<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
True North Communications, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, Par Value $.33-1/3
- --------------------------------------------------------------------------------
(Title of Class of Securities)
344872 10 6
--------------------
(CUSIP Number)
Thomas J. Kuhn, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 29, 1995
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this statement / /.
(Continued on following pages)
Page 1 of 11 Pages
<PAGE> 2
CUSIP No. 3418972 10 6
- --------------------------------------------------------------------------------
1) Names of Reporting Persons; S.S. or I.R.S.
Identification Nos. of Above Persons
Publicis Communication
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group
(a)_______
(b)_______
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds 00
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2 (d) or 2 (e) _________
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization France
- --------------------------------------------------------------------------------
7) Sole Voting Power 2,329,000
---------------------------------------------------------------
Number of
Shares Bene- 8) Shared Voting Power -0-
ficially ---------------------------------------------------------------
Owned by
Each Report- 9) Sole Dispositive Power 2,329,000
ing Person ---------------------------------------------------------------
With
10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting
Person 2,329,000
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
19.8%
- --------------------------------------------------------------------------------
14) Type of Reporting Person CO
Page 2 of 11 Pages
<PAGE> 3
CUSIP No. 3418972 10 6
- --------------------------------------------------------------------------------
1) Names of Reporting Persons; S.S. or I.R.S.
Identification Nos. of Above Persons
Publicis S.A.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group
(See Instructions)
(a)_______
(b)_______
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds 00
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) ________
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization France
- --------------------------------------------------------------------------------
7) Sole Voting Power 2,329,000
---------------------------------------------------------------
Number of
Shares Bene- 8) Shared Voting Power -0-
ficially ---------------------------------------------------------------
Owned by
Each Report- 9) Sole Dispositive Power 2,329,000
ing Person ---------------------------------------------------------------
With
10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting
Person 2,329,000
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
19.8%
- --------------------------------------------------------------------------------
14) Type of Reporting Person HC, CO
Page 3 of 11 Pages
<PAGE> 4
This Amendment No. 2 to Schedule 13D (this "Amendment") with respect
to True North Communications, Inc., a Delaware corporation (the "Company") is
being filed on behalf of Publicis S.A., a societe anonyme organized and
existing under the laws of France ("Publicis"), and Publicis Communication, a
societe anonyme organized and existing under the laws of France
("Communication") (Publicis and Communication being hereinafter referred to
collectively as the "Reporting Persons") to amend the Schedule 13D (the
"Schedule 13D") originally filed by the Reporting Persons on January 30, 1989,
as amended by Amendment No. 1 to the Schedule 13D filed on April 22, 1991
("Amendment No. 1"). Pursuant to Rule 101(a)(2)(ii) of Regulation S-T this
Amendment restates the entire text of the Schedule 13D.
Item 2. Identity and Background.
The principal business of Publicis is to act as a holding company
for subsidiaries engaged primarily in the businesses of advertising, public
relations, direct marketing, sales promotion and design, catalog sales and
health care, recruitment, financial and yellow pages advertising in Europe, the
Middle East and Africa; the business of placing advertisements in various media
in France, including newspapers, television, radio, public transportation, and
cinema; and the business of distributing products to drugstores located in
France. The principal business and office address of Publicis is 133, avenue
des Champs-Elysees, 75008 Paris, France.
The principal business of Communication is to act as a holding
company for subsidiaries engaged primarily in the businesses of advertising,
public relations, direct marketing, sales promotion and design, catalog sales
and health care, recruitment, financial and yellow pages advertising in Europe,
the Middle East and Africa. The principal business and office address of
Communication is 133, avenue des Champs-Elysees, 75008 Paris, France. The
issued and outstanding share capital of Communication is owned approximately 74
percent by Publicis and 26 percent by the Company.
The name, business address and present principal occupation of
each of the directors and executive officers of Publicis and of Communication
are set forth in Appendix I which is attached hereto and incorporated herein by
reference. Each director and executive officer of Publicis and Communication
listed in Appendix I is a citizen of France.
