Document:

EX-10.2

AMENDMENT NUMBER 1

TO THE

STANDARD MICROSYSTEMS CORPORATION

SEVERANCE PLAN

WHEREAS, Standard Microsystems Corporation (“SMSC” or the “Company”) maintains a Severance Plan
that was originally established effective as of January 1, 1986, and was identified as Plan Number
506 (the “Severance Plan” or the “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 1976, as amended (“ERISA”); and

WHEREAS, the Plan was last amended and restated effective as of August 11, 1999, as executed on
such date; and

WHEREAS, the American Jobs Creation Act of 2004 (“AJCA”) enacted new Section 409A of the Internal
Revenue Code (the “Code”); and

WHEREAS, Section 409A applies to all forms of deferred compensation, including benefits that may be
payable under the SMSC Severance Plan; and

WHEREAS, SMSC wishes to amend the Severance Plan to make certain changes to comply with Section
409A and to clarify other provisions of the Plan; and

WHEREAS, Section 22 of the Plan retained the right for SMSC to amend, modify or terminate the Plan
within the complete discretion of the Vice President of Human Resources; and

WHEREAS, SMSC nevertheless wishes to obtain and/or has obtained the approval of the Board of
Directors to make all changes provided in this Amendment Number 1 to the SMSC Severance Plan.

NOW, THEREFORE, the Plan is hereby amended as follows:

	1.	 	Effective Date. The effective date of this Amendment shall be January 1, 2005 to
comply with the provisions of Section 409A.

2. Definitions. The following new definitions shall be added to Section 3 of the Plan.

	 	f.	 	“Change in Control”, as defined in Section 9(b) of the Plan, shall be
modified to also include 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.

	 	g.	 	“Key Employee” means any officer earning over $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 compensation of more than $150,000. For
purposes of determining Key Employee status, the Company 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 an Eligible Employee is a Key Employee shall be
made by the Committee in accordance with the provisions of Section 409A.

	 	h.	 	“Separation from Service” shall have the meaning set forth in Section
409A of the Code and the regulations thereunder. 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 an Eligible Employee continues to
perform services as a consultant or an Employee in accordance with the following rules:

	 	i.	 	Leave of Absence. For purposes of Section 409A, the
employment relationship is treated as continuing in effect while a Eligible
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 Eligible 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 Eligible Employee are
insignificant, a Separation from Service shall be deemed to have occurred. For
purposes of Section 409A, if an Eligible 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.

	 	iii.	 	Consulting Services. Where an Eligible 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 Eligible 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).

	 	i.	 	“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.

	3.	 	Basic Severance Benefit. The Basic Severance Benefit under the SMSC Severance Plan
provides for a maximum benefit equal to 15 weeks of payments to any Eligible Employee after
they have completed 15 Years of Service or more. This benefit could never continue to be paid
for a period longer than 21/2 months after the end of the later of the calendar year in which an
Eligible Employee is terminated or the end of the SMSC fiscal year ending on the last day of
February of each calendar year. Thus, no violation of Section 409A shall occur and no
acceleration of payments are required, as further addressed below.

	4.	 	Executive Severance Benefit. An Executive Severance Benefit is payable to certain
Eligible Employees, which may be paid up to 6 months following a Change in Control. This
benefit could be paid for a period longer than 21/2 months after the end of the later of the
calendar year in which an Eligible Employee is terminated or the end of the SMSC fiscal year
ending on the last day of February of each calendar year and is subject to Section 409A.

	5.	 	Entitlement to Executive Severance Benefits. Eligible Employees are entitled to the
Executive Severance Benefit in the event of a Change in Control. To comply with Section 409A,
the definition of Change in Control is modified as identified above.

	6.	 	COBRA Benefits. In addition to the Basic Severance Benefits and the Executive
Severance Benefits, Section 10 of the Severance Plan also provides for the payment of COBRA
benefits for 3 months following any termination of employment, without extending COBRA
coverage. The Company subsidy of this benefit is specifically exempt from Section 409A.

