STANDARD MICROSYSTEMS CORPORATION SEVERANCE PLAN

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.

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.

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.

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.

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.

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 reduct