Document:

EX-10.1

Exhibit 10.1

STANDARD MICROSYSTEMS CORPORATION

2008 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(the “SERP”)

Amended and Restated as of January 1, 2008

1

STANDARD MICROSYSTEMS CORPORATION

2008 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

PREAMABLE

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

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

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

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

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

WHEREAS, in order to comply with Section 409A of the Code, SMSC amended and restated the 2003
SERP into the Standard Microsystems Corporation 2005 Supplemental Executive Retirement Plan
effective as of January 1, 2005 (the “SERP”, the “Plan” or the “2005 SERP”), on March 22, 2007; and

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

WHEREAS, the 2005 SERP was adopted prior to the issuance of the Final Regulations under
Section 409A of the Code; and

WHEREAS, SMSC wishes to amend and restate the 2005 SERP to incorporate certain provisions of
the Final Regulations; and

WHEREAS, adoption of the 2005 SERP documented SMSC good faith compliance with Section 409A of
the Code.

NOW, THEREFORE, effective as of January 1, 2008, the SERP is amended and restated into the new
Standard Microsystems Corporation 2008 Supplemental Executive Retirement Plan (the “Plan” or the
“2008 Plan”) as follows:

ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

a. The merger or consolidation of SMSC with or into any other corporation or entities whereby
the shareholders of SMSC immediately before the transaction do not own at least 50% of the new
entity;

b. SMSC is merged or consolidated with or into any other corporation or other entity, and at
any time after such merger or consolidation is effected, the Continuing Directors are not or cease
for any reason to constitute a majority of the board of directors either of the surviving entity,
or of any entity in control of the surviving entity;

c. All or substantially all of the assets of SMSC are sold or otherwise transferred to any
other corporation or other entity, or more than 50% of the stock of SMSC is purchased by one
entity, and at any time after such sale or other transfer is effected, the Continuing Directors are
not or cease for any reason to constitute, a majority of the board of directors either of the
entity which has acquired and owns such assets, or of any entity in control of the entity which has
acquired and owns such assets. In determining if a Change in Control occurs, the term “Continuing
Directors” means any person who either: (i) was elected a member of the Board at any Annual Meeting
of Stockholders of SMSC prior to the occurrence of a corporate event that is determined to be a
Change in Control; or (ii) whose election to the Board or nomination for election to the Board by
SMSC’s stockholders was approved in advance by at least two-thirds of the Continuing Directors then
in office,

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

e. Any event described as either a change in ownership or effective control of the Company, or
in the ownership of a substantial portion of the assets of the Company, as defined under Section
409A of the Code or the regulations issued there under.

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

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

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

1.10 “Disability” means a Participant is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment, which can be expected to
result in death or can be expected to last for a continuous period of not less than 12 months, as
determined by an independent third party physician, selected within the discretion of the
Committee. The determination of whether a Participant is disabled shall be determined by the
Committee, in its sole discretion, but subject to the provisions of Section 409A.

1.11 “Effective Date” means January 1, 2008, for purposes of the amended and restated SERP.
The original effective date of the Plan was March 1, 1994. SMSC can demonstrate its good faith
compliance with Section 409A from January 1, 2005 to December 31, 2007, as permitted under the
Final Treasury Regulations issued under Section 409A of the Code.

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

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

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

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

1.16 “Key Employee” means an individual as described in Section 416(i) of the Code, determined
without regard to Section 416(i)(5) thereof. For purposes of this provision, a Key Employee is an
officer earning more than $135,000 in 2005, $140,000 in 2006, $145,000 in 2007, $150,000 in 2008
and $165,000 in 2009 (with a limit of no more than 50 employees, or if less, the greater of 3 or
10% of all employees); a 5% owner; or a 1% owner having annual compensation of more than $150,000.
All amounts shall automatically be increased as provided under the Code for cost of living or other
changes.

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

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

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

1.20 “Plan Year” means the period beginning on each January 1 and ending on the following
December 31.

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

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

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

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

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

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

1.24 “Specified Employee” means a Key Employee who is employed by SMSC or any Related Entities
which has its stock publicly traded on an established securities market. For purposes of
determining Specified Employee status, the Employer hereby designates each December 31 as the
“Identification Date” under Section 409A of the Code. Anyone determined to be a Specified Employee
shall remain a Specified Employee for the 12 month period of time after the expiration of the first
day of the fourth month following the determination of Specified Employee status (i.e., from April
1 to the following March 31). The determination of whether a Participant is a Specified Employee
shall be made by an officer of SMSC on an annual basis for purposes of all nonqualified deferred
compensation plans and any other programs in accordance with the provisions of Section 409A of the
Code.

