Performance Based Restricted Stock Units Award Agreement



 Exhibit 10.3 
 [NOTE: FORM FOR SR VP AND ABOVE OFFICERS FIRST USED IN MARCH 2009] 
 PERFORMANCE BASED RESTRICTED
STOCK UNITS AWARD AGREEMENT 
 ON SEMICONDUCTOR 
 2000 STOCK INCENTIVE PLAN 
 ON Semiconductor Corporation, a Delaware Corporation
(“Company”), hereby grants to ________________ (“Grantee”), a Participant in the ON Semiconductor Corporation (formerly known as SCG Holding Corporation) 2000 Stock Incentive Plan (“Plan”), as amended, a Performance
Based Restricted Stock Units Award (“Award”) for Units (“Units”) representing shares of the Company’s Common Stock (“Stock”). The grant is made effective as of the __________ __, ____(“Grant Date”). This
Award is designated as a “Performance Based Restricted Stock Unit Award,” and as such is granted under the Performance Share Award portion of the Plan. 
 A. The Board of Directors of the Company (“Board”) has adopted the Plan as an incentive to retain members of the Board, and key employees, officers and consultants of the Company and to enhance the
ability of the Company to attract new members of the Board, employees, officers and consultants whose services are considered unusually valuable by providing an opportunity for them to have a proprietary interest in the success of the Company.

 B. Under the Plan, the Board has delegated its authority to administer the Plan to the Compensation Committee of the Board
(“Compensation Committee”) 
 C. The Compensation Committee approved the granting of Units to the Grantee pursuant to the
Plan to provide an incentive to the Grantee to focus on the long-term growth of the Company. 
 D. To the extent not specifically
defined in this Performance Based Restricted Stock Units Award Agreement (“Agreement”), all capitalized terms used in this Agreement shall have the meaning set forth in the Plan. 
 In consideration of the mutual covenants and conditions hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Grantee agree as follows: 
 1. Grant of Units. Grantee is hereby granted
a Performance Based Restricted Stock Units Award for _____________________ Units, representing the right to receive the same number of shares of the Company’s Stock, subject to the terms and conditions in this Agreement. This Award is granted
pursuant to the Plan and its terms are incorporated by reference. 
  

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 2. Vesting of Units and Related Information. 
 2.1 Vesting Schedule. Subject to the terms and conditions set forth in this provision 2 and in other provisions of this Agreement, the
Units will vest (if at all) on each Vesting Date (as defined below) beginning in the ________ quarter of ____ and ending on the Vesting Date for the __________ quarter of ____ provided some or all of the below performance measures (“Performance
Measures”) are achieved. For purposes of this Agreement, the term “Vesting Date” means the date the Company files its Form 10-Q or 10-K during each fiscal quarter, subject to the achievement of relevant Performance Measures.

  

					
	Quarter & Year of Performance	  	   Cumulative Portion of  
   Units Eligible for  
   Vesting  
	  	Performance Measures
	 -
	  	-	  	Minimum: Base1 = $____ million
	  	  	Target2: Base + __% increase over Minimum for each subsequent quarter
	 Quarter
2, ____ 
 (possible Vesting Date in Q3 ____)
	  	1/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter
3, ____ 
 (possible Vesting Date in Q4 ____)
	  	2/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter
4, ____ 
 (possible Vesting Date in Q1 ____)
	  	3/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter
1, ____ 
 (possible Vesting Date in Q2 ____)
	  	4/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter
2, ____ 
 (possible Vesting Date in Q3 ____)
	  	5/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter
3, ____ 
 (possible Vesting Date in Q4 ____)
	  	6/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter
4, _____ 
 (possible Vesting Date in Q1 ____)
	  	7/12	  	Minimum: $_____ million
	  	  	Target: $_____ million

  

	 1
	 Base is defined as $__________ million of adjusted Non-GAAP (as defined above in this Agreement) EBITDA (as defined
above in this Agreement) (per 2.3 and 2.4 below). 



	 2
	 Target is the Performance Measure the Grantee must meet to vest 100% of the Units for a given quarter. Again, based on
adjusted Non-GAAP EBITDA (per 2.3 and 2.4 below). 


