ex10-1.htm


    EXHIBIT
10.1

    
      


       

       

       

      SIGMA
DESIGNS, INC.

       

      2009
STOCK INCENTIVE PLAN

       

      (Adopted
by the Board of Directors on June 9, 2009)

       

       

       

       

       

       

       

       

       

      
         

      

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Table
of Contents

       

      Page

       

      
        
          
            
              
                
                  	
                          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”

                        	
                          2

                        
	
                          (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

                        
	
                          (ff)

                        	
                          “Total
      and Permanent Disability”

                        	
                          5

                        


                

                 

                
                  
                    SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

                    
                    

                  

                  
                    -i-

                    
                      

                    

                  

                  
                    
                    

                  

                

                
                  
                    	
                            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)

                          	
                            Automatic
      Grants to Outside Directors

                          	
                            7

                          
	
                            (c)

                          	
                            Ten-Percent
      Shareholders

                          	
                            8

                          
	
                            (d)

                          	
                            Attribution
      Rules

                          	
                            8

                          
	
                            (e)

                          	
                            Outstanding
      Stock

                          	
                            8

                          
	
                            SECTION
      5.

                          	
                            STOCK
      SUBJECT TO PLAN.

                          	
                            8

                          
	
                            (a)

                          	
                            Basic
      Limitation

                          	
                            8

                          
	
                            (b)

                          	
                            Award
      Limitation

                          	
                            8

                          
	
                            (c)

                          	
                            Additional
      Shares

                          	
                            9

                          
	
                            SECTION
      6.

                          	
                            RESTRICTED
      SHARES.

                          	
                            9

                          
	
                            (a)

                          	
                            Restricted
      Stock Agreement

                          	
                            9

                          
	
                            (b)

                          	
                            Payment
      for Awards

                          	
                            9

                          
	
                            (c)

                          	
                            Vesting

                          	
                            9

                          
	
                            (d)

                          	
                            Voting
      and Dividend Rights

                          	
                            9

                          
	
                            (e)

                          	
                            Restrictions
      on Transfer of Shares

                          	
                            9

                          
	
                            SECTION
      7.

                          	
                            TERMS
      AND CONDITIONS OF OPTIONS.

                          	
                            9

                          
	
                            (a)

                          	
                            Stock
      Option Agreement

                          	
                            10

                          
	
                            (b)

                          	
                            Number
      of Shares

                          	
                            10

                          
	
                            (c)

                          	
                            Exercise
      Price

                          	
                            10

                          
	
                            (d)

                          	
                            Withholding
      Taxes

                          	
                            10

                          
	
                            (e)

                          	
                            Exercisability
      and Term

                          	
                            10

                          
	
                            (f)

                          	
                            Exercise
      of Options

                          	
                            10

                          
	
                            (g)

                          	
                            Effect
      of Change in Control

                          	
                            10

                          
	
                            (h)

                          	
                            No
      Rights as a Shareholder

                          	
                            11

                          
	
                            (i)

                          	
                            Modification,
      Extension and Renewal of Options

                          	
                            11

                          
	
                            (j)

                          	
                            Restrictions
      on Transfer of Shares

                          	
                            11

                          
	
                            (k)

                          	
                            Buyout
      Provisions

                          	
                            11

                          
	
                            SECTION
      8.

                          	
                            PAYMENT
      FOR SHARES.

                          	
                            11

                          
	
                            (a)

                          	
                            General
      Rule

                          	
                            11

                          
	
                            (b)

                          	
                            Surrender
      of Stock

                          	
                            11

                          


                  

                   

                  
                    
                      SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

                      
                      

                    

                    
                      -ii-

                      
                        

                      

                    

                    
                      
                      

                    

                  

                  
                    
                      	
                              (c)

                            	
                              Services
      Rendered

                            	
                              12

                            
	
                              (d)

                            	
                              Cashless
      Exercise

                            	
                              12

                            
	
                              (e)

                            	
                              Exercise/Pledge

                            	
                              12

                            
	
                              (f)

                            	
                              Promissory
      Note

                            	
                              12

                            
	
                              (g)

                            	
                              Other
      Forms of Payment

                            	
                              12

                            
	
                              (h)

                            	
                              Limitations
      under Applicable Law

                            	
                              12

                            
	
                              SECTION
      9.

                            	
                              STOCK
      UNITS.

                            	
                              12

                            
	
                              (a)

                            	
                              Stock
      Unit Agreement

                            	
                              12

                            
	
                              (b)

                            	
                              Payment
      for Awards

                            	
                              12

                            
	
                              (c)

                            	
                              Vesting
      Conditions

                            	
                              12

                            
	
                              (d)

                            	
                              Voting
      and Dividend Rights

                            	
                              13

                            
	
                              (e)

                            	
                              Form
      and Time of Settlement of Stock Units

                            	
                              13

                            
	
                              (f)

                            	
                              Death
      of Recipient

                            	
                              13

                            
	
                              (g)

                            	
                              Creditors’
      Rights

                            	
                              13

                            
	
                              SECTION
      10.

                            	
                              ADJUSTMENT
      OF SHARES.

                            	
                              13

                            
	
                              (a)

                            	
                              Adjustments

                            	
                              13

                            
	
                              (b)

                            	
                              Dissolution
      or Liquidation

                            	
                              14

                            
	
                              (c)

                            	
                              Reorganizations

                            	
                              14

                            
	
                              (d)

                            	
                              Reservation
      of Rights

                            	
                              14

                            
	
                              SECTION
      11.

                            	
                              DEFERRAL
      OF AWARDS.

                            	
                              15

                            
	
                              (a)

                            	
                              Committee
      Powers

                            	
                              15

                            
	
                              (b)

                            	
                              General
      Rules

                            	
                              15

                            
	
                              SECTION
      12.

                            	
                              AWARDS
      UNDER OTHER PLANS.

                            	
                              15

                            
	
                              SECTION
      13.

                            	
                              PAYMENT
      OF DIRECTOR’S FEES IN SECURITIES.

                            	
                              15

                            
	
                              (a)

                            	
                              Effective
      Date

                            	
                              16

                            
	
                              (b)

                            	
                              Elections
      to Receive NSOs, Restricted Shares or Stock Units

                            	
                              16

                            
	
                              (c)

                            	
                              Number
      and Terms of NSOs, Restricted Shares or Stock Units

                            	
                              16

                            
	
                              SECTION
      14.

