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Exhibit 10.2

STANDARD MICROSYSTEMS CORPORATION

SELECTED OFFICER MANAGEMENT INCENTIVE PLAN
(AMENDED AND RESTATED EFFECTIVE SEPTEMBER 29, 2010)

Section 1. Purpose.

The purpose of the Standard Microsystems Corporation Selected Officer Management
Incentive Plan is to promote the interests of Standard Microsystems Corporation
and its subsidiaries by providing eligible key employees of the Company with
incentive to assist the Company in meeting and exceeding its business goals.

Section 2. Definitions.

(a) “Awards” shall mean the performance based awards earned pursuant to the
Plan.

(b) “Board” means SMSC’s Board of Directors.

(c) “Code” means the Internal Revenue Code of 1986, as amended, or the
corresponding provisions of any subsequent federal internal revenue law.

(d) “Committee” means the Compensation Committee of SMSC’s Board of Directors
(and any committee to which the Compensation Committee has delegated its
authority as set forth in Section 3(d) hereof); in any event the Committee shall
be comprised of not less than two directors of the Company, each of whom shall
qualify in all respects as an “outside director” for purposes of Section 162(m)
of the Code.

(e) “Company” or “SMSC” means SMSC or any corporation or business entity of
which SMSC (i) directly or indirectly has an ownership interest of 50% or more,
or (ii) has a right to elect or appoint 50% or more of the board of directors or
other governing body.

(f) “Participant” shall mean a qualifying employee selected by the Committee to
participate in the Plan in accordance with Section 5 hereof.

(g) “Performance Percentage” shall mean with respect to a Participant, the
percentage to be applied to such Participant’s Target Award (if any) to be used
in calculating the actual Award payable to such Participant (if any). The
Performance Percentage shall be calculated on a schedule, matrix or other
objective method based on the Company’s achievement of the Performance Targets.

(h) “Performance Period” means the period in which performance is measured for
which Awards are paid, as determined by the Committee. Performance Periods shall
be at least equal to one fiscal quarter and may be overlapping.

(i) “Performance Schedule” shall mean the schedule, matrix or other objective
method for determining the Plan Funds based on the Company’s achievement of the
Performance Targets.

(j) “Performance Targets” shall mean the performance goals and objectives
established by the Committee to determine funding under the Plan.

(k) “Plan” means this plan, which shall be known as the SMSC Selected Officer
Management Incentive Plan or Officer MIP.

(l) “Plan Funds” shall mean, with respect to a Performance Period, the total
amount of funds available to be paid on a Company wide basis based on the
Performance Schedule.

(m) “Target Award” shall mean the base award expressed as a percentage of base
salary, which will convert into a dollar figure, established for each
Participant for each Performance Period.

 
 

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Section 3. Administration.

(a) The Plan shall be administered by the Committee.

(b) The Committee may, subject to the provisions of the Plan, establish, adopt
or revise rules and regulations relating to the Plan or take such actions as it
deems necessary or advisable for the proper administration of the Plan. The
Committee shall have the authority to interpret the Plan in its absolute
discretion. Each interpretation made or action taken by the Committee pursuant
to the Plan shall be final and conclusive for all purposes and binding upon all
Participants (as defined in Section 2) or former Participants and their
successors in interest.

(c) Neither the Committee nor any member of the Committee shall be liable for
any act, omission, interpretation, construction or determination made in good
faith in connection with the Plan, and the members of the Committee shall be
entitled to indemnification and reimbursement by Company in respect of any
claim, loss, damage or expense (including, without limitation, reasonable
attorneys’ fees) arising or resulting therefrom to the fullest extent permitted
by law.

Section 4. Performance Measures, Funding and Establishment of Target Awards

(a) The Committee may grant Awards to Participants with respect to any
Performance Period subject to the terms and conditions of the Plan. All Awards
shall be settled in cash. Within 90 days after the beginning of a Performance
Period, and in any case before 25% of the Performance Period has elapsed, the
Committee shall establish, with respect to such Performance Period, (a) the
Performance Targets for the Company, (b) Target Awards for each Participant, (c)
the Performance Percentage and Performance Schedules and (d) the potential Plan
Funds. The Performance Targets shall be based on one or more of the following
business criteria: revenue, revenue growth, operating income, operating cash
flow, operating margin, net income, net margin, earnings per share, EBITDA,
return on sales, return on assets (net or gross), return on equity, return on
invested capital and total shareholder return.

