Document:

EX-10.1

William R. Britt

Employment Agreement

This Employment Agreement (this “Agreement”), is made and entered into as of
July 18, 2005 (the “Effective Date”) by and between Centrue Bank (the “Employer”),
a wholly-owned Subsidiary of Centrue Financial Corporation (“Centrue”), and William R.
Britt (the “Executive”).

Recitals

WHEREAS, the parties desire to enter into this Agreement pertaining to the employment of the
Executive by the Employer;

NOW, THEREFORE, in consideration of the premises and of the covenants and agreements
hereinafter contained, it is covenanted and agreed by and between the parties hereto as follows:

Agreements

Section 1. Term With Automatic Renewal Provisions. The term of this Agreement and
Executive’s employment hereunder shall be for a term of three (3) years commencing on the Effective
Date, and shall automatically be extended for one (1) additional year on December 31, 2005 and each
anniversary thereafter, unless either party to this Agreement provides written notice of
non-renewal to the other party not less than thirty (30) days prior to such anniversary of the
Effective Date.

Section 2. Position and Duties. The Employer hereby employs the Executive as the
President and Chief Operating Officer of the Employer or in such other substantially similar senior
executive capacity or capacities as determined by the Board of Directors of the Employer (the
“Board”). During the period of the Executive’s employment hereunder, the Executive shall devote
his best efforts and full business time, energy, skills and attention to the business and affairs
of the Employer. The Executive’s duties and authority shall consist of and include all duties and
authority customarily performed and held by persons holding equivalent positions with business
organizations similar in nature and size to the Employer, as such duties and authority are
reasonably defined, modified and delegated from time to time by the Chief Executive Officer of the
Employer (the “CEO”) or the Board. The Executive shall report to the CEO during the term of this
Agreement. The Executive shall have the powers necessary to perform the duties assigned to him and
shall be provided such supporting services, staff, secretarial and other assistance, office space
and accoutrements as shall be reasonably necessary and appropriate in the light of such assigned
duties.

Section 3. Compensation. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation, expense reimbursement
and other benefits:

a) Base Compensation. The Executive shall receive an aggregate annual minimum Base
Salary of Two Hundred and Sixty Two Thousand dollars ($262,000.00) payable in installments in
accordance with the regular payroll schedule of the Employer (“Base Salary”). Such Base Salary
shall be subject to review annually commencing in 2006 and shall be maintained or increased during
the term of this Agreement in accordance with the Employer’s established management compensation
policies and plans.

b) Performance Bonus. The Executive shall be eligible to receive an annual
performance bonus, payable within sixty (60) days after the end of the fiscal year of the Employer,
in an amount not to exceed fifty percent (50%) of the Executive’s Base Salary for the applicable
year. The amount, if any, shall be determined by the Board, or the appropriate committee thereof,
and shall generally be based on a combination of organization-wide and individual performance
criteria. For purposes of the foregoing, with respect to the period beginning on the Effective
Date and ending on December 31, 2005, the Executive shall be eligible to receive a bonus in an
amount not to exceed Ninety Thousand dollars ($90,000).

c) Stock Options. The executive shall receive a stock option award (the “Option”) to
purchase fourteen thousand five hundred (14,500) shares of Centrue Financial Corporation common
stock pursuant to the terms and conditions of the Centrue Financial Corporation 2003 Stock
Incentive Plan (the “Incentive Plan”). The per share price of the option shall be the fair market
value of a share of Centrue Financial Corporation’s common stock on the date of such award. This
option shall become exercisable with respect to twenty percent (20%) of the shares of stock on the
first anniversary of the grant date and with respect to an additional twenty percent (20%) on each
subsequent anniversary date until such time as this Option is fully exercisable. The option shall
be exercisable for a period as determined under the terms of the Incentive Plan, but in no event
shall the Option be exercisable after the seventh anniversary of the date of grant.

d) Reimbursement of Expenses. The Executive shall be reimbursed, upon submission of
appropriate vouchers and supporting documentation, for all travel, entertainment and other
out-of-pocket expenses reasonably and necessarily incurred by the Executive in the performance of
his duties hereunder and shall be entitled to attend seminars, conferences and meetings relating to
the business of the Employer consistent with the Employer’s established policies in that regard;
provided, however, that it is mutually understood that a portion of Executive’s Base Salary
includes a car allowance of $12,000 and that no further automobile expenses shall be reimbursed
(except as provided in subsection e below).

e) Mileage Reimbursement. Following the close of each calendar year during the term
of this Agreement, Executive shall be reimbursed by the Employer if, and to the extent, that
reimbursement of the actual mileage driven for business purposes during such year, if reimbursed at
the applicable IRS mileage rate, would exceed Twelve Thousand dollars ($12,000).

f) Other Benefits. The Executive shall be entitled to all benefits specifically
established for him and, when and to the extent he is eligible therefor, to participate in all
plans and benefits generally accorded to senior executives of the Employer, including, but not
limited to, pension, profit-sharing, supplemental retirement, incentive compensation, bonus,
disability income, group life medical and hospitalization insurance, and similar or comparable
plans, and also to perquisites extended to similarly situated senior executives, provided, however,
that such plans, benefits and perquisites shall be no less than those made available to all other
employees of the Employer. If the Executive is not immediately eligible to participate in the
health insurance programs of the Employer, the Employer shall reimburse the Executive for COBRA
payments actually made by the Executive pursuant to the benefit plans of the Executive’s prior
employer, but not to exceed the amount that the Employer would have contributed for similar
benefits had the Executive been immediacy eligible to participate in the Employer’s benefit plans.

g) Vacations. The Executive shall be entitled to an annual vacation which shall
accrue in full on the first day of each calendar year and which vacation shall be taken at a time
or times mutually agreeable to the Employer and the Executive; provided, however, that the
Executive shall be entitled to at least twenty (20) days of paid vacation annually.

h) Withholding. The Employer shall be entitled to withhold from amounts payable to
the Executive hereunder, any federal, state or local withholding or other taxes which it is from
time to time required to withhold. The Employer shall be entitled to rely upon the opinion of its
legal counsel with regard to any question concerning the amount or requirement of any such
withholding.

