TRUE NORTH COMMUNICATIONS, DEF 14A, 1995-04-13

TRUE NORTH COMMUNICATIONS
DEF 14A, 1995-04-13
ADVERTISING AGENCIES

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

TRUE NORTH COMMUNICATIONS INC.
.............................................................................
(Name of Registrant as Specified In Its Charter)

..............................................................................
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).

[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:
.......................................................................

2) Aggregate number of securities to which transaction applies:
.......................................................................

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
.......................................................................

4) Proposed maximum aggregate value of transaction:
.......................................................................

* Set forth the amount on which the filing fee is calculated and state how
it was determined.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.

1) Amount Previously Paid:
......................................................

2) Form, Schedule or Registration Statement No.:
......................................................

3) Filing Party:
......................................................

4) Date Filed:
......................................................

<PAGE>

[LOGO OF TRUE NORTH COMMUNICATIONS INC.]

NOTICE OF 1995 ANNUAL
MEETING OF SHAREHOLDERS AND
PROXY STATEMENT

Dear Shareholder:

True North Communications Inc., the new form of global communications
company we are building together, is rising on a firm foundation of financial
and creative strength.

In 1994, our Company achieved its third record year of sustained growth
momentum--now with 12 consecutive quarters of earnings growth.

This success is a tribute to our employees--our largest single shareholder
group--whose performance last year enhanced return for all shareholders:

. Net income reached an all-time high of $30.3 million.

. Earnings per share were $1.34, a 17% increase over 1993; the recent two-
for-one stock split underscored this strong financial progress.

. Worldwide billings grew to $7 billion and FCB once again ranked number
one in America.

. The creative product of all True North agencies generated a dynamic
impact in the marketplace and won widespread public acclaim.

The Proxy Statement contains details on our upcoming Annual Meeting. You'll
also find an enclosed proxy card to register your vote on important business
items.

Thank you for being a part of the True North family. We are staunchly
committed to enhancing your stake in our continued success.

Best regards,

/s/ Bruce Mason
Bruce Mason
<PAGE>

[LOGO OF TRUE NORTH COMMUNICATIONS INC.]

--------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 1995

April 10, 1995

Dear Stockholder;

You are cordially invited to attend the annual meeting of stockholders of
True North Communications Inc. The 1995 annual meeting will be held at The
Mandarin Oriental Hotel, The Embassy Room--Second Floor, 222 Sansome Street,
San Francisco, California on May 17, 1995, at 1:00 P.M., local time, for the
following purposes:

1. To elect 13 directors to serve until the next annual meeting of
stockholders.

2. To approve the appointment of Arthur Andersen & Co. as auditors for
1995.

3. To consider and act upon any other matters that may properly come before
the meeting and any adjournments thereof.

The close of business on March 31, 1995 has been fixed as the record date for
determination of stockholders entitled to notice of and to vote at the annual
meeting and any adjournments thereof. A complete list of such stockholders will
be filed at least ten days before the meeting at the offices of the Company at
101 East Erie, Chicago, Illinois and will be available for inspection by any
stockholder.

Whether or not you plan to attend the meeting, please mark and then sign,
date and return the enclosed proxy card in the accompanying envelope so as to
assure the largest possible representation at the meeting. If you attend the
meeting, your proxy will not be counted with respect to any matter upon which
you vote in person.

/s/ Dale F. Perona
Dale F. Perona
Secretary

STOCKHOLDERS ARE URGED TO MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND MAIL
IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.

<PAGE>

TRUE NORTH COMMUNICATIONS INC.

APRIL 10, 1995

--------------

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 17, 1995

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of True North Communications Inc. (the
"Company") for the annual meeting (the "Annual Meeting") of stockholders to be
held at The Mandarin Oriental Hotel, The Embassy Room--Second Floor, 222
Sansome Street, San Francisco, California, on Wednesday, May 17, 1995, at 1:00
P.M., local time, and at any adjournments thereof, for the purposes set forth
in the Notice of Annual Meeting of Stockholders. The Company's principal
executive offices are located at FCB Center, 101 East Erie Street, Chicago,
Illinois 60611-2897.

Any proxy given pursuant to such solicitation may be revoked by the person
giving it any time prior to its exercise. All properly executed, unrevoked
proxies which are received will be voted as specified. Proxies will be voted in
favor of each proposal set forth in the notice of meeting unless contrary
directions are given. You may revoke your proxy at any time prior to the Annual
Meeting by delivering written notice to the Secretary of the Company, by
submitting a subsequently dated proxy or by attending the Annual Meeting and
voting in person.