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

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

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

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

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

2

ARTICLE II

PARTICIPATION

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

ARTICLE III

VESTING

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

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

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

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

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

ARTICLE IV

BENEFITS

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

4.2 Termination Benefit.

a. A Vested Participant whose employment with the Company terminates prior to attaining
age 65 shall be entitled to receive a termination benefit from the Company in an annual amount
equal to 35% of the Participant’s Base Annual Salary. The termination benefit shall be paid in
equal monthly installments, beginning on the first day of the first calendar month following the
Participant’s attainment of age 65 and shall continue until 120 monthly installments shall have
been paid.

b. A Vested Participant whose employment with the Company terminates by reason of Disability
shall be entitled to receive a termination benefit from the Company in an annual amount equal to
35% of the Participant’s Base Annual Salary. The Disability benefit shall be paid in equal monthly
installments, beginning on the first day of the first calendar month following the determination
that the Participant is Disabled and shall continue until 120 monthly installments shall have been
paid.

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

4.3 Death Benefit. If a Participant who has begun to receive payments under Sections 4.1 or
4.2 shall die before receiving all payments due him hereunder, the present value of all remaining
installments shall be paid to his Beneficiary in a single lump sum cash payment within 30 days
following the Participant’s death.

For Participants who enter the Plan on or after January 1, 2003, and who has begun to receive
payments, dies before receiving all payments, the present value of 50% of the remaining
installments (i.e., 17.5%) shall be paid to a Participant’s Beneficiary in a single lump sum cash
payment within 30 days following the Participant’s death.

In the event that: (i) a Participant dies while still employed by the Company, or (ii) a
Participant who has become entitled to receive a retirement or termination benefit, dies after
retirement or termination of employment, but prior to receiving a benefit under Section 4.1 or 4.2,
the Participant’s Beneficiary shall be entitled to receive a death benefit from the Company equal
to the present value of an annual amount equal to 35% of the Participant’s Base Annual Salary for
up to 120 monthly installments as otherwise provided above in a single lump sum cash payment within
30 days following the Participant’s death.

For Participants who enter the Plan on or after January 1, 2003, if death occurs before
benefits have commenced to be paid, the Participant’s Beneficiary shall be entitled to receive a
death benefit equal to the present value of an annual amount equal to 17.5% of the Participant’s
Base Annual Salary for up to 120 monthly installments (i.e., 50% of the intended installments), as
otherwise provided above in a single lump sum cash payment within 30 days following the
Participant’s death.

All death benefits shall be equal to the net present value of all monthly installments, using
the interest rate contained in the Actuarial Assumption.

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

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

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

ARTICLE V

ALTERNATIVE DISTRIBUTIONS

5.1 Payment of Benefits. Unless elected otherwise in accordance with this Article V, all
benefits shall be paid in accordance with Article IV. However, consistent with Section 409A of the
Code, Participants who are employed by the Company on or after November 18, 2006 shall be given the
ability to make a one time election regarding the manner in which they wish to receive their
accruals for 2005, 2006, 2007 and 2008 and for future benefit years. No further changes can be
made to the SERP to benefit distributions except as permitted under Sections 5.3 and 5.7.
Contributions shall generally begin to be paid following a Separation from Service as follows:

(a) Small Account Balances. To the extent any Participant terminates employment for any
reason, and the present value of the Accrued Benefit in the 2008 SERP is less than $50,000, the
entire vested amount of the Participant’s benefit shall be paid as soon as reasonably possible
within a period of 60 days following such termination of employment in a single lump sum cash
payment. This “de minimus rule” shall apply whether or not a distribution is required as a result
of death, Disability or any Separation from Service, and regardless of age.

(b) Distribution Elections. Within 30 days after a Participant enters the Plan, a Participant
may elect to receive benefits under the Plan, as allowed below. Once an election is made to
receive benefits in a form other than the normal form of payment, such an election may not be
changed, except as otherwise permitted under Sections 5.3 or 5.7.

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

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

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

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

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

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

(c) Installment Payments. Each installment payment shall be treated as a separate payment for
purposes of any change in distribution elections under Section 5.4.

5.2 Disability. In the event that payments have commenced to be made to a Participant,
pursuant to an election made above, or in accordance with Section 4.2, prior to the date the
Participant becomes Disabled, all remaining payments shall continue to be paid to the Participant,
or the Participant’s Spouse or other legal representative responsible for the care of the
Participant, in the same manner as the Participant was receiving payments prior to the
Participant’s Disability, if applicable.

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

5.3 Death. For purposes of any alternative distribution elections, whether or not benefits
have commenced to be paid to a Participant, upon death, all payments shall be paid to the
Participant’s Spouse or other Beneficiary in a single lump sum cash payment within 30 days
following the Participant’s death. If no Spouse or Beneficiary exists, all benefits shall be paid
to the Participant’s estate.

