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e10-q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2001


	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 000-30419

ON SEMICONDUCTOR CORPORATION

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		36-3840979 (I.R.S. Employer Identification No.)

5005 E. McDowell Road

Phoenix, AZ 85008

(602) 244-6600

(Address and telephone number of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes No

The number of shares outstanding of each of the issuer’s classes of common stock as of the close of business on May 4, 2001:


Class	Number of Shares

Common Stock; $.01 par value		173,431,965

TABLE OF CONTENTS


PART I: FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II: OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-10.6
EX-10.7
EX-10.8
EX-10.9
EX-10.10
EX-10.11
ex-18

INDEX


		Page

Part I
	Financial Information




	Item 1 Financial Statements		2




	Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		14




	Item 3 Quantitative and Qualitative Disclosures About Market Risk		20
Part II
	Other Information




	Item 1 Legal Proceedings		21




	Item 2 Changes in Securities and Use of Proceeds		21




	Item 3 Defaults Upon Senior Securities		21




	Item 4 Submission of Matters to a Vote of Security Holders		21




	Item 5 Other Information		21




	Item 6 Exhibits and Reports on Form 8-K		21




Signatures			23
Exhibits

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)


		March 30,			December 31,
		2001			2000

		(unaudited)




ASSETS




Cash and cash equivalents		$	74.7		$	188.9




Receivables, net (including $20.2 and $14.9 due from Motorola)			190.2			271.2




Inventories			276.2			258.1




Other current assets			51.4			39.6




Deferred income taxes			101.0			40.7

	Total current assets		693.5			798.5




Property, plant and equipment, net			658.2			648.2




Deferred income taxes			292.3			286.8




Investments in joint ventures			28.7			45.3




Goodwill and other intangibles, net			135.0			140.8




Other assets			105.0			103.4

	Total assets	$	1,912.7		$	2,023.0

LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS’ EQUITY




Accounts payable (including $13.8 and $7.3 payable to Motorola)		$	144.9		$	175.0




Accrued expenses (including $4.8 and $8.3 payable to Motorola)			115.9			184.3




Income taxes payable			14.7			22.3




Accrued interest			11.2			17.9




Deferred income on sales to distributors (See Note 2)			155.0			—




Current portion of long-term debt			11.0			5.6

	Total current liabilities		452.7			405.1




Long-term debt (including $107.1 and $104.5 payable to Motorola)			1,251.2			1,252.7




Other long-term liabilities			29.1			20.8

	Total liabilities		1,733.0			1,678.6

Commitments and contingencies			—			—

Minority interests in consolidated subsidiaries			6.0			6.7

Common stock ($0.01 par value, 300,000,000 shares authorized, 173,335,944 and 172,746,435 shares issued and outstanding)			1.7			1.7




Additional paid-in capital			735.1			730.4




Accumulated other comprehensive loss			(10.0	)		(0.7	)




Accumulated deficit			(553.1	)		(393.7	)

	Total stockholders’ equity		173.7			337.7

	Total liabilities, minority interests and stockholders’ equity	$	1,912.7		$	2,023.0

See accompanying notes to consolidated financial statements.

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(in millions, except per share data)


				Quarter Ended			Quarter Ended
				March 30, 2001			April 1, 2000

				(unaudited)			(unaudited)




Revenues:




	Net product revenues (including $21.1 and $37.2 from Motorola)			$	357.0		$	451.5




	Foundry revenues from Motorola				3.5			35.3

			Total revenues		360.5			486.8




Cost of sales					273.9			323.4

Gross profit					86.6			163.4

Operating expenses:




	Research and development				22.9			11.2




	Selling and marketing				23.8			19.6




	General and administrative				36.8			51.0




	Amortization of goodwill and other intangibles				5.8			—




	Restructuring and other charges				38.0			4.8

			Total operating expenses		127.3			86.6

Operating income (loss)					(40.7	)		76.8

Other income (expenses), net:




	Interest expense				(29.2	)		(34.7	)




	Equity in earnings (losses) of joint ventures				0.6			(0.2	)




	Gain on sale of investment in joint venture				3.1			—

		Other income (expenses), net			(25.5	)		(34.9	)

Income (loss) before income taxes, minority interests and cumulative effect of accounting change					(66.2	)		41.9




Income tax benefit (provision)					22.7			(15.7	)




Minority interests					0.5			(0.7	)

Net income (loss) before cumulative effect of accounting change					(43.0	)		25.5




Cumulative effect of accounting change, net of income taxes of $38.8 (See Note 2)					(116.4	)		—

Net income (loss)					(159.4	)		25.5




Less: Redeemable preferred stock dividends					—			(6.6	)

Net income (loss) available for common stock				$	(159.4	)	$	18.9

Comprehensive income (loss):




	Net income (loss)			$	(159.4	)	$	25.5




	Foreign currency translation adjustments				(2.5	)		(0.3	)




	Minimum pension liability adjustment				(0.4	)		—




	Cash flow hedges:




		Cumulative effect of accounting change (See Note 10)			(3.4	)		—




		Net losses on derivative instruments			(3.1	)		—




		Reclassification adjustments			0.1			—

Comprehensive income (loss)				$	(168.7	)	$	25.2

Earnings per common share:




Basic:




Net income (loss) before cumulative effect of accounting change				$	(0.25	)	$	0.14




Cumulative effect of accounting change					(0.67	)		—

	Net income (loss)			$	(0.92	)	$	0.14

Diluted:




Net income (loss) before cumulative effect of accounting change				$	(0.25	)	$	0.13




Cumulative effect of accounting change					(0.67	)		—

	Net income			$	(0.92	)	$	0.13

Weighted average common shares outstanding:




	Basic				172.8			136.7

	Diluted				172.8			142.4

See accompanying note to consolidated financials.

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


			Quarter Ended			Quarter Ended
			March 30, 2001			April 1, 2000

			(unaudited)			(unaudited)




Cash flows from operating activities:




	Net income (loss)		$	(159.4	)	$	25.5




Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:




	Cumulative effect of accounting change			116.4			—




	Depreciation and amortization			42.5			34.2




	Amortization of debt issuance costs			1.3			1.6




	Provision for doubtful accounts			(0.2	)		0.3




	Net (gain) loss on disposals of property, plant and equipment			3.1			(0.1	)




	Non-cash interest on junior subordinated note payable to Motorola			2.6			2.3




	Minority interests in earnings (losses) of consolidated subsidiaries			(0.5	)		0.7




	Undistributed (earnings) losses of joint ventures			(0.6	)		0.2




	Tax benefit of stock options exercised			0.1			—




	Gain on sale of investment in joint venture			(3.1	)		—




	Deferred income taxes			(22.8	)		(5.1	)




	Non-cash compensation charges			2.2			—




Changes in assets and liabilities:




	Receivables			81.6			(14.4	)




	Inventories			(18.6	)		0.7




	Other assets			(15.6	)		(5.2	)




	Accounts payable			(29.3	)		7.3




	Accrued expenses			(38.8	)		(7.5	)




	Income taxes payable			(7.9	)		1.3




	Accrued interest			(6.7	)		(10.1	)




	Deferred income on sales to distributors			(27.2	)		—




	Other long-term liabilities			0.4			1.1

		Net cash provided by (used in) operating activities		(80.5	)		32.8

Cash flows from investing activities:




	Purchases of property, plant and equipment			(51.9	)		(21.1	)




	Investments in joint ventures and other			(0.5	)		(2.0	)




	Acquisition of minority interests in consolidated subsidiaries			(0.1	)		—




	Loans to joint venture			(5.0	)		(5.0	)




	Proceeds from sale of investment in joint venture			20.4			—




	Proceeds from sales of property, plant and equipment			0.3			8.8

		Net cash used in investing activities		(36.8	)		(19.3	)

Cash flows from financing activities:




	Proceeds from issuance of common stock under the employee stock purchase plan			2.3			—




	Proceeds from exercise of stock options			0.1			—

		Net cash provided by financing activities		2.4			—

Effect of exchange rate changes on cash and cash equivalents				0.7			—

Net increase (decrease) in cash and cash equivalents				(114.2	)		13.5




Cash and cash equivalents, beginning of period				188.9			126.8

Cash and cash equivalents, end of period			$	74.7		$	140.3

See accompanying notes to consolidated financial statements.

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Background and Basis of Presentation

The accompanying consolidated financial statements as of and for the quarter ended March 30, 2001 include the accounts of ON Semiconductor Corporation, its wholly-owned subsidiaries, and the majority-owned subsidiaries that it controls (collectively, the “Company”). An investment in a majority-owned joint venture that the Company does not control is accounted for on the equity method. Investments in companies that represent less than 20% of the related voting stock are accounted for on the cost basis. All material intercompany accounts and transactions have been eliminated.

The accompanying unaudited financial information reflects all adjustments, consisting only of normal recurring adjustments, that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto as of December 31, 2000 and for the year then ended included in our Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2001.

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

On August 4, 1999, the Company was recapitalized and certain related transactions were effected (the “Recapitalization”) pursuant to an agreement among ON Semiconductor Corporation, its subsidiary, Semiconductor Components Industries, LLC (“SCI LLC”), Motorola and affiliates of Texas Pacific Group. As a result of the Recapitalization, affiliates of Texas Pacific Group owned approximately 91% and Motorola owned approximately 9% of the outstanding common stock of the Company. In addition, as part of these transactions, Texas Pacific Group received 1,500 shares and Motorola received 590 shares of the Company’s mandatorily redeemable preferred stock with a liquidation value of $209 million plus accrued and unpaid dividends. Motorola also received a $91 million junior subordinated note issued by SCI LLC. Cash payments to Motorola in connection with the Recapitalization were financed through equity investments by affiliates of Texas Pacific Group totaling $337.5 million, borrowings totaling $740.5 million under the Company’s $875 million senior bank facilities and the issuance of $400 million of 12% senior subordinated notes due August 2009. Because Texas Pacific Group’s affiliates did not acquire substantially all of the Company’s common stock, the basis of the Company’s assets and liabilities for financial reporting purposes was not impacted by the Recapitalization.

On May 3, 2000, the Company completed the initial public offering (“IPO”) of its common stock, selling 34.5 million shares with an issue price of $16 per share. Net proceeds from the IPO (after deducting issuance costs) were approximately $514.8 million. The net proceeds were used to redeem all outstanding preferred stock (including accrued dividends), redeem a portion of the senior subordinated notes and prepay a portion of the loans outstanding under the senior bank facilities.

Note 2: Cumulative Effect of Accounting Change

Effective January 1, 2001, the Company changed its accounting method for recognizing revenue on sales to distributors. Recognition of revenue and related gross profit on sales to distributors is now deferred until the distributor resells the product.

Management of the Company believes that this accounting change is a preferable method because it better aligns reporting results with, focuses the Company on, and allows investors to better understand, end user demand for the products the Company sells through distribution. This revenue recognition policy is commonly used in the semiconductor market.

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The cumulative effect prior to 2001 of the accounting change was a charge of $155.2 million ($116.4 million or $0.67 per share, net of income taxes) for the quarter ended March 30, 2001. The accounting change resulted in a reduction of the Company’s net loss for the quarter ended March 30, 2001 of $14.2 million, or $.08 per share.

The estimated pro forma effects of the accounting change are as follows:


		Quarter Ended			Quarter Ended
		March 30,			April 1,
		2001			2000

		(unaudited)			(unaudited)




As reported:




	Revenues	$	360.5		$	486.8




	Net income (loss)		(159.4	)		25.5




	Basic net income (loss) per share	$	(0.92	)	$	0.14




	Diluted net income (loss) per share	$	(0.92	)	$	0.13




Pro forma amounts reflecting the accounting change applied retroactively:




	Revenues	$	360.5		$	447.8




	Net income (loss)		(43.0	)		7.9




	Basic net income (loss) per share	$	(0.25	)	$	0.01




	Diluted net income (loss) per share	$	(0.25	)	$	0.01

Note 3: Inventories

Inventories consist of the following (in millions):


	March 30,		December 31,
	2001		2000

	(unaudited)




Raw materials	$	24.1	$	26.6




Work in process		139.6		123.4




Finished goods		112.5		108.1

	$	276.2	$	258.1

Note 4: Restructuring and Other Charges

In March 2001, the Company recorded a $34.2 million charge to cover costs associated with a worldwide restructuring program involving both manufacturing locations and selling, general and administrative functions. The charge included $31.3 million to cover employee separation costs associated with the termination of approximately 1,100 employees and $2.9 million for asset impairments that were charged directly against the related assets. As of March 30, 2001, the remaining liability relating to this restructuring was $13.6 million. As of March 30, 2001, 388 employees have been terminated under the restructuring plan.

Also in March 2001, the Company recorded a $3.8 million charge to cover costs associated with the separation of one of the Company’s executive officers. In connection with the separation, the Company paid the former executive officer $1.9 million. In addition, the Company agreed to accelerate the vesting of his remaining outstanding options to purchase common stock and to allow such options to remain exercisable for the remainder of their ten-year term. The Company recorded a non-cash charge of $1.9 million related to the modification of these options.

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In March 2000, the Company recorded a $4.8 million charge to cover costs associated with a restructuring program at its manufacturing facility in Guadalajara, Mexico. The charge included $3.2 million to cover employee separation costs associated with the termination of approximately 500 employees and $1.6 million for asset impairments that were charged directly against the related assets. As of March 30, 2001 there was no remaining liability related to the 2000 restructuring program.

A summary of activity in the Company’s restructuring reserves for the quarter ended March 30, 2001 is as follows (in millions):






Balance, December 31, 2000.	$	0.7




Plus: March 2001 employee separation charge		31.3




Less: Payments charged against the reserve		(18.4	)

Balance, March 30, 2001.	$	13.6

Note 5: Sale of Investment in Joint Venture

The Company had a 50% interest in Semiconductor Miniatures Products Malaysia Sdn. Bhd. (“SMP”). As a part of the joint venture agreement, the Company’s joint venture partner, Philips Semiconductors International B.V. (“Philips”), had the right to purchase the Company’s interest in SMP between January 2001 and July 2002. On February 1, 2001, Philips exercised its purchase right, acquiring the Company’s 50% interest in SMP. This transaction resulted in proceeds of approximately $20.4 million and a pre-tax gain of approximately $3.1 million.

Note 6: Earnings per Common Share

Basic earnings per share are computed by dividing net income (loss) available for common stock (net income (loss) adjusted for dividends accrued on the Company’s redeemable preferred stock) divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share incorporates the incremental impact of shares issuable upon the assumed exercise of stock options. The number of incremental shares from the assumed exercise of stock options is calculated by applying the treasury stock method. For the quarter ended March 30, 2001, the effect of stock options is not included as it would be anti-dilutive. Earnings per share calculations before cumulative effect of accounting change are as follows (in millions, except per share data):


	Quarter Ended			Quarter Ended
	March 30,			April 1,
	2001			2000

Net income (loss) before cumulative effect of accounting change	$	(43.0	)	$	25.5




Less: Redeemable preferred stock dividends		—			(6.6	)

Net income (loss) before cumulative effect of accounting change available for common stock		(43.0	)		18.9




Cumulative effect of accounting change		(116.4	)		—

Net income (loss) available for common stock	$	(159.4	)	$	18.9

Basic weighted average common shares outstanding		172.8			136.7




Add: Dilutive effect of stock options		—			5.7

Diluted weighted average common shares outstanding		172.8			142.4

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	Quarter Ended			Quarter Ended
	March 30,			April 1,
	2001			2000

Earnings per share:




Basic:




Net income (loss) before cumulative effect of accounting change available for common stock	$	(0.25	)	$	0.14




Cumulative effect of accounting change		(0.67	)		—

Net income (loss) available for common stock	$	(0.92	)	$	0.14

Diluted:




Net income (loss) before cumulative effect of accounting change available for common stock	$	(0.25	)	$	0.13




Cumulative effect of accounting change		(0.67	)		—

Net income (loss) available for common stock	$	(0.92	)	$	0.13

Note 7: Long-Term Debt

In connection with the Recapitalization, the Company and SCI LLC, its primary domestic operating subsidiary (collectively, the “Issuers”), issued $400.0 million senior subordinated notes due 2009. As of March 30, 2001, $260.0 million of the senior subordinated notes were outstanding. The Company’s other domestic subsidiaries (collectively, the “Guarantor Subsidiaries”) have jointly and severally, irrevocably and unconditionally guaranteed the Issuers’ obligations under the senior subordinated notes. The Guarantor Subsidiaries include holding companies whose net assets consist primarily of investments in the Company’s foreign joint ventures in China and the Czech Republic and nominal equity interests in certain of the Company’s foreign subsidiaries as well as Semiconductor Components Industries of Rhode Island, Inc. The foreign joint ventures and the Company’s foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) themselves are not guarantors of the senior subordinated notes.

The Company does not believe that the separate financial statements and other disclosures concerning the Guarantor Subsidiaries provide any additional information that would be material to investors in making an investment decision. Condensed consolidating financial information for the Issuers, the Guarantor

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Subsidiaries and the Non-Guarantor Subsidiaries as of and for quarters ended March 30, 2001 and April 1, 2000 are as follows (in millions):

As of and for the quarter ended March 30, 2001:



		Issuers

		ON Semiconductor			SCI			Guarantor			Non-Guarantor
		Corporation			LLC			Subsidiaries			Subsidiaries			Eliminations			Total
(dollars in millions)
Receivables, net		$	—		$	71.2		$	—		$	119.1		$	—		$	190.2




Inventories			—			49.0			3.4			281.7			(57.9	)		276.2




Other current assets			—			67.7			(1.0	)		128.4			32.0			227.1

	Total current assets		—			187.9			2.4			529.2			(25.9	)		693.5




Property, plant and equipment, net			—			163.5			52.1			446.9			(4.3	)		658.2




Deferred income taxes			—			295.0			14.7			(17.4	)		—			292.3




Goodwill and other intangibles			—			10.2			124.8			—			—			135.0




Investments and other assets			241.6			283.3			42.6			1.8			(435.6	)		133.7

	Total assets	$	241.6		$	939.9		$	236.6		$	960.5		$	(465.8	)	$	1,912.7

Accounts payable		$	—		$	53.3		$	3.2		$	88.4		$	—		$	144.9




Accrued expenses and other current liabilities			(3.3	)		88.7			(8.7	)		54.1			22.0			152.8




Deferred income on sales to distributors			—			73.6			—			81.4			—			155.0

	Total current liabilities		(3.3	)		215.6			(5.5	)		223.9			22.0			452.7




Long-term debt(1)			260.0			1,228.4			—			22.8			(260.0	)		1,251.2




Other long-term liabilities			—			11.1			—			18.0			—			29.1




Intercompany(1)			(188.8	)		(781.5	)		172.5			537.8			260.0			—

	Total liabilities		67.9			673.6			167.0			802.5			22.0			1,733.0




Minority interests			—			—			—			—			6.0			6.0




Stockholders’ equity			173.7			266.3			69.6			157.9			(493.8	)		173.7

Liabilities, minority interests and stockholders’ equity		$	241.6		$	939.9		$	236.6		$	960.4		$	(465.8	)	$	1,912.7

Revenues		$	—		$	208.6		$	16.3		$	434.6		$	(299.0	)	$	360.5




Cost of sales			—			178.6			13.8			381.1			(299.6	)		273.9

Gross profit			—			30.0			2.5			53.5			0.6			86.6

Research and development			—			4.3			4.1			14.5			—			22.9




Selling and marketing			—			12.2			1.6			10.0			—			23.8




General and administrative			—			25.5			2.3			9.0			—			36.8




Amortization of goodwill and other intangibles			—			—			5.8			—			—			5.8




Restructuring and other charges			—			21.7			1.3			15.0			—			38.0

Total operating expenses			—			63.7			15.1			48.5			—			127.3

Operating income (loss)			—			(33.7	)		(12.6	)		5.0			0.6			(40.7	)




Interest expense, net			—			(12.5	)		(4.7	)		(12.0	)		—			(29.2	)




Equity earnings			(159.4	)		(29.1	)		(0.4	)		—			189.5			0.6




Gain on the sale of investment in joint venture			—			—			3.1			—			—			3.1

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)



			Issuers

			ON Semiconductor			SCI			Guarantor			Non-Guarantor
			Corporation			LLC			Subsidiaries			Subsidiaries			Eliminations			Total

Income (loss) before income taxes, minority interests and cumulative effect of accounting change, net				(159.4	)		(75.3	)		(14.6	)		(7.0	)		190.1			(66.2	)




Income tax benefit (provision)				—			11.9			7.9			(0.6	)		3.5			22.7




Minority interests				—			—			—			—			0.5			0.5




Cumulative effect of accounting change, net				—			(44.1	)		—			(72.3	)		—			(116.4	)

Net income (loss)			$	(159.4	)	$	(107.5	)	$	(6.7	)	$	(79.9	)	$	194.1		$	(159.4	)

Net cash provided by (used in) operating activities			$	—		$	77.0		$	2.2		$	(159.9	)	$	0.1		$	(80.5	)

Cash flows from investing activities:




	Purchases of property, plant and equipment			—			(15.8	)		(2.7	)		(33.4	)		—			(51.9	)




	Investments in joint ventures and other			—			—			—			(0.5	)		—			(0.5	)




	Acquisition of minority interests in consolidated subsidiaries			—			—			—			—			(0.1	)		(0.1	)




	Proceeds from sale of investment in joint venture			—			20.4			—			—			—			20.4




	Loans to joint venture			—			(5.0	)		—			—			—			(5.0	)




	Proceeds from sales of property, plant and equipment			—			0.1			—			0.2			—			0.3