A copy of the Annual Report of the Company for the year ended December 31,
1994, including financial statements, is being mailed with this Proxy Statement
to all stockholders entitled to notice of and to vote at the Annual Meeting.
The Annual Report does not constitute a part of the proxy solicitation
material. This Proxy Statement and the accompanying form of proxy were first
sent or given to stockholders on or about April 10, 1995.

VOTING SECURITIES

Only stockholders of record at the close of business on March 31, 1995, the
record date fixed by the Board of Directors, are entitled to vote at the Annual
Meeting. On that date, the Company had outstanding 22,968,202 shares of common
stock (excluding 521,748 shares held in the treasury). Each stockholder is
entitled to one vote in person or by proxy for each share of common stock owned
by such stockholder on the above date. A majority of the outstanding shares of
common stock (excluding shares held in the treasury) constitute a quorum.

A proxy may indicate that all or a portion of the shares represented by that
proxy are not being voted by the stockholder with respect to a particular
matter. Any non-voted shares will be considered present for the purpose of
determining the presence of a quorum.

The following table shows each person or group of persons known to the
management of the Company to be the beneficial owner of more than five percent
of the outstanding shares of the Company's common stock as of the record date:

<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OF CLASS
---------------- ----------------------- --------
<S> <C> <C>
Publicis Communication
133 Champs Elysees
75008 Paris, France........................ 4,658,000 Shares 20.28%
GeoCapital Corporation
767 Fifth Avenue
New York, New York 10153................... 2,033,200 Shares(1) 8.68%
David L. Babson & Co., Inc.
One Memorial Drive
Cambridge, Massachusetts 02142-1300........ 1,376,090 Shares(2) 5.87%
</TABLE>
- - ----------------
(1) Based upon information furnished by GeoCapital Corporation in a Schedule
13G filed with the Securities and Exchange Commission on February 9, 1995.
Shares adjusted for two for one stock split.
(2) Based upon information furnished by David L. Babson & Co., Inc. in a
Schedule 13G filed with the Securities and Exchange Commission on February
10, 1995. Shares adjusted for two for one stock split.

PROPOSAL 1--ELECTION OF DIRECTORS

The Board of Directors intends that the shares represented by proxies will
(unless authority to do so is withheld) be voted in favor of the election as
directors of the nominees set forth in the following table to serve until the
next annual meeting of stockholders and until their successors are duly elected
and qualified. Directors are elected by a plurality of the votes cast. The
thirteen nominees receiving the highest number of votes will be elected. If any
nominee is unable to accept nomination or election, which the Board of
Directors has no reason to anticipate, the shares represented by the proxies
will be voted for the election of such other person as the Board of Directors
may recommend.

2
<PAGE>

<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED
DIRECTOR MARCH 31,
NAME, AGE AND PRINCIPAL OCCUPATION SINCE 1995(1)
---------------------------------- -------- ------------
<S> <C> <C>
JACK BALOUSEK (49)................................... 1989 124,834
President and Chief Operating Officer of the Company;
other senior executive positions with the Company or
subsidiaries for more than five years.
MAURICE LEVY (53).................................... 1989 44,000(2)
Chairman of Publicis S.A., Publicis Communication,
Publicis.FCB Europe and Publicis Conseil; other se-
nior executive positions with those companies or
subsidiaries for more than five years.
GREGORY W. BLAINE (46)............................... 1990 62,942
Executive Vice President, Director of Global Operat-
ing Systems of the Company; other senior executive
positions with the Company or subsidiaries for more
than five years.
LAUREL CUTLER (68)................................... 1990 44,422
Retired; Formerly Director of Global Marketing Plan-
ning; other senior executive positions with the Com-
pany or subsidiaries for more than five years; Di-
rector of Hannaford Brothers Co., Quaker State Corp.
TERRY M. ASHWILL (50)................................ 1991 61,206
Executive Vice President, Chief Financial Officer of
the Company; Chief Financial Officer of Carlson Com-
panies, Inc. 1988-1991; Senior Vice President, Cor-
porate Controller and other financial positions with
Ryder System, Inc., 1974-1988.
J. BRENDAN RYAN (52)................................. 1994 36,959
President and Chief Executive Officer, FCB/Leber Katz
Partners; Executive Vice President and other execu-
tive positions with Ogilvy & Mather Advertising
1977-1991.
RICHARD S. BRADDOCK (53)............................. 1994 1,667
Partner, Clayton, Dubilier & Rice, Inc.; Chief Execu-
tive Officer of MEDCO 1993; President and other ex-
ecutive positions with Citicorp 1973-1992.
All directors and executive officers as a group (15). 758,947(3)
</TABLE>
- - ----------------
(1) Includes shares of the Company's common stock which certain nominees have
the right to acquire under the Company's Stock Option Plan or Outside
Director Stock Option Plan prior to May 30, 1995 as follows: Mr. Mason,
80,800 shares; Mr. Scott, 11,333 shares; Mr. Vehslage, 10,567 shares; Mr.
Minow, 9,933 shares; Mr. Schreyer, 3,867 shares; Mr. Wiggins, 39,920
shares; Mr. Balousek, 102,640 shares; Mr. Levy, 44,000 shares; Mr. Blaine,
19,000 shares; Ms. Cutler, 23,360 shares; Mr. Ashwill, 49,560 shares; Mr.
Ryan, 29,720 shares; and Mr. Braddock, 1,667 shares. Each of the
individuals named in the table has sole voting and investment power with
respect to all beneficially owned shares. Except for the shares of the
Company's common stock Mr. Levy may be deemed to beneficially own, no
director, executive officer or director nominee beneficially owns as much
as 1% of the Company's outstanding common stock.