During the five years immediately prior to the date hereof,
neither Publicis nor Communication, nor to the best of their knowledge, any
director or executive officer of Publicis or Communication listed on Appendix I
hereto, has been (a) convicted in a criminal proceeding (excluding traffic
Page 4 of 11 Pages
<PAGE> 5
violations or similar misdemeanors) or (b) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, United States federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
As more fully described in Items 4 and 5 hereto, the Schedule 13D
related to the acquisition by Communication on January 24, 1989 of beneficial
ownership of shares of capital stock of the Company pursuant to Section 2.4 of
the Master Alliance Agreement, dated as of January 1, 1989, by and between
Communication and the Company (the "Master Alliance Agreement"). This
discussion is qualified in its entirety by reference to the Master Alliance
Agreement, a copy of which was attached as Exhibit A to the Schedule 13D and
incorporated therein by reference.
Pursuant to Sections 2.4 and 2.2 of the Master Alliance Agreement,
on January 24, 1989, Communication acquired by subcription from the Company
2,110,000 shares of Common Stock of the Company, in consideration of the
issuance and delivery by Communication to the Company of 350,000 fully paid and
non-assessable common shares of Communication.
As more fully described in Items 4 and 5 hereto, Amendment No. 1
related to the acquisition by Communication during the period between July 17,
1989 and February 15, 1991 of beneficial ownership of 112,000 shares (the
"Additional Securities") of common stock, par value $.33-1/3 per share ("TNO
Common Stock") of the Company through open market purchases. Communications
used an aggregate of approximately $2,581,000 to purchase the Additional
Securities. All of such funds were obtained from dividends paid to
Communications on shares of TNO Common Stock owned by Communication.
This Amendment relates, in part, to the acquisition by
Communication during the period between August 2, 1994 and September 6, 1994 of
beneficial ownership of 107,000 shares (the "Further Additional Securities")
of TNO Common Stock through open market purchases. Communications used an
aggregate of approximately $4,667,811 to purchase the Further Additional
Securities. All of such funds were obtained from Communication's working
capital.
Item 4. Purpose of Transaction.
Communication acquired the shares of Common Stock to which the
Schedule 13D Statement related to obtain a substantial equity position in
the Company for investment purposes. Pursuant to the Master Alliance Agreement,
Communication and the Company have designated an existing subsidiary of
Communication, Intermarco Algemene Publiceits Unie B.V., a Netherlands Bosloten
Vennootschap, to serve as a joint venture company, which was renamed Publicis
FCB B.V. and which engages in the business of providing advertising and
advertising-related services to clients in Europe, the Middle East and Africa.
In addition, Communication and the Company have engaged from time to time in
smaller, more informal alliances involving the provision of advertising and
advertising-related services throughout the rest of the world. To solidify
their alliance, Communication and the Company have exchanged ownership
interests in their respective corporations. On January 24, 1989, Communication
received 2,110,000 shares of Common Stock of the Company in exchange for
issuing and delivering to the Company 350,000 common shares of Communication.
As part of the exchange of shares, Communication and the Company
have agreed that Communication shall be entitled to have a representative
serve as a director of the Company and that the Company shall be entitled to
have a representative serve as a director of Communication. At the meeting of
the Board of Directors of the Company held on February 21, 1989, Maurice Levy,
the President-Directeur General of Publicis and of Communication, was elected
to serve as Communication's designee on the Company's Board of Directors and
was appointed to certain standing committees of the Board, including FCB's
Management Council and the International Committee.
The acquisition of additional securities of the Company and the
disposition of any shares of Common Stock presently beneficially owned by
Communication is governed by the FCB Stockholders Agreement, dated as of
January 1, 1989, by and between Communication and the Company (the "FCB
Stockholders Agreement"), a copy of which was attached as Exhibit B to the
Schedule 13D and incorporated herein by reference. The controlling provisions
of the FCB Stockholders Agreement are more fully described in Item 6 hereto.
Communication acquired the Additional Securities to which
Amendment No. 1 related to maintain approximately the same percentage equity
interest (19.9%) in the Company as it originally obtained on January 24, 1989.
Since January 24, 1989, the Company has increased the number of outstanding
shares of TNO Common Stock by issuing from time to time additional shares of
TNO Common Stock, principally in connection with the exercise of employee
stock options and other employee benefit plans of the Company. To offset the
dilutive effect which these additional issuances have had on Communication's
percentage equity interest in the Company, Communications acquired over a
period of time between July 17, 1989 and February 15, 1991 a total of 112,000
additional shares of TNO Common Stock so as to maintain its percentage
ownership of approximately 20%. All of the Additional Securities were acquired
by Communication.