                            	
                              LEGAL
      AND REGULATORY REQUIREMENTS.

                            	
                              16

                            
	
                              SECTION
      15.

                            	
                              WITHHOLDING
      TAXES.

                            	
                              16

                            
	
                              (a)

                            	
                              General

                            	
                              16

                            
	
                              (b)

                            	
                              Share
      Withholding

                            	
                              16

                            
	
                              SECTION
      16.

                            	
                              OTHER
      PROVISIONS APPLICABLE TO AWARDS.

                            	
                              17

                            
	
                              (a)

                            	
                              Transferability

                            	
                              17

                            
	
                              (b)

                            	
                              Qualifying
      Performance Criteria

                            	
                              17

                            
	
                              SECTION
      17.

                            	
                              NO
      EMPLOYMENT RIGHTS.

                            	
                              17

                            


                    

                     

                    
                      
                        SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

                        
                        

                      

                      
                        -iii-

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    
                      	
                              SECTION
      18.

                            	
                              DURATION
      AND AMENDMENTS.

                            	
                              18

                            
	
                              (a)

                            	
                              Term
      of the Plan

                            	
                              18

                            
	
                              (b)

                            	
                              Right
      to Amend or Terminate the Plan

                            	
                              18

                            
	
                              (c)

                            	
                              Effect
      of Termination

                            	
                              18

                            
	
                              SECTION
      19.

                            	
                              EXECUTION.

                            	
                              19

                            


                    

                  

                

              

            

          

        

      

       

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -iv-

          
            

          

        

        
          
          

        

      

      SIGMA
DESIGNS, INC.

       

      2009
STOCK INCENTIVE PLAN

       

      
        	
                SECTION
      1.

              	
                ESTABLISHMENT
      AND PURPOSE.

              


      

       

      The Plan
was adopted by the Board of Directors on June 9, 2009, subject to and effective
upon approval by the Company’s shareholders on July 30, 2009 (the “Effective
Date”). The purpose of the Plan is to promote the long-term success of the
Company and the creation of shareholder value by (a) encouraging Employees,
Outside Directors and Consultants to focus on critical long-range objectives,
(b) encouraging the attraction and retention of Employees, Outside Directors and
Consultants with exceptional qualifications and (c) linking Employees, Outside
Directors and Consultants directly to shareholder interests through increased
stock ownership. The Plan seeks to achieve this purpose by providing for Awards
in the form of restricted shares, stock units or options (which may constitute
incentive stock options or nonstatutory stock options).

       

      
        	
                SECTION
      2.

              	
                DEFINITIONS.

              


      

       

      (a)           “Affiliate” shall
mean any entity other than a Subsidiary, if the Company and/or one or more
Subsidiaries own not less than 50% of such entity.

       

      (b)           “Award” shall
mean any award of an Option, a Restricted Share or a Stock Unit under the
Plan.

       

      (c)           “Board
of Directors” shall
mean the Board of Directors of the Company, as constituted from time to
time.

       

      (d)           “Change
in Control” shall
mean the occurrence of any of the following events:

       

      (i)           A
change in the composition of the Board of Directors occurs, as a result of which
fewer than one-half of the incumbent directors are directors who
either:

       

      (A)           Had
been directors of the Company on the “look-back date” (as defined below) (the
“original directors”); or

       

      (B)           Were
elected, or nominated for election, to the Board of Directors with the
affirmative votes of at least a majority of the aggregate of the original
directors who were still in office at the time of the election or nomination and
the directors whose election or nomination was previously so approved (the
“continuing directors”); or

       

      (ii)           Any
“person” (as defined below) who by the acquisition or aggregation of securities,
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company’s then outstanding
securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the “Base
Capital Stock”); except that any change in the relative beneficial ownership of
the Company’s securities by any person resulting solely from a reduction in the
aggregate number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person’s ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such person’s
beneficial ownership of any securities of the Company; or

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      (iii)           The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if persons who were not
shareholders of the Company immediately prior to such merger, consolidation or
other reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities of
each of (A) the continuing or surviving entity and (B) any direct or indirect
parent corporation of such continuing or surviving entity; or

       

      (iv)           The
sale, transfer or other disposition of all or substantially all of the Company’s
assets.

       

      For
purposes of subsection (d)(i) above, the term “look-back” date shall mean the
later of (1) the Effective Date or (2) the date 24 months prior to the date of
the event that may constitute a Change in Control.

       

      For
purposes of subsection (d)(ii)) above, the term “person” shall have the same
meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall
exclude (1) a trustee or other fiduciary holding securities under an employee
benefit plan maintained by the Company or a Parent or Subsidiary and (2) a
corporation owned directly or indirectly by the shareholders of the Company in
substantially the same proportions as their ownership of the Stock.

       

      Any other
provision of this Section 2(d) notwithstanding, a transaction shall not
constitute a Change in Control if its sole purpose is to change the state of the
Company’s incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction, and a Change in Control shall
not be deemed to occur if the Company files a registration statement with the
United States Securities and Exchange Commission for the offering of Stock to
the public.

       

      (e)           “Code” shall
mean the Internal Revenue Code of 1986, as amended.

       

      (f)           “Committee” shall
mean the Committee as designated by the Board of Directors, which is authorized
to administer the Plan, as described in Section 3 hereof.  Within the
limitations of the Plan, any references to the Committee shall also include the
Board and such committee or committees appointed pursuant to Section
3(b).

       

      (g)           “Company” shall
mean Sigma Designs, Inc., a California corporation.

       

      (h)           “Consultant” shall
mean a consultant or advisor who provides bona fide services to the Company, a
Parent, a Subsidiary or an Affiliate as an independent contractor (not including
service as a member of the Board of Directors) or a member of the board of
directors of a Parent or a Subsidiary, in each case who is not an
Employee.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      (i)           “Employee” shall
mean any individual who is a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.

       

      (j)           “Exchange
Act” shall
mean the Securities Exchange Act of 1934, as amended.