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

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

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

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

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

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

5.7 Exception for Specified Employees. Notwithstanding any provision to the contrary, in
accordance with the Final Regulations issued under Section 409A of the Code, to the extent that any
benefits to a Specified Employee do not exceed the lesser of the Specified Employee salary for the
past 2 years or the Section 401(a)(17) limitations, such amount may be paid within the 6 month
period of time during which benefits may generally not be paid to Specified Employees. To the
extent benefits exceed such limitations (which is a maximum of $460,000 in 2008 and $490,000 in
2009), the balance of any payments not otherwise payable during such period shall be made following
the expiration of the 6 month period following a Separation of Service in a single lump sum payment
on the first day of the month after the 6 month separation period with interest equal to prime rate
as of the first day of the month in which a Separation from Service occurs, plus 2%.

5.8 Special Election for 2005, 2006, 2007, and 2008 Contributions. This Plan is being amended
and restated as of January 1, 2008, to comply with the provisions of Section 409A of the Code and
the Final Regulations. In accordance with IRS Notice 2005-1, Q&A-19(c), the Final Treasury
Regulations under Section 409A and IRS Notice 2007-86, a Plan could be amended to provide for new
payment elections without violating the “subsequent deferral” and “anti-acceleration rules” under
Section 409A, as long as a Plan is so amended by December 31, 2008. However, a Participant may
not, in 2008, change a payment election with respect to payments that a Participant would otherwise
receive in 2008, or cause a payment to be accelerated into 2008. Accordingly, with respect to all
benefit accounts made to the 2008 SERP for the 2005, 2006, 2007 and 2008 Plan Years, this Plan
shall allow all Participants to make new payment elections on or before December 31, 2008, with
respect to both the time and form of payment of the 2005, 2006, 2007 and 2008 benefit accruals.
This “second election opportunity” is being granted in accordance with all IRS guidance.
Furthermore, as long as a new election is made in accordance with Section 5.4, a Participant may
elect a new form of distribution for all benefits.

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

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

5.11 Payment Date. Whenever a payment under this Plan specifies a payment period with
reference to a number of days (e.g., “payment shall be made within 30 days after a Separation from
Service”), the actual date of payment within the specified period shall be within the sole
discretion of the Company.

ARTICLE VI

FUNDING

6.1 Plan Unfunded. The Plan shall be unfunded for purposes of the Code and Title I of ERISA,
and no assets shall be set aside for the payment of benefits under the Plan, even if a trust is
established to provide for the payment of any or all benefits hereunder. All benefits shall be
paid from the general assets of the Company, which remain subject to the claims of all general
creditors of the Company and to unrestricted use by the Company until benefit payments are made.
To the extent the Company decides, within its discretion, to establish a trust or other internal
funding vehicles, such as a sinking fund, to provide for the payment of benefits to Participants
and assist in meeting the Company’s obligations under the Plan, any such trusts shall be grantor
trusts established in accordance with the provisions of Revenue Procedure 92-64 (i.e., a “Rabbi
Trust”). Any provisions, which would cause any trust to fail to comply with Revenue Procedure
92-64, or any subsequent Internal Revenue Service rulings or pronouncements, shall be null and
void, and the closest alternative provision contained in Revenue Procedure 92-64 shall apply, if
appropriate. Notwithstanding any provisions to the contrary, in the event of a Change in Control
of the Company, if any benefits under the Plan are held in a “Rabbi Trust”, the assets transferred
to the Rabbi Trust shall become irrevocably held by the Rabbi Trust and may not be recovered by the
Company or any Related Entities, or used by the Company or any Related Entities for any corporate
or other purposes.

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

ARTICLE VII

CLAIMS PROCEDURE

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

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

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

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

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

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

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

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

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

(a) May review pertinent documents;

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

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

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

(a) Specific reasons for the decision;

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

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

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

ARTICLE VIII

MISCELLANEOUS PROVISIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 8.14 Gross-Up for Section 409A Violations. In the event of a violation of
Section 409A of the Code, it is not the intent of the Company for a Participant who is an active
employee within 1 year of any violation (or a former employee who is an active member of the Board
within 1 year prior to any violation) to incur the excise tax and other penalties under Section
409A. Accordingly, to the extent any excise taxes or underpayment of interest or penalties under
Section 409A apply, the Company shall make a “gross up” payment to the Participant, to offset the
effect of any excise tax, interest or penalties incurred in accordance with Section 409A of the
Code, and any tax on such gross up payments, to the extent such action is legally permitted. All
gross up payments set forth in this Plan shall be made as soon as legally permitted under Section
409(A) of the Code, but in no event later than 2 1/2 months following the end of the fiscal year in
which the event giving rise to such payment occurs, and, if permissible, before the excise tax
becomes due.