Page 5 of 11 Pages
<PAGE> 6
Communication acquired the Further Additional Securities to which
,in part, this Amendment relates to maintain approximately the same percentage
equity interest (19.8%) in the Company as it originally obtained on January 24,
1989. Since January 24, 1989, the Company has increased the number of
outstanding shares of TNO Common Stock by issuing from time to time additional
shares of TNO Common Stock, principally in connection with the exercise of
employee stock options and other employee benefit plans of the Company. To
offset the dilutive effect which these additional issuances have had on
Communication's percentage equity interest in the Company, Communications
acquired over a period of time between August 2, 1994 and September 6, 1994 a
total of 107,000 additional shares of TNO Common Stock so as to maintain its
percentage ownership at approximately 19.8%. All of the Further Additional
Securities have been acquired by Communication.
Except as otherwise set forth herein or in any of the Exhibits
attached to the Schedule 13D, as amended, Communication has no current plans or
proposals that would relate to or result in:
(a) the acquisition by any person of additional securities of the
Company, or the disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries;
(d) any change in the present Board of Directors or management
of the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board;
(e) any material change in the present capitalization or dividend
policy of the Company;
(f) any other material change in the Company's business or
corporate structure;
(g) changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any person;
(h) causing a class of securities of the Company to be delisted
from a national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association;
(i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
Communication intends, however, to review its investment in the Company on a
continuing basis, and reserves the right, subject to the limitations contained
in the FCB Stockholders Agreement, to change its purposes and intentions as
described in this Item 4 based on such review and future developments relating
to the Company or otherwise.
Item 5. Interest in Securities of the Issuer.
(a) As of the date of the Schedule 13D, Communication was the
beneficial and record owner of 2,110,000 shares of Common Stock of the Company,
which shares constituted approximately 19.9 percent of the total number of
issued and outstanding shares of Common Stock of the Company as of January 24,
1989, according to information supplied to Communication by the Company. As of
the date of Amendment No. 1, Communication was the beneficial and record owner
of 2,222,000 shares of Common Stock of the Company, which shares constituted
approximately 20 percent of the total number of issued and outstanding shares of
Common Stock of the Company according to information supplied to Communication
by the Company as of March 20, 1991. As of the date of this Amendment,
Communication is the beneficial and record owner of 2,329,000 shares of TNO
Common Stock, which shares constitute approximately 19.8 percent of the total
number of issued and outstanding shares of TNO Common Stock according to
information supplied to Communication by the Company as of November 10, 1994.
Because of its approximately 74% ownership of Communication, Publicis may be
deemed to have the indirect power to vote and dispose of such shares of Common
Stock and thus also to own them beneficially, but Publicis disclaims beneficial
ownership of such shares and its joining in the filing of this Amendment shall
not be construed as an admission that Publicis is the beneficial owner of such
shares. Publicis has no other interest, direct or indirect, in any securities
of the Company.
(b) Subject to the terms of the FCB Stockholders Agreement, which
are more fully described in Item 6 hereto, Communication has the sole power to
vote or direct the vote and to dispose or direct the disposition of the shares
of Common Stock it owns. Because of its ownership of approximately 74 percent of
the outstanding share capital of Communication, Publicis may be deemed to have
the indirect power to vote and dispose of such shares of Common Stock and thus
also to own them beneficially, but Publicis disclaims beneficial ownership of
such shares and its joining in the filing of this Schedule 13D shall not be
construed as an admission that Publicis is the beneficial owner of such shares.
Publicis has no other interest, direct or indirect, in any securities of the
Company.
Page 6 of 11 Pages
<PAGE> 7
(c) Information with respect to all transactions in TNO
Common Stock effected by Communication during the period from August 2,
1994 to September 6, 1994 is set forth on Schedule II annexed hereto and
incorporated herein by reference. Communication has not engaged in any
transactions in TNO Common Stock during the past 180 days. Neither Publicis,
nor, to the best of the Reporting Persons' knowledge, any director or executive
officer listed on Appendix I to the Schedule 13D, has engaged in any
transaction in TNO Common Stock during the past 180 days.
(d) No other person is known to have the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of, the shares of Common Stock owned by Communication.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Certain agreements between Communication and the Company with
respect to Communication's ownership of voting securities of the Company and
related matters are set forth in the FCB Stockholders Agreement. This
discussion is qualified in its entirety by reference to the FCB Stockholders
Agreement. In addition, for purposes of this Item 6 only, the term
"Communication" shall be deemed to refer to Communication as well as to all
affiliates of Communication.
