Document:

EX-10.1

RETIREMENT AND CONSULTING AGREEMENT

This Retirement and Consulting Agreement (this “Agreement”), dated effective as of March 31,
2007, confirms the following understandings and agreements between Allied World Assurance Company
Holdings, Ltd (the “Company”) and G. William Davis, Jr. (hereinafter referred to as “you” or
“your”).

W I T N E S S E T H:

WHEREAS, you and the Company are parties to that certain Employment Agreement between the
Company and Allied World Assurance Company, Ltd (“AWAC”), dated as of November 1, 2006 (the
“Employment Agreement”); and

WHEREAS, in connection with the mutual agreement of you and the Company relating to your
retirement from the Company, and in consideration of the payments and benefits described herein,
you and the Company have mutually agreed to terminate the Employment Agreement, and to enter into
this Agreement setting forth the terms and conditions of your retirement from the Company on March
31, 2007 (the “Retirement Date”), and your engagement as a consultant to the Company thereafter.

NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, it is hereby agreed as
follows:

1. Retirement and Severance Payments.

(a) Each of you and the Company confirm your retirement from the Company and its subsidiaries
effective as of the close of business on the Retirement Date, and your resignation from any and all
positions you held as an employee, officer or director of the Company or its subsidiaries as of the
Retirement Date.

(b) In connection with your retirement, you will be entitled to receive (i) all accrued but
unpaid base salary through the Retirement Date; (ii) any unpaid or unreimbursed business expenses
incurred in accordance with Company policy, to the extent incurred prior to the Retirement Date;
(iii) any benefits provided under the Company’s employee benefit plans due generally upon a
termination of employment, in accordance with the terms therein, including rights to equity in the
Company pursuant to any plan or grant and the right to receive tax reimbursement payments accrued
but unpaid for periods prior to the Retirement Date; and (iv) rights to indemnification by virtue
of your position as former officer or director of the Company or its subsidiaries and the benefits
under any directors’ and officers’ liability insurance policy maintained by the Company, in
accordance with its terms thereof.

(c) In connection with your retirement, all options to purchase common shares of the Company
granted under the Company’s Amended and Restated 2001 Employee Stock Option Plan and restricted
stock units granted under the Company’s Amended and Restated 2004 Stock Incentive Plan
(collectively, the “Equity Awards”) will become immediately vested. The Equity Awards will
otherwise remain subject to the terms and conditions of the Company’s Amended and Restated 2001
Employee Stock Option Plan and Amended and Restated 2004 Stock Incentive Plan, as applicable. In
addition, for purposes of the Company’s Long-Term Incentive Plan (the “LTIP”), you will be deemed
to have a Performance Period Percentage (as defined in the LTIP) equal to 150% such that the
Company will provide you with shares equal to 150% of your Target LTIP Award (as defined in the
LTIP), such shares to be delivered on or as soon as practicable following the Retirement Date.

(d) From and after the Retirement Date, except for such rights as are granted by this
Agreement, you will no longer be entitled to receive any further payments, compensation or other
monies (including severance compensation) from the Company or any of its subsidiaries or to receive
any of the benefits or participate in any benefit plan or program of the Company or any of its
subsidiaries, including without limitation, any salary payment, bonus payment, severance payment,
salary continuation payment, accrued vacation or unused personal days and expense reimbursements,
and the Company and AWAC will have no further obligations under the Employment Agreement.

(e) Prior to the Retirement Date, you will deliver to the Company all of (i) the property of
the Company or its subsidiaries, including credit cards, cell phones, handheld devices
(e.g., Blackberry), equipment, card-key passes, door and file keys, computer access codes,
software and other property that you received, prepared or helped prepare in connection with your
employment with the Company; and (ii) all documents and data, of any nature and in whatever medium,
containing or pertaining to any Confidential Information (as defined in paragraph 4 below). You
also agree that you have not retained and will not retain any copies, duplicates, reproductions or
excerpts of the above items.

(f) All payments provided for in this paragraph 1 will be reduced by any and all applicable
withholdings, contributions and payroll taxes.

2. Consulting Appointment.

(a) On April 1, 2007, the Company will appoint you, and you will serve the Company, in the
capacity of a consultant to the business of the Company and its subsidiaries, through the close of
business on March 31, 2008 (the “Consulting Period”); provided, however, that the Consulting Period
will be automatically extended, without further action by either you or the Company, by one (1)
additional year, first on March 31, 2008, and on each March 31 thereafter, unless either you or the
Company provide the other with not less than sixty (60) days’ prior written notice of either’s
election not to extend the Consulting Period.

(b) During the Consulting Period, you agree to act as a consultant and render your assistance
and participation, giving at all times the full benefit of your knowledge, expertise, technical
skill and ingenuity, in all matters involved in or relating to the business of the Company and its
subsidiaries (the “Consulting Services”). Consistent with your independent contractor status, you
will retain ultimate control over the provision of the Consulting Services hereunder, with such
Consulting Services to be performed at times and places to be mutually agreed upon; provided,
however, that you will not be required to perform Consulting Services in excess of 250 hours per
year (including travel time).

(c) In consideration of the Consulting Services, during the Consulting Period, the Company
will provide you with the following payments and benefits:

(i) For each one-year period of the Consulting Period (i.e., April 1 – March 31), you
will be entitled to receive an amount equal to $120,000 (the “Consulting Fees”). The
Consulting Fees shall be paid in eight (8) substantially equal monthly installments, payable
on the first day of each calendar month from May through December. You shall also be
reimbursed for your reasonable business expenses incurred in connection with the Consulting
Services rendered to the Company or it subsidiaries.

(ii) You will be entitled to participation, on the same basis as the other members of
the Executive Management Committee of the Company, in any health and insurance plans now or
hereafter maintained by the Company or its subsidiaries during the Consulting Period.

(iii) During the 2007 calendar year, you will continue to be eligible to participate in
the Company’s policies relating to tax gross-up payments for housing and tax preparation
services, on the same basis as provided to members of the Executive Management Committee of
the Company during such calendar year.

(iv) The Company will continue to pay for your housing and utilities in Bermuda through
September 30, 2007, such payments to be made on the same basis as those made to members of
the Executive Management Committee of the Company. Thereafter, in connection with your
repatriation to the United States, the Company will reimburse you for the actual and
reasonable costs associated with shipping your household items to a location in the United
States of your choosing, and such other actual and reasonable moving expenses incurred by
you. In addition, the Company will pay for the cost of two (2) one-way business class
airline tickets to the United States for you and your spouse.