       

      (k)           “Exercise
Price” shall
mean, in the case of an Option, the amount for which one Share may be purchased
upon exercise of such Option, as specified in the applicable Stock Option
Agreement.

       

      (l)           “Fair
Market Value” with
respect to a Share, shall mean the market price of one Share, determined by the
Committee as follows:

       

      (i)           If
the Stock was traded over-the-counter on the date in question, then the Fair
Market Value shall be equal to the last transaction price quoted for such date
by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean
between the last reported representative bid and asked prices quoted for such
date by the principal automated inter-dealer quotation system on which the Stock
is quoted or, if the Stock is not quoted on any such system, by the Pink OTC
Market Inc.;

       

      (ii)           If
the Stock was traded on The NASDAQ Stock Market, then the Fair Market Value
shall be equal to the last reported sale price quoted for such date by The
NASDAQ Stock Market LLC;

       

      (iii)           If
the Stock was traded on a United States stock exchange other than The NASDAQ
Stock Market on the date in question, then the Fair Market Value shall be equal
to the closing price reported for such date by the applicable
composite-transactions report; and

       

      (iv)           If
none of the foregoing provisions is applicable, then the Fair Market Value shall
be determined by the Committee in good faith on such basis as it deems
appropriate.

       

      In all
cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.

       

      (m)           “ISO” shall
mean an employee incentive stock option described in Section 422 of the
Code.

       

      (n)           “Nonstatutory Option” or
“NSO” shall
mean an employee stock option that is not an ISO.

       

      (o)           “Offeree” shall
mean an individual to whom the Committee has offered the right to acquire Shares
under the Plan (other than upon exercise of an Option).

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      (p)           “Option” shall
mean an ISO or Nonstatutory Option granted under the Plan and entitling the
holder to purchase Shares.

       

      (q)           “Optionee” shall
mean an individual or estate who holds an Option.

       

      (r)           “Outside
Director” shall
mean a member of the Board of Directors who is not a common-law employee of the
Company, a Parent or a Subsidiary.

       

      (s)           “Parent” shall
mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be a Parent commencing as of such date.

       

      (t)           “Participant” shall
mean an individual or estate who holds an Award.

       

      (u)           “Plan” shall
mean this 2009 Stock Incentive Plan of Sigma Designs, Inc., as amended from time
to time.

       

      (v)           “Purchase
Price” shall
mean the consideration for which one Share may be acquired under the Plan (other
than upon exercise of an Option), as specified by the Committee.

       

      (w)           “Restricted
Share” shall
mean a Share awarded under the Plan.

       

      (x)           “Restricted
Share Agreement” shall
mean the agreement between the Company and the recipient of a Restricted Share
which contains the terms, conditions and restrictions pertaining to such
Restricted Shares.

       

      (y)           “Service” shall
mean service as an Employee, Consultant or Outside Director, subject to such
further limitations as may be set forth in the Plan or the applicable Stock
Option Agreement, Restricted Share Agreement or Stock Unit
Agreement.  Service does not terminate when an Employee goes on a bona
fide leave of absence, that was approved by the Company in writing, if the terms
of the leave provide for continued Service crediting, or when continued Service
crediting is required by applicable law.  However, for purposes of
determining whether an Option is entitled to ISO status, an Employee’s
employment will be treated as terminating 90 days after such Employee went on
leave, unless such Employee’s right to return to active work is guaranteed by
law or by a contract. Service terminates in any event when the approved leave
ends, unless such Employee immediately returns to active work.  The
Company determines which leaves of absence count toward Service, and when
Service terminates for all purposes under the Plan.

       

      (z)           “Share” shall
mean one share of Stock, as adjusted in accordance with Section 8 (if
applicable).

       

      (aa)        “Stock” shall
mean the Common Stock of the Company.

       

      (bb)        “Stock
Option Agreement” shall
mean the agreement between the Company and an Optionee that contains the terms,
conditions and restrictions pertaining to such Option.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      (cc)         “Stock
Unit” shall
mean a bookkeeping entry representing the Company’s obligation to deliver one
Share (or distribute cash) on a future date in accordance with the provisions of
a Stock Unit Agreement.

       

      (dd)         “Stock
Unit Agreement” shall
mean the agreement between the Company and the recipient of a Stock Unit which
contains the terms, conditions and restrictions pertaining to such Stock
Unit.

       

      (ee)          “Subsidiary” shall
mean any corporation, if the Company and/or one or more other Subsidiaries own
not less than 50% of the total combined voting power of all classes of
outstanding stock of such corporation. A corporation that attains the status of
a Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.

       

      (ff)           “Total
and Permanent Disability” shall
mean any permanent and total disability as defined by section 22(e)(3) of
the  Code.

       

      
        	
                SECTION
      3.

              	
                ADMINISTRATION.

              


      

       

      (a)           Committee
Composition. The
Plan shall be administered by the Board or a Committee appointed by the Board.
The Committee shall consist of two or more directors of the Company. In
addition, to the extent required by the Board, the composition of the Committee
shall satisfy (i) such requirements as the Securities and Exchange Commission
may establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and (ii)
such requirements as the Internal Revenue Service may establish for outside
directors acting under plans intended to qualify for exemption under Section
162(m)(4)(C) of the Code.

       

      (b)           Committee
for Non-Officer Grants. The
Board may also appoint one or more separate committees of the Board, each
composed of two or more directors of the Company who need not satisfy the
requirements of Section 3(a), who may administer the Plan with respect to
Employees who are not considered officers or directors of the Company under
Section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and may determine all terms of such grants.

       

      (c)           Committee
Procedures. The
Board of Directors shall designate one of the members of the Committee as
chairman. The Committee may hold meetings at such times and places as it shall
determine. The acts of a majority of the Committee members present at meetings
at which a quorum exists, or acts reduced to or approved in writing (including
via email) by all Committee members, shall be valid acts of the
Committee.

