STANDARD MICROSYSTEMS CORP
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit_10-1.txt
<TEXT>
                                                                    Exhibit 10.1

                 EARLY RETIREMENT AGREEMENT AND GENERAL RELEASE

     WHEREAS, George W. Houseweart (the "Employee") is an employee of SMSC North
America, Inc. ("SMSC" or the "Company"); and

     WHEREAS, the Employee's normal retirement date is March 21, 2007; and

     WHEREAS,  the parties have mutually agreed that the Employee will voluntary
retire early, effective as of September 30, 2006; and

     WHEREAS,   the   parties   have   agreed  to   different   job  titles  and
responsibilities  during the period from October 24, 2005 through  September 30,
2006; and

     WHEREAS,  the parties have also agreed to a reduction in  compensation  and
hours  effective as of February 1, 2006,  in order to allow the Employee to work
on a part-time basis for SMSC, while retaining all employee  benefits  otherwise
available to the Employee; and

     WHEREAS,  the Employee is an employee-at-will  with SMSC, and no Employment
Agreement or Offer Letter exists between the Employee and SMSC providing for the
payment of any early retirement benefits; and

     WHEREAS,  the Employee is not being terminated by SMSC and is therefore not
entitled to any benefits under the Standard  Microsystems  Corporation Severance
Plan as a result of this Early Retirement Agreement; and

     WHEREAS,  SMSC is  willing  to make  all  payments  as  identified  in this
Agreement in order to ensure a smooth  transition of  responsibilities  prior to
the Employee's early retirement date; and

     WHEREAS,  this Agreement  will serve as an  individually  negotiated  Early
Retirement Agreement and General Release between the Employee and SMSC; and

     WHEREAS,  the terms and  condition of this  Agreement are  contingent  upon
execution of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing statements and the mutual
promises set forth below, the Employee and SMSC agree,  effective as of the last
day of the period  during  which the  Employee  may revoke  this  Agreement,  as
follows:

1.   Early  Retirement  Date.  The  Employee's  early  retirement  date  will be
     September 30, 2006 (the "Early Retirement Date").

2.   Job Titles.  The  Employee  will hold the  following  positions  during the
     period prior to his Early Retirement Date.

     a.   On October 24, 2005,  the Employee  will  relinquish  the positions of
          General  Counsel and  Secretary  of SMSC and will hold the position of
          Senior Vice President.

     b.   On February 1, 2006, the Employee will  relinquish the title of Senior
          Vice President and will become an Intellectual Property Attorney until
          the Early Retirement Date.

3.   Compensation and Benefits Prior to Early Retirement. During the period from
     execution of this Agreement until the Employee's Early Retirement Date, the
     Employee will be entitled to the following general benefits:

     a.   All current  salary,  wages,  bonuses and car allowances  will be paid
          through  January 31, 2006,  in accordance  with SMSC's normal  payroll
          procedures.

     b.   During the period from February 1, 2006 until  September 30, 2006, the
          Employee will receive 75% of the  Employee's  annual base salary as of
          January 30, 2006 (i.e., 275,000 x 75% = $206,250),  in accordance with
          normal  payroll  procedures.  The period from February 1, 2006 through
          September  30,  2006  shall  be  known  as the  "Part-Time  Employment
          Period".

          During the Part-Time  Employment Period, the Employee will be expected
          to work the minimum  number of hours  necessary to retain all employee
          benefits  for medical,  dental,  LTD and other  insurances  for active
          employees,  that will be  maintained  in  accordance  with all  normal
          policies and procedures. The Employee acknowledges that these benefits
          are governed by the term of all benefit  programs.  To the extent that
          any benefits  cannot be  maintained  as a result of the  transition to
          part-time  status,  SMSC will only be responsible for the premium cost
          of such benefits,  which will be paid to the Employee, with a gross up
          for any tax liabilities.

     c.   The  Employee  will be eligible to the  Employee's  full bonus for the
          2006 fiscal year end bonus  under the SMSC 2006  Management  Incentive
          Plan  ("MIP");  and the fourth  quarter  bonus for the  period  ending
          February 28, 2006 under the MIP (each  adjusted for  corporate but not
          individual  performance).  All of  these  benefits  will  be  paid  in
          accordance with all applicable plans.