		Net cash used in investing activities		—			(0.3	)		(2.7	)		(33.7	)		(0.1	)		(36.8	)

Cash flows from financing activities:




	Intercompany loans			—			(140.0	)		—			140.0			—			—




	Intercompany loan repayments			—			30.4			—			(30.4	)		—			—




	Proceeds from exercise of stock options and issuance of common stock under the employee stock purchase plan			—			2.4			—			—			—			2.4

		Net cash (used in) provided by financing activities		—			(107.2	)		—			109.6			—			2.4

Effect of exchange rate changes on cash and cash equivalents				—			—			—			0.7			—			0.7

Net increase (decrease) in cash and cash equivalents				—			(30.5	)		(0.5	)		(83.3	)		(0.0	)		(114.2	)




Cash and cash equivalents, beginning of period				—			44.9			(1.1	)		145.1			—			188.9

Cash and cash equivalents, end of period			$	—		$	14.4		$	(1.6	)	$	61.9		$	(0.0	)	$	74.7

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of and for the quarter ended April 1, 2000:



		Issuers

		ON Semiconductor			SCI			Guarantor		Non-Guarantor
		Corporation			LLC			Subsidiaries		Subsidiaries			Eliminations			Total

Receivables, net		$	—		$	108.5		$	—	$	153.1		$	2.2		$	263.8




Inventories			—			107.6			—		141.8			(43.9	)		205.5




Other current assets			—			95.9			—		107.6			—			203.5

	Total current assets		—			312.0			—		402.5			(41.7	)		672.8




Property, plant and equipment, net			—			152.5			—		390.5			—			543.0




Deferred income taxes			—			289.4			—		(5.1	)		2.1			286.4




Investments and other assets			413.0			235.0			55.2		10.8			(585.3	)		128.7

	Total assets	$	413.0		$	988.9		$	55.2	$	798.7		$	(624.9	)	$	1,630.9

Accounts payable		$	—		$	78.3		$	0.7	$	53.9		$	(5.0	)	$	127.9




Accrued expenses and other current liabilities			—			115.0			—		71.4			(2.1	)		184.3

	Total current liabilities		—			193.3			0.7		125.3			(7.1	)		312.2




Long-term debt(1)			400.0			1,297.0			—		0.6			(400.0	)		1,297.6




Other long-term liabilities			—			3.6			—		9.7			—			13.3




Intercompany(1)			15.9			(863.5	)		—		459.9			387.7			—

	Total liabilities		415.9			630.4			0.7		595.5			(19.4	)		1,623.1




Minority interests			—			—			—		—			10.7			10.7




Redeemable preferred stock			226.2			—			—		—			—			226.2




Stockholders’ equity			(229.1	)		358.5			54.5		203.2			(616.2	)		(229.1	)

Liabilities, minority interests and stockholders’ equity		$	413.0		$	988.9		$	55.2	$	798.7		$	(624.9	)	$	1,630.9

Revenues		$	—		$	576.3		$	—	$	292.5		$	(382.0	)	$	486.8




Cost of sales			—			484.7			—		220.7			(382.0	)		323.4

Gross profit			—			91.6			—		71.8			—			163.4

General and administrative			—			30.9			—		20.1			—			51.0




Other operating expenses			—			25.5			—		10.1			—			35.6

Total operating expenses			—			56.4			—		30.2			—			86.6

Operating income (loss)			—			35.2			—		41.6			—			76.8




Interest expense, net			—			(24.2	)		—		(10.5	)		—			(34.7	)




Equity earnings			25.5			20.6			0.5		0.2			(47.0	)		(0.2	)

Income (loss) before income taxes and minority interests			25.5			31.6			0.5		31.3			(47.0	)		41.9




Provision for income taxes			—			(12.1	)		—		(9.2	)		5.6			(15.7	)




Minority interests			—			—			—		—			(0.7	)		(0.7	)

Net income (loss)		$	25.5		$	19.5		$	0.5	$	22.1		$	(42.1	)	$	25.5

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)



			Issuers

			ON Semiconductor		SCI			Guarantor			Non-Guarantor
			Corporation		LLC			Subsidiaries			Subsidiaries			Eliminations			Total

Net cash provided by (used in) operating activities			$	—	$	87.7		$	(0.0	)	$	(55.0	)	$	0.1		$	32.8

Cash flows from investing activities:																		—




	Purchases of property, plant and equipment			—		(5.0	)		—			(16.0	)		(0.1	)		(21.1	)




	Investments in joint ventures and other			—		—			—			(2.0	)		—			(2.0	)




	Loans to unconsolidated joint venture			—		(5.0	)		—			—			—			(5.0	)




	Proceeds from sales of property, plant and equipment			—		3.1			—			5.7			—			8.8

		Net cash used in investing activities		—		(6.9	)		—			(12.3	)		(0.1	)		(19.3	)

Cash flows from financing activities:




	Intercompany loans			—		(35.3	)		—			35.3			—			—




	Intercompany loan repayments			—		6.3			—			(6.3	)		—			—

		Net cash (used in) provided by financing activities		—		(29.0	)		—			29.0			—			—

Effect of exchange rate changes on cash and cash equivalents				—		—			—			—			—			—

Net increase (decrease) in cash and cash equivalents				—		51.8			(0.0	)		(38.3	)		(0.0	)		13.5




Cash and cash equivalents, beginning of period				—		14.9			—			111.9			—			126.8

Cash and cash equivalents, end of period			$	—	$	66.7		$	(0.0	)	$	73.6		$	(0.0	)	$	140.3


(1)	For purposes of this presentation, the senior subordinated notes have been reflected in the condensed balance sheets of both the Company and SCI LLC with the appropriate offset reflected in the eliminations column. Interest expense has been allocated to SCI LLC only.

Note 8: Commitments and Contingencies

The Company is currently involved in a variety of legal matters that arose in the normal course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Note 9: Related Party Transactions

Related party activity between the Company and Motorola is as follows (in millions):


	Quarter		Quarter
	Ended		Ended
	March 30,		April 1,
	2001		2001

Purchases of manufacturing services from Motorola	$	25.5	$	40.5

Cost of other services, rent and equipment purchased from Motorola	$	12.6	$	23.6

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 10: Recently Adopted Accounting Pronouncements

Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended, which establishes standards for the accounting and reporting for derivative instruments, including derivative instruments embedded in other contracts, and hedging activities became effective for the Company as of January 1, 2001.

The Company’s interest rate swaps in effect at January 1, 2001 have been designated as cash flow hedges, are measured at fair value and recorded as assets or liabilities in the consolidated balance sheet. Upon the adoption of SFAS 133, the Company recorded an after-tax charge of approximately $3.4 million to accumulated other comprehensive income (loss) as of January 1, 2001. This charge consists of an approximate $2.1 million adjustment necessary to record the Company’s interest rate swaps in the consolidated balance sheet at their estimated fair values as well as the write-off of an approximate $3.5 million deferred charge (included in other assets in the accompanying consolidated balance sheet at December 31, 2000) relating to the payment made in December 2000 for the early termination of an interest rate protection agreement relating to a portion of the amounts outstanding under the Company’s senior bank facilities, both before income taxes of approximately $2.2 million. The Company recorded a $3.1 million after-tax charge to accumulated other comprehensive income during the first quarter to adjust its cash flow hedge to fair-value at March 30, 2001.

The Company uses forward foreign currency contracts to reduce its overall exposure to the effects of foreign currency fluctuations on its results of operations and cash flows. The fair value of these derivative instruments are recorded as assets or liabilities with gains and losses offsetting the gains and losses on the underlying assets or liabilities. The adoption of SFAS 133 did not impact the Company’s accounting and reporting for these derivative instruments.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with our consolidated financial statements and related notes thereto as of and for the year ended December 31, 2000 included in our Form 10-K filed with the SEC on March 30, 2001. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to certain factors, including those discussed below and elsewhere in this Form 10-Q.

ON Semiconductor is a global supplier of high performance broadband and power management integrated circuits and standard semiconductors used in numerous advanced devices ranging from high speed fiber optic networking equipment to the precise power management functions found in today’s advanced portable electronics.

Recent developments. During the first quarter of 2001, we experienced slowing demand for our products as customers delayed or cancelled bookings in order to manage their inventories in line with incoming business. As we enter the second quarter of 2001, we have seen customer order cancellations and push-outs decrease significantly; however market demand continues to be soft and visibility as to our customers’ expected requirements remains poor. We expect revenues in the second quarter of 2001 to be flat to slightly down from the first quarter. As cost reduction actions taken in the first quarter begin to materialize, we expect gross margins to improve sequentially in the second quarter, more than offsetting expected pricing decreases, which is anticipated to be in the range of approximately 5%. Operating expenses will remain under stringent cost controls and overall are expected to remain at their current reduced levels.

Recapitalization and Initial Public Offering. Immediately prior to our August 4, 1999 recapitalization (the “Recapitalization”), we were a wholly-owned subsidiary of Motorola. We held and continue to hold, through direct and indirect subsidiaries, substantially all of the assets and operations of the Semiconductor Components Group of Motorola’s Semiconductor Products Sector (“SCG”). As part of our Recapitalization, affiliates of the Texas Pacific Group purchased our common shares from Motorola for $337.5 million, and we redeemed common stock held by Motorola for a total of approximately $952 million. As a result, Texas Pacific Group’s affiliates owned approximately 91% and Motorola owned approximately 9% of our voting common stock. To finance a portion of the Recapitalization, Semiconductor Components Industries, LLC (“SCI LLC”), our primary domestic operating subsidiary, borrowed $740.5 million under senior secured bank facilities, we and SCI LLC issued $400 million of senior subordinated notes and SCI LLC issued a $91 million junior subordinated note to Motorola. We also issued mandatorily redeemable preferred stock with a total liquidation preference of $209 million to Motorola and Texas Pacific Group’s affiliates. Because Texas Pacific Group’s affiliates did not acquire substantially all of SCG’s common stock, the basis of SCG’s assets and liabilities for financial reporting purposes was not impacted by our Recapitalization. At the time of the Recapitalization, Motorola agreed to provide us with transition and manufacturing services in order to facilitate our transition to a stand-alone company independent of Motorola.

On May 3, 2000, we completed the initial public offering of our common stock (the “IPO”), selling 34.5 million shares with an issue price of $16 per share. Net proceeds from the IPO (after deducting issuance costs) were approximately $514.8 million. The net proceeds were used to redeem all outstanding preferred stock (including accrued dividends), redeem a portion of the senior subordinated notes and prepay a portion of the loans outstanding under the senior bank facilities.

Acquisition. On April 3, 2000, we acquired all of the outstanding capital stock of Cherry Semiconductor Corporation for approximately $253.2 million in cash (including acquisition related costs), which was financed with cash on hand and borrowings of $220.0 million under our senior bank facilities. Cherry, which was renamed Semiconductor Components Industries of Rhode Island, Inc., designs and manufactures analog and mixed signal integrated circuits for the power management and automotive markets.

Results of Operations

Cumulative effect of accounting change. Effective January 1, 2001, we changed our accounting method for recognizing revenue on sales to distributors. Recognition of revenue and related gross profit on sales to distributors is now deferred until the distributor resells the product.

We believe that this accounting change is a preferable method because it better aligns reporting results with, focuses us on, and allows investors to better understand, end user demand for the products we sell through distribution. This revenue recognition policy is commonly used in the semiconductor market.

The cumulative effect prior to 2001 of the accounting change was a charge of $155.2 million ($116.4 million or $0.67 per share, net of income taxes) for the quarter ended March 30, 2001. The accounting change resulted in a reduction of our net loss for the quarter ended March 30, 2001 of $14.2 million, or $.08 per share.

Earnings per common share. Our diluted earnings per share on an actual and adjusted basis for the quarter ended March 30, 2001, is as follows:



		Quarter Ended						Quarter Ended
		March 30,						April 1,
		2001						2000

		in millions			per share			in millions		per share

Net loss		$	(159.4	)	$	(0.92	)	$	25.5	$	0.13




Plus (net of tax):




	Amortization of goodwill and other intangibles		3.5			0.02			2.9		0.02




	Restructuring and other charges		26.8			0.16			—		—




	Cumulative effect of accounting change		116.4			0.67			—		—

Adjusted net loss		$	(12.7	)	$	(0.07	)	$	28.4	$	0.15

Weighted average common shares outstanding — diluted			172.8			172.8			142.4		142.4

Quarter Ended March 30, 2001 Compared To Quarter Ended April 1, 2000

Operating results for the quarters ended March 30, 2001 and April 1, 2000 follow. The April 1, 2000 pro forma column reflects the results as if the change in distributor revenue recognition had been applied retroactively. The pro forma results are used for comparative purposes in the following discussion of our results of operations.



			Quarter Ended

						April 1,			April 1,
						2000			2000
			March 30,			Pro			As
			2001			forma			reported


			(in millions)




Revenues:




	Net product revenues		$	357.0		$	412.5		$	451.5




	Foundry revenues			3.5			35.3			35.3

		Total revenues		360.5			447.8			486.8




Cost of sales				273.9			307.9			323.4

Gross profit				86.6			139.9			163.4

Operating expenses:




	Research and development			22.9			11.2			11.2




	Selling and marketing			23.8			19.6			19.6




	General and administrative			36.8			51.0			51.0




	Amortization of goodwill and other intangibles			5.8			—			—




	Restructuring and other charges			38.0			4.8			4.8

		Total operating expenses		127.3			86.6			86.6

Operating income (loss)				(40.7	)		53.3			76.8

Other income (expenses), net:




	Interest expense			(29.2	)		(34.7	)		(34.7	)




	Equity in earnings (losses) of joint ventures			0.6			(0.2	)		(0.2	)




	Gain on sale of investment in joint venture			3.1			—			—

		Other income (expenses)		(25.5	)		(34.9	)		(34.9	)

Income before income taxes, minority interests and cumulative effect of accounting change				(66.2	)		18.4			41.9




Income tax benefit (provision)				22.7			(9.8	)		(15.7	)




Minority interests				0.5			(0.7	)		(0.7	)

Net income (loss) before cumulative effect of accounting change				(43.0	)		7.9			25.5

Cumulative effect of accounting change (net of tax)				(116.4	)		—			—

Net income (loss)				(159.4	)		7.9			25.5

Less: Redeemable preferred stock dividends				—			(6.6	)		(6.6	)

Net income (loss) available for common stock			$	(159.4	)	$	1.3		$	18.9

Total revenues. Total revenues decreased $87.3 million, or 19.5%, to $360.5 million in the first quarter of 2001 from $447.8 million in the first quarter of 2000, due to reduced demand for our products resulting from the recent economic downturn and actions taken by our customers to manage their inventories in line with incoming business.

Net product revenues. Net product revenues decreased $55.5 million, or 13.5%, to $357.0 million in the first quarter of 2001 from $412.5 million in the first quarter of 2000. The decrease occurred in all of our major product families except for standard analog. Net revenues for standard analog products, which accounted for 28% of net product revenues in the first quarter of 2001, increased 9% compared to the first quarter of 2000, due to the Cherry acquisition in the second quarter of 2000. Excluding revenues related to Cherry, net revenues for standard analog products decreased 21% compared to the first quarter of 2000. Net revenues from broadband products, which accounted for 15% of net product revenues in the first quarter of 2001 decreased 18% from the first quarter of 2000. Net revenues for standard logic products, which accounted for 8% of net product revenues in the first quarter of 2001, decreased 26% compared to the first quarter of 2000. Net

revenues for discrete products, which accounted for 49% of net product revenues in the first quarter of 2000, decreased 20% compared to the first quarter of 2000. Other product families, including zeners, thyristors, and TMOS, also experienced revenue declines due to decreases in demand.

Approximately 44%, 33% and 23% of our net product revenues in the first quarter of 2001 were derived from the Americas, Asia/ Pacific and Europe (including the Middle East), respectively, compared to 45%, 32% and 23%, respectively, in the first quarter of 2000.

Foundry revenues. Foundry revenues decreased $31.8 million, or 90.1%, to $3.5 million in the first quarter of 2001 from $35.3 million in the first quarter of 2000. These foundry revenues are a result of agreements made with Motorola during our separation. We expect that these revenues will continue to decline in the future. Motorola continues to be one of our largest original equipment manufacturer (OEM) customers, and those product revenues are distinctly different from the aforementioned foundry revenues.

Cost of sales. Cost of sales decreased $34.0 million, or 11.0%, to $273.9 million in the first quarter of 2001 from $307.9 million in the first quarter of 2000, primarily as a result of decreased sales volume.

Gross profit. Gross profit (computed as total revenues less cost of sales) decreased $53.3 million, or 38.1%, to $86.6 million in the first quarter of 2001 from $139.9 million in the first quarter of 2000. As a percentage of total revenues, gross margin declined to 24.0% (23.8% for product gross margin) in the first quarter of 2001 from 31.2% (32.8% for product gross margin) in the first quarter of 2000. The decline in gross profit was primarily due to lower factory utilization resulting from lower customer demand.

Operating expenses

Research and development. Research and development costs increased $11.7 million, or 104.5%, to $22.9 million in the first quarter of 2001 from $11.2 million in the first quarter of 2000, primarily as a result of our efforts to continue to develop our power management and broadband portfolios. As a percentage of net product revenues, research and development costs increased to 6.4% in the first quarter of 2001 from 2.7% in the first quarter of 2000. We introduced 89 new products in the first quarter of 2001. The main emphasis of our new product development is in the high growth market applications of power management and broadband solutions with eighty percent of our overall research and development investment targeted in these areas. Our long-term target for research and development costs is 5-6% of revenues.

Selling and marketing. Selling and marketing expenses increased by $4.2 million, or 21.4%, to $23.8 million in the first quarter of 2001 from $19.6 million in the first quarter of 2000. However, as a result of cost reduction actions taken in the first quarter of 2001, selling and marketing expenses decreased by $3.0 million from the fourth quarter of 2000. The increase in selling and marketing expenses over the first quarter of 2000 was attributable to the Cherry acquisition and increased branding and marketing costs. As a percentage of net product revenues, these costs increased to 6.7% in the first quarter of 2001 from 4.8% in the first quarter of 2000.

General and administrative. General and administrative expenses decreased by $14.2 million, or 27.8% to $36.8 million in the first quarter of 2001 from $51.0 million in the first quarter of 2000, as a result of cost reduction actions and lower discretionary spending. As a percentage of net product revenues, these costs decreased to 10.3% in the first quarter of 2001 from 12.4% in the first quarter 2000.

Amortization of goodwill and other intangibles. Amortization of goodwill and other intangibles was $5.8 million in first quarter of 2001 due to the intangible assets that were acquired with Cherry in the second quarter of 2000, including amounts related to developed technology, assembled workforce and goodwill. There were no intangibles requiring amortization in the first quarter of 2000.

Restructuring and other charges. In March 2001, we recorded a $34.2 million charge to cover costs associated with a worldwide restructuring program. The charge included $31.3 million to cover employee separation costs associated with the termination of approximately 1,100 employees and $2.9 million for asset impairments that were charged directly against the related assets. As of March 30, 2001, the remaining liability relating to this restructuring was $13.6 million.

Also in March 2001, we recorded a $3.8 million charge to cover costs associated with the separation of one of our executive officers. In connection with the separation, we paid the former executive officer $1.9 million. In addition, we agreed to accelerate the vesting of his remaining outstanding options to purchase common stock and to allow such options to remain exercisable for the remainder of their ten-year term. We recorded a non-cash charge of $1.9 million related to the modification of these options.

In March 2000, we recorded a $4.8 million charge to cover costs associated with a restructuring program at our manufacturing facility in Guadalajara, Mexico. The charge included $3.2 million to cover employee separation costs associated with the termination of approximately 500 employees and $1.6 million for asset impairments that were charged directly against the related assets. As of March 30, 2001 there was no remaining liability related to the 2000 restructuring program.

A summary of activity in our restructuring reserves for the quarter ended March 30, 2001 is as follows (in millions):






Balance, December 31, 2000	$	0.7




Plus: March 2001 employee separation charge		31.3




Less: Payments charged against the reserve		(18.4	)

Balance, March 30, 2001	$	13.6

Operating income (loss). Operating income (loss) decreased $94.0 million, to a $40.7 million loss in the first quarter of 2001 compared to income of $53.3 million in the first quarter of 2000. This decrease was due to decreased net product revenues, costs associated with our worldwide restructuring program and the amortization of goodwill and other intangibles. We expect that the cost reduction program that we established this year will result in savings of approximately $60.0 million by year-end with additional benefits to occur in 2002. Excluding restructuring and other charges the operating loss for the quarter ended March 30, 2001 would have been $2.7 million compared to operating income of $58.1 million for the quarter ended April 1, 2000.

Interest expense. Interest expense decreased $5.5 million, or 15.9% to $29.2 million in the first quarter of 2001 from $34.7 million in the first quarter of 2000. The decrease was due the redemption of a portion of the senior subordinated notes and prepayment of a portion of the loans outstanding under the senior bank facilities with the proceeds from our IPO in 2000.

Equity in earnings (losses) of joint ventures. Equity in earnings (losses) from joint ventures increased $0.8 million to $0.6 million in the first quarter of 2001 from a loss of $0.2 million in the first quarter of 2000, due primarily to increased capacity and manufacturing efficiencies at our Chinese joint venture.

Gain on sale of investment in joint venture. We had a 50% interest in Semiconductor Miniatures Products Malaysia Sdn. Bhd. (“SMP”). As a part of the joint venture agreement, our joint venture partner, Philips Semiconductors International B.V. (“Philips”), had the right to purchase our interest in SMP between January 2001 and July 2002. On February 1, 2001, Philips exercised its purchase right, acquiring our 50% interest in SMP. This transaction resulted in proceeds of approximately $20.4 million and a pre-tax gain of approximately $3.1 million.

