Document:

Unassociated Document

    Exhibit
10.6

    

    STANDARD
MICROSYSTEMS CORPORATION

    EXECUTIVE SEVERANCE
PLAN

    

    WHEREAS,
Standard Microsystems Corporation ("SMSC" or the “Company”) maintains the
Standard Microsystems Corporation Severance Plan (the "Severance Plan"
and

    

    WHEREAS,
SMSC acknowledges that the Severance Plan is a "welfare plan" as defined under
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); and

    

    WHEREAS,
SMSC wishes to divide the Severance Plan effective as of November 3, 2009 into
two plans, one for executives (the “Executive Severance Plan”) and one for all
other eligible employees (the “Non-Executive Severance Plan”), for business
reasons; and

    

    WHEREAS,
SMSC intends that this document shall constitute the Executive Severance
Plan;

    

    NOW,
THEREFORE, the Executive Severance Plan is amended and restated as
follows:

    

    
      	
              1.

            	
              Effective
      Date.  The Executive Severance Plan became effective as
      of November 3, 2009.

            

    

    

    
      	
              2.

            	
              Executive Severance Plan
      Year.  The Executive Severance Plan Year shall be the
      calendar year.

            

    

    

    
      	
              3.

            	
              General
      Definitions.

            

    

    

    
      	
               
      

            	
              a.

            	
              "Base Salary" shall mean
      an Employee's regular salary as determined in accordance with SMSC's
      payroll records, excluding any bonuses, commissions, taxable or
      non-taxable fringe benefits, car or other allowances, and any other forms
      of compensation.

            

    

    

    
      	
               
      

            	
              b.

            	
              "Cause" shall mean any
      material violation of the terms of any of SMSC's personnel policies or
      procedures, provided the Employee has been given notice of the violation
      and a reasonable opportunity to cure such violation; any material
      misstatement contained in the Employee’s employment application;
      commission by the Employee 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 the Employee’s
duties.

            

    

    

    
      	
               
      

            	
              c.

            	
              “Code” shall mean the
      Internal Revenue Code of 1986, as
amended.

            

    

    

    
      	
               
      

            	
              d.

            	
              “Committee” means the
      Section 401(k) Committee established for purposes of the SMSC Section
      401(k) Savings Plan.

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              e.

            	
              “Disability” means an
      Employee 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 12 months, as determined by an independent third
      party physician, selected within the discretion of the
      Committee.  The determination of whether an Employee is Disabled
      shall be determined by the Committee, in its sole discretion, but subject
      to the provisions of Section 409A of the
Code.

            

    

    

    
      	
               
      

            	
              f.

            	
              "Employee" shall mean
      any individual employed directly by SMSC or any Related Company, excluding
      the Chief Executive Officer of SMSC, who (i) is in Salary Grade 14 or
      above (or any subsequent similar designation), (ii) all officers in the
      Executive Salary Grade (or any subsequent similar designation), and (iii)
      any other key employees specifically identified in writing by SMSC to
      receive benefits under this plan.

            

    

    

    
      	
               
      

            	
              g.

            	
              “Key Employee” means an
      individual as described in Section 416(i) of the Code, determined without
      regard to Section 416(i)(5)
thereof.

            

    

    

    
      	
               
      

            	
              h.

            	
              "Related Company" means
      any entity that is within SMSC's "controlled group", as defined under
      Section 1563 of the Code and located in the United
  States.

            

    

    

    
      	
               
      

            	
              i.

            	
              “Separation from Service”
      shall have the meaning set forth in Section 409A of the Code and the
      regulations thereunder.  Consistent with Final Treasury
      Regulation Section 1.409A-1(h), or any subsequent guidance under Section
      409A of the Code, no Separation from Service shall occur if an Employee
      continues to perform services as a consultant or an employee of the
      Company or a Related Company in accordance with the following
      rules:

            

    

    

    
      	
               
      

            	
              i.

            	
              Leave of
      Absence.  For purposes of Section 409A of the Code, the
      employment relationship is treated as continuing in effect while an
      Employee is on military leave, sick leave, or other bona fide leave of
      absence, as long as the period of leave does not exceed 6 months, or if
      longer, as long as the Employee’s right to reemployment with the Employer
      provided either by statute or contract.  Otherwise, after a 6
      month leave of absence, the employment relationship is deemed
      terminated.

            

    

    

    
      	
               
      

            	
              ii.

            	
              Part-Time
      Status.  Whether or not a termination of employment
      occurs is determined based upon all facts and
      circumstances.  However, in the event that services provided by
      an Employee are insignificant, a Separation from Service shall be deemed
      to have occurred.  For purposes of Section 409A of the Code, if
      an Employee is providing services to SMSC or any Related Entities at a
      rate that is at least equal to 20% of the services rendered, on average,
      during the immediately preceding 3 full calendar years of employment (or
      such lesser period), and the annual compensation for such services is at
      least 20% of the average annual compensation earned during the final 3
      full calendar years of employment (or such lesser period), no termination
      shall be deemed to have occurred since such services are not
      insignificant.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              iii.

            	
              Consulting
      Services.  Where an Employee continues to provide
      services to SMSC or any Related Entities in a capacity other than as an
      employee, a Separation from Service shall not be deemed to have occurred
      if the Employee is providing services at an annual rate that is 50% or
      more of the services rendered, on average, during the immediately
      preceding 3 full calendar years of employment (or such lesser period) and
      the annual remuneration for such services is 50% or more of the annual
      remuneration earned during the final 3 full calendar years of employment
      (or such lesser period).