Pursuant to Section 1.1 of the FCB Stockholders Agreement, without
the prior written consent of the Company, Communication may not acquire
beneficial ownership of voting securities of the Company which in the aggregate
represent more than 20.5 percent of the total voting power of the Company
(except by way of stock splits of the Company or stock dividends or
distributions by the Company to Communication) unless (i) another person or
group has acquired voting securities of the Company such that such person or
group either owns or has the right to acquire voting securities of the Company
which in the aggregate represent a percentage of the total voting power of the
Company which is greater than the percentage of the total voting power of the
Company represented by the voting securities of the Company then owned by
Communication less five percentage points, in which case Communication may
acquire additional voting securities of the Company such that, when added to
the voting securities of the Company already owned by Communication, the
percentage of the total voting power of the Company represented by the voting
securities of the Company then owned by Communication does not exceed the
percentage of the total voting power of the Company represented by the voting
securities of the Company owned by such other person or group by more than 5
percentage points, (ii) a tender or exchange offer is made by a person or group
to purchase, or to exchange for cash or other consideration, voting securities
of the Company which, if successful, would result in such person or group
either owning or having the right to acquire voting securities of the Company
which in the aggregate represent at least 30 percent of the total voting power
of the Company, in which case Communication may acquire additional voting
securities of the Company without limitation (iii) the Company owns voting
securities of Communication which in the aggregate represent more than 26.5
percent of the total voting power of Communication, in which case Communication
may acquire additional voting securities of the Company but only up to
an amount of voting securities of the Company such that the ratio of the
percentage of the total voting power of the Company represented by the voting
securities of the Company then owned by Communication to the percentage of the
total voting power of Communication represented by the voting securities of
Communication owned by the Company does not exceed 1:1.3, or (iv) the person
designated by Communication to serve as its representative on the Company's
Board of Directors is not elected, so long as the person designated by the
Company to serve as its representative on Communication's Board of Directors
has been duly elected, in which case Communication may acquire additional
voting securities of the Company without limitation.
In the event that the percentage of the total voting power of the
Company represented by the voting securities of the Company owned by
Communication ever exceeds the percentage permitted by the terms of the FCB
Stockholders Agreement, the Company has the right to repurchase from
Communications at the then current market price an amount of voting securities
of the Company such that, immediately after such repurchase, the percentage of
the total voting power of the Company represented by the voting securities of
the Company then owned by Communication equals the permitted percentage. Except
as set forth above, however, Communication shall not otherwise be obligated to
dispose of voting securities of the Company if the percentage of the total
voting power of the Company represented by the voting securities of the Company
owned by Communication ever exceeds the percentage permitted by the terms of
the FCB Stockholders Agreement as a result of a recapitalization of the
Company, a repurchase of voting securities by the Company or any other action
taken by the Company to reduce the total voting power of the Company then in
effect.
In the event that Communication (i) ever owns voting securities of
the Company which in the aggregate represent less than 19.9 percent of the
total voting power of the Company, (ii) wishes to purchase additional voting
securities of the Company such that, immediately after such purchase, the
voting securities of the Company then owned by Communication in the aggregate
represent not more than 19.9 percent of the total voting power of the Company,
and (iii) is able to demonstrate that such additional voting securities of the
Company are not likely to be available in the market over a period of 60 days
for less than 115 percent of their then current market price, the Company is
required to sell such additional voting securities to Communication directly at
the then current market price; provided, however, that in the event that the
Company is required to obtain stockholder approval of such a sale in accordance
with its New York Stock Exchange Listing Agreement or otherwise by law, the
Company is not obligated to issue such voting securities to Communication prior
to obtaining such approval, which it will use its best efforts to secure.
