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EXHIBIT 10.1

                        STANDARD MICROSYSTEMS CORPORATION
                  2006 DIRECTORS STOCK APPRECIATION RIGHTS PLAN

1.   Purpose.  The purpose of this 2006 Directors Stock Appreciation Rights Plan
     (the "Plan" or the "SAR Plan") of Standard  Microsystems  Corporation  (the
     "Company" or "SMSC"),  is to link the compensation of outside  directors of
     the Company,  whose  services  are  considered  essential to the  Company's
     continued  progress,  to the performance of SMSC stock, and to also provide
     them with a further  incentive  to  continue to serve as  directors  of the
     Company.   The  Plan  is  also  intended  to  assist  the  Company  through
     utilization  of the  incentives  provided by the Plan to attract and retain
     experienced  and qualified  candidates to fill  vacancies in the Board that
     may occur in the future.

2.   Administration

     a.   The Plan will be  administered by the Board of Directors (the "Board")
          of the  Company.  The  Board  may  delegate  all or a  portion  of the
          administrative  responsibilities  for the SAR Plan to the Compensation
          Committee of the Board. Subject to the express provisions of the Plan,
          the Board will have  complete  authority  to  interpret  the Plan;  to
          prescribe, amend, and rescind rules and regulations relating to it; to
          determine   the  terms  and   provisions  of  the   respective   Stock
          Appreciation  Rights ("SAR") Agreements (which need not be identical);
          and to make all other  determinations  necessary or advisable  for the
          administration of the Plan. The Board's  determinations on the matters
          referred to in this  Section 2 will be  conclusive  and binding on all
          parties.

     b.   No member of the Board,  or any employee of the Company  authorized to
          administer the Plan,  shall be liable for any action or  determination
          made in good faith with respect to this Plan or any SAR Grant.  To the
          full extent  permitted by law, the Company  shall  indemnify  and hold
          harmless  each  person  made or  threatened  to be made a party to any
          civil or criminal action or proceeding by reason of the fact that such
          person, or such person's testator or intestate,  is or was a member of
          the Board, or an authorized employee.

3.   Participation  in the  Plan.  Each  person  who is now or  shall  become  a
     director of the  Company  and who is not,  while  serving as  director,  an
     employee of the Company or any Subsidiary of the Company, shall be eligible
     to  participate  in the  Plan (an  "Eligible  Director",  hereinafter  also
     referred to as a "Grantee").  A director of the Company shall not be deemed
     to be an  employee of the Company  solely by reason of the  existence  of a
     consulting contract between such director and the Company or any Subsidiary
     thereof  pursuant  to which  the  director  agrees  to  provide  consulting
     services as an independent consultant to the Company or its Subsidiaries on
     a regular or occasional basis for a stated consideration.

4.   SAR Shares  Subject to the Plan.  Subject to the  provisions  of Section 10
     hereof, this Plan has 200,000  "hypothetical" shares (the "Shares") of $.10
     par value  common  stock of SMSC (the  "Common  Stock")  available  for the
     granting of SARs under the Plan.  The Plan does not permit any payments for
     a SAR Grant to be made in the Common Stock of SMSC.

     If any SARs are not granted under the Plan in whole or in part,  such as if
     an  Eligible  Director  should  cease to be a Board  member  before any SAR
     becomes  vested,  "hypothetical"  Shares that could have been granted or do
     not vest shall  remain  available  for the  granting  of new SARs under the
     Plan.

5.   General Terms and Conditions of SAR Grants

     a.   Form of SARs. Each SAR granted under this Plan shall be evidenced by a
          written  SAR  Agreement  in such form as the Board  shall from time to
          time approve,  which SAR Agreement shall set forth the applicable date
          of grant (the  "Grant  Date") and shall  comply with and be subject to
          the terms and conditions set forth in the Plan.

     b.   Initial SARs.  Any Eligible  Director first elected after the adoption
          of this  Plan,  upon such  election,  shall  automatically  be granted
          42,000  Initial SARs. All Initial SARs shall be subject to the Vesting
          Schedule contained in Section 5(f) below.