            

    

    

    
      	
               
      

            	
              j.

            	
              “Service Date” means an
      Employee’s initial date of hire or any re-hire date, if
      later.  In certain instances (which must be approved in writing
      by the CEO or the Vice President of Human Resources of SMSC), Employees
      may be granted past service credit with former employers.  In
      this event, the Service Date may be determined prior to an Employee’s date
      of hire or re-hire with SMSC, within SMSC’s discretion or the provisions
      of any acquisition or other
agreement.

            

    

    

    
      	
               
      

            	
              k.

            	
              “Specified Employee”
      means a Key Employee who is employed by SMSC or any Related Entities which
      has its stock publicly traded on an established securities
      market.  For purposes of the Executive Severance Plan, the
      Specified Employee Identification Date shall be each December 31, and the
      Specified Employee Effective Date shall be the first day of the fourth
      month following the Specified Employee Identification Date (i.e., each
      April 1).  Specified Employees shall be determined by an officer
      of SMSC on an annual basis for purposes of all nonqualified deferred
      compensation plans and any other programs in accordance with the
      provisions of Section 409A of the
Code

            

    

    
      	
               
      

            	
               

            

    

    
      	
              4.

            	
              Eligibility for the Basic
      Severance Benefit.  All Employees (other than excluded
      employees) of SMSC and any Participating Companies are eligible for the
      Basic Severance Benefit described in Section 5 (the "Basic Severance
      Benefit"), unless benefits are otherwise precluded under the terms of this
      Executive Severance Plan.  Notwithstanding any provision to the
      contrary, however, in no event shall any Basic Severance Benefits under
      the Executive Severance Plan be provided to individuals who are hired as
      temporary employees for a specified period of time; are offered but refuse
      to accept another suitable position within the organization; or who are
      provided the opportunity to be retained for any length of time by any
      successor employer or entities. Nor shall any Basic Severance Benefits be
      payable to any Employees who are eligible for any Executive Benefits or
      who have a separately negotiated employment or severance agreement with
      SMSC, to the extent that such Executive Benefits or benefits under a
      separately negotiated employment or severance agreement equal or exceed
      the Basic Severance Benefit

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              5. 

            	
              Basic Severance
      Benefits.

            

    

    

    
      	
               
      

            	
              a.

            	
              Cash
      Benefits.  Employees shall be entitled to a severance
      benefit equal to 1⁄2 of a week's base pay for each 6 months of Continuous
      Service measured from an Employee's Service Date (the “Basic
      Benefit”).  The Basic Benefit shall be increased by a multiplier
      of one and one half (1.5) only for Continuous Service by an Employee
      between five (5) and ten (10) years of service.   The Basic
      Benefit shall be further increased by a multiplier of two (2) only for
      Continuous Service by an Employee after their tenth year. To illustrate
      the above formula, an Employee with thirteen (13) years of Continuous
      Service would receive a severance benefit equal to 18.5 weeks of base pay
      calculated as follows:

            

    

    

    
      	
               
      

            	
              (i)

            	
              1⁄2 week of base pay x
      2 x 5 years (Years 1 to 5) =
      5
      weeks.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              1⁄2 week of base pay x
      2 x 5 years (Years 5 to 10)
      x 1.5 = 7.5
    weeks.

            

    

    

    
      	
               
      

            	
              (iii)

            	
              1⁄2 week of base pay x
      2 x 3 years (Years 10 to 13)
      x 2 = 6
  weeks.

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Total
      Cash Benefit is 18.5 weeks of base
      salary.

            

    

    

    Notwithstanding
anything to the contrary in this Executive Severance Plan, the maximum benefit
that any Employee shall receive under the Executive Severance Plan, exclusive of
employees receiving benefits under Section 8, shall be a maximum benefit of 26
weeks for any Employees.  In determining Continuous Service for
purposes of computing severance benefits, all periods of time from an
individual's Service Date during which an Employee is “actively at work” shall
be taken into consideration, regardless of the actual hours worked in any period
of time, plus any leave time taken under the Family Medical Leave
Act.  Thus, any periods during which an Employee is absent from work,
other than Family Medical Leaves, shall not be considered in determining
Continuous Service.  No severance benefits shall be paid under the
Executive Severance Plan for any partial periods.

    

    Notwithstanding
any provision to the contrary, all Employees shall be paid a "Minimum Benefit"
equal to 2 weeks of base pay.   This Minimum Benefit is inclusive
of the severance benefit determined above, based upon an Employee’s Continuous
Service, and shall not be paid in addition to any benefits based upon Continuous
Service.

    

    
      	
               
      

            	
              b.

            	
              COBRA
      Benefits.  As an additional severance benefit, whether an
      Employee receives the Basic Severance Benefit or the Executive Benefit,
      SMSC shall also pay for 100% of the cost of any continuation health
      coverage if elected under COBRA, by the Employee or any qualified
      beneficiaries, for coverage in existence at the time of any qualifying
      event, for a period equal to the number of weeks of severance to which the
      Employee is entitled following termination of  their employment
      plus an additional period of time until the end of the calendar month in
      which the severance period ends.  Using the above example in
      Section 5.a., if the Employee is entitled to receive 18.5 weeks of
      severance, then SMSC shall pay 100% of the cost of any continuation health
      coverage if elected under COBRA for 18.5 weeks following the termination
      of the Employee plus the number of
      days left in the month that is 18.5 weeks after the Employee’s last date
      of employment.  Notwithstanding
      the foregoing, each Employee shall receive a minimum benefit of three
      months paid COBRA coverage.  The payment of any COBRA premiums
      shall not extend the period of any COBRA entitlement, and shall only apply
      for coverage in effect at the time of a termination, for which COBRA
      election rights exist.  The Employee and any qualified
      beneficiaries may thereafter continue COBRA benefits at their own cost for
      any remaining periods of coverage.  However, COBRA coverage
      shall be terminated when any subsequent coverage is obtained and the
      Employee shall notify SMSC when such subsequent coverage
      commences.

