CARAVELLE and SOPRA

Questions and answers

Does CARAVELLE support the spin-off operation between Sopra Group and Axway ?

Yes it does. CARAVELLE originated the spin-off project between Sopra Group and Axway. Sopra is a leading consulting and IT services company, well established in France. Axway is a middle office sofware editor with international prospects. Their activities differ and, although Sopra enabled Axway’s initial growth, the spin-off has become necessary to their respective development.

Why was CARAVELLE asked to commit to holding its shares for a 3-year period ?

Sopra has favoured a spin-off operation under the « favourable tax regime». This regime allows for a deferred taxation on Axway shares received by shareholders holding less than 5% of the share capital. As a condition, the Bureau des Agréments (the French authority responsible for granting the favourable tax regime) has required the 3 main shareholders to commit to holding their Sopra and Axway shares for a 3-year period.

Why did CARAVELLE refuse to commit to holding its shares post-operation?

CARAVELLE is a French diversified group with long-term perspectives. It is not an investment fund. CARAVELLE holds a substantial part of Sopra’s share capital. However, as a responsible shareholder and sensible investor, it cannot make commitments without certain conditions.

Axway needs a stable shareholding structure to secure its development for at least 5 years. CARAVELLE therefore wanted to establish a shareholder’s agreement with Sopra GMT to ensure this stability. It also wanted the Board of Directors to play a real role towards the Management, as in modern IT companies, which implies communication and sufficient information.

Pierre Pasquier is an outstanding boss and manager for Sopra, very active and unquestioned.  He reached 75 last August. And the increase of the age limit associated with its function of Chief Executive Officer, which caused the resignation of the Deputy Managing Director, is not an appropriate answer to management issues. Pierre Pasquier’s succession is still unprepared. No reasonable shareholder can make commitment to holding its shares for several years without visibility on Pierre Pasquier’s succession.

Are there other options to spin-off Axway ?

CARAVELLE favours the « favourable tax regime » option if the conditions mentioned above are met. Other options can be explored. Axway shares could be distributed as dividends, possibly along with a share buy-back program, or could be proposed in whole or part as payment for a capital reduction.

Why did CARAVELLE reinforce its holding in Sopra ?

So that CARAVELLE may weigh on important topics concerning Sopra’s future, such as the spin-off operation between Sopra Group and Axway, the succession of Pierre Pasquier or the evolution towards a modern corporate governance. Until now, those who have insisted on addressing these subjects have been kept at a distance.

The Chairman and Chief Executive Officer has to deal with these issues together with its shareholders and Board of Directors, in the interest of its employees and shareholders.

CARAVELLE will then be a stable and involved shareholder, as it has always been.

Paris, September 28th, 2010

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