EXHIBIT 10.3

FREESCALE SEMICONDUCTOR, INC.
AWARD DOCUMENT
For the
Freescale Semiconductor, Inc. Omnibus Incentive Plan of 2005
Terms and Conditions Related to Employee Nonqualified Stock Options

             
Recipient:
      Date of Expiration:    

           
 
           
Commerce ID#:
      Number of Options:    

           
 
           
Date of Grant:
      Exercise Price:    

             

Freescale Semiconductor, Inc. (“Freescale”) is pleased to grant you options to
purchase shares of Freescale’s Class A common stock under the Freescale Omnibus
Incentive Plan of 2005 (the “Plan”). The number of options (“Options”) awarded
to you and the Exercise Price per Option are stated above. Each Option entitles
you to purchase one share of Freescale’s common stock on the terms described
below and in the Plan.

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Vesting and Exercisability

You cannot exercise the Options until they have vested.

Regular Vesting – The Options will vest in accordance with the following
schedule (subject to the other terms hereof):

[VESTING SCHEDULE]

Special Vesting – You may be subject to the Special Vesting Dates described
below if your employment or service with Freescale or a Subsidiary (as defined
below) terminates.

Exercisability – You may exercise Options at any time after they vest and before
they expire as described below.

Expiration

All Options expire on the earlier of (1) the Date of Expiration as stated above
or (2) any of the Special Expiration Dates described below. Once an Option
expires, you no longer have the right to exercise it.

Special Vesting Dates and Special Expiration Dates

There are events that cause your Options to vest sooner than the schedule
discussed above or to expire sooner than the Date of Expiration as stated above.
Those events are as follows:

Retirement – If your employment or service with Freescale or a Subsidiary is
ended because of your Retirement, Options that were granted at least one year
prior to your Retirement that are not vested will automatically become fully
vested upon your Retirement. Any remaining unvested Options will be forfeited.
All your vested Options will then expire on the earlier of the third anniversary
of ending your employment or service because of your Retirement or the Date of
Expiration stated above. Retirement means (only for purposes of this Option)
your retirement from Freescale or a Subsidiary as follows:

  (i)   Retiring at or after age 55 with 20 years of service;     (ii)  
Retiring at or after age 60 with 10 years of service;     (iii)   Retiring at or
after age 65, without regard to years of service.

For these purposes, service shall include only uninterrupted service with
Freescale.

 

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Disability – If your employment or service with Freescale or a Subsidiary is
terminated because of your Total and Permanent Disability (as defined below),
Options that are not vested will automatically become fully vested upon your
termination of employment or service. All your Options will then expire on the
earlier of the third anniversary of your termination of employment or service
because of your Total and Permanent Disability or the Date of Expiration stated
above. Until that time, the Options will be exercisable by you or your guardian
or legal representative.

Death – If your employment or service with Freescale or a Subsidiary is
terminated because of your death, Options that are not vested will automatically
become fully vested upon your death. All your Options will then expire on the
earlier of the third anniversary of your death or the Date of Expiration stated
above. Until that time, with written proof of death and inheritance, the Options
will be exercisable by your legal representative, legatees or distributees.

Change In Control – If there is a Change In Control of Freescale (as defined in
the Plan), all the unvested Options will automatically become fully vested as
described in the Plan. If Freescale or a Subsidiary terminates your employment
or service other than for Serious Misconduct within two years of consummation of
a Change In Control, all of your vested Options will be exercisable until the
Date of Expiration stated above.

Termination of Employment or Service Because of Serious Misconduct – If
Freescale or a Subsidiary terminates your employment or service because of
Serious Misconduct (as defined below) all of your Options (vested and unvested)
expire upon your termination.

