Exhibit 10.1
                                                                    ------------

May 27, 2005


                               CONTRACT AMENDMENT


This  serves to amend the  employment  agreement  executed  on  January  7, 2000
between SMSC and Andrew M. Caggia (Andy), as follows:

o    At Andy's  request,  he will be retiring from the role of CFO as of June 1,
     2005.  However,  to  insure an  optimal  transition  with the new CFO,  the
     company  has  requested  that Andy  remain on as a part time  employee  and
     retain the position of Senior Vice President until his full retirement.
o    Effective  June 5, 2005,  Andy will become a part time employee  working 30
     hours per week but with diminishing  compensation and office  attendance as
     follows:

     Time Period          Days/week in office   Annual salary rate
     -------------------- --------------------- ---------------------
     06/05/05-01/15/06    Four                  $230,600
     -------------------- --------------------- ---------------------
     01/16/06-04/15/06    Three                 $172,950
     -------------------- --------------------- ---------------------
     04/16/06-09/05/06    On call               $115,300
     -------------------- --------------------- ---------------------

o    For FY06 Andy's  bonus  target  will be  proportionately  reduced  like his
     salary.  Specifically,  for FY06 the  At-Plan  bonus  is  $118,903  and the
     Strategic  bonus is $59,452.  Any bonus monies earned will be paid in cash.
     No bonus incentive will be provided for FY07, which begins 03/01/06.
o    Provided  Andy  provides  the  services  specified  herein  SMSC's Board of
     Directors  would  accelerate  the  vesting of the  unvested  portion of 529
     shares of  restricted  SMSC stock that were granted on June 17, 2004, as of
     09/05/06.
o    SERP  calculation  will credit  service thru 09/05/06 and use the salary in
     effect as of 05/31/05 for the period 06/01/05-09/05/06.
o    All other provisions of the employment  agreement dated January 7, 2000 and
     any amendments  thereto remain in effect until Andy's full retirement date,
     which will be  September  5, 2006.  As of that date,  the above  employment
     agreement and all amendments  thereto,  including this  amendment,  will be
     terminated.





     Agreed as of May 27, 2005.                 Agreed as of May 27, 2005.


     /s/ Andrew M. Caggia                       /s/ Steven J. Bilodeau
     ------------------------                   ---------------------------
     Andrew M. Caggia                           Steven J. Bilodeau
                                                President and CEO, SMSC