i) Club Dues. The Employer will reimburse the Executive for initiation and regular
membership fees and dues for one (1) country club (with initiation fees limited to Five Thousand
dollars ($5,000)), and shall reimburse the Executive for the amount of charges reasonably incurred
at such club in the conduct of the Employer’s business.

j) Relocation and Temporary Housing. In connection with the Executive’s relocation to
the St. Louis Metropolitan area, the Employer will advance and or reimburse the Executive for
reasonable household packing, moving, storage, related insurance and other costs of the move
(including the sales commission cost incurred in the sale of his current residence), plus an amount
equal to the federal income tax applicable to the amount of such reimbursement (at an assumed tax
rate of 35%), provided that (i) such relocation occurs not later than the first anniversary of the
Effective Date; and (ii) the aggregate of the amounts to be reimbursed and the tax-related payment
with respect thereto shall not exceed Sixty Thousand dollars ($60,000), except to the extent a
greater amount may be approved by the Board. The Employer shall also provide the Executive with
temporary housing in the St. Louis Metropolitan area for up to ninety (90) days.

Section 4. Confidentiality and Loyalty. The Executive acknowledges that during the
course of his employment he may produce and have access to material, records, data, trade secrets
and information not generally available to the public regarding the Employer and its Subsidiaries
(collectively, “Confidential Information”). Accordingly, during and subsequent to termination of
this Agreement, the Executive shall hold in confidence and not directly or indirectly disclose,
use, copy or make lists of any such Confidential Information, except to the extent that such
information is or thereafter becomes lawfully available from public sources, or such disclosure is
authorized in writing by the Employer, required by a law or any competent administrative agency or
judicial authority, or otherwise as reasonably necessary or appropriate in connection with the
performance by the Executive of his duties hereunder. All records, files, documents and other
materials or copies thereof relating to the business of the Employer and its Subsidiaries which the
Executive shall prepare or use, shall be and remain the sole property of the Employer, shall not be
removed from the premises of the Employer or its Subsidiaries, as the case may be, without the
written consent of the Employer’s Chairman of the Board, except as reasonably necessary or
appropriate in connection with the performance by the Executive of his duties hereunder, and shall
be promptly returned to the Employer upon termination of the Executive’s employment hereunder. The
Executive agrees to abide by the reasonable policies of the Employer, as in effect from time to
time, respecting avoidance of interests conflicting with those of the Employer and its
Subsidiaries.

Section 5. Termination.

(a) Termination Without Cause. Either the Employer or the Executive may terminate
this Agreement and the Executive’s employment hereunder for any reason by delivering written notice
of termination to the other party no less than thirty (30) days before the effective date of
termination, which date will be specified in the notice of termination.

(b) Voluntary Termination by Executive. If the Executive voluntarily terminates his
employment under this Agreement other than pursuant to Section 5(d) (Constructive Discharge) or
Section 5(h) (Termination Upon Change of Control), then the Employer shall only be required to pay
the Executive such Base Salary as shall have accrued through the effective date of such termination
plus the amount of any expense reimbursements for expenses incurred prior to the effective date of
such termination, provided that Executive shall have submitted all reimbursement requests within
ten (10) business days of the effective date of such termination, and none of the Employer or any
of its Subsidiaries shall have any further obligations to the Executive.

(c) Premature Termination.

(i) In the event of the termination of this Agreement by the Employer prior to the last day of
the then current term for any reason other than a termination in accordance with the provisions of
Section 5(e) (Termination for Cause), then notwithstanding any mitigation of damages by the
Executive, the Employer shall pay the Executive a sum equal to three (3) times the amount of the
Executive’s then-current annual Base Salary. In addition, the Employer shall reimburse the
Executive for continued coverage (COBRA continuation coverage) for the Executive and the
Executive’s dependents (if applicable) under the health insurance programs maintained by the
Employer during the period of the Executive’s COBRA eligibility; provided, however, that the
continued payment of these amounts by the Employer shall not offset or diminish any compensation or
benefits accrued as of the date of termination.

(ii) Payment to the Executive will be made on a monthly basis over the thirty-six (36) month
period immediately following the Executive’s termination of employment. At the election of the
Employer, payments may be made in a lump sum. Payment of the amounts due under Section 5(c)(i)
shall not be reduced in the event the Executive obtains other employment following the termination
of employment by the Employer.

(iii) If the Employer is not in compliance with its minimum capital requirements or if the
payments required under subsection (i) above would cause the Employer’s capital to be reduced below
its minimum capital requirements, such payments shall be deferred until such time as the Employer
is in capital compliance.

(d) Constructive Discharge. If at any time during the term of this Agreement, except
in instances where Employer has valid grounds to terminate Executive’s employment pursuant to
Section 5(e) (Termination for Cause), the Executive is Constructively Discharged (as hereinafter
defined), then the Executive shall have the right, by written notice given to the Employer not
later than ninety (90) days after such Constructive Discharge, to terminate his services hereunder,
effective as of thirty (30) days after the date of such notice, and the Executive shall have no
rights or obligations under this Agreement other than as provided in this Section 5(d), Section 4
(Confidentiality and Loyalty) and Section 6 (Non-Competition Covenant). In such event, the
Executive shall be entitled to a lump sum payment in an amount equal to the aggregate cash payments
due to the Executive under Section 5(c)(i) and reimbursement of COBRA premiums as if such
termination of his employment were pursuant to Section 5(c) (Premature Termination).

For purposes of this Agreement, the Executive shall be “Constructively Discharged” upon the
occurrence of any one of the following events:

(i) The Executive is removed from the positions with the Employer set forth in Section 2
(Position and Duties); or

(ii) Following a Change in Control, the Executive no longer reports to the CEO or the then
President of the Employer; or

(iii) The Employer changes the primary employment location of the Executive without the
Executive’s consent to a place that is more than fifty (50) miles from the main office of the
Employer; or

(iv) The Employer otherwise commits a material breach of its obligations under this Agreement.

