SGTL Sigmatel (MM)

SPECIAL MEETING OF STOCKHOLDERS

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear SigmaTel, Inc. Stockholder:

The board of directors of SigmaTel, Inc. has approved a merger pursuant to which SigmaTel has agreed to be acquired by Freescale Semiconductor, Inc. subject to certain conditions.

If the merger is completed, holders of SigmaTel’s common stock will receive $3.00 in cash, without interest, for each share of SigmaTel’s common stock they own.

Stockholders of SigmaTel will be asked, at a special meeting of SigmaTel’s stockholders, to adopt the merger agreement. In connection with its evaluation of the merger, our board of directors engaged ThinkEquity Partners LLC, to act as its financial advisor. ThinkEquity Partners LLC delivered its written opinion to our board of directors to the effect that, as of February 3, 2008, and based upon and subject to the factors and assumptions set forth in its written opinion, the $3.00 per share in cash to be received by holders of our common stock pursuant to the merger agreement is fair to such holders from a financial point of view. In addition, our board of directors has unanimously determined that the merger is fair to, and in the best interests of, SigmaTel and our stockholders, declared the merger agreement advisable and approved the merger agreement and the other transactions contemplated by the merger agreement. The board of directors of SigmaTel unanimously recommends that SigmaTel’s stockholders vote FOR the adoption of the merger agreement.

The date, time and place of the special meeting to consider and vote upon a proposal to adopt the merger agreement are as follows:

Monday, April 21, 2008

9:00 a.m., Central time

Offices of Vinson & Elkins L.L.P.

The Terrace 7

2801 Via Fortuna, Suite 100

Austin, Texas 78746

The proxy statement attached to this letter provides you with information about the special meeting of SigmaTel stockholders and the proposed merger. We encourage you to read the entire proxy statement carefully.

Your vote is very important. Whether or not you plan to attend the special meeting, if you are a holder of SigmaTel common stock please take the time to vote by completing, signing, dating and mailing the enclosed proxy card to us.

Phillip E. Pompa President and Chief Executive Officer SigmaTel, Inc.

The proxy statement is dated March 17, 2008, and is first being mailed to stockholders of SigmaTel on or about March 18, 2008.

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SIGMATEL, INC.

1601 South MoPac Expressway, Suite 100

Austin, Texas 78746

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON APRIL 21, 2008

To the Stockholders of SigmaTel, Inc.:

A special meeting of stockholders of SigmaTel, Inc., a Delaware corporation, will be held on Monday, April 21, 2008 at 9:00 a.m., Central time, at the offices of Vinson & Elkins L.L.P., The Terrace 7, 2801 Via Fortuna, Suite 100, Austin, Texas 78746, for the following purposes:

1.    To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of February 3, 2008, among Freescale Semiconductor, Inc., a Delaware corporation, PHX Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of Freescale, and SigmaTel, pursuant to which SigmaTel has agreed to become a wholly owned subsidiary of Freescale subject to certain conditions therein. If the merger is completed, each outstanding share of SigmaTel common stock will be converted into the right to receive $3.00 in cash, without interest; and

2.    To transact such other business as may properly come before the special meeting or any adjournment or postponement thereof.

The board of directors of SigmaTel has fixed the close of business on March 6, 2008 as the record date for the determination of stockholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Only holders of record of shares of SigmaTel’s common stock at the close of business on the record date are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement thereof. At the close of business on the record date, SigmaTel had 36,282,375 shares of common stock outstanding and entitled to vote. Holders of SigmaTel’s common stock are entitled to appraisal rights under the Delaware General Corporation Law in connection with the merger if they meet certain conditions. See “The Merger—Appraisal Rights.”

Your vote is important. The affirmative vote of the holders of a majority of the outstanding shares of SigmaTel’s common stock is required to adopt the merger agreement. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy and thus ensure that your shares will be represented at the special meeting if you are unable to attend. If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be counted as a vote FOR adoption of the merger agreement. If you fail to return your SigmaTel proxy card and do not attend the special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the SigmaTel special meeting and will effectively be counted as a vote against adoption of the merger agreement. If you do attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

By order of the Board of Directors

Barry J. Bumgardner Vice President, General Counsel and Secretary

Austin, Texas

March 17, 2008

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QUESTIONS AND ANSWERS ABOUT THE MERGER

In addition, any holder of any outstanding options that are vested will have the opportunity to elect, instead of exercising such options, to have such options cancelled and converted into the right to receive cash, without interest and less legally required withholdings and deductions, in an amount equal to the product of (a) $3.00, less the applicable exercise price of such option, multiplied by (b) the number of shares of company common stock subject to such options immediately prior to the effective time of the merger.

Any options not exercised or cashed out will terminate at the effective time of the merger.

The affirmative vote of the holders of at least a majority of the outstanding shares of SigmaTel’s common stock is required to adopt the merger agreement.

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SigmaTel, Inc.

Attention: Investor Relations

1601 South MoPac Expressway, Suite 100

Austin, Texas 78746

512-744-9968

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INFORMATION ABOUT SIGMATEL

General

SigmaTel is a fabless semiconductor company that designs, develops and markets proprietary, analog-intensive, mixed-signal ICs for a variety of digital multimedia products in the consumer electronics markets, including digital media players, printers and digital televisions. Our focus on providing system-level solutions enables our customers to rapidly introduce and offer electronic products that are small, light-weight, efficient, reliable, cost effective and capable of performing multiple desired functions.

We were founded in 1993 with a focus on providing semiconductor design services on a contract basis. In 1995, we began developing our own IC products. Since 2001, our focus has been on development and production of host audio codecs and portable multimedia systems on chips. In 2005, as a result of acquisitions, we began commercial shipments of printer and digital camera ICs.

As of February 29, 2008, we employed 322 full-time people, including 200 in research and development, 29 in operations, 50 in sales and marketing and 43 in administration. We have never had a work stoppage and none of our employees is represented by a labor organization. We believe that our relationships with our employees are good.

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INFORMATION ABOUT FREESCALE AND ACQUISITION SUB

Freescale Semiconductor, Inc.

Freescale is a Delaware corporation with its headquarters in Austin, Texas, and is an indirect subsidiary of Freescale Holdings, L.P., a Cayman Islands limited partnership, which is controlled by a consortium of private equity funds including The Blackstone Group, The Carlyle Group, funds advised by Permira Advisers, LLC, TPG Capital and others.

Freescale designs and manufactures embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets in more than 30 countries. Freescale offers families of embedded processors, which include microcontrollers, digital signal processors and communications processors. Freescale also offers a portfolio of complementary devices that facilitate connectivity between products, across networks and to real-world signals, such as sound, vibration and pressure. Freescale’s complementary products include sensors, radio frequency semiconductors, power management and other analog and mixed-signal integrated circuits.

Acquisition Sub

Acquisition Sub is a Delaware corporation formed on February 1, 2008 for the sole purpose of engaging in the merger and related transactions. Acquisition Sub has no operations and is a wholly owned subsidiary of Freescale. In the merger, Acquisition Sub will be merged with and into SigmaTel with SigmaTel as the surviving corporation.

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As of March 6, 2008, there were approximately 109 holders of record of our common stock.

The following table sets forth the closing per share sales price of our common stock, as reported on the Nasdaq Global Select Market on February 1, 2008, the last full trading day before the public announcement of the proposed merger, and on March 13, 2008, the latest practicable trading day before the printing of this proxy statement:

We have never declared or paid cash dividends on our common stock. Our board of directors currently intends to retain our earnings to support operations and to finance expansion and does not currently intend to pay cash dividends on our common stock in the foreseeable future.

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THE SPECIAL MEETING

We are furnishing this proxy statement to our stockholders as part of the solicitation of proxies by our board of directors for use at the special meeting.

Date, Time and Place

We will hold the special meeting at the offices of Vinson & Elkins L.L.P., The Terrace 7, 2801 Via Fortuna, Suite 100, Austin, Texas 78746 at 9:00 a.m., Central time, on Monday, April 21, 2008.

Purpose of Special Meeting

At the special meeting, we will ask holders of our common stock to adopt the merger agreement. Our board of directors has unanimously determined that the merger is fair to, and in the best interests of, SigmaTel and our stockholders, declared the merger agreement advisable and approved the merger agreement and the other transactions contemplated by the merger agreement. The board of directors of SigmaTel unanimously recommends that SigmaTel’s stockholders vote FOR the adoption of the merger agreement.

Record Date; Stock Entitled to Vote; Quorum

Only holders of record of our common stock at the close of business on March 6, 2008, the record date, are entitled to notice of and to vote at the special meeting. On the record date, approximately 36,282,375 shares of our common stock were issued and outstanding and held by approximately 109 holders of record. A quorum will be present at the special meeting if a majority of the shares of our common stock issued and outstanding and entitled to vote on the record date are represented in person or by proxy. In the event that a quorum is not present at the special meeting, it is expected that the meeting will be adjourned or postponed to solicit additional proxies. Holders of record of our common stock on the record date are entitled to one vote per share at the special meeting on the proposal to adopt the merger agreement.

Votes Required

The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding on the record date. If a holder of our common stock abstains from voting or does not vote, either in person or by proxy, it will effectively count as a vote against the adoption of the merger agreement.

Voting of Proxies

All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in the manner specified by the holders. Properly executed proxies that do not contain voting instructions will be voted FOR the adoption of the merger agreement.