  

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	 Quarter 1,
____
 (possible Vesting Date in Q2 ____)
	  	8/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter 2,
____ 
 (possible Vesting Date in Q3 ____)
	  	9/12	  	Minimum: $_____ million
	  	  	Target: $______ million
	 Quarter 3,
____ 
 (possible Vesting Date in Q4 ____)
	  	10/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter 4,
_____ 
 (possible Vesting Date in Q1 ____)
	  	11/12	  	Minimum: $_____ million
	  	  	Target: $_____ million
	 Quarter 1, ____ 
 (possible Vesting Date in Q2 ____)
	  	12/12	  	Minimum: $_____ million
	  	  	Target: $_____ million

 2.2 Terms and Conditions of Vesting. 
 (a) If the Minimum Performance Measure is met for the quarter, 50% of the eligible Units shall vest on the relevant Vesting Date. If the applicable
Target Performance Measure is met for the quarter, the other 50% of the eligible Units shall vest on the relevant Vesting Date. 
 (b) If the
Minimum Performance Measure is not met for the quarter, no portion of the Units shall vest on the relevant Vesting Date. Any unvested Units will carry forward to subsequent quarters until the Minimum Performance Measure or Target Performance Measure
is met, and then all Units carried forward related to these measures shall vest on the relevant Vesting Date. 
 (c) If the Minimum
Performance Measure is met on the relevant Vesting Date, but the Target Performance is not met, 50% of the eligible Units shall vest on the relevant Vesting Date. The remaining 50% of Units shall carry forward to subsequent quarters until the Target
Performance Measure is met, and then all Units carried forward related to this measure shall vest on the relevant Vesting Date. 
 (d) Any
unvested Units shall expire immediately on the day after the Vesting Date occurring for the first quarter of ____. 
 EXAMPLE: For
example, assume you are granted _____ Units. One-twelfth, or ___ of the Units are available to vest upon achievement of the Performance Measure(s) each quarter. 
 [NOTE: VARIOUS EXAMPLES ARE PROVIDED TO THE GRANTEE FOR ILLUSTRATION PURPOSES ONLY] 
  

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	 	•	 	 The vesting of Units will continue in this manner until and through the Vesting Date for Q_ ____, immediately after which any unvested Units shall expire.



 2.3 Non-GAAP EBITDA. For the purposes of the above vesting schedule the “Non-GAAP EBITDA” shall
mean the Company’s earnings before interest (income or expense), taxes, depreciation, and amortization (or “EBITDA”) for the applicable quarter, calculated pursuant to the adjustments in 2.4; provided, however, if the Compensation
Committee determines that an alternative method would be more appropriate to achieve the objectives of this Award then such method shall be applied to determine Non-GAAP EBITDA for purposes of the above 2.1 vesting schedule for any given quarter.
“GAAP” refers to U.S. generally accepted accounting principles consistently applied. 
 2.4 Adjustments to Non-GAAP
EBITDA. The Non-GAAP EBITDA of the Company shall be adjusted to exclude the following, without duplication and if applicable to the Company for Non-GAAP EBITDA for a relevant quarter: (i) amortization of purchased intangible assets;
(ii) in-process research and development expense; (iii) stock-based compensation expense from acquisitions; (iv) stock-based compensation expense determined in accordance with Statement of Financial Accounting Standards No. 123
(as revised and amended); (v) restructuring, asset impairments and other, net; (vi) gain (loss) on debt prepayment; (vii) goodwill impairment charge; (viii) cumulative effect of accounting change required by GAAP;
(ix) extraordinary item; (x) expensing of the step up to fair market value of inventory from acquisitions; and (xi) divestiture related items. Non-GAAP EBITBA, as adjusted, shall specifically include merger and acquisition activity of
the Company. 
 In addition, the Compensation Committee may adjust either the Minimum Performance Measure or Target Performance Measure, as
it deems appropriate in its sole discretion, to exclude the effect (whether positive or negative) of any of the following types of events or matters with respect to the Company occurring after the Grant Date of the Award: other unusual or
infrequent matters or events, or special items similar to the items that the Company excludes or includes (as applicable) when calculating its Non-GAAP EBITDA. Each such adjustment, if any, shall be made solely for the purpose of providing a
consistent basis from period to period for the calculation of the Minimum Performance Measure and Target Performance Measure in order to prevent the dilution or enlargement of the Grantee’s rights with respect to the Award. 
 2.5 Final Determination of Performance Measures Attained. The Company (or the Compensation Committee with respect to grants to covered
employees under Section 162(m) of the U.S. Internal Revenue Code (“Code”)) shall be responsible for determining in good faith whether, and to what extent, the Performance Measures set forth in this Agreement have been achieved. The
Company or the Compensation Committee, as applicable, may reasonably rely on information from, and representations by, individuals within the Company in making such determination and when made such determination shall be final and binding on the
Grantee. 
 3. Termination of Employment. 
  