(2) Mr. Levy is a director and senior officer of Publicis S.A. ("PSA"),
Publicis Communication ("PC"), and Publicis.FCB B.V. ("PBV"). The Company
initiated an arbitration proceeding seeking a determination that PSA, PC,
and PBV breached various contractual obligations owed to the Company under
the 1989 "Alliance Agreements" among the Company, PSA, PC, and PBV.
Detailed information about the Company's claims in the arbitration are set
forth in its Form 8-K filing with the Securities and Exchange Commission
("SEC") made on April 4, 1995.

3
<PAGE>

The Form 8-K was filed in response to PSA and PC's Schedule 13D amendment
filed with the SEC on March 31, 1995 setting forth in detail various claims
and counterclaims which it intends to pursue in the arbitration.

As a director and senior officer of PSA, PC, and PBV, Mr. Levy participated
in the actions of PSA, PC, and PBV that are the subject of the arbitration
and is continuing to participate in their activities, including their
defense in the arbitration. In view of the pending arbitration and other
issues between the Company and PSA, PC, and PBV, disagreements have arisen
concerning the potential conflict between Mr. Levy's role and duties as a
director of the Company and his management role with PSA, PC, and PBV. The
Company is addressing whether or not Mr. Levy, by his participation in the
action of PSA, PC and PBV described above, has breached his fiduciary
duties (including the duty of loyalty) as a director of the Company and is
prepared to take action based on that determination. (Mr. Levy has asserted
that he believes other directors of the Company have breached their
fiduciary duties to the Company by, among other things, causing the Company
to pursue its contractual right to commence the arbitration.) The Company
is addressing this potential conflict through various means, meanwhile
limiting Mr. Levy's participation and involvement in discussions of the
Company's Board that relate directly to these matters.

The Alliance Agreements require the Company's management to recommend to the
Nominating Committee of the Company's Board for nomination as a director a
person designated by PC, and management complied with this obligation by
recommending PC's designee, Mr. Levy. The Company's Board of Directors
recommends that the stockholders re-elect Mr. Levy as a director because the
effect of re-electing Mr. Levy is to preserve various obligations of PSA and
its affiliates under the Alliance Agreements relating to share ownership,
voting and reciprocal Board representation in Europe. Mr. Levy may be deemed
to be the beneficial owner of the 4,658,000 Company shares owned by Publicis
Communication to the extent he has authority to vote such shares.

(3) Equivalent to 3.3% of the Company's outstanding common stock.

The Company's Board of Directors met four times during 1994. Employee
directors receive no compensation for their services on the Board of Directors
or Committees except that they may become eligible for a benefit under the
Company's Directors Part-Time Employment Agreement. Under this Agreement an
employee director between the ages 55 to 65 can continue employment on a part-
time basis and receive part-time salary payments for five years up to the
attainment of age 65. Part-time salary is determined as 45% of the highest five
year average compensation (salary plus variable incentive compensation) during
the prior 10 years of full time employment, reduced by 1/30 for each year
service less than 30 years.

Directors who are not employees of the Company or any of its subsidiaries are
paid $23,000 annually for their services. A per diem allowance of $2,000 is
paid to non-employee directors for attendance at board meetings, meetings of
committees of the board, work on special assignments or requested attendance at
other management meetings. Aggregate per diem payments to such directors in
1994 were $32,500. The Outside Director Stock Option Plan provides for grants
to Outside Directors in proportion to the total of their annual retainer and
per diem allowance. The basis for granting options is a formula tied to annual
growth in net income. Under the terms of this Plan, on March 10, 1995, Louis E.
Scott, Newton N. Minow, Stephen T. Vehslage each received an option to purchase
4,000 shares of the Company's Common Stock, William A. Schreyer received an
option to purchase 3,600 shares of the Company's Common Stock and Richard S.
Braddock received an option to purchase 1,000 shares of the Company's Common
Stock at a price equal to the average closing price for the 10 trading days
prior to the date of award. Stock Options awarded under the plan are
immediately exercisable with respect to one-third of the shares covered
thereby, and, an additional one-third on each of the next two anniversaries of
the grant. In 1994, upon his election

<PAGE>

to the Board of Directors, Richard S. Braddock also received an initial option
to purchase 4,000 shares under the Plan.