     d.   SMSC will  continue  to pay the full cost of all  individual  life and
          disability policies during the Part-Time Employment Period.

     e.   The  Employee  will not be  entitled  to any bonus for the 2007 fiscal
          year ending February 28, 2007, including any quarterly bonuses.

     f.   Upon the Early  Retirement  Date,  SMSC will vest the  Employee in all
          unvested  Restricted Stock Awards,  but not any unvested Stock Options
          or Stock Appreciation Rights.

     g.   In  accordance  with the  January 1, 2005  Amendment  to the  Standard
          Microsystems  Corporation  Executive Retirement Plan (the "SERP"), the
          Board will approve the  determination  of the  Employee's  Base Annual
          Salary, as defined in the SERP as of the period prior to the Part-Time
          Employment  Period.  Accordingly,   the  Employee  will  not  incur  a
          reduction in the Employee's  SERP benefit as a result of the reduction
          in hours and compensation during the Part-Time Employee Period.

     h.   SMSC will maintain all business telephone and internet services during
          the Part-Time Employment Period.

     i.   At the commencement of the Part-Time  Employment  Period, the Employee
          will  relinquish  his car allowance and will no longer be eligible for
          any vacation accruals.  All accrued vacation as of the commencement of
          the Part-Time  Employment  Period will be paid in the Employee's first
          payroll in  February,  2006 at the rate of  compensation  prior to the
          Part-Time Employment Period.

4.   Early Retirement Benefits.  Following the Employee's Early Retirement Date,
     the Employee will be entitled to the following general benefits  consistent
     with a normal  retirement  from SMSC,  and the  additional  COBRA and other
     benefits:

     a.   The Employee will be entitled to elect to receive  continuation health
          coverage under the Consolidated  Omnibus Budget  Reconciliation Act of
          1985 ("COBRA") after the Employee's  Early  Retirement  Date, which is
          the date of a  "qualifying  event"  under  COBRA,  if the Employee was
          receiving  medical,  dental and vision coverage from SMSC. SMSC agrees
          to  reimburse  the  Employee  and/or  directly  pay the  cost of COBRA
          benefits for the Employee and the Employee's spouse from October, 2006
          through March,  2007,  when the Employee would otherwise have attained
          his normal retirement age.

     b.   All group-term  life  insurance,  long-term  disability and short-term
          disability  will  terminate in accordance  with the  provisions of all
          plans,  usually as of the Early  Retirement  Date. The Employee may be
          entitled  to  individual   conversion  privileges  under  the  various
          policies.  SMSC will provide information to the Employee regarding all
          individual conversion rights.

     c.   The Employee will be entitled to a distribution of all vested benefits
          under the Standard  Microsystems  Corporation  Investment  Savings and
          Retirement Plan (the "Section 401(k) Plan").

     d.   The  Employee  will be  entitled to retain the  corporate  cell phone,
          laptop,  monitor, fax, file cabinet, and related equipment used by the
          Employee.  The  value  of  such  property  will  be  included  in  the
          Employee's W-2 Form for the 2006 calendar year.

          The early retirement  benefits whereby SMSC agrees to reimburse or pay
          for the cost of COBRA  coverage for the period  between the Employee's
          Early  Retirement  Date and the date the Employee would otherwise have
          attained age 65 will be paid in accordance  with the Company's  normal
          payroll  procedures.  However,  no COBRA benefits will be paid,  until
          after the return of all property to SMSC, as provided in Section 6.

          Notwithstanding  any  provision  to the  contrary,  the payment of any
          COBRA  benefits  will  not be  treated  as  extending  the  Employee's
          employment for any employee benefit or employment purposes.

5.   Adequate  Consideration.  The  Employee  acknowledges  and agrees  that the
     vesting of all unvested Restricted Stock Awards, the exercise of discretion
     to determine  the  Employee's  Base Annual  Salary under the SERP,  and the
     payment  for the cost of COBRA  coverage  during  the  period  between  the
     Employee's  Early  Retirement  Date  and  the  attainment  of age  65  (the
     "Enhanced  Benefits"),  are adequate and sufficient  consideration  for the
     Employee's execution of the General Release set forth below.