Pursuant to Section 1.2 of the FCB Stockholders Agreement,
Communication has agreed, subject to certain limitations set forth in Section
6.1 of the FCB Stockholders Agreement, to vote all of the voting securities of
the Company which it may at any time own in favor of the nominees to the
Company's Board of Directors which have been recommended by the Company's Board
of Directors to the Company's stockholders. It has further agreed to vote all of
the voting securities of the Company which it may at any time own in accordance
with the recommendation of the Company's Board of Directors on all other matters
submitted to a vote of the Company's stockholders, except that it may vote as it
determines in its sole discretion on (i) any proposed amendment to the Company's
certificate of incorporation or by-laws, (ii) any disposition of the Company (by
way of merger, disposition of assets or otherwise), (iii) any recapitalization
of the Company, (iv) any liquidation of the Company, (v) any vote pursuant to
any provision of law or the Company's certificate of incorporation or by-laws
requiring or permitting stockholders to approve any business combination
proposed by or with another person or its affiliates which have acquired a
certain percentage of the Company's shares or to grant voting rights to such
person or to waive or adopt provisions requiring such a vote or (vi) any action
which Communication, in good faith, believes would be materially adverse to
Communication (other than actions which may be taken by the Company as
contemplated by the FCB Stockholders Agreement).
Pursuant to Section 1.3 of the FCB Stockholders Agreement,
Communication may not deposit any voting securities of the Company in a voting
trust or subject any voting securities of the Company to any arrangement with
respect to the voting of such securities. Pursuant to Section 1.4 of the FCB
Stockholders Agreement, Communication may not solicit proxies with respect to
any voting securities of the Company or become a "participant" in any "election
contest", as such terms are used in Rule 14a-11 of Regulation 14A under the
Securities Exchange Act of 1934, as amended, relating to the election of
directors of the Company, unless Communication's designee to serve on the
Company's Board of Directors is not included in the management slate for
election as a director in accordance with Section 6.1 of the FCB Stockholders
Agreement. Pursuant to Section 1.5 of the FCB Stockholders Agreement,
Communication may not, subject to certain specified exceptions, join a
partnership, limited partnership, syndicate or other group, or otherwise act in
concert with any third person, for the purpose of acquiring, holding or
disposing of any voting securities of the Company.
Pursuant to Section 1.6 of the FCB Stockholders Agreement,
Communication may not, directly or indirectly, sell, transfer, assign, pledge,
encumber or otherwise suffer any lien or security interest to attach to any of
the voting securities of the Company which it may own except (i) to the Company
or a person or group approved by the Company, (ii) to a corporation controlled
by Communication provided that certain requirements are met, (iii) subject to
the Company's right of first refusal, pursuant to a bona fide public offering
(structured so that no single person or group requires beneficial ownership of
voting securities representing more than 5 percent of the total voting power of
the Company) registered under the Securities Act of 1933, as amended, (iv)
subject to the Company's right of first refusal, in transactions in which the
consideration consists solely of cash and which do not result in any single
person or group either owning or having the right to acquire voting securities
which represent more than five percent of the total voting power of the Company,
(v) in response to an offer to purchase, or to exchange for cash or other
consideration, any voting securities of the Company which is made by or on
behalf of the Company or which is unopposed by the Company's Board of Directors,
(vi) subject to the Company's right of first refusal, in response to any other
offer made by a person or group to purchase, or to exchange for cash or other
consideration, voting securities of the Company which, if successful, would
result in such person or group either owning or having the right to acquire
voting securities which in the aggregate represent more than 30 percent of the
total voting power of the Company, or (vii) pursuant to a bona fide pledge to a
bank or other institutional lender, provided that certain requirements are met.
Pursuant to Section 4.1 of the FCB Stockholders Agreement, in the
event of (i) a "change of control" of Communication (as defined in Section
7.1(d) of the FCB Stockholders Agreement), (ii) a default by Communication or
Publicis in any material respect in the performance of any of their obligations
under the FCB Stockholders Agreement, the Master Alliance Agreement or certain
other agreements among Communication, Publicis and the Company, (iii) the
bankruptcy or insolvency of Communication or Publicis, or (iv) the expropriation
of nationalization by any governmental authority (other than the United States)
of any of the stock or the advertising business of Communication or Publicis,
the Company is entitled to repurchase from Communication at the then current
market price of all of the voting securities of the Company then owned by
Communication.
Except as provided in the FCB Stockholders Agreement, neither
Publicis nor Communication has any contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 and between
such persons and any person with respect to any securities of the Company,
including but not limited to transfer or voting of any securities of the
Company, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
The parties are currently engaged in an arbitration initiated by
the Company with respect to certain matters arising under the Master Alliance
Agreement. In addition, on January 24, 1995, Communication notified the
Company that Communication was rescinding the Master Alliance Agreement. Under
applicable French law, such rescission is expected to become effective on July
24, 1995.
