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



    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:

For further information: Financial Analysts only: Martin Faucher,
Vice-President and Chief Financial Officer, (418) 521-3784; Investors: Francis
Trudeau, Director, Acquisitions and Investor Relations, (514) 282-4633;
Medias: Sylvie Isabelle, Optimum Public Relations, (418) 521-3184; Source:
Cossette Inc., www.cossette.com

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COSSETTE INC.

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