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

8.16 No Linked Plans. The Company also maintains the SMSC Section 401(k) Savings Plan (the
“SMSC 401(k) Savings Plan”). Employee Salary and Bonus Deferral Elections under the SERP are made
independent of any elections under the SMSC Section 401(k) Plan. In addition, distribution
elections are made separately between the SERP and the SMSC 401(k) Plan. Accordingly, for purposes
of Section 409A, the SERP and the SMSC 401(k) Plan are “not” linked plans.

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

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

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

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

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

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

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

8.24 Plan Interpretation. The Administrator shall have complete discretion to interpret all
provisions of the Plan and to establish reasonable rules and procedures to facilitate the
administration of the Plan. However, the Plan is intended to comply with Section 409A and shall be
interpreted consistent with the provisions of Section 409A.

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

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

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

Vice President of Human Resources

Standard Microsystems Corporation

80 Arkay Drive

Hauppauge, NY 11788

(631) 434-4600

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

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

STANDARD MICROSYSTEMS CORPORATION

	 	 	 
	By: /s/ Christine King

	Date:

	 	November 7, 2008

3EX-10.2

Exhibit 10.2

STANDARD MICROSYSTEMS CORPORATION

SEVERANCE PLAN

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

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

WHEREAS, the American Jobs Creation Act of 2004 (“AJCA”) enacted new Section 409A of the Internal
Revenue Code (the “Code”), imposing new rules for all forms of deferred compensation, including
benefits under the SMSC Severance Plan; and

WHEREAS, the Severance Plan was amended by execution of Amendment Number 1 on March 22, 2007, to be
in compliance with Section 409A of the Code; and

WHEREAS, the Final Regulations under Section 409A were issued after the Severance Plan was amended;
and

WHEREAS, SMSC wished to amend and restate the Severance Plan to comply with Section 409A of the
Code, including all IRS announcements and notices, and the Final Regulations issued under Section
409A; and

WHEREAS, due to the brevity of the Plan, this document shall serve as both the Plan document and
the Summary Plan Description for the Severance Plan; and

WHEREAS, Section 22 of the Severance Plan retained the right for SMSC to amend, modify or terminate
the Plan.

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

	1.	 	Effective Date. The Plan became effective as of January 1, 1986. The Plan shall be amended
and restated effective as of December 31, 2008 to comply with Section 409A of the Code. SMSC
can demonstrate its good faith compliance with Section 409A from January 1, 2005 to December
31, 2008, as permitted under the Final Treasury Regulations issued under Section 409A of the
Code.

	2.	 	Plan Year. The Plan Year shall be the calendar year.

	3.	 	General Definitions.

	 	a.	 	“Base Salary” shall mean an eligible employee’s regular salary as determined in
accordance with SMSC’s payroll records, excluding any bonuses, commissions, taxable or
non-taxable fringe benefits, car or other allowances, and any other forms of
compensation.

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

	 	c.	 	“Disability” means a Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment, which
can be expected to result in death or can be expected to last for a continuous period
of not less than 12 months, as determined by an independent third party physician,
selected within the discretion of the Committee. The determination of whether a
Participant is Disabled shall be determined by the Committee, in its sole discretion,
but subject to the provisions of Section 409A.

	 	d.	 	“Employee” shall mean any individual employed directly by SMSC or any Related
Company regularly scheduled to work at least 30 hours per week, excluding any part
time, temporary, seasonal, and leased employees, and excluding any independent
contractors and consultants.

	 	e.	 	“Key Employee” means an individual as described in Section 416(i) of the Code,
determined without regard to Section 416(i)(5) thereof. For purposes of this
provision, a Key Employee is an officer earning over $140,000 in 2006, $145,000 in
2007, $150,000 in 2008 and $165,000 in 2009 (with a limit of no more than 50 employees,
or if less, the greater of 3 or 10% of all employees); a 5% owner; or a 1% owner having
annual compensation of more than $150,000. All amounts shall automatically be
increased as provided under the Code for cost of living or other charges.

	 	f.	 	“Participating Company” shall mean any Related Company located in the United
States.

	 	g.	 	“Related Company” means any entity that is within SMSC’s “controlled group”, as
defined under Section 1563 of the Code.

	 	h.	 	“Separation from Service” shall have the meaning set forth in Section 409A of
the Code and the regulations thereunder. Consistent with Final Treasury Regulation
Section 1.409A-1(h), or any subsequent guidance under Section 409A of the Code, no
Separation from Service shall occur if an 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.	 	“Service Date” means an Eligible Employee’s initial date of hire or any re-hire
date, if later. In certain instances (which must be approved in writing by the CEO or
the Vice President of Human Resources of SMSC), Eligible Employees may be granted past
service credit with former employers. In this event, the Service Date may be
determined prior to an Eligible Employee’s date of hire or re-hire with SMSC, within
SMSC’s discretion or the provisions of any acquisition or other agreement.