(v) The provisions and benefits provided under that certain Indemnification Agreement
between you and the Company, dated August 1, 2006, shall continue in effect during the
Consulting Period.

(d) Nothing in this paragraph 2 will be taken to imply any relationship of partnership, agency
or employer and employee between you and the Company following the Retirement Date. During the
Consulting Period you will be an independent contractor, and not an employee of the Company, for
purposes of all applicable laws and regulations governing employment insurance, workers’
compensation, industrial accidents, labor and taxes.

(e) As an independent contractor, you will be solely responsible for, and the Company will not
withhold from any amounts payable under this paragraph 2, any applicable taxes payable with respect
to the payments and benefits provided to you under this paragraph 2.

3. Release.

(a) As used in this Agreement, the term “claims” will include all claims, covenants,
warranties, promises, undertakings, actions, suits, causes of action, obligations, debts, accounts,
attorneys’ fees, judgments, losses and liabilities, of whatsoever kind or nature, in law, equity or
otherwise.

(b) For and in consideration of the payments and benefits described in paragraph 2 above, and
other good and valuable consideration, you, for and on behalf of yourself and your heirs,
administrators, executors and assigns, effective as of the Retirement Date, do fully and forever
release, remise and discharge the Company, its direct and indirect parents, subsidiaries and
affiliates, together with their respective officers, directors, partners, shareholders, employees
and agents (collectively, and with the Company, the “Group”) from any and all claims which you had,
may have had, or now have against the Group, for or by reason of any matter, cause or thing
whatsoever, including any claim arising out of or attributable to your employment or the
termination of your employment with the Company, including, but not limited to, claims of breach of
contract, wrongful termination, unjust dismissal, defamation, libel or slander, or under any
federal, state or local law dealing with discrimination based on age, race, sex, national origin,
handicap, religion, disability or sexual preference.

(c) Notwithstanding any provision of this paragraph 3 to the contrary, by executing this
Agreement, you are not releasing any claims relating to: (i) your rights to enforce this Agreement
and (ii) your rights to the Accrued Obligations under the Employment Agreement.

4. Continuing Obligations. Your obligations described in Section 9 of the Employment
Agreement, which, together with Section 10 of the Employment Agreement and any referenced
definitions are incorporated herein by reference and made a part hereof, will continue in
accordance with the terms contained therein; provided, however, that (i) for purposes of such
covenants, the Non-Compete Period (as defined in the Employment Agreement) shall extend through the
expiration of the Consulting Period, and (ii) you acknowledge that to the extent any such
obligations would otherwise expire by their terms prior to the end of the Consulting Period, you
acknowledge and agree that, in consideration of the payments and benefits provided to you herein,
such obligations shall continue through the expiration of the Consulting Period.

5. Severability. In the event that any one or more of the provisions of this
Agreement is held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or impaired thereby.
Moreover, if any one or more of the provisions contained in this Agreement is held to be
excessively broad as to duration, scope, activity or subject, such provisions will be construed by
limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable
law.

6. Dispute Resolution. Any controversy arising out of or relating to this Agreement
or the breach hereof (other than claims for injunctive relief in connection with the covenants
contained in paragraph 4) will be settled by binding arbitration in accordance with the Employment
Dispute Resolution Rules of the American Arbitration Association (the “AAA”) (before a single
arbitrator appointed pursuant to the procedure below) and judgment upon the award rendered may be
entered in any court having jurisdiction thereof. The costs of any such arbitration proceedings
will be borne equally by you and the Company; provided, however, that the arbitrator shall have the
right to award to either party reasonable attorneys’ fees and costs expended in the course of such
arbitration or enforcement of the awarded rendered thereunder. Any award made by such arbitrator
shall be final, binding and conclusive on the parties for all purposes, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction thereof. The
arbitrator shall be appointed in the following manner: immediately after the filing of the demand
or submission, the AAA shall send simultaneously to each of you and the Company an identical list
of names of persons chosen from the AAA’s panel. Each of you and the Company shall have ten (10)
days from the transmittal date in which to strike names objected to, number the remaining names in
order of preference, and return the list to the AAA. Each of you and the Company may strike three
names on a peremptory basis. If a party does not return the list within the time specified, all
persons named therein shall be deemed acceptable. From among the persons who have been approved on
both lists, and in accordance with the designated order of mutual preference, the AAA shall invite
the acceptance of an arbitrator to serve. If the parties fail to agree on any of the persons
named, or if acceptable arbitrators are unable to act, or if for any other reason the appointment
cannot be made from the submitted lists, the AAA shall have the power to make the appointment from
among other members of the AAA panel without the submission of additional lists.

7. Miscellaneous.

(a) You and the Company represent and acknowledge that, in executing this Agreement, neither
has relied upon any representation or statement not set forth herein. This Agreement sets forth
the entire agreement between the parties hereto and, except as otherwise expressly provided, fully
supersedes any and all prior negotiations, discussions, agreements or understandings between the
parties hereto pertaining to the subject matter hereof. This Agreement may not be changed, amended
or modified, except by writing signed by the party affected by such change, amendment or
modification.

(b) The descriptive headings herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this Agreement.

(c) This Agreement may be executed in two counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.

(d) This Agreement will be governed by and construed in accordance with the laws of the State
of New York without application of conflict of law provisions.

(e) This Agreement represents the entire agreement of the parties with respect to your
employment with the Company and its subsidiaries, your retirement therefrom, and your engagement as
a consultant to the Company thereafter. Except as specifically set forth in paragraph 4 hereof,
this Agreement shall supersede the Employment Agreement in all respects effective as of the date
hereof.

(f) The Company and you acknowledge that each has read this Agreement in its entirety, fully
understand its meaning and are executing this Agreement voluntarily and of your own free will with
full knowledge of its significance.

1

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

By: /s/ Scott Carmilani

Name: Scott Carmilani

Title: President and Chief Executive Officer

/s/ G. William Davis, Jr.