Shares of our common stock represented at the special meeting but not voting, including shares of our common stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business.

Only shares affirmatively voted for the adoption of the merger agreement, including properly executed proxies that do not contain voting instructions, will be counted as favorable votes for that proposal. If a holder of our common stock abstains from voting or does not execute a proxy, it will effectively count as a vote against the adoption of the merger agreement. Brokers who hold shares of our common stock in street name for customers who are the beneficial owners of such shares may not give a proxy to vote those customers’ shares in the absence

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of specific instructions from those customers. These non-voted shares will effectively count as votes against the adoption of the merger agreement.

The persons named as proxies by a stockholder may propose and vote for one or more adjournments of the special meeting, including adjournments to permit further solicitations of proxies.

We do not expect that any matter other than the proposal to adopt the merger agreement will be brought before the special meeting. If, however, our board of directors properly presents other matters, the persons named as proxies will vote in accordance with their judgment as to matters that they believe to be in the best interests of the stockholders.

Revocability of Proxies

The grant of a proxy on the enclosed form of proxy does not preclude a stockholder from voting in person at the special meeting. A stockholder may revoke a proxy at any time prior to its exercise by:

If you have instructed your broker to vote your shares, you must follow directions received from your broker to change these instructions.

Solicitation of Proxies

All costs of solicitation of proxies will be borne by us. The directors and officers and employees of SigmaTel may, without additional compensation, solicit proxies for stockholders by mail, telephone, facsimile, or in person. However, you should be aware that certain members of our board of directors and our executive officers have interests in the merger that are different from, or in addition to, yours. See “Interests of Certain Persons in the Merger.”

The extent to which these proxy soliciting efforts will be necessary depends entirely upon how promptly proxies are received. You should send in your proxy by mail without delay. We also reimburse brokers and other custodians, nominees and fiduciaries for their expenses in sending these materials to you and getting your voting instructions.

Stockholders should not send stock certificates with their proxies. A letter of transmittal with instructions for the surrender of our common stock certificates will be mailed to our stockholders as soon as practicable after completion of the merger.

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THE MERGER

The following discussion summarizes the material terms of the merger. Stockholders should read the merger agreement, which is attached as Appendix A to this proxy statement.

Background of the Merger

Over the past few years, our performance and prospects have been adversely impacted by various factors. The markets in which we compete are intensely competitive and are characterized by rapid technological change, declining average unit selling prices, which we refer to as ASPs, and rapid product obsolescence. Specifically, the ASPs of our products have continued to decrease as growth of the market for portable media players has slowed and as new competitors have entered the market. We have not been able to fully offset declines in ASPs by lowering our costs or increasing our unit shipments. Consequently, our revenue and profits have been declining over time. Our situation has been made more difficult by being late to market with some of our recent portable media player ICs and software to accompany our ICs. Finally, the costs to develop more advanced chips for the portable media player market are high both in terms of personnel and capital.

Our board of directors and management review, on a continuous basis, potential strategic alternatives, including possible strategic transactions or alliances with other companies. Given that our performance and prospects have been so adversely affected over the past few years and that our revenue and profits have continually declined, more significance and attention has been placed on these reviews. Beginning with the promotion of Phillip E. Pompa as our President and Chief Executive Officer in January 2007, our management focused considerable time and effort on exploring all alternatives to enhance our product mix and profitability.

In April 2007, we retained the investment banking firm of Needham & Company, LLC to conduct a thorough strategic evaluation of our integrated circuits for our consumer printers product line, which we refer to as the Printer Product Line. In April 2007, our board of directors and management met and consulted with Needham, and decided the best alternative for us was to sell the Printer Product Line and invest the proceeds in our remaining product lines.

From April through November 2007, Needham contacted 12 potential buyers for the Printer Product Line, set up meetings between management and five of such potential buyers and received indications of interest from four parties interested in acquiring the Printer Product Line. During this period we participated in discussions and negotiations with the most likely potential buyers, but we were not able to obtain a definitive agreement for the sale of the Printer Product Line.

Mr. Pompa and other members of our senior management have engaged from time to time in discussions with representatives of other companies that, in our opinion, are the most likely companies to have a strategic interest in our business. These discussions included potential strategic relationships, alliances and other transactions. Management periodically reported to our board of directors on the substance and status of these discussions. Prior to November 2007, none of those discussions resulted in proposals that our board of directors considered to be attractive to our stockholders.

On October 17, 2007, Mr. Pompa met with Brad Hale, a member of Freescale’s business development group for their Multimedia Applications Division. Mr. Pompa and Mr. Hale discussed our company’s business and Mr. Hale requested a meeting between Mr. Pompa and Sumit Sadana, the Senior Vice President of Strategy and Corporate Development for Freescale. On October 22, 2007 Mr. Pompa and Dr. William “Billy” Edwards, a consultant retained to assist us in evaluating all potential strategic alternatives, met with Mr. Sadana to discuss mutual business opportunities. During this meeting, Mr. Sadana stated that Freescale may be interested in acquiring us.

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On or about September 21, 2007, Stephan Beatty, our Senior Vice President of Product Lines and Operations, had a conversation with a representative of a company that indicated an interest in purchasing our integrated circuits for consumer TV audio product line, which we refer to as the TV Audio Product Line.

At a meeting on October 23, 2007, our board of directors received an update on our performance and the status of Needham’s efforts to sell the Printer Product Line. Mr. Pompa also updated our board on his October 22, 2007 meeting with Dr. Edwards and Mr. Sadana. Mr. Beatty also reported on his conversation with a representative of a company that indicated an interest in purchasing our TV Audio Product Line. Our board of directors concluded that the board should investigate the alternative of selling our company, but needed further information before deciding on any course of action. This conclusion was based on a number of factors, including management’s internal forecast for the quarter ending December 31, 2007, management’s internal projections indicating that we would remain unprofitable through the first half of 2008 and Freescale’s stated interest in acquiring us. Our board instructed management to recommend an investment banker to advise our board of directors and management regarding a possible acquisition of our company or our product lines and the other strategic alternatives available to us. Our board also directed management to continue conversations with Freescale, but not to engage in substantive negotiations until a financial advisor could be retained.

On November 2, 2007, we received a letter from Freescale expressing Freescale’s interest in pursuing a potential acquisition of our company. In the letter, Freescale submitted a preliminary non-binding indication of interest for the acquisition of 100% of the outstanding equity of SigmaTel for a price of $3.38 per share of common stock, but with an aggregate acquisition price of $125 million for all common stock, options, restricted stock units and similar securities. The indicated price of $3.38 per share represented a premium of approximately 30% over the closing price of our stock on November 1, 2007. Freescale’s indication of interest was based on several key assumptions, including the assumption that there had been no deterioration in our financial condition from the balance sheet filed in our quarterly report on Form 10 Q for the quarter ended June 30, 2007, and was expressly subject to successful completion by Freescale of a due diligence review of our business and financial, accounting, technical, intellectual property, legal and other aspects of the company and our business, the negotiation and execution of definitive agreements regarding the transaction and other customary conditions.

At a meeting of our board on November 6, 2007, management and Dr. Edwards reviewed the Freescale indication of interest with our board. After discussing management’s view regarding the level of interest expressed by Freescale, our board directed management to indicate to Freescale that we were interested in having further discussions regarding the possible sale of our company, but that we desired to retain a financial advisor prior to such discussions. Management also reported on the status of discussions for the sale of the Printer Product Line and the interest by one party in acquiring the TV Audio Product Line.

On November 8, 2007, Dr. Edwards had a telephone conversation with representatives of Freescale, and conveyed to them that we were interested in having further discussions regarding the possible sale of our company, but that we desired to retain a financial advisor prior to such discussions.

At a November 11, 2007 meeting of our board, management recommended that the board retain ThinkEquity as the company’s financial advisor. Representatives of ThinkEquity met with our board during this meeting. Our board directed management to negotiate the terms of an engagement letter with ThinkEquity. Our board and management discussed the status of discussions with Freescale. Mr. Pompa also updated our board and ThinkEquity on the status of the sale of the Printer Product Line, including the receipt of a non-binding letter of intent from a potential buyer to acquire the Printer Product Line for $10 million in cash, plus up to an additional $10 million in cash based on achieving certain earn out targets.

Our board of directors met again on November 15, 2007 to consider and review the status of various matters, including the engagement of ThinkEquity, the engagement of Vinson & Elkins L.L.P. as special counsel to the company in connection with one or more possible strategic transactions, and discussions with Freescale. Our board of directors met again on November 21, 2007 to approve the engagement of ThinkEquity and to discuss the current status of various strategic alternatives.

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Our board met on November 27, 2007. Management and representatives of ThinkEquity and Vinson & Elkins were present during this meeting. ThinkEquity made a presentation to our board concerning various strategic alternatives under review, including the potential sale of the Printer Product Line, the potential sale of the TV Audio Product Line and the potential sale of the company as a whole. It was the view of our board, management and ThinkEquity that, over the preceding eight months, we had approached most or all of the likely potential buyers of the Printer Product Line known to them. In total we approached 12 potential buyers of the Printer Product Line.