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              c.

            	
              No Deferred
      Compensation.  The continuation of benefits under COBRA
      and other benefits must be incurred and paid by December 31 of the second
      calendar year following the calendar year in which a separation from
      service occurs.  To the extent that any benefits would extend
      beyond this period, a single lump cash payment will be made as of the
      applicable December 31, in order to avoid any further deferrals of
      compensation.

            

    

    

    
      	
               
      

            	
              d.

            	
              Other
      Benefits.  Other than medical coverage (including dental,
      vision, prescription drug and similar coverage), all other benefits, such
      as group-term life insurance, long-term disability, short-term disability
      and other welfare benefits, shall be terminated in accordance with the
      provisions of all plans, with any applicable individual conversion
      rights.

            

    

    

    
      	
              6.

            	
              Entitlement to Basic Severance
      Benefits.  An Employee shall be entitled to the Basic
      Severance Benefits if an Employee's employment is involuntarily terminated
      by SMSC, unless such termination is for “Cause.  In the event of
      a termination for “Cause”, no Basic Severance Benefits shall be
      paid.

            

    

    

    
      	
              7.

            	
              Eligibility for the Executive
      Severance Benefit.  Employees may be eligible for the
      Executive Severance Benefit (the "Executive
      Benefit").  Employees in Salary Grade 14 shall receive “Salary
      Grade 14 Severance Benefits” as set forth below; all employees in the
      Executive Salary Grade shall receive “Executive Salary Grade Severance
      Benefits” as set forth below; and key employees specifically identified in
      writing by SMSC to receive an Executive Benefit shall receive the level of
      benefit set forth in their written
      designation.    SMSC retains the discretion to
      identify any employees for the Executive Benefit who are employed by SMSC
      or any Related Entities as a result of any
      acquisitions.  However, to the extent any executives are covered
      under any separately written negotiated employment or severance agreements
      that provide for any severance benefits, such individuals shall be
      excluded from participation in the Executive Benefit, and the Executive
      Severance Plan, until such individuals are informed, in writing by the
      SMSC Chief Executive Officer, of their eligibility for participating in
      the Executive Severance Plan.  Individuals who are specifically
      excluded from the
      benefits as of the effective date of this amended and restated Executive
      Severance Plan are identified in separate corporate records and
      agreements.

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    Notwithstanding
any provisions to the contrary, in no event shall any benefits under the
Executive Severance Plan be provided to any individuals who are offered but
refused to accept another suitable position within SMSC, or who are provided the
opportunity to be retained for any length of time by any successor employer,
joint venturer, etc., except as outlined in Section 8 of this Executive
Severance Plan.

    

    
      	
              8.

            	
              Executive Severance
      Benefit.  (a) Salary Grade 14
      Benefits.  Employees eligible for the Salary Grade 14
      Severance Benefit (“Salary Grade 14 Employees”) shall receive an Executive
      Benefit equal to three (3) months of Base Salary upon the occurrence of
      required “Relocation” as defined in Section 9(a) of this Executive
      Severance Plan or the occurrence of an “Involuntary Termination” as
      defined in Section 9(c) of this Executive Severance Plan. Upon the
      occurrence of one of the events enumerated in subsections (i) through (iv)
      of Section 9(b) of this Executive Severance Plan  following a
      “Change in Control” as defined in Section 9(b) of this Executive Severance
      Plan, a Salary Grade14 Employee will be entitled to an
      Executive  Benefit equal to six (6) months of Base
      Salary.

            

    

    

    The above
Salary Grade 14 Severance Benefit shall be provided in lieu of the Basic
Severance Benefit provided under the Executive Severance Plan based upon an
employee's Years of Continuous Service with SMSC, and in no event shall be paid
in addition to any other severance benefits under the SMSC Executive Severance
Plan or any individually negotiated employment or severance
agreements.  If an employee eligible for the Salary Grade 14 Severance
Benefit is entitled to a greater benefit under an individually negotiated
written employment or severance agreement then the employee shall receive the
greater benefit in lieu of the Salary Grade 14 Severance
Benefit.  Furthermore, under the Executive Benefit, no "Minimum
Benefits" shall exist, such as the 2 week Minimum Benefit provided under the
Basic Severance Benefit.  However, in the event the Basic Severance
Benefit for any Employee under this Executive Severance Plan is greater than the
Executive Benefit, an Employee shall be entitled to the greater of such
benefits.

    

    (b)   Executive Salary Grade
Benefits.  Employees eligible for the Executive Salary Grade
Severance Benefit (“Executives”) shall receive an Executive Benefit in the
amount and type for each applicable event as set forth in the table
below:

    

    
      
        	
                 

                Position
      Title

              	 
      	
                 “Relocation”
      as defined in Section 9(a) of this Executive Severance Plan or the
      occurrence of “Involuntary Termination” as defined in Section
      9(c).