     c.   Current  Service  SARs.  In addition to Initial  SARs,  each  Eligible
          Director incumbent for at least three (3) years shall automatically be
          granted  SARs equal to 3,500 shares (the  "Current SAR Grant"),  which
          shall be fully vested upon the first  anniversary  of each Grant Date.
          Current  Service  SARs shall be granted on each  January 15, April 15,
          July 15, and  October 15 (or,  if any such day shall not be a business
          day, then on the next succeeding business day).

     d.   SAR Grant Value. All SARs granted hereunder shall have a "Grant Value"
          equal to the "Fair  Market  Value"  of a share of Common  Stock on the
          Grant Date, as defined in Section 13(f).

     e.   SARs  Nontransferable.  Each SAR  granted  under the Plan by its terms
          shall not be transferable by the Grantee otherwise than by will, or by
          the laws of descent and  distribution.  No SAR or interest therein may
          be  transferred,  assigned,  pledged,  or  hypothecated by the Grantee
          during his or her lifetime,  whether by operation of law or otherwise,
          or be made subject to execution, attachment, or similar process.

     f.   Vesting of SARs.  Each Initial SAR granted  pursuant to this  Sections
          5(b) shall  become  vested,  to the extent of  one-third  (1/3) of the
          number of SARs granted on the first  anniversary of the date of grant,
          and  cumulatively  to the extent of an additional  one-third  (1/3) on
          each of the  next  two (2)  succeeding  anniversaries,  so that on the
          third  anniversary  of the Grant Date, all Initial SARs shall be fully
          vested.

          In the event of death,  Disability or any termination  from the Board,
          the Board shall have the  discretion to accelerate  the vesting of any
          Initial or Current Service SARs.

     g.   Exercise of SARs.  Any SAR, once vested,  can be exercised  within the
          complete  discretion  of the Grantee at any point in time prior to the
          expiration of any SAR.

          All SAR  Grants  shall  be  exercised  only  in  accordance  with  the
          Company's current Trading Policy.

     h.   Payments Upon Exercise. Upon the exercise of a SAR, a Grantee shall be
          entitled  to receive an amount in cash equal to the excess of the fair
          market value of one share over the Grant Value per share  specified in
          the related SAR Grant,  multiplied  by the number of shares in respect
          of which the SAR Grant is exercised.  Full or fractional shares may be
          exercised.  Payment will be made within ten (10)  business days of any
          exercise.

     i.   Termination  of Grantee's  Directorship.  If a Grantee's  directorship
          with the Company is terminated for any reason, other than by reason of
          death or Disability  (as described in  Subsections  (j) and (k) below)
          prior to  exercise,  any vested SARs shall  remain  exercisable  for a
          period  equal to the  lesser of three  (3) years  from the date of the
          termination of a Grantee's  Directorship or the  outstanding  exercise
          period for any SAR.

     j.   Death of Grantee. If a Grantee's  directorship is terminated by reason
          of his death prior to the  exercise of his SAR Grant,  or if a Grantee
          whose  directorship  is  terminated  as a result of a  Disability  (as
          described in  Subsection  (k) below) shall die following the Grantee's
          termination  of being a director,  but prior to exercise of any vested
          SAR  Grant,  such SAR  Grant  shall be  exercisable  by the  Grantee's
          Beneficiary  to the extent of the number of SARs in which the  Grantee
          was  vested  for a period  equal to the lesser of three (3) years from
          the  date  of  the  termination  of a  Grantee's  Directorship  or the
          outstanding exercise period for any SAR.

     k.   Disability of Grantee.  If a Grantee shall become  Disabled during the
          Grantee's directorship with the Company and the Grantee's directorship
          with the Company is terminated as a consequence of such Disability, or
          if a Grantee whose  directorship  is terminated  shall become Disabled
          following the Grantee's termination of being a Director,  but prior to
          the  exercise  of any  vested  SAR  Grant,  any  SAR  Grant  shall  be
          exercisable  by the Grantee or the Grantee's  personal  representative
          for a period  equal to the  lesser of three (3) years from the date of
          the  termination  of  a  Grantee's  Directorship  or  the  outstanding
          exercise period for any SAR.

     l.   Delivery  of Notice and  Execution  of SAR Grant  Agreement.  Upon the
          determination to issue a SAR Award, the Company shall promptly issue a
          notice  representing  the  Shares  subject  to the  SAR  Grant  to the
          Grantee.  Each Grantee shall enter into, and be bound by the terms of,
          a SAR Grant  Agreement which shall include or incorporate by reference
          the  terms of the Plan and  which  shall  contain  such  other  terms,
          conditions  and  restrictions  not  inconsistent  with the Plan as the
          Board shall determine.