ThinkEquity noted that no unsolicited third parties had approach ThinkEquity or us to express any interest in the acquisition of our integrated circuits for digital media players and other consumer electronics product line, which we refer to as the PSG Product Line, and that no prospective buyers for the PSG Product Line had been approached by us. After considering the views and opinions of management and presentation by ThinkEquity, our board concluded that the strategic alternatives that appeared to have the most promise were:

Our board discussed these alternatives and management and ThinkEquity responded to questions from our board of directors. Our board noted the possibility that we might obtain a higher value selling the product lines separately than would be attainable in a sale of the company as a whole, but our board determined that a sale of the entire company appeared to present greater value for our stockholders because, among other reasons,

However, our board also determined that none of the strategic alternatives should be eliminated at that time, and instructed management and ThinkEquity to continue exploring all three alternatives.

Our board, with input from management and ThinkEquity, identified several potential financial and strategic buyers that would likely have an interest in buying our company and/or its individual operating divisions. Our board did not favor conducting a public auction of our company due to the possible negative effects this process would have on our relationships with customers and employees. Instead, our board determined that we should test the market to determine whether the offer submitted by Freescale or any other potential acquirer represented the highest price that could reasonably be obtained for our company. Our board directed management and ThinkEquity to approach the financial and strategic entities that had been identified by our board.

On November 28 and December 3, 2007, our management met with representatives of Freescale and made presentations to Freescale regarding our customers, products, product roadmap, finance, and legal operations. ThinkEquity held a subsequent meeting with Freescale representatives to discuss valuation and a revised price for the company.

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From November 28 through December 24, 2007, management and ThinkEquity contacted executives or representatives of 14 potential financial and strategic buyers to inform them of our possible interest in exploring the sale of our company as a whole or the sale of each of our three product lines and to inquire whether the contacted party had an interest in pursuing such a transaction. We negotiated and entered into confidentiality and standstill agreements with nine parties who expressed an interest in receiving such information. Throughout this period, we provided financial and other diligence information to these nine parties. As a result of these contacts and discussions, only one party (in addition to Freescale) submitted a written indication of interest to purchase our company as a whole. On November 29, 2007, at our request, ThinkEquity contacted the party that had previously indicated an interest in acquiring our TV Audio Product Line. We began discussions with this potential buyer regarding the sale of our TV Audio Product Line. We terminated these discussions when it became apparent that the buyer would insist on obtaining ownership of certain intellectual property, the loss of which could harm our PSG Product Line. ThinkEquity also initiated an auction process for the sale of the Printer Product Line, resulting in revised offers from four parties and a new written offer from one other party.

During this same period, our board of directors held seven meetings to discuss the status of discussions and the strategic alternatives available to us. At these meetings, our board was informed of the status of contacts and discussions regarding a sale of our company as a whole and the sale of each of our operating divisions. Management also continued to inform our board of directors regarding our operational performance. During this period, our board instructed management to continue discussions with Freescale and to seek to obtain Freescale’s best and final offer for our company as a whole. In addition, our board directed management to continue to pursue a sale of one or all of our individual product lines.

On December 6, 2007, we received a letter from Freescale revising its preliminary non-binding indication of interest by increasing the proposed purchase price to a total consideration of $150 million. This indicated price was 20% higher than Freescale’s earlier indicated price and represented more than a 100% premium over the closing price of our stock on December 5, 2007. Freescale’s revised indication of interest continued to be based on the assumption that the balance sheet of the company remained substantially as set forth in our quarterly report on Form 10 Q for the quarter ended September 30, 2007 and remained subject to the successful completion by Freescale of due diligence on our company as a whole and other conditions. On December 12, 2007, representatives of ThinkEquity reported to Freescale our revised internal projections for the quarters ended December 31, 2007 and March 31, 2008. Mr. Sadana assured ThinkEquity that these projections would be consistent with the balance sheet assumption in Freescale’s indication of interest.

On December 18, 2007, a potential financial buyer submitted a preliminary non-binding indication of interest to acquire our company for a price of $4.00 per share of common stock, approximately the same as the price indicated by Freescale. The proposal was subject to a number of conditions, including completion of due diligence and receipt of financing on terms favorable to the potential buyer. In a meeting on that day, our board of directors concluded that this proposal was less favorable to SigmaTel than the proposal from Freescale for a variety of factors, including that:

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At the November 28, 2007 meeting between our management and representatives of Freescale, Freescale informed management that it desired to enter into a period of exclusivity for continuing diligence and negotiation of definitive agreements. From November 28 to December 24, 2007, Freescale continued to reiterate its desire for an exclusivity arrangement, and indicated that a period of at least 60 days was required to complete its diligence and negotiate definitive agreements. On December 18, 2007, following a discussion of the status of contacts with all parties, our board of directors concluded that entering into an exclusivity arrangement with Freescale was in our best interests because, among other reasons:

Our board of directors directed management to continue discussions with Freescale, to negotiate the terms of an exclusivity arrangement with Freescale that would have a shorter term and to seek other modifications to the form of agreement proposed by Freescale, including the ability to continue discussions with other potential buyers for the sale of our Printer Product Line. Our board directed management to seek to delay the commencement of an exclusivity period until December 24, 2007, and to inform the previously contacted potential bidders that had not yet declined to express an interest that any indications of interest must be submitted on or prior to December 23, 2007. None of such potential bidders submitted an indication of interest by December 23, 2007. On December 24, 2007, we entered into an exclusivity agreement with Freescale that precluded us from having discussions or negotiations with other potential buyers until 5:00 p.m., Central time on January 21, 2008, but did not preclude us from continuing to have discussions for the sale of our Printer Product Line.

From December 24, 2007 until January 20, 2008, Freescale and its representatives conducted due diligence on us, including substantial document and legal review, meetings with our executive officers and discussions with our legal counsel. On January 7 and 8, 2008, Mr. Pompa met with Michel Mayer, the Chief Executive Officer of Freescale, and Henri Richard, Senior Vice President of Sales and Marketing for Freescale, to discuss organizations, key employees and potential integration issues. On January 10, 2008, we received a draft merger agreement from counsel for Freescale. Throughout the following week, our legal counsel and Freescale’s legal counsel exchanged drafts of the merger agreement. On January 17 and 18, 2008 all parties met in Austin to discuss and resolve outstanding issues.

Our board of directors met on January 16 and 20, 2008 to review the proposed merger agreement, discuss significant outstanding issues and direct management regarding the resolution of these issues.

On January 18, 2007, Mr. Pompa met with Mr. Sadana at our headquarters. Mr. Sadana expressed concern within Freescale about the proposed $150 million aggregate purchase price due to a perceived weakness in internal revenue forecasts. Our management met with representatives of Freescale on January 20, 2008 to discuss our internal sales and margin forecasts for 2008 and to review with Freescale their internal budget and underlying assumptions supporting the purchase price. On January 21, 2008, Mr. Sadana informed Mr. Pompa and ThinkEquity that Freescale had reached the conclusion that they could no longer justify a $150 million purchase price for our company based on a number of factors, including Freescale’s concerns that it lacked experience with our China and far east sales channel, deteriorating economic conditions, the recent trend of increases in our operating expenditures and our inability to complete a sale of the Printer Product Line. Mr. Sadana declined to propose a price at which Freescale would consider continuing with the transaction.

Our board of directors met on January 21, 2008. Following an update on the status of discussions with Freescale, our board explored in detail the other strategic alternatives available to us. Our board directed management to continue with their efforts to sell the Printer Product Line, to reengage in discussions with other potential buyers and to reevaluate our 2008 operating budget.

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On January 28, 2008, Freescale informed Mr. Pompa and representatives of ThinkEquity that Freescale would be willing to resume negotiations to acquire the company at an aggregate purchase price of $110 million. We indicated that we were exploring other alternatives, but that our board might entertain a proposal from Freescale if certain outstanding issues under the draft merger agreement were resolved favorably to us, including the removal of closing conditions that we maintain a minimum cash balance and that we obtain certain third party consents prior to closing. Although Freescale did not respond to these issues, they indicated that they might also insist on a closing condition that the sale of the Printer Product Line be completed.

Our board met shortly following this call to discuss the revised proposal from Freescale and the status of other efforts to identify other potential buyers. Our board instructed ThinkEquity to continue to negotiate with Freescale to seek a higher price and eliminate the objectionable closing conditions.

From January 26 through January 30, 2008, representatives of ThinkEquity and Freescale discussed the purchase price and outstanding issues under the draft merger agreement. ThinkEquity and our management also continued discussions with other potential buyers.

On January 30, 2008, our board of directors met to discuss the current status of discussions with Freescale and other parties. Management informed our board that the potential buyers (other than Freescale) that had been contacted had indicated either that their interest would be at a price lower than $110 million or that they were unable to reengage in discussions and complete due diligence within a reasonable timeframe. ThinkEquity informed our board that Freescale had indicated that they would not reengage in discussions on the other outstanding issues until the parties had agreed in principle on a revised purchase price. Our board of directors directed ThinkEquity to respond to Freescale that we would be willing to entertain a $110 million price, but only if the other outstanding issues were resolved favorably to us.