              	 
      	
                Change
      in Control” as defined in Section 9(b) of this Executive Severance Plan
      coupled with one of the events set forth in subsections (i)-(iv) of
      Section 9(b) of this Executive Severance Plan.

              
	 
      	 
      	 
      	 
      	 
      
	
                Vice
      President and Above in Greater Than Salary Grade 14

              	
                  

              	
                A
      termination payment equal to (i) one year base salary plus (ii) the
      employee’s target bonus amount for the fiscal year in which they were
      terminated.

                 

                All
      equity based instruments, including without limitation stock options,
      restricted stock, stock appreciation rights, and restricted stock units,
      that would have vested within one year of the event shall immediately vest
      on the date of the event.

              	
                  

              	
                A
      termination payment equal to (i) one year base salary plus (ii) the
      employee’s target bonus amount for the fiscal year in which they were
      terminated.

                 

                All
      equity based instruments, including without limitation stock options,
      restricted stock, stock appreciation rights, and restricted stock units,
      shall immediately vest on the date of the
event.

              

      

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    Notwithstanding
the foregoing or any other provision of this Executive Severance Plan to the
contrary, the vesting of any equity based instrument shall not accelerate as set
forth above if the terms of the relevant plan document prohibit such accelerated
vesting; in such an event the accelerated vesting shall be limited to the
maximum number of shares or other applicable units permitted by the relevant
plan.  In addition to the foregoing benefits, SMSC shall also pay for
100% of the cost of any continuation health coverage if elected under COBRA, by
the Employee or any qualified beneficiaries, for coverage in existence at the
time of any qualifying event, for a period equal to the number of weeks of
severance to which the Employee is entitled following termination of their
employment plus an additional period of time until the end of the calendar month
in which the severance period ends.   Furthermore, unless
otherwise provided for in a separate written agreement with SMSC, no Employee
will be eligible to receive an annual cash bonus under the applicable cash
incentive plans of SMSC for the year in which such Employee’s employment with
SMSC terminates.

    

    
      	
              9.

            	
              Entitlement to Executive
      Benefits.  The provisions of the Executive Severance Plan
      shall be controlling with regard to the entitlement of any Executive
      Benefits.  Therefore, no Employee who is terminated for “Cause”
      shall be entitled to receive any benefits.  However, Employees
      shall be entitled to the Executive Benefit upon the occurrence of any of
      the following events:

            

    

    

    
      	
               
      

            	
              a.

            	
              Relocation.  If
      an Employee is required without consent to relocate to a new position that
      is more than 50 miles from the location of the employee's employment prior
      to such written required relocation, the employee may, within 90 days from
      receipt of such notification and prior to receipt of any relocation
      expenses by SMSC, inform SMSC, in writing, of the employee's desire to
      terminate employment with SMSC or any Related Company, and to receive the
      Executive Benefit.

            

    

    

    
      
        	
              	
                b.

              	
                Change in
      Control.  Upon the occurrence of a "Change in Control" of
      SMSC, including any Related Company, in which the Employee is employed,
      followed by (i)(A) a material reduction (i.e. 5% or more)  in
      the Employee’s Base Salary or the targeted incentive compensation or
      bonuses of such Employee, (i.e., as a percentage of Base Salary) or (B) a
      material diminution in the authority, duties or responsibilities of the
      Employee, including without limitation, a demotion from, or loss of, the
      position held by the Employee immediately prior to the Change in Control
      (ii) an involuntary termination of the employee's employment, other than
      for "Cause" (iii) retirement or Disability or (iv) a Relocation as defined
      above, in each case, within the twelve month period on and immediately
      following such Change in Control, an Employee shall be entitled to an
      Executive Benefit, subject to Section 9(d) if
  applicable.

              

      

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    A "Change
in Control" of SMSC shall be deemed to have occurred upon the first to
occur of any event described as either a change in ownership or effective
control of the Company, or in the ownership of a substantial portion of the
assets of the Company, as defined under Section 409A of the Code.

    

    The
events set forth in Sections 9 (a) and (b)(i) of this Executive Severance Plan
shall be considered “Good Reason” terminations as further described
below.

    

    
      	
               
      

            	
              c.

            	
              Involuntary
      Termination.  Employees shall also be entitled to the
      Executive Benefits on any involuntary termination of employment without
      Cause.

            

    

    

    
      	
               
      

            	
              d.

            	
              Good Reason
      Termination.  Section 9 (a) and (b)(i) provide that an
      Employee who is an executive may terminate the Employee’s employment for
      “Good Reason”.

            

    

    

    In order
to comply with the safe harbor “Good Reason” provisions contained in Final
Treasury Regulation Section 1.409A-1, the Employee’s Separation from Service
shall be “treated” as an involuntary termination if the following “safe harbor”
events occur to ensure that a “Good Reason” termination exists:

    

    
      	
               
      

            	
              i.

            	
              The
      Employee must separate from service within a limited period of time, not
      to exceed 60 days following the reason for the “Good Reason”
      termination.

            

    

    

    
      	
               
      

            	
              ii.

            	
              The
      amount, time and form of payment upon a voluntary separation from service
      for “Good Reason” shall be identical to the amount, time and form of
      payment upon an involuntary Separation from
  Service.

            

    

    

    
      	
               
      

            	
              iii.