(e) Termination for Cause. This Agreement may be terminated for Cause as hereinafter
defined. “Cause” shall mean: (i) the Executive’s death; (ii) the Executive’s Permanent Disability,
which shall mean the Executive’s inability, as a result of physical or mental incapacity,
substantially to perform his duties hereunder for a period of six (6) consecutive months; (iii) a
material violation by the Executive of any applicable material law or regulation respecting the
business of the Employer; (iv) the Executive being found guilty of a felony or an act of dishonesty
in connection with the performance of his duties as an officer of the Employer, or which
disqualifies the Executive from serving as an officer or director of the Employer or any one of its
Subsidiaries; (v) the willful or negligent failure of the Executive to perform his duties hereunder
in any material respect; (vi) the Executive engages in one or more violations of Employer’s
policies or procedures or directives of the Board and that have a material financial adverse effect
on the Employer or any one of its Subsidiaries; or (vii) the Executive is removed or suspended from
banking pursuant to Section 8(e) of the Federal Deposit Insurance Act, as amended (the “FDIA”), or
any other applicable state or federal law. The Executive shall be entitled to at least thirty (30)
days’ prior written notice of the Employer’s intention to terminate his employment for any cause
(except the Executive’s death) specifying the grounds for such termination and shall be provided a
reasonable opportunity to present to the Board his position regarding any dispute relating to the
existence of such cause. In the event of a dispute regarding the Executive’s Permanent Disability,
each of the Executive and the Employer shall choose a physician who together will choose a third
physician to make a final determination thereof. Upon a termination of the Executive’s employment
with the Employer for Cause, the Executive shall be entitled to receive from the Employer only such
payments as are due and owing to the Executive as of the effective date of such termination. If
the Executive’s employment is terminated for Cause pursuant to this Section, then the Employer
shall only be required to pay the Executive such Base Salary as shall have accrued through the
effective date of such termination and neither the Employer nor any of its Subsidiaries shall have
any further obligations to the Executive.

(f) Payments Upon Death. In the event payments are due and owing under this Agreement
at the death of the Executive, payment shall be made to such beneficiary as the Executive may
designate in writing, or failing such designation, to the executor of his estate, in full
settlement and satisfaction of all claims and demands on behalf of the Executive.

(g) Payments Prior to Permanent Disability. The Executive shall be entitled to the
compensation and benefits provided for under this Agreement for any period during the term of this
Agreement and prior to the establishment of the Executive’s Disability during which the Executive
is unable to work due to a physical or mental infirmity. Notwithstanding anything contained in this
Agreement to the contrary, until the date specified in a notice of termination relating to the
Executive’s Disability, the Executive shall be entitled to return to his positions with the
Employer as set forth in this Agreement in which event no Disability of the Executive will be
deemed to have occurred.

(h) Termination Upon Change of Control.

(i) In the event of a Change of Control (as defined below) of the Employer and the termination
of the Executive’s employment under A, B or C below, subject to Section 5(h)(iii) below, the
Executive shall be entitled to receive in lieu of any other payments provided for in this Agreement
a lump sum payment equal to the amount determined pursuant to Section 5(c) (Premature Termination),
and the continuation of benefits as provided in Section 5(c). Any of the following shall
constitute termination of the Executive’s employment within the meaning of this Section 5(h):

A. The Executive voluntarily terminates his employment pursuant to Section 5(d) (Constructive
Discharge) within the one (1) year period immediately following the Change of Control.

B. The Executive voluntarily terminates his employment for any reason within the one (1) year
period immediately following the Change of Control; provided, however, that this subsection B shall
only apply if the Change of Control occurs after the first anniversary of the Effective Date.

C. This Agreement and the Executive’s employment are terminated by the Employer or its
successor within the one (1) year period immediately following the Change of Control.

(ii) For purposes of this Section, the term “Change of Control” shall mean the following:

A. The consummation of the acquisition by any person (as such term is defined in Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%)
or more of the combined voting power of the then outstanding voting securities of Centrue; or

B. Consummation of: (1) a merger or consolidation to which Centrue is a party if the
stockholders immediately before such merger or consolidation do not, as a result of such merger or
consolidation, own, directly or indirectly, more than sixty-seven percent (67%) of the combined
voting power of the then outstanding voting securities of the entity resulting from such merger or
consolidation in substantially the same proportion as their ownership of the combined voting power
of Centrue’s voting securities outstanding immediately before such merger or consolidation; or (2)
a complete liquidation or dissolution or an agreement for the sale or other disposition of all or
substantially all of the assets of Centrue.

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because
fifty percent (50%) or more of the combined voting power of Centrue’s then outstanding securities
is acquired by: (1) a trustee or other fiduciary holding securities under one or more employee
benefit plans maintained for employees of the entity; or (2) any corporation which, immediately
prior to such acquisition, is owned directly or indirectly by the stockholders in the same
proportion as their ownership of stock immediately prior to such acquisition.

(iii) It is the intention of the Employer and the Executive that no portion of any payment
under this Agreement, or payments to or for the benefit of the Executive under any other agreement
or plan, be deemed to be an “Excess Parachute Payment” as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), or its successors. It is agreed that the present
value of and payments to or for the benefit of the Executive in the nature of compensation, receipt
of which is contingent on the Change of Control of the Employer, and to which Section 280G of the
Code applies (in the aggregate “Total Payments”) shall not exceed an amount equal to one dollar
($1.00) less than the maximum amount which the Employer may pay without loss of deduction under
Section 280G(a) of the Code. Present value for purposes of this Agreement shall be calculated in
accordance with Section 280G(d)(4) of the Code. Within ninety (90) days following the earlier of
(A) the giving of the notice of termination or (B) the giving of notice by the Employer to the
Executive of its belief that there is a payment or benefit due the Executive which will result in
an excess parachute payment as defined in Section 280G of the Code, the Executive and the Employer,
at the Employer’s expense, shall obtain the opinion of such legal counsel and certified public
accountants as the Executive may choose (notwithstanding the fact that such persons have acted or
may also be acting as the legal counsel or certified public accountants for the Employer), which
opinions need not be unqualified, which sets forth (I) the amount of the Base Period Income of the
Executive, (II) the present value of Total Payments and (III) the amount and present value of any
excess parachute payments. In the event that such opinions determine that there would be an excess
parachute payment, the payment hereunder or any other payment determined by such counsel to be
includable in Total Payments shall be modified, reduced or eliminated as specified by the Executive
in writing delivered to the Employer within sixty (60) days of the Executive’s receipt of such
opinions or, if the Executive fails to so notify the Employer, then as the Employer shall
reasonably determine, so that under the bases of calculation set forth in such opinions there will
be no excess parachute payment. The provisions of this subparagraph, including the calculations,
notices and opinions provided for herein shall be based upon the conclusive presumption that (y)
the compensation and benefits provided for in Section 3 hereof and (z) any other compensation
earned by the Executive pursuant to the Employer’s compensation programs which would have been paid
in any event, are reasonable compensation for services rendered, even though the timing of such
payment is triggered by the Change of Control; provided, however, that in the event such legal
counsel so requests in connection with the opinion required by this subparagraph, the Executive and
the Employer shall obtain, at the Employer’s expense, and the legal counsel may rely on in
providing the opinion, the advice of a firm of recognized executive compensation consultants as to
the reasonableness of any item of compensation to be received by the Executive. In the event that
the provisions of Sections 280G and 4999 of the Code are repealed without succession, this
subparagraph shall be of no further force or effect.