	7.	 	Payment of Benefits. Section 17 of the Severance Plan provides that all benefits are
paid in either a single lump sum payment or in weekly, bi-weekly, monthly or other installment
periods, in accordance with SMSC’s regular payroll practices, within the “discretion” of SMSC.
In order to comply with Section 409A, payment of benefits shall be revised as follows:

“Effective as of the date of this Amendment, all benefits shall be paid on a weekly,
bi-weekly or monthly basis in accordance with the Company’s regular payroll practices, which
date shall be treated as a “fixed payment date” for purposes of Section 409A. Furthermore,
notwithstanding any provisions to the contrary, no payments shall be made unless there is a
Separation from Service. All other provisions of Section 17 of the Plan shall continue to
apply.”

	8.	 	Change in Control.  Section 9.b. of the Plan is hereby amended to insert the words
“,within one (1) year from the “Change in Control,”” after the word “followed” on the third
line of Section 9.b.

	9.	 	Acceleration of De Minimus Payments. Notwithstanding any provisions in the Severance
Plan or this Amendment to the contrary, if any severance benefits to be paid are equal to or
less than $10,000 (exclusive of the COBRA subsidy), they shall be paid in a single lump sum
cash payment as soon as reasonably practicable following a Separation from Service.

	10.	 	Delay in Payment for Eligible Employees. To the extent that an Eligible Employee
would receive any payment hereunder that would violate Section 409A, in no event shall any
such payment be made within 6 months after the Eligible 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 6th month 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 Eligible 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 Eligible Employees, the
Eligible Employee shall also be reimbursed for such out-of-pocket expenses as of the first day
of the 6th month after a Separation from Service, retroactively, to make the
Eligible Employee whole for any out-of-pocket costs. To the extent any payments are delayed
for any Eligible 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%.

	11.	 	Section 409A. In the event that any termination would cause any payments to be paid
beyond 21/2 months following the end of the later of 21/2 months after the end of the Plan
Year or the SMSC fiscal year (i.e., the last day of February) in which a termination
occurs, a final payment equal to the balance owed shall be made prior to the 21/2 month period
following the applicable Termination Date, in order to rely upon the “short-term deferral
rule” under Section 409A to avoid any unintended form of deferred compensation.

	12.	 	Compliance With the Code. The Severance Plan is intended to comply with the
provisions of Section 409A and all other provisions of the Code. If there is any discrepancy
between the provisions of this Severance Plan 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.

	13.	 	Violation of Section 409A. All Eligible 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 an underpayment of interest penalties. All
Eligible Employees shall also be informed that the amount of their benefits under the Plan may
be reported to the IRS, as required for nonqualified deferred compensation programs.

	14.	 	Employment and Severance Agreements, and Offer Letters. Sections 7 and 28 of the
Severance Plan provides that to the extent an Eligible Employee is entitled to any severance
benefits under any separately negotiated agreements, no benefits are payable under the
Severance Plan. The following new Section 28 shall be incorporated into the Plan as follows,
and the language in Section 7 is superceded by this new Section 28:

“Notwithstanding any provisions to the contrary, if any Eligible Employee is entitled to any
severance benefits under any separately negotiated employment or severance agreements, or
offer letters, no benefits shall be payable under the Severance Plan unless provided
otherwise in any such separate agreement or letter. However, in the event that any separate
Agreement or letter provides for any additional benefits, including benefits provided under
the Severance Plan, in no event shall any Eligible 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 Eligible
Employee with the greater of the benefits provided under the Severance Plan or any
separately negotiated agreement or letter.”

	15.	 	Plan Number. Section 30 of the Severance Plan provides that the Plan Number assigned
to the Plan for purposes of Internal Revenue Service from 5500 filings is 506. The Plan
Number was previously changed to 505, in order to consolidate all Form 5500s. This change
became effective on or about January 1, 2003.

This Amendment Number 1 is hereby executed the 22nd day of March, 2007.

STANDARD MICROSYSTEMS CORPORATION

	 	 	 
	Date: March 22, 2007

	 	By: /s/ Steven J. Bilodeau
	
 
	 	 
	
 
	 	Steven J. Bilodeau
	(C:\Clients\SMC\409A\409A-Sev.Amd-2)EX-10.3

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Amended and Restated Agreement made as of March 19, 2007 between Standard Microsystems Corporation,
a Delaware corporation having an office at 80 Arkay Drive, Hauppauge, New York 11788 (“Company”),
and David S. Smith, residing at 26 Birch Road, Darien, Connecticut 06820 (“Executive”).