            	
              The
      Employee must provide notice of the existence of the “Good Reason”
      condition within a period not to exceed 30 days of its initial
      existence.

            

    

    

    
      	
               
      

            	
              iv.

            	
              The
      Company shall be provided a period of 30 days during which it may remedy
      the condition entitling the Employee to terminate employment for “Good
      Reason”.

            

    

    

    
      	
              10.

            	
              Payment of
      Benefits.  All benefits shall be paid in a single lump
      sum payment within thirty (30) days after execution of a Release and the
      expiration of any revocation period as provided in Section 14 of this
      Executive Severance Plan.  Payment shall commence no later than
      March 15 of the calendar year following the Executive Severance Plan Year
      in which a Separation from Service occurs, provided the Employee executes
      and returns a Release within the applicable time limitations prior to such
      date.  However, any severance benefits shall be reduced to the
      extent of any advance payment under any sales or commission program, for
      any excess expense reimbursements, and for any amounts owed to SMSC by the
      Employee (to the extent permitted under state
      law).  Furthermore, payment of any severance benefits is
      contingent upon the return of any SMSC property in the possession of the
      Employee, including personal computers (“PCs”), fax machines, scanners,
      copiers, building access passes and keys, cellular phones, SMSC credit
      cards, and any SMSC documents, correspondence, proprietary information and
      related corporate materials or
equipment.

            

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              Notwithstanding
      any provisions to the contrary, if the period during which the Employee
      has discretion to consider and revoke the Release straddles two taxable
      years of the Employee, then the Company shall make the payments to which
      the Employee is entitled under the Executive Severance Plan in the second
      of such taxable years, regardless of the taxable year during which the
      Employee actually delivers the executed Release to the
      Company.

            

    

    

    
      	
               
      

            	
              a.

            	
              Section
      409A.  In the event that any termination would cause any
      payments to be paid beyond 21⁄2 months following the end of the Executive
      Severance Plan Year in which a termination occurs, a final payment equal
      to the balance owed shall be made prior to the 21⁄2 month period following
      Separation from Service, in order to rely upon the “short-term deferral
      rule” under Section 409A of the Code to avoid any unintended form of
      deferred compensation.

            

    

    

    
      	
               
      

            	
              b.

            	
              Delay in Payment for Specified
      Employees.  To the extent that an Employee would receive
      any payment hereunder that would violate Section 409A of the Code, in no
      event shall any such payment be made within 6 months after the Employee’s
      Separation from Service.  Any and all payments that are required
      to be made within such 6 month period shall be delayed until the first day
      of the 6 months after a Separation from Service occurs and shall
      retroactively be paid to make the Employee whole for any lost
      benefits.  To the extent that an Employee is required to pay for
      the cost of any health or other benefits to keep them in full force and
      effect during the 6 month delay period for Employees, the Employee shall
      also be reimbursed for such out-of-pocket expenses as of the first day of
      the 6 months after a Separation from Service, retroactively, to make the
      Employee whole for any out-of-pocket costs.  To the extent any
      payments are delayed for any Employees, they shall receive interest on
      such delayed payments equal to the prime rate determined as of the first
      day of the month in which a Separation from Service shall occur, plus
      2%.

            

    

    

    
      	
               
      

            	
              c.

            	
              Exception for Specified
      Employees.  Notwithstanding any provision to the
      contrary, in accordance with the Final Regulations issued under Section
      409A of the Code, to the extent that the severance 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 shall 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 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 6 months following a
      Separation from Service, with interest equal to prime plus 2% for the
      delay in making payments as required under the Executive Severance
      Plan.  To the extent SMSC must allocate the payments to be made
      from this Executive Severance Plan and the Company’s Supplemental
      Executive Retirement Plan (the “SERP”) to comply with the above limits,
      the Company shall first make all payments due under this Executive
      Severance Plan and then make all payments due under the SERP, all subject
      to the foregoing limits.

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      
        	
              	
                d. 

              	
                Notwithstanding
      anything to the contrary in this Executive Severance Plan, in the event
      that: (i) the aggregate payments of benefits to be made or afforded to any
      employee under this Executive Severance Plan (the "Termination Benefits")
      would be deemed to include an "excess parachute payment" under Section
      280G of the Code or any successor thereto; and (ii) if such Termination
      Benefits were reduced to an amount (the "Non-Triggering Amount"), the
      value of which is $1 less than an amount equal to the total amount of any
      payments permissible (e.g., not triggering any excise tax or loss of
      deduction) under Section 280G of the Code or any successor thereto; then
      the Termination Benefits to be paid to any employee shall be so reduced so
      as to be a Non-Triggering Amount.  Any allocations of any
      reductions required hereby among the Termination Benefits, shall be
      determined by SMSC, within its
discretion.

              

      

    

     

    
      	
              11.

            	
              Covenant Not to
      Compete.   In order to be eligible to receive
      benefits hereunder, Employees shall agree that during a period equal to
      the number of weeks of base salary received by the Employee as an
      Executive Benefit (the “Non-Compete Time Period”) after an employee’s
      Separation from Service, the employee shall not, directly or indirectly,
      through any other person, firm, corporation or other entity, be employed
      by or engaged as a consultant or independent contractor to any business
      entity engaged in a business that is a competitor of SMSC, or any related
      entities, anywhere in the United States.   For example, an
      Employee that received one year’s base salary as an Executive Benefit
      would have a one year Non-Compete Time Period after their Separation from
      Service.   For purposes of this Executive Severance Plan, a
      business entity shall be considered to be a competitor with SMSC, and all
      related entities, if it is engaged in any of the following activities: the
      marketing, sale, design, development, manufacture or assembly of any
      integrated circuit or related product competing with an integrated circuit
      or related product then offered by SMSC without written consent which will
      not be unreasonably withheld if it is a non-competitive
      situation.