       

      (d)           Committee
Responsibilities. Subject
to the provisions of the Plan, the Committee shall have full authority and
discretion to take the following actions:

       

      (i)           To
interpret the Plan and to apply its provisions;

       

      (ii)           To
adopt, amend or rescind rules, procedures and forms relating to the
Plan;

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (iii)          To
adopt, amend or terminate sub-plans established for the purpose of satisfying
applicable foreign laws including qualifying for preferred tax treatment under
applicable foreign tax laws;

       

      (iv)          To
authorize any person to execute, on behalf of the Company, any instrument
required to carry out the purposes of the Plan;

       

      (v)           To
determine when Awards are to be granted under the Plan;

       

      (vi)          To
select the Offerees and Optionees;

       

      (vii)         To
determine the number of Shares to be made subject to each Award;

       

      (viii)        To
prescribe the terms and conditions of each Award, including (without limitation)
the Exercise Price and Purchase Price, and the vesting or duration of the Award
(including accelerating the vesting of Awards, either at the time of the Award
or thereafter, without the consent of the Participant), to determine whether an
Option is to be classified as an ISO or as a Nonstatutory Option, and to specify
the provisions of the agreement relating to such Award;

       

      (ix)          To
amend any outstanding Award agreement, subject to applicable legal restrictions
and to the consent of the Participant if the Participant’s rights or obligations
would be materially impaired;

       

      (x)           To
prescribe the consideration for the grant of each Award or other right under the
Plan and to determine the sufficiency of such consideration;

       

      (xi)          To
determine the disposition of each Award or other right under the Plan in the
event of a Participant’s divorce or dissolution of marriage;

       

      (xii)         To
determine whether Awards under the Plan will be granted in replacement of other
grants under an incentive or other compensation plan of an acquired
business;

       

      (xiii)        To
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan or any Award agreement;

       

      (xiv)        To
establish or verify the extent of satisfaction of any performance goals or other
conditions applicable to the grant, issuance, exercisability, vesting and/or
ability to retain any Award; and

       

      (xv)         To
take any other actions deemed necessary or advisable for the administration of
the Plan.

       

      Subject
to the requirements of applicable law, the Committee may designate persons other
than members of the Committee to carry out its responsibilities and may
prescribe such conditions and limitations as it may deem appropriate, except
that the Committee may not delegate its authority with regard to the selection
for participation of or the granting of Options or other rights under the Plan
to persons subject to Section 16 of the Exchange Act. All decisions,
interpretations and other actions of the Committee shall be final and binding on
all Offerees, all Optionees, and all persons deriving their rights from an
Offeree or Optionee. No member of the Committee shall be liable for any action
that he has taken or has failed to take in good faith with respect to the Plan,
any Option, or any right to acquire Shares under the Plan.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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                SECTION
      4.

              	
                ELIGIBILITY.

              


      

       

      (a)           General
Rule. Only
common-law employees of the Company, a Parent or a Subsidiary shall be eligible
for the grant of ISOs. Only Employees, Consultants and Outside Directors shall
be eligible for the grant of Restricted Shares, Stock Units or Nonstatutory
Options.

       

      (b)           Automatic
Grants to Outside Directors.

       

      (i)           Each
Outside Director who first joins the Board of Directors on or after the
Effective Date, and who was not previously an Employee, shall receive a
Nonstatutory Option, subject to approval of the Plan by the Company’s
shareholders, to purchase 40,000 Shares (subject to adjustment under Section 10)
on the date of his or her election to the Board of Directors. Twenty-five
percent (25%) of the Shares subject to each Option granted under this Section
4(b)(i) shall vest and become exercisable on the first anniversary of the date
of grant. The balance of the Shares subject to such Option (i.e. the remaining
seventy-five percent (75%)) shall vest and become exercisable monthly over a
3-year period beginning on the day which is one month after the first
anniversary of the date of grant, at a monthly rate of 2.0833% of the total
number of Shares subject to such Option. Notwithstanding the foregoing, each
such Option shall become vested if a Change in Control occurs with respect to
the Company during the Optionee’s Service.

       

      (ii)           On
the first business day following the conclusion of each regular annual meeting
of the Company’s shareholders, commencing with the annual meeting occurring
after the Effective Date, each Outside Director who was not elected to the Board
for the first time at such meeting and who will continue serving as a member of
the Board of Directors thereafter shall receive an Option to purchase 10,000
Shares (subject to adjustment under Section 10), provided that such Outside
Director has served on the Board of Directors for at least six months. Each
Option granted under this Section 4(b)(ii) shall vest and become exercisable on
the first anniversary of the date of grant; provided, however, that each such
Option shall become exercisable in full immediately prior to the next regular
annual meeting of the Company’s shareholders following such date of grant in the
event such meeting occurs prior to such first anniversary date. Notwithstanding
the foregoing, each Option granted under this Section 4(b)(ii) shall become
vested if a Change in Control occurs with respect to the Company during the
Optionee’s Service.

       

      (iii)           The
Exercise Price of all Nonstatutory Options granted to an Outside Director under
this Section 4(b) shall be equal to 100% of the Fair Market Value of a Share on
the date of grant, payable in one of the forms described in Section 8(a), (b) or
(d).

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (iv)           All
Nonstatutory Options granted to an Outside Director under this Section 4(b)
shall terminate on the earlier of (A) the day before the tenth anniversary of
the date of grant of such Options or (B) the date twelve months after the
termination of such Outside Director’s Service for any reason; provided,
however, that any such Options that are not vested upon the termination of the
Outside Director’s Service as a member of the Board of Directors for any reason
shall terminate immediately and may not be exercised.

       

      (c)           Ten-Percent
Shareholders. An
Employee who owns more than 10% of the total combined voting power of all
classes of outstanding stock of the Company, a Parent or Subsidiary shall not be
eligible for the grant of an ISO.

       

      (d)           Attribution
Rules. For
purposes of Section 4(c) above, in determining stock ownership, an Employee
shall be deemed to own the stock owned, directly or indirectly, by or for such
Employee’s brothers, sisters, spouse, ancestors and lineal descendants. Stock
owned, directly or indirectly, by or for a corporation, partnership, estate or
trust shall be deemed to be owned proportionately by or for its shareholders,
partners or beneficiaries.

       

      (e)           Outstanding
Stock. For
purposes of Section 4(c) above, “outstanding stock” shall include all stock
actually issued and outstanding immediately after the grant. “Outstanding stock”
shall not include shares authorized for issuance under outstanding options held
by the Employee or by any other person.

       

      
        	
                SECTION
      5.