Richard S. Braddock, Louis E. Scott, and William A. Schreyer are members of
the Company's Audit Committee. Mr. Braddock joined the committee in November,
1994. The functions of this committee, which met three times during 1994, are
to 1) review and approve the Company's internal audit program and the system of
internal controls, 2) to select independent public accountants for
recommendation to the board and stockholders for approval, and 3) to review
with such accountants the scope and results of the annual audit.

Stephen T. Vehslage, Newton N. Minow, Louis E. Scott and William A. Schreyer
are members of the Company's Compensation Committee. Mr. Schreyer joined the
Committee in November, 1994. The functions of this committee, which met four
times during 1994, are to determine the compensation and all other terms of
employment, including the grant of options, for employees who are directors or
officers of the Company.

Newton N. Minow, Louis E. Scott, Stephen T. Vehslage and William A. Schreyer
are members of the Company's Nominating Committee. Mr. Schreyer joined the
Committee in November, 1994. The function of this committee, which met four
times during 1994, is to recommend to the full board nominees for election as
directors. Stockholders may recommend director candidates for consideration by
the Committee. Any recommendations by stockholders to the Committee for
nominees for election at the 1996 Annual Meeting must be submitted in a written
notice to the Secretary of the Company at least 30 days but no more than 90
days prior to March 31, 1996. The Company's By-Laws provide, in general, that
stockholders may directly nominate one or more persons for election as
directors at the Annual Meeting only if written notice of the stockholder's
intent to make such nomination is received by the Secretary of the Company at
least 50 days but no more than 90 days before the date of the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED
ABOVE.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has sole authority for determining the
compensation for the directors and officers of the Company. Stock option grants
for all employees of the Company must also be reviewed and approved by the
Committee. Finally, the Committee reviews and recommends changes to the direct
compensation, remuneration and benefit programs for all employees of True North
Communications Inc.

The Compensation Committee met four times during 1994. In addition to
decisions regarding executive compensation, other actions and activities of the
Committee during the year included:

. Welcoming William A. Schreyer, retired Chairman of Merrill Lynch & Co.,
to the Committee on November 8, 1994.

. The recommendation that the Company's Performance Program incentive
compensation elements be presented to shareholders for approval in order
to maintain the full deductibility of amounts in excess of the IRS 162(m)
limits. Shareholders approved this proposal in May, 1994.

. A comprehensive review of the overall incentive compensation program
using both internal staff and external compensation consultants. This
review reaffirmed that the Company is interpreting survey data correctly
in its application of the Performance Program. The program is working as
intended and can in some measure be credited with the third consecutive
year of 18% growth in earnings for the Company.

. Adoption of stock ownership guidelines for the Employee Directors of True
North Communications Inc. These guidelines require that a specified
amount of an executive's annual base salary be achieved as a level of
personal stock ownership in the Company. The

5
<PAGE>

Chief Executive Officer must achieve a level of stock ownership equivalent
to 3 1/2 times annual base salary. All other Employee Directors must
achieve a level of stock ownership equivalent to 2 1/2 times base salary.
Employee Directors have five years to build to this level with progress
toward this goal regularly reviewed and taken into account in
administration of the Performance Program.

. Approval of stock option grants to 167 senior executives totaling 639,300
shares during 1994.

In making compensation decisions in 1994 for individual executives, the
Committee was guided by the detailed pay-for-performance principles contained
in the True North Performance Program. This program has been approved by
Shareholders with the details provided in prior proxies.

The principles and each component in place since 1992 and used for 1994
administration were:

Base Salary--This is managed over time to remain below the average for
comparable positions at competitive multinational advertising agencies.
Each of the agencies reported as the peer group for the company performance
chart have been included in this group of competitive agencies for purposes
of comparison. No minimum nor maximum interval between raises exists. Since
the inception of the True North Performance Program, the average interval
between raises for Employee Directors has averaged about 25 months.

Variable Incentive Compensation--The potential amount of Variable
Incentive Compensation is determined by improvement in Company net income
versus the prior year on an accelerated, sliding scale basis. The basis for
1994 awards was the 18% improvement in the Company's net income from 1993
to 1994. Actual individual awards of Variable Incentive Compensation are
then determined by the level of profit growth and achievement of other
measurable objectives for which the individual was responsible. These
objectives, in varying degrees, include such items as establishing ways of
incenting and measuring improvement in the quality of the creative product,
implementation of key elements of the Company's growth plan, and measuring
effectiveness in fulfillment of management responsibilities.

