Exhibit 10.3

November 5, 2008

Mr. Walter Siegel
19 Hickory Drive
Great Neck, NY 11023

Re: Letter Agreement

Dear Walter:

On September 30, 2005, you received an Offer Letter from Standard Microsystems
Corporation (the “Company” or “SMSC”). As a result of Section 409A (“409A” or
“Section 409A”) of the Internal Revenue Code (the “Code”), SMSC wishes to once
again reconfirm the terms of your continued employment as Vice President and
General Counsel as follows:

  •   Annual Base Salary: $294,000

  •   Annual Incentive Bonus Target: $104,958 (or approximately 36% of base
salary). Generally, one-half of any bonus is paid in cash and one half is paid
as a restricted stock award vesting 25% after each of the first two years after
the date of the grant and the remaining 50% after the third year from the date
of the grant. For the Company’s fiscal year 2007, your incentive bonus plan will
be modified to provide for an additional over-plan bonus amount consistent with
what is approved by the Compensation Committee, which is currently approximately
13% of base salary. Notwithstanding anything herein to the contrary, any annual
bonus for a particular fiscal year shall be paid to you as soon as reasonably
practicable following the end of such fiscal year and in any event no later than
2 1/2 months following the end of such fiscal year; provided that in the event
payment of such bonus to you within such 2 1/2 month period is impracticable,
either administratively or economically, as determined by the Company, payment
of such bonus will be made as soon as practicable thereafter.

  •   Monthly Car Allowance: $700

  •   Your annual salary, annual incentive bonus target, and monthly car
allowance may be reviewed and increased from time to time.

  •   Eligibility for Individual Executive Life Insurance ($250,000 death
benefit), subject to obtaining underwriting.

  •   Eligibility Individual Executive Disability Income Insurance (up to 1/3rd
of salary), subject to obtaining underwriting.

  •   Eligibility to participate in the Company’s Supplemental Executive
Retirement Plan, which, if fully vested, provides for a retirement benefit of
35% of base salary for 10 years.

  •   Eligibility for severance benefits as set forth below: If your employment
is terminated for any reason other than “Cause”, of if your compensation or
duties are reduced following a “Change in Control”, including without limitation
no longer being the general counsel of any successor to the Company, or upon a
“Required Relocation” (hereinafter referred to as “Good Reason Terminations”),
then you shall receive severance in a single lump sum cash payment equal to
12 months base salary (each a “Severance Eligible Event”). In addition, the
Company shall pay you in a lump sum cash payment an amount equal to the value,
as if fully vested, of any granted stock option, RSA or stock appreciation
rights upon any Change in Control or “Severance Eligible Event.” For purposes of
this paragraph:

a) “Cause” shall mean only any material violation of the terms of any of SMSC’s
personnel policies or procedures, provided you have been given notice of the
violation and a reasonable opportunity to cure such violation; any material
misstatement contained in your employment application; commission by you of any
crime or fraud against SMSC or its property or any crime involving moral
turpitude or reasonably likely to bring discredit upon SMSC; or gross negligence
or willful misconduct in the performance of your duties;

b) A “Change in Control” of SMSC shall be deemed to have occurred upon the
occurrence of one of the following events:

  i.   The merger or consolidation of SMSC with or into any other corporation or
entities whereby the shareholders of SMSC immediately before the transaction do
not own at least 50% of the new entity;

  ii.   SMSC is merged or consolidated with or into any other corporation or
other entity, and at any time after such merger or consolidation is effected,
the Continuing Directors are not or cease for any reason to constitute a
majority of the board of directors either of the surviving entity, or of any
entity in control of the surviving entity; or

  iii.   All or substantially all of the assets of SMSC are sold or otherwise
transferred to any other corporation or other entity, or more than 50% of the
stock of SMSC is purchased by one entity, and at any time after such sale or
other transfer is effected, the Continuing Directors are not or cease for any
reason to constitute, a majority of the board of directors either of the entity
which has acquired and owns such assets, or of any entity in control of the
entity which has acquired and owns such assets.