(i) Regulatory Suspension and Termination.

(i) If the Executive is suspended from office and/or temporarily prohibited from participating
in the conduct of the Employer’s affairs by a notice served under Section 8(e)(3) (12 U.S.C. §
1818(e)(3)) or 8(g) (12 U.S.C. § 1818(g)) of the FDIA, the Employer’s obligations under this
contract shall be suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Employer may in its discretion (A) pay the
Executive all or part of the compensation withheld while their contract obligations were suspended
and (B) reinstate (in whole or in part) any of the obligations which were suspended.

(ii) If the Executive is removed and/or permanently prohibited from participating in the
conduct of the Employer’s affairs by an order issued under Section 8(e) (12 U.S.C. § 1818(e)) or
8(g) (12 U.S.C. § 1818(g)) of the FDIA, all obligations of the Employer under this contract shall
terminate as of the effective date of the order, but vested rights of the contracting parties shall
not be affected.

(iii) If the Employer is in default as defined in Section 3(x) (12 U.S.C. § 1813(x)(1)) of the
FDIA, all obligations of the Employer under this contract shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of the contracting parties.

(iv) All obligations of the Employer under this contract shall be terminated, except to the
extent determined that continuation of the contract is necessary for the continued operation of the
institution by the Federal Deposit Insurance Corporation (the “FDIC”), at the time the FDIC enters
into an agreement to provide assistance to or on behalf of the Employer under the authority
contained in Section 13(c) (12 U.S.C. § 1823(c)) of the FDIA, or when the Employer is determined by
the FDIC to be in an unsafe or unsound condition. Any rights of the parties that have already
vested, however, shall not be affected by such action.

Section 6. Non-Competition Covenant.

(a) Restrictive Covenant. The Employer and the Executive have jointly reviewed the
customer lists and operations of the Employer or any of its Affiliates (defined below) and have
agreed that the primary service area of the Employer’s lending and deposit taking functions in
which the Employer has and will actively participate extends separately to each area which
encompasses the counties in which the Employer or any of its Affiliates have an office or branch
and the area within twenty-five (25) miles of the border of each such county (the “Restrictive
Area”). Therefore, as an essential ingredient of and in consideration of this Agreement and the
payment of the amounts described in Section 3, the Executive hereby agrees that, except with the
express prior written consent of the Employer, for a period of one (1) year after the termination
of the Executive’s employment with the Employer, whether such termination of employment occurs
during the term of this Agreement or following the term or termination of this Agreement (the
“Restrictive Period”):

(i) The Executive will not, directly or indirectly, engage or invest in, own, manage, operate,
finance, control, or participate in the ownership, management, operation or control of, be employed
by, associated with, or in any manner connected with, lend the Executive’s name or any similar name
to, lend the Executive’s credit to, or render services or advice to, any person, firm, partnership,
corporation or trust which owns or operates, a bank, savings and loan association, credit union or
similar financial institution (a “Financial Institution”) within the Restrictive Area; provided
however, that the ownership by the Executive of shares of the capital stock which are listed on a
securities exchange or quoted on the National Association of Securities Dealers Automated Quotation
System which do not represent more than five percent (5%) of the outstanding capital stock of any
Financial Institution, shall not violate any terms of this Agreement.

(ii) The Executive will not, directly or indirectly, either for himself, or any other
Financial Institution: (A) induce or attempt to induce any employee of the Employer or any of its
Affiliates to leave the employ of their respective employer; (B) in any way interfere with the
relationship between the Employer or any of its Affiliates and any employee of the Employer or any
of its Affiliates; (C) employ, or otherwise engage as an employee, independent contractor or
otherwise, any employee of the Employer or any of its Affiliates; or (D) induce or attempt to
induce any customer, supplier, licensee, or business relation of the Employer or any of its
Affiliates to cease doing business with the Employer or any of its Affiliates, or in any way
interfere with the relationship between any customer, supplier, licensee or business relation of
the Employer or any of its Affiliates.

(iii) The Executive will not, directly or indirectly, either for himself, or any other
Financial Institution, solicit the business of any person or entity known to the Executive to be a
customer of the Employer or any of its Affiliates whether or not such Executive had personal
contact with such person or entity, with respect to products or activities which compete in whole
or in part with the products or activities of the Employer or any of its Affiliates.

(iv) The Executive will not, directly or indirectly, serve as the agent, broker or
representative of, or otherwise assist, any person or entity in obtaining services or products from
any Financial Institution within the Restrictive Area.

(v) The Executive expressly agrees that the covenants contained in this Section 6(a) are
reasonable with respect to their duration, geographical area, and scope.

(vi) For purposes of this Agreement, the Employer’s “Affiliates” include each corporation,
partnership, bank, savings bank, savings and loan association, credit union or other financial
institution, directly or indirectly, which is controlled by, controls, or is under common control
with, the Employer, and “control” means (x) the ownership of 51% or more of the voting securities
or other voting interest or other equity interest of any corporation, partnership, joint venture or
other business entity, or (y) the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such corporation, partnership, joint venture
or other business entity

(b) Violation of Restrictive Covenant. If the Executive violates the restrictions
contained in Section 6(a) and the Employer or any of its Affiliates bring legal action for
injunctive or other relief, the Employer or any of its Affiliates shall not, as a result of the
time involved in obtaining such relief, be deprived of the benefit of the full period of the
Restrictive Period. Accordingly, the Restrictive Period shall be deemed to have the duration
specified in Section 6(a) computed from the date the relief is granted but reduced by the time
between the period when the Restrictive Period began to run and the date of the first violation of
the restrictions contained in Section 6(a) by the Executive. In the event that a successor assumes
and agrees to perform this Agreement, the restrictions contained in Section 6(a) shall continue to
apply only to the primary service area of the Employer as it existed immediately before such
assumption and shall not apply to any of the successor’s other offices.

