[FORM OF ROLLOVER OPTION] FREESCALE HOLDINGS NONQUALIFIED STOCK OPTION AGREEMENT

Exhibit 10.3

[FORM OF ROLLOVER OPTION]

FREESCALE HOLDINGS

NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT (the “Agreement”), is made effective as of December 1, 2006 (the “Date of Grant”), between Freescale Holdings (Bermuda) I, Ltd., a Bermuda limited company (the “Company”), and              (hereinafter called the “Participant”):

R E C I T A L S:

WHEREAS, the Company has adopted the Freescale Holdings 2006 Management Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; and

WHEREAS, the Committee has determined that it would be in the best interests of the Company and its shareholders to grant the Stock Option provided for herein to the Participant pursuant to the Plan and the terms set forth herein.

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

1. Grant of the Option. The Company hereby grants (subject to the Participant’s execution of the Investors Agreement) to the Participant the right and option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of              shares of Common Stock (each, a “Share” and collectively, the “Shares”). The purchase price of the Shares subject to the Option shall be $             per Share (the “Option Price”). The Option is intended to be a non-qualified stock option, and is not intended to be treated as an option that complies with Section 422 of the Code and is granted to the Participant in substitution for an option (which option is hereby cancelled) held by the Participant to acquire shares of Freescale Semiconductor, Inc., a Delaware corporation (the “Old Option”), such substitution being made in accordance with Treasury Regulation Section 1.424-1 and Proposed Treasury Regulation 1.409A-1(5)(v). The material terms of the Old Option (which is attached hereto as Exhibit A) are deemed incorporated into this Option except with respect to the exercise price and the number and kind of shares which have been adjusted, or as otherwise expressly provided herein or in the Investors Agreement.

2. Vesting. The Option shall be fully vested and exercisable.

3. Exercise of Option.

(i) Each election to exercise this Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Participant or by his or her

executor, administrator, or permitted transferee (subject to any restrictions provided under the Plan and the Investors Agreement), made pursuant to and in accordance with the terms and conditions set forth in the Plan and received by the Company at its principal offices, accompanied by payment in full as provided in the Plan.

(ii) The Option Price may be paid by delivery of cash or check acceptable to the Committee or by means of withholding of Shares subject to the Option with an aggregate Fair Market Value equal to (i) the aggregate exercise price and (ii) unless the Company is precluded or restricted from doing so under debt covenants, minimum statutory withholding taxes with respect to such exercise, or by such other method provided under the Plan and explicitly approved by the Committee. In the event that this Option is exercised by a person other than the Participant, the Company shall ascertain the authority of the Option holder to exercise this Option and shall deliver the Shares hereunder to the Option holder after it is satisfied as to such authority.

(iii) Notwithstanding any other provision of the Plan or this Agreement to the contrary, the Option may not be exercised prior to the completion of any registration or qualification of the Option or the Shares under applicable state and federal securities or other laws, or under any ruling or regulation of any governmental body or national securities exchange that the Committee shall in its sole discretion determine to be necessary or advisable. The Committee shall use best efforts to cause any registration or qualification of the Option or the Shares to be completed.

(iv) Upon the Company’s determination that the Option has been validly exercised as to any of the Shares, the Company shall issue certificates in the Participant’s name for such Shares. However, the Company shall not be liable to the Participant for damages relating to any reasonable delays in issuing the certificates to such Participant, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates themselves which it promptly undertakes to correct.

(v) In the event of the Participant’s death, the Option shall remain exercisable by the Participant’s executor or administrator, or the person or persons to whom the Participant’s rights under this Agreement shall pass by will or by the laws of descent and distribution as the case may be, to the extent set forth in Section 3(a). Any heir or legatee of the Participant shall take rights herein granted subject to the terms and conditions hereof.

(vi) In no event may a Participant or any other holder of an Option who has not executed the Investors Agreement exercise an Option or any portion thereof.

4. Forfeiture. Notwithstanding anything herein to the contrary, if the Participant’s Employment is terminated for Cause or if the Participant breaches any Restrictive Covenants applicable to the Participant (including, without limitation, the Restrictive Covenants set forth in Exhibit B hereto) (i) following termination of Participant’s Employment by the Participant other than due to Disability or Good Reason, in each case prior to the first anniversary of the Date of Grant or (ii) during the Severance Period (as defined below), then any Options then held by the Participant shall be subject to the call option set forth in Section 6 of the

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Investors Agreement as though such Options were Purchased Securities (as defined in the Investors Agreement) and the conditions for triggering the call option set forth in Section 6.1 were met. Notwithstanding anything contained in this Agreement or the Investors Agreement to the contrary, the purchase price per Option shall equal $14 per share less the applicable per share Option exercise price. For purposes of this Agreement “Severance Period” shall mean, in the event of termination of the Participant’s Employment in circumstances entitling the Participant to severance and under which plan, policy or individual agreement the Participant elects to and actually receives severance, under an applicable plan or policy or an individual agreement, the two-year period following the date of such termination.