In determining if a Change in Control occurs, the term “Continuing Directors”
means any person who either: (i) was elected a member of the Board at any Annual
Meeting of Stockholders of SMSC prior to the occurrence of a corporate event
that is alleged to be a Change in Control; or (ii) whose election to the Board
or nomination for election to the Board by SMSC’s stockholders was approved in
advance by at least two-thirds of the Continuing Directors then in office; and

c) A “Required Relocation” shall mean if you are required to relocate to a new
position that is more than 75 miles from the location of your employment prior
to such written required relocation.

d) You may terminate your employment hereunder for “Good Reason”, which shall be
“treated” as an involuntary termination if the following “safe harbor” rules are
satisfied:

  (i)   You must Separate from Service within a limited period of time, not to
exceed 60 days following the reason for the Good Reason termination;

  (ii)   You must provide notice of the existence of the Good Reason condition
within a period not to exceed 30 days of its initial existence.

  (iii)   The Company shall be provided a period of 30 days during which it may
remedy the condition entitling you to terminate your employment for Good Reason.

e) For purposes of this Letter Agreement the value of any stock option or SAR
shall be the spread between the grant price and the closing price of the common
stock of the Company measured on the exchange on which the Company’s stock is
traded on the date of the relevant event, or the next day on which the exchange
is open if the exchange is closed on the date of the relevant event; the value
of any common stock shall be the closing price of the common stock of the
Company measured on the exchange on which it is traded on the date of the
relevant event, or the next day on which the exchange is open if the exchange is
closed on the date of the relevant event. Once the Company makes such payment
all such SARS, stock options and stock grants shall be automatically deemed
cancelled.

The foregoing severance benefits may not be reduced without your written
consent, notwithstanding the terms and conditions of any Severance Plan, or the
cancellation of modification of any Severance Plan. The payment of 12 months
base salary as severance is in lieu of any base salary you would receive as part
of any Severance Plan; however you shall receive any additional benefits not set
forth herein, to which you are entitled as an Executive as part of any Severance
Plan sponsored by the Company.

The parties acknowledge that the payment of some or all of the above benefits
payable under the SMSC Severance Plan or this Letter Agreement may be considered
to be a form of nonqualified deferred compensation benefits subject to 409A of
the Code. In recognition of this fact, the parties hereby agree and confirm as
follows:

  i.   Notwithstanding anything to the contrary in this Agreement, in no event
shall any benefits be paid to you prior to the 6th month anniversary of the your
Separation from Service as defined in 409A, unless otherwise permissible under
409A. Any and all payments that may not be paid prior to such 6th month
anniversary shall be delayed until the first day of the month after such 6th
anniversary occurs and shall retroactively apply to make you whole for any lost
benefits, with interest at the rate of prime plus 2%, determined as of the first
day of the month in which the Separation from Service occurred. To the extent
that you are required to pay for the cost of any benefits to keep them in full
force and effect during the 6 month delay period, you shall also be reimbursed
for such out-of-pocket expenses as of the same date provided above with the same
rate of interest.

  ii.   Notwithstanding any provision to the contrary, in accordance with the
Final Regulations issued under Section 409A of the Code, to the extent that any
benefits to a Specified Employee do not exceed the lesser of the Specified
Employee salary for the past 2 years or the Section 401(a)(17) limitations, such
amount may be paid within the 6 month period of time during which benefits may
generally not be paid to Specified Employees. To the extent benefits exceed such
limitations (which is a maximum of $460,000 in 2008 and $490,000 in 2009), the
balance of any payments not otherwise payable during such period shall be made
following the expiration of the 6 month period following a Separation of Service
in a single lump sum payment on the first day of the month after the 6 month
separation period with interest equal to prime rate as of the first day of the
month in which a Separation from Service occurs, plus 2%.

  iii.   In the event that any payment or benefit required to be paid to you
pursuant to this Agreement would violate 409A, the parties agree notwithstanding
any provisions of this Agreement to the contrary, to amend this Agreement, to
the extent necessary and reasonable to maintain the spirit of this Agreement
without resulting in a violation under 409A.

  iv.   In the event of a violation of 409A, it is not the intent of the Company
for you to incur the excise tax and other penalties under 409A. Accordingly, to
the extent any excise taxes or underpayment of interest or penalties under 409A
apply, the Company shall make a “gross up” payment to you, to offset the effect
of any excise tax, interest or penalties incurred in accordance with 409A, and
any tax on such gross up payments, to the extent such action is legally
permitted.