6.   Return of Property.  To the extent the Employee is in the possession of any
     SMSC property,  excluding the property addressed in Section 4(d), including
     building access passes and keys, SMSC credit cards, and any SMSC documents,
     correspondence  and related corporate  materials,  the Employee will return
     all property to SMSC on or before the Early Retirement Date.

7.   Expense  Accounts  and Reports.  The  Employee  will be allowed to submit a
     final expense  report and accounting to SMSC within 2 weeks after the Early
     Retirement Date, and will receive all necessary  reimbursements  from SMSC,
     if any, in accordance with all corporate policies and procedures.

8.   General Release. In exchange for the Enhanced Benefits made available under
     this Agreement,  the Employee agrees to forever release and discharge SMSC,
     and all subsidiaries  and affiliates,  as provided under Section 414 of the
     Internal  Revenue Code (the "Code") in  determining  a single  employer for
     purposes of employee benefits (collectively,  "Related Entities"),  and all
     officers,  directors,  agents,  and employees of SMSC or Related  Entities,
     from all  claims,  grievances,  liabilities,  and  lawsuits  whether or not
     arising out of the Employee's employment or the Employee's early retirement
     from SMSC, and agrees not to assert any such claim,  grievance,  liability,
     or lawsuit.  This release includes,  but is not limited to, any claim under
     the following laws:

     (a)  The Constitution of the United States;

     (b)  The Age  Discrimination  in  Employment  Act of 1967,  as amended,  29
          U.S.C.   ss.621  et  seq.,  which  prohibits  age   discrimination  in
          employment;

     (c)  Title VII of the  Civil  Rights  Act of 1964,  as  amended,  42 U.S.C.
          ss.2000(e) et seq., which prohibits discrimination in employment based
          on race, color, national origin, religion or sex;

     (d)  The Civil Rights Act of 1866, 42 U.S.C. ss.1981 et seq.;

     (e)  The Equal Pay Act,  which  prohibits  paying men and women unequal pay
          for equal work;

     (f)  Any  other  federal,  state,  or local law or  regulation  prohibiting
          employment discrimination;

     (g)  The Employee Retirement Income Security Act, 29 U.S.C. ss.1001 et seq.
          ("ERISA");

     (h)  Section 806 of 18 U.S.C. ss.1514A.

     (i)  Executive Orders 11246 and 11141;

     (j)  The Americans  with  Disabilities  Act of 1990, 42 U.S.C.  ss.12101 et
          seq.;

     (k)  The Federal  Family and Medical  Leave Act, 29 U.S.C.  ss.2601 et seq.
          and any comparable state statutes;

     (l)  The  Constitution  of the  State of New York or any  other  applicable
          states;

     (m)  Any claim arising from any express or implied contracts;

     (n)  Any claim under any other statute,  regulation,  ordinance,  or common
          law rule relating to the  Employee's  employment  or  separation  from
          employment,  including any claim for wrongful  discharge or defamation
          arising out of employment or otherwise.

          The Employee  waives any claims or rights to payment of any attorney's
          or  professional  advisor fees or expenses for review of this document
          or any issues arising out of the Employee's early retirement.

          Notwithstanding any provisions to the contrary,  this release does not
          include, a release of: (a) the Employee's rights under this Agreement;
          (b) the Employee's right, if any, to individual  conversion privileges
          under any medical,  dental, long term disability,  life insurance, and
          other welfare  programs;  (c) any obligations  under the SERP; and (d)
          any  obligation  of the Company to the  Employee  under any  indemnity
          agreement or any  obligation  of the Company to indemnify the Employee
          pursuant to contract, law, charter, by-law or otherwise.

9.   No Future Lawsuits. The Employee agrees that the Employee will not file, or
     permit to be filed in the Employee's name or on the Employee's  behalf, any
     lawsuit or  administrative  claim  against  any of the  persons or entities
     released  in this  Agreement  based  upon any act or event  which  occurred
     before the  effective  date of this  Agreement.  The Employee will also not
     cooperate in the initiation of any lawsuits,  except as otherwise  required
     by law.