              	
                STOCK
      SUBJECT TO PLAN.

              


      

       

      (a)           Basic
Limitation. Shares
offered under the Plan shall be authorized but unissued Shares or treasury
Shares. The aggregate number of Shares authorized for issuance as Awards under
the Plan shall not exceed 2,900,000 Shares, plus any Shares subject to
outstanding options under the Company’s 2001 Stock Plan on the effective date of
this Plan that are subsequently forfeited or terminated for any other reason
before being exercised, such number of additional Shares not to exceed an
aggregate of 1,000,000 Shares; provided that no Shares which are returned to the
Company’s 2001 Stock Plan in connection with an option exchange program approved
by the Company’s stockholders, other than those Shares underlying options that
are issued as replacement awards, will be available for grant under the
Plan. Shares subject
to Options shall be counted against this limit as one (1) Share for every one
(1) Share subject to the Option.  Shares subject to Awards other than
Options shall be counted against this limit as 1.3 Shares for every one (1)
Share subject to the Award.   The limitations of this Section
5(a) shall be subject to adjustment pursuant to Section 10. The number of Shares
that are subject to Options or other Awards outstanding at any time under the
Plan shall not exceed the number of Shares which then remain available for
issuance under the Plan.  The Company, during the term of the Plan,
shall at all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan.

       

      (b)           Award
Limitation.  Subject
to the provisions of Section 10, no Participant may receive Options, Restricted
Shares or Stock Units under the Plan in any calendar year that relate to more
than 300,000 Shares, and no more than two times this amount in the first year of
employment.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (c)           Additional
Shares.  If
Restricted Shares or Shares issued upon the exercise of Options are forfeited,
then such Shares shall not be counted against the maximum Share limitation under
this Section 5 and shall again become available for Awards under the
Plan.  If Stock Units or Options are forfeited or terminate for any
other reason before being settled or exercised, then the corresponding Shares
subject to the Award shall not be counted against the maximum Share limitation
under this Section 5 and shall again become available for Awards under the
Plan.  To the extent that a Share subject to an Award which counted as
1.3 Shares against the limit on the number of Shares available for issuance
under the Plan pursuant to Section 5(a), again becomes available for Awards
pursuant to this Section 5(c), then the number of Shares available for Awards
shall increase by 1.3 Shares.  Any Awards settled in cash will not be
counted against the maximum Share limitation under this Section
5.  Any Shares exchanged or withheld as full or partial payment to the
Company of the exercise price or tax withholding will not be returned to the
number of Shares available for issuance under the Plan.

       

      
        	
                SECTION
      6.

              	
                RESTRICTED
      SHARES.

              


      

       

      (a)           Restricted
Stock Agreement. Each
grant of Restricted Shares under the Plan shall be evidenced by a Restricted
Stock Agreement between the recipient and the Company. Such Restricted Shares
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The provisions of the
various Restricted Stock Agreements entered into under the Plan need not be
identical.

       

      (b)           Payment
for Awards.  Restricted
Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including (without limitation) cash, cash equivalents,
full-recourse promissory notes, past services and future services.

       

      (c)           Vesting.  Each
Award of Restricted Shares may or may not be subject to vesting. Vesting shall
occur, in full or in installments, upon satisfaction of the conditions specified
in the Restricted Stock Agreement.  A Restricted Stock Agreement may
provide for accelerated vesting in the event of the Participant’s death,
disability or retirement or other events.  The Committee may
determine, at the time of granting Restricted Shares of thereafter, that all or
part of such Restricted Shares shall become vested in the event that a Change in
Control occurs with respect to the Company.

       

      (d)           Voting
and Dividend Rights.  The
holders of Restricted Shares awarded under the Plan shall have the same voting,
dividend and other rights as the Company’s other shareholders. A Restricted
Stock Agreement, however, may require that the holders of Restricted Shares
invest any cash dividends received in additional Restricted Shares. Such
additional Restricted Shares shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were
paid.

       

      (e)           Restrictions
on Transfer of Shares.  Restricted
Shares shall be subject to such rights of repurchase, rights of first refusal or
other restrictions as the Committee may determine. Such restrictions shall be
set forth in the applicable Restricted Stock Agreement and shall apply in
addition to any general restrictions that may apply to all holders of
Shares.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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                SECTION
      7.

              	
                TERMS
      AND CONDITIONS OF OPTIONS.

              


      

       

      (a)           Stock
Option Agreement. Each
grant of an Option under the Plan shall be evidenced by a Stock Option Agreement
between the Optionee and the Company.  Such Option shall be subject to
all applicable terms and conditions of the Plan and may be subject to any other
terms and conditions which are not inconsistent with the Plan and which the
Committee deems appropriate for inclusion in a Stock Option
Agreement.  The Stock Option Agreement shall specify whether the
Option is an ISO or an NSO.  The provisions of the various Stock
Option Agreements entered into under the Plan need not be
identical.

       

      (b)           Number
of Shares.  Each
Stock Option Agreement shall specify the number of Shares that are subject to
the Option and shall provide for the adjustment of such number in accordance
with Section 10.

       

      (c)           Exercise
Price.  Each
Stock Option Agreement shall specify the Exercise Price.  The Exercise
Price of an Option shall not be less than 100% of the Fair Market Value of a
Share on the date of grant.  Subject to the foregoing in this Section
7(c), the Exercise Price under any Option shall be determined by the Committee
at its sole discretion.  The Exercise Price shall be payable in one of
the forms described in Section 8.

       

      (d)           Withholding
Taxes.  As
a condition to the exercise of an Option, the Optionee shall make such
arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with such exercise.  The Optionee shall also make such arrangements as
the Committee may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that may arise in connection with the
disposition of Shares acquired by exercising an Option.

       

      (e)           Exercisability
and Term.  Each
Stock Option Agreement shall specify the date when all or any installment of the
Option is to become exercisable. The Stock Option Agreement shall also specify
the term of the Option; provided that the term shall in no event exceed 10 years
from the date of grant.  A Stock Option Agreement may provide for
accelerated exercisability in the event of the Optionee’s death, disability, or
retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee’s
Service.  Subject to the foregoing in this Section 7(e), the Committee
at its sole discretion shall determine when all or any installment of an Option
is to become exercisable and when an Option is to expire.

