November 3, 2009
Exhibit
10.3
November
3, 2009
Xx.
Xxxxxx Xxxxxx
00
Xxxxxxx Xxxxx
Xxxxx
Xxxx, XX 00000
Re: Letter
Agreement
Dear
Xxxxxx:
On
September 30, 2005, you received an Offer Letter from Standard Microsystems
Corporation (the “Company” or “SMSC”), which was subsequently amended as a
result of Section 409A (“409A” or “Section 409A”) of the Internal Revenue Code
(the “Code”). SMSC wishes to once again reconfirm the terms of your continued
employment as follows:
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Annual
Base Salary: $294,000 to be increased effective January 1, 2010
to $317,100.
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You
are hereby promoted effective January 1, 2010 to the position of Senior
Vice President and General Counsel.
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Annual
Bonus target opportunity of 50% of your then current base salary pursuant
to the terms and conditions of the Company’s then current management
incentive plan in which you are eligible to
participate. Notwithstanding anything herein to the contrary,
any annual bonus for a particular fiscal year shall be paid to you as soon
as reasonably practicable following the end of such fiscal year and in any
event no later than 2½ months following the end of such fiscal year;
provided that in the event payment of such bonus to you within such 2½
month period is impracticable, either administratively or economically, as
determined by the Company, payment of such bonus will be made as soon as
practicable thereafter.
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Monthly
Car Allowance: $700 which shall terminate on December 31,
2009.
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Annual Equity Award: The Company
shall grant to you 20,000 stock options on an annual basis which will be
awarded quarterly on the same schedule as such grants are made to the
Directors of the Company pursuant to the terms and conditions of the plan
from which such grants are made. 25% of each such stock option
grant will vest on each of the first four anniversaries of the grant date
of such stock option provided you continue to remain employed by the
Company on each of the applicable vesting
dates. Notwithstanding anything herein to the contrary, from
time to time, the Board or the Compensation Committee, in its sole
discretion may modify the grant to include a partial or total substitution
of alternative equity based instruments or to increase or decrease the
number of stock options or alternative equity based instruments
awarded.
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Your
annual salary and annual incentive bonus target may be reviewed and
increased from time to time.
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Eligibility
Individual Executive Disability Income Insurance (up to 1/3rd
of salary), subject to SMSC Board approval, physical exam and obtaining
underwriting.
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Eligibility
to participate in the Company’s Supplemental Executive Retirement Plan, as
may be amended from time to time.
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Eligibility
to participate in the Executive Health Management Program made available
by the Company.
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Convert
your eligible life insurance policy which is being
discontinued.
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Eligibility
for the Executive Salary Grade Severance Benefit in accordance with the
terms and conditions of the Company’s Severance Plan, as may be amended
from time to time.
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Vacation
time to be accrued at the rate of 20 days per
year.
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Paid
holidays will be according to the Company’s holiday schedule for U.S.
employees.
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You
will be eligible to participate in all other benefits programs offered to
similarly situated employees in New
York.
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In the
event that any payment or benefit required to be paid to you pursuant to this
letter agreement would violate Section 409A, the parties agree notwithstanding
any provisions in this letter agreement to the contrary, to amend this letter
agreement, to the extent necessary and reasonable to maintain the spirit of this
letter agreement without resulting in a violation under 409A.
Your eligibility to participate in the various
compensation and benefits plans offered by the Company is subject to your
compliance with the terms of each plan, which may be changed by the Company from
time to time in accordance with the terms of the relevant plan
document.
A basic
philosophy of SMSC is that we depend upon our employees to
succeed. We therefore want our relationship to be one of
long-standing, which offers you the opportunity to effectively use your skills
and successfully service our customers’ needs. We are confident that
you will perform satisfactorily and follow our policies and
procedures. Our objective has always been to provide employees with
career opportunities; however, this will be influenced by your performance and
SMSC’s success in the marketplace. Changes in the economy, our
markets and technology will continue to occur; therefore, notwithstanding the
fact that we are a career employee oriented Company, this offer of employment
should not be construed as a contract or a commitment that your employment will
continue for a specific period of time.
2
We look
forward to having you remain with SMSC for what I am confident will be a
mutually beneficial association. In the meantime, if you have any
questions, please do not hesitate to contact me. This Letter
Agreement may be executed by each party by facsimile counterpart.
Except as
set forth herein, this Letter Agreement supersedes and replaces the Offer Letter
and any other letter or agreement, written or oral, governing the terms and
conditions of your employment with the Company, except for your Employee
Agreement dated October 24, 2005. The terms and conditions of any
prior stock option, stock appreciation right or restricted stock awards
previously granted to you shall be subject to the terms and conditions of this
Letter Agreement.
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Sincerely,
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/s/
Xxxxxxxxx Xxxx
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President
and Chief Executive Officer
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Encl.
Agreed
and accepted.
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SIGNATURE:
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/s/
Xxxxxx Xxxxxx
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DATE:
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11/4/09
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3
