<PAGE>
As filed with the Securities and Exchange Commission on April 8, 1997
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TRUE NORTH COMMUNICATIONS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------------------------
DELAWARE 36-1088161
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
101 EAST ERIE STREET
CHICAGO, IL 60611-2897
(312) 425-6500
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------------------
BRUCE MASON
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
TRUE NORTH COMMUNICATIONS INC.
101 EAST ERIE STREET
CHICAGO, IL 60611-2897
(312) 425-6500
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
---------------------------
Copy to:
ALAN K. AUSTIN
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
(415) 493-9300
---------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.33-1/3 par value 952,621 shares $18.625 $17,742,566.12 $5,377
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculation of the registration fee based
on the average of the high and low prices of the Registrant's Common Stock
on the New York Stock Exchange on April 2, 1997.
---------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ Information contained herein is subject to completion or amendment. A +
+ registration statement relating to these securities has been filed with the +
+ Securities and Exchange Commission. These securities may not be sold nor +
+ may offers to buy be accepted prior to the time the registration statement +
+ becomes effective. This prospectus shall not constitute an offer to sell +
+ or the solicitation of an offer to buy nor shall there be any sale of +
+ these securities in any State in which such offer, solicitation or sale +
+ would be unlawful prior to the registration or qualification under the +
+ securities laws of any such State. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated April 8, 1997
PROSPECTUS
952,621 SHARES
TRUE NORTH COMMUNICATIONS INC.
----------------------
COMMON STOCK
($.33-1/3 PAR VALUE)
----------------------
This Prospectus relates to 952,621 shares (the "Shares") of Common Stock,
$.33-1/3 par value (the "Common Stock"), of True North Communications Inc., a
Delaware corporation (the "Company"). The Shares may be offered by certain
stockholders of the Company (the "Selling Stockholders") from time to time in
transactions on the New York Stock Exchange (the "NYSE"), or in the over-the-
counter market or otherwise at prices and at terms then prevailing or at prices
related to then current market prices or in negotiated transactions. The Shares
were issued in a transaction exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section
4(2) thereof. See "Selling Stockholders" and "Plan of Distribution."
The Company will receive no part of the proceeds of sales made
hereunder. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all selling and other expenses
incurred by the Selling Stockholders will be borne by such Selling Stockholders.
The Company and the Selling Stockholders have each agreed to indemnify the other
against certain liabilities, including certain liabilities under the Securities
Act.
The Common Stock is traded on the NYSE under the symbol "TNO." On
April 2, 1997, the closing price of the Common Stock on the NYSE was $18.125.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
Each Selling Stockholder and any broker executing selling orders on
behalf of the Selling Stockholders may be deemed to be an "underwriter" within
the meaning of the Securities Act. Commissions received by any such broker may
be deemed to be underwriting commissions under the Securities Act.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
The date of this Prospectus is April __, 1997.
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
REGISTERED SHARES TO WHICH IT RELATES, NOR SHALL THERE BE ANY SALE OF THE SHARES
BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO
MAKE SUCH OFFER, SOLICITATION OR SALE. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices at Seven World
Trade Center, 13th Floor, New York, New York, 10048, and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and copies of such material can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is
listed for trading on the New York Stock Exchange under the trading symbol
"TNO." Such reports, proxy statements and other information concerning the
Company may also be inspected at the offices of the New York Stock Exchange at
20 Broad Street, New York, New York 10005. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the Commission's Web site is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement
(which term shall include all amendments, exhibits and schedules thereto) on
Form S-3 under the Securities Act, with respect to the Shares offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, and to which reference is hereby
made. Statements made in this Prospectus as to the contents of any document
referred to are not necessarily complete. With respect to each such document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference. The
Registration Statement may be inspected without charge at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at Seven World
Trade Center, 13th Floor, New York, New York 10048 and 500 Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials may be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the
following documents and information heretofore filed with the Commission:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996; and
-2-
<PAGE>
(2) the description of the Company's Preferred Stock Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed on
March 5, 1986, Amendment No. 1 to Form 8-A filed on March 31, 1988 and
Registration Statement on Form 8-A filed on November 18, 1988.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act, after the date of this Prospectus and prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus and
to be part hereof from the date of filing such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for all purposes to the extent that a statement contained
in this Prospectus or in any other subsequently filed documents which also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement contained herein shall be deemed to be modified or
superseded for all purposes to the extent that a statement contained in a
subsequently filed document which is deemed to be incorporated by reference
herein modifies or supersedes such statement.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus is delivered, upon written or oral request of
any such person, a copy of any and all of the information that has been or may
be incorporated by reference in this Prospectus, other than exhibits to such
documents. Requests for such copies should be directed to the Company at 101
East Erie Street, Chicago, IL 60611. The Company's telephone number at that
location is (312) 425-6500.