       

      (f)           Exercise
of Options.  Each
Stock Option Agreement shall set forth the extent to which the Optionee shall
have the right to exercise the Option following termination of the Optionee’s
Service with the Company and its Subsidiaries, and the right to exercise the
Option of any executors or administrators of the Optionee’s estate or any person
who has acquired such Option(s) directly from the Optionee by bequest or
inheritance. Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of
Service.

       

      (g)           Effect
of Change in Control. The
Committee may determine, at the time of granting an Option or thereafter, that
such Option shall become exercisable as to all or part of the Shares subject to
such Option in the event that a Change in Control occurs with respect to the
Company.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (h)           No
Rights as a Shareholder. An
Optionee, or a transferee of an Optionee, shall have no rights as a shareholder
with respect to any Shares covered by his Option until the date of the issuance
of a stock certificate for such Shares. No adjustments shall be made, except as
provided in Section 10.

       

      (i)           Modification,
Extension and Renewal of Options. Within
the limitations of the Plan, the Committee may modify, extend or renew
outstanding options or may accept the cancellation of outstanding options (to
the extent not previously exercised), whether or not granted hereunder, in
return for the grant of new Options for the same or a different number of Shares
and at the same or a different exercise price, or in return for the grant of the
same or a different number of Shares. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, materially
impair his or her rights or obligations under such Option.  In
addition, notwithstanding any other provision of the Plan, and except in
connection with a corporate transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, or exchange of shares), in no event shall the Committee
reduce the exercise price of an outstanding Option, or cancel any outstanding
Option having a per Share exercise price greater than the Fair Market Value of a
Share in exchange for cash, another Award or an Option with an exercise price
that is less than the exercise price of the original Option, without shareholder
approval.

       

      (j)           Restrictions
on Transfer of Shares. Any
Shares issued upon exercise of an Option shall be subject to such special
forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Committee may determine. Such restrictions shall be
set forth in the applicable Stock Option Agreement and shall apply in addition
to any general restrictions that may apply to all holders of
Shares.

       

      (k)           Buyout
Provisions. Subject
to Section 7(i), the Committee may at any time (a) offer to buy out for a
payment in cash or cash equivalents an Option previously granted or (b)
authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.

       

      
        	
                SECTION
      8.

              	
                PAYMENT
      FOR SHARES.

              


      

       

      (a)           General
Rule.  The
entire Exercise Price or Purchase Price of Shares issued under the Plan shall be
payable in lawful money of the United States of America at the time when such
Shares are purchased, except as provided in Section 8(b) through Section 8(g)
below.

       

      (b)           Surrender
of Stock.  To
the extent that a Stock Option Agreement so provides, payment may be made all or
in part by surrendering, or attesting to the ownership of, Shares which have
already been owned by the Optionee or his representative.  Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan. The Optionee shall not surrender, or attest to the
ownership of, Shares in payment of the Exercise Price if such action would cause
the Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting
purposes.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (c)           Services
Rendered.  At
the discretion of the Committee, Shares may be awarded under the Plan in
consideration of services rendered to the Company or a Subsidiary prior to the
Award.  If Shares are awarded without the payment of a Purchase Price
in cash, the Committee shall make a determination (at the time of the Award) of
the value of the services rendered by the Offeree and the sufficiency of the
consideration to meet the requirements of Section 6(b).

       

      (d)           Cashless
Exercise.  To
the extent that a Stock Option Agreement so provides, payment may be made all or
in part by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell Shares and to deliver all or part of
the sale proceeds to the Company in payment of the aggregate Exercise
Price.

       

      (e)           Exercise/Pledge.  To
the extent that a Stock Option Agreement so provides, payment may be made all or
in part by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker or lender to pledge Shares, as security for a
loan, and to deliver all or part of the loan proceeds to the Company in payment
of the aggregate Exercise Price.

       

      (f)           Promissory
Note.  To
the extent that a Stock Option Agreement or Restricted Stock Agreement so
provides, payment may be made all or in part by delivering (on a form prescribed
by the Company) a full-recourse promissory note.

       

      (g)           Other
Forms of Payment.  To
the extent that a Stock Option Agreement or Restricted Stock Agreement so
provides, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.

       

      (h)           Limitations
under Applicable Law.  Notwithstanding
anything herein or in a Stock Option Agreement or Restricted Stock Agreement to
the contrary, payment may not be made in any form that is unlawful, as
determined by the Committee in its sole discretion.

       

      
        	
                SECTION
      9.

              	
                STOCK
      UNITS.

              


      

       

      (a)           Stock
Unit Agreement. Each
grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement
between the recipient and the Company. Such Stock Units shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Stock Unit Agreements
entered into under the Plan need not be identical.

       

      (b)           Payment
for Awards. To the
extent that an Award is granted in the form of Stock Units, no cash
consideration shall be required of the Award recipients.

       

      (c)           Vesting
Conditions. Each
Award of Stock Units may or may not be subject to vesting. Vesting shall occur,
in full or in installments, upon satisfaction of the conditions specified in the
Stock Unit Agreement. A Stock Unit Agreement may provide for accelerated vesting
in the event of the Participant’s death, disability or retirement or other
events. The Committee may determine, at the time of granting Stock Units or
thereafter, that all or part of such Stock Units shall become vested in the
event that a Change in Control occurs with respect to the Company.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (d)           Voting
and Dividend Rights. The
holders of Stock Units shall have no voting rights. Prior to settlement or
forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s
discretion, carry with it a right to dividend equivalents. Such right entitles
the holder to be credited with an amount equal to all cash dividends paid on one
Share while the Stock Unit is outstanding. Dividend equivalents may be converted
into additional Stock Units. Settlement of dividend equivalents may be made in
the form of cash, in the form of Shares, or in a combination of both. Prior to
distribution, any dividend equivalents which are not paid shall be subject to
the same conditions and restrictions (including without limitation, any
forfeiture conditions) as the Stock Units to which they attach.