(c) Remedies for Breach of Restrictive Covenant. The Executive acknowledges that the
restrictions contained in Sections 4 and 6(a) of this Agreement are reasonable and necessary for
the protection of the legitimate business interests of the Employer or any of its Affiliates, that
any violation of these restrictions would cause substantial injury to the Employer or any of its
Affiliates and such interests, that the Employer would not have entered into this Agreement with
the Executive without receiving the additional consideration offered by the Executive in binding
himself to these restrictions and that such restrictions were a material inducement to the Employer
to enter into this Agreement. In the event of any violation or threatened violation of these
restrictions, the Employer or any of its Affiliates, in addition to and not in limitation of, any
other rights, remedies or damages available to the Employer under this Agreement or otherwise at
law or in equity, shall be entitled to preliminary and permanent injunctive relief to prevent or
restrain any such violation by the Executive and any and all persons directly or indirectly acting
for or with him, as the case may be.

Section 7. Intercorporate Transfers. If the Executive shall be voluntarily
transferred to a Subsidiary of the Employer or of Centrue, such transfer shall not be deemed to
terminate or modify this Agreement and the employing corporation to which the Executive shall have
been transferred shall, for all purposes of this Agreement, be construed as standing in the same
place and stead as the Employer as of the date of such transfer, provided however, that this
Section 7 shall not modify Employer’s obligations under Section 2, 3 and 5 hereof.

Section 8. Interest in Assets. Neither the Executive nor his estate shall acquire
hereunder any rights in funds or assets of the Employer, otherwise than by and through the actual
payment of amounts payable hereunder; nor shall the Executive or his estate have any power to
transfer, assign, anticipate, hypothecate or otherwise encumber in advance any of said payments;
nor shall any of such payments be subject to seizure for the payment of any debt, judgment,
alimony, separate maintenance or be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise of the Executive.

Section 9. Indemnification. The Employer shall provide the Executive (including his
heirs, personal representatives, executors and administrators) for the term of this Agreement with
coverage under a standard directors’ and officers’ liability insurance policy at its expense.

Section 10. General Provisions.

(a) Successors; Assignment. This Agreement shall be binding upon and inure to the
benefit of the Executive, his heirs, legatees and personal representatives, the Employer and its
successors and assigns, and any successor or assign of the Employer shall be deemed the “Employer”
hereunder. The Employer shall require any successor to all or substantially all of the business
and/or assets of the Employer, whether directly or indirectly, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent as the Employer would be required to perform if no such succession had taken place.

(b) Entire Agreement; Modifications. This Agreement constitutes the entire agreement
between the parties respecting the subject matter hereof, and supersedes all prior negotiations,
undertakings, agreements and arrangements with respect thereto, whether written or oral. Except as
otherwise explicitly provided herein, this Agreement may not be amended or modified except by
written agreement signed by the Executive and the Employer.

(c) Survival. The provisions of Sections 4 and 6 shall survive the expiration or
termination of this Agreement, in each case for the period set forth in such section.

(d) Enforcement and Governing Law. The provisions of this Agreement shall be regarded
as divisible and separate; if any of said provisions should be declared invalid or unenforceable by
a court of competent jurisdiction, the validity and enforceability of the remaining provisions
shall not be affected thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the State of Illinois without
reference to the law regarding conflicts of law.

(e) Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in a location selected by the Executive within twenty-five (25) miles from the
location of the main office of the Employer, in accordance with the employment rules of the
American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award
in any court having jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of his right to be paid through the date of termination during the pendency of
any dispute or controversy arising under or in connection with this Agreement.

(f) Legal Fees. All reasonable legal fees paid or incurred by the Executive pursuant
to any dispute or question of interpretation relating to this Agreement shall be paid or reimbursed
by the Employer if the Executive is successful on the merits pursuant to a legal judgment,
arbitration or settlement.

(g) Waiver. No waiver by either party at any time of any breach by the other party
of, or compliance with, any condition or provision of this Agreement to be performed by the other
party shall be deemed a waiver of any similar or dissimilar provisions or conditions at the same
time or any prior or subsequent time.

(h) Notices. Notices pursuant to this Agreement shall be in writing and shall be
deemed given when received; and, if mailed, shall be mailed by United States registered or
certified mail, return receipt requested, postage prepaid; and if to the Employer, addressed to the
principal headquarters of the Employer, attention: Chairman of the Board; or, if to the Executive,
to the address set forth below the Executive’s signature on this Agreement, or to such other
address as the party to be notified shall have given to the other.

[Remainder of Page Intentionally Left Blank]

1

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

	 	 	 
	CENTRUE FINANCIAL CORPORATION

By:

	 	WILLIAM R. BRITT

	 

	 	 
	Its:      

	 	Address:
	 
	 	 

2Exhibit No. 4.1

                        STANDARD MICROSYSTEMS CORPORATION
                        2004 INDUCEMENT STOCK OPTION PLAN

                    Effective as of July 14, 2004, As Amended

1.       Purpose of the Plan

         The purpose of this Standard  Microsystems  Corporation 2004 Inducement
Stock  Option  Plan  is  to  promote  the  interests  of  the  Company  and  its
stockholders   by  providing  new  employees  of  the  Company  or  any  of  its
subsidiaries  (including  employees  who  join  the  Company  as a  result  of a
corporate  transaction)  with an  appropriate  and material  incentive to accept
employment with the Company or any of its subsidiaries.

2.       Definitions

         (a) "Board" shall mean the Board of Directors of the Company.