On March 29, 1995, Communication notified the Company of its
commencement of a dispute resolution procedure pursuant to Article 9.2 of the
Master Alliance Agreement dated as of
Page 7 of 11 Pages
<PAGE> 8
January 1, 1989 by and between Communication and the Company. Communication
contends that the Company failed to comply with provisions of the Master
Alliance Agreement and related agreements between Communication, the Company and
certain of their respective affiliates. Attached as Exhibit A hereto is
Communication's notice to the Company dated March 29, 1995.
Item 7. Material to be Filed as Exhibits.
The following exhibit is filed herewith:
Exhibit A -- Notice from Communication to the Company dated
March 29, 1995 regarding certain claims and
counterclaims.
Page 8 of 11 Pages
<PAGE> 9
SIGNATURES
After reasonable inquiry and to the best of its knowledge and
belief, each of the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Dated: March 31, 1995
PUBLICIS S.A.
By: /s/ Maurice Levy
------------------------------------
Maurice Levy,
President
PUBLICIS COMMUNICATION
By: /s/ Jean-Paul Morin
------------------------------------
Jean-Paul Morin,
Secretaire General
Page 9 of 11 Pages
<PAGE> 10
APPENDIX I
Directors And Executive Officers of Publicis S.A.
<TABLE>
<CAPTION>
Name Business Address Principal Occupation
---- ---------------- --------------------
<S> <C> <C>
Marcel Bleustein Blanchet 133, avenue des Champs-Elysees, President du Conseil de
75008 Paris, France Surveillance of Publicis S.A.
Maurice Levy 133, avenue des Champs-Elysees, President of Directoire and Chief
75008 Paris, France Executive Officer of Publicis S.A.
Bruno Desbartes 7, rue de Monttessuy Member of Directoire of Publicis
75007 Paris, France S.A.
Gerard Pedraglio 133, avenue des Champs-Elysees, Member of Directoire of Publicis
75008 Paris, France S.A.
Jean-Paul Morin 133, avenue des Champs-Elysees, Secretaire General and Chief
75008 Paris, France Financial Officer of Publicis S.A.
</TABLE>
Directors And Executive Publicis Communication
<TABLE>
<CAPTION>
Name Business Address Principal Occupation
---- ---------------- --------------------
<S> <C> <C>
Maurice Levy 133, avenue des Champs-Elysees, President du Conseil
75008 Paris, France d'Administration
Claude Marcus 133, avenue des Champs-Elysees, Administrateur
75008 Paris, France
Gerard Pedraglio 133, avenue des Champs-Elysees, Administrateur
75008 Paris, France
Jean-Paul Morin 133, avenue des Champs-Elysees, Secretaire General -- Administrateur
75008 Paris, France
</TABLE>
Page 10 of 11 Pages
<PAGE> 11
<TABLE>
<CAPTION>
Securities
Acquired
----------
Title of
Security Transaction Date Transaction Amount Price
- -------- ---------------- ----------- ------ -----
<S> <C> <C> <C> <C>
Common Stock 8/02/94 Purchase 1,200 $44.00
Common Stock 8/03/94 Purchase 900 $44.00
Common Stock 8/09/94 Purchase 400 $44.00
Common Stock 8/10/94 Purchase 4,700 $44.00
Common Stock 8/12/94 Purchase 1,800 $44.00
Common Stock 8/16/94 Purchase 9,700 $44.00
Common Stock 8/18/94 Purchase 22,600 $44.00
Common Stock 8/19/94 Purchase 46,200 $44.00
Common Stock 9/02/94 Purchase 18,500 $41.9425
Common Stock 9/06/94 Purchase 1,000 $41.875
</TABLE>
Page 11 of 11 Pages
<PAGE> 12
Exhibit Index
The following exhibit is filed herewith:
Exhibit A -- Notice from Communication to the Company dated
March 29, 1995 regarding certain claims and
counterclaims.
<PAGE> 1
EXHIBIT A
[LETTERHEAD OF PUBLICIS COMMUNICATION]
Le President-Directeur General
TRANSLATION WITHOUT LEGAL EFFECT
VIA FAX & REGISTERED AIRMAIL,
RETURN RECEIPT REQUESTED
Strictly Confidential
Mr. Bruce Mason 29 March 1995
Chairman/CEO
True North Communications, Inc.