	G.	 	William Davis, Jr.

2EX-10.1

STANDARD MICROSYSTEMS CORPORATION

2005 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(the “SERP”)

Amended and Restated as of January 1, 2005

1

STANDARD MICROSYSTEMS CORPORATION

2005 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

PREAMABLE

WHEREAS, Standard Microsystems Corporation (“SMSC” or the “Company”), a Delaware Corporation,
previously amended and restated the Standard Microsystems Corporation Executive Retirement Plan
which was last amended and restated effective as of January 1, 2003 (the “Plan” or the “2003
SERP”); and

WHEREAS, the purpose of the 2003 SERP was to provide a supplemental retirement benefit for
certain key executive officers through the payment of supplemental retirement and death benefits;
and

WHEREAS, new Section 409A of the Internal Revenue Code, as enacted under the American Jobs
Creation Act of 2004 (“AJCA”) imposes new rules regarding the time and form of distributions under
nonqualified retirement plans, such as the 2003 SERP; and

WHEREAS, all benefits to which employees had a legally binding right, and no substantial risk
of forfeiture effective as of December 31, 2004, could continue to be governed by the terms of the
2003 SERP and are not subject to Section 409A under a special “grandfather rule”; and

WHEREAS, after consideration, the only advantage of the grandfathered rule is to permit prior
deferrals not to be subject to the 6 month delay in payment rules for “Specified Employees” of
publicly traded companies, such as SMSC; and

WHEREAS, in order to comply with Section 409A of the Code, SMSC wishes to amend and restate
the 2003 SERP into the Standard Microsystems Corporation 2005 Supplemental Executive Retirement
Plan (the “SERP”, the “Plan” or the “2005 SERP”); and

WHEREAS, the intent of the 2005 SERP is to comply with all IRS announcements and notices,
including Notice 2005-1 and the Proposed Regulations issued under Section 409A.

NOW, THEREFORE, effective as of January 1, 2005, the 2005 SERP is amended and restated as
follows:

ARTICLE I

DEFINITIONS

The following words and terms as used herein shall have the respective meanings hereinafter set
forth, unless the context clearly requires a different meaning.

1.1 “Actuarial Assumptions” means, for purposes of determining optional forms of payment, the
interest rate most recently used by the Company’s actuary for the purpose of financial accounting
under the Plan and the GAR 94 Mortality Table for post-commencement periods with no mortality for
pre-commencement periods, except as otherwise indicated in any Exhibits, as amended from time to
time.

1.2 “Administrator” means the Committee selected by the Board to administer the Plan (the
“Committee”) or, if the Board fails to select a Committee, SMSC. The Board may from time to time
appoint members of the Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, in the Committee. The Administrator shall have plenary
authority in its discretion to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, and to make all determinations it may deem necessary or advisable
for the administration of the Plan. Any interpretation or determination made by the Administrator
pursuant to the foregoing shall be conclusive and binding upon any person having or claiming any
interest under the Plan.

1.3 “Beneficiary” means the person, persons or entity designated in writing by the Executive,
on forms provided by the Administrator, to receive the benefits payable under the Plan in the event
of the Executive’s death. An Executive may change his Beneficiary from time to time by filing a
new written designation with the Administrator and such designation shall be effective upon receipt
by the Administrator. If an Executive has not validly designated a Beneficiary or if a designated
Beneficiary shall predecease an Executive, any death benefit then payable under the Plan shall be
paid to the Executive’s spouse, if then living, and if such spouse is not then living, to the
Executive’s estate.

1.4 “Board” means the Board of Directors of SMSC.

1.5 “Base Annual Salary” means one-third of the aggregate base salary paid by the Company to
the Participant during the 36-month period immediately preceding the Participant’s termination of
employment, or, in the case of a Participant who becomes a Vested Participant upon occurrence of a
change in control, as referred to in Section 1.6, Base Annual Salary means the annual base salary
in effect immediately before such change in control. Such base salary shall be determined before
reduction for employee contributions to the Standard Microsystems Corporation Incentive Savings and
Retirement Plan, flexible spending accounts, or other similar reductions. Base Annual Salary shall
not include overtime, commissions, bonuses, options, benefits or any other compensatory payment,
whether or not taxable, not described in the first sentence of this Section. Notwithstanding any
provisions to the contrary, to the extent that any Participant works a reduced number of hours, the
Board may, within its discretion, determine that such Participant shall have the Participant’s Base
Annual Salary determined as of the time the reduction in hours occurs. Future SERP benefits shall
continue to be computed based upon the 36 month period immediately preceding the reduction in
hours, or the annual base salary in effect immediately before a change in control, whichever is
appropriate, rather than the ultimate termination of employment.

1.6 “Change in Control” means the occurrence of one of the following events:

a. 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;

b. 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;

c. 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 determined 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,

d. Any other event for which SMSC is required to report such a change on Form 8-K, as required
by the Securities and Exchange Commission; or,

e. 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 or the regulations issued there under.

1.7 “Claims Coordinator” means the individual(s) designated by the Administrator to receive
applications for benefits by Participants and Beneficiaries.

1.8 “Code” means the Internal Revenue Code of 1986, as amended.

1.9 “Company” means SMSC and any subsidiary or division of SMSC designated by resolution of
the Board to which the Plan shall be applicable, and any successor thereof, which adopts the Plan.

1.10 “Disability” means a Participant 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 a Participant is disabled shall be determined by the
Committee, in its sole discretion, but subject to the provisions of Section 409A.

1.11 “Effective Date” means January 1, 2005, for purposes of the amended and restated SERP.
The original effective date of the Plan was March 1, 1994.

1.12 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

1.13 “Executive” means an officer of the Company whom the Board has explicitly authorized by
Resolution to participate in the Plan.

1.14 “Highly Compensated Employee” means an individual who is characterized as a highly
compensated employee under Section 414(q) of the Code. To the extent required by Department of
Labor Regulation Section 2520.104-23, to permit the Plan to qualify as a “Top Hat” plan for a
select group of highly compensated employees, the term Highly Compensated Employee shall be
restricted by the Committee to satisfy this Department of Labor Regulation. To the extent any
Participant is determined to no longer be a Highly Compensated Employee while actively
participating in the Plan, all future benefits shall terminate until such time as the Participant
is once again determined to be a Highly Compensated Employee. The Committee shall have the
discretion to take all actions necessary to preserve the “Top Hat” status of the Plan, including
but not limited to distributing any benefits and terminating the participation of any Participant
in the Plan, except to the extent such action would violate Section 409A.

1.15 “Highly Compensated Participant” means a Highly Compensated Employee who participate in
the Plan.

1.16 “Key Employee” means an individual as described in Section 416(i) of the Code, determined
without regard to Section 416(i)(5) thereof. For purposes of this provision, a Key Employee is an
officer earning more than $135,000 in 2005 and $140,000 in 2006 (with a limit of no more than 50
employees, or if less, the greater of 3 or 10% of all employees); a 5% owner; or a 1% owner having
annual compensation of more than $150,000. All amounts shall automatically be increased as
provided under the Code. For purposes of determining Key Employee status, the Employer hereby
designates each December 31 as the “identification date” under Section 409A of the Code. Anyone
determined to be a Key Employee shall remain a Key Employee for the 12 month period of time after
the expiration of 4 months following the determination of Key Employee status. The determination
of whether a Participant is a Key Employee shall be made by the Administrator in accordance with
the provisions of Section 409A.