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 3.1 General. Subject to the provisions of 3.2 below, if the Grantee terminates employment
with the Company for any reason (including upon a termination for Cause), any Units that are not vested under the schedule in 2.1 above will be canceled and forfeited as of the date of termination of employment or service. In no event shall any
Units vest after the Vesting Date for the first quarter of 2012. 
 3.2 Change in Control. If the Company terminates the
Grantee’s employment without Cause (including a deemed termination for Good Reason, if applicable for this Grantee, as defined in Grantee’s employment agreement or similar document) within two (2) years following a Change in Control,
then the unvested portion of the Units shall become immediately vested. 
 4. Time and Form of Payment. Subject to the
provisions of the Agreement and the Plan, as the number of Units vest under 2 above, the Company will deliver to the Grantee the same number of whole shares of Stock, rounded up or down. Notwithstanding the preceding, the Company must deliver these
shares (if any) within 15 days of the date of vesting. 
 5. Nontransferability. The Units granted by this Agreement shall not
be transferable by the Grantee or any other person claiming through the Grantee, either voluntarily or involuntarily, except by will or the laws of descent and distribution or as otherwise provided under Section 13.5 of the Plan. 
 6. Adjustments. In the event of a stock dividend or in the event the Stock shall be changed into or exchanged for a different number or
class of shares of stock of the Company or of another corporation, whether through reorganization, recapitalization, stock split-up, combination of shares, merger or consolidation, there shall be substituted for each such remaining share of Stock
then subject to this Agreement the number and class of shares of stock into which each outstanding share of Stock shall be so exchanged, all as set forth in Section 14 of the Plan. 
 7. Delivery of Shares. No shares of Stock shall be delivered under this Agreement until: (i) the Units vest in accordance with the
schedule set forth in 2.1 above; (ii) approval of any governmental authority required in connection with the Agreement, or the issuance of shares thereunder, has been received by the Company; (iii) if required by the Compensation
Committee, the Grantee has delivered to the Company documentation (in form and content acceptable to the Company in its sole and absolute discretion) to assist the Company in concluding that the issuance to the Grantee of any share of Stock under
this Agreement would not violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations; and (iv) the Grantee has complied with 13 below of this Agreement in order for the proper provision for
required tax withholdings to be made. 
 8. Securities Act. The Company shall not be required to deliver any shares of Stock
pursuant to the vesting of Units if, in the opinion of counsel for the Company, such issuance would violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations. 
  

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 9. Voting and Other Stockholder Related Rights. The Grantee will have no voting rights or
any other rights as a stockholder of the Company (e.g., no rights to cash dividends) with respect to nonvested Units until the Units become vested and the Company issues shares of Stock to the Grantee. 
 10. Delivery of Documents and Notices. Any document relating to participation in the Plan or any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any,
provided for the Grantee by the Company or a subsidiary, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid,
addressed to the other party at the current address on file with the Company or at such other address as such party may designate in writing from time to time to the other party. 
 10.1 Description of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, a grant notice,
this Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Grantee electronically. In addition, the Grantee may deliver electronically any grant notice and the
Agreement to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company
intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company. 
 10.2 Consent to Electronic Delivery. The Grantee acknowledges that the Grantee has read 10.1 above of this Agreement and consents to the
electronic delivery of the Plan documents and any grant notice, as described in 10.1. The Grantee acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Grantee by contacting
the Company by telephone or in writing. The Grantee further acknowledges that the Grantee will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. 
 11. Administration. This Agreement shall at all times be subject to the terms and conditions of the Plan and the Plan shall in all respects
be administered by the Compensation Committee in accordance with the terms of and as provided in the Plan. The Compensation Committee shall have the sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of
the majority of the Compensation Committee with respect thereto and to this Agreement shall be final and binding upon the Grantee and the Company. In the event of any conflict between the terms and conditions of any grant notice, this Agreement
and/or the Plan, first the provisions of the Plan and then the Agreement shall control. All questions of interpretation concerning any grant notice, this Agreement and the Plan shall be determined by the Compensation Committee. 
  

