OTTAWA & DALLAS--July 16, 2001--Corel Corporation and Micrografx, Inc. today announced that they have signed a definitive agreement whereby Corel will acquire Micrografx in a stock-for-stock transaction to be accounted for as a purchase transaction. The transaction is subject to regulatory approval and approval by Micrografx's shareholders. This acquisition represents yet another important milestone in Corel's corporate strategy which is designed to position the company for long-term growth and profitability. As announced in January 2001, Corel's growth strategy provides a framework for the company's future that is being unfolded in three phases or "horizons''. For the first horizon, Corel is focused on two goals: strengthening its position in the graphics market and effectively managing its business applications division to upgrade its large base of existing users. In horizon two, Corel will more fully embrace the power of the Web by developing advanced Web-based functionality within existing and new product lines. For horizon three, Corel will develop new technology to target fast-growing emerging markets, such as wireless and Web-based services. Corel is able to advance key aspects of each horizon as a result of this acquisition. "This is clearly a strategic opportunity for both Corel and Micrografx, for three main reasons,'' said Derek Burney, president and CEO of Corel Corporation. "First, by adding these technologies to our arsenal of award-winning applications, we will broaden and enhance our current portfolio and tailor our products to the distinct customer segments we've identified. The technical illustration market is an important customer segment we're targeting and we look forward to combining Micrografx's demonstrated leadership in this area with our own strengths to better serve our customers. "Second, in addition to adding value to our graphics lineup, we will leverage the innovative emerging technologies that Micrografx has developed to accelerate the execution of our horizon two and three objectives,'' added Mr. Burney. "These technologies will be key ingredients in our development of new offerings which will enable our customers to create graphics-rich content that can be output easily and simultaneously to multiple channels, including the Web. "Finally, by devoting greater resources to Micrografx's Enterprise Process Management (EPM) division, we will become a major force in, what is for us, a new and lucrative market, while at the same time utilizing those technologies to broaden our portfolio of creative product applications.'' "We are very pleased to be combining our resources with Corel's,'' said Jim Hopkins, chairman and CEO at Micrografx, Inc. "Supported by Corel's development expertise, market strengths, international reputation and strong financial position, we will be able to move forward with some exciting new business plans we've developed for our existing and emerging technologies.'' Corel and Micrografx share synergies which, when the two operations are combined, are expected to generate new revenue opportunities and cost efficiencies from which its collective worldwide customer base will benefit. Based on preliminary estimates, after the realization of anticipated synergies and excluding any one-time integration costs, this acquisition is expected to be accretive to cash flow and cash earnings per share in the fourth quarter of Corel's fiscal 2001 and thereafter. Over the next several weeks, Corel and Micrografx will work together on a comprehensive plan outlining how best to integrate the two companies. Following the closing of the deal, which is expected to occur in Corel's fourth quarter, they will announce further details related to the integration plan. Exchange terms: The deal is structured to provide Micrografx shareholders with a transaction value equivalent to one times Micrografx's fiscal 2001 annual revenues, subject to certain adjustments, totaling approximately US $32.0 million ("Transaction Value''), or approximately US $2.00 per Micrografx share. In the event that Corel's common share price at closing is less than US $2.90, Corel will have the option to pay the Transaction Value in cash. In the event that Corel's common share price at closing is equal to or greater than US $2.90, Corel will issue common stock with a then-current value equivalent to one-half of the Transaction Value at the closing, the number of shares to be issued being determined by Corel's common stock price at closing. In addition, Corel will issue participation rights for the remaining one-half Transaction Value. The value under these rights will be paid to the holders at the first anniversary of the closing date. In the event that Corel's common stock price at that time is equal to or less than the price at closing, Corel will pay in cash the remaining one-half Transaction Value. If Corel's common stock price at that time is higher than the price at closing, Corel will issue common stock with a then-current value equivalent to the remaining one-half Transaction Value plus, on a per share basis, 18 per cent of any increase in the price of Corel common stock in the 12-month period following closing. Corel expects that the maximum number of shares that it will issue is approximately 11.0 million.