       

      (e)           Form
and Time of Settlement of Stock Units.
Settlement of vested Stock Units may be made in the form of (a) cash, (b) Shares
or (c) any combination of both, as determined by the Committee. The actual
number of Stock Units eligible for settlement may be larger or smaller than the
number included in the original Award, based on predetermined performance
factors. Methods of converting Stock Units into cash may include (without
limitation) a method based on the average Fair Market Value of Shares over a
series of trading days. A Stock Unit Agreement may provide that vested Stock
Units may be settled in a lump sum or in installments. A Stock Unit Agreement
may provide that the distribution may occur or commence when all vesting
conditions applicable to the Stock Units have been satisfied or have lapsed, or
it may be deferred to any later date. The amount of a deferred distribution may
be increased by an interest factor or by dividend equivalents. Until an Award of
Stock Units is settled, the number of such Stock Units shall be subject to
adjustment pursuant to Section 10.

       

      (f)           Death
of Recipient. Any
Stock Units Award that becomes payable after the recipient’s death shall be
distributed to the recipient’s beneficiary or beneficiaries. Each recipient of a
Stock Units Award under the Plan shall designate one or more beneficiaries for
this purpose by filing the prescribed form with the Company. A beneficiary
designation may be changed by filing the prescribed form with the Company at any
time before the Award recipient’s death. If no beneficiary was designated or if
no designated beneficiary survives the Award recipient, then any Stock Units
Award that becomes payable after the recipient’s death shall be distributed to
the recipient’s estate.

       

      (g)           Creditors’
Rights. A
holder of Stock Units shall have no rights other than those of a general
creditor of the Company. Stock Units represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable
Stock Unit Agreement.

       

      
        	
                SECTION
      10.

              	
                ADJUSTMENT
      OF SHARES.

              


      

       

      (a)           Adjustments.  In
the event of a subdivision of the outstanding Stock, a declaration of a dividend
payable in Shares, a declaration of a dividend payable in a form other than
Shares in an amount that has a material effect on the price of Shares, a
combination or consolidation of the outstanding Stock (by reclassification or
otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a
similar occurrence, the Committee shall make appropriate adjustments
in:

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (i)           The
number of Options, Restricted Shares and Stock Units available for future Awards
under Section 5;

       

      (ii)           The
limitations set forth in Sections 5(a) and (b);

       

      (iii)           The
number of NSOs to be granted to Outside Directors under Section
4(b);

       

      (iv)           The
number of Shares covered by each outstanding Option;

       

      (v)           The
Exercise Price under each outstanding Option; and

       

      (vi)           The
number of Stock Units included in any prior Award which has not yet been
settled.

       

      Except as
provided in this Section 11, a Participant shall have no rights by reason of any
issue by the Company of stock of any class or securities convertible into stock
of any class, any subdivision or consolidation of shares of stock of any class,
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class.

       

      (b)           Dissolution
or Liquidation. To the
extent not previously exercised or settled, Options, and Stock Units shall
terminate immediately prior to the dissolution or liquidation of the
Company.

       

      (c)           Reorganizations. In the
event that the Company is a party to a merger or other reorganization,
outstanding Awards shall be subject to the agreement of merger or
reorganization. Such agreement shall provide for:

       

      (i)           The
continuation of the outstanding Awards by the Company, if the Company is a
surviving corporation;

       

      (ii)           The
assumption of the outstanding Awards by the surviving corporation or its parent
or subsidiary;

       

      (iii)           The
substitution by the surviving corporation or its parent or subsidiary of its own
awards for the outstanding Awards;

       

      (iv)           Full
exercisability or vesting and accelerated expiration of the outstanding Awards;
or

       

      (v)           Settlement
of the intrinsic value of the outstanding Awards in cash or cash equivalents
followed by cancellation of such Awards.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
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      (d)           Reservation
of Rights. Except
as provided in this Section 11, an Optionee or Offeree shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend or any other increase or decrease in the number of
shares of stock of any class. Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or Exercise Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or
assets.

       

      
        	
                SECTION
      11.

              	
                DEFERRAL
      OF AWARDS.

              


      

       

      (a)           Committee
Powers. The
Committee (in its sole discretion) may grant an Award that permits or requires a
Participant to:

       

      (i)           Have
cash that otherwise would be paid to such Participant as a result of the
settlement of Stock Units credited to a deferred compensation account
established for such Participant by the Committee as an entry on the Company’s
books;

       

      (ii)           Have
Shares that otherwise would be delivered to such Participant as a result of the
exercise of an Option converted into an equal number of Stock Units;
or

       

      (iii)           Have
Shares that otherwise would be delivered to such Participant as a result of the
exercise of an Option or the settlement of Stock Units converted into amounts
credited to a deferred compensation account established for such Participant by
the Committee as an entry on the Company’s books. Such amounts shall be
determined by reference to the Fair Market Value of such Shares as of the date
when they otherwise would have been delivered to such Participant.

       

      (b)           General
Rules. A
deferred compensation account established under this Section 11 may be credited
with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Section 11.

       

      
        	
                SECTION
      12.

              	
                AWARDS
      UNDER OTHER PLANS.

              


      

       

      The
Company may grant awards under other plans or programs. Such awards may be
settled in the form of Shares issued under this Plan.  Such Shares
shall be treated for all purposes under the Plan like Shares issued in
settlement of Stock Units and shall, when issued, reduce the number of Shares
available under Section 5.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
      13.

              	
                PAYMENT
      OF DIRECTOR’S FEES IN SECURITIES.

              


      

       

      (a)           Effective
Date. No
provision of this Section 13 shall be effective unless and until the Board has
determined to implement such provision.

       

      (b)           Elections
to Receive NSOs, Restricted Shares or Stock Units. An
Outside Director may elect to receive his or her annual retainer payments and/or
meeting fees from the Company in the form of cash, NSOs, Restricted Shares or
Stock Units, or a combination thereof, as determined by the Board. Such NSOs,
Restricted Shares and Stock Units shall be issued under the Plan. An election
under this Section 14 shall be filed with the Company on the prescribed
form.

       

      (c)           Number
and Terms of NSOs, Restricted Shares or Stock Units. The
number of NSOs, Restricted Shares or Stock Units to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise be
paid in cash shall be calculated in a manner determined by the Board. The terms
of such NSOs, Restricted Shares or Stock Units shall also be determined by the
Board.