5. Certain Covenants. The Participant hereby agrees and covenants to perform all of his obligations set forth in Exhibit B hereto (which is incorporated by reference hereby) and acknowledges that the Participant’s obligations set forth in Exhibit B constitute a material inducement for the Company’s grant of Options to the Participant, but, as to the Company’s remedy, subject only to the provisions set forth in subsection (f) of Exhibit B.

6. Share Restrictions, etc. Except as expressly provided herein, the Participant’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Investors Agreement.

7. Distributions, Redemptions, etc. Upon the occurrence of an Adjustment Event, the Option Price shall be reduced by an amount equal to the per-Share amount paid in connection with the Adjustment Event; provided, however, that any such reduction shall be limited to that portion of such amount which would not cause the Option Price to be reduced below 25% of the per-Share Fair Market Value, as of the date of such reduction. In the case of a redemption or repurchase, the number of Shares of the class of stock redeemed or repurchased that are subject to the Option will be automatically reduced by an amount proportionate to the percentage reduction in outstanding shares of the affected class resulting from the redemption or repurchase.

8. No Right to Continued Employment. The granting of the Option evidenced hereby and this Agreement shall impose no obligation on the Company or any Affiliate to continue the Employment of the Participant and shall not lessen or affect the Company’s or its Affiliate’s right to terminate the Employment of such Participant.

9. Legend on Certificates. The certificates representing the Shares purchased by exercise of the Option shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares are listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

10. Transferability. Except as provided in the Investors Agreement, the Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that the

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designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof. During the Participant’s lifetime, the Option is exercisable only by the Participant or a permitted transferee (pursuant to the Investors Agreement).

11. Withholding. Subject to Section 3(b), the Participant may be required to pay to the Company or any Affiliate and the Company shall have the right and is hereby authorized to withhold from any payment due or transfer made under the Option or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities or other property) of any applicable withholding taxes in respect of the Option, its exercise or any payment or transfer under or with respect to the Option or the Plan and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.

12. Securities Laws. The issuance of any Shares hereunder shall be subject to pursuant to, the Participant making or entering into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws.

13. Notices. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address appearing in the personnel records of the Company for the Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

14. Governing Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

15. Consent to Jurisdiction. All actions arising out of or relating to this Agreement shall be heard and determined exclusively in any New York state or federal court sitting in the Borough of Manhattan in The City of New York. The parties hereto hereby (a) submit to the exclusive jurisdiction of any state or federal court sitting in the Borough of Manhattan of The City of New York for the purpose of any action arising out of or relating to this Agreement brought by any party hereto, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune of from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the above-named courts.

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16. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 16 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 16 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

17. Option Subject to Plan and Investors Agreement. By entering into this Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan and the Investors Agreement and the Offering Memorandum for the Plan. The Option is subject to the Plan and the Investors Agreement, each as may be amended from time to time, and the terms and provisions of the Plan and the Investors Agreement are hereby incorporated herein by reference. By entering into this Agreement, the Participant hereby authorizes John Torres as the Participant’s attorney-in-fact and delegates full power and authority to Mr. Torres to enter into the Investors Agreement on the Participant’s behalf.

18. Change in Control Severance Plan. In consideration of the grant of the Option and acknowledging that such agreement constitutes a material inducement for the grant of such Option, the Participant hereby agrees that as of the date hereof, with respect to the Freescale Semiconductor, Inc. Officer Change in Control Severance Plan (the “CIC Plan”), in no event will there be deemed to be a Good Reason with respect to the Participant under the CIC Plan solely by reason of (a) Freescale Semiconductor, Inc. becoming privately held in connection with the consummation of the transactions contemplated by the Merger Agreement (as defined in the Investors Agreement), (b) on account of a lateral change to the Participant’s duties that does not affect the Participant’s reporting relationships or (c) the Participant ceasing to serve as an executive of a publicly held corporation. The Participant further agrees that the last sentence of Section 7.4 of the CIC Plan shall be of no force and effect.

19. Section 409A. It is intended that the terms of this Agreement comply with Section 409A of the Code. If it is determined that the terms of this Agreement have been structured in a manner that would result in adverse tax treatment under Section 409A of the Code, the parties agree to cooperate in taking all reasonable measures to restructure the arrangement to minimize or avoid such adverse tax treatment without materially impairing Participant’s economic rights.

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20. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

Agreed and acknowledged as of the date first above written:

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EXHIBIT A

[Terms of Old Option]

EXHIBIT B

Restrictive Covenants