1.17 “Participant” means an Executive, who is a Highly Compensated Employee, who has executed
and filed with the Administrator a Participation Agreement.

1.18 “Participation Agreement” means an agreement executed in accordance with the provisions
of Section 2.1 of the Plan.

1.19 “Plan” shall mean the Standard Microsystems Corporation 2005 Supplemental Executive
Retirement Plan.

1.20 “Related Entities” means any entity within the SMSC “single employer” controlled group as
defined under Section 414 of the Code, or any entity that is part of SMSC’s “controlled group” as
defined under Section 1563 of the Code.

1.21 “Retirement” means a Participant has retired from service with SMSC, and all Related
Entities, in accordance with SMSC’s normal employment policies and procedures, after attaining the
age of 65 or earlier.

1.22 “Separation from Service” means a Participant is no longer employed by SMSC or any
Related Entities within or outside of the United States on account of a termination of employment,
Retirement, Disability or death. Consistent with Proposed Treasury Regulation Section 1.409A-1(h),
or any subsequent guidance under Section 409A of the Code, no Separation from Service shall occur
if a Participant continues to perform services as a consultant or an Employee in accordance with
the following rules:

a. Leave of Absence. For purposes of Section 409A, the employment relationship is treated as
continuing in effect while a Participant 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
Participant’s right to reemployment with SMSC or any Related Entity are provided either by statute
or contract. Otherwise, after a 6 month leave of absence, the employment relationship is deemed
terminated.

b. 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 a Participant
are insignificant, a Separation from Service shall be deemed to have occurred. For purposes of
Section 409A, if a Participant 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.

c. Consulting Services. Where a Participant 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 Participant 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).

1.23 “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. The stock of SMSC, is
traded on the NASDAQ Stock Exchange.

1.24 “Spouse” means the person to whom a Participant is legally married at the time of such
determination (as determined by the Administrator under local state law). The term “Surviving
Spouse” means the survivor of a deceased former Participant to whom such deceased former
Participant was legally married (as determined by the Administrator) on the date of the
Participant’s death.

1.25 “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting
from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as
defined in Section 152(a)) of the Participant; loss of the Participant’s property due to casualty;
or any other similar extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, as determined under Section 409A of the Code.

1.26 “Valuation Date” means the last day of each Plan Year, or more frequently as determined
within the discretion of the Committee.

1.27 “Vested Participant” means a Participant who has become vested in accordance with the
provisions of Article III.

1.28 “Years of Service” means periods of time during which a Participant is employed at the
Company, regardless of the actual hours worked in any periods. The Administrator shall adopt
uniform rules for crediting Years of Service. Under such rules, periods of authorized leaves of
absence and periods of service for Related Entities may be credited towards satisfaction of the
applicable Years of Service for vesting. For Participants who enter the Plan after January 1,
2003, only service as an Executive is credited as Years of Service. For clarity regarding
Participants who are not fully vested as of January 28, 2003, the following dates are the dates
that each such Participant became a Participant in the Plan: Steven Bilodeau, March 1, 1999; Peter
Byrnes, July 14, 1998; Andrew Caggia, February 15, 2000; and Robert Hollingsworth, January 28,
2003.

ARTICLE II

PARTICIPATION

2.1 Commencement of Participation. An Executive shall become a Participant, effective as of
his hire date or the date he became an Executive (for Participants who enter the plan after January
1, 2003), as applicable, upon receipt by the Administrator of a Participation Agreement that is
properly executed by the Executive. The Participation Agreement shall be in a form prescribed by
the Administrator and shall specify that the Executive agrees to be bound by all of the terms of
the Plan.

ARTICLE III

VESTING

3.1 a. Prior to 2003. For Participants who entered the Plan prior to January 1, 2003, such
Participants become 100% vested in all benefits under the Plan upon the completion of 10 continuous
Years of Service for the Company, including Years of Service prior to the establishment of the Plan
and Years of Service prior to becoming an Executive, except that, per employment agreements dated
March 18, 1999, and January 7, 2000, respectively, Steven Bilodeau and Andrew Caggia shall become
50% vested upon the completion of 5 Years of Service with the remaining 50% vesting as outlined in
Section 3(1)(b) below.

b. Effective in 2003. For Participants who enter the Plan on or after January 1, 2003, such
Participants shall become 50% vested in their benefits under the Plan upon the completion of 5
Years of Service as an Executive. Participants shall thereafter become further vested over the
next 5 years in a pro rata manner measured from the fifth anniversary date of when the Participant
became an Executive on a monthly basis, providing for a full month of vesting service for each
month in which any time is worked, or credited for having been worked. Upon the completion of 10
Years of Service, a Participant shall be 100% vested in all benefits. For example, if an
individual becomes a Participant on or after January 1, 2003, works for the Company for a period of
7 years and 6 months, the Participant shall be 75% vested in the Plan (5 years; plus 30 months
divided by 60 months, multiplied by the remaining 5 year vesting period).

3.2 Break in Service. For Participants who enter the Plan on or after January 1, 2003, in
determining Years of Service, only Years of Service worked for the Company, and any Related
Entities, as an Executive, shall be taken into consideration in determining a Participant’s vested
percentage. Periods of time prior to any break in service shall not be considered in determining
Years of Service. However, any periods worked after becoming an Executive, in any capacity other
than as an Executive, shall not count as a break in service, even though such time does not count
for vesting. Notwithstanding the provisions of this Section 3.2, the Board of Directors may,
within its discretion, grant past service credits to any Participant for purposes of vesting.

3.3 Vesting Upon a Change in Control. In the event of any Change in Control, notwithstanding
any provisions of the Plan to the contrary, all Participants, who entered the Plan before January
1, 2003, shall immediately become 100% vested in their benefits. All benefits shall continue to be
paid in accordance with the terms of the Plan.

The above provisions regarding 100% vesting upon a Change in Control only applies to
Participants who enter the Plan before January 1, 2003. However, the Board, may, within its
discretion, approve the vesting, in whole or in part, for Participants who entered the Plan after
January 1, 2003, in the event of a Change in Control.

ARTICLE IV

BENEFITS

4.1 Retirement Benefit. A Vested Participant who retires on or after attaining age 65 shall
be entitled to receive a retirement benefit from the Company, in an annual amount equal to 35% of
the Participant’s Base Annual Salary. The retirement benefit shall be paid in equal monthly
installments, beginning on the first day of the first calendar month following the Participant’s
termination of employment, and shall continue until 120 monthly installments shall have been paid.