Deferred Variable Incentive Compensation--Deferred Variable Incentive
Compensation is also determined by improvement in Company net income versus
the prior year on an accelerated sliding scale basis though with lower
potential awards than the Variable Incentive Compensation component.
Deferred Variable Incentive Compensation vests at 20% on the date of award
and an additional 20% per year for each of the four subsequent years. Like
Variable Incentive Compensation, actual individual awards are adjusted
based on performance against measurable objectives as noted above.

Variable Incentive Stock Options--The granting of Variable Incentive
Stock Options is intended to incent executive performance over both the
short and long term. Annual grants are determined by the amount of
improvement in Company net income versus the prior year. Improvement in
prior year's results is the basis for making grants as the Committee does
not take into consideration the amount and terms of prior awards in
determining the grant size. The value of the grants, however, increases
only as the value of the Company's common stock for all stockholders
increases over time. Incentive stock option grants are made at an amount no
less than current fair market value, vest over five years and are
exercisable over ten years.

Compensation for 1994 for the Chief Executive Officer, Bruce Mason, was
based upon these principles and followed the prescribed approach for each
component.

Mr. Mason's base salary was last changed March 1, 1993. This level of salary
still places him below the competitive average consistent with the True North
Performance Program principles.

Mr. Mason's Variable Incentive Compensation for 1994 was $630,000. Based on
the Company's record performance, Mr. Mason was eligible for a maximum of
$840,000, but he requested that the

6
<PAGE>

amount be reduced in light of recent softness in the price of the Company's
stock. The maximum award would have been merited, reflective of attainment of
all Company financial and personal performance objectives. These included an
18% increase in net income over 1993, a 12.4% increase in operating margin and
achievement of qualitative objectives tied to establishing a strong foundation
for the Company's future growth, particularly as it relates to the creation of
the True North architecture.

Mr. Mason's Deferred Variable Incentive Compensation for 1994 performance was
$225,000 of which $45,000 was immediately vested. The remainder vests equally
over the next four years. Performance criteria for this award were the same as
for the Variable Incentive Compensation component. As with Variable Incentive
Compensation, Mr. Mason was eligible for a maximum award of $300,000, but
voluntarily reduced the amount.

Finally, Mr. Mason was granted Variable Incentive Stock Options for 53,000
shares during 1994. A 1995 grant of 42,000 shares was awarded to Mr. Mason. As
with the other components, Mr. Mason was eligible for a maximum grant in 1995
of 56,000 shares but voluntarily reduced the award.

All decisions regarding Mr. Mason's 1994 Variable Compensation components
were made by the Compensation Committee on March 10, 1995 after Company
earnings information for 1994 became available.

The Compensation Committee will continue to monitor and review all aspects of
the True North Performance Program. The Program currently is meeting its
objectives of incenting growth in earnings and improving the overall operations
of the Company. The Committee feels that the True North Performance Program has
contributed significantly to the Company's performance over the past three
years. Strong earnings growth along with the momentum and expectation to
continue this trend in future years is the surest way to increase shareholder
value over the long term.

Stephen T. Vehslage, Chairman
Newton N. Minow
Louis E. Scott
William A. Schreyer
Members of the Compensation
Committee

7
<PAGE>

EXECUTIVE COMPENSATION

The Summary Compensation Table shows the compensation for the past three
fiscal years of the Company for the Chief Executive Officer and the four other
most highly compensated executive officers.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------ -----------------------
AWARDS PAYOUTS
NAME ------------ ----------
AND SECURITIES ALL OTHER
PRINCIPAL OTHER ANNUAL UNDERLYING LTIP COMPENSATION
POSITION YEAR SALARY BONUS COMPENSATION(2) OPTIONS/SARS PAYOUTS(3) (4)
--------- ---- -------- -------- --------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bruce Mason............. 1994 $600,000 $630,000(1) 53,000 $225,000(1) $420,457
Chairman and Chief 1993 $583,333 $800,000 64,500 $290,000 $356,531
Executive Officer 1992 $500,000 $700,000 74,000 $250,000 $193,991
Jack Balousek........... 1994 $450,000 $470,000 38,000 $190,000 $242,693
President and Chief 1993 $450,000 $485,000 58,000 $191,250 $253,583
Operating Officer 1992 $450,000 $550,000 66,400 $225,000 $197,749
Terry M. Ashwill........ 1994 $375,000 $395,000 31,800 $190,000 $180,101
Executive Vice
President, Chief
Financial Officer
1993 $333,333 $380,000 42,000 $166,700 $ 77,348
1992 $325,000 $340,000 $5,578 24,000 $162,500 $ 72,164
Brendan Ryan............ 1994 $394,166 $600,000 16,600 $250,000 $211,356
President and CEO 1993 $365,000 $400,000 24,000 $182,500 $123,163
FCB/LKP 1992 $365,000 $320,000 28,000 $182,500 $116,459
Gregory W. Blaine....... 1994 $325,000 $340,000 13,400 $162,000 $149,380
Executive Vice Presi- 1993 $295,000 $310,000 11,400 $147,500 $111,554
dent,
Director of Global 1992 $255,000 $185,000 17,400 $ 89,000 $ 81,542
Operating Systems
</TABLE>
- - ----------------
(1) Mr. Mason on his own initiative requested that his incentive compensation
be reduced in light of recent softness in the price of the Company's stock.