Minority interests. Minority interests represent the portion of net income (loss) of two Czech joint ventures attributable to the minority owners of each joint venture. We consolidate these joint ventures in our financial statements. Minority interests were $0.5 million in the first quarter of 2001 compared to $(0.7) million in the first quarter of 2000.

Income tax benefit (provision). We recorded an income tax benefit of $22.7 million in the first quarter of 2001 compared to an income tax provision of $9.8 million in the first quarter of 2000 as a result of our operating results for the quarter.

Liquidity and Capital Resources

For the first quarter of 2001, net cash used in operating activities was $80.5 million compared to $32.8 million provided by operating activities for the first quarter of 2000. Cash used in operating activities for the first quarter was due primarily to the net loss of $159.4 million, adjusted for non-cash charges, including depreciation and amortization of $42.5 million, $22.8 million for deferred income taxes and $116.4 million relating to the cumulative effect of accounting change relating to the revenue recognition on sales to distributors. Cash used in operating activities was also affected by changes in assets and liabilities including a decrease in accounts receivable of $81.6 and an increase in other long-term liabilities of $0.4 million. These amounts were offset by an $18.6 million increase in inventories and a $15.6 million increase in other assets as well as decreases of $29.3 million in accounts payable, $38.8 million in accrued expenses, $7.9 million in income taxes payable, $6.7 million in accrued interest and $27.2 million decrease in deferred income on sales to distributors. The decreases in accounts receivable and accounts payable were due to lower levels of sales and purchases, respectively, during the quarter.

Net cash used in investing activities was $36.8 million for the first quarter of 2001 compared to $19.3 million for the first quarter of 2000. The net cash outflows consisted of $51.9 million for purchases of property, plant and equipment and $5.0 million for loans to a joint venture. These outflows were partially offset by proceeds of $20.4 million related to the sale of the Company’s interest in the SMP joint venture.

Net cash provided by financing activities was $2.4 million for the first quarter of 2001. Cash inflows consisted of proceeds of $2.3 million from the issuance of common stock under our employee stock purchase plan and $0.1 million from stock option exercises.

As of March 30, 2001, long-term debt (including current maturities) totaled $1,262.2 million and stockholders’ equity was $173.7 million. Long-term debt included $869.3 million under our senior bank facilities, $260.0 million senior subordinated notes, $107.1 million in respect of our junior subordinated note, a $22.8 million note payable to a Japanese bank and a capital lease of $3.0 million. We are required to begin making principal payments on our senior bank facilities in the third quarter of 2001.

As of March 30, 2001, $132.8 million of our $150 million revolving facility was available, reflecting outstanding letters of credit of $17.2 million. Under certain circumstances, the terms of our credit agreements allow us to incur additional indebtedness, although there can be no assurances that we would be able to borrow on terms acceptable to us.

Our credit agreements currently do, and other debt instruments we enter into in the future may, impose various restrictions and covenants that could limit our ability to respond to market conditions, to provide for unanticipated capital needs or to take advantage of business opportunities. At March 30, 2001, we were in compliance with all debt covenants. We review our financial projections on a regular basis and, in light of current projections for the balance of 2001, are considering what revisions to our senior bank facilities may be necessary to maintain such compliance. Our ability to make payments on and to refinance our indebtedness, to remain in compliance with the various restrictions and covenants found in our credit agreements and to fund working capital, capital expenditures, research and development efforts and strategic acquisitions will depend on our ability to generate cash in the future, which is subject to, among other things, our future operating performance and to general economic, financial, competitive, legislative, regulatory and other conditions, some of which may be beyond our control.

Our primary future cash needs, both in the short term and in the long term, will continue to be for capital expenditures, debt service and working capital. Although our cash position worsened during the quarter, we believe that cash flow from operations and borrowings under our existing senior bank facilities will be sufficient to service our indebtedness and fund our other liquidity needs for the remainder of 2001, and that these sources could be supplemented, if necessary, with the proceeds from additional financings and targeted sales of assets. As part of our business strategy, we review acquisition and divestiture opportunities and proposals on a regular basis.

Historically, our revenues have been affected by the seasonal trends of the semiconductor and related industries. As a result of these trends, we typically experienced sales increases in the first two quarters of the

year and relatively flat sales levels in the third and fourth quarters. However, over the past three years, various events have disrupted this pattern. In 1998, third quarter revenues declined, primarily as a result of the Asian economic crisis. In 1999, third and fourth quarter revenues increased due to the continuing recovery in the semiconductor market. In the fourth quarter of 2000 and the first quarter of 2001 revenues declined due to slowing demand in the semiconductor market.

Recent Accounting Pronouncements

Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended establishes standards for the accounting and reporting for derivative instruments, including derivative instruments embedded in other contracts, and hedging activities became effective for us as of January 1, 2001.

Our interest rate swaps in effect at January 1, 2001 have been designated as cash flow hedges, are measured at fair value and recorded as assets or liabilities in the consolidated balance sheet. Upon the adoption of SFAS 133 we recorded an after-tax charge of approximately $3.4 million to accumulated other comprehensive income (loss) as of January 1, 2001. This charge consists of an approximate $2.1 million adjustment necessary to record our interest rate swaps in the consolidated balance sheet at their estimated fair values as well as the write-off of an approximate $3.5 million deferred charge (included in other assets in the accompanying consolidated balance sheet at December 31, 2000) relating to the payment made in December 2000 for the early termination of an interest rate protection agreement relating to a portion of the amounts outstanding under our senior bank facilities, both before income taxes of approximately $2.2 million. We recorded a $3.1 million after-tax charge to accumulated other comprehensive income during the first quarter to adjust our cash flow hedge to fair-value at March 30, 2001.

We use forward foreign currency contracts to reduce our overall exposure to the effects of foreign currency fluctuations on our results of operations and cash flows. The fair values of these derivative instruments are recorded as assets or liabilities with gains and losses offsetting the gains and losses on the underlying assets or liabilities. The adoption of SFAS 133 did not impact our accounting and reporting for these derivative instruments.

Business Risks and Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” as that term is defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” or “anticipates,” or by discussions of strategy, plans or intentions. All forward-looking statements in the Form 10-Q are made based on management’s current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. Among these factors are changes in overall economic conditions, the cyclical nature of the semiconductor industry, changes in demand for our products, changes in inventories at our customers and distributors, technological and product development risks, availability of manufacturing capacity, availability of raw materials, competitors’ actions, loss of key customers, order cancellations or reduced bookings, changes in manufacturing yields, control of costs and expenses, inability to reduce manufacturing and selling, general and administrative costs, litigation, risks associated with acquisitions and dispositions, changes in management, risks associated with our substantial leverage and restrictive covenants in our debt instruments, and risks involving environmental or other governmental regulation. Additional factors that could affect the company’s future operating results are described from time to time in ON Semiconductor’s Securities and Exchange Commission reports. See in particular Exhibit 99.1, entitled “Risk Factors”, in the Form 10-K dated March 30, 2001, and subsequently filed reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to financial market risks, including changes in interest rates and foreign currency exchange rates. To mitigate these risks, we utilize derivative financial instruments. We do not use derivative financial instruments for speculative or trading purposes.

As of March 30, 2001, our long-term debt (including current maturities) totaled $1,262.2 million. We have no interest rate exposure due to rate changes for our fixed rate interest bearing debt, which totaled $389.9 million or our capital lease obligation which totaled $3.0 million. We do have interest rate exposure with respect to the $869.3 million outstanding balance on our senior bank facilities due to its variable LIBOR pricing; however, from time to time, we have entered into interest rate swaps to reduce this interest rate exposure. As of March 30, 2001, we had four interest rate swaps covering exposures on $255 million of our variable interest rate debt. A 50 basis point increase in interest rates would result in increased annual interest expense of $3.1 million for the next twelve months.

A majority of our revenue, expense and capital purchasing activities are transacted in U.S. dollars. However, as a multinational business, we also conduct these activities through transactions denominated in a variety of other currencies. We use forward foreign currency contracts to hedge firm commitments and reduce our overall exposure to the effects of currency fluctuations on our results of operations and cash flows. Gains and losses on these foreign currency exposures would generally be offset by corresponding losses and gains on the related hedging instruments. This strategy reduces, but does not eliminate, the short-term impact of foreign currency exchange rate movements. For example, changes in exchange rates may affect the foreign currency sales price of our products and can lead to increases or decreases in sales volume to the extent that the sales price of comparable products of our competitors are less or more than the sales price of our products.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Changes in Securities and Use of Proceeds

Not Applicable.

Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable.

Item 5. Other Information

Not Applicable.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits —


Exhibit
No.		Exhibit Description

Exhibit 10.1		Amendment to Promissory Note, dated March 10, 2001, from James Thorburn and Jacqueline Thorburn to Semiconductor Components Industries, LLC(1)
Exhibit 10.2		Separation Letter Agreement dated February 28, 2001 (with attached General Release and Waiver dated March 10, 2001), between James Thorburn and Semiconductor Components Industries, LLC(1)
Exhibit 10.3		Promissory Note, dated March 9, 2001, from Michael Rohleder and Roxanne Rohleder to Semiconductor Components Industries, LLC(1)
Exhibit 10.4		Deed of Trust, dated March 7, 2001, from Michael Rohleder and Roxanne Rohleder to Semiconductor Components Industries, LLC(1)
Exhibit 10.5		Non-Qualified Stock Option Agreement for Directors, dated as of February 28, 2001, between ON Semiconductor Corporation and Albert Hugo-Martinez(1)
Exhibit 10.6		Non-Qualified Stock Option Agreement for Directors, dated as of February 28, 2001, between ON Semiconductor Corporation and Jerome Gregoire(1)
Exhibit 10.7		Non-Qualified Stock Option Agreement for Directors, dated as of February 16, 2001, between ON Semiconductor Corporation and John Legere(1)
Exhibit 10.8		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and Steve Hanson(1)
Exhibit 10.9		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and Dario Sacomani(1)
Exhibit 10.10		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and Michael Rohleder(1)
Exhibit 10.11		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and William George(1)
Exhibit 18		Letter from PricewaterhouseCoopers LLP re Change in Accounting Principles

(1) Management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K —

During the first quarter of 2001, the Company filed three reports on Form 8-K (1) dated January 31, 2001 and filed February 2, 2001, (2) dated February 28, 2001 and filed March 1, 2001, and (3) dated March 8, 2001 and filed March 15, 2001. The January 31, 2001 report was filed pursuant to Items 5 and 7, reported the Company’s fourth quarter and year 2000 earnings and included as an exhibit a press release dated January 31, 2001 titled “ON Semiconductor Announces Record Revenues and Earnings for 2000.” The February 28, 2001 report was filed pursuant to Items 5 and 7, reported a management change and the Company and included as an exhibit a press release dated February 28, 2001 titled “ON Semiconductor Announces Management Change.” The March 8, 2001 report, which was filed pursuant to Items 5 and 7, reported the Company’s update of its first quarter 2001 estimates and included as an exhibit a press release dated March 8, 2001 titled “ON Semiconductor Corporation Updates First Quarter Estimates.”

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 14, 2001


	ON SEMICONDUCTOR CORPORATION
	(Registrant)

	/s/ DARIO SACOMANI

	By: Dario Sacomani
	Senior Vice President, Chief Financial Officer
	(Duly Authorized Officer and Principal
	Financial Officer of the Registrant)

EXHIBIT INDEX


Exhibit 10.1		Amendment to Promissory Note, dated March 10, 2001, from James Thorburn and Jacqueline Thorburn to Semiconductor Components Industries, LLC(1)
Exhibit 10.2		Separation Letter Agreement dated February 28, 2001 (with attached General Release and Waiver dated March 10, 2001), between James Thorburn and Semiconductor Components Industries, LLC(1)
Exhibit 10.3		Promissory Note, dated March 9, 2001, from Michael Rohleder and Roxanne Rohleder to Semiconductor Components Industries, LLC(1)
Exhibit 10.4		Deed of Trust, dated March 7, 2001, from Michael Rohleder and Roxanne Rohleder to Semiconductor Components Industries, LLC(1)
Exhibit 10.5		Non-Qualified Stock Option Agreement for Directors, dated as of February 28, 2001, between ON Semiconductor Corporation and Albert Hugo-Martinez(1)
Exhibit 10.6		Non-Qualified Stock Option Agreement for Directors, dated as of February 28, 2001, between ON Semiconductor Corporation and Jerome Gregoire(1)
Exhibit 10.7		Non-Qualified Stock Option Agreement for Directors, dated as of February 16, 2001, between ON Semiconductor Corporation and John Legere(1)
Exhibit 10.8		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and Steve Hanson(1)
Exhibit 10.9		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and Dario Sacomani(1)
Exhibit 10.10		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and Michael Rohleder(1)
Exhibit 10.11		Non-Qualified Stock Option Agreement, dated as of February 21, 2001, between ON Semiconductor Corporation and William George(1)
Exhibit 18		Letter from PricewaterhouseCoopers LLP re Change in Accounting Principles


(1)	Management contract or compensatory plan or arrangement.

   1
                                                                    Exhibit 10.1

                          AMENDMENT TO PROMISSORY NOTE



$1,469,000.00                                                     Phoenix, AZ
6.62% Interest                                                    March 10, 2001



         WHEREAS James Thorburn and his spouse, Jacqueline Thorburn
(collectively referred to as "Thorburn") entered into a Promissory Note in the
face amount of $1,469,000.00 dated July 21, 2000, the proceeds of which were
used by Thorburn to purchase a home at 8635 N. 65th Street, Paradise Valley,
Arizona with Principal and Interest payable to Semiconductor Components
Industries, LLC ("SCI, LLC") (the "Original Note");

         WHEREAS James Thorburn and SCI, LLC entered into a Letter Agreement
dated February 28, 2001 (the "Letter Agreement") requiring the change of terms
of the Original Note; and

         WHEREAS the Letter Agreement required the payment of a Lump Sum, as
defined in the Letter Agreement, to be paid to James Thorburn on a specified
date determined by the terms of the Letter Agreement (the date of such payment
is referred to as the "Lump Sum Payment Date");

         NOW THEREFORE, in consideration of the terms and conditions set forth
below, the parties agree as follows:

         1.       All capitalized terms not defined in this Amendment to
                  Promissory Note shall have the meaning defined in the Original
                  Note.

         2.       Other than the changes set forth below, all terms and
                  conditions of the Original Note shall remain in full force and
                  effect.

         3.       All Paragraph references made below refer to the paragraph
                  numbers set forth in the Original Note.

         4.       Amendments:

                  A. Paragraph 1 of the Original Note is replaced in its
                     entirety by the following:

                     1. Payment/Prepayment.

                        (a) This Note may be prepaid at any time, in whole or in
                            part, without penalty or premium. Each partial
                            prepayment shall be applied first to the Interest
                            and then to the Principal Amount. This Note is a
                            full recourse note secured by the Property (as
                            defined in Section 2 below).

                                                                               1
   2
                        (b) Unless paid sooner, the Principal Amount plus
                            Interest, shall be due and payable to SCI, LLC as
                            follows:

                                    (1)      All interest accrued up to and
                                             including the Lump Sum Date shall
                                             be a set-off and reduction to the
                                             Lump Sum payment amount set forth
                                             in the Letter Agreement;

                                    (2)      Beginning on the date which is one
                                             month after the Effective Date, as
                                             defined in the Letter Agreement,
                                             Thorburn shall make monthly
                                             payments of Interest only to SCI,
                                             LLC for a period of seventeen
                                             months; and

                                    (3)      On or before the date eighteen
                                             months from the Effective Date (or
                                             the next business day if the last
                                             day of such eighteen-month period
                                             is not a business day), payment of
                                             the entire outstanding Principal
                                             and accrued unpaid Interest shall
                                             be paid to SCI, LLC.

                  B. Subparagraph 5(g) shall be modified so that the address for
                     notice to Thorburn shall be 8635 N. 65th Street, Paradise
                     Valley, Arizona 85253.

                  C. Appendix I to the Original Note is deleted in its entirety.


                                        /s/ James Thorburn
                                        ---------------------------------------
                                                    James Thorburn




                                        /s/ Jacqueline Thorburn
                                        ---------------------------------------
                                                    Jacqueline Thorburn


                                                                               2

   1

                                                                    Exhibit 10.2

                            [ON SEMICONDUCTOR LOGO]

                                                    ON SEMICONDUCTOR CORPORATION
                                                    SEMICONDUCTOR COMPONENTS
                                                    INDUSTRIES, LLC
                                                    5005 EAST MCDOWELL ROAD
                                                    PHOENIX, AZ 85008
                                                    HTTP://ONSEMI.COM




February 28, 2001


James Thorburn
8635 N. 65th Street
Paradise Valley, AZ


Dear Jim:

         Pursuant to our recent conversations, we mutually agree that your
employment with Semiconductor Components Industries, LLC (the "Company") and all
of its affiliates shall terminate effective March 10, 2001 (the "Effective
Date"). In connection with your termination of employment, upon the Effective
Date, you shall be deemed to have resigned all other offices and positions that
you hold in respect of the Company and its affiliates. All capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in your
Employment Agreement with the Company, dated November 8, 1999, as amended on
July 20, 2000.

                  1. Pursuant to Section 5(a) of the Employment Agreement, no
         later than ten days after the general release and waiver (in the form
         acceptable to the Company) becomes effective, the Company shall pay you
         a lump-sum payment (the "Lump-Sum Payment") of $1,898,679, less all
         applicable withholdings and the amounts described below, which
         represents three times the sum of your highest annualized Base Salary
         and the Annual Bonus paid to you in respect of fiscal year 2000. The
         Company will provide you with the form of general release and waiver.

                  2. Notwithstanding any provision of the SCG Holding
         Corporation 1999 Founders Stock Option Plan (the "Option Plan") or the
         Stock Option Grant Agreement respecting the termination of your
         employment, but subject to your compliance with the terms of this
         letter agreement and the Employment Agreement, the Option granted to
         you under the Option Plan pursuant to Section 2(d) of the Employment
         Agreement shall become fully vested and exercisable as of the Effective
         Date and shall remain outstanding and exercisable until the expiration
         of its term.
   2
                            [ON SEMICONDUCTOR LOGO]

Mr. James Thorburn
February 28, 2001
Page 2 of 3


                  3. If you elect to continue the medical benefits currently
         provided to you through the Company's group health plan pursuant to
         your rights under COBRA, the Company shall pay your COBRA premiums in
         respect of such benefits for up to eighteen months after the Effective
         Date. The Company will continue to provide short term and long term
         disability insurance and life insurance benefits based on your Base
         Salary immediately prior to the Effective Date for the eighteen month
         period immediately following the Effective Date.

                  4. In respect of the loan (the "Loan"), provided to you in
         accordance with the Promissory Note, dated July 21, 2000, (the "Note")
         in connection with the purchase of your residence located at 8635 N.
         65th Street, Paradise Valley, Arizona, you agree to pay the Interest
         (as defined in the Note) accrued up to and including the date that the
         Lump-Sum Payment is paid, and you hereby authorize the Company to
         withhold such amount from the Lump-Sum Payment. In addition, you and
         the Company agree to amend the Note to provide that, notwithstanding
         your termination of employment, the Loan shall remain outstanding for
         the eighteen-month period immediately following the Effective Date and
         you shall pay the Company the accrued Interest on a monthly basis
         during such eighteen-month period. On the last day of such
         eighteen-month period (or the next business day if the last day of such
         eighteen-month period is not a business day), the entire Principal
         Amount plus Interest (to the extent not yet paid) shall become
         immediately due and payable. You hereby agree to execute and deliver
         any documents or other materials that the Company determines are
         necessary to evidence the above-described agreement and/or to continue
         without interruption or impairment the Company's security interest in
         the Property (as defined in the Note).

                  5. The Company will draft an appropriate press release
         relating to your resignation of employment and present it to you for
         comment prior to its release. In addition, the Company will provide a
         reference at your request that is consistent with the press release.

                  6. You may retain your mobile telephone, wireless pager and
         home or portable computer, in each case, at your own cost, provided
         that you remove all confidential and proprietary information in a
         manner reasonably satisfactory to the Company. In addition, you shall
         return any and all other Company property and confidential or
         proprietary information (in whatever form) to the Company on or before
         the Effective Date.

                  7. Except as provided herein, all other terms and conditions
         of the Employment Agreement, including without limitation your
         obligations under Sections 8 and 9 thereof, the Option Plan and Stock
         Option Grant Agreement, Promissory Notes and all other relevant
         documents shall remain in full force and effect.
   3
                            [ON SEMICONDUCTOR LOGO]

Mr. James Thorburn
February 28, 2001
Page 3 of 3


                  8. The foregoing provisions are subject to and conditioned
         upon the approval of the Board of Directors of ON Semiconductor
         Corporation.

If you agree with the foregoing provisions, please sign in the appropriate space
below and return the original to me.

                                       Sincerely,


                                       /s/ Steve Hanson
                                       ------------------------------------
                                       Steve Hanson
                                       President and CEO
                                       ON Semiconductor Corporation
                                       Semiconductor Components Industries, LLC


Agreed and accepted:


/s/ James Thorburn
- ------------------------
James Thorburn
Date: 2-28-01
     -------------------


   4

                           GENERAL RELEASE AND WAIVER

                  GENERAL RELEASE and WAIVER (this "Agreement") made as of March
10, 2001, by and between James Thorburn (the "Employee") and Semiconductor
Components Industries, LLC, a limited liability company formed under the laws of
the State of Delaware (the "Employer").