101 East Erie St.
Chicago, IL 60611
USA
Bruce:
The agreements which constitute our Alliance, and in particular article 9.2 of
the Master Alliance Agreement (MAA), stipulate that any dispute, controversy or
claim must be submitted to a Dispute Resolution process, prior to its eventual
submission to arbitration.
In the context of the arbitration which you initiated, we intend to lodge a
counterclaim leading to the allocation of damages and to the application, to
the benefit of Publicis, of articles 7.02 (C) and (d) of the PBV Shareholders
Agreement relating to the possibility offered to Publicis to acquire additional
shares from FCB in the Joint Venture, and to deprive FCB of the benefit of the
terms of articles II, III, IV, VI and VII of the PBV Shareholders Agreement.
This counterclaim will be based on the numerous violations of our agreements by
FCB since the commencement of the Alliance and even very recently.
By means of this letter we intend to submit these violations to the Dispute
Resolution process; they include those breaches listed below, while in no way
being necessarily restricted to this list:
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Bruce Mason
29 March 1995
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I - BREACHES OF FINANCIAL OBLIGATIONS
a) Refusal to pay the expenses incurred by Publicis in connection with
client accounts obtained for FCB or by FCB with the active
collaboration of Publicis, notably numerous accounts in numerous
countries for [certain significant clients].
b) Refusal by FCB to pay coordination fees, although the principle of
the payment of coordination fees had been accepted and appears in
the Alliance agreements.
c) Refusal to accept the development costs incurred by Publicis for
client prospects intended for FCB, notably [certain significant
clients].
d) Although Publicis had, in a spirit of reconciliation, accepted a
mere temporary suspension of FCB's payment of dividends to
Publicis, refusal by FCB to "unfreeze" the payment of said
dividends.
e) Non-payment of severance payments due to the managers of certain
former FCB subsidiaries paid by the Joint Venture and for which FCB
had undertaken to reimburse the Joint Venture.
f) Non-acceptance by FCB of the charges resulting from legal
proceedings pertaining to the Spanish subsidiary which was
contributed to the Joint Venture. The financial consequences of
this legal proceeding are unjustly borne by the Joint Venture.
g) More generally, refusal to settle the accounts between the two
parties, causing considerable financial hardship to Publicis,
resulting not only from the non-payment of sums due to Publicis but
also from the resulting financing costs.
II - BREACHES OF OBLIGATION TO COOPERATE IN THE DEVELOPMENT OF THE
ALLIANCE; BREACHES OF OBLIGATION OF LOYALTY VIS-A-VIS PUBLICIS
The introduction to the Master Alliance Agreement states that the parties
thereto have decided to create a global Alliance.
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Bruce Mason
29 March 1995
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This decision, which is the subject of the agreements, supposes an alliance
between the parties in all regions of the world where they intend to carry out
their business activities.
Publicis considers that FCB has breached all of its obligations arising from
this alliance by excluding Publicis from all important decisions in its sphere
of influence and refraining to participate in the development of business
activities in Publicis' and the Joint Venture's sphere of influence.
This lack of, or refusal to cooperate, has manifested itself in breaches of
both the letter and the spirit of our agreements, some of which have been
major, as regarding FCB, Publicis and the Joint Venture.
A. Concerning FCB:
a) Major reorganization of FCB's operations, in the context of a
re-definition of its objectives, by the creation of a new structure,
True North, without Publicis having been involved in the prior
planning of this reorganization nor even fully informed, although
the new structure is intended to receive networks competitive to
Publicis, in blatant breach of our agreements.
b) Non-observance of the following terms of the FCB Stockholders
Agreement:
article 2.5 acquisition by FCB of its own shares
article 6.4 information to be supplied to Publicis
B. Concerning Publicis Communication:
a) Refusal to fund Publicis Communication: refusal to provide the
necessary funds for its development and to subscribe to any
increase in share capital.
b) Non-observance of the terms of the FCB Stockholders Agreement
regarding the participation of Publicis representatives in the FCB
Board of Directors.
c) Non-establishment within FCB of the committees stipulated in
articles 1-3 and 2-6 of the MAA (Management Council and
International Committee).
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Bruce Mason
29 March 1995
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d) Refusal to associate the name of Publicis with that of FCB in the
FCB agencies, in breach of the obligation undertaken by FCB in
article 1-2 (d) of the MAA.
e) Violation of the terms of article 1-2 of the Publicis Communication
Shareholders Agreement regarding the vote of FCB's representative
at the Publicis Communication General Shareholders Meeting.