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 12. Continuation of Employment. This Agreement shall not be construed to confer upon the
Grantee any right to continue employment with the Company and shall not limit the right of the Company, in its sole and absolute discretion, to terminate Grantee’s employment at any time. 
 13. Tax Withholding. Pursuant to Section 17.3 of the Plan, unless otherwise provided by the Compensation Committee prior to the
vesting of shares/Units as set forth in the next sentence, the Grantee shall satisfy any federal, state, local or foreign employment or income taxes due upon the vesting of the Units (or otherwise) by having the Company withhold from those shares of
Stock that the Grantee would otherwise be entitled to receive, a number of shares having a Fair Market Value equal to the minimum statutory amount necessary to satisfy the Company’s applicable federal, state, local and foreign income and
employment tax withholding obligation. In lieu of, and subject to, the above, the Compensation Committee may also permit the Grantee to satisfy any federal, state, local, or foreign employment or income taxes due upon the vesting of shares of the
Units (or otherwise) by: (i) personal check or other cash equivalent acceptable to the Company; (ii) permitting the Grantee to execute a same day sale of Stock pursuant to procedures approved by the Company; or (iii) such other method
as approved by the Compensation Committee, all in accordance with applicable Company policies and procedures and applicable law. 
 14.
Amendments. This Agreement may be amended only by a written agreement executed by the Company and the Grantee. 
 15.
Integrated Agreement. Any grant notice, this Agreement and the Plan shall constitute the entire understanding and agreement of the Grantee and the Company with respect to the subject matter contained herein or therein and supersedes
any prior agreements, understandings, restrictions, representations, or warranties between the Grantee and the Company with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated
herein or therein, the provisions of any grant notice and the Agreement shall survive any settlement of the Award and shall remain in full force and effect. 
 16. Severability. If one or more of the provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be
construed, interpreted or revised retroactively to permit this Agreement to be construed so as to foster the intent of this Agreement and the Plan 
 17. Counterparts. Any grant notice and this Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 18. Governing Law. This Agreement shall be interpreted and administered under the laws of the State of Delaware. 
  

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 19. Other. The Grantee represents that the Grantee has read and is familiar with the
provisions of the Plan and this Agreement, and hereby accepts the Award subject to all of their terms and conditions. 
 20.
Section 409A Compliance. Section 409A of the Code imposes an additional 20% tax, plus interest, on payments from “non-qualified deferred compensation plans.” Certain payments under this Agreement could be considered
to be payments under a “non-qualified deferred compensation plan.” The additional 20% tax, and interest, does not apply if the payment qualifies for an exception to the requirements of Section 409A or complies with the requirements of
Section 409A. It is Company’s belief that the payments due pursuant to this Agreement shall qualify for the “short-term deferral” exception to 409A as set forth in Treasury Regulation Section § 1.409A-1(b)(4).
Notwithstanding anything to the contrary in this Agreement, if the Company determines that the Grantee is a “specified employee” (as defined in Treas. Reg. § 1.409A-1(i)) and that payments to be provided to Grantee (i) are made
on account of the Grantee’s Separation from Service, and (ii) are or may become subject to the additional 20% tax imposed under Section 409A, then such payments shall be paid on the first business day following the expiration of the
six month period following the Grantee’s Separation from Service. For purposes of this Agreement, the term Separation from Service and Termination of Employment shall have the meaning set forth in Section 409A of the Code and the
regulations and guidance issued thereunder. 
 21. Compliant Operation and Interpretation. The Company believes that the
Agreement is not subject to the requirements of Section 409A of the Code, but it does not warrant or guaranty that the Agreement is either exempted from the requirements of Section 409A or that the Agreement complies with
Section 409A. Employee remains solely responsible for any adverse tax consequences imposed upon him by Section 409A. 
 IN WITNESS
WHEREOF, the Company has caused this Agreement to be signed by its duly authorized representative and the Grantee has signed this Agreement as of the date first written above. 
  

			
	ON SEMICONDUCTOR CORPORATION
		
	By:	 	 
		 	[NAME OF OFFICER]
		
	Its:	 	 
		 	
		
	By:	 	 
		 	(Grantee)


  

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