TRUE NORTH COMMUNICATIONS INC, DEF 14A, 1996-04-09

TRUE NORTH COMMUNICATIONS INC
DEF 14A, 1996-04-09
ADVERTISING AGENCIES

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<PAGE>
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 [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[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, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

[_] $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:

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

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] 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:

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

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(3) Filing Party:

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(4) Date Filed:

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Notes:
<PAGE>

[LOGO OF TRUE NORTH COMMUNICATIONS INC.]

NOTICE OF 1996
ANNUAL MEETING OF
SHAREHOLDERS AND
PROXY STATEMENT

Dear Shareholder:

In 1995, we began to build out the architecture of True North. We became a
leader in digital and interactive marketing, one of a number of pivotal
resources the Company has pioneered to help clients compete in a new era of
global communication.

These highlights of our Company's overall performance underscore our
sustained momentum:

. Earnings reached a new high of $33 million on record revenues of $439
million (exclusive of a one-time 1st quarter restructuring charge).

. Strong gains were posted across all our businesses and in all our global
markets, adding more than $300 million in billings from new assignments,
a 20% increase over 1994.

. Worldwide billings grew to $7.5 billion, including our joint venture with
Publicis in Europe. FCB ranked number one in America once again.

. Our Company expanded its global reach and resources with the acquisition
of seven premier agencies in Asia-Pacific, Latin America and the United
States.

. In its first year of operation, TN Technologies Inc., with $20 million in
revenues, ranked as one of the largest interactive units among the top 20
agencies, according to AD AGE.

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. Our goal is to enhance
our Company's leadership position and your share in our ongoing success.

Best regards,

/s/ Bruce Mason
Bruce Mason
<PAGE>

[LOGO OF TRUE NORTH COMMUNICATIONS INC.]

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1996

April 9, 1996

Dear Stockholder;

You are cordially invited to attend the annual meeting of stockholders of
True North Communications Inc. The 1996 annual meeting will be held at The
University of Chicago Graduate School of Business, The Conference Center--
Sixth Floor, 450 North Cityfront Plaza, Chicago, Illinois on May 15, 1996, at
10:00 A.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
1996.

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 22, 1996 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.

MARCH 29, 1996

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

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 15, 1996

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 University of Chicago Graduate School of Business, The Conference
Center--Sixth Floor, 450 North Cityfront Plaza, Chicago, Illinois, on
Wednesday, May 15, 1996, at 10:00 A.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,
1995, 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 9, 1996.

VOTING SECURITIES

Only stockholders of record at the close of business on March 22, 1996, the
record date fixed by the Board of Directors, are entitled to vote at the
Annual Meeting. On that date, the Company had outstanding 23,533,232 shares of
common stock (excluding 3,339 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 19.79%
GeoCapital Corporation
767 Fifth Avenue
New York, New York 10153................... 2,074,500 Shares(1) 8.82%
David L. Babson & Co., Inc.
One Memorial Drive
Cambridge, Massachusetts 02142-1300........ 1,254,740 Shares(2) 5.33%
</TABLE>
- ----------------
(1) Based upon information furnished by GeoCapital Corporation in a Schedule
13G filed with the Securities and Exchange Commission on February 12,
1996.
(2) Based upon information furnished by David L. Babson & Co., Inc. in a
Schedule 13G filed with the Securities and Exchange Commission on February
12, 1996.