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

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

5. Basic Severance Benefits.

	 	a.	 	Cash Benefits. Eligible Employees shall be entitled to a severance benefit
equal to 1/2 of a week’s base pay for each 6 months of Continuous Service measured from
an Eligible Employee’s Service Date up to 15 years of service. As a result of the
preceding Severance Benefit Formula, the maximum benefit that any Eligible Employee
shall receive under the Severance Plan, exclusive of employees receiving benefits under
Section 8, shall be a maximum benefit of 15 weeks for any Eligible Employees who have
completed 15 Years of Service or more. In determining Continuous Service for purposes
of computing severance benefits, all periods of time from an individual’s Service Date
during which an eligible employee is “actively at work” shall be taken into
consideration, regardless of the actual hours worked in any period of time, plus any
leave time taken under the Family Medical Leave Act. Thus, any periods during which an
Eligible Employee is absent from work, other than Family Medical Leaves, shall not be
considered in determining Continuous Service. No severance benefits shall be paid
under the Plan for any partial periods.

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

	 	b.	 	COBRA Benefits. As an additional severance benefit, whether an employee
receives the Basic Severance Benefit or the Executive Severance Benefit, SMSC shall
also pay for 100% of the cost of any continuation health coverage if elected under
COBRA, by the employee or any qualified beneficiaries, for coverage in existence at the
time of any qualifying event, for a period of 3 months following any termination of
employment of an employee. The payment of any COBRA premiums shall not extend the
period of any COBRA entitlement, and shall only apply for coverage in effect at the
time of a termination, for which COBRA election rights exist.

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

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

	6.	 	Entitlement to Basic Severance Benefits. An Eligible Employee shall be entitled to the Basic
Severance Benefits if an Eligible Employee’s employment is involuntarily terminated with SMSC,
unless such termination is for “Cause” as defined below in this Section 6. In the event of a
termination for “Cause”, including unsatisfactory job performance, no Basic Severance Benefits
shall be paid.

For purposes of this Plan the term “Cause” shall include, but not be limited to the
following: any material violation of the terms of any of SMSC’s personnel policies or
procedures; any material misstatement contained in the Eligible Employee’s employment
application; commission by the Eligible Employee of any crime or fraud against SMSC or its
property or any crime involving moral turpitude or reasonably likely to bring discredit upon
SMSC; unsatisfactory job performance; material failure to perform or meet standards of
performance established by SMSC with respect to any services to be provide by the Eligible
Employee; and any violation of SMSC’s operating policies.

	7.	 	Eligibility for the Executive Severance Benefit. Employees who may be eligible for the
Executive Severance Benefit (the “Executive Benefit”) shall include Divisional Vice
Presidents, Vice Presidents, Senior Vice Presidents, Executive Vice Presidents, Presidents,
Chief Operating Officer, Chief Executive Officer, Chief Financial Officer, and any other key
employees specifically identified by SMSC to receive the Executive Benefit, in writing. SMSC
retains the discretion to identify any employees for the Executive Benefit who are employed by
SMSC or any Related Entities as a result of any acquisitions. However, to the extent any
executives are covered under any separately negotiated employment or severance agreements,
that provide for any severance benefits, such individuals shall be excluded from participation
in the Executive Benefit, and the Severance Plan, until such individuals are informed, in
writing by the SMSC Chief Executive Officer, of their eligibility for participating in the
Severance Plan. Individuals who are specifically excluded from the benefits as of the
effective date of this amended and restated Severance Plan are identified in separate
corporate records and agreements.

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

	8.	 	Executive Severance Benefit. Eligible Employees for the Executive Benefit shall receive an
Executive Severance Benefit equal to three (3) months of Base Salary upon the occurrence of
required “Relocation” as defined in Section 9(a) of this Plan or the occurrence of “Other
Events” as defined in Section 9(c) of this Plan. Eligible Employees for the Executive Benefit
shall receive an Executive Severance Benefit equal to six (6) months of Base Salary upon the
occurrence of “Change in Control” as defined in Section 9(b) of this Plan.