C. Concerning the Joint Venture:
a) Opposition to Publicis' acquisition of FCA and unjustified refusal
to integrate FCA's European subsidiaries into the Joint Venture, in
spite of the fact that said integration and said acquisition are
essential to the development of Publicis and the Alliance, and you
had personally encouraged the negotiations.
b) Non-transfer to the Joint Venture of FCB's shares in the FCB
subsidiaries in Greece and Turkey.
c) Lack of any involvement in the development of the Joint Venture
clients; no significant new client has been contributed by FCB to
the Joint Venture since its creation, and most of FCB's clients are
handled by European agencies in competition with the Joint Venture.
d) Refusal to put at the Joint Venture's disposal the funds necessary
to its development, and refusal to participate in the increase in
its share capital.
e) Non-observance of the clauses relating to the operation of the
Joint Venture: refusal to give the PBV Shareholders Committee the
powers which are recognized by the Alliance as rightly pertaining
to it, by requiring that it observe FCB's own procedures, notably
as regards financial procedures, acquisitions, demands for the
constitution of an Audit Committee and a Finance Committee which
are not provided for in the contract. . .
III - BREACHES OF OBLIGATION TO PARTICIPATE IN THE DEVELOPMENT OF THE
PUBLICIS AGENCY IN NEW YORK
Contrary to the undertaking by FCB in article 1-2 (b) of the MAA, FCB has
always refused to give the slightest assistance in
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Bruce Mason
29 March 1995
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the operation and development of the Publicis agency in New York, in spite of
repeated requests by Publicis.
IV - BREACHES OF OBLIGATION TO COOPERATE IN THE DEVELOPMENT OF THE
ALLIANCE IN JAPAN
According to the terms of article 1-1 (a) of the MAA, FCB undertook to involve
Publicis in the development of its activities in the Asia/Pacific region.
Not only was Publicis kept out of all discussions undertaken by FCB with the
Japanese agency I&S in 1991, but even after Publicis had been informed
subsequently to these discussions of the establishment of an FCB operation in
Japan, FCB refused to involve Publicis in spite of its requests to be so
involved.
FCB has equally refused to associate the name of Publicis with that of FCB,
despite the fact that a significant part of the billings are derived from
Publicis' clients.
V - ACTIONS INDICATING AN INTENTION TO HARM PUBLICIS
Since the initiation by FCB of the Dispute Resolution process in relation to
the acquisition of FCA, FCB has become guilty of actions characteristic of a
real intention to harm its partner.
FCB has sought to paralyse the proper operation of the Joint Venture (for
example: the request for a special audit, the refusal to sign administrative
documents, the refusal to participate in the Shareholders Committee meetings,
the refusal to convene an Alliance Operating Committee meeting . . .)
Moreover, FCB has distributed:
- - to the public via the press (mass circulation, financial and trade)
- - to the staff (via internal memoranda)
- - to the competition (via personal letters)
information harmful to the Alliance and Publicis, notably making public its
intent to take control of the Joint Venture; FCB
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29 March 1995
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has written directly to most of the competitive networks informing them of its
dispute with Publicis, thereby providing them with a weapon with which to cause
irreparable harm to Publicis' business and its relationships with its clients.
All these violations are of a deliberate nature and characterize FCB's
intention not to carry out the Alliance as it was originally intended and
conceived.
They denote the absence of any intention to serve the collective interests of
the Alliance, the absence of an Alliance spirit, an essential condition to the
Alliance.
More serious yet, this attitude, which alters the very substance of our
agreement, has the effect of rendering the performance of these (agreements)
contrary to the American, European and French laws regarding competition.
To examine the totality of these grievances, I designate as Publicis'
representatives on the Dispute Resolution Committee, Messrs. Gerard Pedraglio
and Jean-Paul Morin.
The 30-days time period stipulated by the Alliance (article 9-2 of the MAA)
commences on March 30,1995. Messrs. Pedraglio and Morin are at your disposal
to meet with your representatives as soon as they have been duly designated.
Regards,
Maurice Levy
cc: Publicis' Conseil de Surveillance
True North Communications, Inc. Board
Publicis Communication Board
Publicis-FCB Europe Shareholders
Committee