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 22,
NAME, AGE AND PRINCIPAL OCCUPATION SINCE 1996(1)
---------------------------------- -------- ------------
<S> <C> <C>
JACK BALOUSEK (50).................................. 1989 166,201
Chairman and Chief Operating Officer of TN Technolo-
gies, Inc.; other senior executive positions with
the Company or subsidiaries for more than five
years.
MAURICE LEVY (54)................................... 1989 62,000(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 (47).............................. 1990 76,810
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 (69).................................. 1990 57,342
Consultant; formerly Director of Global Marketing
Planning; other senior executive positions with the
Company or subsidiaries for more than five years;
Director of Hannaford Brothers Co., Quaker State
Corp.
TERRY M. ASHWILL (51)............................... 1991 93,097
Executive Vice President, Chief Financial Officer of
the Company for the past five years.
J. BRENDAN RYAN (53)................................ 1994 57,045
Chairman and Chief Executive Officer of Foote, Cone
& Belding; other senior executive positions with
the Company or subsidiaries for the past five
years; Director of Capstone Pharmacy Services, Inc.
RICHARD S. BRADDOCK (54)............................ 1994 16,534
Consultant; formerly a Partner, Clayton, Dubilier &
Rice, Inc. 1994-1995; Chief Executive Officer of
MEDCO 1993; President and other executive positions
with Citicorp 1973-1992; Director of Kodak, DFS
Group Ltd., Alliant Food Service, Lincoln Center
for the Performing Arts, Tuck School of Business
(Dartmouth), Cancer Research Institute.
All directors and executive officers as a group
(16)............................................... 1,040,704(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, 1996 as follows: Mr. Mason,
128,340 shares; Mr. Scott, 14,758 shares; Mr. Vehslage, 13,467 shares; Mr.
Minow, 12,633 shares; Mr. Schreyer, 7,167 shares; Mr. Wiggins, 66,160
shares; Mr. Balousek, 142,820 shares; Mr. Levy, 62,000 shares; Mr. Blaine,
31,540 shares; Ms. Cutler, 36,280 shares; Mr. Ashwill, 80,600 shares; Mr.
Ryan, 48,940 shares; and Mr. Braddock, 16,534 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"). In 1994
the Company initiated an arbitration proceeding seeking a determination
that PSA, PC, and PBV breached various contractual obligations under the
1989 "Alliance Agreements'. In 1995 PC asserted various claims and

3
<PAGE>

counterclaims it intended to pursue in the arbitration. Arbitration
proceedings remain pending. Also in 1995 PC gave notice to the Company that
the Alliance Agreements would be terminated. On February 29, 1996, the
Company announced that, while it would continue negotiations with PC and
PSA to arrive at a new arrangement, it considered the notice of PC
terminating the Alliance Agreements as taking effect. In doing so, True
North explicitly reserved all its rights. The Company also stated: "The
termination of the agreements does not alter the status that [PC] and [the
Company] have as shareholders in each other or their respective 51% and 49%
ownership in the very successful [PBV] European joint venture.'
(3) Equivalent to 4.4% of the Company's outstanding common stock.

The Company's Board of Directors met 5 times during 1995. 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 1995 were $76,000. 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
February 14, 1996, Louis E. Scott received an option to purchase 2,400 shares
of the Company's Common Stock, Newton N. Minow received an option to purchase
1,700 shares of the Company's Common Stock, William A. Schreyer received an
option to purchase 2,300 shares of the Company's Common Stock and Richard S.
Braddock and Stephen T. Vehslage each received an option to purchase 2,100
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.

William A. Schreyer and Richard S. Braddock are members of the Company's
Audit Committee. The functions of this committee, which met 4 times during
1995, 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. The functions of this
committee, which met 4 times during 1995, 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. The function of this
committee, which met 4 times during 1995, 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 1997 Annual
Meeting must be submitted in a written notice to the Secretary of the Company
at least 30 days but no more than

4
<PAGE>

90 days prior to March 31, 1997. 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 1995. In addition to
decisions regarding executive compensation, other actions and activities of
the Committee during the year included:

. A continuation of the practice of a comprehensive review of the overall
compensation program for executives using both internal staff and
external compensation consultants. This review reaffirmed that the
Company is interpreting survey data correctly in its application of the
compensation programs.

. Reviewed the final regulations concerning accounting for stock option
grants. The Committee reaffirmed that the Company will comply with the
new accounting regulations and their new disclosure requirements. There
is no additional financial impact to the Company as a result of these new
regulations.

. Approval of stock option grants to 161 senior executives totaling 747,850
shares during 1995.

In making compensation decisions in 1995 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 1995
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 31 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
1995 awards was the actual improvement in the Company's net income before
unusual items from 1994 to 1995. 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

5
<PAGE>

elements of the Company's growth plan, and measuring effectiveness in
fulfillment of management responsibilities. Based on overall Company
financial performance, no participant in the Performance Program received a
maximum payout for 1995.