W I T N E S S E T H:

WHEREAS, Company desires to employ Executive as Company’s Chief Financial Officer (“CFO”), upon the
terms and conditions hereinafter in this Amended and Restated Employment Agreement (the
“Agreement”) set forth, and Executive desires to be so employed; and

WHEREAS, the Company and the Executive acknowledge that the Executive is currently a “Specified
Employee” as defined under Section 409A of the Internal Revenue Code (the “Code”), thereby
necessitating certain changes to the Executive’s original Employment Agreement dated September 16,
2005; and

WHEREAS, the primary change from the original Employment Agreement dated September 16, 2005 shall
be to ensure that certain payments are not made until 6 months after the Executive separates from
service with the Company, except to the extent that any exceptions may exist under Section 409A of
the Code and the regulations promulgated thereunder or any successor thereto (collectively referred
to herein as “409A’).

Now, therefore, in consideration of the promises and the mutual covenants and conditions contained
herein, the parties hereto agree as follows:

	1.	 	Employment.

The Company hereby agrees to employ Executive, and Executive hereby accepts such employment, upon
the terms and conditions hereinafter set forth.

2. Title and Duties.

Company shall employ Executive as Senior Vice President and Chief Financial Officer (“CFO”),
effective as of the date of execution hereof. Executive will render his services faithfully and to
the best of his ability and devote his full business time and attention to the services to be
rendered by him hereunder.

3. Term; Severance; Change in Control.

a. The term of employment under the Agreement shall commence as of the date hereof and shall
continue through September 15, 2008 (the “Employment Term”). Thereafter, the Employment Term shall
be automatically extended for one-year periods, unless either party shall give notice (“Contrary
Notice”) as per section 12 (e) herein, at least ninety (90) days prior to the end of the initial
Employment Term, or any extended Employment Term, that the Employment Term shall not be so
extended.

b. Notwithstanding Section 3.a, the Employment Term shall terminate prior to any date otherwise
specified in Section 3.a, upon:

(i) Executive’s death or Disability. “Disability” shall mean the physical or mental
incapacity of Executive, which cannot be overcome by making any reasonable accommodations
and which prevents Executive from performing Executive’s duties as herein provided for a
continuous period of 60 days or an aggregate period of 90 days during any consecutive
six-month period, and disability shall be deemed to have occurred as of the end of the
applicable period. Termination as a result of death is effective on the date of death;

(ii) Notice by Company of termination for “Cause”, which shall mean the Executive’s (x)
material dishonesty in the course of employment, (y) willful and material failure to perform
his duties hereunder, following delivery of written notice thereof and a reasonable period,
not to exceed 30 days from delivery of notice, to cure such failure, or (z) conduct,
regardless whether in the course of employment, constituting a felony or any crime involving
moral turpitude or being charged or sanctioned by a federal or state government or
governmental authority or agency with violations of federal or state securities laws in any
judicial or administrative process or proceeding, or having been found by any court or
governmental authority or agency to have committed any such violation;

(iii) Notice by Company of termination other than for cause. Reduction of compensation or
duties, OR relocation of Executive’s location of employment outside of Long Island OR other
breach hereof and failure to cure within 30 days following delivery of written notice
thereof by the Executive to the Company shall be considered notice of termination under this
subsection; or,

(iv) Notice of voluntary termination by Executive within six months after a Change in
Control of Company. For purposes hereof, a “Change in Control of Company” shall mean an
event that Company would be required to report as such pursuant to Securities and Exchange
Commission (“SEC”) Form 8-K, or as defined under 409A.