     m.   Tax  Withholding.  The  obligation of the Company to make payment upon
          the  exercise  of any SAR Grant  shall be  subject  to all  applicable
          Federal, state and local tax withholding requirements. A Grantee shall
          be  responsible  for any  portion  of the  Grantee's  tax  liabilities
          associated with the exercise of any SAR Grants.

     n.   Next Business Day Rule. To the extent that any SAR is granted on a day
          that is not a business day in which the NASDAQ is open, the Grant Date
          of any SAR shall be the next  business  day upon  which the  NASDAQ is
          open.

6.   No Right to Continue as a Director.  Neither the Plan, the execution of any
     SAR Grant Agreement, nor any other action taken pursuant to the Plan, shall
     constitute  or be evidence of any  agreement or  understanding,  express or
     implied, that the Company will retain a director for any period of time, or
     at any particular rate of compensation.

7.   No Stockholder's  Rights for Grantees.  A Grantee shall have no rights as a
     stockholder with respect to any Shares covered by SAR Grant.

8.   No Right to Vote.  A Grantee  shall  have no right to vote any  Shares as a
     result of the granting of any SAR.

9.   No Right to  Dividends.  A Grantee  shall have no right to  dividends  as a
     result of the granting of any SARs.

10.  Adjustments. The number of Shares representing the number of SARs which may
     be issued  under the Plan,  as stated in  Section 4 hereof,  as well as the
     Grant Value per share under such outstanding SAR Awards,  and the amount to
     be paid upon the  exercise of any SAR,  shall be  suitably  adjusted by the
     Board to reflect any stock dividend,  stock split, shares  combination,  or
     similar change in the  capitalization  of the Company.  The Board shall use
     its reasonable judgment in determining a suitable adjustment.

     In the event the Company is liquidated or a corporate transaction described
     in  Section  424(a)  of  the  Code  and  the  Treasury  Regulations  issued
     thereunder occurs (as, for example, a merger, consolidation, acquisition of
     property or stock,  separation or  reorganization),  each  outstanding  SAR
     Grant shall be assumed by the surviving or successor corporation if any.

11.  Change in Control.  Notwithstanding any provisions to the contrary,  in the
     event of a Change in Control, the Board may, within its discretion,  within
     a period of twelve (12) months after such Change in Control, determine that
     each SAR Grant  outstanding  hereunder shall  terminate  within thirty (30)
     days after notice to the Grantees,  and such Grantees shall  receive,  with
     respect to each SAR Grant, an amount equal to the excess of the Fair Market
     Value of such SAR Grant over the Grant Value,  as determined  under Section
     5(d),  to the extent such action is  consistent  with  Section  409A of the
     Code, and any guidance issued  thereunder.  Such amount shall be payable in
     cash.

12.  Amendment  or  Discontinuance  of  the  Plan.  The  Board  may  suspend  or
     discontinue  the Plan or  revise  or amend  it in any  respect  whatsoever;
     provided,  however,  that, without approval of the Grantees, no revision or
     amendment shall change the rights under any granted or vested SARs.

13.  Definition.  For  purposes  of the Plan the words and  phrases  used herein
     shall have the following meanings:

     a.   "Beneficiary"  shall  mean a  Grantee's  spouse,  if  married,  or the
          Grantee's  estate,  if no  spouse  exists.  A  Grantee  may,  however,
          designate  other  individuals  or  entities as a  Beneficiary  for any
          payment, in accordance with procedures established by the Board.

     b.   "Board" means the Board of Directors of SMSC.

     c.   "Change in Control"  shall mean:  (i) the  acquisition of ownership of
          stock of the Company, by any person (including,  without limitation, a
          corporation,  trust,  partnership,  joint venture,  limited  liability
          company (a "Person") or by any group of  Persons),  whether  directly,
          indirectly,  beneficially or of record, in which acquisition, together
          with stock held by such person or group,  represents  more than 20% of
          the total voting power of all outstanding  stock of the Company;  (ii)
          any merger or  consolidation  of the Company which the stockholders of
          the Company before such merger or consolidation do not, as a result of
          the  merger  or  consolidation,  own at  least  50% of the  merger  or
          consolidation;  or (iii) any nomination and election of 50% or more of
          all members of the Board of Directors of the Company within a 36-month
          period  whose  election  is without the  recommendation  of the Board.
          "Change in Control"  shall not include  acquisition  of the  Company's
          stock by any Company employee benefit plans.