4.2 Termination Benefit.

a. A Vested Participant whose employment with the Company terminates prior to attaining
age 65 shall be entitled to receive a termination benefit from the Company in an annual amount
equal to 35% of the Participant’s Base Annual Salary. The termination benefit shall be paid in
equal monthly installments, beginning on the first day of the first calendar month following the
Participant’s attainment of age 65 and shall continue until 120 monthly installments shall have
been paid. If a Participant who has begun to receive payments under this Section 4.2 shall die
before receiving all payments due him hereunder, the remaining installments shall be paid to his
Beneficiary, monthly.

b. A Vested Participant whose employment with the Company terminates by reason of Disability
shall be entitled to receive a termination benefit from the Company in an annual amount equal to
35% of the Participant’s Base Annual Salary. The Disability benefit shall be paid in equal monthly
installments, beginning on the first day of the first calendar month following the determination
that the Participant is Disabled and shall continue until 120 monthly installments shall have been
paid. If a Participant who has begun to receive payments under this Section 4.2 shall die before
receiving all payments due him hereunder, the net present value of all remaining installments,
using the interest rate contained in the Actuarial Assumption, shall be paid in a single lump sum
cash payment to his Beneficiary, within 30 days after such death.

c. Notwithstanding Section 4.2(b), no termination benefit shall be payable to a Participant
who is not a Vested Participant, whose employment terminates by reason of a Disability, on or after
the date that the Participant resumes employment with the Company or another employer.

4.3 Death Benefit. If a Participant who has begun to receive payments under Section 4.1 shall
die before receiving all payments due him hereunder, the remaining installments shall be paid to
his Beneficiary.

For Participants who enter the Plan on or after January 1, 2003, and who has begun to receive
payments, dies before receiving all payments, 50% of the remaining installments (i.e., 17.5%) shall
be paid to a Participant’s Beneficiary.

In the event that: (i) a Participant dies while still employed by the Company, or (ii) a
Participant who has become entitled to receive a retirement or termination benefit, dies after
retirement or termination of employment, but prior to receiving a benefit under Section 4.1 or 4.2,
the Participant’s Beneficiary shall be entitled to receive a death benefit from the Company in an
annual amount equal to 35% of the Participant’s Base Annual Salary.

For Participants who enter the Plan on or after January 1, 2003, if death occurs before
benefits have commenced to be paid, the Participant’s Beneficiary shall be entitled to receive a
death benefit from the Company in an annual amount equal to 17.5% of the Participant’s Base Annual
Salary for up to 120 monthly installments (i.e., 50% of the intended installments), as otherwise
provided above.

The death benefit shall be paid in a single lump sum payment equal to the net present value of
all monthly installments, using the interest rate contained in the Actuarial Assumption, within 30
days following the Participant’s death.

4.4 Termination for Cause. Notwithstanding any other provision of the Plan, if the Company
terminates a Participant’s employment for cause (as hereinafter defined), neither the Participant
nor his Beneficiary shall be entitled to any benefit under the Plan. For purposes of the Plan, the
term “for cause” shall mean and be limited to the following events: (i) the Participant’s
conviction in a court of law of a felony or other crime involving moral turpitude; (ii) the
Participant’s material breach of any covenant set forth in any agreement between the Participant
and the Company; or (iii) the Participant’s commission of an act or omission constituting willful
misconduct that is injurious to the Company or a Related Entity. A resolution of the Board
declaring that the Participant has committed a breach, act omission or performance described in
Section 4.4 (ii) through (iii) shall be conclusive evidence thereof.

4.5 Suicide Exclusion. Notwithstanding any other provision of the Plan: (i) no benefit shall
be payable to any Beneficiary in the event the Participant dies, as the result of suicide or
self-inflicted injury, within 2 years of the date he first becomes a Participant; and (ii) no
increase in the amount of any benefit provided under the Plan shall be payable to any Beneficiary
in the event the Participant dies, as the result of suicide or self-inflicted injury, within 2
years of the date of such increase.

4.6 Part-Time Employee Benefits. In the event that any Participant continues to work with
SMSC following the attainment of age 65, or earlier, on a part-time schedule, working less than 20
hours per week, such a Participant shall be treated as a “retired” employee for purposes of
receiving all benefits under Section 4.1, unless no Separation from Service is deemed to occur for
purposes of Section 409A.

ARTICLE V

ALTERNATIVE DISTRIBUTIONS

5.1 Payment of Benefits. Unless elected otherwise in accordance with this Article V, all
benefits shall be paid in accordance with Article IV. However, consistent with Section 409A of the
Code, Participants who are employed by the Company on or after November 18, 2006 shall be given the
ability to make a one time election regarding the manner in which they wish to receive their
accruals for 2005 and 2006, and for future benefit years. No further changes can be made to the
SERP to benefit distributions except as permitted under this provision. Contributions shall
generally begin to be paid following a Separation from Service as follows:

(a) Small Account Balances. To the extent any Participant terminates employment for any
reason, and the present value of the Accrued Benefit in the 2005 SERP is less than $50,000, the
entire vested amount of the Participant’s benefit shall be paid as soon as reasonably possible
within a period of 60 days following such termination of employment in a single lump sum cash
payment. This “de minimus rule” shall apply whether or not a distribution is required as a result
of death, Disability or any Separation from Service, and regardless of age.

(b) Distribution Elections. Within 30 days after a Participant enters the Plan, a Participant
may elect to receive benefits under the Plan, as allowed below. Once an election is made to
receive benefits in a form other than the normal form of payment, such an election may not be
changed, except as otherwise permitted under Section 5.5.

Alternative forms of distributions that may be elected at the time a Participant enters the
Plan include the following:

(i) Quarterly/monthly installments over a period of years (not to exceed 20 years) beginning
on the first day of the calendar quarter following the earlier of or later of attaining any
specified age between 55 and 65 or a Separation from Service.

(ii) In a single lump sum cash payment on:

(A) The first day of the calendar quarter after attaining any
specified age between 55 and 65 elected by a Participant.

(B) The first day of the calendar quarter following the
earlier of or the later of attaining age a specified age
between 55 and 65 or incurring a Separation from Service.

(C) Any date specified by a Participant in the applicable
Distribution Election Form after age 55.

(c) Installment Payments. Each installment payment shall be treated as a separate payment for
purposes of any change in distribution elections under Section 5.5.