c. Should Company terminate the Employment Term pursuant to clauses (i) or (iii) of Section 3.b:
(i) Company shall pay Executive, in lump sum on the day of termination, an amount equal to one
year’s Base Salary, the value of any vested or unvested stock grants, the value of any deferred
compensation (excluding the SERP addressed in Section 5, and stock options but including stock
appreciation rights), any accrued, unused vacation and unreimbursed business expenses (including
automobile expenses, and tax gross up on such automobile expenses); (ii) Company shall pay any
accrued, unpaid Bonus, as hereinafter defined, (i.e., a pro-rated amount of the Bonus that
Executive would have earned if Executive remained employed through the then current fiscal year of
Company, to be based on the number of weeks employed during the then current fiscal year), payable
at the same time such Bonus would have been paid for such fiscal year; (iii) Company shall
continue to provide Company-paid individual life insurance, and shall pay the cost of all family
group health insurance plans under COBRA, provided by Company to Executive as of the date of such
termination, excluding group life and group disability plans, for a period of 18 months from the
date of termination of the Employment Term, or until Executive shall have sooner obtained full-time
employment; (iv) insofar as any stock option granted by Company to Executive would have, but for
such termination, become exercisable in accordance with its terms within 24 months of the date of
such termination, such option shall become exercisable as of such termination date, remain
exercisable during the 24-month period immediately following such termination date, and expire at
the end of such 24-month period, except that if the termination of the Employment Term pursuant to
clause (iii) of Section 3.b occurs within twelve months from the date of grant of such option, such
option shall become exercisable to the extent permitted under the provisions of the plan from which
any such stock option was granted. This Section 3.c sets forth Company’s entire obligation to
Executive in case of termination of the Employment Term on any basis referred to in this Section
3.c.

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

d. Should Company terminate the Employment Term pursuant to clause 3.b (ii), Company’s obligations
hereunder shall then be fully satisfied upon payment by Company to Executive of any unpaid Base
Salary, accrued, unused vacation time and unreimbursed business expenses through the date of
termination, provided, however, that such payment shall not prevent the Company from seeking relief
respecting any claim it might have against the Executive hereunder or otherwise.

e. In the event of a Change in Control of Company all stock options, all restricted stock awards
(RSAs), and deferred compensation (excluding the SERP addressed in Section 5, and stock options but
including stock appreciation rights) shall immediately vest and become exercisable, and should
Executive’s employment be terminated pursuant to clause 3.b (iv) or, within six months after the
Change in Control, by Company pursuant to clause 3.b (iii), Executive shall be entitled to the
payments referred to in clause 3.c (i) (except for any payments related to stock appreciation
rights or restricted stock), the insurance coverage referred to in clause 3.c (iii), a payment in
an amount equal to 50% of Base Salary on the day of termination, and any unexercised stock option
or SAR shall remain exercisable for the 24-month period immediately following such termination.
With respect to the immediate vesting of any stock option or SAR in this section 3.e. by reason of
a Change in Control of Company that occurs within twelve months from the date of grant, immediate
vesting will only occur to the extent permitted under the provisions of the plan from which any
such stock option or SAR was granted.

f. The parties acknowledge that the payment of some or all of the above severance benefits may be
considered to be a form of nonqualified deferred compensation benefits subject to 409A. In
recognition of this fact, the parties hereby agree and confirm as follows:

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

	 	ii.	 	The parties acknowledge that the continuation of benefits under COBRA and other
benefits may be continued during the 6 month delay for Specified Employees, but must
also be incurred and paid by the 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.

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

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

	 	v.	 	All gross up payments set forth in this Agreement (including any gross up
contemplated in Section 5 hereof) shall be made as soon as legally permitted under
409A, but in no event later than 2 1/2 months following the end of the fiscal year in
which the event giving rise to such gross up payment occurs and, if permissible, before
the excise tax becomes due.

4. Annual compensation.

In consideration of the services to be rendered by Executive hereunder, Company shall pay to
Executive:

	 	(i)	 	An annual base salary of $325,000, which may be increased, but not decreased
without Executive’s consent, from time to time, by Company’s Board of Directors, based
upon Compensation Committee review and recommendation (“Base Salary”) and

	 	(ii)	 	A management incentive bonus opportunity (“Bonus”) with respect to an
applicable fiscal year equal to 102% of Base Salary, in accordance with the

Management Incentive Plan (the “MIP”) for other Company executives, as approved by
the Board of Directors. Notwithstanding anything herein to the contrary, the Bonus
for a particular fiscal year shall be paid to the Executive as soon as reasonably
practicable following the end of such fiscal year and in any event no later than 2 1/2
months following the end of such fiscal year; provided that in the event
payment of the Bonus to the Executive within such 2 1/2 month period is impracticable,
either administratively or economically, as determined by the Company, payment of
the Bonus will be made as soon as practicable thereafter.