         (b)  "Cause"   shall  mean  the   termination   by  the  Company  of  a
Participant's  employment by reason of the  Participant's (i) willful refusal to
perform the Participant's obligations to the Company, (ii) misconduct,  contrary
to the interests of the Company,  or (iii) commission of a serious criminal act,
whether  denominated a felony,  misdemeanor  or  otherwise.  In the event of any
dispute  whether  a  termination  for  Cause  has  occurred,  the  Board  may by
resolution  resolve  such  dispute  and  such  resolution  shall  be  final  and
conclusive on all parties.

         (c)  "Change in  Control"  shall mean an event or series of events that
would be required to be  described as a change in control of the Company on Form
8-K  promulgated  under the  Securities  Exchange Act of 1934,  as amended.  The
determination  whether and when a Change in Control has  occurred or is about to
occur shall be made by a vote of a majority of the  non-employee  members of the
Board who shall have constituted the Board  immediately  prior to the occurrence
of the event or series of events constituting such Change in Control.

         (d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

         (e) "Committee" shall mean a committee consisting of not fewer than two
members  of the  Board  duly  elected  by the Board to  administer  this Plan in
accordance with Section 3(a) hereof.

         (f)  "Common  Stock"  shall  mean the  shares  of  common  stock of the
Company, $0.10 par value per share.

         (g) "Company"  shall mean  Standard  Microsystems  Corporation  and any
successor.

         (h) "Disability"  shall mean permanent and total disability  within the
meaning of Section 22(e) of the Internal  Revenue Code of 1986,  as amended.  In
the event of any dispute  whether a termination  due to Disability has occurred,
the Board may by resolution  resolve such dispute and such  resolution  shall be
final and conclusive on all parties.

         (i) "Exercise Price" shall mean the price that the Participant must pay
under the Option for each share of Common Stock as  determined  by the Committee
for each grant and specified in the Stock Option Agreement.

         (j) "Fair Market  Value" of a share of Common  Stock shall mean,  as of
the date on which such fair market value is to be determined,  the closing price
(or the average of the latest bid and asked  prices) of a share of Common  Stock
as reported in The Wall Street  Journal (or a publication  or reporting  service
deemed  equivalent  to The Wall Street  Journal for such purpose by the Board or
the  Committee)  for the  over-the-counter  market  or any  national  securities
exchanges  and other  securities  markets  which at the time are included in the
stock price quotations of such  publication.  In the event that the Board or the
Committee shall determine such stock price  quotation is not  representative  of
fair market value, the Board or the Committee may determine Fair Market Value in
such a manner as it shall deem appropriate under the circumstances.

         (k) "Grant  Date"  shall mean the date of grant of an Option as defined
in Section 6(c) herein.

         (l)  Non-Qualified  Stock  Option"  shall mean an Option that is not an
"incentive stock option" within the meaning of Section 422 of the Code.

         (m) "Option" shall mean the option to purchase  Common Stock granted to
any  Participant  under the  Plan.  Each  Option  granted  hereunder  shall be a
Non-Qualified  Stock Option and shall be  identified as such in the Stock Option
Grant Agreement by which it is evidenced.

         (n) "Option Spread" shall mean,  with respect to an Option,  the excess
if any, of the Fair Market Value of a share of Common Stock as of the applicable
Valuation Date over the Exercise Price.

         (o)  "Participant"  shall mean a new  employee of the Company or any of
its subsidiaries to whom a grant of an Option under this Plan has been made.

         (p)  "Plan"  shall mean this  Standard  Microsystems  Corporation  2004
Inducement Stock Option Plan, as may be amended from time to time.

         (q) "Stock Option  Agreement" shall mean the separate written agreement
evidencing the grant of each Option pursuant to this Plan.

         (r) "Valuation Date" shall mean the trading date immediately  preceding
the date of the relevant transaction.

3.       Administration of the Plan

         (a)  Composition of the Committee.  This Plan will be administered by a
Committee,  which shall  consist of not fewer than two directors of the Company,
who shall be appointed  and serve at the  pleasure of the Board.  All members of
the  Committee  shall be both  "Non-Employee  Directors"  within the  meaning of
paragraph  (b)(3)(i) of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934 and "independent  directors" within the meaning of NASDAQ Rules applying
to  compensation  committee  independence.  The  Committee  shall  have  and may
exercise all of the powers of the Board under this Plan, other than the power to
appoint a director to committee  membership.  A majority of the Committee  shall
constitute a quorum,  and acts of the majority of members present at any meeting
at which a quorum is  present  shall be deemed  the acts of the  Committee.  The
Committee may also act by instrument signed by all members of the Committee.  In
the absence of a Committee,  the Board shall  function as the  Committee for all
purposes under this Plan,  and to the extent that the Board so acts,  references
in this Plan to the Committee  shall refer to the Board as applicable,  provided
that the grant of an Option  under this Plan shall be  approved by a majority of
the "independent directors" of the Board.

         (b) Powers of the Committee. In addition to the other powers granted to
the Committee under this Plan, the Committee shall have discretionary authority,
subject to and  consistent  with the  express  provisions  of this Plan,  (i) to
direct the grants of options;  (ii) to determine the numbers of shares of Common
Stock covered by each option,  the exercise price of the Common Stock covered by
each option,  the  individuals  to whom and the time or times at which,  options
shall be granted or options  may be  exercised;  (iii) to  prescribe,  amend and
rescind  rules  and  regulations  relating  to  the  Plan,  including,   without
limitation,  such  rules and  regulations  as it shall  deem  advisable  so that
transactions  involving  options or awards may qualify for exemption  under such
rules and  regulations as the Securities and Exchange  Commission may promulgate
from time to time exempting transactions from Section 16(b) of the Exchange Act;
(iv) to determine the terms and provisions of, and to cause the Company to enter
into, Stock Option  Agreements,  which Stock Option Agreements may vary from one
another,  as the Committee shall deem  appropriate;  (v) to amend any such Stock
Option Agreement from time to time, with the consent of the Participant; (vi) to
construe  and  interpret  this Plan,  such rules and  regulations  and the Stock
Option  Agreements;  and (viii) to make all other  determinations  necessary  or
advisable for the  administration  of, and to make all other  determinations the
Committee may deem necessary or advisable for the administration of, the Plan.