The above Executive Benefit shall be provided in lieu of the Basic Severance Benefit
provided under the Severance Plan based upon an employee’s Years of Continuous Service with
SMSC, and in no event shall be paid in addition to any other severance benefits under the
SMSC Severance Plan or any individually negotiated employment or severance agreements.
Furthermore, under the Executive Severance Benefit, no “Minimum Benefits” shall exist, such
as the 2 week Minimum Benefit provided under the Basic Severance Benefit. However, in the
event the Basic Severance Benefit for any Eligible Employee under this Severance Plan is
greater than the Executive Benefit, an executive employee shall be entitled to the greater
of such benefits.

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

	 	a.	 	Relocation. If an Eligible Employee is required to relocate to a new position
that is more than 75 miles from the location of the employee’s employment prior to such
written required relocation, the employee may, within 90 days from receipt of such
notification and prior to receipt of any relocation expenses by SMSC, inform SMSC, in
writing, of the employee’s desire to terminate employment with SMSC or any Related
Entity, and to receive the Executive Benefit.

	 	b.	 	Change in Control. Upon the occurrence of a “Change in Control” of SMSC,
including any affiliated or subsidiary companies, in which any eligible employees are
employed, followed by a reduction in an employee’s Base Salary by more than 15%, or
any significant reduction (greater than 25%) in any targeted incentive compensation or
bonuses, (i.e., as a percentage of Base Salary) as of the date of any Change in Control
or an involuntary termination of the employee’s employment, other than for “Cause” or
retirement or Disability, an eligible employee shall be entitled to the Executive
Severance Benefit in accordance with Section 9(d) below.

A “Change in Control” of SMSC shall be deemed to have occurred upon the occurrence
of one of the following events:

	 	i.	 	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.

Notwithstanding the preceding paragraphs of this Section 9, in the event
that: (i) the aggregate payments of benefits to be made or afforded to any
employee under this Amendment (the “Termination Benefits”) would be deemed
to include an “excess parachute payment” under Section 280G of the Code or
any successor thereto; and (ii) if such Termination Benefits were reduced to
an amount (the “Non-Triggering Amount”), the value of which is $1 less than
an amount equal to the total amount of any payments permissible under
Section 280G of the Code or any successor thereto; then the Termination
Benefits to be paid to any employee shall be so reduced so as to be a
Non-Triggering Amount. Any allocations of any reductions required hereby
among the Termination Benefits, in accordance with the proceeding paragraphs
of this Section 9, shall be determined by SMSC, within its discretion.

	 	c.	 	Other Events. Eligible Employees shall also be entitled to the Severance
Benefits identified in this Plan, under any corporate transactions or events as
provided in the Severance Plan, including any involuntary termination of employment
without cause.

	 	d.	 	Good Reason Termination. Section 9 provides that an Eligible Employee who is
an executive may terminate the Eligible Employee’s employment for “Good Reason”.

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

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

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

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

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

	10.	 	Termination of Severance Benefits. Notwithstanding any provisions to the contrary, in the
event that an employee is receiving any severance benefits on a periodic basis, and if such an
employee obtains new employment during the period in which severance benefits would otherwise
be paid, all severance benefits shall immediately be terminated and no further severance
benefits shall be due and payable.

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

	 	a.	 	Section 409A. In the event that any termination would cause any payments to be
paid beyond 21/2 months following the end of the Plan Year in which a termination occurs,
a final payment equal to the balance owed shall be made prior to the 21/2 month period
following 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.

	 	b.	 	Delay in Payment for Specified 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 6 months after a Separation
from Service occurs and shall retroactively be paid to make the Employee whole for any
lost benefits. To the extent that an 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 6 months 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%.

	 	c.	 	Exception for Specified Employees. Notwithstanding any provision to the
contrary, in accordance with the Final Regulations issued under Section 409A of the
Code, to the extent that the severance benefits to a Specified Employee do not exceed
the lesser of the Specified Employee salary for the past 2 years or the Section
401(a)(17) limitations, such amount shall be paid within the 6 month period of time
during which benefits may generally not be paid to Specified Employees. To the extent
benefits exceed such limitations (which is a maximum of $460,000 in 2008 and $490,000
in 2009), the balance of any payments shall be made following the expiration of the 6
month period following a Termination Date and a Separation of Service in a single lump
sum payment on the first day of the 6 months following a Separation from Service, with
interest equal to prime plus 2% for the delay in making payments as required under the
Severance Plan.

	12.	 	Covenant Not to Compete. Eligible Employees shall agree that during a period of 6 months
after an employee’s Separation from Service, the employee shall not, directly or indirectly,
through any other person, firm, corporation or other entity, be employed by or engaged as a
consultant or independent contractor to any business entity engaged in a business that is a
competitor of SMSC, or any related entities, anywhere in the United States. For purposes of
this Plan, a business entity shall be considered to be a competitor with SMSC, and all related
entities, if it is engaged in any of the following activities: the marketing, sale, design,
development, manufacture or assembly of any integrated circuit or related product competing
with an integrated circuit or related product then offered by SMSC without written consent
which will not be unreasonably withheld if it is a non-competitive situation.