From January 30 through February 1, 2008, the parties negotiated the remaining outstanding issues under the draft merger agreement and reached resolution on these issues. On Friday, February 1, 2008, our board of directors met with our management and representatives of ThinkEquity and Vinson & Elkins. Our board discussed the resolution of outstanding issues under the draft merger agreement. Legal counsel reviewed in detail the terms of the proposed merger agreement with our board. A representative of ThinkEquity then reviewed their financial analysis of the proposed transaction with our board. Following its presentation, ThinkEquity delivered its oral opinion to our board of directors to the effect that, as of that date and based upon and subject to the factors and assumptions discussed with our board of directors and set forth in the form of its written opinion, the price of $3.00 per share in cash to be received by the holders of our outstanding common stock under the terms of the proposed merger was fair to such holders from a financial point of view. ThinkEquity indicated that it was prepared to deliver to our board a written opinion to this effect, in the form previously presented to our board. See “The Merger—Opinion of SigmaTel’s Financial Advisor.” After discussions and deliberation, our board of directors unanimously:

From February 1 through 3, 2008, Freescale continued its due diligence and legal counsel for the company and Freescale had numerous discussions to finalize ancillary documents and to address administrative matters relating to the merger and the public announcement of the merger. Management of SigmaTel and Freescale also

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met during this period to plan external and internal communications regarding the merger and related matters. On Sunday, February 3, 2008, we and Freescale executed the merger agreement. On February 4, 2008, we and Freescale issued separate press releases announcing the merger agreement.

Following the public announcement of the merger agreement, management and representatives of ThinkEquity initiated discussions with 27 potential buyers, including the financial buyer that had submitted a preliminary, non-binding indication of interest. The financial buyer declined the opportunity to engage in discussions with our company based on the current valuation presented in the merger agreement. We conducted meetings and conference calls with the potential buyers that expressed an interest in learning more about our company. As of the date of this proxy statement, no such potential buyers were actively reviewing our company and no indications of interest in excess of $3.00 per share of our common stock had been received.

Reasons for the Merger and Board of Directors’ Recommendation

Reasons for the Merger . The terms of the merger agreement and the proposed merger are the result of arm’s-length negotiations between representatives of SigmaTel and representatives of Freescale. In arriving at its decision to approve and recommend the merger agreement for adoption by SigmaTel’s stockholders, our board of directors considered a number of factors, including, but not limited to, the following:

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In the course of its deliberations, our board of directors also considered, among other things, the following positive factors:

In the course of its deliberations, our board of directors also considered, among other things, the following negative factors:

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The preceding discussion of the information and factors considered by our board of directors is not, and is not intended to be, exhaustive. In light of the variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, our board of directors did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination. In addition, our board of directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of our board of directors, but rather, our board of directors conducted an overall analysis of the factors described above, including discussions with and questioning of our senior management and legal and financial advisors.

Board of Directors Recommendation . After careful consideration, our board of directors has unanimously determined that the merger is fair to, and in the best interests of, SigmaTel and our stockholders, declared the merger agreement advisable and approved the merger agreement and the other transactions contemplated by the merger agreement. ACCORDINGLY, THE BOARD OF DIRECTORS OF SIGMATEL UNANIMOUSLY RECOMMENDS THAT YOU VOTE “ FOR ” ADOPTION OF THE MERGER AGREEMENT.

Opinion of SigmaTel’s Financial Advisor

Our board of directors retained ThinkEquity to act as its financial advisor with respect to the proposed transaction. In connection with that engagement, our board requested that ThinkEquity evaluate the fairness, from a financial point of view, of the consideration to be paid to our stockholders pursuant to the merger agreement. At the meeting of our board of directors on February 1, 2008, ThinkEquity rendered its oral opinion to our board, which opinion was subsequently confirmed in writing, that as of February 3, 2008 and subject to the assumptions made, matters considered and limits of such review set forth in ThinkEquity’s opinion, the consideration to be paid to our stockholders in the proposed merger was fair to such stockholders from a financial point of view.

The full text of ThinkEquity’s written opinion, which sets forth material information relating to such opinion, including the assumptions made, matters considered and qualifications and limitations on the scope of review undertaken by ThinkEquity, is attached to this proxy statement as Appendix B and is incorporated into this document by reference in its entirety. This description of ThinkEquity’s opinion is qualified in its entirety by reference to, and should be reviewed together with, the full text of the opinion. You are urged to read the opinion and consider it carefully.

ThinkEquity’s opinion is addressed to our board of directors and addresses only the fairness, from a financial point of view, of the consideration to be paid to our stockholders in the proposed merger, as of the date of the opinion. The terms of the proposed transaction, including the consideration to be paid to our stockholders in the proposed merger, were determined through negotiations between us and Freescale and were not determined or recommended by ThinkEquity. ThinkEquity’s opinion does not address our underlying business decision to engage in the proposed merger, or the merits of the proposed merger as compared to other transactions or business or financial strategies that may be available to us. In addition, the opinion does not constitute a recommendation to any one of our stockholders as to how such stockholder should vote on the proposed merger.

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In arriving at its opinion, ThinkEquity, among other things:

In connection with its review, ThinkEquity did not assume any responsibility for independent verification of any of the foregoing information, and relied on assurances by our management that they are not aware of any facts that would make such information inaccurate, incomplete or misleading. With respect to the financial forecasts provided to it by, or discussed with, our company, ThinkEquity assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of our management as to the future financial performance of our company. ThinkEquity did not make a physical inspection or independent evaluation or appraisal of any of our properties, assets, facilities or liabilities. In addition, ThinkEquity assumed consummation of the proposed merger in a timely manner in accordance with the terms described in the merger agreement.

ThinkEquity’s opinion was necessarily based upon information available to it, and financial, economic, market and other conditions as they existed and could be evaluated on the date of the opinion.

ThinkEquity’s Financial Analyses

At the meeting of our board of directors held on February 1, 2008, ThinkEquity presented certain financial analyses and delivered its oral opinion. ThinkEquity subsequently delivered its confirming written opinion dated February 3, 2008. The following is a summary of the material financial analyses performed by ThinkEquity in arriving at its opinion.

Research Analyst Stock Price Targets . ThinkEquity reviewed six recent publicly available research analyst reports for our company and observed that the range of the research analyst share price targets was $2.10 to $3.00, with a mean of $2.63 and a median of $2.80. ThinkEquity compared this range to the $3.00 per share consideration to be received by holders of our common stock, and observed that this consideration was above the mean and the median of this range of research analyst share price targets.

Comparable Public Trading Multiples Analysis . ThinkEquity compared selected financial and trading data of our company that it deemed relevant to its analysis of our company with similar data for the following 12 publicly traded semiconductor companies:

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For each of the companies identified above, ThinkEquity calculated various valuation multiples, including the ratio of enterprise value to the reported revenue for the latest 12 months and estimated revenue for the calendar years 2007 and 2008. ThinkEquity calculated the enterprise value as the market capitalization plus debt, preferred stock and minority interests, less cash, cash equivalents and highly liquid investments. To calculate these multiples, ThinkEquity used revenue projections reported by independent research analyst reports and Reuters estimates. For our company, ThinkEquity relied on internal management projections.

ThinkEquity derived the following ranges of multiples of enterprise value:

ThinkEquity observed that the implied multiples of enterprise value to be paid for our company in the proposed merger to SigmaTel’s latest 12 months revenue, its 2007 revenue and its estimated 2008 revenue was 0.3x, which was within the ranges of the comparable public trading multiples, although below the mean and the median.

You should note that no company used in the above analysis is identical to SigmaTel. In evaluating companies identified by ThinkEquity as comparable to SigmaTel, ThinkEquity made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters. Many of these matters are beyond our control, such as the impact of competition on our business and the industry generally, industry growth, and the absence of any material change in our financial condition and prospects, in our industry, or in the financial markets generally. A complete analysis involves complex considerations and judgments concerning differences in financial and operating characteristics of the comparable companies and other factors that could affect the public trading values of such comparable companies.

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Comparable Transaction Analysis . Using publicly available research analyst estimates and other publicly available information, ThinkEquity examined the following transactions, which we refer to as the comparable transactions, in the semiconductor industry that ThinkEquity deemed relevant.

For each comparable transaction, ThinkEquity calculated various valuation multiples, including the ratio of enterprise value to the estimated revenue for the 12 months preceding, and for the 12 months immediately following, the period in which the relevant comparable transaction was announced.

All calculations of multiples paid in the comparable transactions were based on public information available at the time of public announcement of such comparable transaction. ThinkEquity’s analysis did not take into account different market and other conditions during the period in which the comparable transactions occurred.

ThinkEquity derived a range of multiples of enterprise value:

ThinkEquity observed that the implied multiples of enterprise value being paid for SigmaTel in the proposed merger to SigmaTel’s latest 12 months revenue, its 2007 revenue and its estimated 2008 revenue was 0.3x, which was below the mean and the median of the comparable transaction multiples.

You should note that no transaction utilized in the analysis above is identical to the proposed transaction. A complete analysis involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved in these transactions and other factors that could affect the transaction multiples in such transactions to which the proposed transaction is being compared.

Premiums Paid Analysis

ThinkEquity reviewed premiums to stock price paid in the comparable transactions. ThinkEquity reviewed the premiums paid in these comparable transactions over the price of the target stock as reported by FactSet at

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various dates (or for various periods) before the approximate date on which the public became aware of the possibility of the comparable transactions. The following table summarizes the range of premiums paid in the comparable transactions:

ThinkEquity observed that the $3.00 per share to be paid to our stockholders in the proposed merger represented a premium of 75.6% to our closing stock price on January 31, 2008, 85.4% to our stock price over the seven calendar days ending January 31, 2008, and a premium of 42.3% to our stock price over the 30 calendar days ending January 31, 2008. ThinkEquity noted that the one-day and seven-day premiums were above the high ends of the ranges of the one-day and seven-day premiums paid in the comparable transactions, and the 30-day premium was above the mean and median of the ranges of the 30-day premiums paid in the comparable transactions.

