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| SECTION 1. |   | ESTABLISHMENT AND PURPOSE.                             | 1 |
|------------|--------|--------------------------------------------------------|---|
| SECTION 2. |   | DEFINITIONS.                                           | 1 |
| (a)        |   | “Affiliate”                                | 1 |
| (b)        |   | “Award”                                    | 1 |
| (c)        |   | “Board of Directors”                       | 1 |
| (d)        |   | “Change in Control”                        | 1 |
| (e)        |   | “Code”                                     | 2 |
| (f)        |   | “Committee”                                | 2 |
| (g)        |   | “Company”                                  | 2 |
| (h)        |   | “Consultant”                               | 3 |
| (i)        |   | “Employee”                                 | 3 |
| (j)        |   | “Exchange Act”                             | 3 |
| (k)        |   | “Exercise Price”                           | 3 |
| (l)        |   | “Fair Market Value”                        | 3 |
| (m)        |   | “ISO”                                      | 3 |
| (n)        |   | “Nonstatutory Option” or “NSO” | 3 |
| (o)        |   | “Offeree”                                  | 3 |
| (p)        |   | “Option”                                   | 4 |
| (q)        |   | “Optionee”                                 | 4 |
| (r)        |   | “Outside Director”                         | 4 |
| (s)        |   | “Parent”                                   | 4 |
| (t)        |   | “Participant”                              | 4 |
| (u)        |   | “Plan”                                     | 4 |
| (v)        |   | “Purchase Price”                           | 4 |
| (w)        |   | “Restricted Share”                         | 4 |
| (x)        |   | “Restricted Share Agreement”               | 4 |
| (y)        |   | “Service”                                  | 4 |
| (z)        |   | “Share”                                    | 4 |
| (aa)       |   | “Stock”                                    | 4 |
| (bb)       |   | “Stock Option Agreement”                   | 4 |
| (cc)       |   | “Stock Unit”                               | 5 |
| (dd)       |   | “Stock Unit Agreement”                     | 5 |
| (ee)       |   | “Subsidiary”                               | 5 |

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| (ff)       |   | “Total and Permanent Disability”   | 5  |
|------------|--------|------------------------------------------------|----|
| SECTION 3. |   | ADMINISTRATION.                                | 5  |
| (a)        |   | Committee Composition                          | 5  |
| (b)        |   | Committee for Non-Officer Grants               | 5  |
| (c)        |   | Committee Procedures                           | 5  |
| (d)        |   | Committee Responsibilities                     | 5  |
| SECTION 4. |   | ELIGIBILITY.                                   | 7  |
| (a)        |   | General Rule                                   | 7  |
| (b)        |   | [Reserved]                                     | 7  |
| (c)        |   | Ten-Percent Shareholders                       | 7  |
| (d)        |   | Attribution Rules                              | 7  |
| (e)        |   | Outstanding Stock                              | 7  |
| SECTION 5. |   | STOCK SUBJECT TO PLAN.                         | 7  |
| (a)        |   | Basic Limitation                               | 7  |
| (b)        |   | Award Limitation                               | 8  |
| (c)        |   | Additional Shares                              | 8  |
| SECTION 6. |   | RESTRICTED SHARES.                             | 8  |
| (a)        |   | Restricted Stock Agreement                     | 8  |
| (b)        |   | Payment for Awards                             | 8  |
| (c)        |   | Vesting                                        | 8  |
| (d)        |   | Voting and Dividend Rights                     | 8  |
| (e)        |   | Restrictions on Transfer of Shares             | 9  |
| SECTION 7. |   | TERMS AND CONDITIONS OF OPTIONS.               | 9  |
| (a)        |   | Stock Option Agreement                         | 9  |
| (b)        |   | Number of Shares                               | 9  |
| (c)        |   | Exercise Price                                 | 9  |
| (d)        |   | Withholding Taxes                              | 9  |
| (e)        |   | Exercisability and Term                        | 9  |
| (f)        |   | Exercise of Options                            | 9  |
| (g)        |   | Effect of Change in Control                    | 10 |
| (h)        |   | No Rights as a Shareholder                     | 10 |
| (i)        |   | Modification, Extension and Renewal of Options | 10 |
| (j)        |   | Restrictions on Transfer of Shares             | 10 |
| (k)        |   | Buyout Provisions                              | 10 |
| SECTION 8. |   | PAYMENT FOR SHARES.                            | 10 |
| (a)        |   | General Rule                                   | 11 |
| (b)        |   | Surrender of Stock                             | 11 |