In the case of a Change in Control of Company, you are entitled to a “gross-up”
payment in an amount sufficient to offset the effect of any excise tax incurred
in accordance with Section 280G of the Code, and any tax on the gross-up
payment; provided, that in the event the aggregate amount of the payments and
benefits, that are otherwise subject to the excise tax of Section 4999 of the
Code, you are entitled to receive in connection with a Change in Control (the
“Aggregate Payment”) is equal to less than Twenty Thousand Dollars ($20,000.00)
more than the product of (i) three and (ii) your Base Amount (as such term is
defined in Section 280G(b)(3) of the Code and the regulations issued under
Section 280G of the Code), the Aggregate Payment will be reduced to the minimum
amount as will result in no portion of the Aggregate Payment being subject to
such excise tax; provided that the payments and/or benefits to be eliminated in
effecting such reduction shall be agreed upon between the Company and you.

All gross up payments set forth in the Letter Agreement shall be made as soon as
legally permitted under 409A, but in no event later than 2 1/2 months following
the end of the fiscal year in which the event giving rise to such gross up
payment occurs and, if permissible, before the excise tax becomes due.

In order to receive the foregoing severance benefits, you shall be required to
execute a general release within 30 days of the date of your separation from
service (the “Release Period”) in substantially the form currently set forth in
Section 15 of the Severance Plan, however in addition to the exclusions from the
release set forth in the Severance Plan, the Company will also exclude from the
release any obligation of the Company to you under any indemnity agreement, and
any obligation of the Company to indemnify you pursuant to contract, law,
charter, by-law or otherwise.

  •   Vacation time to be accrued at the rate of 20 days per year.

  •   Paid holidays will be according to the Company’s holiday schedule for U.S.
employees.

  •   You will be eligible to participate in all other benefits programs offered
to similarly situated employees in New York.

Any payment that otherwise would be made to you prior to your delivery of such
executed release shall be paid to you on the first business day following the
conclusion of the Release Period.

Your eligibility to participate in the various compensation and benefits plans
offered by the Company is subject to your compliance with the terms of each
plan, which may be changed by the Company from time to time except as set forth
above.

A basic philosophy of SMSC is that we depend upon our employees to succeed. We
therefore want our relationship to be one of long-standing, which offers you the
opportunity to effectively use your skills and successfully service our
customers’ needs. We are confident that you will perform satisfactorily and
follow our policies and procedures. Our objective has always been to provide
employees with career opportunities; however, this will be influenced by your
performance and SMSC’s success in the marketplace. Changes in the economy, our
markets and technology will continue to occur; therefore, notwithstanding the
fact that we are a career employee oriented Company, this offer of employment
should not be construed as a contract or a commitment that your employment will
continue for a specific period of time.

We look forward to having you remain with SMSC for what I am confident will be a
mutually beneficial association. In the meantime, if you have any questions,
please do not hesitate to contact me. This Letter Agreement may be executed by
each party by facsimile counterpart.

This Letter Agreement supersedes and replaces your Offer Letter and is only
supplemented by your Employee Agreement dated October 24, 2005. This Letter
Agreement does not cancel any stock options, stock appreciation rights or
restricted stock awards previously granted to you; nor does it cancel your
Indemnity Agreement, which shall remain in full force and effect.

Sincerely,

/s/ Christine King
President and Chief Executive Officer

Encl.

Agreed and accepted.

     
SIGNATURE:
  /s/ Walter Siegel
 
   
DATE:
  November 6, 2008