THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

SigmaTel, Inc. (SGTL)

3/23/2006 Proxy Information

Other than compensation agreements and other arrangements which are described above in “Employment Contracts, Termination of Employment and Change-in-Control Arrangements” and the transactions described below, since January 1, 2005, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $60,000 and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of their immediate family had or will have a direct or indirect material interest.

Consulting Agreement with Robert T. Derby. On October 19, 2004, we entered into a Consulting Agreement with Robert T. Derby, an independent member of our Board of Directors. Pursuant to the Consulting Agreement, Mr. Derby is to provide sales and sales organization consulting services to SigmaTel from time to time, as needed, on an hourly basis. In order to preserve Mr. Derby’s status as one of our “independent” directors for purposes of complying with the NASDAQ rules regarding director independence, the Consulting Agreement provides that in no event will consulting fees paid to Mr. Derby within any consecutive 12-month period be in excess of $60,000. Since October 19, 2004, we have paid approximately $10,000 to Mr. Derby for services performed by him in connection with this Consulting Agreement.

Transactions in the Ordinary Course of Business. We sell products in the ordinary course of business to Creative Technology which, until October 2005, held greater than 5% of our outstanding common stock. Revenues from Creative Technology were approximately $43.9 million for the year ended December 31, 2005.

License of Technology. In October 2001, we entered into an asset purchase and license agreement with Metanoia, a company started by a former officer and then-current common stockholder of SigmaTel. The agreement requires SigmaTel to exclusively license DSL technology developed and owned by us to Metanoia. The total consideration payable to SigmaTel included (i) approximately 1,400,000 shares of Metanoia’s preferred stock; (ii) $207,000 payable in cash; and (iii) a note receivable of $1,000,000 bearing interest at 8% per annum payable on April 24, 2002. In March 2002, prior to the maturity of the note, Metanoia exercised its option to extend the maturity date of the note to January 24, 2003 (the “New Maturity Date”). In December 2002, prior to the New Maturity Date, we entered into an agreement with Metanoia to extend the maturity of the note to January 24, 2005 and to remove certain licensing restrictions for the use of the technology. In consideration for the amendment, Metanoia issued a new note in the amount of $500,000 to SigmaTel bearing interest at 8% per annum and maturing on January 24, 2004. Metanoia is in the process of raising capital for its business operations. We have received little cash consideration from the Metanoia transactions. As of December 31, 2005, SigmaTel had not recognized a gain on the non-cash consideration received as Metanoia had not generated operating cash flows and there is no active trading market for Metanoia securities. The licenses granted to Metanoia in the asset purchase and license agreement are perpetual. The asset purchase and license agreement provides that Metanoia may not directly compete with us or assist any other person to directly compete with us, except that Metanoia can conduct competing business in the communications industry, even if it is in direct competition with us. At the current time, we are not pursuing business activities in the ADSL communications industry.

Indemnification and Insurance. Our Bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law. We have entered into indemnification agreements with all of our directors and executive officers and have purchased directors’ and officers’ liability insurance. In addition, our certificate of incorporation limits the personal liability of our Board of Directors members for breaches by the directors of their fiduciary duties.

3/4/2005 Proxy Information

Consulting Agreement with Robert T. Derby. On October 19, 2004, we entered into a Consulting Agreement with Robert T. Derby, an independent member of our board of directors. Pursuant to the Consulting Agreement, Mr. Derby is to provide sale and sales organization consulting services to SigmaTel from time to time, as needed, on an hourly basis. In order to preserve Mr. Derby’s status as one of our “independent” directors for purposes of complying with the NASDAQ rules regarding director independence, the Consulting Agreement provides that in no event will consulting fees paid to Mr. Derby within any consecutive 12-month period be in excess of $60,000. Since October 19, 2004, we have paid approximately $10,000 to Mr. Derby for services performed by him in connection with this Consulting Agreement.

Transactions in the Ordinary Course of Business. We sell products in the ordinary course of business to Creative Technology. Revenues from Creative Technology were approximately $27.5 million for the year ended December 31, 2004.

License of Technology. In October 2001, we entered into an asset purchase and license agreement with Metanoia, a company started by a former officer and then-current common stockholder of SigmaTel. The agreement requires SigmaTel to exclusively license DSL technology developed and owned by us to Metanoia. The total consideration payable to SigmaTel included (i) approximately 1,400,000 shares of Metanoia’s preferred stock; (ii) $207,000 payable in cash; and (iii) a note receivable of $1,000,000 bearing interest at 8% per annum payable on April 24, 2002. In March 2002, prior to the maturity of the note, Metanoia exercised its option to extend the maturity date of the note to January 24, 2003 (the “New Maturity Date”). In December 2002, prior to the New Maturity Date, we entered into an agreement with Metanoia to extend the maturity of the note to January 24, 2005 and to remove certain licensing restrictions for the use of the technology. In consideration for the amendment, Metanoia issued a new note in the amount of $500,000 to SigmaTel bearing interest at 8% per annum and maturing on January 24, 2004. Metanoia is in the process of raising capital for its business operations. We have received little cash consideration from the Metanoia transactions. As of December 31, 2004, SigmaTel had not recognized a gain on the non-cash consideration received as Metanoia had not generated operating cash flows and there is no active trading market for Metanoia securities. The licenses granted to Metanoia in the asset purchase and license agreement are perpetual. The asset purchase and license agreement provides that Metanoia may not directly compete with us or assist any other person to directly compete with us, except that Metanoia can conduct competing business in the communications industry, even if it is in direct competition with us. At the current time, we are not pursuing business activities in the ADSL communications industry.

Registration Rights. We have granted the investors in our preferred stock rights to require us to register or include their shares in a registered offering of our securities. According to the terms of an amended and restated investors’ rights agreement among us and the following investors: CTI Limited, CTI II Limited, the holders of approximately 3.5 million shares of our common stock are entitled to have their shares registered by us under the Securities Act. These registration rights include the following:

• the holders of at least a majority of the then outstanding registrable securities may require, on two occasions beginning 180 days after the effective date of the final prospectus circulated in our initial public offering, that we register their shares for public resale. We are obligated to register these shares if the holders of a majority of such shares request registration and only if such registration covers registrable securities with an anticipated aggregate offering price of at least $5,000,000;

• any holder or holders of the then outstanding registrable securities may require that we register their shares for public resale on Form S-3 or similar short-form registration, provided we are eligible to use Form S-3 or similar short-form registration. We are obligated to register these shares if the value of the securities to be registered is at least $1,000,000, and only if we have previously effected less than five registrations on Form S-3 pursuant to these registration rights; and

• if we register any of our shares of common stock for purposes of effecting any public offering, the holders of registrable securities are entitled to include their shares of common stock in the registration.

These registration rights are subject to conditions and limitations, including the right of the underwriters of an offering to limit the number of shares of common stock to be included in the registration. We are generally required to bear all of the expenses of all registrations under the investors’ rights agreement, except underwriting discounts and commissions. The investors’ rights agreement also contains our commitment to indemnify the holders of registration rights for certain losses they may incur in connection with registrations under the agreement. Registration of any of the shares of common stock held by security holders with registration rights would result in those shares becoming freely tradable without restriction under the Securities Act.

Indemnification and Insurance. Our bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law. We have entered into indemnification agreements with all of our directors and executive officers and have purchased directors’ and officers’ liability insurance. In addition, our certificate of incorporation limits the personal liability of our board members for breaches by the directors of their fiduciary duties.