     In the event any charge or  complaint  is filed or any action is pursued by
     others in the Employee's name or on the Employee's  behalf by or before any
     federal,  state,  or local agency or court,  the Employee hereby waives the
     right to any damages or other relief from any such action.  This  paragraph
     does not apply to a  challenge  made by the  Employee  to the  knowing  and
     voluntary  nature  of  the  Employee's  waiver  of  claims  under  the  Age
     Discrimination in Employment Act of 1967, as amended ("ADEA").

10.  Non-Admission  of  Liability.  The use of this  Agreement  by SMSC does not
     signify  any  liability  by SMSC or any  Related  Entities  to provide  any
     benefits.

11.  Period for Review and Consideration of Agreement.  The Employee understands
     that the Employee  will be given a period of 21 days to review and consider
     this Agreement before signing it. The Employee further understands that the
     Employee may wait up to 21 days prior to signing the Agreement, or may also
     execute the Agreement prior to the expiration of the 21 day review period.

12.  Older Workers  Benefit  Protection Act. SMSC is not required to provide the
     Employee with certain demographic information required by the Older Workers
     Benefit  Protection Act of 1990, due to the voluntary  early  retirement by
     the Employee.

13.  Encouragement  to Consult  Attorney.  The Employee is encouraged to consult
     with an attorney before signing this Agreement.

14.  Right to Revoke Agreement.  The Employee may revoke this Agreement within 7
     calendar  days  of the  Employee's  signing  of  this  Agreement.  If  this
     Agreement  has not  been  revoked  within  such 7 day  period,  it  becomes
     effective on the 8th day.  Revocation  can be made by  delivering a written
     notice of  revocation  to Andy  Solowey,  Senior  Vice  President  of Human
     Resources.  For this  revocation  to be effective,  written  notice must be
     received by SMSC no later than close of business  on the 7th  calendar  day
     after the Employee signs this Agreement. If the Employee fails to sign this
     Agreement  or  revokes  this  Agreement,   it  will  not  be  effective  or
     enforceable  and the  Employee  will  not  receive  the  Enhanced  Benefits
     described in Sections 3 and 4 of this Agreement.

15.  Intellectual Property and Confidential  Information.  All of the Employee's
     obligations under the Patent and Trade Secrets Agreement dated December 12,
     1988, will end on the Early Retirement Date,  except to the extent provided
     in Section 16 below.

16.  Trade Secrets,  Confidential and/or Proprietary  Information.  The Employee
     will regard and  preserve as  confidential:  (i) all trade  secrets  and/or
     other proprietary and/or confidential  information belonging to the Company
     or  any  Related  Entities;   and  (ii)  all  trade  secrets  and/or  other
     proprietary  and/or  confidential  information  belonging  to a third party
     which have been  confidentially  disclosed  to the  Company or any  Related
     Entities,  which trade secrets and/or other proprietary and/or confidential
     information  described in (i) and (ii) above  (collectively,  "Confidential
     Information")  have  been  disclosed  to  the  Employee  by  reason  of the
     Employee's  relationship  with the  Company or any  Related  Entities.  The
     Employee will not, without written authority from the Company to do so, use
     for the  Employee's  own benefit or purposes,  or the benefit or purpose of
     any person or entity  other than the Company,  nor disclose to others,  any
     Confidential  Information.  This provision will not apply to the Employee's
     general  expertise and know-how,  nor to Confidential  Information that has
     been  voluntarily  disclosed  to the public by the  Company,  or  otherwise
     entered the public domain  through lawful means.  Confidential  Information
     shall include, but not be limited to, all nonpublic information relating to
     the Company's:  (i) business,  research,  development and marketing  plans,
     strategies and forecasts;  (ii) business; (iii) products (whether existing,
     in development,  or being contemplated);  (iv) reports; (v) formulas;  (vi)
     specifications;  (vii)  designs,  software  and  other  technology;  (viii)
     research and  development  programs;  (ix) terms of contracts;  and (x) any
     employee information.