5.2 Disability. In the event that payments have commenced to be made to a Participant,
pursuant to an election made above, prior to the date the Participant becomes Disabled, all
remaining payments shall continue to be paid to the Participant, or the Participant’s Spouse or
other legal representative responsible for the care of the Participant, in the same manner as the
Participant was receiving payments prior to the Participant’s Disability, if applicable.

In the event that payments, pursuant to an election made above, have not commenced to be paid
to a Participant prior to the date of a Participant becomes Disabled, all payments shall be made to
the Participant or any legal representative, in installments over 10 years beginning as of the
first day of the calendar quarter following the date of the Participant’s Disability.

5.3 Death. In the event that payments have commenced to be made to a Participant, pursuant to
an election made above, prior to the date of the Participant’s death, all remaining payments shall
be paid in a single lump sum payment to the Participant’s Spouse or other Beneficiaries, as soon as
administratively possible after the Participant’s death.

In the event that payments, pursuant to an election made above, have not commenced to be paid
to the Participant prior to the date of the Participant’s death, all payments shall be paid as soon
as administratively possible following a Participant’s death, to the Participant’s Spouse or other
Beneficiary in a single lump sum cash payment. If no Spouse or Beneficiary exists, all benefits
shall be paid to the Participant’s estate.

5.4 Changes in the Time and Form of Distributions. In accordance with Section 409A of the
Code, a Participant may generally not change the time and/or form of a distribution under the Plan,
except as provided in IRS Notice 2005-1 and the Proposed Regulations issued under Section 409A, and
any Final Regulations or subsequent guidance.

In accordance with Proposed Treasury Regulations Section 1.409A-2(b)(1), a Participant may
make a “subsequent election” to delay a payment or change the form of payment of an amount of
deferred compensation. In order for such an election to be effective the election must be made 12
months prior to the date the payment is scheduled to be paid; the election cannot take effect until
at least 12 months after the date upon which the election is made; and the payment with regard to
such election must be deferred for a period of not less than 5 years from the date such payment
would otherwise have been made. For purposes of this provision, consistent with Proposed Treasury
Regulation Section 1.409A-2(b)(2)(iii) or any other guidance, each installment payment to which any
Participant shall be entitled shall be treated as a right to a series of separate payments, thereby
permitting a Participant to elect to defer the payment of any quarterly installment, as long as
such a deferral election is made consistent with the 12 month election rule and the 5 year delay in
payment requirements of this Plan and Section 409A of the Code.

Consistent with the provisions of this Section 5.4, a Participant may elect an alternative
date upon which to have benefits commence under the normal form of distribution or under any other
manner of distribution permitted in accordance with Section 5.1 of the Plan.

The Committee shall establish uniform procedures, including a Distribution Election Form, in
order to allow Participants to elect alternative forms of distributions. The Committee shall make
best efforts to ensure that all procedures are established in a manner to allow Participants to
elect alternative forms of distributions prior to the date that benefits would otherwise commence,
in order to minimize any unintended taxation to Participants under the constructive receipt rule
and Section 409A. The Committee may also establish reasonable procedures to allow Participants to
elect the form of distribution at the time they become Participants in the Plan, or any time
thereafter prior to entitlement to benefits. Participants may be allowed to change their form of
distribution within the discretion of the Committee, as long as such action is taken in accordance
with Section 409A of the Code.

5.5 Limitation on Elections. Notwithstanding any provisions in the Plan to the contrary, the
Committee shall not honor any distribution elections, to the extent such elections would violate
the provisions of Sections 5.4 of the Plan or Section 409A of the Code. If any potential violation
would occur under Section 409A, the normal form of distribution shall be paid under the Plan as if
no election had been made.

5.6 Delay in Payment for Specified Employees. Notwithstanding any provisions in the Plan to
the contrary, if a Participant is a Specified Employee, upon a Separation from Service for any
reason other than death, the Participant’s Account may not be paid, or commenced to be paid,
earlier than 6 months after the last date of the Participant’s Separation from Service with the
Company, unless the Participant qualifies for an exemption or safe harbor. In the event any
amounts to be paid during the first 6 months following a Separation from Service are required to be
deferred in accordance with this Section, to be in compliance with Section 409A of the Code, such
delayed payments shall be paid on the first day of the month after the 6 month separation period,
retroactively, with interest equal to the prime rate as of the first day of the month in which a
Separation from Service occurs, plus 2%.

5.7 Special Election for 2005, 2006 and 2007 Contributions. This Plan is being amended and
restated as of January 1, 2005, to comply with the provisions of Section 409A of the Code. In
accordance with IRS Notice 2005-1, Q&A-19(c), and Proposed Treasury Regulation Section 409A, a Plan
could be amended to provide for new payment elections without violating the “subsequent deferral”
and “anti-acceleration rules” under Section 409A, as long as a Plan is so amended by December 31,
2007. However, a Participant may not, in 2007, change a payment election with respect to payments
that a Participant would otherwise receive in 2006, or cause a payment to be made in 2006.
Accordingly, with respect to all benefit accounts made to the 2005 SERP for the 2005, 2006 and 2007
Plan Years, this Plan shall allow all Participants to make new payment elections on or before
December 31, 2007, with respect to both the time and form of payment of the 2005, 2006 and 2007
benefit accruals. This “second election opportunity” is being granted in accordance with all IRS
guidance. Furthermore, as long as a new election is made in accordance with Section 5.4, a
Participant may elect a new form of distribution for all benefits.

5.8 No Withdrawals for Unforeseeable Emergencies. A Participant shall not be permitted to
receive a withdrawal prior to the occurrence of a Separation from Service, death or Disability, in
the event of an Unforeseeable Emergency.

5.9 Actuarial Equivalent. All of the above distribution options shall be the actuarially
equivalent of the normal form of benefit under the SERP based upon all Actuarial Assumptions.

ARTICLE VI

FUNDING

6.1 Plan Unfunded. The 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 Plan, even if a trust is
established to provide for the payment of any or all benefits hereunder. All benefits shall be
paid from the general assets of the Company, which remain subject to the claims of all general
creditors of the Company and to unrestricted use by the Company until benefit payments are made.
To the extent the Company decides, within its discretion, to establish a trust or other internal
funding vehicles, such as a sinking fund, to provide for the payment of benefits to Participants
and assist in meeting the Company’s obligations under the Plan, any such trusts shall be grantor
trusts established in accordance with the provisions of Revenue Procedure 92-64 (i.e., a “Rabbi
Trust”). Any provisions, which would cause any trust to fail to comply with Revenue Procedure
92-64, or any subsequent Internal Revenue Service rulings or pronouncements, shall be null and
void, and the closest alternative provision contained in Revenue Procedure 92-64 shall apply, if
appropriate. Notwithstanding any provisions to the contrary, in the event of a Change in Control
of the Company, if any benefits under the Plan are held in a “Rabbi Trust”, the assets transferred
to the Rabbi Trust shall become irrevocably held by the Rabbi Trust and may not be recovered by the
Company or any Related Entities, or used by the Company or any Related Entities for any corporate
or other purposes.