(b) The measurement of any Performance Targets may be based on non-GAAP or pro
forma financial measures. Such measures may exclude the impact of charges for
extraordinary, unusual, non-recurring or other items that the Committee
determines should not be included in the Performance Targets (including without
limitation charges for equity based compensation, acquisitions or dispositions,
restructurings and discontinued operations), and the cumulative effects of
accounting changes, each as defined by generally accepted accounting principles
and as identified in the Company’s audited financial statements, including the
notes thereto. Any Performance Targets may be used to measure the performance of
an individual, the Company or a subsidiary of the Company as a whole or any
business unit of the Company or any subsidiary or any combination thereof, as
the Committee may deem appropriate, or any of the above Performance Targets as
compared to the performance of a group of comparator companies, or a published
or special index that the Committee, in its sole discretion, deems appropriate.

Section 5. Eligibility.

Awards may be granted to the Chief Executive Officer and such other key
employees of the Company who are selected for participation in the Plan by the
Committee.

Section 6. Individual Performance and Determination of Awards.

(a) Calculation. In the manner required by Section 162(m) of the Code, the
Committee shall, promptly after the date on which the necessary financial and
other information for a particular Performance Period becomes available, certify
in writing the extent to which Performance Targets have been achieved. Using the
Performance Schedule, the Committee shall determine the actual Plan Funds
available and the Performance Percentage. Awards shall be calculated for each
Participant by multiplying the Target Award by the Performance Percentage. The
total of all Participants Awards may not exceed the actual Plan Funds for any
Performance Period.

(b) Discretionary Reduction. The Committee may, in its discretion, reduce or
eliminate the amount of any Award payable to any Participant, based on such
factors as the Committee may deem relevant, but the Committee may not increase
the amount of any Award payable to any Participant above the amount established
in accordance with Section 6 (a) of the Plan. For purposes of clarity, the
Committee may exercise the discretion provided for by the foregoing sentence in
a non-uniform manner among Participants.

(c) Limitation. The amount paid under the Plan to any Participant with respect
to any Award for a Performance Period of one year or less shall not exceed one
million five hundred thousand dollars ($1,500,000). The amount paid under the
Plan to any Participant with respect to any Award for a Performance Period of
more than one year shall not exceed three million dollars ($3 million). No
Participant shall be eligible to earn Awards for more than four Performance
Periods that end within any single fiscal year of the Company.

 
 

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(d) Payment. The Company shall pay Awards as soon as administratively practical
following certification by the Committee of the extent to which the applicable
Performance Targets have been achieved and the determination of the actual
Awards in accordance with Section 4 and this Section 6; provided that in no
event shall any Award (or any other amount payable pursuant to this Plan) be
paid later than the fifteenth (15) day of the third month following the end of
the fiscal year with respect to which Award (or such other amount) was earned,
if at all.  A Participant must be employed by the Company on the last date of
the Performance Period to receive an Award.  Notwithstanding the foregoing,
payment of Awards shall be subject to any election duly and validly made in
accordance with Section 409A of the Code by a Participant with respect to the
deferral of all or a portion of his or her Award under a deferred compensation
plan of the Company.

Section 7. General Provisions.

(a) No Rights to Awards or Continued Employment. No employee of the Company
shall have any claim or right to receive Awards under the Plan. Neither the Plan
nor any action taken under the Plan shall be construed as giving any employee
any right to be retained by the Company.

(b) No Limits on Other Awards and Plans. Nothing contained in this Plan shall
prohibit the Company from establishing other special awards or incentive
compensation plans providing for the payment of incentive compensation to
employees of the Company, including any Participants.

(c) Withholding Taxes. The Company shall deduct from all payments and
distributions under the Plan any required federal, state or local governments
tax withholdings.

(d) Unfunded Status of Plan. The Company shall not have any obligation to
establish any separate fund or trust or other segregation of assets to provide
for payments under the Plan. To the extent any person acquires any rights to
receive payments hereunder from the Company, such rights shall be no greater
than those of an unsecured creditor.

(e) Effective Date; Amendment. The Plan is effective as of September 1, 2009.
The Committee may at any time and from time to time alter, amend, suspend or
terminate the Plan in whole or in part.

(f) Governing Law. The Plan and the rights of all persons under the Plan shall
be construed and administered in accordance with the laws of the State of New
York without regard to its conflict of law principles.

(g) Section 409A. The intent of the Company is that payments and benefits under
this Plan comply with Section 409A of the Code. All Awards granted pursuant to
this Plan are intended to be excluded from coverage under Section 409A of the
Code pursuant to Section 1.409A-1(b)(4) “Short-term deferrals”. If any provision
of the Plan would otherwise frustrate or conflict with this intent, the
Committee may amend the Plan to the extent necessary to comply with Section 409A
of the Code, provided that such amendment will not result in additional cost to
the Company. Neither the Company nor any Participant shall have the right to
accelerate or defer the delivery of any Award except to the extent specifically
permitted or required by Section 409A of the Code.
 
 

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