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| (c)         |   | Services Rendered                                           | 11 |
|-------------|--------|-------------------------------------------------------------|----|
| (d)         |   | Cashless Exercise                                           | 11 |
| (e)         |   | Exercise/Pledge                                             | 11 |
| (f)         |   | Promissory Note                                             | 11 |
| (g)         |   | Other Forms of Payment                                      | 11 |
| (h)         |   | Limitations under Applicable Law                            | 11 |
| SECTION 9.  |   | STOCK UNITS.                                                | 11 |
| (a)         |   | Stock Unit Agreement                                        | 11 |
| (b)         |   | Payment for Awards                                          | 12 |
| (c)         |   | Vesting Conditions                                          | 12 |
| (d)         |   | Voting and Dividend Rights                                  | 12 |
| (e)         |   | Form and Time of Settlement of Stock Units                  | 12 |
| (f)         |   | Death of Recipient                                          | 12 |
| (g)         |   | Creditors’ Rights                                     | 13 |
| SECTION 10. |   | ADJUSTMENT OF SHARES.                                       | 13 |
| (a)         |   | Adjustments                                                 | 13 |
| (b)         |   | Dissolution or Liquidation                                  | 13 |
| (c)         |   | Reorganizations                                             | 13 |
| (d)         |   | Reservation of Rights                                       | 14 |
| SECTION 11. |   | DEFERRAL OF AWARDS.                                         | 14 |
| (a)         |   | Committee Powers                                            | 14 |
| (b)         |   | General Rules                                               | 14 |
| SECTION 12. |   | AWARDS UNDER OTHER PLANS.                                   | 14 |
| SECTION 13. |   | PAYMENT OF DIRECTOR’S FEES IN SECURITIES.             | 15 |
| (a)         |   | Effective Date                                              | 15 |
| (b)         |   | Elections to Receive NSOs, Restricted Shares or Stock Units | 15 |
| (c)         |   | Number and Terms of NSOs, Restricted Shares or Stock Units  | 15 |
| SECTION 14. |   | LEGAL AND REGULATORY REQUIREMENTS.                          | 15 |
| SECTION 15. |   | WITHHOLDING TAXES.                                          | 15 |
| (a)         |   | General                                                     | 15 |
| (b)         |   | Share Withholding                                           | 16 |
| SECTION 16. |   | OTHER PROVISIONS APPLICABLE TO AWARDS.                      | 16 |
| (a)         |   | Transferability                                             | 16 |
| (b)         |   | Qualifying Performance Criteria                             | 16 |
| SECTION 17. |   | NO EMPLOYMENT RIGHTS.                                       | 17 |
| SECTION 18. |   | DURATION AND AMENDMENTS.                                    | 17 |
| (a)         |   | Term of the Plan                                            | 17 |

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| (b)         |   | Right to Amend or Terminate the Plan | 17 |
|-------------|--------|--------------------------------------|----|
| (c)         |   | Effect of Termination                | 17 |
| SECTION 19. |   | EXECUTION.                           | 18 |

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|   | SIGMA DESIGNS, INC. |   |
|--------|---------------------|--------|
|   |                |   |   |
|   | By:                 |   |   |
|   | Name           |   |   |
|   | Title          |   |   |
|   |                |   |   |

----

| Name of Optionee:                      | [Name of Optionee]                                                                                                          |
|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|
| Total Number of Option Shares Granted: | [Total Number of Shares]                                                                                                    |
| Type of Option:                        | o Incentive Stock Option                                                                                                    |
|                                   | o Nonstatutory Stock Option                                                                                                 |
| Exercise Price Per Share:              | $                            |
| Grant Date:                            | [Date of Grant]                                                                                                             |
| Vesting Commencement Date:             | [Vesting Commencement Date]                                                                                                 |
| Vesting Schedule:                      | [Vesting Schedule]                                                                                                          |
| Expiration Date:                       | [Expiration Date] This Option expires earlier ifyour Service terminates earlier, as described inthe Stock Option Agreement. |

| OPTIONEE:                     | SIGMA DESIGNS, INC. |
|-------------------------------|---------------------|
|                          |                |
|                          |                |
|                          |                | By: |   |
| Optionee’s Signature    |                |
|                          |                |
|                          |                | Title: |   |
| Optionee’s Printed Name |                |