(2) Executive officer perquisites were below the amount required to be
reported. The amount shown for Mr. Ashwill for 1992 is for tax
reimbursements and allowances resulting from his relocation to Chicago.

(3) Amounts shown in this column are the total Deferred Variable Incentive
Compensation awarded in the year shown. Upon award, this is 20% vested and
vests an additional 20% at each of the next four anniversaries of the date
of the award.

(4) Amounts shown in this column are for company contributions and accruals
under compensation and benefit programs for the named executives. The
amounts are as follows:

The company contribution to the True North Profit Sharing-Retirement
Plan was $12,129 for 1994 for each of the named executives.

The company matching contribution to the True North Stock Purchase
Plan was $4,801 for 1994 for each of the named executives.

The company matching contribution to the True North Stock Purchase
Integration Plan for 1994, was $50,568 for Mr. Mason, $31,927 for Mr.
Balousek, $24,711 for Mr. Ashwill, $26,281 for Mr. Ryan and $19,900 for
Mr. Blaine.

The company contribution to the True North Profit Sharing Integration
Plan for 1994 was $118,136 for Mr. Mason, $74,161 for Mr. Balousek,
$57,138 for Mr. Ashwill, $60,842 for Mr. Ryan and $45,790 for Mr.
Blaine.

8
<PAGE>

The amount accrued under the Company's Part-time Director Agreement
for 1994, was $224,010 for Mr. Mason, $113,513 for Mr. Balousek,
$81,322 for Mr. Ashwill, $100,339 for Mr. Ryan and $51,227 for Mr.
Blaine.

The company-paid amount for life insurance for 1994 was $10,813 for
Mr. Mason, $6,162 for Mr. Balousek, $6,964 for Mr. Ryan and $15,533 for
Mr. Blaine.

STOCK OPTIONS

During 1994, stock option grants covering 639,300 shares were awarded to 167
employees under the Company's Stock Option Plan. Each grant was made at the
fair market value on the date of the award, vests over five years and is
exercisable over ten years. The option grants in 1994 for the named executive
officers are shown in the following chart.

OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS(1) OPTION TERM
-------------------------------------------- -------------------
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES IN PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- - ---- ---------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bruce Mason............. 53,000 8.3% $22.625 2/16/04 $754,123 $1,911,096
Jack Balousek........... 38,000 5.9% $22.625 2/16/04 $540,692 $1,370,220
Terry M. Ashwill........ 31,800 5.0% $22.625 2/16/04 $452,475 $1,146,658
Brendan Ryan............ 16,600 2.6% $22.625 2/16/04 $236,197 $ 598,570
Gregory Blaine.......... 13,400 2.1% $22.625 2/16/04 $190,665 $ 483,183
</TABLE>

- - ----------------
(1) Options were granted at market price on the date of grant (2/16/94). All
options are exercisable at a rate of 20% per year beginning on the first
anniversary of the date of grant.

Using the identical growth rates assumed above and the base share price of
$22.625 on 2/16/94, the potential value of stock appreciation over the same ten
year period is shown for all stockholders.

<TABLE>
<CAPTION>
ALL STOCKHOLDER'S
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FROM
2/16/94-2/16/04
-------------------------
5%($) 10%($)
------------ ------------
<S> <C> <C>
All stockholders (3,429 stockholders holding
23,199,342 shares at 2/16/94)....................... $330,097,427 $836,531,691
</TABLE>

9
<PAGE>

The exercised shares, number of options held and their value at year end for
the named executive officers are shown in the following table.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT FY- IN-THE-MONEY
SHARES END OPTIONS AT FY-END
ACQUIRED VALUE -------------- -----------------
ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE ($) UNEXERCISABLE UNEXERCISABLE
- - ---- -------- -------- -------------- -----------------
<S> <C> <C> <C> <C>
Bruce Mason.................. 9,000 $159,750 42,500/149,000 $304,950/$650,925
Jack Balousek................ 2,400 $ 41,400 70,160/124,240 $578,280/$584,670
Terry M. Ashwill............. 0 0 30,000/ 87,800 $227,700/$381,300
Brendan Ryan................. 0 0 16,000/ 52,600 $119,300/$250,950
Gregory Blaine............... 0 0 10,560/ 34,560 $ 85,933/$150,478
</TABLE>

