CASH BONUS INCENTIVE PLAN

1.

Stimulate employees to work individually and as teams to meet objectives consistent with enhancing shareholder value.

2.

Facilitate the Company’s ability to attract, retain, and motivate top technical, managerial, and executive talent.

3.

Ensure that employees are held accountable, and appropriately rewarded, for both organizational and individual performance.

1.

ANNUAL SALARY — The regular base salary of a Participant at the time of calculation of the incentive award payment, but excluding any incentive compensation, commissions, over-time payments, retroactive payments not affecting the base salary or applicable to the current year, and any other payments of compensation of any kind.

2.

BOARD — The Board of Directors of the Company.

3.

BUSINESS PLAN — The Company’s Annual Business Plan.

4.

BUSINESS UNIT – The business units defined by the Company from time to time to reflect its major product lines.

5.

COMMITTEE — The Compensation Committee of the Board of Directors as from time to time appointed or constituted by the Board of Directors.

6.

COMPANY — Semtech Corporation and those subsidiaries of which it owns directly or indirectly 50% or more of the voting stock or other equity interests.

7.

EMPLOYEE — Any person who is employed by the Company and who is paid a salary as distinguished from an hourly wage. The term shall be deemed to include any person who was employed by the Company during all or any part of the year with respect to which a bonus pool has been established by the Committee but shall not include any employee who, during any part of a Plan Year, was represented by a collective bargaining agent or whose salary is paid by a third party.

8.

MANAGER – the manager of a Business Unit or, with respect to a Participant who is not a member of a Business Unit, the relevant corporate function head. Managers generally hold the position of Vice President.

9.

PARTICIPANT — Any Employee selected to participate in the Plan in accordance with its terms.

10.

PLAN — This Semtech Corporation Cash Bonus Incentive Program.

11.

PLAN YEAR — The Company’s fiscal year.

12.

SECTION 16 GROUP – The Chief Executive Officer and other officers and employees who have been determined by the Board to be statutory insiders subject to the requirements of Section 16 of the Securities Exchange Act of 1934, as amended.

13.

SUPERVISOR – A Participant’s immediate supervisor.

1.

As early as feasible at the beginning of each Plan Year, the Chief Executive Officer shall recommend to the Committee for its review and approval an amount to be established as a bonus pool for the Plan Year. The proposed pool amount shall be calculated as the sum of (a) the target bonus awards (calculated in accordance with Exhibit A hereto) for employees recommended to be Participants for the Plan Year and (b) an estimate of target awards for positions that may be filled during the Plan Year (new hires who may become Participants on a pro rata basis).

2.

To assist the Committee in making a determination with respect to the Chief Executive Officer’s recommendation, the proposed bonus pool shall also be expressed as a percentage of pre-tax profit, as set forth in the Business Plan. However, for this purpose such pre-tax profit shall be computed prior to the deduction of incentive compensation payments to be paid under the Plan and may exclude anticipated extraordinary items.

3.

Incentive compensation payments will be made in accordance with Article V. In accordance with Exhibit A hereto, the aggregate incentive compensation payments made under the Plan for the Plan Year may exceed the bonus pool in certain circumstances, but in no event will the aggregate incentive compensation payments under the Plan for a Plan Year exceed 120% of the bonus pool established for that Plan Year.

4.

The bonus pool does not represent a segregated fund of assets. Participants have no claim on any particular group of Company assets, either before or after incentive compensation payments are determined for the Plan Year. Any incentive compensation awarded under the Plan will be paid from the general assets of the Company.

1.

CALCULATION OF PAYMENTS — Incentive compensation payments to Participants shall be calculated in accordance with the formula and procedures set forth in Exhibit A hereto. All calculations will be made under the supervision of the Chief Financial Officer. All payments shall be in cash.

2.

INDIVIDUAL PERFORMANCE FACTORS – A Participant’s Individual Performance Factor that is factored into the incentive payment calculation shall be based on achievement of performance goals, as provided in Exhibit A. A

Participant’s Individual Performance Factor shall be determined by the Participant’s Supervisor. The Individual Performance Factor of the Chief Executive Officer shall be determined by the Committee and the Committee shall review the Individual Performance Factors of other Participants who are members of the Section 16 Group. The Committee may, at the request of any member of the Committee, review the Individual Performance Factors of any other Participant or groups of Participants. The Committee may make adjustments in any such performance factors as it considers appropriate.

3.

ORGANIZATIONAL PERFORMANCE FACTORS – After the end of the Plan Year, the performance of the Company and each Business Unit shall be rated against the Business Plan to determine the Organizational Performance Factors that are factored into the incentive payment calculation, all as provided in Exhibit A hereto.

4.

METHOD OF PAYMENT –

A.

The incentive compensation payment determined for each Participant with respect to each Plan Year shall be paid to such Participant in cash within two and one-half months after the close of the Plan Year, provided however, that payments will not be made until the Company’s registered independent public accountant has completed its audit of the Company’s financial statements for the Plan Year. Notwithstanding any awards authorized by the Committee for the Plan Year, the Committee may, in its sole discretion, cancel or adjust downward the unpaid awards for any or all Participants based on the results of the audit.

B.

Incentive compensation payments shall be paid net of any taxes or other amounts required to be withheld.

5.

RIGHTS OF PARTICIPANTS

A.

Selection of an individual as a Participant for one Plan Year does not mean that the individual will be selected to participate in future Plan Years.

B.

The establishment of a bonus pool is subject to the discretion of the Committee. No Participant shall have any right to require the Committee to establish a bonus pool for any Plan Year. No Participant shall have any vested interest or property right or any share in any amounts that may be established as a bonus pool.

C.

All payments are subject to the discretion of the Committee. No Participant shall have any right to require the Committee to authorize any incentive compensation payments under the Plan. Even though Participant performance may be rated periodically during the Plan Year, all incentive compensation payments are subject to calculation as set forth in Exhibit A and the discretion of the Committee. The mere existence of periodic performance assessments does not give the Participant any basis for claiming any incentive compensation under this Plan on a pro rata basis during the Plan Year or otherwise.

D.

Payments properly made under the Plan and distributed to Participants shall not be recoverable from the Participant by the Company.

E.

Nothing in this Plan gives a Participant the right to remain in the employ of the Company. Except to the extent explicitly provided otherwise in a then effective written employment contract executed by Participant and the Company, Participant is an at will employee whose employment may be terminated without liability at any time for any reason.

A.

AWARD FORMULA

1.

It is expected that the business and individual objectives established for this Plan will be accomplished in accordance with the Company’s Code of Conduct. A Participant’s commitment and adherence to the Company’s ethical standards will be considered in determining awards under this Plan.

2.

Incentive compensation payments will be calculated by multiplying the Participant’s Annual Salary by the applicable “Target” of the Participant’s position (as defined in B) to establish the Participant’s “Target Award”

3.

For Participants who are members of a Business Unit - The Participant’s Target Award will be multiplied by the Individual Performance Factor (as defined in C). The resulting award will then be multiplied by the sum of 70% of the relevant Business Unit Performance Factor (as defined in D) and 30% of the Corporate Performance Factor (as defined in D).

4.

For the Chief Executive Officer and Participants who are members of a corporate functional group rather than a Business Unit - The Participant’s Target Award will be multiplied by the Individual Performance Factor (as defined in C). The resulting award will then be multiplied by the Corporate Performance Factor (as defined in D).

5.