17.  Return of  Documents.  Upon the Early  Retirement  Date,  the Employee will
     return all media on which any  Confidential  Information may be recorded or
     located, including,  without limitation,  documents,  program source codes,
     samples,   models,   blueprints,   photocopies,    photographs,   drawings,
     descriptions,   reproductions,   cards,  tapes,  discs  and  other  storage
     facilities (collectively "Documentation") made by the Employee or that came
     into the Employee's  possession by reason of the Employee's employment with
     the Company  that are the  property of the Company and shall be returned to
     the Company. The Employee will not deliver,  reproduce, or in any way allow
     any  Documentation  to be delivered or used by any third party  without the
     written  direction or consent of a duly  authorized  representative  of the
     Company.

18.  Covenant Not to Compete.  The  Employee  agrees that for a period of 1 year
     after the Early  Retirement  Date,  the  Employee  will  not,  directly  or
     indirectly,  through any other person,  firm,  corporation or other entity,
     compete  with the Company or any Related  Entities,  anywhere in the United
     States  in the  performance  of  services  similar  to the  services  being
     provided  prior  to the  Employee's  Early  Retirement  Date  or any  prior
     services  provided  to SMSC or any  Related  Entities.  The Company and the
     Employee  agree that the  Company's  and all Related  Entities  business is
     national in scope and is highly competitive.

19.  No  Solicitation  of Employees.  During the course of  employment  with the
     Company,  the  Employee  came into  contact  and became  familiar  with the
     Company's  employees,   their  knowledge,   skills,  abilities,   salaries,
     commissions,  draws,  benefits,  and 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.  Any  solicitation,  luring  away or  hiring  of such
     employees of the Company will be highly  detrimental to the business of the
     Company and may cause  serious loss of business  and great and  irreparable
     harm. Consequently,  the Employee covenants and agrees that for a period of
     1 year after the Employee's  Early  Retirement Date, the Employee will not,
     directly  or  indirectly,  whether  on behalf of the  Employee  or  others,
     solicit,  lure or hire away any  employees  of the  Company or any  Related
     Entities, or assist or aid in any such activity.

20.  No Solicitation of Clients. The Employee agrees that for a period of 1 year
     after the Employee's Early Retirement Date, the Employee will not, directly
     or indirectly, through any other person, firm, corporation or other entity,
     solicit any customers or clients of the Company or any Related Entities.

21.  Reasonableness  of Covenants.  The Employee  acknowledges that the scope of
     the Covenant Not to Compete and the Nonsolicitation of Employees and Client
     provisions  contained in this Agreement are  reasonable.  In the event that
     any aspect of these provisions is deemed to be unreasonable by a court, the
     Employee will submit to any  reductions as the court will deem  reasonable.
     In the  event  the  Employee  violates  these  provisions,  then  the  time
     limitations  will be extended for a period of time equal to the pendency of
     such proceedings, including appeals.

22.  Confidentiality  of Terms.  The  Employee  and SMSC agree that the terms of
     this  Agreement  are  confidential  and will not be disclosed to any person
     without the written consent of SMSC, except to the Employee's legal and tax
     advisors and members of the Employee's  immediate  family, or to the extent
     required by law.  However,  the Employee agrees and acknowledges  that this
     Agreement  may be  introduced as evidence by SMSC in the event the Employee
     commences any legal,  administrative,  judicial or arbitration  proceedings
     against SMSC.

23.  Non-Defamation. The Employee agrees that the Employee will not, directly or
     indirectly, in public or private,  deprecate,  impugn or otherwise make any
     remarks  that would tend to or be  construed  to tend to defame SMSC or its
     reputation,  nor will the Employee assist any other person, firm or company
     in  engaging  in such  activities.  SMSC also  agrees  not to engage in any
     activities,  directly or indirectly, that would defame the Employee, or the
     Employee's reputation.