In addition, using publicly available information, ThinkEquity examined recent transactions in the technology industry (including transactions involving semiconductor companies) in which the transaction enterprise value was between $50 million and $250 million. ThinkEquity reviewed the premiums paid in these technology transactions over the price of the target stock as reported by CapitalIQ at various dates before the approximate date on which the public became aware of the possibility of such transactions. These transactions were:

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The following table summarizes the range of premiums paid in the selected technology transactions identified above:

ThinkEquity noted that the premium of 75.6% to SigmaTel’s closing stock price on January 31, 2008, of 85.4% to SigmaTel’s stock price during the seven calendar days ending January 31, 2008, and of 42.3% to SigmaTel’s stock price during the 30 calendar days ending January 31, 2008, represented by the $3.00 per share to be received by our stockholders in the proposed merger, were above the median and the mean of the one-day, seven-day and 30-day premiums paid in the technology transactions identified above.

You should note that no transaction utilized in the analyses above is identical to the proposed merger. A complete analysis involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved in these transactions and other factors that could affect the premiums paid in such transactions to which the proposed transaction is being compared.

General

The summary set forth above does not purport to be a complete description of the analyses performed by ThinkEquity in arriving at its opinion. The fact that any specific analysis is referred to in the summary above or in this proxy statement is not meant to indicate that such analysis was given more weight than any other analysis. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. As a result, such an opinion is not readily susceptible to summary description. No company, business or transaction used in ThinkEquity’s analyses as a comparison is identical to SigmaTel or the proposed merger, nor is an evaluation of ThinkEquity’s analyses entirely mathematical. In arriving at its opinion, ThinkEquity did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, ThinkEquity believes that its analyses must be considered as a whole and that selecting portions of its analyses and of the

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factors considered by it, without considering all factors and analyses, would, in the view of ThinkEquity, create an incomplete and misleading view of the analyses underlying its opinion. The analyses performed by ThinkEquity include analyses based upon forecasts of future results, which results may be significantly more or less favorable than those upon which ThinkEquity’s analyses were based. These analyses are inherently subject to uncertainty as a result of numerous factors, including, without limitation, general economic and competitive conditions.

SigmaTel retained ThinkEquity based upon ThinkEquity’s experience and expertise. ThinkEquity is an investment banking firm with substantial experience in transactions similar to the proposed transaction. ThinkEquity, as part of its investment banking business, is regularly engaged in the valuation of businesses in connection with mergers, acquisitions, underwritings, private placements of listed and unlisted securities, financial restructurings and other financial services.

Under the terms of the engagement letter between ThinkEquity and us, ThinkEquity agreed to provide advisory services to us, including an opinion as to the fairness, from a financial point of view, of the consideration to be received pursuant to the proposed merger by our stockholders. Under the terms of the engagement letter, we agreed to pay ThinkEquity a customary fee, a significant portion of which is contingent upon consummation of the proposed merger. In addition, we agreed to indemnify ThinkEquity and its affiliates (and their respective directors, officers, agents, employees and controlling persons) against certain liabilities and expenses, including certain liabilities under the federal securities laws, related to or arising out of ThinkEquity’s engagement.

ThinkEquity and its affiliates may, in the future, provide financial advisory and financing services to us or Freescale and/or either of our or their affiliates and may receive fees for the rendering of such services. Additionally, ThinkEquity may, in the ordinary course of its business, actively trade in the debt, equity and other securities of us or Freescale and our and their respective affiliates for its own account and for the accounts of its customers. Accordingly, ThinkEquity may at any time hold a long or short position in those securities.

Appraisal Rights

If the merger is consummated, holders of our common stock on the date of consummation who demand the appraisal of such holders’ shares and who do not vote in favor of the merger are entitled to certain appraisal rights under Section 262 of the DGCL in connection with the merger. Such holders who perfect their appraisal rights and follow the procedures in the manner prescribed by the DGCL will be entitled to have their shares converted into the right to receive from us such consideration as may be determined by the Court of Chancery, which we refer to as the Court, to be due pursuant to the DGCL. Any stockholder who wishes to demand appraisal rights, or who wishes to preserve his or her right to do so, should review this section carefully, since failure to comply with the procedures set forth in Section 262 of the DGCL will result in the loss of such rights.

REFERENCE IS MADE TO SECTION 262 OF THE DGCL, A COPY OF WHICH IS ATTACHED TO THIS PROXY STATEMENT AS APPENDIX C, FOR A COMPLETE STATEMENT OF THE APPRAISAL RIGHTS OF DISSENTING STOCKHOLDERS. THE FOLLOWING INFORMATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THAT SECTION.

FAILURE TO STRICTLY FOLLOW THE PROCEDURES SET FORTH IN SECTION 262 OF THE DGCL MAY RESULT IN THE LOSS, TERMINATION OR WAIVER OF APPRAISAL RIGHTS. SIGMATEL STOCKHOLDERS WHO VOTE TO ADOPT THE MERGER AGREEMENT WILL NOT HAVE A RIGHT TO HAVE THEIR SHARES OF OUR COMMON STOCK APPRAISED OR OTHERWISE BE ENTITLED TO APPRAISAL RIGHTS. STOCKHOLDERS DESIRING TO EXERCISE THEIR APPRAISAL RIGHTS MUST ALSO SUBMIT A WRITTEN DEMAND FOR PAYMENT OF THE FAIR VALUE OF OUR COMMON STOCK HELD BY THEM TO US PRIOR TO THE VOTE OF THE STOCKHOLDERS ON THE MERGER.

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Each stockholder electing to demand the appraisal of his or her shares shall deliver to us, prior to the taking of a vote on the merger, a written demand for appraisal of his, her or its shares of our common stock. A written demand will be sufficient if it reasonably informs us of the identity of the stockholder and that such stockholder intends to demand the appraisal of his, her or its shares of our common stock. Such written demand should be delivered to c/o SigmaTel, Inc., 1601 South MoPac Expressway, Suite 100, Austin, Texas 78746, Attention: General Counsel.

Within 10 days after the effective date of the merger, the surviving corporation shall notify each stockholder seeking appraisal who has not voted in favor of the merger of the date that the merger became effective.

At any time within 60 days after the effective date of the merger, any stockholder who has delivered a written demand to us shall have the right to withdraw such written demand for appraisal and to accept the terms of the merger agreement. After this period, a stockholder may withdraw his, her or its written demand for appraisal and receive payment for his, her or its shares as provided in the merger agreement only with our consent.

Within 120 days after the effective time of the merger (but not thereafter), any stockholder who has satisfied the requirements of Section 262 may deliver to us a written demand for a statement listing the aggregate number of shares not voted in favor of the merger and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. We, as the surviving corporation in the merger, must mail such written statement to the stockholder no later than the later of 10 days after the stockholder’s request is received by us or 10 days after the latest date for delivery of a demand for appraisal under Section 262.

Within 120 days after the effective date of the merger, the surviving corporation or any electing stockholder who is entitled to appraisal rights may file a petition with the Court demanding a determination of the value of the stock of all such electing stockholders. We have no present intention to file such a petition if demand for appraisal is made. Note that if no petition is filed within the allotted time, then the right of the electing stockholder to an appraisal may cease.

A demand for appraisal must be executed by or for the stockholder of record, fully and correctly, as such stockholder’s name appears on the share certificate. An authorized agent, including an agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner and expressly disclose the fact that, in exercising the demand, he or she is acting as agent for the record owner.

The beneficial owner of shares of stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request a statement listing the number of shares not voted in favor of the merger and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares.

At the hearing on a petition, the Court shall determine the stockholders who are entitled to an appraisal of their shares and may require the stockholders who have demanded appraisal to submit their certificates to the Register in Chancery. Failure to comply may result in a dismissal of the proceedings as to such stockholder. After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger, together with an interest, if any, to be paid on the amount determined to be the fair value. The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving corporation to the stockholders entitled thereto.

SigmaTel stockholders considering seeking appraisal rights under Delaware law should note that they could receive a value for their shares that is more, the same or less than the consideration they would receive pursuant

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to the merger agreement if they did not seek appraisal. The costs of the appraisal proceeding may be determined by the court and taxed against the parties as the court deems equitable under the circumstances. Upon application of an electing stockholder, the court may order that all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all shares that are under these proceedings. SIGMATEL STOCKHOLDERS CONSIDERING EXERCISING APPRAISAL RIGHTS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS WITH REGARD TO THE TAX CONSEQUENCES OF SUCH ACTIONS.

At the effective time of the merger, the shares of our common stock held by an electing stockholder will be canceled, and such stockholder will be entitled to no further rights except the right to receive payment of the fair value of such holder’s shares. However, if the SigmaTel stockholder fails to perfect or withdraws or loses his or her appraisal rights with respect to his or her shares of our common stock, such holder will receive the applicable merger consideration in exchange for his or her common stock under the terms of the merger agreement.

To the extent that there are any inconsistencies between the foregoing summary and Section 262 of the DGCL, the DGCL shall control.

Accounting Treatment

The merger will be accounted for as a “purchase transaction” for financial accounting purposes.

Form of the Merger

Subject to the terms and conditions of the merger agreement and in accordance with Delaware law, at the effective time of the merger, Acquisition Sub, a wholly owned subsidiary of Freescale and a party to the merger agreement, will merge with and into us. We will survive the merger as a wholly owned Delaware subsidiary of Freescale.