	 	(iii)	 	Any Bonus payable shall be paid in cash, or shares of Company restricted stock
in accordance with the MIP, as approved by the Board of Directors. At least half of
the Bonus will be paid in cash. All restricted stock so issued shall be subject to the
same transfer restrictions and forfeiture under the same conditions as shall apply
generally to Company bonus awards of Company restricted stock, except as otherwise
provided herein in paragraphs 3 and 6. Executive shall have the right to demand
registration for all vested stock and Company shall use best effort to cause such
registration at Company expense to be effective.

5. Benefits; Expenses.

Executive shall be entitled to such benefits as are provided generally to Company’s senior
executive officers. In addition, the Company shall lease for Executive’s use an automobile at a
monthly lease expense not to exceed $1,100 plus insurance, and will also reimburse for fuel and
normal travel expenses (i.e. tolls, parking, etc.). The preceding expenses (excluding the
automobile lease) are fully tax protected.

Company shall furnish Executive with individual supplemental life insurance coverage in the amount
of $250,000 and individual disability income coverage if insurance underwriting can be obtained
based on Executive’s health examination results.

Company shall furnish and maintain continuously directors and officers liability insurance coverage
during employment, and will continue to indemnify and advance legal expenses on behalf of
Executive, during Employment Term and after termination for actions occurring during the Employment
Term to the extent permitted by law.

Executive shall accrue vacation time at a rate of twenty days per year.

Executive’s benefit under the Executive Retirement Plan (the “SERP”) shall vest 50% after five
years of service and pro-ratably over the next five years as to the remaining 50%. Executive’s
eligibility for and enrollment in the SERP shall commence upon Executive’s first day of employment
with Company. The Company’s Board of Directors shall fully vest Executive’s SERP benefits upon a
Change in Control of Company. The acceleration of vesting does not otherwise change the
distribution rules in existence under the SERP.

Subject to Section 3.f(v) hereof, in the case of a Change in Control of Company, Executive is
entitled to a “gross-up” payment in an amount sufficient to offset the effect of any excise tax
incurred in accordance with Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”).

Executive must follow the Company’s stock, options and appreciation rights trading policy.

6. Appointment Bonus.

On September 16, 2005, the Company shall grant a restricted stock bonus of $200,000 to Executive.
Restrictions on 50% of this bonus will be removed after one year of continuous service with the
Company and restrictions on the remaining 50% will be removed after two years of continuous
employment with the Company.

7. Intellectual Property; Noncompetition.

a. Assignment of Inventions.

(i) Subject to paragraph (a)(ii) below, Executive hereby assigns and agrees to assign to
Company, or to any business concern controlled by or under common control with Company
(“Company Affiliate”) as Company shall specify, all of Executive’s right, title and interest
in and to any inventions, formulas, techniques, processes, ideas, algorithms, discoveries,
designs, developments and improvements which Executive may make, reduce to practice,
conceive, invent, discover, design or otherwise acquire during Executive’s employment by
Company or any Company Affiliate, whether or not made during regular working hours, relating
to the actual or anticipated business, products, research or development of Company or any
Company Affiliate (collectively, “Inventions”).

(ii) The foregoing shall not apply to, and Executive shall not be required to assign any of
Executive’s rights in, an invention that Executive developed entirely on Executive’s own
time without using any equipment, supplies, facilities, computer programs, or trade
secret(s) and/or other proprietary and/or confidential information of Company or any Company
Affiliate, except for those inventions that either:

	 	(1)	 	Relate directly or indirectly at the time of conception or
reduction to practice of the invention, to the business of Company or any
Company Affiliate, or to the actual or contemplated products, research or
development of Company or any Company Affiliate, or

	 	(2)	 	Result from any work performed by Executive for Company or any
Company Affiliate.

