Information memorandum on the Company’s share repurchase programme to be voted by the shareholders on 27 April 2007

Pompey, France 04/18/2007 09:00:00 AM

The purpose of this information memorandum is to provide an overview of the objectives and salient features of the share repurchase programme implemented by the Company pursuant to the authority granted to the Company’s Board of Directors by the shareholders during their meeting of 20 April 2006, as well as on estimated consequences for the Company’s shareholders.

1. Introduction

Global Graphics SA (the “Company”) is the parent company of the Global Graphics group of companies, a worldwide leader in the development and supply of digital printing software solutions (notably Page Description Languages, such as PostScript® and PDF), and electronic document management applications (particularly those based on PDF and XPS documents).

The Company’s shares are admitted to trading on Euronext Brussels under the ticker GLOG and the ISIN number FR0004152221.
On the issue date of this information memorandum, the Company’s share capital consists of 10,272,531 ordinary shares, of par value of € 0.40 each.


2. Objectives of the share repurchase programme and utilisation of shares acquired through this programme

The objectives pursued by the Company in implementing this share repurchase programme are the following (by order of declining priority):


3. Status of the current share repurchase programme

On 20 April 2006, the Company’s shareholders granted the Company’s Board of Directors with appropriate authority to implement a share repurchase programme to effect the purchase of a maximum of one million of the 10,198,375 ordinary shares then forming the share capital of the Company (i.e. up to 9.80% of the Company’s share capital at that date).

Pursuant to such authorisation, between 26 September 2006 and 30 March 2007, the Company repurchased a total of 68,670 shares for a total cost of € 690,243, or an average purchase price of € 10.05 a share.

As at 31 March 2007 as well as at the date of this information memorandum, the Company holds 68,670 of its own shares, or 0.67% of its share capital.

4. Allocation of own shares held by the Company to each of the programme’s objectives

All of the 68,670 own shares repurchased by the Company as part of its share repurchased programme have been allocated to the first objective of the programme, i.e. meeting any obligations arising from the Company’s share option programmes or other allocations of shares to employees and directors of the Company.

5. Legal background

5.1 Legal and regulatory background

This share repurchase programme complies with applicable provisions of Law n°98-546 of 2 July 1998 which related to miscellaneous provisions in the economic and financial areas, and with the Commission Regulation (EC) No. 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of 28 January 2003 of the European Parliament and of the Council regarding exemptions for share repurchase programmes and stabilisation of financial instruments, which entered into force on 13 October 2004.

5.2 Resolutions passed by the Company’s shareholders

The implementation of the share repurchase programme is subject to approval by the Company’s shareholders at the occasion of the annual meeting scheduled on 27 April 2007 (see section 5.2.1 below), being noted that the shareholders granted the Company’s Board of Directors with appropriate authority to decrease the amount of the Company’s share capital through the cancellation of the Company’s own shares acquired through the Company’s share repurchase programme (the text of such resolution is being included in section 5.2.2 below).

5.2.1 Share repurchase programme

The shareholders will be invited to vote the following resolution in their ordinary meeting of 27 April 2007:

“Seventh resolution - Share repurchase programme

That the shareholders, having heard the Board of Directors’ report, and in accordance with article L.225-209 and subsequent articles of the French Commerce Code, voted that the Board of Directors of the Company be granted with appropriate authority to effect the repurchase of ordinary shares of the Company, on one or several occasions, at times it shall consider appropriate within the next eighteen months, up to a limit of one million shares.

That such authorisation would supersede that granted to the Board of Directors by the shareholders on 20 April 2006.

That such purchase of shares shall pursue the following objectives:

That such purchases of shares may be done by all means, including through the purchase of blocks of shares, and at any times deemed appropriate by the Board of Directors, including when a take-over bid or a public offer exchange of shares is in progress, if allowed by applicable laws and market regulations. It is however not the intention of the Company to effect any repurchases of its own shares by using derivative financial instruments.

That the maximum price at which shares may be repurchased be set at € 15.00 a share. In case of a transaction affecting the number of shares (including a stock split, a reverse stock split, or the allocation of ordinary shares at no cost to the recipient of such grants of shares), the above-mentioned limit price will be adjusted by a factor equal to the number of outstanding shares before giving effect to the contemplated transaction divided by the number of outstanding shares after giving effect to the contemplated transaction.

That, accordingly, the maximum amount of the share repurchase programme be set at € 15,000,000.

That the Board of Directors of the Company be granted with appropriate authority to effect the above-mentioned transactions, decide all precise terms and conditions of the share repurchase programme, and enter into any agreement, take any measure and conduct any formality in relation with this share repurchase programme, as deemed appropriate”.