                  WHEREAS, the Employer engaged Employee to be an employee of
the Employer pursuant to the employment agreement between the Employee and the
Employer, dated November 8, 1999, as amended July 20, 2000 (the "Employment
Agreement");

                  WHEREAS, the Employee's employment with the Employer has
terminated effective March 10, 2001 in accordance with the letter agreement (the
"Letter Agreement") between and among the Employee, the Employer and ON
Semiconductor Corporation, dated February 28, 2001 (all defined terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Letter Agreement);

                  NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and for other good and valuable consideration, receipt of which is
hereby acknowledged, the Employer and Employee agree as follows:

                  1. Confirmation of Termination. The Parties hereby now
acknowledge and confirm that Employee's employment with the Employer has
terminated as of March 10, 2001 (the "Termination Date"), and the Employee
hereby resigns effective as of the Termination Date from all other positions,
offices or other affiliations that he holds in connection with the Employer and
its affiliates.

                  2. General Release and Waiver

                  (a) In consideration of the Lump-Sum Payment, acceleration of
exercisability of the Options, payment of COBRA premiums, extension of the terms
of the $1.4 million Loan and other benefits provided in the Letter Agreement
(collectively referred to herein as the "Termination Payment"), Employee hereby
releases, remises and acquits the Employer and all of its affiliates, and their
respective officers, directors, shareholders, members, family members, agents,
employees, consultants, independent contractors, attorneys, advisers, successors
and assigns (collectively, the "Releasees"), jointly and severally, from any and
all claims, known or unknown, which Employee or Employee's heirs, successors or
assigns have or may have against any of such parties arising on or prior to the
date of this Agreement and any and all liability which any of such parties may
have to Employee, whether denominated claims, demands, causes of action,
obligations, damages or liabilities arising from any and all bases, however
denominated, including but not limited to the Age Discrimination in Employment
Act, the Americans with Disabilities Act of 1990, the Family and Medical Leave
Act of 1993, Title VII of the United States Civil Rights Act of 1964, 42 U.S.C.
Section 1981, the Arizona Civil Rights Act, the California Fair Employment and
Housing Act, California's Civil Rights Act, Section 51 of the California Civil
Code, the California Labor Code, the California Family Rights Act, or any other
Federal, state, or local law and any workers' compensation or disability claims
under any such laws. This General Release and Waiver relates to any and all
claims, including without

                                       1
   5
limitations claims arising from and during Employee's employment relationship
with the Employer, any stock options, equity-based or other incentive plans, or
as a result of the termination of such employment relationship. Employee further
agrees that Employee will not file or permit to be filed on Employee's behalf
any such claim. Notwithstanding the preceding sentence or any other provision of
this Agreement, this release is not intended to interfere with Employee's right
to file a charge with the Equal Employment Opportunity Commission in connection
with any claim he believes he may have against the Employer. However, by
executing this Agreement, Employee hereby waives the right to recover in any
proceeding Employee may bring before the Equal Employment Opportunity Commission
or any state human rights commission or in any proceeding brought by the Equal
Employment Opportunity Commission or any state human rights commission on
Employee's behalf. This release is for any relief, no matter how denominated,
including, but not limited to, injunctive relief, wages, back pay, front pay,
compensatory damages, or punitive damages. This General Release and Waiver shall
not apply to any obligation of the Employer pursuant to this Agreement or the
Letter Agreement.

                  (b) Employee expressly understands and agrees that the General
Release and Waiver set forth in Section 2(a) above fully and finally releases
and forever resolves the claims released and discharged therein, including those
which may be unknown, unanticipated and/or unsuspected. Employee further
acknowledges that he is aware that he may hereafter discover facts in addition
to or different from those which he now knows or believes to exist with respect
to the subject matter of this Agreement, but that it is his intention to hereby
fully, finally and forever settle and release all of the claims, known or
unknown, anticipated or unanticipated, suspected or unsuspected, which now
exist, may exist or heretofore have existed between or among himself and the
Releasees. Employee hereby acknowledges that he has read and understands Section
1542 of the California Civil Code, which provides as follows:

                  A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
                  DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
                  EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

Employee understands that Section 1542 gives him the right not to release
existing claims for which he is presently unaware, unless he knowingly and
voluntarily waives such right. Having been so apprised, he nevertheless
voluntarily elects to and expressly waives all benefits under Section 1542 of
the California Civil Code, as well as under any other statute or common law
principles of similar effect of California or any other jurisdiction, to the
extent that such benefits may contravene the provisions of section 2(a) of this
Agreement.

                  (c) Employee acknowledges that the Termination Payment
Employee is receiving in connection with the foregoing release is in addition to
anything of value to which Employee already is entitled from the Employer.

                                       2
   6
                  3. Restrictive Covenants

                  Employee and Employer hereby acknowledge and agree that they
each continue to be subject to and bound by the provisions of Sections 8 through
10 of the Employment Agreement.

                  4. Confidentiality of Agreement

                  Employee shall keep the existence and terms of this Agreement
and the Letter Agreement confidential and shall not directly or indirectly
disseminate any information (in any form) regarding this Agreement and the
Letter Agreement to any person or entity except as may be agreed to in writing
by the Employer. Notwithstanding the foregoing, Employee may disclose the
information described herein, to the extent Employee is compelled to do so by
lawful service of process, subpoena, court order, or as Employee is otherwise
compelled to do by law, including full and complete disclosure in response
thereto, in which event Employee agrees to provide the Employer with a copy of
the document(s) seeking disclosures of such information promptly upon receipt of
such document(s) and prior to disclosure by Employee of any such information, so
that the Employer may, upon notice to Employee, take such action as it deems to
be necessary or appropriate in relation to such subpoena or request.

                  5. Certain Forfeitures in Event of Breach

                  Employee acknowledges and agrees that, notwithstanding any
other provision of this Agreement, in the event Employee materially breaches any
of his obligations under this Agreement, Employee will forfeit his right to
receive the Termination Payment, including without limitation the extension of
the $1.4 million Loan, provided under the Letter Agreement to the extent not
theretofore paid to him as of the date of such breach and, if already made as of
the time of breach, Employee agrees that he will reimburse the Employer,
immediately, for the amount of such payment.

                  6. No Admission

                  This Agreement does not constitute an admission of liability
or wrongdoing of any kind by the Employer or its affiliates.

                  7. Heirs and Assigns

                  The terms of this Agreement shall be binding on the parties
hereto and their respective successors and assigns.

                  8. General Provisions

                  (a) Integration

                  This Agreement and the Letter Agreement, including the
documents which survive the termination of Employee's employment pursuant to the
Letter Agreement, constitutes the entire understanding of the Employer and
Employee with respect to the subject matter hereof and supersedes all prior
understandings, written or oral. For the avoidance of doubt, the parties

                                       3
   7
hereto acknowledge and agree that the Employee shall continue to be bound by the
Non-Solicitation, Non-Disparagement and other restrictive covenants provided in
the Employment Agreement. The terms of this Agreement may be changed, modified
or discharged only by an instrument in writing signed by the parties hereto. A
failure of the Employer or Employee to insist on strict compliance with any
provision of this Agreement shall not be deemed a waiver of such provision or
any other provision hereof. In the event that any provision of this Agreement is
determined to be so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.

                  (b) Choice of Law

                  This Agreement shall be construed, enforced and interpreted in
accordance with and governed by the laws of the State of Arizona, without regard
to its choice of law provisions.

                  (c) Construction of Agreement

                  The parties hereto acknowledge and agree that each party has
reviewed the terms and provisions of this Agreement and has had the opportunity
to contribute to its revision. Accordingly, the rule of construction to the
effect that ambiguities are resolved against the drafting party shall not be
employed in the interpretation of this Agreement. Rather, the terms of this
Agreement shall be construed fairly as to both parties hereto and not in favor
or against either party. The headings in this Agreement are inserted for
convenience of reference only and shall not be part of or control or affect the
meaning of any provision hereof. Terms used in the singular shall include the
plural and terms used in one gender shall include the other, in each case, as
the context requires.

                  (d) Counterparts

                  This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which counterpart,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement. A facsimile of a signature shall be deemed to be and have the affect
of an original signature.

                  9. Knowing and Voluntary Waiver

                  Employee acknowledges that, by Employee's free and voluntary
act of signing below, Employee agrees to all of the terms of this Agreement and
intends to be legally bound thereby.

                  Employee understands that he may consider whether to agree to
the terms contained herein for a period of twenty-one days after the date
hereof. Employee acknowledges that he received this Agreement on or before the
date first written above. Accordingly, Employee may execute this Agreement by
March 31, 2001, to acknowledge his understanding of and agreement with the
foregoing. However, the Termination Payment provided herein shall not commence
until this Agreement is executed, returned to the Employer and becomes effective
as provided below. Employee acknowledges that he has been advised to consult
with an attorney prior to executing this Agreement.

                                       4
   8
                  This Agreement will become effective, enforceable and
irrevocable seven days after the date on which it is executed by Employee (the
"Effective Date"). During the seven-day period prior to the Effective Date,
Employee may revoke his agreement to accept the terms hereof by indicating in
writing to the Employer his intention to revoke in the manner specified below.
If Employee exercises his right to revoke hereunder, he shall forfeit his right
to receive any of the benefits provided for herein, and to the extent such
payments have already been made, Employee agrees that he will immediately
reimburse the Employer for the amounts of such payment. In order to revoke this
Agreement, Employee must deliver the written revocation notice referred to above
on or before the expiration of the seven-day period described above directly to
Sonny Cave at On Semiconductor, 5005 E. McDowell Road, Phoenix, AZ 85008.

                                       Semiconductor Components Industries, LLC

                                       /s/George H. Cave
                                       ----------------------------------------
                                       Name: George H. Cave
                                       Title: Vice President, General Counsel
                                              and Secretary

/s/ James Thorburn
- ------------------------------------
James Thorburn

                                       5
   9
Acknowledgment

         STATE OF Arizona         )
                  ----------------
                                        ss:
         COUNTY OF Maricopa       )
                   ---------------

                  On the 9th day of March, 2001, before me personally came James
Thorburn who, being by me duly sworn, did depose and say that he resides at 8635
N. 65th Street, Paradise Valley, Arizona; and did acknowledge and represent that
he has had an opportunity to consult with attorneys and other advisers of his
choosing regarding the General Release and Waiver Agreement attached hereto,
that he has reviewed all of the terms of the General Release and Waiver
Agreement and that he fully understands all of its provisions, including,
without limitation, the general release and waiver set forth therein.


/s/ Linda M. Lee
- ------------------------

Notary Public

Date: March 9, 2001




                                       6

   1
                                                                    Exhibit 10.3

                                 PROMISSORY NOTE


$1,000,000.00                                                        Phoenix, AZ
5.07% Interest                                                      March 9,2001



         Michael Rohleder and his spouse, Roxanne Rohleder (collectively
referred to as "Rohleder") for value received, hereby promise to pay to the
order of Semiconductor Components Industries ("SCI, LLC"), at its offices
located at 5005 East McDowell Rd., Phoenix, AZ 85008, or such other place as the
holder hereof may designate by notice to Rohleder, the principal amount of ONE
MILLION DOLLARS ($1,000,000.00) ("Principal Amount"), plus interest of 5.07
percent per annum, compounded annually ("Interest") (Interest payable hereunder
shall be computed on the basis of actual days elapsed and a year of 360 days),
in lawful money of the United States, in the manner set forth in Section 1
hereof.

                  1. Payment/Prepayment.

                  (a) This Note may be prepaid at any time, in whole or in part,
without penalty or premium. Each partial prepayment shall be applied first to
the Interest and then to the Principal Amount. This Note is a full recourse note
secured by the Property (as defined in Section 2 below).

                  (b) This Note will be funded by March 9, 2001 (the "Loan
Date"). Unless paid sooner, the Principal Amount plus Interest shall be due and
payable to SCI, LLC on the earlier of (x) the fifth anniversary of the Loan Date
or (y) no later than 90 days after the termination of Rohleder's employment with
SCI, LLC, its subsidiaries or ON Semiconductor Corporation ("ON Semiconductor")
for any reason. In the event Rohleder is actively employed with SCI, LLC, its
subsidiaries or ON Semiconductor on the fifth anniversary of the Loan Date, the
Board of Directors of ON Semiconductor (the "Board") may consider: (1) forgiving
up to 50% of the Principal Amount and/or Interest if ON Semiconductor achieves
Market Share growth of 0.1% in each separate calendar year between the Loan Date
and the fifth anniversary of the Loan Date in both the Analog and Broadband
groups of ON Semiconductor unless such groups no longer independently exist
during the period of this Loan, then any comparable group or groups, as
determined in the sole and absolute discretion of ON Semiconductor, shall be
used for this Section 1(b)(1); (2) forgiving up to 25% of the Principal Amount
and/or Interest if Rohleder scores 3.0 or higher on a scale of 1.0 to 4.0 in
each annual performance rating by SCI, LLC, its subsidiaries or ON
Semiconductor, as appropriate, for each year between the Loan Date and the fifth
anniversary of the Loan Date; and (3) forgiving up to 25% of the Principal
Amount and/or Interest if ON Semiconductor achieves product design wins that
increase revenue from new products by 25% of total revenue of ON Semiconductor
or greater by the fifth anniversary of the Loan Date; provided, however, that
such design wins are reasonably attributable to Rohleder in the sole and
absolute discretion of ON Semiconductor. For the avoidance of doubt, it is in
the Board's sole and absolute discretion to forgive any part of the Principal
Amount or Interest if any or all of the foregoing targets are achieved.

                                                                               1
   2
                  (c) Prior to the fifth anniversary of the Loan Date, in the
event Rohleder's employment is terminated due to Rohleder's death or Disability
(as such term is defined in Rohleder's Employment Agreement with Semiconductor
Components Industries, LLC), the Board, in its sole and absolute discretion, may
consider at the time of the termination event by death or Disability forgiving
all or any portion of the Principal Amount and/or accrued Interest.

                  2. Acknowledgement.

                  Rohleder acknowledges and confirms that (i) SCI, LLC has
loaned Rohleder the Principal Amount of the Note for the sole purpose of
Rohleder paying off an existing loan and causing the release and termination of
any deeds of trust on his primary residence located at 8217 N. Coconino Road,
Paradise Valley, Arizona 85253 (the "Property"); (ii) he will use the proceeds
of the Note solely for such purpose; and (iii) SCI, LLC shall have the right to
withhold any amounts otherwise payable to Rohleder (including, without
limitation, bonuses and severance pay, but excluding his Base Salary as such
term is defined in Rohleder's Employment Agreement with Semiconductor Components
Industries, LLC) and apply such amounts to satisfy Rohleder's obligations
hereunder.

                  3. Event of Acceleration.

         (a) The holder of this Note, by written notice to Rohleder, may declare
the entire outstanding Principal Amount plus Interest immediately due and
payable in the event that Rohleder breaches any of the terms of the Note, the
deed of trust (a form of which is attached hereto) ("Acceleration Event"), in
which event the maturity of the then unpaid balance of the Note shall be
accelerated and shall become immediately due and payable.

         (b) In the event that Rohleder breaches any of the terms of the Note or
the deed of trust, and so long as such default remains uncured, at the option of
the holder hereof upon acceleration of maturity, the unpaid principal sum hereof
shall bear interest at an interest rate equal to the stated interest rate for
this Note plus two percent (2%) per annum. At such time as a judgment is
obtained for any amounts loaned under this Note or any document or instrument
securing this Note, interest shall continue to accrue on the amount of judgment
at a rate of interest equal to the stated interest rate for this Note plus two
percent (2%) per annum.

                  4. Security Interest.

         As collateral security for the full and timely payment of all amounts
due under the Note, Rohleder hereby agrees to grant SCI, LLC a security interest
in the Property by executing a first priority deed of trust and Rohleder also
agrees to execute any and all additional documents necessary to provide such
security interest.

                  5. Miscellaneous.

         (a) Time is of the essence of payment. The undersigned agree to pay a
late charge not to exceed an amount equal to the stated interest rate of this
Note plus two percent (2%) of any payment which is not paid within five (5) days
of the date due to cover the extra expense of handling past due payments.

                                                                               2
   3
         (b) Rohleder shall pay all costs and expenses incurred by the holder in
connection with the collection of the Note, including reasonable attorneys'
fees.

         (c) Except as provided above, the makers, endorsers, and guarantors of
this Note jointly and severally waive diligence, demand, presentment for
payment, protest, notice of non-payment and of protest, notice of default,
notice of acceleration, and all other notices or demands of any kind. They
jointly and severally consent, without notice to them and without release of
their liability, to extensions and accommodations given by the holder of this
Note, to release modifications and exchanges of any security, and to releases,
in whole or in part, of any other maker, endorser, or guarantor. They each agree
to make payment without the prior resort by the holder to any security or
against any other maker, endorser, or guarantor.

         (d) The undersigned hereby agree to pay the contracted rate of
interest, which includes interest at the rate set forth herein and all costs and
fees associated with obtaining this credit accommodation to the extent any such
costs and fees are deemed interest under applicable law.

         (e) This Note shall be governed by and construed in accordance with the
laws of the State of Arizona applicable to agreements made and to be performed
therein without regard to the principles of conflicts of law, and cannot be
changed orally.

         (f) No delay or failure on the part of the holder of this Note to
exercise any power or right given under this Note, including, but not limited
to, the right to accelerate the amounts due, shall operate as a waiver of the
power or right and no right or remedy of the holder shall be deemed abridged or
modified by any course of conduct. All rights and remedies existing hereunder
are cumulative and not exclusive of each other or any rights or remedies
otherwise available.

         (g) This Note shall not be construed to confer upon Rohleder any right
to continue in the employ of SCI, LLC, its subsidiaries or ON Semiconductor and
shall not limit the right of such entity in its sole discretion, to terminate
the employment of Rohleder at any time.

         (h) All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally, three days after being
mailed by registered mail, return receipt requested, or the following day if
sent by overnight courier service, to ON Semiconductor, attention: General
Counsel, Law Department (M/D A700), at the address set forth at the beginning of
this Note and to Rohleder at 5005 East McDowell Rd., Phoenix, AZ 85008, or such
other address as either party may specify by notice given pursuant hereto.

         (i) To the extent permitted by applicable law, Rohleder hereby waives
all benefits that might accrue by virtue of any present or future moratorium
laws exempting any of the Property, or any other property, real or personal, or
any part of the proceeds arising from any sale of any such property, from
attachment, levy, or sale under execution, or providing for any stay of
execution to be issued on any judgment recovered on this Note (excepting only
any stay of execution).

         (j) If any term or provision of this Note or the application thereof to
any circumstance shall, to any extent, be invalid, illegal or unenforceable,
such term or such provisions shall be

                                                                               3
   4
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating or rendering unenforceable any remaining terms and
provisions hereof or thereof or the application of such term or provision to
circumstances other than those as to which it is held invalid, illegal or
unenforceable.

         (k) This Note shall not be transferable by Rohleder; however, SCI, LLC
may transfer the Note to any other person or entity without Rohleder's consent.


                                        /s/ Michael Rohleder
                                        ---------------------------------------
                                                   Michael Rohleder




                                        /s/ Roxanne Rohleder
                                        ---------------------------------------
                                                   Roxanne Rohleder



                                                                               4

   1
                                                                    Exhibit 10.4


When recorded return to:
ON Semiconductor
Semiconductor Components Industries, LLC
Law Department, M/D A700
5005 E. McDowell Road
Phoenix, AZ 85008
Attn: Judith A. Boyle, Assistant General Counsel

                                  DEED OF TRUST

TRUSTOR:          Michael and Roxanne Rohleder, husband and wife
                  8217 N. Coconino Road
                  Paradise Valley, AZ 85253

BENEFICIARY:      Semiconductor Components Industries, LLC, a Delaware limited
                    liability company
                  5005 E. McDowell Road
                  Phoenix, AZ 85008

TRUSTEE:          Fidelity National Title Insurance Company, a California
                    corporation
                  P.O. Box 32695
                  Phoenix, AZ 85064

PROPERTY in Maricopa County, State of Arizona, described as:

         See Exhibit A attached hereto and incorporated herein by this
         reference.

This Deed of Trust made between the Trustor, Trustee and Beneficiary above
named,

         WITNESSETH: That Trustor IRREVOCABLY GRANTS, BARGAINS, SELLS, CONVEYS,
TRANSFERS and ASSIGNS to TRUSTEE, IN TRUST WITH POWER OF SALE, the above
described real property and all buildings and improvements thereon or that may
hereafter be erected thereon, all fixtures, and all equipment, machinery, and
apparatus of every kind and nature now located on said property or hereafter
attached to or used in connection with the property described above, all of
which Trustor represents are and shall be and are intended to be a part of the
realty, together with all permits, licenses, grazing and range rights relating
to or pertaining to said property, if any, together with all and singular the
tenements, hereditaments, and appurtenances, and all of the rents, issues and
profits thereof, and the reversion and reversions, remainder and remainders, and
together with all water rights thereunto belonging, to have and hold unto
Trustee, its successors and assigns forever (hereinafter called "Trust
Property").

         FOR THE PURPOSE OF SECURING:

         (1) To secure performance of the covenants and agreements herein set
forth and payment of Trustor's Note dated the second day of March, 2001, in the
sum of One Million
   2
Dollars ($1,000,000) and interest as specified therein, and any and all
extensions, revisions or renewals thereof in whole or in part.

         (2) Performance of each covenant, promise and agreement of Trustor
contained herein or incorporated herein by reference; and

         (3) Payment of all sums required to be made by Trustor pursuant to the
terms hereof. It is understood, however, by Trustor and Beneficiary that
Beneficiary shall not be required to make any such additional advances and/or
Loans and that, if any such advances and/or Loans are made, they will be made
only at such times and in such amounts as Beneficiary may, in its sole
discretion, determine.