         (c)   Determinations   of  the  Committee.   Every  action,   decision,
interpretation  or  determination  by the Committee or the Board with respect to
the  application or  administration  of this Plan or any Stock Option  Agreement
shall be final and binding upon all persons.

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

         (e) Inconsistent Terms. In the event of a conflict between the terms of
this Plan and the terms of any Stock  Option  Agreement,  the terms of this Plan
shall govern.

         (f) Plan Term.  The  Committee  shall not grant any Options  under this
Plan on or after July 14, 2014.  All Options that remain  outstanding as of such
date shall continue to be governed by this Plan.

4.       Participation in this Plan

         Options may be granted only to individuals who have not been previously
employed by the Company or served as a member of the Board,  or following a bona
fide period of non-employment, and who become employees of the Company or any of
its subsidiaries,  including individuals who become employees in connection with
a merger or acquisition.  The Options may be granted to any such individual as a
material inducement to such individual  accepting employment with the Company or
any of its  subsidiaries,  provided,  however,  that any such grant of an Option
shall not become effective unless and until such individual  actually  commences
employment with the Company or any of its subsidiaries.

5.       Shares Subject to this Plan

         Subject to  adjustment  as  provided  in this  Section 5 and  Section 7
hereof,  the maximum number of shares of Common Stock  available for grant under
this Plan shall be 700,000.  Such shares of Common  Stock may, as the  Committee
shall from time to time determine,  be either  authorized and unissued shares of
Common Stock or issued  shares of Common Stock that have been  reacquired by the
Company.  To the extent  that any  Option  granted  under this Plan  terminates,
expires or is canceled without having been exercised, the shares covered by such
Option shall again be available for grant under this Plan.

6.       Options

         (a) Form of  Options.  Each  Option  granted  under  this Plan shall be
evidenced by a Stock Option  Agreement in such form as the Committee  shall from
time to time approve,  which  agreement  shall comply with and be subject to the
terms and conditions set forth in this Plan. The Options granted under this Plan
shall be clearly identified in the Stock Option Agreement as Non-Qualified Stock
Options.

         (b) Exercise Price.  The Exercise Price per share of Common Stock under
each Option shall be established  by the  Committee,  but shall not be less than
the Fair  Market  Value of a share of Common  Stock on the date  such  Option is
granted.

         (c)  Grant  Date.  The  Grant  Date of the  Options  shall  be the date
designated by the  Committee and specified in the Stock Option  Agreement as the
date the Option is granted.

         (d) Vesting of Options.  Unless  otherwise  determined by the Committee
and set forth in the Stock Option Agreement, each Option granted under this Plan
shall become  exercisable,  to the extent of one-quarter of the aggregate number
of shares optioned thereby, two years after the Grant Date and, cumulatively, to
the  extent  of an  additional  one-quarter,  at the  expiration  of  each  year
thereafter, so that, five years after the Grant Date, each Option shall be fully
exercisable,  subject  to the  provisions  set  forth  elsewhere  in this  Plan.
Notwithstanding the foregoing,  the Committee may declare any outstanding Option
immediately  and  fully  exercisable  (but  in  no  event  prior  to  the  first
anniversary  of  the  Grant  Date).   Notwithstanding  the  foregoing,   if  the
Participant's  employment  with the  Company  is  terminated  by  reason  of the
Participant's death,  Disability or actual retirement at age 65 or thereafter or
the  Participant  dies or suffers a  Disability  within the three  month  period
following any termination of the  Participant's  employment by the Company other
than a  termination  by the Company for Cause (as  defined  below) or  voluntary
resignation by the  Participant,  one hundred percent (100%) of the Option shall
become vested and  exercisable  immediately  upon the date of the  Participant's
death, Disability or retirement.

         (e)  Limitations on Transfer.  No Options granted under this Plan shall
be transferable by the Participants  either  voluntarily or by operation of law,
otherwise   than  by  last  will  and  testament  or  by  laws  of  descent  and
distribution,  and such Option  shall be  exercised  during the  lifetime of the
Participant,  only  by the  Participant,  or by his or  her  guardian  or  legal
representative.  In the event of any  purported  transfer  in  violation  of the
provisions of this Plan, such purported  transfer shall, to the extent permitted
by applicable law, be void and of no effect.

         (f) Exercise of Options.  A Participant  electing to exercise an Option
shall give written  notice to the Company of such  election and of the number of
shares  he or she has  elected  to  purchase;  provided  that no  Option  may be
exercised as to fewer than 100 shares  unless it is then  exercised as to all of
the shares then  purchasable  thereunder.  Such notice shall be  accompanied  by
payment to the Company of the full Exercise Price in cash; provided that, unless
otherwise  determined by the Committee,  the Exercise Price may be paid in whole
or in part, by surrender or delivery to the Company of shares of Common Stock of
the Company  which have been owned by the  Participant  for more than six months
before the  exercise  date  having a Fair  Market  Value on the date of exercise
equal to the  portion  of the  Exercise  Price  being so paid.  In  addition,  a
Participant  shall,  upon  notification  of  the  amount  due  and  prior  to or
concurrently  with issuance or delivery to the Participant of such shares,  pay,
in  cash,  any  amount  necessary  to  satisfy  federal,  state  and  local  tax
requirements.

         (g)  Issuance  or  Delivery  of Shares.  As soon as  practicable  after
receipt of the notice and payment referred to in Section 6(f) above, the Company
shall  issue or  deliver  such  shares to the  Participant  at the office of the
Secretary of the Company, 80 Arkay Drive, Hauppauge,  New York 11788, or at such
other place as may be mutually  acceptable  to the Company and the  Participant;
provided,  however,  that  the time of such  delivery  may be  postponed  by the
Company  for such  period of time as the  Company may require to comply with any
law or  regulation  applicable  to the  issuance or  transfer of shares.  If the
Participant  fails for any reason to accept  delivery  of all or any part of the
number of shares specified in such notice upon tender of delivery  thereof,  the
Participant's right to purchase such undelivered shares may be terminated by the
Company  by notice to the  Participant  and  refund  to the  Participant  of the
Participant's  payment.  Notwithstanding  anything  herein to the contrary,  the
Company  shall not be required  to issue or deliver  any shares of Common  Stock
pursuant  to the  exercise  of any  Options,  unless and until the  Company  has
determined,  with  advice of counsel,  that the  issuance  and  delivery of such
shares are in compliance with all applicable  laws,  regulations of governmental
authorities  and, if applicable,  the  requirements of any exchange on which the
shares  of  Common  Stock  are  listed  or  traded.  The  Company  shall use its
reasonable  efforts to comply with any such law,  regulation or requirement with
respect to the issuance and  delivery of such  certificates.  In addition to the
terms and conditions provided herein, the Company may require that a Participant
make such reasonable covenants, agreements and representations as the Committee,
in its sole  discretion,  deems advisable in order to comply with any such laws,
regulations or requirements.