b. Trade Secrets. Executive shall regard and preserve as confidential: (x) all trade
secrets and/or other proprietary and/or confidential information belonging to Company or any
Company Affiliate; and (y) all trade secrets and/or other proprietary and/or confidential
information belonging to a third party which have been confidentially disclosed to Company or any
Company Affiliate, which trade secrets and/or other proprietary and/or confidential information
described in (x) and (y) above (collectively, “Confidential Information”) have been or may be
developed or obtained by or disclosed to Executive by reason of Executive’s employment. Executive
shall not, without written authority from Company to do so, use for Executive’s own benefit or
purposes, or the benefit or purpose of any person or entity other than Company or any Company
Affiliate, nor disclose to others, either during Executive’s employment with Company or thereafter,
except as required in the course of employment with Company or any Company Affiliate, or except as
required by law, any Confidential Information (Executive, as CFO, shall have the usual and
customary discretion to determine when disclosure is required for the benefit of Company). This
provision shall not apply to Confidential Information that has been voluntarily disclosed to the
public by Company or any Company Affiliate, or otherwise entered the public domain through lawful
means. Confidential Information shall include, but not be limited to, all nonpublic information
relating to any of the following regarding Company or any Company Affiliate: (1) business,
research, development and marketing plans, strategies and forecasts; (2) business; (3) products
(whether existing, in development, or being contemplated); (4) customers’ identities, usages, and
requirements; (5) reports; (6) formulas; (7) specifications; (8) designs, software and other
technology; (9) research and development programs; and (10) terms of contracts.

c. Works of Authorship. Executive agrees that any original works of authorship, including, without
limitation, all documents, blueprints, drawings, mask works and computer programs (including,
without limitation, all software, firmware, object code, source code, documentation,
specifications, revisions, supplements, modules, and upgrades), conceived, created, performed or
produced during the term of Executive’s employment with Company or any Company Affiliate, and all
foreign and domestic, registered and unregistered, copyrights and mask work rights and applications
for registrations therefore related to any such work of authorship, in each case, whether or not
made during regular working hours, relating to the actual or anticipated business, products,
research or development of Company or any Company Affiliate (collectively, “Works of Authorship”)
shall be the exclusive property of Company or any Company Affiliate as Company shall specify. To
the extent that Executive has or obtains any right, title or interest in or to any Works of
Authorship, Executive hereby assigns and agrees to assign to Company or any Company Affiliate as
Company shall specify, all of such right, title and interest therein and thereto. This paragraph
does not include any publicly available materials, unless such materials shall have become public
in violation of this Agreement.

d. Disclosure. Executive shall promptly and fully disclose any and all Inventions and Works of
Authorship to Company’s General Counsel or other official as Company’s Board of Directors may
designate for such purpose.

e. Further Assistance. Executive shall, during Executive’s employment with Company or any Company
Affiliate and at any time thereafter, upon the request of and at the expense of Company or such
Company Affiliate, but at no additional compensation to Executive: do all acts and things
including, but not limited to, making and executing documents, applications and instruments and
giving information and testimony, in each case, deemed by Company from time to time, in its sole
discretion, to be necessary or appropriate (1) to vest, secure, defend, protect or evidence the
right, title and interest of Company in and to any and all Inventions, Works of Authorship and
Confidential Information; and (2) to obtain for Company, in relation to all such, letters patent,
design registrations, copyright registrations and/or mask work registrations, in the United States
and any foreign countries, and/or any reissues, renewals and/or extensions thereof.

f. Previous Obligations. Executive represents and warrants to Company that Executive has no
continuing obligation with respect to assignment of inventions, developments or improvements to any
previous employer(s), respecting any invention, development, or improvement made prior to September
16, 2005, nor does Executive claim any existing title in any previous unpatented inventions,
developments or improvements within the scope of this Section 7 except as may be set forth on an
Exhibit hereto acknowledged on the face thereof as an Exhibit hereto by an authorized
representative of Company.

g. Return of Documents. All media on which any Inventions, Works of Authorship or Confidential
Information may be recorded or located, including, without limitation, documents, samples, models,
blueprints, photocopies, photographs, drawings, descriptions, reproductions, cards, tapes, discs
and other storage facilities (collectively, “Documentation”) made by Executive or that come into
Executive’s possession by reason of Executive’s employment are the property of Company and shall be
returned to Company by Executive upon termination of employment. Executive will not deliver,
reproduce, or in any way allow any Documentation to be delivered or used by any third party without
the written direction or consent of a duly authorized representative of Company.

