Cossette announces the implementation of an executive retention program and updates on its strategic review process

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KOS (TSX)QUEBEC CITY, Aug. 27 /CNW Telbec/ - Cossette announces that its Board of Directors, having received a favourable recommendation from its Special Committee with the assistance of its legal advisor and the financial advisor of the Company, has approved (Messrs. Claude Lessard and Pierre Delagrave abstaining) the implementation of a retention program for executives, effective immediately.
The decision to implement a retention program was made in the context of the unsolicited and non-binding proposal by Cosmos Capital to acquire all the shares of the Company not already owned by its members and the decision of the Board of Directors of the Company to publicly and actively solicit proposals from third parties interested in the Company. The retention program is designed to facilitate retention of executives, address their concerns at this time of uncertainty and maintain stability.
The retention program includes customary change of control agreements with executives providing for severance payments in case of a change of control of the Company and the termination of employment of executives under certain specific circumstances. It also includes retention bonuses for executives (except for Messrs. Claude Lessard and Pierre Delagrave) totalling approximately $3,500,000. The retention bonuses will be payable six months after the change of control of the Company. If the Board of Directors ends its strategic review process, it may also decide, depending on the circumstances, to pay the retention bonuses. This program will be rolled out in the next few days.
"The Special Committee is very satisfied with the retention program Cossette is implementing. In the new context like the one Cossette is facing, it is imperative to reassure our clients by retaining our people in order to maintain our high level of service. This measure also constitutes an important factor for maximising value for shareholders", commented Mr. Jean Lavigueur, Chairman of the Special Committee.
Update on Strategic Review Process
Since the August 14th announcement that the Board of Directors of the Company would actively solicit proposals from third parties interested in acquiring the Company, BMO Capital Markets, the financial advisor of the Company, has broadly solicited expressions of interest from third parties in respect of a potential acquisition and has held encouraging dialogues with them. Cossette has executed confidentiality and standstill agreements with a number of these parties and provided them with access to an extensive electronic data room and the opportunity to conduct a thorough due diligence process on the Company.
The Company cautions shareholders that there is no assurance whether the Company will receive a definitive proposal with respect to a potential acquisition as a result of this process. Also, even if a definitive proposal is received, there is no assurance that such a proposal will be recommended by the Special Committee or the Board of Directors or that such a proposal will be implemented.
Cossette Inc. offers a full range of leading-edge communication services to clients of all sizes, including some of the most prestigious brands in the world. A customer-driven organization built around highly specialized business units, Cossette also offers Convergent Communications(TM), a unique working method that brings added value to the client by integrating various services offered by the Group, including strategic planning and research, advertising, media buying and channel planning, sales promotion, direct response, database and direct marketing, customer relationship management, interactive marketing and technology solutions, public relations, organizational communication and change management, sponsorship and alliance marketing, branding and design, ethnic marketing, business-to-business communications (B2B practices) and print and video production. Cossette has approximately 1,485 employees and offices in Quebec City, Montreal, Toronto, Vancouver, Halifax, New York, Irvine, Los Angeles, London and Shanghai.
For further information
Financial Analysts only: Martin Faucher, Vice-President and Chief Financial Officer, (418) 521-3784Investors: Francis Trudeau, Director, Acquisitions and Investor Relations, (514) 282-4633Medias: Sylvie Isabelle, Optimum Public Relations, (418) 521-3184Source: Cossette Inc., www.cossette.com