         TO PROTECT THE PROPERTY AND SECURITY GRANTED BY THIS TRUST DEED, IT IS
AGREED:

         1. Trustor warrants that it is seized of good and merchantable fee
simple title to the Trust Property, subject only to reservations in the patent,
water right application, obligations arising in favor of water use or irrigation
associations or companies (none of the assessments of which are delinquent),
current taxes not delinquent, easements and restrictions of record. Trustor
acknowledges that all legal descriptions of real estate listed herein were
provided by Trustor, warrants the correctness of such descriptions, and agrees
that, in the event there does exist an error or defect in such legal
descriptions, Trustor authorizes Trustee to do all acts and things and execute
all documents deemed necessary by Beneficiary, proper and convenient for the
perfection, protection, preservation or enforcement of Beneficiary's rights
hereunder.

         2. Trustor agrees to pay all indebtedness secured hereby including
principal, interest, costs and attorney's fees in accordance with the terms of
each evidence of indebtedness.

         3. Trustor agrees to pay, before the same becomes delinquent, all
taxes, assessments, water and other charges levied or assessed upon or against
the Trust Property, and in addition all charges for gas, electricity and other
items furnished to or charged against the Trust Property.

         Trustor agrees to pay, prior to delinquency, any and all ground rents
and amounts payable under any Lease, trust deed, mortgage or other instrument
which may be an encumbrance on the Trust Property.

         4. Trustor agrees to keep the improvements now or hereafter located on
the Trust Property insured against loss by fire and other hazards and casualties
in such amounts and for such periods as may be required from time to time by
Beneficiary. Trustor also agrees to maintain and keep in force during the term
hereof flood hazard insurance as may be or may have been required by Beneficiary
or by law or regulation. Trustor agrees to pay the premiums on such insurance,
when due and prior to delinquency, and furnish proof of such payment to
Beneficiary. All insurance shall be carried in responsible insurance companies
approved by Beneficiary. The policies shall be held by Beneficiary and shall
have, at all times, loss payable clauses attached thereto in favor of and
approved by Beneficiary.

                                       2
   3
                  In the event of any loss or damage to the improvements,
Trustor will give immediate notice by mail to Beneficiary and make proper proof
of loss (and if not made by Trustor, Beneficiary may make the same). Beneficiary
may require that the payment for such loss be paid directly to Beneficiary only
and not jointly to Trustor and Beneficiary. Beneficiary may, at its option,
apply the payment to the reduction of the indebtedness secured hereby or may
apply the same to the restoration or repair of the property damaged. Trustor
hereby assigns to Beneficiary all such policies and the payments to be made
thereunder.

                  In the event of foreclosure of this Trust Deed, or exercise of
the power of sale given to Trustee, or acquisition of the title to the property
by Beneficiary or its assigns, all right, title, and interest of Trustor in and
to the policies and proceeds thereof and sums payable thereunder shall forthwith
pass automatically to the purchaser of said property.

                  5. Trustor agrees to keep the buildings and other improvements
on the property at all times in good condition and repair. All apparatus and
machinery shall be kept in good working order and properly serviced and
repaired. Trustor will not allow nor commit any waste, and will not demolish nor
structurally alter any buildings on the property, and will do no act to injure
or depreciate the value of such property. The property and buildings thereon
shall be kept in a reasonably clean, safe and sanitary condition and shall not
be allowed to become dilapidated or rundown.

                  Trustor agrees that it will not remove or allow to be removed
any fixture or fixtures from the Trust Property without the prior written
consent of Beneficiary. Trustor further agrees that in adding any new fixtures
or in substituting fixtures on the Trust Property, prior proof will be furnished
Beneficiary that no security exists therein.

                  6. In the event Trustor fails to make any payment required to
be made by it hereunder, or fails to keep the property so insured, or fails to
keep the property so repaired, or fails to perform any of its other obligations
hereunder, Beneficiary may make any such payment, obtain any such insurance,
make any such repairs (Trustor hereby grants Beneficiary the right to go upon
the premises for such purpose), or remedy any other default of Trustor. All
expenditures made by Beneficiary shall be prima facie evidence of the necessity
therefor and reasonableness thereof. Such expenditures, together with all
incidental costs of Beneficiary, including reasonable attorney's fees if
incurred, shall be immediately due and payable by Trustor to Beneficiary, shall
bear interest until paid at the rate of two percent (2%) per month, and shall be
secured by this Trust Deed.

                  7. Trustee and Beneficiary and their officers, employees, and
agents may enter upon and inspect the property at any reasonable time or times.

                  8. The proceeds of any judgment, award or settlement in any
condemnation or eminent domain proceeding or on account of injury to the
property by reason of public use, or by reason of private trespass, or other
injury to the property, shall be paid to Beneficiary, who may at its option,
either reapply the proceeds to reduce the indebtedness secured hereby (whether
matured or to mature in the future) or be released to Trustor. Trustor hereby
assigns and transfers to Beneficiary all such amounts and proceeds and agrees
that Beneficiary may receipt for the same on behalf of Trustor.

                                       3
   4
                  9. Trustor by execution of this Deed of Trust assigns and
transfers to Beneficiary all of Trustor's right, title and interest in and to
all leases, rents, profits or income from the Trust Property and each and every
part thereof, including all present and future leases or rental agreements,
which assignment and transfer may be enforced by Beneficiary only upon any
default by Trustor, existing under this agreement, by any one or more of the
following methods: (a) appointment of a receiver; (b) Beneficiary taking
possession of the Trust Property; (c) Beneficiary collecting any moneys payable
under leases or rental agreements directly from the parties obligated for
payment; (d) injunction; or (e) any other method permitted by law.

                  Unless and until Beneficiary shall elect to collect said rents
and rentals, the same shall be collected by Trustor, but Beneficiary may at any
time, after Trustor's default, collect all such rents and rentals and Trustor
agrees not to hinder or delay Beneficiary in collecting the same.

                  Any rents or rentals received by Beneficiary shall be applied
first to the cost of collection, second to any expenses Beneficiary may expend
in making the property ready for or satisfactory to any lessee or tenant, and
the remainder shall be applied on the indebtedness secured hereby (whether
matured or unmatured) as Beneficiary may elect.

                  Trustor shall not consent to the cancellation or surrender of
any lease on the property, or any portion thereof, having an unexpired term of
two (2) years or more, or decrease the rental payable under any lease, or
receive or collect more than two (2) month's rent in advance, and Trustor agrees
not to default in performing its obligations under all leases on the property.

                  10. Time is of the essence of this Trust Deed. No failure on
the part of Beneficiary to exercise any of its rights hereunder shall be
construed as a waiver of or prejudice its rights in the event of any other
subsequent default or breach. No delay on the part of Beneficiary in exercising
any of its rights hereunder shall preclude it from the exercise thereof at any
time during the continuance of any such default. The acceptance of late payments
shall not waive the "time is of the essence" provision. All rights and remedies
of Beneficiary are cumulative and concurrent, and may be exercised singly,
severally or concurrently as Beneficiary may elect.

                  11. In the event the indebtednesses secured hereby or this
Trust Deed is placed in the hands of attorneys for collection or foreclosure,
then Trustor agrees to pay reasonable attorney's fees to Beneficiary, in
addition to the amount due thereon, together with all costs and expenses
incurred by Beneficiary in the collection and foreclosure thereof, and together
with the cost of a title search, the payment of which sums are secured by this
Trust Deed.

                  12. In the event of any default by Trustor in the payment of
the indebtedness secured hereby; or in the event of any default of Trustor in
performing any of its obligations hereunder or any obligations under any loan
agreement or other document executed by Trustor and held by Beneficiary; or in
the event Trustor, or any guarantor or surety shall be adjudicated insolvent or
bankrupt or any proceedings are filed by or against them or any of them in the
nature of bankruptcy or reorganization or arrangement with creditors; or in the
event any proceeding is filed to foreclose or any Notice of Trustee's Sale is
recorded on any other lien on the Trust

                                       4
   5
Property (whether junior or senior to this Trust Deed); or in the event any Writ
or Attachment shall be filed or levied against the Trust Property; or in the
event Trustor abandons the Trust Property or leaves the same unattended or
unprotected; or in the event Beneficiary shall deem the security provided by
this Trust Deed inadequate or in danger of being impaired or diminished from any
cause whatsoever (any of such events being an event of default hereunder); then
and in any such event Beneficiary may declare the entire debt and all
indebtedness of Trustor to Beneficiary to be immediately due and payable without
notice to Trustor. Beneficiary may thereupon, at its option, and without prior
notice and without affecting the lien of this Trust Deed, do any one or more of
the following: enter upon the premises and inspect, repair, improve and maintain
the same, rent or lease the premises or portions thereof as Beneficiary shall
see fit, and perform such other acts thereon as Beneficiary may deem necessary
or advisable; sue for all or part of the indebtedness owing from Trustor to
Beneficiary without affecting or without losing the security of this Trust Deed;
foreclose this Trust Deed as a mortgage in the manner provided by law; cause the
exercise of the power of sale granted herein; bring an action for damages, or
exercise such other remedies or combination of remedies Beneficiary may have
under law and equity.

                  13. Upon payment in full of all sums secured hereby and
performance of all obligations of Trustor hereunder, the lien of this Trust Deed
upon the Trust Property shall be released by reconveyance by Deed of Release,
which said reconveyance and release shall be without warranty and shall operate
to reconvey the estate vested in Trustee hereby.

                  Beneficiary may, at any time, without notice, release any
person liable for payment of any indebtedness secured hereby, release portions
of the Trust Property from this Trust Deed, or extend or modify the time for
payment of the indebtedness secured hereby by agreement with Trustor or by
agreement with subsequent owners of said property, and any such release,
extension or modification shall not affect the personal liability of any person
for the payment of said indebtedness or the lien of this Trust Deed upon the
remaining portion of said property.

                  At any time, without liability therefor and without notice,
and without affecting the personal liability of Trustor of any other person for
payment of the indebtedness secured hereby, Trustee may, with the consent of
Beneficiary: (a) release and reconvey by Deed of Release any part of the Trust
Property from the lien hereof; (b) consent to the making and recording of any
maps or plats of the Trust Property; (c) join in granting any easement on the
Trust Property; or (d) join in any extension agreement or any agreement
subordinating or modifying the lien or charge hereof. If Trustee shall perform
any such acts or execute complete or partial reconveyances it shall be paid a
fee in accordance with its established fees and charges therefor.

                  If reconveyance by Deed of Release is to be made by Trustee,
Beneficiary shall deliver the original of this Trust Deed and the note secured
hereby to Trustee with a request for reconveyance by Deed of Release.

                  The Grantee in any Deed of Release executed pursuant to this
Trust Deed may be described as "the person or persons legally entitled thereto"
and the recitals therein of any matters or facts shall be conclusive proof of
the truthfulness thereof.

                                       5
   6
                  14. In the event of default hereunder, Beneficiary, if it
desires Trustee to exercise the power of sale granted hereby, shall execute and
deliver to Trustee a written declaration of default and demand for sale and
shall surrender to Trustee this Trust Deed, the note secured hereby and all
documents evidencing any expenditures hereunder, together with such other
documents as Trustee may require. Beneficiary shall also execute and deliver to
Trustee all notices to Trustor that must be signed by Beneficiary. Upon receipt
thereof, Trustee shall sell the Trust Property as provided by law. Trustee may
postpone the sale as provided by law. After sale of the Trust Property, Trustee
shall deliver its deed to the purchaser conveying the property so sold but
without any covenant or warranty, express or implied. The recital in any such
deed of any matters or facts, stated either specifically or in general terms, or
as conclusions of law or facts, shall be conclusive proof of the truthfulness
thereof.

                  15. Beneficiary may, at any time, request cancellation of
Trustee's Notice of Sale, whereupon Trustee shall execute and record, or cause
to be recorded, a Cancellation of Notice of Sale in the same county in which the
Notice of Sale was recorded. The exercise by Beneficiary of this right shall not
constitute a waiver of any default then existing or subsequently occurring.

                  In the event this Trust Deed and the indebtedness and
obligations secured hereby are reinstated in the manner provided by law,
Beneficiary shall forthwith notify Trustee thereof as provided by law. Upon such
notification, Trustee shall record, or cause to be recorded, a Cancellation of
Notice of Sale in the same county in which the Notice of Sale was recorded
within the period then required by law.

                  16. In the event of default hereunder, at any time before the
Trust Property has been sold pursuant to the power of sale granted hereby, this
Trust Deed may be foreclosed in the manner provided by law for the foreclosure
of mortgages on real property.

                  17. In the event of default hereunder, Beneficiary shall be
entitled to the appointment of a Receiver to take charge of the property,
collect the rents, issues and profits therefrom, care for and repair the same,
improve the same when necessary or desirable, lease and rent the property or
portion thereof (including leases existing beyond the term of receivership),
plant, cultivate and harvest crops thereon, and otherwise use and utilize the
property and to have such other duties as may be fixed by the Court.

                  Trustor specifically agrees that the Receiver may be appointed
without any notice to Trustor whatsoever, and the Court may appoint a Receiver
without reference to matters normally taken into account by Courts in the
discretionary appointment of Receivers, it being the intention of Trustor to
hereby authorize the appointment of a Receiver when Trustor is in default and
Beneficiary has requested the appointment of a Receiver. Trustor hereby agrees
and consents to the appointment of the particular person or firm (including an
officer or employee of Beneficiary) designated by Beneficiary as Receiver and
hereby waives its rights to suggest or nominate any person or firm as Receiver
in opposition to that designated by Beneficiary.

                  18. Beneficiary may substitute another Trustee herein named to
exercise the rights, powers and duties granted by law and contained herein. Upon
such appointment, and

                                       6
   7
without the necessity of a conveyance to the successor Trustee, the latter shall
be vested with all the title, powers and duties conferred upon the Trustee
herein named.

                  19. Beneficiary or any purchaser at Trustee's sale or at any
foreclosure sale may, if it so elects, be subrogated to and succeed to all the
rights of Trustor under any or all leases on the property or portions thereof.
Beneficiary may, if it so elects, subordinate its rights hereunder to any lease
on the property, or a portion thereof, and keep the lease in effect through and
after any foreclosure action or Trustee's sale.

                  20. Beneficiary shall be subrogated to the lien,
notwithstanding its release of record, of any prior mortgage, trust deed or
other encumbrance paid or discharged from the proceeds of the note secured
hereby, or from any advance made by Beneficiary.

                  21. In the event of the passage after the date of this Trust
Deed of any law levying any tax upon this Trust Deed or the debt secured hereby,
which Beneficiary is obliged to pay, then Trustor agrees to pay said tax or
reimburse Beneficiary for the payment of the same, provided that Trustor shall
not be obligated to pay any amount which would be considered as interest at a
rate higher than allowed by law, and provided further that in the event of the
enactment of any such law Beneficiary shall have the right, at its option, to
declare the indebtedness secured hereby to be immediately due and payable.

                  22. Trustor agrees that in the event of a sale, assignment,
encumbrance, or any other transfer of the Trust Property described herein or any
portion thereof or interest therein, whether such transfer is voluntary or
involuntary, or in the event Trustor contracts for the sale of said property, or
any portion thereof or interest therein, then and in that event, Beneficiary
may, at its option, accelerate the time for payment of all indebtedness secured
hereby and demand full repayment thereof, or give its written consent to such
transfer on such terms and conditions as Beneficiary may in its sole discretion
require.

                  23. Trustee may, but shall be under no obligation or duty to,
appear in or defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee. If Trustee shall take
such action at the request of Beneficiary, it shall be paid therefor in
accordance with its established fees and charges and shall be reimbursed for its
costs and expenses actually incurred, including attorney's fees.

                  24. The Trust created hereby is irrevocable by Trustor.
Trustee accepts this Trust Deed, duly executed and acknowledged, is made a
public record as provided by law, but acceptance is not required as a condition
to the validity hereof, and this Trust Deed is effective upon delivery. Trustee
shall not be obligated to notify any party hereto of pending sale under any
other trust deed, or any action or proceeding in which Trustor, Beneficiary or
Trustee shall be a party, except as required by law.

                  25. The word "Trustor" and the language of this instrument
shall, where there is more than one Trustor, be construed as plural and be
binding equally on Trustors. The obligations of Trustors hereunder and under the
note secured hereby shall be joint and several. This Trust Deed applies to, is
binding upon, and inures to the benefit of all parties hereto, their heirs,
executors, administrators, successors and assigns. The term "Beneficiary" shall
include

                                       7
   8
not only the original Beneficiary hereunder, but also any future owner and
holder of the note secured hereby.

                  26. If any provision hereof should be held unenforceable or
invalid, in whole or in part, then such unenforceable or void provision or part
shall be deemed separable from the remaining provisions hereof and shall in no
way affect the validity of this Trust Deed.

                  27. Notwithstanding any provisions herein, or in the note,
notes or other evidences of indebtedness, secured hereby, or in any related
agreement between Trustor and Beneficiary, the total liability of Trustor for
payments in the nature of interest shall not exceed the limits now imposed by
the laws of the State of Arizona.

                  28. Trustor requests that a copy of any Notice of Sale
hereunder be mailed to him at his mailing address set forth below. Any notices
required to be given to Trustor by mailing shall be effective and complete when
mailed and shall be mailed to the address set forth below. Lack of receipt
thereof shall in no way invalidate the notice or any sale by Trustee hereunder.
If Trustor desires to change the address to which notices shall be mailed, such
change shall be accomplished by a request as provided by law.

                  29. Trustee shall be paid for all acts performed by it
hereunder or in connection herewith in accordance with its established fees and
charges. All such fees and charges shall be paid by Trustor, and if Beneficiary
shall advance any such fees or charges, Trustor shall reimburse Beneficiary for
same on demand. Payment thereof is secured by this Trust Deed.

                IN WITNESS WHEREOF, Trustor has executed this Deed of Trust this
7th day of March, 2001.


/s/ Michael Rohleder
- ---------------------------------
Michael Rohleder                          8217 E. Coconino Road
                                          Paradise Valley, AZ 85253


/s/ Roxanne Rohleder
- ---------------------------------
Roxanne Rohleder                          8217 E. Coconino Road
                                          Paradise Valley, AZ 85253


                                       8
   9
STATE OF Arizona                    )
         ---------------------------
                                    ) ss.
County of Maricopa                  )
          --------------------------

                  The foregoing instrument was acknowledged before me this
7th day of March 2001, by Michael Rohleder.

                IN WITNESS HEREOF, I have hereunto set my hand and official
seal.

                                         /s/ Tracy Hewelt
                                         --------------------------------------
                                                     Notary Public

My commission expires:

        3-2-02
- ----------------------


                                 [NOTARY SEAL]


STATE OF Arizona                    )
         ---------------------------
                                    ) ss.
County of Maricopa                  )
          --------------------------

                  The foregoing instrument was acknowledged before me this
7th day of March 2001, by Roxanne Rohleder.

                IN WITNESS HEREOF, I have hereunto set my hand and official
seal.

                                         /s/ Sheri Biesemeyer
                                         --------------------------------------
                                                     Notary Public

My commission expires:

       6-17-03
- ----------------------


                                 [NOTARY SEAL]

                                       9
   10
                                    EXHIBIT A


                                Legal Description

Lot 6, MOCKINGBIRD VISTAS, according to the plat of record in the office of the
County Recorder of Maricopa County, Arizona, recorded in Book 452 of Maps, page
14.

   1
                                                                    Exhibit 10.5

                             SCG HOLDING CORPORATION
                            2000 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                                  FOR DIRECTORS


         This Option Agreement is made and entered into by and between ON
SEMICONDUCTOR CORPORATION ("Company") and ALBERT HUGO-MARTINEZ ("Optionee"), as
of the 28th day of February, 2001 ("Date of Grant").

                                    RECITALS


         A. The Board of Directors of the Company has adopted the SCG Holding
Corporation 2000 Stock Incentive Plan ("Plan") as an incentive to retain members
of the Board of Directors, key employees, officers, and consultants of the
Company and to enhance the ability of the Company to attract such individuals
whose services are considered unusually valuable by providing an opportunity for
them to have a proprietary interest in the success of the Company.

         B. The Board has approved the granting of options to the Optionee
pursuant to the Plan to provide an incentive to the Optionee to focus on the
long-term growth of the Company.

         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 Optionee agree as follows:

                  1. GRANT OF OPTION. The Company hereby grants to the Optionee
the right and option (hereinafter referred to as the "Option") to purchase an
aggregate of 20,000 shares (such number being subject to adjustment as provided
in paragraph 11 hereof and Section 14 of the Plan) of the Common Stock of the
Company (the "Stock") on the terms and conditions herein set forth. This Option
may be exercised in whole or in part and from time to time as hereinafter
provided. The Option granted under this Agreement is NOT intended to be an
"incentive stock option" as set forth in Section 422 of the Internal Revenue
Code of 1986, as amended.

                  2. VESTING OF OPTION. The Option shall vest and become
exercisable in accordance with the schedule below:

         -        One-Half of the Option grant shall become exercisable on
                  February 28, 2002; and

         -        On-Half of the Option grant shall become exercisable on
                  February 28, 2003.

                  3. PURCHASE PRICE. The price at which the Optionee shall be
entitled to purchase the Stock covered by the Option shall be $6.00 per share.