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 the current
fair market value, vest over five years and are exercisable over ten years.

Compensation for 1995 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. At this level of
salary, he remains below the competitive average consistent with the True
North Performance Program principles.

Mr. Mason's Variable Incentive Compensation for 1995 was $580,000. This
amount was determined based on the parameters of the Performance Program. The
Compensation Committee reviewed the award in light of the Company's
performance and other qualitative objectives for Mr. Mason.

Mr. Mason's Deferred Variable Incentive Compensation for 1995 performance
was $210,000 of which $42,000 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.

Finally, Mr. Mason was granted Variable Incentive Stock Options for 46,200
shares during 1995. A 1996 grant of 42,000 shares was awarded to Mr. Mason.

All decisions regarding Mr. Mason's 1995 Variable Compensation components
were made by the Compensation Committee in February, 1996 after Company
earnings information for 1995 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.

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

6
<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............. 1995 $600,000 $580,000 46,200 $210,000 $451,326
Chairman and Chief 1994 $600,000 $630,000(1) 53,000 $225,000(1) $420,457
Executive Officer 1993 $583,333 $800,000 64,500 $290,000 $356,531
Brendan Ryan............ 1995 $439,583 $460,000 27,500 $160,000 $253,190
President and CEO 1994 $394,166 $600,000 16,600 $250,000 $211,356
FCB/LKP 1993 $365,000 $400,000 24,000 $182,500 $123,163
Jack Balousek........... 1995 $450,000 $270,000 38,500 $125,000 $249,378
President and Chief 1994 $450,000 $470,000 38,000 $190,000 $242,693
Operating Officer 1993 $450,000 $485,000 58,000 $191,250 $253,583
Terry M. Ashwill........ 1995 $380,000 $280,000 37,400 $135,000 $180,988
Executive Vice 1994 $375,000 $395,000 31,800 $190,000 $180,101
President, Chief 1993 $333,333 $380,000 42,000 $166,700 $ 77,348
Financial Officer
Craig R. Wiggins........ 1995 $400,000 $270,000 13,200 $125,000 $168,815
Vice Chairman 1994 $400,000 $140,000 36,400 $ 65,000 $163,694
1993 $400,000 $420,000 $11,694 52,000 $200,000 $191,251
</TABLE>
- ----------------
(1) Mr. Mason on his own initiative requested that his incentive compensation
be reduced in light of 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. Wiggins for 1993 is for tax
reimbursements and allowances resulting from his relocation to New York.
(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 $10,482 for 1995 for each of the named executives.

The company matching contribution to the True North Stock Purchase
Plan was $4,749 for 1995 for each of the named executives.

The company matching contribution to the True North Stock Purchase
Integration Plan for 1995, was $42,786 for Mr. Mason, $35,306 for Mr.
Ryan, $30,620 for Mr. Balousek, $24,938 for Mr. Ashwill and $13,481 for
Mr. Wiggins.

The company contribution to the True North Profit Sharing Integration
Plan for 1995 was $88,424 for Mr. Mason, $72,853 for Mr. Ryan, $63,024
for Mr. Balousek, $51,143 for Mr. Ashwill and $31,867 for Mr. Wiggins.

7
<PAGE>

The amount accrued under the Company's Part-time Director Agreement
for 1995, was $293,197 for Mr. Mason, $126,603 for Mr. Balousek,
$89,676 for Mr. Ashwill, $122,790 for Mr. Ryan and $99,846 for Mr.
Wiggins.

The company-paid amount for life insurance for 1995 was $11,688 for
Mr. Mason, $8,900 for Mr. Balousek, $7,010 for Mr. Ryan and $8,390 for
Mr. Wiggins.

STOCK OPTIONS

During 1995, stock option grants covering 747,850 shares were awarded to 161
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 1995 for the named executive
officers are shown in the following chart.