THE COMPANY
The Company is one of the largest advertising companies in the United
States, with agency brands such as Foote, Cone & Belding, Mojo, Bayer Bess
Vanderwarker Inc. and Borders, Perrin and Norrander and others. In addition to
designing and creating effective advertising campaigns for radio, television and
print media, the Company's agency brands also offer their clients additional
services including digital and interactive communications, sales promotion and
direct marketing, public relations, market and product research, package design
and trademark and trade name development.
The Company, formerly known as Foote, Cone & Belding Communications,
Inc., was incorporated in Delaware in 1942 and changed the name of its parent
holding company to True North Communications Inc. in 1995. The Company's
principal executive offices are located at 101 East Erie Street, Chicago, IL
60611 and its telephone number at that address is (312) 425-6500.
-3-
<PAGE>
RISK FACTORS
Certain statements contained in this Prospectus and the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 (including
the Company's Annual Report to stockholders under the captions "About True
North" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" incorporated therein by reference) constitute "Forward-
Looking Statements" within the meaning of Section 21e(I)(1) of the Exchange Act.
Such Forward-Looking Statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results of the Company to be
materially different from any future results expressed or implied by these
statements. Such factors include, among other things, the following: general
economic and business conditions, changes in demand for the Company's services,
changes in competition, the ability of the Company to integrate acquisitions or
complete future acquisitions, interest rate fluctuations, dependence upon and
availability of qualified personnel, and changes in governmental regulation. In
light of these and other uncertainties, the Forward-Looking Statements included
in these documents should not be regarded as a representation by the Company
that the Company's plans and objectives will be achieved.
In evaluating the Company's business, prospective investors should consider
carefully the following risk factors in addition to the other information set
forth in this Prospectus.
VARIABILITY OF OPERATING RESULTS. The Company's operating results
have fluctuated in the past, and may continue to fluctuate in the future, as a
result of a variety of factors, including the timing of any material reduction,
cancellation or completion of major projects, the loss of a major client, the
loss or hiring of personnel, the timing of the opening or closing of an office,
the relative mix of business, changes in the pricing strategies of the Company
or its competitors, fluctuations in working capital, fluctuations in personnel
and other costs relating to the expansion of operations, and other factors that
are outside of the Company's control. As a result of these fluctuations, the
Company believes that period to period comparisons cannot be relied upon as
indicators of future performance. Due to all of the foregoing factors, in some
future quarters the Company's operating results may fall below the expectations
of securities analysts and investors. In such event, the trading price of the
Common Stock could likely be materially and adversely affected.
The Company experiences some variation in operating results throughout the
year which results in part from timing of product introductions, business cycles
of the Company's clients and marketing communications spending patterns in
general. The Company expects this variation in operating results to continue in
the future. As included in the Company's Annual Report to Stockholders the
Company reported net losses for the quarters ended March 31, 1995 and 1996. The
Company expects to also report a net loss for the quarter ended March 31, 1997.
See Registrant's Annual Report To Stockholders under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Publicis Relationship."
CLIENTS. Due to the nature of their Company's business, clients could at
some time in the future reduce their advertising budget, or transfer to another
agency all or part of their advertising presently placed through the Company.
Representation of a client does not necessarily mean that all advertising for
such client is handled by the Company exclusively. In many cases, the Company
handles the advertising of only a portion of a client's products or services or
only the advertising in particular geographic areas.
COMPETITION. The advertising agency business is highly competitive,
with agencies of all sizes competing primarily on the basis of quality of
service to attract and retain clients and personnel. Advertisers are able to
move from one agency to another with relative ease, in part because accounts are
terminable on short notice, usually 90-180 days. Competition for clients by
large advertising agencies is limited somewhat because many advertisers prefer
not to be represented by an agency which handles competing products or services
for other advertisers.