PENSION PLAN

The Pension Table that follows is required by SEC regulations, however on
both a current and projected basis, none of the directors and officers will
receive a benefit under the Company's Supplemental Pension Plan. The Plan
covers all eligible employees of the Company and works in conjunction with the
Company's primary retirement program, the True North Profit Sharing-Retirement
Plan, to guarantee that total retirement benefits will not fall below a
prescribed minimum level. Each of the named executives participates in the True
North Profit Sharing-Retirement Plan, and in so doing, any benefit under the
Supplemental Pension Plan is expected to be completely offset.

The Supplemental Pension Plan provides for 45% of final average pay less
offsets of 19.5% of social security final average compensation and the annuity
value of an individual's Profit Sharing account. The table shows amounts
without regard to these offsets, the maximum recognizable compensation limit
($150,000 in 1995) or the maximum annual retirement benefit ($120,000 in 1995).
Compensation as defined above includes salary and incentive payments.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
ANNUAL --------------------------------------------
COMPENSATION 15 20 25 30 35
- - ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$300,000.......................... $ 67,500 $ 90,000 $112,500 $135,000 $135,000
400,000.......................... 90,000 120,000 150,000 180,000 180,000
500,000.......................... 112,500 150,000 187,500 225,000 225,000
600,000.......................... 135,000 180,000 225,000 270,000 270,000
700,000.......................... 157,500 210,000 262,500 315,000 315,000
800,000.......................... 180,000 240,000 300,000 360,000 360,000
</TABLE>

As of December 31, 1994, Mr. Mason had 26 years; Mr. Balousek had 16 years;
Mr. Ashwill had 3 years; Mr. Ryan had 2 years; and Mr. Blaine had 16 years of
credited service with the Company for qualification in the Supplemental Pension
Plan.

10
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Stephen T. Vehslage, Newton N. Minow, Louis E. Scott and William A. Schreyer
serve as the Company's Compensation Committee. Mr. Scott is a former officer of
the Company who retired in 1987. In 1994, the Company and certain of its
subsidiaries retained the legal services of Sidley & Austin, a firm where Mr.
Minow is of counsel. The Company and certain of its subsidiaries expect to
retain Sidley & Austin in 1995.

COMPANY PERFORMANCE

The following line graph provides a five-year comparison of cumulative total
returns for the Company, the S&P 500 Composite Index and an Advertising Index
comprised of: True North Communications Inc., The Interpublic Group of
Companies, Inc., Omnicom Group Inc., Grey Advertising Inc., Saatchi & Saatchi
Company PLC (ADR) and WPP Group plc (ADR).

[GRAPH APPEARS HERE]

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG TNC, S&P 500 AND ADVERTISING INDEX

Measurement Period S&P ADVERTISING
(Fiscal Year Covered) TNC 500 INDEX
- - ------------------- ---- --- -----------
<S> <C> <C> <C>
Measurement Pt-
12/31/89 $100 $100 $100
FYE 12/31/90 $ 73 $ 97 $ 71
FYE 12/31/91 $ 96 $126 $103
FYE 12/31/92 $123 $135 $128
FYE 12/31/93 $192 $149 $138
FYE 12/31/94 $176 $150 $149
</TABLE>

PROPOSAL 2--APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors of the Company has selected Arthur Andersen & Co. as
auditors of the Company and its subsidiaries for the fiscal year 1995. This
firm of independent public accountants has served the Company in this capacity
since 1943. A representative of Arthur Andersen & Co. is expected to be present
at the annual meeting and will have the opportunity to make a statement and
will also be available to respond to appropriate questions.

THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES PRESENT, IN
PERSON OR BY PROXY, AND ENTITLED TO VOTE, IS REQUIRED TO APPROVE THE
APPOINTMENT OF ARTHUR ANDERSEN & CO. ABSTENTIONS WILL HAVE THE SAME EFFECT AS
VOTES AGAINST THE PROPOSAL. NON-VOTED SHARES WILL NOT BE CONSIDERED PRESENT AND
ENTITLED TO VOTE ON THE PROPOSAL.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPOINTMENT OF ARTHUR ANDERSEN & CO. AS AUDITORS FOR 1995.

