strategy as referred to in practice 1.1.1 of the DCGC as further outlined in the Sustainability section and in the Company’s Corporate Social Responsibility Report. In addition to quarterly updates on the business performance and detailed presentations by the various business managers, the Board, as part of its annual meeting schedule, spent a full meeting in November to review and discuss the mid- to long-term strategy of the Company.

The Board is committed to maintaining a dialogue with shareholders to ensure that they understand our differentiated strategy and business model and have an opportunity to discuss and engage on a broad range of topics, including our strategy. The Board will also review the implementation of our strategy at our annual general meeting of shareholders, giving attendees the opportunity to discuss our annual Dutch board report and the accompanying financial statements prepared in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”). We also regularly discuss our strategy in shareholder engagement sessions.

Risk Oversight

Our management is