                  4. TERM OF OPTION. The Option granted under this Agreement
shall expire, unless otherwise exercised, ten years from the Date of Grant,
through and including the normal close of business of the Company on February
28, 2011 ("Expiration Date"), subject to earlier termination as provided in
paragraph 8 hereof.
   2
                  5. EXERCISE OF OPTION. The Option may be exercised by the
Optionee as to all or any part of the Stock then vested by delivery to the
Company of written notice of exercise and payment of the purchase price as
provided in paragraphs 6 and 7 hereof.

                  6. METHOD OF EXERCISING OPTION. Subject to the terms and
conditions of this Option Agreement, the Option may be exercised by timely
delivery to the Company of written notice, which notice shall be effective on
the date received by the Company ("Effective Date"). The notice shall state the
Optionee's election to exercise the Option, the number of shares in respect of
which an election to exercise has been made, the method of payment elected (see
paragraph 7 hereof), the exact name or names in which the shares will be
registered and the Social Security number of the Optionee. Such notice shall be
signed by the Optionee and shall be accompanied by payment of the purchase price
of such shares. In the event the Option shall be exercised by a person or
persons other than Optionee pursuant to paragraph 8 hereof, such notice shall be
signed by such other person or persons and shall be accompanied by proof
acceptable to the Company of the legal right of such person or persons to
exercise the Option. All shares delivered by the Company upon exercise of the
Option shall be fully paid and nonassessable upon delivery.

                  7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased
upon the exercise of the Option shall be made by the Optionee in cash,
previously-acquired Stock held for more than six months (through actual tender
or by attestation), broker-assisted cashless exercise arrangement, or such other
method permitted by the Board and communicated to the Optionee in writing prior
to the date the Optionee exercises all or any portion of the Option.

                  8. TERMINATION OF SERVICES.

                           8.1 GENERAL. If the Optionee ceases to perform
services as a member of the Board of Directors of the Company for any reason
other than death or Disability, then the Optionee may at any time within ninety
(90) days after the effective date of termination of services exercise the
Option to the extent that the Optionee was entitled to exercise the Option at
the date of termination, provided that the Option shall lapse immediately upon a
termination for Cause. In no event shall the Option be exercisable after the
Expiration Date. Any portion of the Option that is not vested on the date the
Optionee ceases to perform services as a Company Director, shall be forfeited on
such date.

                           8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of
the death or Disability (as that term is defined in the Plan) of the Optionee
within a period during which the Option, or any part thereof, could have been
exercised by the Optionee, including ninety (90) days after termination of
services (the "Option Period"), the Option shall lapse unless it is exercised
within the Option Period and in no event later than twelve (12) months after the
date of the Optionee's death or Disability by the Optionee or the Optionee's
legal representative or representatives in the case of a Disability or, in the
case of death, by the person or persons entitled to do so under the Optionee's
last will and testament or if the Optionee fails to make a testamentary
disposition of such Option or shall die intestate, by the person or persons
entitled to receive such Option under the applicable laws of descent and
distribution. An Option may be exercised following the death or Disability of
the Optionee only if the Option was exercisable by the Optionee immediately
prior to his death or Disability. In no event shall the Option be

                                                                               2
   3
exercisable after the Expiration Date. The Board shall have the right to require
evidence satisfactory to it of the rights of any person or persons seeking to
exercise the Option under this paragraph 8 to exercise the Option.

                  9. NONTRANSFERABILITY. The Option granted by this Option
Agreement shall be exercisable only during the term of the Option provided in
paragraph 4 hereof and, except as provided in paragraph 8 above, only by the
Optionee during his lifetime and while a Director of the Company. Except as
otherwise permitted by the Committee, this Option shall not be transferable by
the Optionee or any other person claiming through the Optionee, either
voluntarily or involuntarily, except by will or the laws of descent and
distribution.

                  10. MARKET STAND-OFF AGREEMENT. The Optionee, if requested by
the Company and an underwriter of Stock (or other securities) of the Company,
agrees not to sell or otherwise transfer or dispose of any Stock (or other
securities) of the Company held by the Optionee during the period not to exceed
180 days as requested by the managing underwriter following the effective date
of a registration statement of the Company filed under the Securities Act. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop transfer instructions with respect to
the Stock (or other securities) subject to the foregoing restriction until the
end of such project.

                  11. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. 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 Option
the number and class of shares of stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to the Option, all as set forth in Section 14
of the Plan.

                  12. DELIVERY OF SHARES. No shares of Stock shall be delivered
upon exercise of the Option until (i) the purchase price shall have been paid in
full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Option, or the issuance of shares
thereunder, has been received by the Company; and (iv) if required by the Board,
the Optionee has delivered to the Board an Investment Letter in form and content
satisfactory to the Company as provided in paragraph 13 hereof.

                  13. SECURITIES ACT. The Company shall not be required to
deliver any shares of Stock pursuant to the exercise of all or any part of the
Option 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. The Board may require that the Optionee, prior
to the issuance of any such shares pursuant to exercise of the Option, sign and
deliver to the Company a written statement ("Investment Letter") stating (i)
that the Optionee is purchasing the shares for investment and not with a view to
the sale or distribution thereof; (ii) that the Optionee will not sell any
shares received upon exercise of the Option or any other shares of the Company
that the Optionee may then own or thereafter acquire except either (a) through a
broker on a national securities exchange or (b) with the prior written approval
of the Company; and (iii)

                                                                               3
   4
containing such other terms and conditions as counsel for the Company may
reasonably require to assure compliance with the Securities Act of 1933 or other
applicable federal or state securities laws and regulations. Such Investment
Letter shall be in form and content acceptable to the Board in its sole
discretion.

                  14. DEFINITIONS; COPY OF PLAN. To the extent not specifically
provided herein, all capitalized terms used in this Option Agreement shall have
the same meanings ascribed to them in the Plan. By the execution of this
Agreement, the Optionee acknowledges receipt of a copy of the Plan.

                  15. ADMINISTRATION. This Option 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 Board in accordance with the terms of and as
provided in the Plan. The Board 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 Board with respect thereto and to this Option Agreement shall be final
and binding upon the Optionee and the Company. In the event of any conflict
between the terms and conditions of this Option Agreement and the Plan, the
provisions of the Plan shall control.

                  16. CONTINUATION OF SERVICES. This Option Agreement shall not
be construed to confer upon the Optionee any right to continue providing
services as a Company Director and shall not limit the right of the Company, in
its sole discretion, to terminate the services of the Optionee at any time.

                  17. OBLIGATION TO EXERCISE. The Optionee shall have no
obligation to exercise any option granted by this Agreement.

                  18. GOVERNING LAW. This Option Agreement shall be interpreted
and administered under the laws of the State of Delaware.

                  19. AMENDMENTS. This Option Agreement may be amended only by a
written agreement executed by the Company and the Optionee. The Company and the
Optionee acknowledge that changes in federal tax laws enacted subsequent to the
Date of Grant, and applicable to stock options, may provide for tax benefits to
the Company or the Optionee. In any such event, the Company and the Optionee
agree that this Option Agreement may be amended as necessary to secure for the
Company and the Optionee any benefits that may result from such legislation. Any
such amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.

                                                                               4
   5
         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its duly authorized representative and the Optionee has signed this
Option Agreement as of the date first written above.


ON SEMICONDUCTOR CORPORATION              OPTIONEE/ALBERT HUGO-MARTINEZ



By: /s/ George H. Cave                    /s/ Albert Hugo-Martinez
   ---------------------------------      -------------------------------------
Its: Vice President & Secretary
    --------------------------------




                                                                               5

   1
                                                                    Exhibit 10.6


                             SCG HOLDING CORPORATION
                            2000 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                                  FOR DIRECTORS


         This Option Agreement is made and entered into by and between ON
SEMICONDUCTOR CORPORATION ("Company") and JEROME N. GREGOIRE ("Optionee"), as of
the 28th day of February, 2001 ("Date of Grant").

                                    RECITALS


         A. The Board of Directors of the Company has adopted the SCG Holding
Corporation 2000 Stock Incentive Plan ("Plan") as an incentive to retain members
of the Board of Directors, key employees, officers, and consultants of the
Company and to enhance the ability of the Company to attract such individuals
whose services are considered unusually valuable by providing an opportunity for
them to have a proprietary interest in the success of the Company.

         B. The Board has approved the granting of options to the Optionee
pursuant to the Plan to provide an incentive to the Optionee to focus on the
long-term growth of the Company.

         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 Optionee agree as follows:

                  1. GRANT OF OPTION. The Company hereby grants to the Optionee
the right and option (hereinafter referred to as the "Option") to purchase an
aggregate of 20,000 shares (such number being subject to adjustment as provided
in paragraph 11 hereof and Section 14 of the Plan) of the Common Stock of the
Company (the "Stock") on the terms and conditions herein set forth. This Option
may be exercised in whole or in part and from time to time as hereinafter
provided. The Option granted under this Agreement is NOT intended to be an
"incentive stock option" as set forth in Section 422 of the Internal Revenue
Code of 1986, as amended.

                  2. VESTING OF OPTION. The Option shall vest and become
exercisable in accordance with the schedule below:

         -        One-Half of the Option grant shall become exercisable on
                  February 28, 2002; and

         -        On-Half of the Option grant shall become exercisable on
                  February 28, 2003.

                  3. PURCHASE PRICE. The price at which the Optionee shall be
entitled to purchase the Stock covered by the Option shall be $6.00 per share.

                  4. TERM OF OPTION. The Option granted under this Agreement
shall expire, unless otherwise exercised, ten years from the Date of Grant,
through and including the normal close of business of the Company on February
28, 2011 ("Expiration Date"), subject to earlier termination as provided in
paragraph 8 hereof.
   2
                  5. EXERCISE OF OPTION. The Option may be exercised by the
Optionee as to all or any part of the Stock then vested by delivery to the
Company of written notice of exercise and payment of the purchase price as
provided in paragraphs 6 and 7 hereof.

                  6. METHOD OF EXERCISING OPTION. Subject to the terms and
conditions of this Option Agreement, the Option may be exercised by timely
delivery to the Company of written notice, which notice shall be effective on
the date received by the Company ("Effective Date"). The notice shall state the
Optionee's election to exercise the Option, the number of shares in respect of
which an election to exercise has been made, the method of payment elected (see
paragraph 7 hereof), the exact name or names in which the shares will be
registered and the Social Security number of the Optionee. Such notice shall be
signed by the Optionee and shall be accompanied by payment of the purchase price
of such shares. In the event the Option shall be exercised by a person or
persons other than Optionee pursuant to paragraph 8 hereof, such notice shall be
signed by such other person or persons and shall be accompanied by proof
acceptable to the Company of the legal right of such person or persons to
exercise the Option. All shares delivered by the Company upon exercise of the
Option shall be fully paid and nonassessable upon delivery.

                  7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased
upon the exercise of the Option shall be made by the Optionee in cash,
previously-acquired Stock held for more than six months (through actual tender
or by attestation), broker-assisted cashless exercise arrangement, or such other
method permitted by the Board and communicated to the Optionee in writing prior
to the date the Optionee exercises all or any portion of the Option.

                  8. TERMINATION OF SERVICES.

                     8.1 GENERAL. If the Optionee ceases to perform services as
a member of the Board of Directors of the Company for any reason other than
death or Disability, then the Optionee may at any time within ninety (90) days
after the effective date of termination of services exercise the Option to the
extent that the Optionee was entitled to exercise the Option at the date of
termination, provided that the Option shall lapse immediately upon a termination
for Cause. In no event shall the Option be exercisable after the Expiration
Date. Any portion of the Option that is not vested on the date the Optionee
ceases to perform services as a Company Director, shall be forfeited on such
date.

                     8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the
death or Disability (as that term is defined in the Plan) of the Optionee within
a period during which the Option, or any part thereof, could have been exercised
by the Optionee, including ninety (90) days after termination of services (the
"Option Period"), the Option shall lapse unless it is exercised within the
Option Period and in no event later than twelve (12) months after the date of
the Optionee's death or Disability by the Optionee or the Optionee's legal
representative or representatives in the case of a Disability or, in the case of
death, by the person or persons entitled to do so under the Optionee's last will
and testament or if the Optionee fails to make a testamentary disposition of
such Option or shall die intestate, by the person or persons entitled to receive
such Option under the applicable laws of descent and distribution. An Option may
be exercised following the death or Disability of the Optionee only if the
Option was exercisable by the Optionee immediately prior to his death or
Disability. In no event shall the Option be

                                                                               2
   3
exercisable after the Expiration Date. The Board shall have the right to require
evidence satisfactory to it of the rights of any person or persons seeking to
exercise the Option under this paragraph 8 to exercise the Option.

                  9. NONTRANSFERABILITY. The Option granted by this Option
Agreement shall be exercisable only during the term of the Option provided in
paragraph 4 hereof and, except as provided in paragraph 8 above, only by the
Optionee during his lifetime and while a Director of the Company. Except as
otherwise permitted by the Committee, this Option shall not be transferable by
the Optionee or any other person claiming through the Optionee, either
voluntarily or involuntarily, except by will or the laws of descent and
distribution.

                  10. MARKET STAND-OFF AGREEMENT. The Optionee, if requested by
the Company and an underwriter of Stock (or other securities) of the Company,
agrees not to sell or otherwise transfer or dispose of any Stock (or other
securities) of the Company held by the Optionee during the period not to exceed
180 days as requested by the managing underwriter following the effective date
of a registration statement of the Company filed under the Securities Act. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop transfer instructions with respect to
the Stock (or other securities) subject to the foregoing restriction until the
end of such project.

                  11. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. 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 Option
the number and class of shares of stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to the Option, all as set forth in Section 14
of the Plan.

                  12. DELIVERY OF SHARES. No shares of Stock shall be delivered
upon exercise of the Option until (i) the purchase price shall have been paid in
full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Option, or the issuance of shares
thereunder, has been received by the Company; and (iv) if required by the Board,
the Optionee has delivered to the Board an Investment Letter in form and content
satisfactory to the Company as provided in paragraph 13 hereof.

                  13. SECURITIES ACT. The Company shall not be required to
deliver any shares of Stock pursuant to the exercise of all or any part of the
Option 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. The Board may require that the Optionee, prior
to the issuance of any such shares pursuant to exercise of the Option, sign and
deliver to the Company a written statement ("Investment Letter") stating (i)
that the Optionee is purchasing the shares for investment and not with a view to
the sale or distribution thereof; (ii) that the Optionee will not sell any
shares received upon exercise of the Option or any other shares of the Company
that the Optionee may then own or thereafter acquire except either (a) through a
broker on a national securities exchange or (b) with the prior written approval
of the Company; and (iii)

                                                                               3
   4
containing such other terms and conditions as counsel for the Company may
reasonably require to assure compliance with the Securities Act of 1933 or other
applicable federal or state securities laws and regulations. Such Investment
Letter shall be in form and content acceptable to the Board in its sole
discretion.

                  14. DEFINITIONS; COPY OF PLAN. To the extent not specifically
provided herein, all capitalized terms used in this Option Agreement shall have
the same meanings ascribed to them in the Plan. By the execution of this
Agreement, the Optionee acknowledges receipt of a copy of the Plan.

                  15. ADMINISTRATION. This Option 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 Board in accordance with the terms of and as
provided in the Plan. The Board 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 Board with respect thereto and to this Option Agreement shall be final
and binding upon the Optionee and the Company. In the event of any conflict
between the terms and conditions of this Option Agreement and the Plan, the
provisions of the Plan shall control.

                  16. CONTINUATION OF SERVICES. This Option Agreement shall not
be construed to confer upon the Optionee any right to continue providing
services as a Company Director and shall not limit the right of the Company, in
its sole discretion, to terminate the services of the Optionee at any time.

                  17. OBLIGATION TO EXERCISE. The Optionee shall have no
obligation to exercise any option granted by this Agreement.

                  18. GOVERNING LAW. This Option Agreement shall be interpreted
and administered under the laws of the State of Delaware.

                  19. AMENDMENTS. This Option Agreement may be amended only by a
written agreement executed by the Company and the Optionee. The Company and the
Optionee acknowledge that changes in federal tax laws enacted subsequent to the
Date of Grant, and applicable to stock options, may provide for tax benefits to
the Company or the Optionee. In any such event, the Company and the Optionee
agree that this Option Agreement may be amended as necessary to secure for the
Company and the Optionee any benefits that may result from such legislation. Any
such amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.


                                                                               4
   5
          IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its duly authorized representative and the Optionee has signed this
Option Agreement as of the date first written above.


ON SEMICONDUCTOR CORPORATION                    OPTIONEE/JEROME N. GREGOIRE



By: /s/ George H. Cave                           /s/ Jerome N. Gregoire
   --------------------------------------       --------------------------------
Its: Vice President & Secretary
    -------------------------------------




                                                                               5

   1
                                                                    Exhibit 10.7


                          ON SEMICONDUCTOR CORPORATION
                            2000 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                                  FOR DIRECTORS


         This Option Agreement is made and entered into by and between ON
SEMICONDUCTOR CORPORATION ("Company") and JOHN LEGERE ("Optionee"), as of the
16th day of February, 2001 ("Date of Grant").

                                    RECITALS


         A. The Board of Directors of the Company has adopted the ON
Semiconductor Corporation (formerly known as SCG Holding Corporation) 2000 Stock
Incentive Plan ("Plan") as an incentive to retain members of the Board of
Directors, key employees, officers, and consultants of the Company and to
enhance the ability of the Company to attract such individuals whose services
are considered unusually valuable by providing an opportunity for them to have a
proprietary interest in the success of the Company.

         B. The Board has approved the granting of options to the Optionee
pursuant to the Plan to provide an incentive to the Optionee to focus on the
long-term growth of the Company.

         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 Optionee agree as follows:

                  1. GRANT OF OPTION. The Company hereby grants to the Optionee
the right and option (hereinafter referred to as the "Option") to purchase an
aggregate of 21,428 shares (such number being subject to adjustment as provided
in paragraph 11 hereof and Section 14 of the Plan) of the Common Stock of the
Company (the "Stock") on the terms and conditions herein set forth. This Option
may be exercised in whole or in part and from time to time as hereinafter
provided. The Option granted under this Agreement is NOT intended to be an
"incentive stock option" as set forth in Section 422 of the Internal Revenue
Code of 1986, as amended.

                  2. VESTING OF OPTION. The Option shall vest and become
exercisable in accordance with the schedule below:

         -        33 1/3% of the Option grant shall become exercisable on
                  February 16, 2002;

         -        an additional 33 1/3% of the Option grant shall become
                  exercisable on February 16, 2003; and

         -        the final 33 1/3% of the Option grant shall become exercisable
                  on February 16, 2004.

                  3. PURCHASE PRICE. The price at which the Optionee shall be
entitled to purchase the Stock covered by the Option shall be $7.00 per share.
   2
                  4. TERM OF OPTION. The Option granted under this Agreement
shall expire, unless otherwise exercised, ten years from the Date of Grant,
through and including the normal close of business of the Company on February
16, 2011 ("Expiration Date"), subject to earlier termination as provided in
paragraph 8 hereof.

                  5. EXERCISE OF OPTION. The Option may be exercised by the
Optionee as to all or any part of the Stock then vested by delivery to the
Company of written notice of exercise and payment of the purchase price as
provided in paragraphs 6 and 7 hereof.

                  6. METHOD OF EXERCISING OPTION. Subject to the terms and
conditions of this Option Agreement, the Option may be exercised by timely
delivery to the Company of written notice, which notice shall be effective on
the date received by the Company ("Effective Date"). The notice shall state the
Optionee's election to exercise the Option, the number of shares in respect of
which an election to exercise has been made, the method of payment elected (see
paragraph 7 hereof), the exact name or names in which the shares will be
registered and the Social Security number of the Optionee. Such notice shall be
signed by the Optionee and shall be accompanied by payment of the purchase price
of such shares. In the event the Option shall be exercised by a person or
persons other than Optionee pursuant to paragraph 8 hereof, such notice shall be
signed by such other person or persons and shall be accompanied by proof
acceptable to the Company of the legal right of such person or persons to
exercise the Option. All shares delivered by the Company upon exercise of the
Option shall be fully paid and nonassessable upon delivery.

                  7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased
upon the exercise of the Option shall be made by the Optionee in cash,
previously-acquired Stock held for more than six months (through actual tender
or by attestation), broker-assisted cashless exercise arrangement, or such other
method permitted by the Board and communicated to the Optionee in writing prior
to the date the Optionee exercises all or any portion of the Option.

                  8. TERMINATION OF SERVICES.

                     8.1 GENERAL. If the Optionee ceases to perform services as
a member of the Board of Directors of the Company for any reason other than
death or Disability, then the Optionee may at any time within ninety (90) days
after the effective date of termination of services exercise the Option to the
extent that the Optionee was entitled to exercise the Option at the date of
termination, provided that the Option shall lapse immediately upon a termination
for Cause. In no event shall the Option be exercisable after the Expiration
Date. Any portion of the Option that is not vested on the date the Optionee
ceases to perform services as a Company Director, shall be forfeited on such
date.

                     8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the
death or Disability (as that term is defined in the Plan) of the Optionee within
a period during which the Option, or any part thereof, could have been exercised
by the Optionee, including ninety (90) days after termination of services (the
"Option Period"), the Option shall lapse unless it is exercised within the
Option Period and in no event later than twelve (12) months after the date of
the Optionee's death or Disability by the Optionee or the Optionee's legal
representative or representatives in the case of a Disability or, in the case of
death, by the person or persons

                                       2
   3
entitled to do so under the Optionee's last will and testament or if the
Optionee fails to make a testamentary disposition of such Option or shall die
intestate, by the person or persons entitled to receive such Option under the
applicable laws of descent and distribution. An Option may be exercised
following the death or Disability of the Optionee only if the Option was
exercisable by the Optionee immediately prior to his death or Disability. In no
event shall the Option be exercisable after the Expiration Date. The Board shall
have the right to require evidence satisfactory to it of the rights of any
person or persons seeking to exercise the Option under this paragraph 8 to
exercise the Option.