<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............. 46,200 6.2% $19.3125 3/10/05 $561,123 $1,421,997
Brendan Ryan............ 27,500 3.7% $19.3125 3/10/05 $334,002 $ 846,427
Jack Balousek........... 38,500 5.1% $19.3125 3/10/05 $467,603 $1,184,997
Terry M. Ashwill........ 37,400 5.0% $19.3125 3/10/05 $454,243 $1,151,140
Craig Wiggins........... 13,200 1.8% $19.3125 3/10/05 $260,321 $ 406,285
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR

- ----------------
(1) Options were granted at market price on the date of grant (3/10/95). 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
$19.3125 on 3/10/95, 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
3/10/95-3/10/05
-------------------------
5%($) 10%($)
------------ ------------
<S> <C> <C>
All stockholders (6,924 stockholders holding
23,362,277 shares at 3/10/95)....................... $283,747,177 $719,071,058
</TABLE>

8
<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................. 0 $ 0 80,800/156,900 $285,525/$254,850
Brendan Ryan................ 0 0 29,720/66,380 $114,150/$100,100
Jack Balousek............... 0 0 102,640/130,260 $464,850/$228,900
Terry M. Ashwill............ 0 0 53,560/110,640 $207,900/$143,100
Craig Wiggins............... 0 0 39,920/85,360 $117,900/$149,100
</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, 1995, Mr. Mason had 27 years; Mr. Ryan had 4 years; Mr.
Balousek had 17 years; Mr. Ashwill had 4 years; and Mr. Wiggins had 22 years
of credited service with the Company for qualification in the Supplemental
Pension Plan.

9
<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 1995, 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 1996.

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., Cordiant PLC (ADR)
and WPP Group plc (ADR).

<TABLE>

[GRAPH APPEARS HERE]

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG TRUE NORTH COMMUNICATIONS INC., S&P 500 INDEX AND ADVERTISING INDEX

<CAPTION>
Measurement Period TRUE NORTH S&P ADVERTISING
(Fiscal Year Covered) COMMUNICATIONS INC. 500 INDEX INDEX
- ------------------- ------------------- --------- -----------
<S> <C> <C> <C>
Measurement Pt-
12/31/90 $100 $100 $100
FYE 12/31/91 $132 $130 $145
FYE 12/31/92 $168 $140 $179
FYE 12/31/93 $263 $154 $185
FYE 12/31/94 $242 $156 $193
FYE 12/31/95 $214 $215 $260
</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 1996. 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 1996.

10
<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 1997, all stockholder proposals must be
received by the Company on or prior to December 12, 1996.

/s/ Dale F. Perona

Dale F. Perona
Secretary

Dated: April 9, 1996

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1995 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.

11
<PAGE>

- --------------------------------------------------------------------------------
P R O X Y
TRUE NORTH COMMUNICATIONS INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The signatory hereby appoints BRUCE MASON and GREGORY BLAINE, and each or either
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
COMMUNICATIONS INC. at the annual meeting of its stockholders to be held at The
University of Chicago Graduate School of Business, The Conference Center--Sixth
Floor, 450 North Cityfront Plaza, Chicago, Illinois, on May 15, 1996 at 10:00
A.M. local time, to vote on the proposals 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>

Please mark your votes as in this example. |
[X] | 2739
----

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
1996.
FOR AGAINST ABSTAIN
[_] [_] [_]

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

Change of Address/Comments on Reverse Side

[_]

The undersigned hereby acknowledges receipt of the Notice of the 1996 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 /\

S.C. Johnson and FCB:
Global Partners

FCB capped 1995's dynamic performance with the assignment of S.C. Johnson & Son,
Inc.'s worldwide consumer products account across 50 countries to begin 1996 on
a historic note.

This win, one of the largest account consolidations in the industry,
represents $350 million in global billings. Thanks to this resounding vote of
confidence in the talent of our people and the strength of our network, we have
been invested with the enormous privilege of harnessing the global power of such
leading brands as Raid, Glade, Pledge, Shout, Off!, Edge, Windex and Drano.

If an agency is judged by the company it keeps, then FCB has been truly
honored to work shoulder-to-shoulder with the people of S.C. Johnson for more
than four decades.

<PAGE>

GRAPHIC MATERIAL APPENDIX

1. Page 10 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 9, 1996.

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

S.C. Johnson and FCB:
Global Partners

Then off to the side is the S.C. Johnson Raid Bug holding the world.