Merger Consideration

At the effective time of the merger, each outstanding share of our common stock (other than treasury shares, shares held by Freescale or Acquisition Sub, shares held by any direct or indirect wholly owned subsidiary belonging to us or Freescale and those shares held by stockholders who perfected their appraisal rights as described in “—Appraisal Rights”), will be canceled and automatically converted into the right to receive $3.00 in cash, without interest. Treasury shares, shares of our common stock held by Freescale or Acquisition Sub and shares held by our or Freescale’s wholly owned subsidiaries will be canceled immediately prior to the effective time of the merger.

As of the effective time of the merger, all shares of our common stock will no longer be outstanding and will automatically be canceled and will cease to exist and each holder of a certificate representing any shares of our common stock (other than stockholders who have perfected their appraisal rights) will cease to have any rights as a stockholder, except the right to receive $3.00 per share in cash, without interest. The price of $3.00 per share was determined through arm’s-length negotiations between Freescale and us.

Freescale shall be entitled to deduct and withhold from any consideration payable pursuant to the merger agreement such amounts as Freescale is required to deduct and withhold under the tax laws. See “The Merger—Material United States Federal Income Tax Consequences of the Merger.”

Conversion of Shares; Procedures for Exchange of Certificates

The conversion of our common stock into the right to receive $3.00 per share in cash, without interest, will occur automatically at the effective time of the merger. As soon as reasonably practicable after the effective time

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of the merger, Freescale will cause a letter of transmittal to be mailed to each former SigmaTel stockholder. The letter of transmittal will contain instructions for obtaining cash in exchange for shares of our common stock. You should not return stock certificates with the enclosed proxy.

Upon surrender of a stock certificate representing shares of our common stock, together with a duly completed and validly executed letter of transmittal, and any other documents that may be reasonably required by the paying agent, the holder of the certificate will be entitled to receive from the paying agent, on behalf of Freescale, as promptly as practicable in accordance with the paying agent’s customary procedures, $3.00 in cash for each share represented by the stock certificate, and the corresponding stock certificate will be cancelled. Any holder who surrenders such certificate and duly completes and executes the letter of transmittal will also have waived all appraisal rights under the applicable provisions of the DGCL.

In the event of a transfer of ownership of shares of our common stock that is not registered in our stock transfer records, the merger consideration for shares of our common stock may be paid to a person other than the person in whose name the surrendered certificate is registered if:

If payment is to be made to a person other than the person in whose name the surrendered certificate is registered, the paying agent may require a properly executed stock power with the signature on the stock power and on the letter of transmittal guaranteed by a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program, all as shall be more particularly described in the letter of transmittal.

In the event of a lost, stolen or destroyed certificate representing shares of common stock, the merger consideration for shares of our common stock may be paid to a person upon their making of an affidavit of such fact. The paying agent may further require the owner of the lost, stolen or destroyed certificate to provide a reasonable form of bond as indemnity and may further require such owner to execute an indemnity agreement.

No interest will be paid or accrue on any cash payable upon the surrender of stock certificates representing shares of our common stock. The cash paid upon conversion of shares of our common stock will be issued in full satisfaction of all rights relating to the shares of our common stock.

If any cash deposited with the paying agent is not claimed within 270 days after the effective time of the merger, Freescale may require such cash be returned to Freescale. Thereafter, holders must look to Freescale for payment as general creditors.

Effect on Awards Outstanding under SigmaTel’s Stock Plans

Stock Options . As a result of, but conditioned upon consummation of, the merger, all outstanding options that are not vested immediately prior to the effective time of the merger will be accelerated so that they are fully vested and exercisable 30 days prior to the effective time of the merger. Any outstanding options that are vested prior to the effective time of the merger may be exercised for shares of common stock. Each share of common stock purchased upon such exercise will, at the effective time of the merger, automatically convert into the right to receive $3.00 in cash, without interest and less legally required withholdings and deductions.

In addition, any holder of any outstanding options that are vested will have the opportunity to elect, instead of exercising such options, to have such options cancelled and converted into the right to receive cash, without interest and less legally required withholdings and deductions, in an amount equal to the product of (a) $3.00 less

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the applicable exercise price of such option multiplied by (b) the number of shares of company common stock subject to such options immediately prior to the effective time of the merger.

Any options not exercised or cashed out will terminate at the effective time of the merger.

Restricted Stock . If any of SigmaTel’s restricted stock unit awards are outstanding at the effective time of the merger, they will be accelerated and converted into the right to receive $3.00 in cash, without interest and less legally required withholdings and deductions, for each share of common stock subject to such restricted stock unit award.

Effective Time of the Merger

If the merger is completed, it will become effective upon the filing of a certificate of merger with the Delaware Secretary of State or at such later time as is agreed upon by Freescale and us and specified in the certificate of merger. The filing of the certificate of merger will occur as soon as practicable on or after the closing of the merger, which (if it occurs) will not be later than the second business day after satisfaction or waiver of the conditions to the completion of the merger described in the merger agreement or at such other time as agreed to by Freescale and us.

Delisting and Deregistration of SigmaTel’s Common Stock

If the merger is completed, our common stock will no longer be traded on the Nasdaq Global Select Market and will be deregistered under the Exchange Act.

Material United States Federal Income Tax Consequences of the Merger

General . The following describes the material U.S. federal income tax consequences of the merger that are generally applicable to U.S. holders of SigmaTel common stock. However, this discussion does not address all aspects of taxation that may be relevant to particular U.S. holders in light of their personal investment or tax circumstances or to persons who are subject to special treatment under the U.S. federal income tax laws. In particular, this discussion deals only with U.S. holders that hold shares of SigmaTel common stock as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended. In addition, this discussion does not address the tax treatment of special classes of U.S. holders, such as banks, insurance companies, regulated investment companies, tax-exempt organizations, financial institutions, broker-dealers, persons, if any, holding SigmaTel common stock as “qualified small business stock,” persons holding SigmaTel common stock as part of a hedging, “straddle,” conversion or other integrated transaction, U.S. expatriates, persons whose functional currency is not the U.S. dollar, or persons subject to the alternative minimum tax. This discussion may not be applicable to stockholders who acquired SigmaTel common stock pursuant to the exercise of options or warrants or otherwise as compensation. Furthermore, this discussion does not address any aspect of state, local or foreign tax considerations. We urge you to consult your own tax advisor as to the specific tax consequences of the merger, including the applicable federal, state, local and foreign tax consequences to you of the merger.

As used in this proxy statement, a “U.S. holder” means a beneficial owner of SigmaTel common stock who is for U.S. federal income tax purposes:

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If a partnership holds stock, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. Partners of partnerships that hold our common stock are urged to consult their own tax advisors about the U.S. federal income tax consequences of the merger.

This discussion is based on the Internal Revenue Code of 1986, as amended, applicable Department of Treasury regulations, judicial authority, and administrative rulings and practice, all as of the date of this proxy statement. Future legislative, judicial, or administrative changes or interpretations may adversely affect the accuracy of the statements and conclusions described in this proxy statement. Any changes or interpretations could be applied retroactively and could affect the tax consequences of the merger to U.S. holders.

Consequences of the Merger to U.S. Holders . The receipt of cash in exchange for SigmaTel common stock in the merger or as a result of the exercise of appraisal rights will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder will recognize capital gain or loss equal to the difference between the amount of cash received and the U.S. holder’s tax basis in the SigmaTel common stock exchanged in the merger. Gain or loss will be calculated separately for each block of shares, with each block of shares consisting of shares acquired at the same cost in a single transaction. Such gain or loss will be long-term capital gain or loss if the U.S. holder held the SigmaTel common stock for more than one year as of the effective time of the merger. Certain limitations apply to the deductibility of capital losses by U.S. holders.

Federal Income Tax Backup Withholding . A U.S. holder may be subject to backup withholding at the rate of 28% with respect to a payment of cash in the merger unless the U.S. holder:

To prevent backup withholding and possible penalties, each U.S. holder should complete and sign the substitute Form W-9 included in the letter of transmittal which will be sent to U.S. holders if the merger is completed. Any amount withheld under these rules may be credited against the U.S. holder’s U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service.

We strongly urge each U.S. holder to consult its own tax advisor as to the specific tax consequences of the merger, including the applicability and effect of U.S. Federal, state, local and foreign income and other tax laws, in view of the U.S. holder’s particular circumstances.

Regulatory Matters

United States Antitrust . Under the HSR Act and the rules that have been promulgated under the Act, acquisitions of a sufficient size may not be consummated unless information has been furnished to the Antitrust Division of the U.S. Department of Justice and to the Federal Trade Commission and the applicable waiting period has expired or been terminated early by the antitrust authorities.

The merger of SigmaTel with Acquisition Sub is subject to the notification requirements under the HSR Act. Under the HSR Act, the transaction cannot be consummated until the expiration or early termination of the waiting period following the filing of Hart-Scott-Rodino Notification and Report Forms by Freescale and us. Freescale and SigmaTel expect to file their notification forms and to trigger the commencement of the HSR waiting period in the near future.