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| Tax Treatment      | This Option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code or a nonstatutory option, as provided in the Notice of Stock Option Grant. Even if this Option is designated as an incentive stock option, it shall be deemed to be a nonstatutory option to the extent required by the $100,000 annual limitation under Section 422(d) of the Internal Revenue Code.                                                                                     |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Vesting            | This Option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. This Option will in no event become exercisable for additional Shares after your Service as an Employee or a Consultant has terminated for any reason.                                                                                                                                                                                                                                            |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Term               | This Option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the Notice of Stock Option Grant. This Option may expire earlier if your Service terminates, as described below.                                                                                                                                                                                                                         |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| RegularTermination | If your Service terminates for any reason except death or “Total and Permanent Disability” (as defined in the Plan), then this Option will expire at the close of business at Company headquarters on the date three (3) months after the date your Service terminates (or, if earlier, the Expiration Date). The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons. |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Death              | If your Service terminates because of death, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date). During that period of up to 12 months, your estate or heirs may exercise the Option.                                                                                                                                                                              |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Disability         | If your Service terminates because of your Total and Permanent Disability, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date).                                                                                                                                                                                                                                     |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Leaves of Absence  | For purposes of this Option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.                                                                                  |

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|                    | If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.                                           |
|-------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Restrictions onExercise | The Company will not permit you to exercise this Option if the issuance of Shares at that time would violate any law or regulation. The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of the Company stock pursuant to this Option shall relieve the Company of any liability with respect to the non-issuance or sale of the Company stock as to which such approval shall not have been obtained.                                                |
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Notice of Exercise      | When you wish to exercise this Option you must provide a notice of exercise form in accordance with such procedures as are established by the Company and communicated to you from time to time. Any notice of exercise must specify how many Shares you wish to purchase and how your Shares should be registered. The notice of exercise will be effective when it is received by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so. |
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Form of Payment         | When you submit your notice of exercise, you must include payment of the Option exercise price for the Shares you are purchasing. Payment may be made in the following form(s):                                                                                                                                                                                                                                                                                                                                                                                  |
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Your personal check, a cashier’s check or a money order. |
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Certificates for Shares that you own, along with any forms needed to effect a transfer of those Shares to the Company. The value of the Shares, determined as of the effective date of the Option exercise, will be applied to the Option exercise price. Instead of surrendering Shares, you may attest to the ownership of those Shares on a form provided by the Company and have the same number of Shares subtracted from the Shares issued to you upon exercise of the Option. However, you may not surrender, or attest to the ownership of Shares in payment of the exercise price if your action would cause the Company to recognize a compensation expense (or additional compensation expense) with respect to this Option for financial reporting purposes. |
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | By delivery on a notice of exercise form approved by the Company of an irrevocable direction to a securities broker approved by the Company to sell all or part of the Shares that are issued to you when you exercise this Option and to deliver to the Company from the sale proceeds an amount sufficient to pay the Option exercise price and any withholding taxes. The balance of the sale proceeds, if any, will be delivered to you. |

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|                                  | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | By delivery on a notice of exercise form approved by the Company of an irrevocable direction to a securities broker or lender approved by the Company to pledge Shares that are issued to you when you exercise this Option as security for a loan and to deliver to the Company from the loan proceeds an amount sufficient to pay the Option exercise price and any withholding taxes. |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                     |
|                                  | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Any other form permitted by the Committee in its sole discretion.                                                                                                                                                                                                                                                                                                                        |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                  | Notwithstanding the foregoing, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| WithholdingTaxes and StockWithholding | You will not be allowed to exercise this Option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of this award or the Option exercise. With the Committee’s consent, these arrangements may include withholding Shares that otherwise would be issued to you when you exercise this Option. The Fair Market Value of these Shares, determined as of the effective date of the Option exercise, will be applied as a credit against the withholding taxes. You also authorize the Company, or your actual employer, to satisfy all withholding obligations of the Company or your actual employer from your wages or other cash compensation payable to you by the Company or your actual employer.                                                                                                               |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Restrictions onResale                 | You agree not to sell any Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Transfer of Option          | In general, only you can exercise this Option prior to your death. You may not sell, transfer, assign, pledge or otherwise dispose of this Option, other than as designated by you by will or by the laws of descent and distribution, except as provided below. For instance, you may not use this Option as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may in any event dispose of this Option in your will. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your Option in any other way.                                                                                                                                       |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                  | However, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the Committee may, in its sole discretion, allow you to transfer this Option as a gift to one or more family members. For purposes of this Agreement, “family member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, or sister-in-law (including adoptive relationships), any individual sharing your household (other than a tenant or employee), a trust in which one or more of these individuals have more than 50% of the beneficial interest, a foundation in which you or one or more of these persons control the management of assets, and any entity in which you or one or more of these persons own more than 50% of the voting interest. |

