According to the Company’s FORM 10-Q for the quarterly period ended September 27, 2003, in May 2000, various plaintiffs filed a class action lawsuit in the U.S. District Court for the Northern District of California, alleging violations of the Securities Exchange Act of 1934 (Exchange Act) and Rule 14d-10 of the Exchange Act in connection with Intel’s acquisition of DSP Communications, Inc. The complaint alleged that Intel and CWC (Intel’s wholly owned subsidiary at the time) agreed to pay certain DSP executives additional consideration of $15.6 million not offered or paid to other stockholders. The alleged purpose of this payment to the insiders was to obtain DSP insiders’ endorsement of Intel’s tender offer in violation of the anti-discrimination provision of Section 14(d)(7) and Rule 14d-10. The plaintiffs sought unspecified damages for the class, and unspecified costs and expenses. In July 2002, the District Court granted Intel’s motion for summary judgment, but in October 2002, the District Court vacated the summary judgment. In January 2003, the parties reached a settlement agreement, which was reviewed and approved by the court in June 2003.

By the Notice of Pendency and Proposed Settlement of Class Action, the proposed settlement creates a fund in the amount of $4,500,000 in cash.

A class action has been commenced on behalf of the public shareholders of DSP Communications, Inc. (NYSE: DSP) alleging that on October 14, 1999, the directors of DSP entered into a merger agreement in violation of their fiduciary duties by, among other things, failing to take steps to maximize shareholder value in connection with the sale of DSP to Intel Corporation ("Intel") and ignoring and/or failing to take steps to protect against the directors' own conflicts of interest.