                  9. NONTRANSFERABILITY. The Option granted by this Option
Agreement shall be exercisable only during the term of the Option provided in
paragraph 4 hereof and, except as provided in paragraph 8 above, only by the
Optionee during his lifetime and while a Director of the Company. Except as
otherwise permitted by the Committee, this Option shall not be transferable by
the Optionee or any other person claiming through the Optionee, either
voluntarily or involuntarily, except by will or the laws of descent and
distribution.

                  10. MARKET STAND-OFF AGREEMENT. The Optionee, if requested by
the Company and an underwriter of Stock (or other securities) of the Company,
agrees not to sell or otherwise transfer or dispose of any Stock (or other
securities) of the Company held by the Optionee during the period not to exceed
180 days as requested by the managing underwriter following the effective date
of a registration statement of the Company filed under the Securities Act. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop transfer instructions with respect to
the Stock (or other securities) subject to the foregoing restriction until the
end of such project.

                  11. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. 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 Option
the number and class of shares of stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to the Option, all as set forth in Section 14
of the Plan.

                  12. DELIVERY OF SHARES. No shares of Stock shall be delivered
upon exercise of the Option until (i) the purchase price shall have been paid in
full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Option, or the issuance of shares
thereunder, has been received by the Company; and (iv) if required by the Board,
the Optionee has delivered to the Board an Investment Letter in form and content
satisfactory to the Company as provided in paragraph 13 hereof.

                  13. SECURITIES ACT. The Company shall not be required to
deliver any shares of Stock pursuant to the exercise of all or any part of the
Option 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. The Board may require that the Optionee, prior
to the issuance of any such shares pursuant to exercise of the Option, sign and
deliver to the


                                       3
   4
Company a written statement ("Investment Letter") stating (i) that the Optionee
is purchasing the shares for investment and not with a view to the sale or
distribution thereof; (ii) that the Optionee will not sell any shares received
upon exercise of the Option or any other shares of the Company that the Optionee
may then own or thereafter acquire except either (a) through a broker on a
national securities exchange or (b) with the prior written approval of the
Company; and (iii) containing such other terms and conditions as counsel for the
Company may reasonably require to assure compliance with the Securities Act of
1933 or other applicable federal or state securities laws and regulations. Such
Investment Letter shall be in form and content acceptable to the Board in its
sole discretion.

                  14. DEFINITIONS; COPY OF PLAN. To the extent not specifically
provided herein, all capitalized terms used in this Option Agreement shall have
the same meanings ascribed to them in the Plan. By the execution of this
Agreement, the Optionee acknowledges receipt of a copy of the Plan.

                  15. ADMINISTRATION. This Option 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 Board in accordance with the terms of and as
provided in the Plan. The Board 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 Board with respect thereto and to this Option Agreement shall be final
and binding upon the Optionee and the Company. In the event of any conflict
between the terms and conditions of this Option Agreement and the Plan, the
provisions of the Plan shall control.

                  16. CONTINUATION OF SERVICES. This Option Agreement shall not
be construed to confer upon the Optionee any right to continue providing
services as a Company Director and shall not limit the right of the Company, in
its sole discretion, to terminate the services of the Optionee at any time.

                  17. OBLIGATION TO EXERCISE. The Optionee shall have no
obligation to exercise any option granted by this Agreement.

                  18. GOVERNING LAW. This Option Agreement shall be interpreted
and administered under the laws of the State of Delaware.

                  19. AMENDMENTS. This Option Agreement may be amended only by a
written agreement executed by the Company and the Optionee. The Company and the
Optionee acknowledge that changes in federal tax laws enacted subsequent to the
Date of Grant, and applicable to stock options, may provide for tax benefits to
the Company or the Optionee. In any such event, the Company and the Optionee
agree that this Option Agreement may be amended as necessary to secure for the
Company and the Optionee any benefits that may result from such legislation. Any
such amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.




                                       4
   5
         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its duly authorized representative and the Optionee has signed this
Option Agreement as of the date first written above.


ON SEMICONDUCTOR CORPORATION                 OPTIONEE/JOHN LEGERE



By: /s/ George H. Cave                        /s/ John Legere
   --------------------------------          -----------------------------------
Its:  Vice President and Secretary

   1
                                                                    Exhibit 10.8


                          ON SEMICONDUCTOR CORPORATION
                            2000 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT


         This Option Agreement is made and entered into by and between ON
Semiconductor Corporation ("Company") and STEVE HANSON ("Optionee"), as of the
21st day of February, 2001 ("Date of Grant").

                                    RECITALS


         A. The Board of Directors of the Company has adopted the ON
Semiconductor Corporation (formerly known as SCG Holding Corporation) 2000 Stock
Incentive Plan, as amended (the "Plan"), as an incentive to retain key
employees, officers, and consultants of the Company and to enhance the ability
of the Company to attract new 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. The Board has approved the granting of options to the Optionee
pursuant to the Plan to provide an incentive to the Optionee to focus on the
long-term growth of the Company.

         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 Optionee agree as follows:

                  1. GRANT OF OPTION. The Company hereby grants to the Optionee
the right and option (hereinafter referred to as the "Option") to purchase an
aggregate of 400,000 shares (such number being subject to adjustment as provided
in paragraph 11 hereof and Section 14 of the Plan) of the Common Stock of the
Company (the "Stock") on the terms and conditions herein set forth. This Option
may be exercised in whole or in part and from time to time as hereinafter
provided. The Option granted under this Agreement is NOT intended to be an
"incentive stock option" as set forth in Section 422 of the Internal Revenue
Code of 1986, as amended.

                  2. VESTING OF OPTION. The Option shall vest and become
exercisable in accordance with the schedule below:

     25% of the Option grant shall become exercisable on February 21, 2002;

     25% of the Option grant shall become exercisable on February 21, 2003;

     25% of the Option grant shall become exercisable on February 21, 2004;

     25% of the Option grant shall become exercisable on February 21, 2005.

                  3. PURCHASE PRICE. The price at which the Optionee shall be
entitled to purchase the Stock covered by the Option shall be $6.125 per share
(i.e., the closing price of the Company's commons tock on February 21, 2001).
   2
                  4. TERM OF OPTION. The Option granted under this Agreement
shall expire, unless otherwise exercised, ten years from the Date of Grant,
through and including the normal close of business of the Company on February
21, 2011 ("Expiration Date"), subject to earlier termination as provided in
paragraph 8 hereof.

                  5. EXERCISE OF OPTION. The Option may be exercised by the
Optionee as to all or any part of the Stock then vested by delivery to the
Company of written notice of exercise and payment of the purchase price as
provided in paragraphs 6 and 7 hereof.

                  6. METHOD OF EXERCISING OPTION. Subject to the terms and
conditions of this Option Agreement, the Option may be exercised by timely
delivery to the Company of written notice, which notice shall be effective on
the date received by the Company ("Effective Date"). The notice shall state the
Optionee's election to exercise the Option, the number of shares in respect of
which an election to exercise has been made, the method of payment elected (see
paragraph 7 hereof), the exact name or names in which the shares will be
registered and the Social Security number of the Optionee. Such notice shall be
signed by the Optionee and shall be accompanied by payment of the purchase price
of such shares. In the event the Option shall be exercised by a person or
persons other than Optionee pursuant to paragraph 8 hereof, such notice shall be
signed by such other person or persons and shall be accompanied by proof
acceptable to the Company of the legal right of such person or persons to
exercise the Option. All shares delivered by the Company upon exercise of the
Option shall be fully paid and nonassessable upon delivery.

                  7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased
upon the exercise of the Option shall be made by the Optionee in cash,
previously-acquired Stock held for more than six months (through actual tender
or by attestation), broker-assisted cashless exercise arrangement, or such other
method permitted by the Board and communicated to the Optionee in writing prior
to the date the Optionee exercises all or any portion of the Option.

                  8. TERMINATION OF EMPLOYMENT OR SERVICES.

                     8.1 GENERAL. If the Optionee terminates employment or
otherwise ceases to perform services for the Company for any reason other than
death or Disability, then the Optionee may at any time within 90 days after the
effective date of termination of employment or services exercise the Option to
the extent that the Optionee was entitled to exercise the Option at the date of
termination, provided that the Option shall lapse immediately upon a termination
for Cause. In no event shall the Option be exercisable after the Expiration
Date.

                     8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the
death or Disability (as that term is defined in the Plan) of the Optionee within
a period during which the Option, or any part thereof, could have been exercised
by the Optionee, including 90 days after termination of employment or services
(the "Option Period"), the Option shall lapse unless it is exercised within the
Option Period and in no event later than twelve (12) months after the date of
the Optionee's death or Disability by the Optionee or the Optionee's legal
representative or representatives in the case of a Disability or, in the case of
death, by the person or persons entitled to do so under the Optionee's last will
and testament or if the Optionee fails to make a


                                       2
   3
testamentary disposition of such Option or shall die intestate, by the person or
persons entitled to receive such Option under the applicable laws of descent and
distribution. An Option may be exercised following the death or Disability of
the Optionee only if the Option was exercisable by the Optionee immediately
prior to his death or Disability. In no event shall the Option be exercisable
after the Expiration Date. The Board shall have the right to require evidence
satisfactory to it of the rights of any person or persons seeking to exercise
the Option under this paragraph 8 to exercise the Option.

                  9. NONTRANSFERABILITY. The Option granted by this Option
Agreement shall be exercisable only during the term of the Option provided in
paragraph 4 hereof and, except as provided in paragraph 8 above, only by the
Optionee during his lifetime and while an Optionee of the Company. Except as
otherwise permitted by the Committee, this Option shall not be transferable by
the Optionee or any other person claiming through the Optionee, either
voluntarily or involuntarily, except by will or the laws of descent and
distribution.

                  10. MARKET STAND-OFF AGREEMENT. The Optionee, if requested by
the Company and an underwriter of Stock (or other securities) of the Company,
agrees not to sell or otherwise transfer or dispose of any Stock (or other
securities) of the Company held by the Optionee during the period not to exceed
180 days as requested by the managing underwriter following the effective date
of a registration statement of the Company filed under the Securities Act. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop transfer instructions with respect to
the Stock (or other securities) subject to the foregoing restriction until the
end of such project.

                  11. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. 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 Option
the number and class of shares of stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to the Option, all as set forth in Section 14
of the Plan.

                  12. DELIVERY OF SHARES. No shares of Stock shall be delivered
upon exercise of the Option until (i) the purchase price shall have been paid in
full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Option, or the issuance of shares
thereunder, has been received by the Company; and (iv) if required by the Board,
the Optionee has delivered to the Board an Investment Letter in form and content
satisfactory to the Company as provided in paragraph 13 hereof.

                  13. SECURITIES ACT. The Company shall not be required to
deliver any shares of Stock pursuant to the exercise of all or any part of the
Option 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. The Board may require that the Optionee, prior
to the issuance of any such shares pursuant to exercise of the Option, sign and
deliver to the Company a written statement ("Investment Letter") stating (i)
that the Optionee is purchasing the


                                       3
   4
shares for investment and not with a view to the sale or distribution thereof;
(ii) that the Optionee will not sell any shares received upon exercise of the
Option or any other shares of the Company that the Optionee may then own or
thereafter acquire except either (a) through a broker on a national securities
exchange or (b) with the prior written approval of the Company; and (iii)
containing such other terms and conditions as counsel for the Company may
reasonably require to assure compliance with the Securities Act of 1933 or other
applicable federal or state securities laws and regulations. Such Investment
Letter shall be in form and content acceptable to the Board in its sole
discretion.

                  14. DEFINITIONS; COPY OF PLAN. To the extent not specifically
provided herein, all capitalized terms used in this Option Agreement shall have
the same meanings ascribed to them in the Plan. By the execution of this
Agreement, the Optionee acknowledges receipt of a copy of the Plan.

                  15. ADMINISTRATION. This Option 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 Board in accordance with the terms of and as
provided in the Plan. The Board 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 Board with respect thereto and to this Option Agreement shall be final
and binding upon the Optionee and the Company. In the event of any conflict
between the terms and conditions of this Option Agreement and the Plan, the
provisions of the Plan shall control.

                  16. CONTINUATION OF EMPLOYMENT OR SERVICES. This Option
Agreement shall not be construed to confer upon the Optionee any right to
continue in the employ of, or providing services to, the Company and shall not
limit the right of the Company, in its sole discretion, to terminate the
employment or services of the Optionee at any time.

                  17. OBLIGATION TO EXERCISE. The Optionee shall have no
obligation to exercise any option granted by this Agreement.

                  18. GOVERNING LAW. This Option Agreement shall be interpreted
and administered under the laws of the State of Delaware.

                  19. AMENDMENTS. This Option Agreement may be amended only by a
written agreement executed by the Company and the Optionee. The Company and the
Optionee acknowledge that changes in federal tax laws enacted subsequent to the
Date of Grant, and applicable to stock options, may provide for tax benefits to
the Company or the Optionee. In any such event, the Company and the Optionee
agree that this Option Agreement may be amended as necessary to secure for the
Company and the Optionee any benefits that may result from such legislation. Any
such amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.




                                       4
   5
         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its duly authorized representative and the Optionee has signed this
Option Agreement as of the date first written above.

                           ON SEMICONDUCTOR CORPORATION


                           By:    /s/ George H. Cave
                                  ----------------------------------------------
                           Its:   Vice President & Secretary
                                  ----------------------------------------------



                           STEVE HANSON (OPTIONEE)


                           By:    /s/ Steve Hanson
                                  ----------------------------------------------




                                       5

   1
                                                                    Exhibit 10.9


                          ON SEMICONDUCTOR CORPORATION
                            2000 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT


         This Option Agreement is made and entered into by and between ON
Semiconductor Corporation ("Company") and DARIO SACOMANI ("Optionee"), as of the
21st day of February, 2001 ("Date of Grant").

                                    RECITALS


     A. The Board of Directors of the Company has adopted the ON Semiconductor
Corporation (formerly known as SCG Holding Corporation) 2000 Stock Incentive
Plan, as amended (the "Plan"), as an incentive to retain key employees,
officers, and consultants of the Company and to enhance the ability of the
Company to attract new 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. The Board has approved the granting of options to the Optionee pursuant
to the Plan to provide an incentive to the Optionee to focus on the long-term
growth of the Company.

     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 Optionee agree as follows:

     1. GRANT OF OPTION. The Company hereby grants to the Optionee the right and
option (hereinafter referred to as the "Option") to purchase an aggregate of
100,000 shares (such number being subject to adjustment as provided in paragraph
11 hereof and Section 14 of the Plan) of the Common Stock of the Company (the
"Stock") on the terms and conditions herein set forth. This Option may be
exercised in whole or in part and from time to time as hereinafter provided. The
Option granted under this Agreement is NOT intended to be an "incentive stock
option" as set forth in Section 422 of the Internal Revenue Code of 1986, as
amended.

     2. VESTING OF OPTION. The Option shall vest and become exercisable in
accordance with the schedule below:

          25% of the Option grant shall become exercisable on February 21, 2002;

          25% of the Option grant shall become exercisable on February 21, 2003;

          25% of the Option grant shall become exercisable on February 21, 2004;

          25% of the Option grant shall become exercisable on February 21, 2005.

     3. PURCHASE PRICE. The price at which the Optionee shall be entitled to
purchase the Stock covered by the Option shall be $6.125 per share (i.e., the
closing price of the Company's commons stock on February 21, 2001).
   2
     4. TERM OF OPTION. The Option granted under this Agreement shall expire,
unless otherwise exercised, ten years from the Date of Grant, through and
including the normal close of business of the Company on February 21, 2011
("Expiration Date"), subject to earlier termination as provided in paragraph 8
hereof.

     5. EXERCISE OF OPTION. The Option may be exercised by the Optionee as to
all or any part of the Stock then vested by delivery to the Company of written
notice of exercise and payment of the purchase price as provided in paragraphs 6
and 7 hereof.

     6. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
Option Agreement, the Option may be exercised by timely delivery to the Company
of written notice, which notice shall be effective on the date received by the
Company ("Effective Date"). The notice shall state the Optionee's election to
exercise the Option, the number of shares in respect of which an election to
exercise has been made, the method of payment elected (see paragraph 7 hereof),
the exact name or names in which the shares will be registered and the Social
Security number of the Optionee. Such notice shall be signed by the Optionee and
shall be accompanied by payment of the purchase price of such shares. In the
event the Option shall be exercised by a person or persons other than Optionee
pursuant to paragraph 8 hereof, such notice shall be signed by such other person
or persons and shall be accompanied by proof acceptable to the Company of the
legal right of such person or persons to exercise the Option. All shares
delivered by the Company upon exercise of the Option shall be fully paid and
nonassessable upon delivery.

     7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased upon the
exercise of the Option shall be made by the Optionee in cash,
previously-acquired Stock held for more than six months (through actual tender
or by attestation), broker-assisted cashless exercise arrangement, or such other
method permitted by the Board and communicated to the Optionee in writing prior
to the date the Optionee exercises all or any portion of the Option.

     8. TERMINATION OF EMPLOYMENT OR SERVICES.

     8.1 GENERAL. If the Optionee terminates employment or otherwise ceases to
perform services for the Company for any reason other than death or Disability,
then the Optionee may at any time within 90 days after the effective date of
termination of employment or services exercise the Option to the extent that the
Optionee was entitled to exercise the Option at the date of termination,
provided that the Option shall lapse immediately upon a termination for Cause.
In no event shall the Option be exercisable after the Expiration Date.

     8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the death or
Disability (as that term is defined in the Plan) of the Optionee within a period
during which the Option, or any part thereof, could have been exercised by the
Optionee, including 90 days after termination of employment or services (the
"Option Period"), the Option shall lapse unless it is exercised within the
Option Period and in no event later than twelve (12) months after the date of
the Optionee's death or Disability by the Optionee or the Optionee's legal
representative or representatives in the case of a Disability or, in the case of
death, by the person or persons entitled to do so under the Optionee's last will
and testament or if the Optionee fails to make a


                                       2
   3
testamentary disposition of such Option or shall die intestate, by the person or
persons entitled to receive such Option under the applicable laws of descent and
distribution. An Option may be exercised following the death or Disability of
the Optionee only if the Option was exercisable by the Optionee immediately
prior to his death or Disability. In no event shall the Option be exercisable
after the Expiration Date. The Board shall have the right to require evidence
satisfactory to it of the rights of any person or persons seeking to exercise
the Option under this paragraph 8 to exercise the Option.

     9. NONTRANSFERABILITY. The Option granted by this Option Agreement shall be
exercisable only during the term of the Option provided in paragraph 4 hereof
and, except as provided in paragraph 8 above, only by the Optionee during his
lifetime and while an Optionee of the Company. Except as otherwise permitted by
the Committee, this Option shall not be transferable by the Optionee or any
other person claiming through the Optionee, either voluntarily or involuntarily,
except by will or the laws of descent and distribution.

     10. MARKET STAND-OFF AGREEMENT. The Optionee, if requested by the Company
and an underwriter of Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Stock (or other securities) of the
Company held by the Optionee during the period not to exceed 180 days as
requested by the managing underwriter following the effective date of a
registration statement of the Company filed under the Securities Act. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop transfer instructions with respect to
the Stock (or other securities) subject to the foregoing restriction until the
end of such project.

     11. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. 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 Option the number and
class of shares of stock into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate purchase price for the shares
then subject to the Option, all as set forth in Section 14 of the Plan.

     12. DELIVERY OF SHARES. No shares of Stock shall be delivered upon exercise
of the Option until (i) the purchase price shall have been paid in full in the
manner herein provided; (ii) applicable taxes required to be withheld have been
paid or withheld in full; (iii) approval of any governmental authority required
in connection with the Option, or the issuance of shares thereunder, has been
received by the Company; and (iv) if required by the Board, the Optionee has
delivered to the Board an Investment Letter in form and content satisfactory to
the Company as provided in paragraph 13 hereof.

     13. SECURITIES ACT. The Company shall not be required to deliver any shares
of Stock pursuant to the exercise of all or any part of the Option 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. The Board may require that the Optionee, prior to the issuance of
any such shares pursuant to exercise of the Option, sign and deliver to the
Company a written statement ("Investment Letter") stating (i) that the Optionee
is purchasing the


                                       3
   4
shares for investment and not with a view to the sale or distribution thereof;
(ii) that the Optionee will not sell any shares received upon exercise of the
Option or any other shares of the Company that the Optionee may then own or
thereafter acquire except either (a) through a broker on a national securities
exchange or (b) with the prior written approval of the Company; and (iii)
containing such other terms and conditions as counsel for the Company may
reasonably require to assure compliance with the Securities Act of 1933 or other
applicable federal or state securities laws and regulations. Such Investment
Letter shall be in form and content acceptable to the Board in its sole
discretion.

     14. DEFINITIONS; COPY OF PLAN. To the extent not specifically provided
herein, all capitalized terms used in this Option Agreement shall have the same
meanings ascribed to them in the Plan. By the execution of this Agreement, the
Optionee acknowledges receipt of a copy of the Plan.

     15. ADMINISTRATION. This Option 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 Board in accordance with the terms of and as provided in the
Plan. The Board 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 Board
with respect thereto and to this Option Agreement shall be final and binding
upon the Optionee and the Company. In the event of any conflict between the
terms and conditions of this Option Agreement and the Plan, the provisions of
the Plan shall control.