         (h)  Withholding  Taxes;  Participant  Representations.   Prior  to  or
concurrently with issuance or delivery by the Company to the Participant of such
shares,  the  Participant  shall (i) upon  notification  of the amount due,  pay
promptly, in cash, any amount necessary to satisfy applicable federal, state and
local tax  requirements,  and (ii) if such shares are not then registered  under
the Securities Act of 1933, give assurance satisfactory to the Company that such
shares  are  being  purchased  for  investment  and  not  with  a  view  to  the
distribution  thereof,  and the Participant  shall give such other assurance and
take such other action as the Company  shall require to secure  compliance  with
any  federal or state  securities  law  applicable  to the  issuance  of shares;
provided that the out-of-pocket expense of such registration or compliance shall
be borne by the Company.  (i) Rights as Stockholder.  No Participant  shall have
the rights of a  stockholder  with respect to shares  covered by an Option until
such Participant becomes the holder of record of such shares.

         (j) Expiration of the Options. Except as provided in this Section 6(j),
no Option  granted to a  Participant  may be exercised,  unless,  at the time of
exercise,  the  Participant  is an  employee  of  the  Company  or  any  of  its
subsidiaries.  Options  granted  under this Plan to a  Participant  shall not be
affected  by any  change  of  duties  or  position  so long  as the  Participant
continues  to be an employee of the  Company.  With respect to the Option or any
portion  thereof which has not become vested and  exercisable,  the Option shall
expire on the date the  Participant's  employment is terminated  for any reason.
With respect to any Option or any portion  thereof which has become  exercisable
(including any Option that becomes  exercisable as a result of the Participant's
death,  Disability or retirement as provided in Section 6(d)),  the Option shall
expire on the earlier of: (i) three months after the  Participant's  termination
of employment other than for Cause, death or Disability; (ii) the later to occur
of (x) three months after the  termination  of the  Participant's  employment by
reason of death or  Disability  or (y) thirty  days after the  appointment  of a
legal  representative  or  guardian,  but in no event  more than one year  after
termination  of  employment  by  reason  of  death  or  Disability,   (iii)  the
commencement  of business  on the date the  Participant's  employment  is, or is
deemed to have been,  terminated for Cause; or (iv) the tenth anniversary of the
Grant Date.

7.       Adjustments Upon Changes in Capitalization

         (a) In the event of any change in the Company's Common Stock subject to
the  Option,  by  reason  of  any  stock  dividend,  split-up,   reorganization,
liquidation and the like, such adjustment  shall be made in the number of shares
subject to the Option and the Exercise  Price per share as the Board  shall,  in
its sole  judgment,  deem  appropriate  to give proper effect to such event.  No
adjustment  shall be made in the  requirements  set forth in  Section  6(f) with
respect to the minimum number of shares that must be purchased upon any exercise
of an Option.

         (b)  In  the  event  of  (i)  a  dissolution,  liquidation,  merger  or
consolidation of the Company or (ii) a sale of all or  substantially  all of the
assets of the Company or the sale of substantially all of the assets or stock of
a subsidiary of which the Participant is then an employee,  or (iii) a Change in
Control has occurred or is about to occur with respect to the Company, then, the
Board  may  determine  that  the  Option  shall  become  immediately  and  fully
exercisable.

8.       No Special Employment Rights

         Nothing  contained in this Plan shall confer upon the  Participants any
right with respect to the  continuation of their  employment or interfere in any
way with the right of the  Company  or any of its  subsidiaries,  subject to the
terms of any separate  employment  agreements  to the  contrary,  at any time to
terminate  such  employment or to increase or decrease the  compensation  of the
Participants from the rate in existence at the time of the grant of any Option.

9.       Amendments to this Plan; Termination of this Plan

         The Committee may, in its absolute discretion, from time to time revise
or amend this Plan; provided,  however, that any such amendment shall not impair
or adversely  affect a  Participant's  rights under this Plan or any outstanding
Option  without such  Participant's  written  consent.  The Committee may at any
time, in its absolute discretion, suspend or terminate this Plan. No Options may
be  granted  during  any  suspension  of this  Plan or after  this Plan has been
terminated. The termination of this Plan shall not affect ant Options previously
granted.  After this Plan  terminates,  the function of the Committee under this
Plan will be limited to supervising  the  administration  of Options  previously
granted.

10.      Miscellaneous

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

         (b) Effect on Prior Option Plans.  The adoption of this Plan shall have
no effect on  outstanding  options or awards  granted by the  Company  under any
other plan.

         (c) No Obligation to Exercise an Option.  The grant to the Participants
of the Options shall impose no obligation upon the Participants to exercise such
Options.

         (d) Notices. All notices and other communications hereunder shall be in
writing  and shall be given  and  shall be  deemed  to have  been duly  given if
delivered in person, by cable, telegram, telex or facsimile transmission, to the
parties as follows:

         If to the Participant, to the Participant's last known address.

         If to the Company:

                  Standard Microsystems Corporation
                  Attention: Secretary
                  80 Arkay Drive
                  Hauppauge, New York 11788

         or to such other  address as any party may have  furnished to the other
in writing in  accordance  herewith,  except  that  notices of change of address
shall only be effective upon receipt.

         (e) Descriptive Headings. The headings in this Plan are for convenience
of  reference  only and shall not limit or  otherwise  affect the meaning of the
terms contained herein.

         (f) Gender. All references herein to the masculine gender shall include
the feminine.

         (g)  Governing  Law.  This Plan shall be governed by, and construed and
enforced in accordance  with, the laws of the State of New York,  without regard
to the provisions governing conflict of laws.

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