11
<PAGE>

SOLICITATION OF PROXIES

The solicitation of proxies on the enclosed form is made on behalf of the
Board of Directors of the Company. Such solicitation of proxies normally will
be made by mail. Employees of the Company may also solicit proxies by telephone
or personal contact, but at no additional compensation. Bankers, brokers and
others holding Common Stock of the Company in their names or in the names of
nominees will be reimbursed for reasonable expenses incurred in sending proxies
and proxy material to the beneficial owners of such shares. The total cost of
solicitation of proxies will be borne by the Company.

The Board of Directors is not aware of any other matters which may be brought
before the meeting. If other matters not currently known come before the
meeting, the persons named in the accompanying form of proxy or their
substitutes will vote such proxy in accordance with their best judgment.

STOCKHOLDER PROPOSALS

In order to be considered for inclusion in the Company's Proxy Statement for
its annual meeting to be held in 1996, all stockholder proposals must be
received by the Company on or prior to December 12, 1995.

/s/ Dale F. Perona
Dale F. Perona
Secretary

Dated: April 10, 1995

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1994 AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE UPON THE
WRITTEN REQUEST OF ANY STOCKHOLDERS ENTITLED TO VOTE AT THE MEETING DIRECTED TO
THE ATTENTION OF DALE F. PERONA, SECRETARY OF THE COMPANY, AT 101 EAST ERIE
STREET, CHICAGO, ILLINOIS 60611-2897.

12
<PAGE>

[X] Please mark your votes as in this example. 3294
----

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
- - --------------------------------------------------------------------------------

1. Election of Directors (see reverse)
FOR WITHHELD
[_] [_]

(For except as marked to the contrary below.)

- - --------------------------------------------------------------------------------

2. Proposal to approve the appointment of Arthur Andersen & Co. as auditors for
1995.
FOR AGAINST ABSTAIN
[_] [_] [_]

Change of Address/Comments on Reverse Side [_]

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
- - --------------------------------------------------------------------------------

The undersigned hereby acknowledges receipt of the Notice of the 1995 Annual
Meeting of Stockholders and accompanying Proxy Statement.

PLEASE SIGN BELOW EXACTLY AS NAME APPEARS. When shares are held by joint ten-
ants, both should sign. When signing as Guardian, Executor, Administrator, At-
torney, Trustee, etc. please give full title as such. If a corporation, sign in
full corporate name, by President or other authorized officer, giving title, if
a partnership, sign in partnership name by authorized person.

- - --------------------------------------------------------------------------------

- - --------------------------------------------------------------------------------
SIGNATURE(S) DATE

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
. FOLD AND DETACH HERE .

65th Anniversary
Levi Strauss & Co.

This year we celebrate the 65th anniversary of FCB's partnership with Levi
Strauss & Co., one of the most enduring and successful brand-building
relationships in the history of American advertising.

Since 1930, FCB has worked to create advertising as good as Levi's products
themselves . . . ads with a human touch that strike a universal chord. From the
favorite choice of cowboys and cattlemen, Levi's have become a commanding global
fashion icon, the uniform of youth--and those who think young--the world over.
And Levi Strauss & Co. has grown to be the world's largest apparel company. Our
thanks to a great client as we conquer new worlds together.

- - --------------------------------------------------------------------------------
<PAGE>
P R O X Y

TRUE NORTH COMMUNICATIONS INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The signatory hereby appoints BRUCE MASON and GREGORY BLAINE, and each or ei-
ther of them, with full power of substitution and resubstitution, attorneys and
proxies with the powers the signatory would possess if personally present to
vote all the shares of Common Stock of the signatory in TRUE NORTH COMMUNICA-
TIONS INC. at the annual meeting of its stockholders to be held at The Mandarin
Oriental Hotel, The Embassy Room--Second Floor, 222 Sansome Street, San Fran-
cisco, California, on May 17, 1995 at 1:00 P.M. local time, to vote on the pro-
posals set forth on the opposite side of this card.

Election of Directors, Nominees:
B. Mason, L.E. Scott, S.T. Vehslage,
N.N. Minow, W.A. Schreyer, C.R.
Wiggins, J.B. Balousek, M. Levy, G.W.
Blaine, L. Cutler,
T.M. Ashwill, J. B. Ryan, R. S.
Braddock.

(change of address/comments)

- - -----------------------------------------

(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY COMMITTEE
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.

SEE REVERSE
SIDE
. FOLD AND DETACH HERE .
<PAGE>

GRAPHIC MATERIAL APPENDIX

1. Page 11 of the Proxy Statement includes a line graph comparing the
cumulative total return on the Common Stock of the Company for the last
five years with the cumulative total return on the S&P 500 Composite
Index and an index of peer companies selected by the Company. A paper
copy of this line graph was filed with the Securities and Exchange
Commission under cover of Form SE on April 13, 1995.

2. An attachment to the Proxy Card contains the following text:

65th Anniversary

Then off to the side is a Levi Strauss & Co. jean tab.