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|                         | In addition, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the Committee may, in its sole discretion, allow you to transfer this option to your spouse or former spouse pursuant to a domestic relations order in settlement of marital property rights.                                                                                                                                                         |
|------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                         | The Committee will allow you to transfer this Option only if both you and the transferee(s) execute the forms prescribed by the Committee, which include the consent of the transferee(s) to be bound by this Agreement.                                                                                                                                                                                                                                                 |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Retention Rights             | Neither your Option nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.                                                                                                                                                                                                    |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ShareholderRights            | Your Options carry neither voting rights nor rights to dividends. You, or your estate or heirs, have no rights as a shareholder of the Company unless and until you have exercised this Option by giving the required notice to the Company and paying the exercise price. No adjustments will be made for dividends or other rights if the applicable record date occurs before you exercise this Option, except as described in the Plan.                              |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Adjustments                  | In the event of a stock split, a stock dividend or a similar change in Company Shares, the number of Shares covered by this Option and the exercise price per Share shall be adjusted pursuant to the Plan.                                                                                                                                                                                                                                                              |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Successors andAssigns        | The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns.  Your rights and obligations under this Agreement may only be assigned with the prior written consent of the Company.                                                                                                                                                                                              |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Notice                       | Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto. |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Applicable Law               | This Agreement will be interpreted and enforced under the laws of the State of California (without regard to their choice-of-law provisions).                                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| The Plan andOther Agreements | The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in the Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded. This Agreement may be amended only by another written agreement, signed by both parties.   |

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| OPTIONEE INFORMATION: |   |
|-----------------------|--------|
|                  |   |
| Name:                 |   |   | Social Security Number: |   |
|                  |   |   |   |   |
| Address:              |   |   | Employee Number: |   |

| OPTION INFORMATION:                                                                                         |                   |
|-------------------------------------------------------------------------------------------------------------|------------------------|
|                                                                                                        |                   |
| Date ofGrant:                                                                                               | _______________, 200__ | Type of Stock Option: |
| Exercise Price per Share:  $______________                                                        | o                      | Nonstatutory (NSO) |
| Total number of Shares of Sigma Designs,inc. (the “Company”) covered by option: __________ | o                      | Incentive (ISO) |

| o |   Check for $                   , payable to “Sigma Designs, Inc.” |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | In my name only                                      |                                                                                |
|---|-----------------------------------------------------------|-------------------------------------------------------------------------------------|
| o | In the names of my spouse andmyself as community property | My spouse’s name (if applicable):____________________________________________ |

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| o                                                                                | In the names of my spouse andmyself as joint tenants with theright of survivorship                                                                                          |                                                                                                                                                                    |
|----------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| o                                                                                | In the name of an eligiblerevocable trust                                                                                                                                        | Full legal name of revocable trust:____________________________________________________________________________________________________________________________________ |
| The certificate for the Purchased Sharesshould be sent to the following address: | ________________________________________________________________________________________________________________________________________________________________________________ |

| 1. | I understand that all sales of Purchased Shares are subject to compliance with the Company’s policy on securities trades.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | I hereby acknowledge that I received and read a copy of the prospectus describing the Company’s Amended and Restated 2009 Stock Incentive Plan and the tax consequences of an exercise.                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 3. | In the case of a nonstatutory option, I understand that I must recognize ordinary income equal to the spread between the fair market value of the Purchased Shares on the date of exercise and the exercise price. I further understand that I am required to pay withholding taxes at the time of exercising a nonstatutory option.                                                                                                                                                                                                                                                                          |
| 4. | In the case of an incentive stock option, I agree to notify the Company if I dispose of the Purchased Shares before I have met both of the tax holding periods applicable to incentive stock options (that is, if I make a disqualifying disposition).                                                                                                                                                                                                                                                                                                                                                        |
| 5. | I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me. In the event that I choose to transfer my Purchased Shares to a trust that does not satisfy the requirements of the Internal Revenue Service (i.e., a trust that is not an eligible revocable trust), I also acknowledge that the transfer will be treated as a “disposition” for incentive stock option tax purposes. As a result, the favorable incentive stock option tax treatment will be unavailable and other unfavorable tax consequences may occur. |

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| SIGNATURE AND DATE: |   |   |   |
|---------------------|--------|--------|--------|
|                |   |   |   |
|                |   |   |   |
|                |   |   |   |   | , 200 |   |   |