5.2.2 Cancellation of own shares acquired through the share repurchase programme

In their extraordinary meeting of 20 April 2006, the shareholders granted the Company’s Board of Directors with appropriate authority to decrease the amount of the Company’s share capital through the cancellation of the Company’s own shares acquired as a result of the utilisation of the share repurchase programme referred to in the preceding paragraph, by casting an unanimous vote on the following resolution:

“Fourteenth resolution - Authorisation to be given to the Board of Directors to decrease the Company’s share capital as a result of the utilisation of the share repurchase programme

That the shareholders, having heard the Board of Directors’ report and the auditors’ report thereon, voted that:
  1. The Board of Directors be granted with appropriate authority to decide, as deemed appropriate, in one or several instances, and up to a maximum number of one million shares, to cancel own shares held by the Company as a result of purchases made in accordance with the provisions of article L.225-209 of the French Commerce Code, and decrease the amount of the Company’s share capital in due proportion, in accordance with applicable legal and regulatory provisions;
  2. Such authorisation be granted for a twenty-four month period starting from the date of the shareholders’ meeting;
  3. The Company’s Board of Directors be granted with appropriate authority to utilise such authorisation, have share purchases effected, decrease the amount of the Company’s share capital and amend the Company’s articles of association accordingly, take any measure and conduct any formalities required pursuant to this resolution.”

6. Financial information relating to the share repurchase programme

6.1 Maximum fraction of the Company’s share capital and maximum number of shares which may be purchased

In their meeting on 27 April 2007, the shareholders will be proposed to grant the Company’s Board of Directors with the authority to repurchase a maximum number of one million of the Company’s own shares, i.e. a maximum of 9.73% of the total number of ordinary shares which were outstanding on the date of issue of this information memorandum.

As the Company holds 68,670 of its own shares at the date of its information memorandum, the maximum number of shares which may be repurchased as part of the Company’s share repurchase programme is 931,330 shares, or 9.07% of the Company’s share capital.

6.2 Maximum price at which shares may be repurchased

In their meeting on 27 April 2007, the shareholders will be proposed to set the maximum price at which shares may be repurchased pursuant to this programme at € 15.00 a share.
In case of a transaction affecting the number of outstanding shares, including a stock split or a reverse stock split, the above-mentioned price limit will be adjusted by a factor equal to the number of outstanding shares before the effect of the contemplated transaction divided by the number of outstanding shares after the effect of the contemplated transaction.

6.3 Maximum amount of the share repurchase programme

The maximum amount of cash resources which would be allotted to this share repurchase programme would be € 15 million, assuming all shares are purchased at the maximum purchase price of € 15.00 a share.

In any case, pursuant to article L.225-210 of the French Commerce Code, the maximum amount of share repurchases which could be made pursuant to this programme may not be greater than the amount of reserves which are available for distribution to the shareholders (thus excluding the legal reserve).
On the date of issue of this information memorandum, the total amount of reserves which are available for such distribution was € 30,595,790, before giving effect to the allocation of the net statutory profit for the year ended 31 December 2006 amounting to € 372,446.

6.4 Duration of the share repurchase programme

Pending approval by the Company’s shareholders in their meeting on 27 April 2007, share repurchases made pursuant to this programme may be effected within the eighteen months starting from the date the shareholders granted the relevant authority to the Company’s Board of Directors, i.e. up to 26 October 2008.

6.5 Financing of the share repurchase programme

It is the Company’s intent to purchase its own shares using its available net cash resources, up to the limit of available distributable reserves. However, the Company reserves the right to consider financing the purchase of its own shares through proceeds from new borrowings, as deemed appropriate.

6.6 Other information relating to the share repurchase programme

6.6.1 Utilisation of derivative financial instruments

It is not the intention of the Company to effect any repurchases of its own shares by using derivative financial instruments.

6.6.2 Purchase of shares out of Euronext’s order book

To ensure an equal treatment of all the Company’s shareholders, it not the intention of the Company to effect any repurchases of its own shares out of Euronext’s order book.

7. Tax implications of share repurchase programmes

7.1 For the Company’s shareholders

As the purchase of shares by the Company from a shareholder is likely to be subject to a different tax regime depending on whether the shareholder selling the shares is a natural or a legal person, and whether a French tax resident or not, we advise our shareholders to further discuss the potential tax implications of their contribution of shares to the Company’s share repurchase programme with their usual tax advisor.

7.2 For the Company

With regards to their subsequent cancellation, the repurchase by the Company of its own shares has no effect on the Company’s taxable result because the amounts paid to the Company’s shareholders as a result of the repurchase of its own shares cannot be considered as a tax deductible item.

The repurchase by the Company of its own shares without their subsequent cancellation is likely to have an effect on the Company’s taxable result should these shares be subsequently disposed of at a price which would be different from the price at which they were repurchased by the Company (for instance, in the case of a grant of shares at no cost to the recipient), up to the amount of the gain or loss made on such share disposal.

8. Notification of any significant change made to the provisions of this information memorandum

Any significant change made to any provisions of this information memorandum will be disseminated to the general public in accordance with applicable legal and regulatory provisions, notably through :