     16. CONTINUATION OF EMPLOYMENT OR SERVICES. This Option Agreement shall not
be construed to confer upon the Optionee any right to continue in the employ of,
or providing services to, the Company and shall not limit the right of the
Company, in its sole discretion, to terminate the employment or services of the
Optionee at any time.

     17. OBLIGATION TO EXERCISE. The Optionee shall have no obligation to
exercise any option granted by this Agreement.

     18. GOVERNING LAW. This Option Agreement shall be interpreted and
administered under the laws of the State of Delaware.

     19. AMENDMENTS. This Option Agreement may be amended only by a written
agreement executed by the Company and the Optionee. The Company and the Optionee
acknowledge that changes in federal tax laws enacted subsequent to the Date of
Grant, and applicable to stock options, may provide for tax benefits to the
Company or the Optionee. In any such event, the Company and the Optionee agree
that this Option Agreement may be amended as necessary to secure for the Company
and the Optionee any benefits that may result from such legislation. Any such
amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.


                                       4
   5
         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its duly authorized representative and the Optionee has signed this
Option Agreement as of the date first written above.

                           ON SEMICONDUCTOR CORPORATION


                           By:   /s/ George H. Cave
                                 -----------------------------------------------
                           Its:  Vice President & Secretary
                                 -----------------------------------------------



                           DARIO SACOMANI (OPTIONEE)


                           By:   /s/ Dario Sacomani
                                 -----------------------------------------------



                                       5

   1
                                                               EXHIBIT 10.10
                          ON SEMICONDUCTOR CORPORATION
                            2000 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT


         This Option Agreement is made and entered into by and between ON
Semiconductor Corporation ("Company") and MICHAEL ROHLEDER ("Optionee"), as of
the 21st day of February, 2001 ("Date of Grant").

                                    RECITALS


         A. The Board of Directors of the Company has adopted the ON
Semiconductor Corporation (formerly known as SCG Holding Corporation) 2000 Stock
Incentive Plan, as amended (the "Plan"), as an incentive to retain key
employees, officers, and consultants of the Company and to enhance the ability
of the Company to attract new 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. The Board has approved the granting of options to the Optionee
pursuant to the Plan to provide an incentive to the Optionee to focus on the
long-term growth of the Company.

         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 Optionee agree as follows:

          1. GRANT OF OPTION. The Company hereby grants to the Optionee the
right and option (hereinafter referred to as the "Option") to purchase an
aggregate of 533,000 shares (such number being subject to adjustment as provided
in paragraph 11 hereof and Section 14 of the Plan) of the Common Stock of the
Company (the "Stock") on the terms and conditions herein set forth. This Option
may be exercised in whole or in part and from time to time as hereinafter
provided. The Option granted under this Agreement is NOT intended to be an
"incentive stock option" as set forth in Section 422 of the Internal Revenue
Code of 1986, as amended.

          2. VESTING OF OPTION. The Option shall vest and become exercisable in
accordance with the schedule below:

         25% of the Option grant shall become exercisable on February 21, 2002;

         25% of the Option grant shall become exercisable on February 21, 2003;

         25% of the Option grant shall become exercisable on February 21, 2004;

         25% of the Option grant shall become exercisable on February 21, 2005.


          3. PURCHASE PRICE. The price at which the Optionee shall be entitled
to purchase the Stock covered by the Option shall be $6.125 per share (i.e., the
closing price of the Company's common stock on February 21, 2001).


   2

         4. TERM OF OPTION. The Option granted under this Agreement shall
expire, unless otherwise exercised, ten years from the Date of Grant, through
and including the normal close of business of the Company on February 21, 2011
("Expiration Date"), subject to earlier termination as provided in paragraph 8
hereof.

          5. EXERCISE OF OPTION. The Option may be exercised by the Optionee as
to all or any part of the Stock then vested by delivery to the Company of
written notice of exercise and payment of the purchase price as provided in
paragraphs 6 and 7 hereof.

          6. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by timely delivery to the
Company of written notice, which notice shall be effective on the date received
by the Company ("Effective Date"). The notice shall state the Optionee's
election to exercise the Option, the number of shares in respect of which an
election to exercise has been made, the method of payment elected (see paragraph
7 hereof), the exact name or names in which the shares will be registered and
the Social Security number of the Optionee. Such notice shall be signed by the
Optionee and shall be accompanied by payment of the purchase price of such
shares. In the event the Option shall be exercised by a person or persons other
than Optionee pursuant to paragraph 8 hereof, such notice shall be signed by
such other person or persons and shall be accompanied by proof acceptable to the
Company of the legal right of such person or persons to exercise the Option. All
shares delivered by the Company upon exercise of the Option shall be fully paid
and nonassessable upon delivery.

          7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased upon
the exercise of the Option shall be made by the Optionee in cash,
previously-acquired Stock held for more than six months (through actual tender
or by attestation), broker-assisted cashless exercise arrangement, or such other
method permitted by the Board and communicated to the Optionee in writing prior
to the date the Optionee exercises all or any portion of the Option.

          8. TERMINATION OF EMPLOYMENT OR SERVICES.

          8.1 GENERAL. If the Optionee terminates employment or otherwise ceases
to perform services for the Company for any reason other than death or
Disability, then the Optionee may at any time within 90 days after the effective
date of termination of employment or services exercise the Option to the extent
that the Optionee was entitled to exercise the Option at the date of
termination, provided that the Option shall lapse immediately upon a termination
for Cause. In no event shall the Option be exercisable after the Expiration
Date.

          8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the death or
Disability (as that term is defined in the Plan) of the Optionee within a period
during which the Option, or any part thereof, could have been exercised by the
Optionee, including 90 days after termination of employment or services (the
"Option Period"), the Option shall lapse unless it is exercised within the
Option Period and in no event later than twelve (12) months after the date of
the Optionee's death or Disability by the Optionee or the Optionee's legal
representative or representatives in the case of a Disability or, in the case of
death, by the person or persons entitled to do so under the Optionee's last will
and testament or if the Optionee fails to make a

                                       2
   3
testamentary disposition of such Option or shall die intestate, by the person or
persons entitled to receive such Option under the applicable laws of descent and
distribution. An Option may be exercised following the death or Disability of
the Optionee only if the Option was exercisable by the Optionee immediately
prior to his death or Disability. In no event shall the Option be exercisable
after the Expiration Date. The Board shall have the right to require evidence
satisfactory to it of the rights of any person or persons seeking to exercise
the Option under this paragraph 8 to exercise the Option.

          9. NONTRANSFERABILITY. The Option granted by this Option Agreement
shall be exercisable only during the term of the Option provided in paragraph 4
hereof and, except as provided in paragraph 8 above, only by the Optionee during
his lifetime and while an Optionee of the Company. Except as otherwise permitted
by the Committee, this Option shall not be transferable by the Optionee or any
other person claiming through the Optionee, either voluntarily or involuntarily,
except by will or the laws of descent and distribution.

          10. MARKET STAND-OFF AGREEMENT. The Optionee, if requested by the
Company and an underwriter of Stock (or other securities) of the Company, agrees
not to sell or otherwise transfer or dispose of any Stock (or other securities)
of the Company held by the Optionee during the period not to exceed 180 days as
requested by the managing underwriter following the effective date of a
registration statement of the Company filed under the Securities Act. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop transfer instructions with respect to
the Stock (or other securities) subject to the foregoing restriction until the
end of such project.

          11. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. 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 Option the number and
class of shares of stock into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate purchase price for the shares
then subject to the Option, all as set forth in Section 14 of the Plan.

          12. DELIVERY OF SHARES. No shares of Stock shall be delivered upon
exercise of the Option until (i) the purchase price shall have been paid in full
in the manner herein provided; (ii) applicable taxes required to be withheld
have been paid or withheld in full; (iii) approval of any governmental authority
required in connection with the Option, or the issuance of shares thereunder,
has been received by the Company; and (iv) if required by the Board, the
Optionee has delivered to the Board an Investment Letter in form and content
satisfactory to the Company as provided in paragraph 13 hereof.

          13. SECURITIES ACT. The Company shall not be required to deliver any
shares of Stock pursuant to the exercise of all or any part of the Option 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. The Board may require that the Optionee, prior to the issuance
of any such shares pursuant to exercise of the Option, sign and deliver to the
Company a written statement ("Investment Letter") stating (i) that the Optionee
is purchasing the

                                       3
   4
shares for investment and not with a view to the sale or distribution thereof;
(ii) that the Optionee will not sell any shares received upon exercise of the
Option or any other shares of the Company that the Optionee may then own or
thereafter acquire except either (a) through a broker on a national securities
exchange or (b) with the prior written approval of the Company; and (iii)
containing such other terms and conditions as counsel for the Company may
reasonably require to assure compliance with the Securities Act of 1933 or other
applicable federal or state securities laws and regulations. Such Investment
Letter shall be in form and content acceptable to the Board in its sole
discretion.

          14. DEFINITIONS; COPY OF PLAN. To the extent not specifically provided
herein, all capitalized terms used in this Option Agreement shall have the same
meanings ascribed to them in the Plan. By the execution of this Agreement, the
Optionee acknowledges receipt of a copy of the Plan.

          15. ADMINISTRATION. This Option 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 Board in accordance with the terms of and as
provided in the Plan. The Board 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 Board with respect thereto and to this Option Agreement shall be final
and binding upon the Optionee and the Company. In the event of any conflict
between the terms and conditions of this Option Agreement and the Plan, the
provisions of the Plan shall control.

          16. CONTINUATION OF EMPLOYMENT OR SERVICES. This Option Agreement
shall not be construed to confer upon the Optionee any right to continue in the
employ of, or providing services to, the Company and shall not limit the right
of the Company, in its sole discretion, to terminate the employment or services
of the Optionee at any time.

          17. OBLIGATION TO EXERCISE. The Optionee shall have no obligation to
exercise any option granted by this Agreement.

          18. GOVERNING LAW. This Option Agreement shall be interpreted and
administered under the laws of the State of Delaware.

          19. AMENDMENTS. This Option Agreement may be amended only by a written
agreement executed by the Company and the Optionee. The Company and the Optionee
acknowledge that changes in federal tax laws enacted subsequent to the Date of
Grant, and applicable to stock options, may provide for tax benefits to the
Company or the Optionee. In any such event, the Company and the Optionee agree
that this Option Agreement may be amended as necessary to secure for the Company
and the Optionee any benefits that may result from such legislation. Any such
amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.


                                       4
   5

         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its duly authorized representative and the Optionee has signed this
Option Agreement as of the date first written above.

                                  ON SEMICONDUCTOR CORPORATION


                                   By:   /s/ George H. Cave
                                         --------------------------------------
                                   Its:   Vice President & Secretary
                                         --------------------------------------



                                  MICHAEL ROHLEDER (OPTIONEE)


                                  By:   /s/ Michael Rohleder
                                        ----------------------------------------

                                       5

   1
                                                                   EXHIBIT 10.11

                          ON SEMICONDUCTOR CORPORATION
                            2000 STOCK INCENTIVE PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT


         This Option Agreement is made and entered into by and between ON
Semiconductor Corporation ("Company") and WILLIAM GEORGE ("Optionee"), as of the
21st day of February, 2001 ("Date of Grant").

                                    RECITALS


          A. The Board of Directors of the Company has adopted the ON
Semiconductor Corporation (formerly known as SCG Holding Corporation) 2000 Stock
Incentive Plan, as amended (the "Plan"), as an incentive to retain key
employees, officers, and consultants of the Company and to enhance the ability
of the Company to attract new 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. The Board has approved the granting of options to the Optionee
pursuant to the Plan to provide an incentive to the Optionee to focus on the
long-term growth of the Company.

         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 Optionee agree as follows:

             1. GRANT OF OPTION. The Company hereby grants to the Optionee the
right and option (hereinafter referred to as the "Option") to purchase an
aggregate of 100,000 shares (such number being subject to adjustment as provided
in paragraph 11 hereof and Section 14 of the Plan) of the Common Stock of the
Company (the "Stock") on the terms and conditions herein set forth. This Option
may be exercised in whole or in part and from time to time as hereinafter
provided. The Option granted under this Agreement is NOT intended to be an
"incentive stock option" as set forth in Section 422 of the Internal Revenue
Code of 1986, as amended.

             2. VESTING OF OPTION. The Option shall vest and become exercisable
in accordance with the schedule below:

         25% of the Option grant shall become exercisable on February 21, 2002;

         25% of the Option grant shall become exercisable on February 21, 2003;

         25% of the Option grant shall become exercisable on February 21, 2004;

         25% of the Option grant shall become exercisable on February 21, 2005.

             3. PURCHASE PRICE. The price at which the Optionee shall be
entitled to purchase the Stock covered by the Option shall be $6.125 per share
(i.e., the closing price of the Company's commonstock on February 21, 2001).

   2

             4. TERM OF OPTION. The Option granted under this Agreement shall
expire, unless otherwise exercised, ten years from the Date of Grant, through
and including the normal close of business of the Company on February 21, 2011
("Expiration Date"), subject to earlier termination as provided in paragraph 8
hereof.

             5. EXERCISE OF OPTION. The Option may be exercised by the Optionee
as to all or any part of the Stock then vested by delivery to the Company of
written notice of exercise and payment of the purchase price as provided in
paragraphs 6 and 7 hereof.

             6. METHOD OF EXERCISING OPTION. Subject to the terms and conditions
of this Option Agreement, the Option may be exercised by timely delivery to the
Company of written notice, which notice shall be effective on the date received
by the Company ("Effective Date"). The notice shall state the Optionee's
election to exercise the Option, the number of shares in respect of which an
election to exercise has been made, the method of payment elected (see paragraph
7 hereof), the exact name or names in which the shares will be registered and
the Social Security number of the Optionee. Such notice shall be signed by the
Optionee and shall be accompanied by payment of the purchase price of such
shares. In the event the Option shall be exercised by a person or persons other
than Optionee pursuant to paragraph 8 hereof, such notice shall be signed by
such other person or persons and shall be accompanied by proof acceptable to the
Company of the legal right of such person or persons to exercise the Option. All
shares delivered by the Company upon exercise of the Option shall be fully paid
and nonassessable upon delivery.

             7. METHOD OF PAYMENT FOR OPTIONS. Payment for shares purchased upon
the exercise of the Option shall be made by the Optionee in cash,
previously-acquired Stock held for more than six months (through actual tender
or by attestation), broker-assisted cashless exercise arrangement, or such other
method permitted by the Board and communicated to the Optionee in writing prior
to the date the Optionee exercises all or any portion of the Option.

             8. TERMINATION OF EMPLOYMENT OR SERVICES.

                8.1 GENERAL. If the Optionee terminates employment or otherwise
ceases to perform services for the Company for any reason other than death or
Disability, then the Optionee may at any time within 90 days after the effective
date of termination of employment or services exercise the Option to the extent
that the Optionee was entitled to exercise the Option at the date of
termination, provided that the Option shall lapse immediately upon a termination
for Cause. In no event shall the Option be exercisable after the Expiration
Date.

                8.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the death
or Disability (as that term is defined in the Plan) of the Optionee within a
period during which the Option, or any part thereof, could have been exercised
by the Optionee, including 90 days after termination of employment or services
(the "Option Period"), the Option shall lapse unless it is exercised within the
Option Period and in no event later than twelve (12) months after the date of
the Optionee's death or Disability by the Optionee or the Optionee's legal
representative or representatives in the case of a Disability or, in the case of
death, by the person or persons entitled to do so under the Optionee's last will
and testament or if the Optionee fails to make a
                                       2
   3
testamentary disposition of such Option or shall die intestate, by the person or
persons entitled to receive such Option under the applicable laws of descent and
distribution. An Option may be exercised following the death or Disability of
the Optionee only if the Option was exercisable by the Optionee immediately
prior to his death or Disability. In no event shall the Option be exercisable
after the Expiration Date. The Board shall have the right to require evidence
satisfactory to it of the rights of any person or persons seeking to exercise
the Option under this paragraph 8 to exercise the Option.

                9. NONTRANSFERABILITY. The Option granted by this Option
Agreement shall be exercisable only during the term of the Option provided in
paragraph 4 hereof and, except as provided in paragraph 8 above, only by the
Optionee during his lifetime and while an Optionee of the Company. Except as
otherwise permitted by the Committee, this Option shall not be transferable by
the Optionee or any other person claiming through the Optionee, either
voluntarily or involuntarily, except by will or the laws of descent and
distribution.

                10. MARKET STAND-OFF AGREEMENT. The Optionee, if requested by
the Company and an underwriter of Stock (or other securities) of the Company,
agrees not to sell or otherwise transfer or dispose of any Stock (or other
securities) of the Company held by the Optionee during the period not to exceed
180 days as requested by the managing underwriter following the effective date
of a registration statement of the Company filed under the Securities Act. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop transfer instructions with respect to
the Stock (or other securities) subject to the foregoing restriction until the
end of such project.

                11. ADJUSTMENTS IN NUMBER OF SHARES AND OPTION PRICE. 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 Option
the number and class of shares of stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to the Option, all as set forth in Section 14
of the Plan.

                12. DELIVERY OF SHARES. No shares of Stock shall be delivered
upon exercise of the Option until (i) the purchase price shall have been paid in
full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Option, or the issuance of shares
thereunder, has been received by the Company; and (iv) if required by the Board,
the Optionee has delivered to the Board an Investment Letter in form and content
satisfactory to the Company as provided in paragraph 13 hereof.

                13. SECURITIES ACT. The Company shall not be required to deliver
any shares of Stock pursuant to the exercise of all or any part of the Option
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. The Board may require that the Optionee, prior to the issuance
of any such shares pursuant to exercise of the Option, sign and deliver to the
Company a written statement ("Investment Letter") stating (i) that the Optionee
is purchasing the
                                       3

   4

shares for investment and not with a view to the sale or distribution thereof;
(ii) that the Optionee will not sell any shares received upon exercise of the
Option or any other shares of the Company that the Optionee may then own or
thereafter acquire except either (a) through a broker on a national securities
exchange or (b) with the prior written approval of the Company; and (iii)
containing such other terms and conditions as counsel for the Company may
reasonably require to assure compliance with the Securities Act of 1933 or other
applicable federal or state securities laws and regulations. Such Investment
Letter shall be in form and content acceptable to the Board in its sole
discretion.

                14. DEFINITIONS; COPY OF PLAN. To the extent not specifically
provided herein, all capitalized terms used in this Option Agreement shall have
the same meanings ascribed to them in the Plan. By the execution of this
Agreement, the Optionee acknowledges receipt of a copy of the Plan.

                15. ADMINISTRATION. This Option 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 Board in accordance with the terms of and as
provided in the Plan. The Board 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 Board with respect thereto and to this Option Agreement shall be final
and binding upon the Optionee and the Company. In the event of any conflict
between the terms and conditions of this Option Agreement and the Plan, the
provisions of the Plan shall control.

                16. CONTINUATION OF EMPLOYMENT OR SERVICES. This Option
Agreement shall not be construed to confer upon the Optionee any right to
continue in the employ of, or providing services to, the Company and shall not
limit the right of the Company, in its sole discretion, to terminate the
employment or services of the Optionee at any time.

                17. OBLIGATION TO EXERCISE. The Optionee shall have no
obligation to exercise any option granted by this Agreement.

                18. GOVERNING LAW. This Option Agreement shall be interpreted
and administered under the laws of the State of Delaware.

                19. AMENDMENTS. This Option Agreement may be amended only by a
written agreement executed by the Company and the Optionee. The Company and the
Optionee acknowledge that changes in federal tax laws enacted subsequent to the
Date of Grant, and applicable to stock options, may provide for tax benefits to
the Company or the Optionee. In any such event, the Company and the Optionee
agree that this Option Agreement may be amended as necessary to secure for the
Company and the Optionee any benefits that may result from such legislation. Any
such amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.

                                       4
   5


         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its duly authorized representative and the Optionee has signed this
Option Agreement as of the date first written above.

                                   ON SEMICONDUCTOR CORPORATION


                                   By:   /s/ George H. Cave
                                         --------------------------------------
                                   Its:   Vice President & Secretary
                                         --------------------------------------



                                   WILLIAM GEORGE (OPTIONEE)


                                   By:   /s/ William George
                                         --------------------------------------


                                       5

   1

                                                                      Exhibit 18




May 14, 2001


To the Board of Directors of
ON Semiconductor Corporation


We are providing this letter to you for inclusion as an exhibit to your Form
10-Q filing pursuant to Item 601 of Regulation S-K.

We have been provided a copy of ON Semiconductor Corporation's (the "Company")
Quarterly Report on Form 10-Q for the period ended March 30, 2001. Note 2
therein describes a change in the Company's revenue recognition method for sales
to distributors from the time product is sold to distributors to the time
product is sold by the distributors to the end customers. It should be
understood that the preferability of one acceptable method of accounting over
another for revenue recognition relating to distributor sales has not been
addressed in any authoritative accounting literature, and in expressing our
concurrence below we have relied on management's determination that this change
in accounting principle is preferable. Based on our reading of management's
stated reasons and justification for this change in accounting principle in the
Form 10-Q, and our discussions with management as to their judgment about the
relevant business planning factors relating to the change, we concur with
management that such change represents, in the Company's circumstances, the
adoption of a preferable accounting principle in conformity with Accounting
Principles Board Opinion No. 20.

We have not audited any financial statements of the Company as of any date or
for any period subsequent to December 31, 2000. Accordingly, our comments are
subject to change upon completion of an audit of the financial statements
covering the period of the accounting change.

Very truly yours,



/s/PricewaterhouseCoopers LLP

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