exv10w3



 






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.










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.





 









 








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





 









 








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




 









 








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