Corel Corporation Announces Settlement Proposal in Pennsylvania Class Action - Company Introduces New Interim CFO.

Business Editors

OTTAWA, Canada--(BUSINESS WIRE)--June 16, 2003

Corel Corporation (Nasdaq:CORL)(TSX:COR) announced today that it has reached an agreement-in-principle to settle all claims in a class-action lawsuit against the Company and former president, CEO and chairman, Michael Cowpland, pending in the Eastern District of Pennsylvania. The settlement will not have a material effect on Corel's financial condition and will be funded through the Company's existing insurance benefits.

"Although we remain committed to our belief that the claims are without merit, we feel that it is in the best interest of the Company and its shareholders to end the expense and distraction of the lawsuit and focus our energy on executing our long-term strategic goals," said Derek Burney, President and CEO of Corel Corporation.

The claims were asserted on behalf of a class of persons who purchased Corel stock on the NASDAQ stock exchange between December 7, 1999 and March 20, 2000.

The agreement-in-principle is subject to a number of conditions. Once the appropriate documents have been signed by the parties, preliminary approval will be sought from the Court. If granted, a notice will be sent to the class and an opportunity will be provided for class members to opt out of the class and the settlement. Those who do not opt out may formally object to the settlement at a judicial hearing. The Court will then determine whether to grant final judicial approval to the settlement. The terms of the settlement and the procedures which shareholders may follow will be set forth in a notice to be sent to the class.

Also today, Corel provided an update on the status of Mr. Martin Catto, Executive Vice President of Finance and Interim Chief Financial Officer. As first announced on September 30th, 2002, Mr. Catto joined Corel on an interim basis for a period of six months to one year. As a result of personal commitments, Mr. Catto will be returning to his home in New York where, after a brief hiatus, he will resume his consulting career.

Mr. Joel Price, Corel's Vice President of Finance, will assume the role of interim Chief Financial Officer pending the completion of an executive search to fill the role on a permanent basis. Mr. Price, who is a candidate for this position, will also have an opportunity to apply.

To access a biography of Mr. Price, please visit Corel's Web site at www.corel.com/executivebios.

About Corel Corporation

Founded in 1985, Corel Corporation (www.corel.com) is a leading technology company specializing in content creation tools, business process management and XML-enabled enterprise solutions. The company's goal is to give consumers and enterprise customers the ability to create, exchange and instantly interact with visual content that is always relevant, accurate and available. With its headquarters in Ottawa, Canada, Corel's common stock trades on the Nasdaq Stock Market under the symbol CORL and on the Toronto Stock Exchange under the symbol COR.

This press release contains forward-looking statements as defined by the United States Private Securities Litigation Reform Act of 1995, involving the company's expectations about future financial results and other matters, including the consummation and judicial approval of the above-described settlement. These statements reflect management's current belief as to the future course of the settlement negotiations and approval process, and management's current forecast of certain aspects of the company's future business. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results of operations to differ materially from historical results or current expectations. The words "plan", "expect", "believe", "intend", "anticipate", "forecast", "target", "estimate" and similar expressions identify forward-looking statements. Risk factors include the inability to conclude negotiations on terms satisfactory to the Company and its insurers, judicial reaction to the settlement, an unexpectedly large number of opt outs, the number and quality of objections to the settlement, as well as shifts in customer demand, product shipments schedules, product mix, competitive products and pricing, technological shifts and other variables. Readers are referred to Corel's most recent reports filed with the Securities and Exchange Commission for a more complete discussion of the other risks and uncertainties. The factors underlying forecasts are dynamic and subject to change. As a result, forecasts speak only as of the date they are given and do not necessarily reflect the company's outlook at any other point in time. The company does not undertake to update or review these forward-looking statements.

Corel and the Corel logo are trademarks or registered trademarks of Corel Corporation and/or its subsidiaries. All other product, font and company names and logos are trademarks or registered trademarks of their respective companies.