Eligible employees shall acknowledge in the Release required under Section 15 that the scope
of this covenant not to compete is reasonable. In the event that any aspect of this
covenant is deemed to be unreasonable by a court, an Eligible Employee shall submit to the
reduction of either the time or territory to such an area or period as the court will deem
reasonable. In the event an Eligible Employee violates this covenant, then the time
limitation shall be extended for a period of time equal to the pendency of such proceedings,
including appeals.

	13.	 	Nonsolicitation of Clients. For a period of 1 year after the Eligible Employee’s Separation
from Service, the Employee shall not, directly or indirectly, through any other person, firm,
corporation or other entity, solicit any customers or clients of SMSC, in order to receive the
severance benefits.

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

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

	15.	 	Conditions for Payment. As a condition precedent to the payment of any Basic or Executive
Severance Benefits, inclusion of the 2 week “Minimum Payment” and any COBRA coverage, SMSC
shall require an Eligible Employee to sign a Severance Agreement and General Release (the
“Release”) within 30 days of the date of the Eligible Employee’s separation from service (the
“Release Period”). The Release shall require the Eligible Employee to agree to release SMSC,
any Related Companies, and the employees and directors of any and all Related Companies, from
all claims or demands the Eligible Employee may have based on employment with SMSC, including
claims of which the Eligible Employee is unaware and claims which are not specifically
released and identified below. These claims include, but are not limited to, claims arising
under the Constitution of the United States, a release of any rights or claims the Employee
may have under the Age Discrimination in Employment Act of 1967 as amended, 29 U.S.C. 621 et
seq., which prohibits age discrimination in employment; Title VII of the Civil Right Act of
1964, as amended, 42 U.S.C. 2000(e) et seq., which prohibits discrimination in employment
based on race, color, national origin, religion or sex; the Civil Rights Act of 1966, 42
U.S.C. 1981 et seq.; the Equal Pay Act, which prohibits paying men and women unequal pay for
equal work; or any other federal, state or local laws or regulations prohibiting employment
discrimination; Employee Retirement Income Security Act, 29 U.S.C. 1001 et seq.; Executive
Orders 11246 and 11141; the Constitution of the State of New York or any other states in which
the Eligible Employee resides or works; any New York or other state laws against
discrimination; any express or implied contracts with SMSC or any Related Company; any federal
or state common law and any federal, state or local statutes, ordinances and regulations. The
Release may include other provisions not stated herein. Any payment that otherwise would be
made to the Eligible Employee prior to his delivery of such executed release shall be paid to
the Eligible Employee on the first business day following the conclusion of the Release
Period.

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

	16.	 	Corporate Acquisitions and Transactions. The intent of the Plan is to compensate Eligible
Employees with long-term employment with SMSC, if the need to terminate an Eligible Employee
or to eliminate a position occurs. In the event that an Eligible Employee working for SMSC or
any Related Company is subsequently offered employment by any related or unrelated entities as
a result of any corporate transaction or reorganization, no severance benefits shall be
payable whether or not the individual continues to work for the buyer or any other successor
entity in any corporate acquisition or other transaction, whether or not such offers or
positions are at comparable wages or job levels.

	17.	 	ERISA Compliance. Notwithstanding any provisions to the contrary, in no event shall any
severance benefit exceed 2 times an Eligible Employee’s annual compensation paid during the
Plan Year immediately preceding the termination of the Eligible Employee’s services.
Furthermore, in no event shall severance benefits be paid for a period of more than 24 months
after an Eligible Employee’s termination of employment. These rules are intended to comply
with Department of Labor Regulation Section 2510.3-2.

	18.	 	Older Workers Benefits Protection Act. With regard to each individual Severance Agreement and
General Release required under Section 15, SMSC shall give consideration to requiring either a
21 day review period for individual and independent terminations, or use of a 45 day review
period for significant reductions in force. Separate Severance Agreements and General Release
forms may be used with different employees in order to effectuate the intent of the Severance
Plan and/or to provide additional severance benefits in order to accommodate the unique
circumstances of any individual terminations.

	19.	 	WARN Notices. Prior to the effectuating any significant reduction in force, SMSC shall give
consideration as to whether or not any notifications are required to employees and/or local
officials under the Workers’ Adjustment and Retraining Notification Act of 1990 (“WARN”).
Furthermore, prior to effectuating any reduction in force that may require issuance of WARN
Notices, SMSC may terminate the Severance Plan in order to avoid the duplication of providing
either 60 days of notice and/or 60 days of pay, in addition to any severance benefits that may
be required under the terms of the SMSC Severance Plan.