6.2 Insurance. To cover all or part of its potential liabilities under the Plan, the Company
may, but need not, purchase one or more life insurance policies on the lives of one or more
Executives, but no Executive shall have any preferred claim for proceeds of any such policy or any
beneficial ownership in any such policy as a result thereof. The Company makes no representation
that it will use any life insurance policy acquired by it and insuring the life of an Executive to
provide benefits under the Plan or that any such policy will, in any way, represent security for
the payment of the benefits provided for under this Plan. No insurance policy or other asset
acquired or held by the Company to support the Company’s obligations under the Plan shall be deemed
to be held under any trust for the benefit of any Executive or Beneficiary or to be security for
the performance of the obligations of the Company, but will be, and remain, a general, unpledged,
unrestricted asset of the Company that may be used for any corporate purpose.

ARTICLE VII

CLAIMS PROCEDURE

7.1 Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such
Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a
written claim for a determination with respect to the amounts distributable to such Claimant from
the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim
must be made within 60 days after such notice was received by the Claimant. All other claims must
be made within 180 days of the date on which the event that caused the claim to arise occurred.
The claim must state, in detail, the determination desired by the Claimant.

7.2 Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, and shall notify the Claimant in writing:

(a) That the Claimant’s requested determination has been made, and that the claim has been
allowed in full; or

(b) That the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner calculated to be
understood by the Claimant:

(i) The specific reason(s) for the denial of the claim, or any part of it;

(ii) Specific reference(s) to pertinent provisions of the Plan upon which such denial was
based;

(iii) A description of any additional material or information necessary for the Claimant to
perfect the claim, and an explanation of why such material or information is necessary; and

(iv) An explanation of the claim review procedure set forth in Section 7.3 below.

7.3 Review of a Denied Claim. With 60 days after receiving a notice from the Committee that a
claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized
representative) may file with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review procedure began, the Claimant (or
the Claimant’s duly authorized representative):

(a) May review pertinent documents;

(b) May submit written comments or other documents; and/or

(c) May request a hearing, which the Committee, in its sole discretion, may grant.

7.4 Decision on Review. The Committee shall render its decision on review promptly, and not
later than 60 days after the filing of a written request for review of the denial, unless a hearing
is held or other special circumstances require additional time, in which case the Committee’s
decision must be rendered within 120 days after such date. Such decision must be written in a
manner calculated to be understood by the Claimant, and it must contain:

(a) Specific reasons for the decision;

(b) Specific reference(s) to the pertinent Plan provisions upon which the decision was based;
and

(c) Such other matters as the Committee deems relevant.

7.5 Legal Action. A Claimant’s compliance with the foregoing provisions of this Article is a
mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim
for benefits under this Plan.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

8.1 Benefits Non-Assignable. Neither a Participant nor any Beneficiary under the Plan shall
have any right to assign, transfer, pledge or otherwise encumber the right to receive any benefits
hereunder, and any attempted assignment, transfer, pledge or other encumbrance shall be null and
void, and have no effect. Similarly, no rights under the Plan shall be subject to attachment or
garnishment, or otherwise subject to liability for the debts, contracts, liabilities or torts by
the creditors of any Participant or Beneficiary.

Notwithstanding the general inability to assign benefits under the Plan, consistent with IRS
Notice 2002-31 and Revenue Ruling 2002-22, to the extent that a valid Property Settlement or
Divorce Decree directs that any portion of a Participant’s benefits under the Plan be designated to
a former Spouse, benefits shall be paid to the Spouse, at the same time benefits would otherwise
have been payable to the Participant. In no event, shall any former Spouse obtain any additional
rights to receive any form of distribution, or benefits payable in any manner not permitted under
the Plan, or at any time earlier than when a Participant would otherwise have been entitled to
receive such benefits.

8.2 Replacement of Other Benefits. The benefits provided under this Plan shall be in lieu of
any other retirement, disability or death benefit provided by action of the Board or by agreement
between the Company and a Participant that may exist from time to time, and in particular, any
benefit provided by a resolution of the Board adopted May 11, 1979, other than (i) retirement,
disability and death benefits available to Company employees generally, including, but not limited
to, benefits payable under the Standard Microsystems Company Incentive Savings and Retirement Plan,
(ii) life insurance policies purchased for Executives under the executive life insurance program,
(iii) disability benefits payable under the Company’s officers’ disability insurance program, and
(iv) a written employment agreement which expressly provides that the benefits payable thereunder
are in addition to the benefits payable under this Plan.

8.3 Employment Not Guaranteed by Plan. Participation in the Plan shall not be deemed to be
consideration for, or an inducement to, or a condition of the employment of any employee. Nothing
contained in this Plan shall be deemed to give any Participants the right to be retained in the
employment of the Company, nor shall any Participant, retired Participant, deceased Participant,
disabled Participant, or terminated Participant have any right to any payment, except as such
payment may be provided under the terms of the Plan.

8.4 Withholding. The Company shall be entitled to deduct from all benefit payments made to a
Participant or any Beneficiary all applicable federal, state or local taxes required by law to be
withheld from such payments.

8.5 Cooperation of Participant. If so requested by the Company, a Participant shall take
whatever actions may be reasonably necessary to enable the Company to timely apply for and acquire
insurance, which the Company may purchase to finance operation of the Plan.

8.6 Fiduciary And Administrator. The Administrator shall be the Plan administrator, agent for
legal process and fiduciary, for purposes of ERISA. The Administrator may use agents, may allocate
its responsibilities to others and may exercise any other powers necessary for the discharge of its
duties to the extent not in conflict with the provisions of ERISA. The Company, in its discretion,
may obtain one or more policies of insurance, insuring Committee members and. any employees of the
Company to whom any responsibility with respect to the administration of the Plan has been
delegated, against any and all costs, expenses and liabilities (including attorneys’ fees) incurred
by such persons as a result of any act, or omission to act, in connection with the performance of
their duties, responsibilities and obligations under the Plan and any applicable law. To the
extent that the Company does not obtain such insurance, the Company shall indemnify and hold such
parties harmless in the same manner and to the same extent as directors and officers of the
Company, subject to any limitations imposed by law on such indemnification.