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| Date of Grant:               |   | [Date of Grant]      |
|------------------------------|--------|---------------------------|
| Name of Recipient:           |   | [Name of Recipient]  |
| Total Number of Shares       |   |                      |
| Granted:                     |   | [Total Shares]            |
|                         |   |                      |
| Fair Market Value per Share: |   | $[Value Per Share]        |
|                         |   |                      |
| Total Fair Market Value      |   |                      |
| Of Award:                    |   | $[Total Value]            |
|                         |   |                      |
| Vesting Commencement Date:   |   | [Vest Day]                |
|                         |   |                      |
| Vesting Schedule:            |   | [Vesting Schedule]        |

|  [NAME OF RECIPIENT] |   | SIGMA DESIGNS, INC. |   |
|---------------------------|--------|---------------------|--------|
|                      |   |                |   |   |
|                      |   |                |   |   |
|                      |   | By:                 |   |   |
|                      |   |                |   |   |
|                      |   | Title:              |   |   |

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| Payment For Shares | No cash payment is required for the Shares you receive.  You are receiving the Shares in consideration for Services rendered by you.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Vesting            | The Shares that you are receiving will vest in installments, as shown in the Notice of Restricted Stock Award.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|               | No additional Shares vest after your Service as an Employee or a Consultant has terminated for any reason.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Shares Restricted  | Unvested Shares will be considered “Restricted Shares.”  You may not sell, transfer, assign, pledge or otherwise dispose of Restricted Shares; provided, however, that the Committee may, in its sole discretion allow you to transfer Restricted Shares to your spouse, children or grandchildren or to a trust established by you for the benefit of yourself or your spouse, children or grandchildren.  A transferee of Restricted Shares must agree in writing on a form prescribed by the Company to be bound by all provision of this Agreement.  |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Forfeiture         | If your Service terminates for any reason, then your Shares will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of termination.  This means that the Restricted Shares will immediately revert to the Company.  You receive no payment for Restricted Shares that are forfeited.  The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons.                                          |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Leaves Of Absence  | For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law.  But your Service terminates when the approved leave ends, unless you immediately return to active work.                                                                                                                                                                     |
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|               | If you go on a leave of absence, then the vesting schedule specified in the Notice of Restricted Stock Award may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave.  If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Restricted Stock Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.                                                     |
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| Stock Certificates     | The certificates for the Restricted Shares have stamped on them a special legend referring to the forfeiture restrictions.  In addition to or in lieu of imposing the legend, the Company may hold the certificates in escrow.  As your vested percentage increases, you may request (at reasonable intervals) that the Company release to you a non-legended certificate for your vested Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| Shareholder Rights     | During the period of time between the date of grant and the date the Restricted Shares become vested, you shall have all the rights of a shareholder with respect to the Restricted Shares except for the right to transfer the Restricted Shares, as set forth above.  Accordingly, you shall have the right to vote the Restricted Shares and to receive any cash dividends paid with respect to the Restricted Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Withholding Taxes      | No Shares will be released to you unless you have made arrangements acceptable to the Company to pay withholding taxes that may be due as a result of this Award or the vesting of the Shares.  You authorize the Company or your actual employer, at their discretion, to satisfy the withholding tax obligations by one or a combination of the following:  (i) withholding from your wages or other cash compensation paid to you by the Company or your actual employer; (ii) withholding from proceeds of the sale of Shares released upon vesting of the Award either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization); or (iii) withholding of Shares that would otherwise be released to you upon vesting of the Award, but not in excess of the amount of Shares necessary to satisfy the minimum withholding amount (with the Fair Market Value of these Shares determined as of the date when taxes otherwise would have been withheld in cash applied as credit against the withholding taxes). |
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| Restrictions On Resale | You agree not to sell any Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale.  This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| No Retention Rights    | Neither your Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity.  The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| Adjustments            | In the event of a stock split, a stock dividend or a similar change in Company Shares, or a merger or a reorganization of the Company, the forfeiture provisions described above will apply to all new, substitute or additional securities or other properties to which you are entitled by reason of your ownership of the Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Successors and Assigns       | The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns.  Your rights and obligations under this Agreement may only be assigned with the prior written consent of the Company.                                                                                                                                                                                              |
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| Notice                       | Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto. |
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| Applicable Law               | This Agreement will be interpreted and enforced under the laws of the State of California (without regard to their choice-of-law provisions).                                                                                                                                                                                                                                                                                                                            |
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| The Plan and OtherAgreements | The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in this Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended only by another written agreement, signed by both parties.    |