8. Competition.

Executive covenants and agrees that (a) for so long as he shall be employed by Company or any
Company Affiliate, he shall not, directly or indirectly, as principal, partner, agent, servant,
employee, stockholder, or otherwise, anywhere in the world (the “Territory”), engage or attempt to
engage in any business activity competitive with the business being conducted or, to the knowledge
of Executive prior to Notice of Termination or actual termination, whichever is earlier, being
planned to be conducted by Company or any Company Affiliate, and (b) for one year after
termination, Executive shall not, in the Territory, so engage or attempt to engage in any business
activity competitive with any business conducted or planned to be conducted by any of Company or
any Company affiliate within one year prior to termination. The foregoing shall not prohibit
Executive, his affiliates, spouse, and children from owning beneficially any publicly traded
security, so long as the beneficial ownership by all of them, when combined with the beneficial
ownership of such publicly traded security by any person (as defined in Section 13(d) of the
Exchange Act) of which any of them is a member, constitutes less than 5% of the class of such
publicly traded security. Executive recognizes that the foregoing territorial and time limitations
are reasonable and properly required for the adequate protection of the business of Company and
that in the event that any such territorial or time limitation is deemed to be unreasonable in any
proceeding to enforce these provisions or otherwise, Executive agrees to request, and to submit to,
the reduction of said territorial or time limitation to such an area or period as shall be deemed
reasonable by the relevant tribunal. In the event that Executive shall be in violation of the
foregoing restrictive covenants, then the time limitation thereof shall be extended for a period of
time during which such breach or breaches shall occur. The existence of any claim or cause of
action by Executive against Company, if any, whether predicated upon this Agreement or otherwise,
shall not constitute a defense to the enforcement by Company of the foregoing restrictive
covenants.

9. Separation from Service.

For purposes of this Agreement, a Separation from Service means the Executive is no longer employed
by the Company or any Company Affiliates 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 409A, no Separation from Service
shall occur if an executive continues to perform services as a consultant or an employee in
accordance with the following rules:

a. Leave of Absence. For purposes of 409A, the employment relationship is treated as continuing in
effect while an Executive 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 Executive’s
right to reemployment with the Company is 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 an Executive as
insignificant, a Separation from Service shall be deemed to have occurred. For purposes of 409a,
if an Executive is providing services to the Company or any Company Affiliates 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 significant.

c. Consulting Services. Where an Executive continues to provide services to the Company or any
Company Affiliates in a capacity other than as an employee, a Separation from Service shall not be
deemed to have occurred if the Executive 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).

10. Non-solicitation of Employees.

Executive covenants and agrees that for a period of 24 months after Executive’s termination of
employment with Company for any reason, Executive shall not, directly or indirectly, whether on
behalf of the Executive or others, solicit, lure or hire away any employees of Company or assist or
aid in any such activity.

11. Release of Violation of Covenants.

Any options or SARs that are granted to Executive are an incentive for Executive to remain employed
by Company and to exert his best efforts to enhance the value of Company over the long-term.
Accordingly, in addition to all the rights Company shall have against Executive, in the event
Executive violates the provisions of Section 7, Intellectual Property/Non-Competition; Section 8,
regarding Competition; and Section 9, addressing the Non-Solicitation of Employees (“Violation”),
Company shall have the following rights:

a. Any stock option or SAR granted to Executive during his employment, whether or not fully vested,
shall be immediately canceled as of the date of such “Violation”.

b. Any gain attributable to the exercise of any stock option or SAR by Executive (represented by
the closing market price on the date of exercise over the exercise price, multiplied by the number
of option shares or SARs exercised, without regard to any subsequent market price decreases or
increases) within a period of 12 months prior to the date of any Violation shall be paid by
Executive to Company.

Executive hereby agrees to pay to Company the difference between the fair market value of Company
stock on the date of exercise, and the option or SAR price, without regard to any income taxes
Executive may have paid or be responsible to pay relating to the exercise of any options or SARs.

