Employee Matters Agreement

EMPLOYEE MATTERS AGREEMENT

BY AND AMONG

MOTOROLA, INC.,

SCG HOLDING CORPORATION

AND

SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC

DATED AS OF MAY 11, 1999

TABLE OF CONTENTS

ARTICLE I — DEFINITIONS

1.1 Previously Defined Terms.....................................1

1.2 Terms Defined in the Reorganization or Recapitalization Agreement....................................................1

1.3 General Definitions..........................................1

1.4 Amendment of Schedules.......................................3

1.5 Interpretation...............................................4

ARTICLE II — GENERAL PROVISIONS

2.1 Transfer of Transferred Employees............................4

2.2 Transfer of Contractors and Consultants......................4

2.3 Novation of Contracts........................................4

2.4 Maintenance of Employment Terms and Conditions...............4

2.5 Employment Records...........................................6

2.6 Transfer of Inactive SCG Employees...........................6

2.7 No Third Party Beneficiaries.................................6

2.8 PSIP Profit Sharing Contribution for 1999....................7

ARTICLE III — ADDITIONAL EMPLOYMENT MATTERS

3.1 Employment Taxes.............................................7

ARTICLE IV — ADDITIONAL EMPLOYEE BENEFIT MATTERS

4.1 US Retirement Plans..........................................7

4.2 Foreign Retirement Plans.....................................8

4.3 Compliance with Law; Mutual Cooperation.....................10

ARTICLE V — REPRESENTATIONS AND WARRANTIES

5.1 Labor Matters...............................................10

5.2 Representations and Warranties for Employee Benefit Plans...11

ARTICLE VI — INDEMNIFICATIONS

6.1 Survival Periods............................................12

6.2 Indemnification By Motorola.................................12

6.3 Indemnification by the Company and SCILLC...................13

ARTICLE VII — CONDITIONS PRECEDENT

7.1 Conditions Precedent to Transfers of Employees and Benefit Assets..............................................14

ARTICLE VIII — MISCELLANEOUS

8.1 Further Actions.............................................15

8.2 Notices.....................................................15

8.3 Expenses....................................................15

8.4 Entire Agreement............................................15

8.5 Assignment; Binding Effect; Severability....................15

8.6 Governing Law...............................................15

8.7 Execution in Counterparts...................................15

8.8 Headings....................................................16

8.9 Amendment and Waiver........................................16

8.10 U.S. Currency...............................................16

EMPLOYEE MATTERS AGREEMENT dated as of May 11, 1999 ("AGREEMENT") by and among Motorola, Inc., a Delaware corporation ("PARENT" or "MOTOROLA"), SCG Holding Corporation, a Delaware corporation and a wholly owned subsidiary of Motorola (the "COMPANY"), and Semiconductor Components Industries, LLC, a Delaware limited liability company ("SCI LLC"), the sole member of which is the Company.

RECITALS

A. Motorola engages through its Semiconductor Components Group ("SCG") in the development, manufacture and sale of discrete and integrated circuit semiconductor products and related products.

B. Concurrently herewith, Motorola, the Company, and SCI LLC are entering into that certain Reorganization Agreement ...

C. Concurrently herewith, Motorola, the Company and certain other parties are entering into that certain Agreement and Plan of Recapitalization and Share Purchase ...

D. It is contemplated under the Reorganization Agreement that Motorola, the Company, and SCI LLC enter into this Agreement.

ARTICLE I - DEFINITIONS

1.1 Previously Defined Terms.

1.2 Terms Defined in the Reorganization or Recapitalization Agreement.

1.3 General Definitions.

"Employee Benefit Plan" means any plan, fund, or program providing benefits or retirement income.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"Foreign Retirement Plan Transfer Agreement" means a written agreement between the parties.

"Expatriate Employees" means employees hired in one country and assigned to another on a temporary basis.

"Inactive SCG Employees" means SCG Employees absent due to leave or disability.

"Retained Employee Benefit Plan Liabilities" means liabilities under an Employee Benefit Plan maintained by Motorola or another Existing SCG Entity.

"Retirement Plan" means an Employee Benefit Plan that provides retirement income or deferred income.

"SCG Employees" means all employees of the Existing SCG Parties who work primarily in the operation of the Business.

"Transferred Contractors" means consultants and independent contractors primarily supporting the Business.

"Transferred Employees" means Transferred SCG Employees, Transferred Shared Services Employees, and Transferred Expatriate Employees.

"Transferred Expatriate Employees" means those Expatriate Employees identified on Schedule 1.3B.

"Transferred SCG Employees" means all SCG Employees except Inactive SCG Employees.

"Transferred Shared Services Employees" means those employees identified on Schedule 1.3D.

"US Retirement Plan Transfer Agreement" means the written agreement relating to the transfer of assets and liabilities from the Motorola pension plan to qualified Retirement Plans maintained by an SCG Party.

ARTICLE II - GENERAL PROVISIONS

2.1 Transfer of Transferred Employees.

2.2 Transfer of Contractors and Consultants.

2.3 Novation of Contracts.

2.4 Maintenance of Employment Terms and Conditions.

SCI LLC will continue the employment of Transferred Employees and provide substantially similar terms and conditions of employment for one year after the Closing Date.

The SCG Parties will assume certain accrued liabilities and maintain comparable benefit coverage where required.

Government-mandated Employee Benefit Plans shall be maintained as required by law.

2.5 Employment Records.

2.6 Transfer of Inactive SCG Employees.

2.7 No Third Party Beneficiaries.

2.8 PSIP Profit Sharing Contribution for 1999.

ARTICLE III - ADDITIONAL EMPLOYMENT MATTERS

3.1 Employment Taxes.

ARTICLE IV - ADDITIONAL EMPLOYEE BENEFIT MATTERS

4.1 US Retirement Plans.

4.2 Foreign Retirement Plans.

4.3 Compliance with Law; Mutual Cooperation.

ARTICLE V - REPRESENTATIONS AND WARRANTIES

5.1 Labor Matters.

5.2 Representations and Warranties for Employee Benefit Plans.

ARTICLE VI - INDEMNIFICATIONS

6.1 Survival Periods.

6.2 Indemnification By Motorola.

6.3 Indemnification by the Company and SCI LLC.

ARTICLE VII - CONDITIONS PRECEDENT

7.1 Conditions Precedent to Transfers of Employees and Benefit Assets.

ARTICLE VIII - MISCELLANEOUS

8.1 Further Actions.

8.2 Notices.

8.3 Expenses.

8.4 Entire Agreement.

8.5 Assignment; Binding Effect; Severability.

8.6 Governing Law.

8.7 Execution in Counterparts.

8.8 Headings.

8.9 Amendment and Waiver.

8.10 U.S. Currency.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.