As recorded in the docket dated October 16, 2003, on January 8, 2003, the Court entered the Certified Copy of the Order from the Ninth Circuit Court of Appeals dismissing the plaintiff’s appeal.

According to Network Associates, Inc.’s Form 10-Q for the quarterly period ended June 30, 2001, Defendants filed a motion to dismiss on June 6, 2000. The Court granted in part and dismissed in part the motion to dismiss. The Court allowed only plaintiffs’ claims related to In-Process Research and Development to go forward and shortened the class period to April 6, 1999. Plaintiffs filed a First Amended Consolidated Complaint, and defendants filed an answer. In February 2001, the Company settled the class action. The amount of the settlement is $30 million and is being funded principally by the Company’s Directors and Officers insurance carriers. On May 21, 2001, the Court issued a Final Judgment approving the settlement agreement and dismissing with prejudice all claims asserted by the class. On June 19, 2001, a member of the class filed a Notice of Appeal in the District Court for Northern District of California, notifying the parties that he would appeal to the Ninth Circuit Court of Appeals to overturn the Court’s Final Judgment.

The complaint charges that during the Class Period the defendants, including NETA, violated the federal securities laws by misrepresenting and/or failing to disclose material information regarding Networks Associates' financial results and business prospects, giving the false impression that the Company's finances were accurately reported, that its business was healthy, its prospects good, and that it would earn in the range of $2.12 per share in 1999. These false statements caused the price of the Company's stock to be artificially inflated during the entire Class Period to levels as high as $67-11/16 per share and consistently above $30. The Individual Defendants, all of them senior executive officers of the Company, are also alleged to have taken advantage of such inflated stock prices and their insider knowledge of undisclosed adverse information, by selling almost $33 million of their Networks Associates stock during the Class Period. When Networks Associates belatedly revealed, among other things, that an SEC investigation had uncovered improper accounting practices and that its first quarter 1999 earnings would be substantially less than previously indicated by the defendants and the First Call analyst consensus, the price of Networks Associates shares plummeted, and investors who purchased NETA were damaged thereby. Subsequently, the stock fell precipitously again when full year estimates were sharply reduced by NETA.

A similar purported class action was filed in the U.S. District Court for the Western District of Washington.