Sigma Designs and Potomac Reach Agreement

Sigma Designs (NASDAQ: SIGM) announced today that it has reached an agreement regarding the election of directors at the Company's 2012 Annual Meeting of Shareholders with Potomac Capital Partners III, L.P. (together with its affiliates, "Potomac"), which beneficially owns approximately 7.9% of the outstanding shares of Sigma common stock.

Under the terms of the agreement, Potomac and Sigma each agreed to vote their respective proxies at the 2012 Annual Meeting to elect two new directors recommended by Potomac, Eric B. Singer and Mark J. Bonney, and two incumbent directors recommended by Sigma, Thinh Q. Tran and Lung C. Tsai. In addition, effective immediately following the Annual Meeting, the number of directors on Sigma's Board will increase from four to five members. Each of the individual continuing directors has confirmed his intent to appoint Maury Austin, former Chief Financial Officer of MIPS Technologies, Inc., to serve as a fifth director. Mr. Austin's selection was the result of a collaborative process conducted by the Board and Potomac to identify a qualified, mutually agreeable, fifth director.

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