            

    

    

    Employees
shall acknowledge in the Release required under Section 14 that the scope of
this covenant not to compete is reasonable.  In the event that any
aspect of this covenant is deemed to be unreasonable by a court, an Employee
shall submit to the reduction of either the time or territory to such an area or
period as the court will deem reasonable.  In the event an Employee
violates this covenant, then the time limitation shall be extended for a period
of time equal to the pendency of such proceedings, including
appeals.

    

    
      	
              12.

            	
              Nonsolicitation of
      Clients.  In order to be eligible to receive benefits
      hereunder, for a period of 1 year after the Employee’s Separation from
      Service, the Employee shall not, directly or indirectly, through any other
      person, firm, corporation or other entity, solicit any customers or
      clients of SMSC.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Employees
shall acknowledge that the scope of this nonsolicitation provision is
reasonable. In the event that any aspect of this provision is deemed to be
unreasonable by a court, an Employee shall submit to any reductions as the court
shall deem reasonable.  In the event the Employee violates this
provision, then the time limitations shall be extended for a period of time
equal to the pendency of such proceedings, including appeals.

    

    
      	
              13.

            	
              No Solicitation of
      Employees.  During the course of an Employee's employment
      with the Company, the Employee shall come into contact and became familiar
      with the Company's employees, their knowledge, skills, abilities,
      salaries, commissions, draws, benefits, and/or other matters with respect
      to such employees, all of which information is not generally known to the
      public, but has been developed, acquired or compiled by the Company at its
      great effort and expense.   In order to be eligible to
      receive benefits hereunder, the Employee shall agree that any
      solicitation, luring away or hiring of such employees of the Company shall
      be highly detrimental to the business of the Company and may cause serious
      loss of business and great and irreparable harm.  Consequently,
      Employees shall agree that for a period of 1 year after the Employee’s
      Separation from Service, the Employee shall not, directly or indirectly,
      whether on behalf of the Employee or others, solicit, lure or hire away
      any employees of the Company or assist or aid in any such
      activity.

            

    

    

    
      	
              14.

            	
              Conditions for
      Payment.  As a condition precedent to the payment of any
      Basic or Executive Benefits, inclusion of the 2 week "Minimum Payment"
      and any COBRA coverage, SMSC shall require an Employee to sign a Severance
      Agreement and General Release (the "Release") within 21 or 45 days of the date of
      the Employee’s Separation from Service (the “Release Period”), as provided
      in Section 15.  The Release shall require the Employee to agree
      to release SMSC, any Related Companies, and the employees and directors of
      any and all Related Companies, from all claims or demands the Employee may
      have based on employment with SMSC, including claims of which the Employee
      is unaware and claims which are not specifically released and identified
      below.  These claims include, but are not limited to, claims
      arising under the Constitution of the United States, a release of any
      rights or claims the Employee may have under the Age Discrimination in
      Employment Act of 1967 as amended, 29 U.S.C. 621 et seq., which prohibits
      age discrimination in employment; Title VII of the Civil Right Act of
      1964, as amended, 42 U.S.C. 2000(e) et seq., which prohibits
      discrimination in employment based on race, color, national origin,
      religion or sex; the Civil Rights Act of 1966, 42 U.S.C. 1981 et seq.; the
      Equal Pay Act, which prohibits paying men and women unequal pay for equal
      work; or any other federal, state or local laws or regulations prohibiting
      employment discrimination; Employee Retirement Income Security Act, 29
      U.S.C. 1001 et seq.; Executive Orders 11246 and 11141; the Constitution of
      the State of New York or any other states in which the Employee resides or
      works; any New York or other state laws against discrimination; any
      express or implied contracts with SMSC or any Related Company; any federal
      or state common law and any federal, state or local statutes, ordinances
      and regulations.  The Release may include other provisions not
      stated herein.  Any payment that otherwise would be made to the
      Employee prior to his delivery of such executed release shall be paid to
      the Employee on the first business day following the conclusion of the
      Release Period.

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    The
Release shall not include, however, a release of (a) the Employee's right, if
any to any other pension, health or similar benefits under SMSC's standard
policy and procedures programs; (b) the Employee's right to individual
conversion privileges under any medical, dental, long-term disability, life
insurance or any other welfare programs, or (c) any right of the Employee to be
indemnified by SMSC.

    

    
      	
              15.

            	
              Older Workers Benefits
      Protection Act. With regard to each individual Severance Agreement
      and General Release required under Section 14, SMSC shall give
      consideration to requiring either a 21 day review period for individual
      and independent terminations, or use of a 45 day review period for
      significant reductions in force.  Separate Severance Agreements
      and General Release forms may be used with different employees in order to
      effectuate the intent of the Executive Severance Plan and/or to provide
      additional severance benefits in order to accommodate the unique
      circumstances of any individual
terminations.

            

    

    

    
      	
              16.

            	
              Violation of Section
      409A.  All Employees shall be informed that in the event
      of any violation of Section 409A of the Code, severance and other payments
      may be subject to income taxes, a 20% excise tax, and underpayment of
      interest penalties.  However, the Executive Severance Plan and
      any Release are intended to comply with Section 409A of the Code and shall
      be interpreted consistent with the provisions of Section 409A of the
      Code.