Change in Employment in Connection with a Divestiture – If you accept employment
with another company in direct connection with the sale, lease, outsourcing
arrangement or any other type of asset transfer or transfer of any portion of a
facility or any portion of a discrete organizational unit of Freescale or a
Subsidiary (a “Divestiture”), all of your unvested Options will automatically
expire upon termination in direct connection with a Divestiture and your vested
Options will expire 12 months after such Divestiture or such shorter period
remaining until expiration as set forth above.

Termination of Employment or Service by Freescale or a Subsidiary Other than for
Serious Misconduct or a Divestiture– If Freescale or a Subsidiary on its
initiative, terminates your employment or service other than for Serious
Misconduct or a Divestiture, all of your unvested Options will automatically
expire upon termination and your vested Options will expire twelve months after
your termination of employment or such shorter period remaining until expiration
as set forth above.

Termination of Employment or Service for any Other Reason than Described Above –
If your employment or service with Freescale or a Subsidiary terminates for any
reason other than that described above, including voluntary resignation of your
employment or service, all of your Options (vested and unvested) will
automatically expire on the date of termination.

Leave of Absence/Temporary Layoff

If you take a Leave of Absence from Freescale or a Subsidiary that your employer
has approved in writing in accordance with your employer’s Leave of Absence
Policy and which does not constitute a termination of employment as determined
by Freescale, or you are placed on Temporary Layoff (as defined below) by
Freescale or a Subsidiary the following will apply:

Vesting of Options – Options will continue to vest in accordance with the
vesting schedule set forth above.

Exercising Options – You may exercise Options that are vested or that vest
during the leave of absence or layoff.

Effect of Termination of Employment or Service – If your employment or service
is terminated during the Leave of Absence or Temporary Layoff, the treatment of
your Options will be determined as described under “Special Vesting Dates and
Special Expiration Dates” above.

Other Terms

Method of Exercising – You must follow the procedures for exercising options
established by Freescale from time to time. At the time of exercise, you must
pay the Exercise Price for all of the Options being exercised and any taxes that
are required to be withheld by Freescale or a Subsidiary in connection with the
exercise. Options may not be exercised for less than 50 shares unless the number
of shares represented by the Option is less than 50 shares, in

FSL Standard Stock Option Award Agreement — 2005

 

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which case the Option must be exercised for the remaining amount.

Transferability – Unless the Committee provides, Options are not transferable
other than by will or the laws of descent and distribution.

Tax Withholding – Freescale or a Subsidiary is entitled to withhold an amount
equal to the required minimum statutory withholding taxes for the respective tax
jurisdictions attributable to any share of common stock deliverable in
connection with the exercise of the Options. You may satisfy any withholding
obligation in whole or in part by electing to have Freescale retain Option
shares having a Fair Market Value on the date of exercise equal to the minimum
amount required to be withheld.

Definition of Terms

If a term is used but not defined, it has the meaning given such term in the
Plan.

“Fair Market Value” is the closing price for a share of Freescale common stock
on the relevant date. The official source for the closing price is the New York
Stock Exchange Composite Transaction as reported in the Wall Street Journal.

“Serious Misconduct” means any misconduct identified as a ground for termination
in the Freescale Code of Business Conduct, or the human resources policies, or
other written policies or procedures.

“Subsidiary” means an entity of which Freescale owns directly or indirectly at
least 50% and that Freescale consolidates for financial reporting purposes.

“Total and Permanent Disability” means for (x) U.S. employees, entitlement to
long-term disability benefits under the Freescale Disability Income Plan and any
successor plan or a determination of permanent total disability under a state
workers compensation statute and (y) non-U.S. employees, as established by
applicable Freescale policy or as required by local regulations.

“Temporary Layoff” means a layoff or redundancy that is communicated as being
for a period of up to twelve months and as including a right to recall under
defined circumstances.