	20.	 	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 underpayment of interest penalties. However, the Plan and any
Release are intended to comply with Section 409A and shall be interpreted consistent with the
provisions of Section 409A.

	21.	 	Plan Unfunded. The Plan shall be unfunded for purposes of the Code and Title I of ERISA, and
no assets shall be set aside for the payment of benefits under the Plan. All participants are
general creditors of SMSC for the payment of any benefits.

	22.	 	Amendment and Termination. The Plan may be amended, modified, or terminated at any time, by
action of the Compensation Committee of the Board of Directors of the Company.

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

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

	25.	 	Claims and Review Procedures. SMSC hereby adopts the following claims procedures to review
all claims for benefits under the Plan, in accordance with Department of Labor Regulation 29
CFR §2560.503-1:

	 	a.	 	Benefit Claims. Claims for benefits shall be made in writing to the Employer,
or, in the event the Employer contracts with a person or corporation to process claims
for any benefits, claims for such benefits shall be forwarded to such person or
corporation as designated by the Employer. Whoever is designated to process claims for
benefits, whether the Employer, or any other person, shall be referred to as the “Claim
Coordinator” in this Claims Procedure.

The “Claim Coordinator” shall make all determinations as to the right of any
claimant to a benefit under the Plan. If the “Claim Coordinator” denies in whole or
in part any claim for a benefit under the Plan the “Claim Coordinator” shall furnish
the claimant with notice of the decision not later than 90 days after receipt of the
claim by the “Claim Coordinator”, unless special circumstances require an extension
of time for processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the claimant prior
to the termination of the initial 90-day period. In no event shall such extension
exceed the period of 90 days from the end of such initial period. The extension
notice shall indicate the special circumstances requiring an extension of time and
the date by which the processor expects to render the final decision. If no notice
of a decision or extension is provided, the claimant shall assume the claim has been
denied.

The written notice which the processor shall provide to every claimant who is denied
a claim for benefits shall be set forth in a manner calculated to be understood by
the claimant:

	 	i.	 	The specific reason or reasons for the denial;

	 	ii.	 	Specific reference to pertinent Plan provisions on which the
denial is based;

	 	iii.	 	A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and

	 	iv.	 	Appropriate information as to the steps to be taken if the
claimant wishes to submit his claim for review.

A claimant or his authorized representative may request the Appeals Committee to
review the denial of a claim by the “Claim Coordinator”. The Appeals Committee
shall be established by the Employer as the “Named Appeals Fiduciary”, as required
under ERISA for reviewing claims. Such request shall be made in writing and shall
be presented to the Appeals Committee not more than 60 days after receipt by the
claimant of written notification of the denial of a claim. The claimant shall have
the right to review pertinent documents and to submit issues and comments in
writing. The Appeals Committee shall make its decision on review not later than 60
days after receipt by the Appeals Committee of the claimant’s request for review,
unless special circumstances require an extension of time, in which case a decision
shall be rendered as soon as possible by not later than 120 days after receipt by
the Appeals Committee of the request for review. If such an extension of time for
review is required because of special circumstances, written notice of the extension
shall be furnished to the claimant prior to the commencement of the
extension. The decision of review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Plan provisions on which the
decision is based.

	 	b.	 	Compliance with Regulations. It is intended that the claims procedure of this
Plan is administered in accordance with the claims procedure regulations of the
Department of Labor set forth in 29 CFR Section 2560.503-1. Accordingly, the above
claims procedures shall be required to the extent necessary to comply with any future
laws, regulations or announcements.

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

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

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

	29.	 	Employment and Severance Agreements, and Offer Letters. Sections 4 and 7 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.
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.

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

	31.	 	Plan Number. The Plan Number assigned to this Plan for purposes of Internal Revenue Form
5500 filings is 501.

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

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

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

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

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

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

	38.	 	Governing Laws. The Plan shall be governed and construed in accordance with the laws of the
State of New York, except to the extent preempted by ERISA.

STANDARD MICROSYSTEMS CORPORATION

/s/ Christine King

President and Chief Executive Officer

November 7, 2008

1

IMPORTANT INFORMATION.

	 	•	 	Plan Year: January 1 to December 31

	 	•	 	Type of Plan: Severance Plan

	 	•	 	Plan No.: 501

	 	•	 	Plan Sponsor: Standard Microsystems Corporation

EIN 11-2234952

	 	•	 	Plan Administrator: Standard Microsystems Corporation

	 	•	 	Funding: Employer self funded

	 	 	 	 	 
	•

	 	Agent for Service

of Legal Process:
	 	

Standard Microsystems Corporation

80 Arkay Drive

Hauppauge, New York 11788

2

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