            

    

    

    
      	
              17.

            	
              Executive Severance Plan
      Unfunded Top-Hat Plan.  The Executive Severance Plan
      shall be unfunded for purposes of the Code and Title I of ERISA, and no
      assets shall be set aside for the payment of benefits under the Executive
      Severance Plan.  All Employees are general creditors of SMSC for
      the payment of any benefits.  This Plan is intended to be a
      “top-hat" pension benefit plan within the meaning of U.S. Department of
      Labor Regulation Section 2520.104-23 covering a select group of management
      or highly compensated employees.

            

    

    

    
      	
              18.

            	
              Amendment and
      Termination.  The Executive Severance Plan may be
      amended, modified, or terminated at any time, by action of the
      Compensation Committee of the Board of Directors of the Company, except
      that the benefits payable to Employees upon the events set forth in this
      Executive Severance Plan may not be reduced, eliminated or diminished
      without their written consent.

            

    

    

    
      	
              19.

            	
              Nonassignability.  No
      benefits provided under the Executive Severance Plan may be assigned or
      transferred, and no benefits are subject to
      attachment.  However, in the event of death of an Employee
      receiving severance benefits, the benefits shall continue to be paid to
      the Employee’s  spouse, or if no spouse exists, the Employee’s
      estate as income in respect of the
decedent.

            

    

    

    
      	
              20.

            	
              Executive Severance Plan
      Interpretation.  SMSC shall have complete discretion to
      interpret all provisions of the Executive Severance Plan and to establish
      reasonable rules and procedures to facilitate the administration of the
      Executive Severance Plan.

            

    

    

    
      	
              21.

            	
              Withholding of
      Taxes.  SMSC shall deduct from all severance payments
      made to any Employee all applicable federal, state or local taxes required
      by law to be withheld from such
payments.

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    
      	
              22.

            	
              Retirement and Other
      Benefits.  Severance benefits shall not be treated as
      "Compensation" under the terms of any qualified retirement
      plans.  Nor shall the payment of any severance benefits be
      treated as extending any individual's employment, for any employee benefit
      or employment purposes.

            

    

    

    
      	
              23.

            	
              Other
      Covenants.  Notwithstanding any provisions to the
      contrary, to the extent that any longer periods are used for any covenants
      not to compete or solicit customers or employers, within any other
      employment agreements, severance agreements, or offer letters, the longer
      period shall be controlling for purposes of any
  Employee.

            

    

    

    
      	
              24.

            	
              Employment and Severance
      Agreements, and Offer Letters.  Sections 4 and 7 of the
      Executive Severance Plan provide that to the extent an Employee is
      entitled to any severance benefits under any separately written negotiated
      agreements, no benefits are payable under the Executive Severance
      Plan.  Notwithstanding any provisions in this Executive
      Severance Plan to the contrary, if any Employee is entitled to any
      severance benefits under any separately written negotiated employment or
      severance agreements, or offer letters, no benefits shall be payable under
      the Executive Severance Plan unless provided otherwise in any such
      separate written agreement or letter.  However, in the event
      that any separate written agreement or letter provides for any additional
      benefits, including benefits provided under the Executive Severance Plan,
      in no event shall any Employee receive benefits which are determined to be
      duplicative, within the discretion of the Committee.  In the
      event of any conflict in benefits, the Committee, within its discretion,
      shall provide an Employee with the greater of the benefits provided under
      the Executive Severance Plan or any separately written negotiated
      agreement or letter.

            

    

    

    
      	
              25.

            	
              Form of
      Communication.  Any election, claims, notice or other
      communication required or permitted to be made by or to an Employee under
      this Executive Severance Plan shall be made in writing and in such form as
      shall be prescribed by SMSC.  Such communication shall be
      effective upon receipt by SMSC, if hand delivered or sent by first class
      mail, postage pre-paid, return receipt requested to the Vice President of
      Human Resources, Standard Microsystems Corporation, 80 Arkay Drive,
      Hauppauge, New York 11788.

            

    

    

    
      	
              26.

            	
              Severability.  The
      invalidity of any portion of this Executive Severance Plan shall not
      invalidate the remainder, and the remainder of the Executive Severance
      Plan shall continue in full force and
effect.

            

    

    

    
      	
              27.

            	
              No Future Application for
      Employment.  An Employee agrees not to apply for any new
      positions with SMSC or any Related Entities following any Separation from
      Service if so provided in the Employee’s Severance Agreement, within the
      discretion of SMSC.

            

    

    

    
      	
              28.

            	
              No Release of Future
      Claims.  This Executive Severance Plan does not waive or
      release any rights or claims that the Employee may have under the Age
      Discrimination in Employment Act which arises after the effective date of
      the Executive Severance Plan, if
applicable.

            

    

    

    
      	
              29.

            	
              Reference.  Reference
      inquiries from prospective employers shall be handled by only verifying
      the Employee's dates of employment, last position held and level of
      compensation.

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
      	
              30.

            	
              Captions.  The
      captions at the head of a paragraph of this Executive Severance Plan are
      designed for convenience of reference only and are not to be resorted to
      for the purpose of interpreting any provision of this Executive Severance
      Plan.

            

    

    

    
      	
              31.

            	
              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.

            

    

    

    
      	
              32.