24.  Consequences  of Violation of Promises.  If the Employee  breaks any of the
     Employee's  promises  contained  within  this  Agreement  and/or  files any
     lawsuit based on legal claims that the Employee has released,  the Employee
     will pay for all costs  incurred  by SMSC,  any  Related  Entities,  or the
     officers,  directors,  agents or employees of SMSC or any Related Entities,
     including reasonable attorney's fees to enforce any provisions or to defend
     against any claim by the  Employee.  The  Employee  also agrees that if the
     Employee  acts in violation of this  Agreement,  the Employee will remit to
     SMSC any and all monies  paid to the  Employee or any other  parties  under
     this Agreement, including the cost of any COBRA coverage, and all severance
     benefits will cease to be paid.  The terms of this paragraph will not apply
     to a challenge  to the knowing and  voluntary  nature of a waiver of claims
     under the Age Discrimination in Employment Act of 1967 and SMSC will not be
     penalized for exercising that right.

25.  Section  409A.  As part of the  American  Jobs  Creation  Act of 2004,  new
     Section  409A of the Code was  enacted to  regulate  nonqualified  deferred
     compensation plans. In general, any benefits paid following the termination
     of an individual's employment,  on a voluntary or involuntary basis, may be
     treated as a form of deferred  compensation under Section 409A of the Code,
     unless a specific  regulatory  exemption exists.  The Proposed  Regulations
     under Section 409A of the Code currently exempt certain  arrangements  from
     the definition of deferred  compensation.  Under these exemptions  benefits
     that are paid within 2 1/2 months  after the end of the later of the fiscal
     year for an employer or the tax year for an employee in which a  separation
     from service occurs, are not considered  deferred  compensation.  Given the
     fact that the Employee's  Early Retirement Date will be September 30, 2006;
     and the payment of COBRA  benefits  will be completed in March,  2007,  the
     payment of COBRA  benefits  following the early  retirement of the Employee
     will not result in any deferred  compensation under the "2 1/2 month rule".
     This result easily occurs, since SMSC has a fiscal year ending February 28,
     2007.  Accordingly,  all COBRA  payments  will clearly be made within 2 1/2
     months  of the  SMSC  tax  year  in  which  the  early  retirement  occurs.
     Furthermore,  the Proposed  Regulations  also provide that any  arrangement
     that  entitles  an employee to certain  reimbursements  that are  otherwise
     excludable from gross income, such as the reimbursement for COBRA benefits,
     that are incurred and paid by the December 31 of the second  calendar  year
     following the calendar year in which a separation from service occurs,  are
     not considered to be deferred compensation.

     Based upon the  Proposed  Regulations,  this  Agreement  is not  subject to
     Section  409A,   which  could  otherwise  impose  a  20%  excise  tax,  and
     underpayment  of tax  interest  penalties,  on  any  form  of  nonqualified
     deferred compensation.

26.  Entire Agreement.  This document,  constitutes the entire Agreement between
     the Employee and SMSC  concerning the subject matter hereof,  except to the
     extent the Patent and Trade Secrets  Agreement has been  incorporated  into
     this Agreement.  SMSC has made no promises to the Employee other than those
     in this Agreement  concerning  the subject  matter  hereof.  This Agreement
     supersedes all prior agreements and understandings between the parties with
     respect to such subject matters.

27.  Waivers.  A  waiver  by  either  party  of any  term or  condition  of this
     Agreement in any instance will not be deemed or construed to be a waiver of
     such term or condition for the future, or of any subsequent breach thereof.
     All  rights,  remedies,  undertakings  or  obligations  contained  in  this
     Agreement  will be cumulative and none of them will be in limitation of any
     other right, remedy, undertaking or obligation of either party.

28.  Injunctive  Relief.  The  Employee  acknowledges  that  damages  may  be an
     inadequate remedy in the event of an intended,  threatened or actual breach
     by the Employee of any of the covenants made in this Agreement.  Any breach
     by the Employee may cause SMSC great and irreparable  injury and damage. To
     the extent  that such injury and damage can be  demonstrated  to a court of
     competent  jurisdiction,   SMSC  will  be  entitled,  without  waiving  any
     additional  rights or remedies  otherwise  available  to SMSC at law, or in
     equity or by statute, to injunctive and other equitable relief in the event
     of an intended,  threatened,  or actual  breach by the Employee of any said
     covenants.

29.  Sarbanes-Oxley  Act of 2002.  SMSC and the  Employee  agree that this early
     retirement  is occurring  for the reasons cited above and is not related to
     any lawful  actions taken by the Employee  under the  provisions of Section
     806 of 18 U.S.C. ss.1514A.