8.7 Payment of Benefit of Incompetent. In the event the Administrator finds that a
Participant or Beneficiary is unable to manage his affairs because of minority, illness, accident,
or other reason, any benefits payable hereunder may, in the discretion of the Administrator, be
paid to a spouse, child, parent, or other relative or dependent or to any person found by the
Administrator to have incurred expenses for the support and maintenance of such Participant or
Beneficiary; and any such payments so made shall be a complete discharge of all Company liability
therefore.

8.8 Change of Business Form. In the event of any consolidation, merger, acquisition or
reorganization of the Company (or a portion thereof), the obligations of the Company under this
Plan shall continue and be binding upon the Company and its successors. The Company shall not
cease its business activities or terminate its existence without having made adequate provisions
for the fulfillment of its obligations hereunder.

8.9 Amendment and Termination of Plan. The Board, in its sole discretion, may amend or
terminate the Plan at any time, and from time to time; provided, however, that no Plan amendment or
termination shall, without the consent of the affected Participant, reduce or eliminate (i) any
benefit that has begun to be paid or (ii) with respect to a Vested Participant, any benefit,
whether or not it has begun to be paid (determined without taking into account future increases in
the Participant’s salary). Notwithstanding the foregoing, the Board may make any amendment which
is necessary or appropriate to ensure that the Plan be treated as an unfunded plan which provides
benefits for a “select group of management or highly compensated employees” within the meaning of
Sections 201, 301, and 401 of ERISA.

8.10 Plan Document Controlling. All provisions of the Plan shall be controlled by this Plan
document and all prior Plan documents, Amendments and Board Resolutions shall be superceded by this
document.

8.11 Severability. In the event that any one or more provision of the Plan or any action
taken pursuant to the Plan 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, but in such
particular jurisdiction and instance the Plan 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.

8.12 Administration. The Administrator shall have the power to delegate specific
responsibilities. Such delegations may be to officers or employees of the Company or to other
individuals, all of whom shall serve at the pleasure of the Administrator and, if full-time
employees of the Company, without additional compensation.

8.13 Consequences of a Violation. All Participants shall be informed that they may
voluntarily participate in the SERP, after being notified of their eligibility to participate in
the SERP. All Participants shall be notified of the potential tax consequences under Section 409A,
if the provisions of the Plan and Section 409A are not followed, including the imposition of
immediate income taxes, a 20% excise tax, underpayment of interest penalties, and Form W-2
reporting. All Participants shall also be informed that the amount of their benefits under the
Plan shall be reported to the IRS, as required for nonqualified deferred compensation programs.
Furthermore, Participant shall be informed that when their benefits become vested under the Plan,
and not subject to any substantial risk of forfeiture under Sections 3121(v) and 3306(r) and other
provisions of the Code, the Participants shall be subject to FICA and all related taxes.

 8.14 Gross-Up for Section 409A Violations. In the event of a violation of
Section 409A of the Code, it is not the intent of the Company for a Participant who is an active
employee within 1 year of any violation (or a former employee who is an active member of the Board
within 1 year prior to any violation) to incur the excise tax and other penalties under Section
409A. Accordingly, to the extent any excise taxes or underpayment of interest or penalties under
Section 409A apply, the Company shall make a “gross up” payment to the Participant, to offset the
effect of any excise tax, interest or penalties incurred in accordance with Section 409A of the
Code, and any tax on such gross up payments, to the extent such action is legally permitted. All
gross up payments set forth in this Agreement shall be made as soon as legally permitted under
Section 409(A) of the Code, 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 payment occurs, and, if permissible, before the excise
tax becomes due.

8.15 Specified Employees. The Company has its stock traded on an established securities
market. Accordingly, “Specified Employees” shall exist under Section 409A, for whom benefit
payments may not be made for a 6 month period after a Separation from Service occurs.

8.16 Top Hat Plan. ERISA generally applies to protect the interests of “employees”, and DOL
Regulation Section 2520.104-23 establishes rules for certain arrangements that provide benefits for
a select group of management or Highly Compensated Employees, referred to as “Top Hat” programs.
This Plan is intended to be a Top Hat program under ERISA. In determining if the Plan satisfies
all rules to be classified as a Top Hat program, or in reviewing the number of Participants in the
Plan for any reasons, all employees of the Company and any Related Entities, whether foreign or
Domestic, shall be taken into consideration.

8.17 Compliance With the Code. The SERP is intended to comply with the provisions of Section
409A of the Code, and all other provisions. If there is any discrepancy between the provisions of
this SERP and the provisions of Section 409A, this discrepancy shall be resolved in a manner as to
give full effect to the provisions of Section 409A of the Code.

8.18 Annual Statement. Participants shall receive an annual statement after the end of each
Plan Year, confirming the amounts credited to each Participant’s Account.

8.19 Form of Communication. Any election, claims, notice or other communication required or
permitted to be made a Participant under this Plan shall be made in writing and in such form as
shall be prescribed by the Committee. Such communication shall be effective upon receipt, if hand
delivered or sent by first class mail, postage pre-paid, return receipt requested to Standard
Microsystems Corporation, Attention: Vice President of Human Resources, 80 Arkay Drive, P.O. Box
18047, Hauppauge, New York 11788.

8.20 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.

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

8.22 Expenses. All expenses incurred in administering the Plan shall be paid by the Company.

8.23 Plan Interpretation. The Administrator shall have complete discretion to interpret all
provisions of the Plan and to establish reasonable rules and procedures to facilitate the
administration of the Plan.

8.24 Binding Agreement. The provisions of this Plan shall be binding upon the Participant and
the Company and their successors, assigns, heirs, executors and beneficiaries.

8.25 Governing Law. Except to the extent preempted by federal law, the Plan shall be governed
by and construed in accordance with the laws of the State of New York.

	 	8.26	 	Notice and Inquiries. All notices to the Company may be addressed as follows:

Vice President of Human Resources

Standard Microsystems Corporation

80 Arkay Drive

Hauppauge, NY 11788

(631)434-4600

The Company shall provide each Participant with written notice by registered mail, at the last
address it maintains for each Participant, of any change in the above contact information for the
Company.

IN WITNESS WHEREOF, SMSC has adopted this Plan effective as of the day and year first written
above.

	 	 	 	 	 	 	 	 	 	 	 
	 

 

Date

	 	 
	 	   
	 	    
	 	      
	 	STANDARD MICROSYSTEMS CORPORATION

 

By: /s/ Steven J. Bilodeau
	
 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	March 22, 2007

	 	 	 	   
	 	 	 	 	 	Steven J. Bilodeau
	 
	 	 	 	 	 	 	 	 	 	 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]