Consent to Transfer Personal Data

By accepting this award, you voluntarily acknowledge and consent to the
collection, use, processing and transfer of personal data as described in this
paragraph. You are not obliged to consent to such collection, use, processing
and transfer of personal data. However, failure to provide the consent may
affect your ability to participate in the Plan. Freescale and its Subsidiaries
hold certain personal information about you, that may include your name, home
address and telephone number, date of birth, social security number or other
employee identification number, salary, nationality, job title, any shares of
stock held in Freescale, or details of all options or any other entitlement to
shares of stock awarded, canceled, purchased, vested, or unvested, for the
purpose of implementing, managing and administering the Plan (“Data”). Freescale
and/or its Subsidiaries will transfer Data amongst themselves as necessary for
the purpose of implementation, administration and management of your
participation in the Plan, and Freescale and/or any of its Subsidiaries may each
further transfer Data to any third parties assisting Freescale in the
implementation, administration and management of the Plan. These recipients may
be located throughout the world, including the United States. You authorize them
to receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purpose of implementing, administering and managing your
participation in the Plan, including any requisite transfer of such Data as may
be required for the administration of the Plan and/or the subsequent holding of
shares of stock on your behalf by a broker or other third party with whom you
may elect to deposit any shares of stock acquired pursuant to the Plan. You may,
at any time, review Data, require any necessary amendments to it or withdraw the
consents herein in writing by contacting Freescale; however, withdrawing your
consent may affect your ability to participate in the Plan.

Acknowledgement of Discretionary Nature of the Plan; No Vested Rights

You acknowledge and agree that the Plan is discretionary in nature and limited
in duration, and may be amended, cancelled, or terminated by Freescale or a
Subsidiary, in its sole discretion, at any time. The grant of awards under the
Plan is a one-time benefit and does not create any contractual or other right to
receive an award in the future. Future grants, if any, will be at the sole
discretion of Freescale, including, but not limited to, the timing of

FSL Standard Stock Option Award Agreement — 2005

 

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any grant, the amount of the award, vesting provisions, and the exercise price.

Agreement Following Termination of Employment

As a further condition of accepting the Options, you acknowledge and agree that
for a period of two years following your termination of employment or service,
you will not recruit, solicit or induce, or cause, allow, permit or aid others
to recruit, solicit or induce, or to communicate in support of those activities,
any employee of Freescale or a Subsidiary to terminate his/her employment with
Freescale or a Subsidiary and/or to seek employment with your new or prospective
employer, or any other company.

You agree that upon termination of employment with Freescale or a Subsidiary,
you will immediately inform Freescale of (i) the identity of your new employer
(or the nature of any start-up business or self-employment), (ii) your new
title, and (iii) your job duties and responsibilities. You hereby authorize
Freescale or a Subsidiary to provide a copy of this Award Document to your new
employer. You further agree to provide information to Freescale or a Subsidiary
as may from time to time be requested in order to determine your compliance with
the terms hereof.

Substitute Stock Appreciation Right

Freescale reserves the right to substitute a Stock Appreciation Right for your
Option in the event certain changes are made in the accounting treatment of
stock options. Any substitute Stock Appreciation Right shall be applicable to
the same number of shares as your Option and shall have the same Date of
Expiration, Exercise Price, and other terms and conditions. Any substitute Stock
Appreciation Right may be settled only in Common Stock.

Acceptance of Terms and Conditions

By accepting the Options, you agree to be bound by these terms and conditions,
the Plan and any and all rules and regulations established by Freescale in
connection with awards issued under the Plan. As a condition to receiving the
Options granted hereunder, you may be asked to sign such other documents and
agreements, including, without limitation, a Stock Option Consideration
Agreement, as the Committee may deem necessary or appropriate.

Other Information about Your Options and the Plan

You can find other information about options and the Plan at:
http://compass.freescale.net/go/2005.fsl.omnibus.plans If you do not have access
to the website, please contact Freescale Global Rewards, 6501 William Cannon
Drive West, Austin, TX 78735; 512-895-2000; for an order form to request Plan
documents.

FSL Standard Stock Option Award Agreement — 2005