       

      
        	
                SECTION
      14.

              	
                LEGAL
      AND REGULATORY REQUIREMENTS.

              


      

       

      Shares
shall not be issued under the Plan unless the issuance and delivery of such
Shares complies with (or is exempt from) all applicable requirements of law,
including (without limitation) the Securities Act of 1933, as amended, the rules
and regulations promulgated thereunder, state securities laws and regulations
and the regulations of any stock exchange on which the Company’s securities may
then be listed, and the Company has obtained the approval or favorable ruling
from any governmental agency which the Company determines is necessary or
advisable. The Company shall not be liable to a Participant or other persons as
to: (a) the non-issuance or sale of Shares as to which the Company has been
unable to obtain from any regulatory body having jurisdiction the authority
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares under the Plan; and (b) any tax consequences expected, but not
realized, by any Participant or other person due to the receipt, exercise or
settlement of any Award granted under the Plan.

       

      
        	
                SECTION
      15.

              	
                WITHHOLDING
      TAXES.

              


      

       

      (a)           
General. To the
extent required by applicable federal, state, local or foreign law, a
Participant or his or her successor shall make arrangements satisfactory to the
Company for the satisfaction of any withholding tax obligations that arise in
connection with the Plan. The Company shall not be required to issue any Shares
or make any cash payment under the Plan until such obligations are
satisfied.

       

      (b)           Share
Withholding. The
Committee may permit a Participant to satisfy all or part of his or her
withholding or income tax obligations by having the Company withhold all or a
portion of any Shares that otherwise would be issued to him or her or by
surrendering all or a portion of any Shares that he or she previously acquired.
Such Shares shall be valued at their Fair Market Value on the date when taxes
otherwise would be withheld in cash. In no event may a Participant have Shares
withheld that would otherwise be issued to him or her in excess of the number
necessary to satisfy the legally required minimum tax withholding.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
      16.

              	
                OTHER
      PROVISIONS APPLICABLE TO AWARDS.

              


      

       

      (a)           Transferability. Unless
the agreement evidencing an Award (or an amendment thereto authorized by the
Committee) expressly provides otherwise, no Award granted under this Plan, nor
any interest in such Award, may be sold, assigned, conveyed, gifted, pledged,
hypothecated or otherwise transferred in any manner (prior to the vesting and
lapse of any and all restrictions applicable to Shares issued under such Award),
other than by will or the laws of descent and distribution; provided, however,
that an ISO may be transferred or assigned only to the extent consistent with
Section 422 of the Code. Any purported assignment, transfer or encumbrance in
violation of this Section 16(a) shall be void and unenforceable against the
Company.

       

      (b)           Qualifying
Performance Criteria. The
number of Shares or other benefits granted, issued, retainable and/or vested
under an Award may be made subject to the attainment of performance goals for a
specified period of time relating to one or more of the following performance
criteria, either individually, alternatively or in any combination, applied to
either the Company as a whole or to a business unit or Subsidiary, either
individually, alternatively or in any combination, and measured either annually
or cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated comparison
group or index, in each case as specified by the Committee in the Award: (a)
cash flow, (b) earnings per share, (c) earnings before interest, taxes and
amortization, (d) return on equity, (e) total shareholder return, (f) share
price performance, (g) return on capital, (h) return on assets or net assets,
(i) revenue, (j) income or net income, (k) operating income or net operating
income, (l) operating profit or net operating profit, (m) operating margin or
profit margin, (n) return on operating revenue, (o) return on invested capital,
or (p) market segment shares (“Qualifying Performance Criteria”). The Committee
may appropriately adjust any evaluation of performance under a Qualifying
Performance Criteria to exclude any of the following events that occurs during a
performance period: (i) asset write-downs, (ii) litigation or claim judgments or
settlements, (iii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results, (iv) accruals for
reorganization and restructuring programs and (v) any extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
managements’ discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to shareholders for the
applicable year. If applicable, the Committee shall determine the Qualifying
Performance Criteria not later than the 90th day of
the performance period, and shall determine and certify, for each Participant,
the extent to which the Qualifying Performance Criteria have been met. The
Committee may not in any event increase the amount of compensation payable under
the Plan upon the attainment of a Qualifying Performance Criteria to a
Participant who is a “covered employee” within the meaning of Section 162(m) of
the Code.

       

      
        	
                SECTION
      17.

              	
                NO
      EMPLOYMENT RIGHTS.

              


      

       

      No
provision of the Plan, nor any right or Option granted under the Plan, shall be
construed to give any person any right to become, to be treated as, or to remain
an Employee. The Company and its Subsidiaries reserve the right to terminate any
person’s Service at any time and for any reason, with or without
notice.

       

      
        
          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
      18.

              	
                DURATION
      AND AMENDMENTS.

              


      

       

      (a)           Term
of the Plan. The
Plan, as set forth herein, shall terminate automatically on June 9, 2019 and may
be terminated on any earlier date pursuant to Subsection (b) below.

       

      (b)           Right
to Amend or Terminate the Plan. The
Board of Directors may amend or terminate the Plan at any time and from time to
time. Rights and obligations under any Award granted before amendment of the
Plan shall not be materially impaired by such amendment, except with consent of
the Participant. An amendment of the Plan shall be subject to the approval of
the Company’s shareholders only to the extent required by applicable laws,
regulations or rules.

       

      (c)           Effect
of Termination. No
Awards shall be granted under the Plan after the termination thereof. The
termination of the Plan shall not affect Awards previously granted under the
Plan.

       

      [Remainder
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          SIGMA
DESIGNS, INC.
2009 STOCK INCENTIVE PLAN

          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
      19.

              	
                EXECUTION.

              


      

       

      To record
the adoption of the Plan by the Board of Directors, the Company has caused its
authorized officer to execute the same.

       

      
        
          	 	
                  SIGMA
      DESIGNS, INC.

                
	 	 
      
	 	 
      
	 	 
      
	 	
                  By

                	 
      
	 	 
      
	 	
                  Name

                	 
      
	 	 
      
	 	
                  Title

                	 
      


        

      

       

       

       

       

      SIGMA DESIGNS,
INC.

      2009 STOCK INCENTIVE
PLAN


       

      -19-