30.  No Application for Employment. The Employee agrees not to apply for any new
     positions  with SMSC or any  Related  Entities  after the Early  Retirement
     Date.

31.  Employment-At-Will.  The Employee acknowledges that the Employee remains an
     employee of SMSC, and is subject to the SMSC employment-at-will policy. The
     Employee will be  responsible  for  performing  all  responsibilities  in a
     satisfactory  manner.  In the  event  the  Employee  does not  satisfy  the
     responsibilities of the Employee's position and/or violates any policies or
     procedures of SMSC, the Employee may be immediately  terminated.  Upon such
     action,  unless such termination is for "Cause", the parties agree that all
     payments  contemplated  under this  Agreement  will  immediately be due and
     payable and the Agreement will be honored. To the extent necessary to avoid
     any adverse tax  consequences  under  Section  409A,  the parties  agree to
     execute a new Agreement maintaining as much of the intent of this Agreement
     as possible.

     For purposes of this provision,  "Cause" shall include,  but not be limited
     to: any material violation of the terms of this Early Retirement  Agreement
     by the Employee; any material and intentional misstatement contained in the
     Employee's representations under this Early Retirement Agreement, or in any
     other  corporate  records;  the  commission by the Employee of any crime or
     fraud against the Employer or any Related Entities or their property or any
     crime  involving  moral  turpitude or reasonably  likely to bring discredit
     upon the  Employer  or any  Related  Entities;  the  failure to  adequately
     perform the  responsibilities  of the Employee's position following written
     notice of such  failure  and not cured  within  30 days;  and any  material
     violation of the Employer's published operating policies and procedures.

32.  Execution  of  Agreement.  This  Agreement  may be  executed in two or more
     counterparts,  each of which  will be deemed an  original  and all of which
     together will constitute one and the same instrument.

33.  Severability  Clause.  If any  one or  more  provisions  contained  in this
     Agreement  will,  for  any  reason,  be  held  to be  invalid,  illegal  or
     unenforceable   in   any   respect,   such   invalidity,    illegality   or
     unenforceability will not affect any other provision of this Agreement, but
     this  Agreement   will  be  construed  as  if  such  invalid,   illegal  or
     unenforceable provision had never been contained herein.

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 arise after the effective  date of the  Agreement,  if
     applicable.

35.  Reference.  Reference inquiries from prospective  employers will be handled
     by only verifying the Employee's dates of employment and last position held
     with  SMSC  consistent  with  SMSC's  usual  human  resource  policies  and
     procedures.

36.  Binding  Agreement.  The  provisions of this Agreement will be binding upon
     the Employee, and SMSC and their successors,  assigns, heirs, executors and
     beneficiaries.  Execution of this Agreement binds the Employee to the Early
     Retirement Date designated  above,  which date may not be extended  without
     the mutual agreement of SMSC and the Employee.

37.  Captions.  The captions used in this Agreement are designed for convenience
     of  reference  only  and  are not to be  resorted  to for  the  purpose  of
     interpreting any provision of this Agreement.

38.  New York Law.  The  Employee  and SMSC  agree that this  Agreement  and any
     interpretation  thereof  will be  governed  by the laws of the State of New
     York.

     THE  EMPLOYEE  ACKNOWLEDGES  THAT THE  EMPLOYEE  HAS READ  THIS  AGREEMENT,
     UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT.

                                          EMPLOYEE


Dated: October 14, 2005                  By:   /s/  George W. Houseweart
                                         ___________________________________
                                          George W. Houseweart


                                          SMSC NORTH AMERICA, INC.

Dated: October 14, 2005                  By:   /s/  Steven J. Bilodeau
                                         ___________________________________
                                          Steven J. Bilodeau
                                          Chairman and Chief Executive Officer




For internal use:

       Date Delivered to Employee: October 14, 2005.

       21-day Period for Consideration Ends November 4, 2005.

       Date signed:  10/14/05

       7-day Period for Revocation Ends:   10/21/05

                                                                October 14, 2005
</TEXT>
</DOCUMENT>