            	
              Governing Laws. The
      Executive Severance Plan shall be governed and construed in accordance
      with the laws of the State of New
York.

            

    

    

    
      
        	 
      	
                STANDARD
      MICROSYSTEMS CORPORATION

              
	 
      	 
      
	
                January
      7, 2010

              	
                /s/ Christine King

              	 
      
	
                Date

              	
                Christine
      King

              
	 
      	
                President and
      Chief Executive
Officer

              

      

    

     

    
      
         

      

      
        14Unassociated Document

    Exhibit
10.7

    

    STANDARD
MICROSYSTEMS CORPORATION

    RESTRICTED
STOCK UNIT GRANT AGREEMENT

     

    THIS
AGREEMENT (this “Agreement”), made as
of the ____ day of ________, _____ (the "Grant Date"), between
Standard Microsystems Corporation (the “Company”), and __________ (the "Grantee").

    

    WHEREAS,
the Company has adopted the Standard Microsystems Corporation 2009 Long Term
Incentive Plan (the "Plan")
and

    

    WHEREAS,
pursuant to the Plan, the Compensation Committee of the Board of Directors of
the Company (the “Committee”) has
determined to make a grant of Restricted Stock Units to the Grantee, subject to
the terms, conditions and limitations provided herein and in the
Plan.

    

    NOW,
THEREFORE, the parties hereto agree as follows:

    

    
      	
            	
              1.

            	
              The
      Plan.  This Agreement shall be construed in accordance
      with, and subject to, the terms of the Plan (the provisions of which are
      incorporated herein by reference).  In the event of any conflict
      between the provisions of the Plan and the provisions of this Agreement,
      the provisions of this Agreement shall govern.  Capitalized
      terms used but not defined herein shall have the meanings ascribed to them
      in the Plan.

            

    

     

    
      	
            	
              2.

            	
              Grant of Restricted Stock
      Units.  Pursuant to, and subject to, the terms and
      conditions set forth herein and in the Plan, the Company hereby grants the
      Grantee _________ Restricted Stock Units as of the Grant
    Date.

            

    

     

    
      	
            	
              3.

            	
              Vesting.  Subject
      to Section 3 below, the Restricted Stock Units shall vest as follows (each
      date, a Vesting Date with respect to the applicable tranche of Restricted
      Stock Units):

            

    

     

    
      
        
          
            
              
                	
                        DATE

                      	 	
                        PERCENT VESTED

                      	 	
                        NUMBER VESTED

                      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      

              

            

          

        

      

    

     

    
      
        	
              	
                4.

              	
                Settlement.  Settlement
      of vested Restricted Stock Units shall be made in shares of common stock
      of the Company within 30 days following the applicable Vesting
      Date.

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              5.

            	
              Withholding.  The
      Company shall have a right to withhold from any payment of Stock to a
      Participant or other person under the Plan an amount sufficient to cover
      any required withholding taxes, including the Participant’s social
      security and Medicare taxes (FICA) and federal, state, local income tax or
      such other applicable taxes (“Taxes”) with respect to income arising from
      payment of the Award.  The Company shall have the right to
      require the payment of any Taxes before issuing any Stock pursuant to the
      Award.

            

    

    

    
      
        	
              	
                6.

              	
                Effect of Termination of
      Employment or Services.  In case of termination of
      the   Grantee’s employment, directorship or consultancy
      prior to the final Vesting Date, outstanding Restricted Stock Units shall
      be treated in accordance with Section 10 of the
  Plan.

              

      

    

     

    
      	
               
      

            	
              7.

            	
              Modification of
      Agreement.  Except as set forth in the Plan and herein,
      this Agreement may be modified, amended, suspended or terminated, and any
      terms or conditions may be waived, but only by a written instrument
      executed by the parties hereto.

            

    

     

    
      	
               
      

            	
              8.

            	
              Severability.  Should
      any provision of this Agreement be held by a court of  competent
      jurisdiction to be unenforceable or invalid for any reason, the remaining
      provisions of this Agreement shall not be affected by such holding and
      shall continue in full force and effect in accordance with their
      terms.

            

    

     

    
      	
               
      

            	
              9.

            	
              Governing
      Law.  The validity, interpretation, construction and
      performance of this Agreement shall be governed by the laws of the State
      of Delaware, without regard to its conflict of laws
    principle.

            

    

     

    
      	
               
      

            	
              10.

            	
              Entire
      Agreement.  This Agreement and the Plan reflects the
      agreement of the parties hereto with respect to the subject matter hereof,
      and supercedes any prior agreement, arrangement or understanding between
      the parties.

            

    

     

    
      	
               
      

            	
              11.

            	
              Grantee Acknowledgment.
      The Grantee hereby acknowledges receipt of a copy of the Plan. The Grantee
      hereby acknowledges that all decisions, determinations and interpretations
      of the Committee in respect of the Plan, this Agreement and the Restricted
      Stock Units shall be final and
conclusive.

            

    

     

    *   *   *   *   *

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as
of the day and year first above written.

    

    
      
        
          
            
              
                	 
      	
                        STANDARD
      MICROSYSTEMS

                        CORPORATION

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	
                        Name:

                      	 
      
	 
      	
                        Title:

                      	 
      
	 
      	 
      	 
      
	 
      	
                        GRANTEE:

                      
	 
      	 
      
	 
      	
                        Name:

                      	 
      

              

            

          

        

      

    

     

    
      
        
        

      

      
        3

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