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The Antitrust Division of the Department of Justice or the Federal Trade Commission may challenge the merger on antitrust grounds either before or after expiration or termination of the waiting period. Accordingly, at any time before or after the completion of the merger, either the Antitrust Division of the Department of Justice or the Federal Trade Commission could take action under the antitrust laws as it deems necessary or desirable in the public interest, or another person could take action under the antitrust laws, including seeking to enjoin the merger. Additionally, at any time before or after the completion of the merger, notwithstanding that the applicable waiting period has expired or ended, any state could take action under the antitrust laws as it deems necessary or desirable in the public interest. We cannot be sure that a challenge to the merger will not be made or that, if a challenge is made, that we will prevail.

Foreign Antitrust . Notifications and antitrust reviews may be required in one or more foreign jurisdictions. The parties are currently evaluating the need for such notifications.

General . It is possible that any of the governmental entities, including but not limited to foreign governmental entities, with which filings are made may seek, as conditions for granting approval of the merger, various regulatory concessions. We cannot assure you that Freescale or SigmaTel will be able to satisfy or comply with these conditions or be able to cause their respective subsidiaries to satisfy or comply with these conditions. We also cannot assure you that the required regulatory approvals will be obtained within the time frame contemplated by us or on terms that will be satisfactory to Freescale and SigmaTel.

Continuation of SigmaTel’s Employee Benefits

The merger agreement provides that, if Freescale requests, SigmaTel will terminate all of its compensation, insurance and other employee benefit plans, programs or arrangements effective immediately prior to the effective time of the merger. However, Freescale has agreed that from the effective time of the merger until the first anniversary of the effective time of the merger, it will provide the employees of SigmaTel and its subsidiaries who remain employed with SigmaTel with substantially similar types and levels of retirement and welfare benefits (other than equity based benefits) as those provided to similarly situated employees of Freescale.

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THE MERGER AGREEMENT

The following summary of the merger agreement is qualified in its entirety by reference to the complete text of the merger agreement, which is incorporated by reference and a composite copy of which is attached as Annex A to this proxy statement. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this summary or any other information contained in this proxy statement. We urge you to read the merger agreement carefully and in its entirety, as well as this proxy statement, before making any decisions regarding the merger.

The merger agreement has been included with this proxy statement to provide you additional information regarding its terms. The merger agreement sets forth the contractual rights of Freescale and us but is not intended to be a source of factual, business or operational information about Freescale and us. That kind of information can be found elsewhere in this proxy statement and in the other filings we make with the SEC, which are available as described in “Where You Can Find More Information.”

As a stockholder, you are not a third party beneficiary of the merger agreement and therefore you may not directly enforce any of its terms or conditions. The parties’ representations, warranties and covenants were made as of specific dates and only for purposes of the merger agreement and are subject to important exceptions and limitations, including a contractual standard of materiality different from that generally relevant to investors. In addition, the representations and warranties may have been included in the merger agreement for the purpose of allocating risk between Freescale and us, rather than to establish matters as facts. Certain of the representations, warranties and covenants in the merger agreement are qualified by information we filed with the SEC prior to the date of the merger agreement, as well as by disclosure schedules we delivered to Freescale prior to signing the merger agreement. The disclosure schedules have not been made public because, among other reasons, they include confidential or proprietary information. We believe, however, that all information material to a stockholder’s decision to approve the merger is included or incorporated by reference in this proxy statement.

Furthermore, you should not rely on the covenants in the merger agreement as actual limitations on our business because we may take certain actions that are either expressly permitted in the confidential disclosure letters to the merger agreement or as otherwise consented to by Freescale, which may be given without prior notice to the public.

The Merger . The merger agreement provides for the merger of Acquisition Sub with and into SigmaTel upon the terms, and subject to the conditions, of the merger agreement. As the surviving corporation, SigmaTel will continue to exist following the merger. Upon consummation of the merger, the directors of Acquisition Sub will be the initial directors of the surviving corporation and the officers of SigmaTel will be the initial officers of the surviving corporation. All surviving corporation officers will hold their positions until their successors are elected or appointed and qualified or until the earlier of their death, resignation or removal.

Effective Time . If the merger is completed, it will become effective upon the filing of a certificate of merger with the Delaware Secretary of State or at such later time as is agreed upon by Freescale and us and specified in the certificate of merger. The filing of the certificate of merger will occur as soon as practicable on or after the closing of the merger, which (if it occurs) will not be later than the second business day after satisfaction or waiver of the conditions to the completion of the merger described in the merger agreement or at such other time as agreed to by Freescale and us.

Merger Consideration . Each share of our common stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive $3.00 in cash, without interest, except for:

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After the merger is effective, each holder of a certificate representing any shares of common stock (other than shares for which appraisal rights have been properly demanded and perfected) will no longer have any rights with respect to the shares, except for the right to receive the merger consideration.

Treatment of Options and Other Awards

Stock Options . As a result of, but conditioned upon consummation of, the merger, all outstanding options that are not vested immediately prior to the effective time of the merger will be accelerated so that they are fully vested and exercisable 30 days prior to the effective time of the merger. Any outstanding options that are vested prior to the effective time of the merger may be exercised for shares of common stock. Each share of common stock purchased upon such exercise will, at the effective time of the merger, automatically convert into the right to receive $3.00 in cash, without interest and less legally required withholdings and deductions.

In addition, any holder of any outstanding options that are vested will have the opportunity to elect, instead of exercising such options, to have such options cancelled and converted into the right to receive cash, without interest and less legally required withholdings and deductions, in an amount equal to the product of (a) $3.00, less the applicable exercise price of such option, multiplied by (b) the number of shares of company common stock subject to such options immediately prior to the effective time of the merger.

Any options not exercised or cashed out will terminate at the effective time of the merger.

Restricted Stock . If any of SigmaTel’s restricted stock unit awards are outstanding at the effective time of the merger, they will be accelerated and converted into the right to receive $3.00 in cash, without interest and less legally required withholdings and deductions, for each share of common stock subject to such restricted stock unit award.

Payment for the Shares of Common Stock . Computershare Investor Services LLC or another bank or trust company designated by Freescale and reasonably acceptable to SigmaTel shall act as the paying agent and shall make payment of the merger consideration as described above. Promptly after the effective time of the merger, Freescale will deposit in trust with the paying agent cash sufficient to pay the merger consideration to the stockholders and holders of options and restricted stock units.

As soon as reasonably practicable (and within 5 business days) after the effective time of the merger, Freescale will cause a letter of transmittal to be mailed to each former SigmaTel stockholder. The letter of transmittal will contain instructions for obtaining cash in exchange for shares of our common stock. You should not return stock certificates with the enclosed proxy.

Upon surrender of a stock certificate representing shares of our common stock, together with a completed and validly executed letter of transmittal, and any other documents that may be reasonably required by the paying agent, the holder of the certificate will be entitled to receive from the paying agent, on behalf of Freescale, as promptly as practicable in accordance with the paying agent’s customary procedures, $3.00 in cash for each share represented by the stock certificate, and the corresponding stock certificate will be cancelled.

In the event of a lost, stolen or destroyed certificate representing shares of common stock, the merger consideration for shares of our common stock may be paid to a person upon their making of an affidavit of such fact. The paying agent may further require the owner of the lost, stolen or destroyed certificate to provide a reasonable form of bond as indemnity and may further require such owner to execute an indemnity agreement.

No interest will be paid or accrue on any cash payable upon the surrender of stock certificates representing shares of our common stock. The cash paid upon conversion of shares of our common stock will be issued in full satisfaction of all rights relating to the shares of our common stock.

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If any cash deposited with the paying agent is not claimed within 270 days after the effective time of the merger, Freescale may require such cash be returned to Freescale. Thereafter, holders must look to Freescale for payment as general creditors.

Representations and Warranties . In the merger agreement, we made customary representations and warranties to Freescale relating to, among other things:

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In the merger agreement, Freescale and Acquisition Sub made customary representations and warranties to us relating to, among other things:

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Material Adverse Effect . Several of our representations and warranties contained in the merger agreement are qualified by reference to whether the item in question is reasonably likely to have a “company material adverse effect.” The merger agreement provides that a “company material adverse effect” means any state of facts, change, event, circumstance or effect, that individually or in the aggregate, is materially adverse to (a) the financial condition, properties, assets (including intangible assets), liabilities, business or results of operations of us or our subsidiaries, taken as a whole, or (b) our ability to perform our obligations under this Agreement and timely consummate the transactions contemplated thereby. However, none of the following will be deemed, by itself or in combination, to constitute, and none of the following will be taken into account in determining whether there has been or will be a company material adverse effect:

Several of the representations and warranties of Freescale contained in the merger agreement are qualified by reference to whether the item in question is reasonably likely to have a “parent material adverse effect.” The merger agreement provides that a “parent material adverse effect” means any state of facts, change, event, circumstance or effect that, individually or in the aggregate, is materially adverse to the ability of Freescale to perform its obligations under the merger agreement and timely consummate the transactions contemplated by the merger agreement.