For purposes of this Section 10, the date of the Violation shall be established in good faith by
Company. The date of Violation shall be deemed to have occurred within 10 days after Company
provides Executive with notice of any Violation. If Executive disagrees with the determination of
any Violation, the date of Violation shall be extended until the dispute is resolved, but the
damages shall nevertheless be determined as of the date of Violation determined by Company, if such
Violation is upheld in any Court Order, mediator’s decision, or other similar forum.

Company shall have the right, in its sole discretion, not to enforce the provisions of this Section
10 with respect to Executive.

12. Release from prior agreements.

Executive releases Company and Company releases Executive from any prior agreements between Company
and Executive upon the commencement of the term of this Employment Agreement, except for any
continuing obligations of Executive relating to proprietary or confidential information of the
Company.

13. Miscellaneous.

a. Executive agrees that a remedy at law for any breach or proposed or attempted breach of the
provisions of Sections 7, 8 or 9 shall be inadequate and that Company shall be entitled to
injunctive relief with respect to such breach or proposed or attempted breach, in addition to any
other remedy it might have. The provisions of Sections 7, 8 and 9 shall be enforceable
notwithstanding the existence of any claim or cause of action of Executive against Company or any
Company Affiliate, whether predicated on such Section or otherwise.

b. Except as otherwise provided herein, the agreements, assignments and appointments made by
Executive hereunder and the obligations of Executive herein shall survive the termination of
Executive’s employment with Company, whether by Executive or Company.

c. This Agreement may be modified only by a written instrument duly executed by the parties
hereto. No term or provision of this Agreement shall be deemed waived. And no breach excused,
unless such waiver or consent shall be in writing and signed by the parties hereto. The failure of
either party or any Company Affiliate at any time to enforce performance of any provision of this
Agreement shall in no way affect such person’s rights thereafter to enforce the same, nor shall the
waiver by any such person of any breach of any provision hereof be deemed to be a waiver of any
other breach of the same or any other provision hereof.

d. If any provision of this Agreement, or the application of such provision, is held invalid,
the remainder of this Agreement and the application of such provision to persons or circumstances
other than those as to which it is held invalid shall not be affected thereby.

e. Any notice authorized or required to be given hereunder shall be deemed given or made, if
in writing, upon personal delivery, by telecopy on the date that transmission is confirmed
electronically, if such confirmation occurs by 4:00 PM on such date and such date is a business
day, or otherwise, on the first business day thereafter, or three days after mailing by certified
or registered mail, return receipt requested, to the Company, at the address set forth at the top
of the first page, to the attention of Mr. Steven J. Bilodeau, Chief Executive Officer, or to the
Executive at the address to which this letter is addressed, as set forth above, or such other
address of which either party shall give notice to the other.

f. This agreement shall be governed by the laws of the state of New York, applicable to an
agreement negotiated, signed, and wholly to be performed in such state.

g. Any dispute arising hereunder (including but not limited to interpretation of performance)
shall be resolved in New York NY by arbitration before the American Arbitration Association, in
accordance with its rules, except that the arbitrator shall be an active member of the New York bar
specializing for at least 15 years in general corporate law and contracts practice, who shall apply
the terms of this agreement and make findings of fact and conclusions of law in making his award.

h. This Agreement is the exclusive and complete statement of the parties regarding this subject
matter and supersedes and replaces any prior Employment Agreements or any other document concerning
this subject matter. It does not cancel any stock options, stock appreciation rights or restricted
stock awards previously granted to you; nor does it cancel your Indemnity Agreement, which shall
remain in full force and effect. The following sections shall survive the termination or
expiration of this Agreement: 3.c-f, the indemnification obligations of the Company contained in
the third paragraph of Section 5. and Sections 7-13.

IN WITNESS WHEREOF, the undersigned have executed this agreement on the dates below as of the date
first written above.

	 	 	 
	EXECUTIVE

	 	STANDARD MICROSYSTEMS

CORPORATION
	 
	 	 
	By: /s/ David S. Smith

	 	By: /s/ Steven J. Bilodeau
	 

	 	 
	David S. Smith

Date: March 22, 2007

	 	Steven J. Bilodeau, Chief Executive Officer

Date: March 22, 2007

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