     d.   "Code" means the Internal  Revenue Code of 1986,  as amended from time
          to time.

     e.   "Disability"  means a Grantee  is unable to engage in any  substantial
          gainful activity by reason of any medically  determinable  physical or
          mental  impairment which can be expected to result in death, or can be
          expected to last for a continuous  period of not less than twelve (12)
          months.

     f.   "Fair Market  Value"  means,  as of the date on which such Fair Market
          Value is to be  determined,  the  closing  price of a share of  Common
          Stock as  reported in The Wall Street  Journal  (or a  publication  or
          reporting  service  deemed  equivalent to The Wall Street  Journal for
          such  purpose  by the Board)  for the  over-the-counter  market or any
          national  securities exchange and other securities market which at the
          time are included in the stock price quotations of such publication.

     g.   "SAR Grant" means an award of SARs granted under the Plan.

     h.   "Stock  Appreciation  Right" means a  contractual  right that allows a
          Grantee to receive  payment  for a SAR Grant equal to the value of any
          appreciation  in the value of SMSC Common  Stock over the Grant Value,
          as provided in Section 5, on the applicable exercise date.

     i.   "Subsidiary"  means any entity as  defined  in  Section  424(f) of the
          Code.

14.  Section 409A.  Section 409A of the Code was enacted as part of the American
     Jobs Creation Act of 2004  ("AJCA").  As originally  enacted,  Section 409A
     would  have  precluded  the  issuance  of  SARs.   However,   the  Proposed
     Regulations  issues under Section 409A  confirmed that SARs may continue to
     be  granted,  and  are  not  treated  as a form  of  nonqualified  deferred
     compensation,  as long as the value of all SARs are based upon fair  market
     value at the time of grant.  Consistent with the Proposed Regulations,  the
     SAR Plan is not subject to the  provisions  of Section  409A,  and shall be
     amended, if necessary, to comply with Final Regulations under Section 409A.

15.  Notice. Any notice to the Company required by this Plan shall be in writing
     addressed to the General  Counsel of the Company at its  principal  office,
     and  shall be deemed  delivered  only when it is  received  by the  General
     Counsel.

16.  Expenses. The administrative or other expenses of the Plan shall be paid by
     the Company.

17.  Severability.  In the event that any one or more  provisions of the Plan or
     any Agreement,  or any action taken pursuant to the Plan or such Agreement,
     should,  for any reason,  be  unenforceable or invalid in any respect under
     the laws of the United States,  any state of the United States or any other
     government,  such unenforceability or invalidity shall not affect any other
     provision  of the  Plan  or of  such or any  other  Agreement,  but in such
     particular  jurisdiction  and instance the Plan and the affected  Agreement
     shall be construed as if such  unenforceable  or invalid  provision had not
     been  contained  therein or as if the action in question had not been taken
     thereunder.

18.  Gender and Number. The masculine gender,  where appearing herein,  shall be
     deemed to include the feminine gender,  and the singular shall be deemed to
     include the plural, unless the context clearly indicates to the contrary.

19.  Conflict. In the event of a conflict between the terms of this Plan and the
     terms of any Agreement, the terms of this Plan shall govern.

20.  Governing  Law.  This Plan and all  determinations  made and actions  taken
     pursuant  hereto  shall be  governed  by the law of the  State of New York,
     without regard to the provisions  governing conflict of laws, and construed
     accordingly.Exhibit 10.1(b)

             Schedule of Secured Convertible Note (demand) Issued by
               NCT Group, Inc. to Carole Salkind on July 10, 2006

    Issue Date       Due Date           Principal         Conversion Price
    ----------       --------           ---------         ----------------
     07/10/06        Earlier of:        $1,120,000     Greater of:  (i) $0.0019;
                     (i) demand;                       or (ii) the par value of
                     or (ii) 01/10/07                  NCT Group, Inc.
                                                       common stock on the
                                                       date of conversion

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