Conduct of Business Pending the Merger . Under the merger agreement, we have agreed that prior to the earlier of the termination of the merger agreement or the effective time of the merger, subject to certain exceptions, unless we obtain Freescale’s written consent we will and will cause each of our subsidiaries to:

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In addition, we have agreed that, among other things and subject to certain exceptions, neither we nor any of our subsidiaries may, without Freescale’s written consent (which consent may not be unreasonably withheld, delayed or conditioned):

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Reasonable Efforts . Except as otherwise limited by the terms of the merger agreement, we and Freescale have each agreed to use our commercially reasonable efforts to effectuate the transactions contemplated by the merger agreement and to fulfill and cause to be fulfilled the conditions to closing under the merger agreement. We have further agreed to:

We agreed to prepare and file with the SEC this proxy statement for use in connection with the solicitation of proxies from our stockholders in favor of the adoption of the merger agreement and approval of the merger and to use our reasonable best efforts to cause such proxy statement to be cleared by the SEC as promptly as practicable. We have further agreed to use reasonable best efforts to solicit from our stockholders proxies in favor of the adoption of the merger agreement and the approval of the merger, and to take all other action required by the rules of the Nasdaq Global Select Market, the laws of Delaware and all other applicable laws to secure the vote or consent of our stockholders to effect the merger.

Conditions to the Completion of the Merger . Each party’s obligation to effect the merger is subject to the satisfaction of various conditions, which include the following:

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We will not be obligated to effect the merger unless the following conditions are satisfied or waived:

Freescale will not be obligated to effect the merger unless the following conditions are satisfied or waived:

Restrictions on Solicitation of Other Offers . The merger agreement provides that, until 11:59 p.m., Central time, on March 4, 2008, we are permitted to:

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From and after 11:59 p.m., Central time, on March 4, 2008, we have agreed not to:

Prior to the effective time of the merger, we have agreed not to:

In addition, as of 11:59 p.m., Central time, on March 4, 2008, we have agreed:

unless the takeover proposal offered by such person and related to such action meets the requirements of the following paragraph. We may also continue discussions after this time with parties who have made a takeover proposal prior to such time, or with whom we are having ongoing discussions at such time if, in each case, we have not breached the non-solicitation provisions of the merger agreement and our board of directors determines in good faith after consultation with its financial advisor and outside legal counsel that such continued discussions are reasonably likely to result in a superior proposal and that such actions are necessary to comply with the directors’ fiduciary duties under applicable law.

Notwithstanding these restrictions, at any time prior to the approval of the merger agreement by our stockholders, we are permitted to engage in discussions or negotiations with, or provide any non-public information to, any party to the extent that:

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In such cases, we will not, and will not allow our representatives to, disclose any non-public information to such person without entering into a confidentiality agreement that contains provisions that are no less favorable in the aggregate to us than those contained in the confidentiality agreement entered into with Freescale. Also, we will promptly provide to Freescale any non-public information concerning us or our subsidiaries provided to such other person which was not previously provided to Freescale.

We will promptly (within 24 hours) notify Freescale in the event we receive a takeover proposal, or request or inquiry that is reasonably likely to relate to a takeover proposal, including any requests for non-public information relating to us or our subsidiaries, and will keep Freescale informed on a daily basis as to the status and details of any such takeover proposal. We will also provide Freescale with at least 48 hours notice of any meeting of our board of directors to consider a takeover proposal or any related notice or inquiry and at least three business days notice of any meeting of our board of directors to recommend a superior proposal to the stockholders (including drafts of definitive documents relating to such superior proposal).

A “takeover proposal” means any inquiry, proposal or offer from any person or group of persons other than Freescale or its affiliates relating to or any indication of interest in any transaction or series of related transactions involving (i) a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction involving the company and any of its subsidiaries, (ii) any direct or indirect acquisition of 15% or more of the total voting power or of any class of equity securities of the Company or any of its subsidiaries, or (iii) any direct or indirect acquisition of 15% or more of the consolidated total assets of the Company and its subsidiaries.

A “superior proposal” means a bona fide written takeover proposal to acquire all or substantially all our assets or all of our outstanding voting securities not made in violation of the non-solicitation obligations under the merger agreement, that our board of directors in good faith determines (after consultation with our financial advisors and outside legal counsel) is (i) financially more favorable to our stockholders than the transactions contemplated by the merger agreement and (ii) reasonably likely to be consummated without delay, taking into account all legal, financial, regulatory, timing, approvals and consent requirements, any financing conditions or contingencies and other aspects of such proposal and the third party making such proposal.

Recommendation/Withdrawal/Termination in Connection with a Superior Proposal . The merger agreement requires us to call, give notice of, convene and hold a meeting of our stockholders to adopt the merger agreement. In this regard, our board of directors has unanimously resolved to recommend that our stockholders adopt the merger agreement. However, our board of directors may, at any time prior to the adoption of the merger agreement by our stockholders, withhold, withdraw, modify or qualify its recommendation that the stockholders of SigmaTel adopt the merger agreement or approve, recommend or otherwise declare advisable a superior proposal if we receive a bona fide written takeover proposal that our board of directors determines in good faith, after consultation with our financial advisors and outside legal counsel:

To the extent our board proposes to take the foregoing actions with regard to its recommendation prior to a vote by the stockholders to approve the merger agreement, it may only do so after:

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We agreed not to submit any takeover proposal to our stockholders prior to termination of the merger agreement.

Termination . The merger agreement may be terminated at any time prior to the effective time of the merger under certain circumstances, including:

Termination Fee . The merger agreement provides that regardless of whether the merger is consummated, all fees and expenses incurred by the parties shall be borne by the party incurring such expenses.

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The merger agreement requires that we pay Freescale a termination fee of $4,785,000 if, among other things, Freescale terminates the merger agreement as a result of:

The merger agreement also requires that we pay Freescale a termination fee of $4,785,000 if:

in any such case, within 12 months of such termination we consummate or enter into a definitive agreement to consummate a takeover with a party and pursuant to a takeover proposal that was publicly known prior to such termination.

The merger agreement also requires that we pay Freescale a termination fee if we terminate the merger agreement pursuant to a determination by our board of directors, in good faith after consultation with our outside legal counsel, that they are required by their fiduciary duties to our stockholders to terminate the merger agreement in connection with entering into a definitive agreement with respect to a takeover proposal that qualifies as a superior proposal. This termination fee will be $4,785,000 unless the superior proposal was initially received by us on or prior to March 4, 2008, and was not withdrawn or materially modified after such date, in which case the termination fee will be $3,025,000.

If either Freescale or we terminate the merger agreement as a result of a breach, not cured within 10 business days, of the other party of any of its representations, warranties, covenants and other agreements contained in the merger agreement such that any of the conditions to the completion of the merger would not be satisfied, the non-terminating party is required to reimburse the terminating party for its reasonable out-of-pocket expenses incurred in connection with the merger agreement.

Continuation of SigmaTel’s Employee Benefits. The merger agreement provides that, if Freescale requests, SigmaTel will terminate all of its compensation, insurance and other employee benefit plans, programs or arrangements effective immediately prior to the effective time of the merger. However, Freescale has agreed that from the effective time of the merger until the first anniversary of the effective time of the merger, it will provide the employees of SigmaTel and its subsidiaries who remain employed with SigmaTel with substantially similar types and levels of retirement and welfare benefits (other than equity based benefits) as those provided to similarly situated employees of Freescale.

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Indemnification and Insurance . The merger agreement provides that from and after the effective time of the merger, Freescale will and will cause the surviving corporation and its subsidiaries, to fulfill and honor the obligations of SigmaTel pursuant to any indemnification agreements between us and our subsidiaries and our current and former directors and officers in effect as of the date of the merger agreement. The certificate of incorporation and bylaws of the surviving corporation and its subsidiaries will contain provisions with respect to exculpation and indemnification that are at least as favorable to our subsidiaries and our directors and officers as those contained in our charter documents as in effect on the date of the merger agreement, and such provisions will not be amended, repealed or otherwise modified for a period of six years from the effective time of the merger in a manner adverse to such directors and officers unless required by applicable law.

The merger agreement further provides that Freescale shall, and shall cause the surviving corporation, to maintain, for six years after the effective time of the merger and for a price not to exceed a stated amount set forth in the merger agreement, directors’ and officers’ liability insurance coverage covering those persons who were, as of the date of the merger agreement, covered by our directors’ and officers’ liability insurance policies, on terms no less favorable than those in effect on the date of the merger agreement, and covering all periods prior to the effective time of the merger.

We may, prior to the effective time of the merger, purchase a directors’ and officers’ liability insurance tail or runoff insurance program, in form and substance reasonably satisfactory to Freescale, effective for six years from the effective date of the merger, and have Freescale and the surviving corporation maintain such policy. Such policy shall be in lieu of the policy discussed above and shall have a premium capped at an amount discussed in the merger agreement.

Amendment; Extension and Waiver . Our board of directors and the board of directors of Freescale may amend the merger agreement at any time by the execution of a written agreement.

At any time prior to the effective time of the merger, the parties may:

Any extensions or waivers must be in writing and signed by the party granting such extension or waiver.

Specific Performance . The parties are entitled to specific performance of the terms of the merger agreement, including an injunction or injunctions to prevent breaches of the merger agreement and to enforce the terms of the merger agreement in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware. This remedy is in addition to any other remedy to which a party is entitled.

Expenses . Subject to certain payments triggered under the termination provisions, regardless of whether the merger is consummated, all fees and expenses incurred by the parties in connection with the merger agreement shall paid by the party incurring such expenses.

SigmaTel Certificate of Incorporation . As of the effective time of the merger, our certificate of incorporation will be amended and restated to read the same as the certificate of incorporation attached as an exhibit to the merger agreement. At the effective time of the merger the name of the surviving corporation of the merger will be “SigmaTel, Inc.”

SigmaTel Bylaws . As of the effective time of the merger, our bylaws will be amended and restated to read the same as the bylaws of Acquisition Sub.

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