DEPENDENCE ON KEY PERSONNEL. The Company's success will depend on the
ability of the Company's senior management and to a significant degree on the
continuing contributions of its key account management, marketing, creative and
technology development personnel, as well as its ability to attract and retain
highly skilled personnel in all job categories. Competition for qualified
personnel in the advertising industry is intense. The Company has at times
experienced, and continues to experience, difficulty in recruiting sufficient
numbers of qualified personnel. The loss of the services of any senior
management or other key employee or the inability to attract and retain
additional personnel as required could adversely affect the Company's business,
financial condition or results of operations. If one or more of the Company's
key employees resigns from the Company to join a competitor or to form a
competing company, the loss of such personnel could have a material adverse
effect on the Company's business, financial condition or results of operations.
In addition, the loss of existing or potential clients as the result of the loss
of any key employee to a competitor or otherwise could have a material adverse
effect on the Company's business, financial condition or results of operations.
In the event of the loss of any key personnel, there can be no assurance that
-4-
<PAGE>
the Company would be able to prevent the unauthorized disclosure or use of its
technical knowledge, practices, procedures or client lists.
REGULATION. Federal, state and local governments and governmental
agencies in recent years have adopted statutes and regulations affecting the
advertising activities of advertising agencies and their clients. For example,
statutes and regulations have prohibited television advertising for certain
products and have regulated the form and content of certain types of advertising
for many consumer products. The Federal Trade Commission ("FTC") has also
required proof of accuracy of advertising claims with respect to various
products and, in its enforcement policies, is seeking to establish more
stringent standards with respect to advertising practices. The FTC has the
authority to investigate and to institute proceedings against advertisers and
their advertising agencies for deceptive advertising. Proposals have also been
made for the adoption of additional statutes and regulations which would further
restrict the advertising activities of advertising agencies and their clients.
The effect on the advertising business of future application of existing
statutes or regulations, or the extent, nature or effect of future legislation
or regulatory activity with respect to advertising, may have an adverse impact
on the Company's business.
SUSCEPTIBILITY TO GENERAL ECONOMIC CONDITIONS. The Company's revenues
and results of operations, like those of other advertising companies, will be
subject to fluctuations based upon general economic conditions in the United
States. If there were to be a general economic downturn or a recession in the
United States, the Company expects its clients could substantially and
immediately reduce their advertising budgets leading to a reduction in the level
of the Company's fees and commissions. Most of the factors that could
influence clients and prospective clients to reduce their advertising budgets
under these circumstances are beyond the Company's control. In the event of
such an economic downturn, the Company's business, financial condition or
results of operations could be materially and adversely affected.
-5-
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders
and the number of Shares being offered by each of them hereby. Upon completion
of the offering, assuming all Shares being offered are sold, none of the Selling
Stockholders will own any shares of Common Stock. The Shares are being
registered to permit secondary trading of the Shares, and the Selling
Stockholders may offer Shares for resale from time to time. See "Plan of
Distribution."
The Shares being offered by the Selling Stockholders were acquired
from the Company in a transaction exempt from the registration requirements of
the Securities Act provided by Section 4(2) thereof pursuant to the Amended and
Restated Partnership Interest and Stock Purchase Agreement (the "Purchase
Agreement") dated as of December 31, 1996 between the Company and the Selling
Stockholders. Pursuant to the Purchase Agreement, the Selling Stockholders
acquired an aggregate of 1,121,226 shares of the Company's Common Stock of which
168,605 were subsequently repurchased by the Company based on prevailing market
prices.
Each Selling Shareholder that acquired Common Stock pursuant to the
Purchase Agreement represented to the Company that it was acquiring the Shares
for investment and not with the present intention of distributing such Shares.
In lieu of granting the Selling Stockholders demand registration rights, the
Company agreed to file with the Commission, under the Securities Act, a
Registration Statement on Form S-3, of which this Prospectus forms a part, with
respect to the resale of the Shares. Sales of the Shares are subject to certain
volume limitations as set forth in the Purchase Agreement.
<TABLE>
<CAPTION>
Number of Shares
Number of Shares Number of Shares Beneficially
Beneficially Owned Being Owned
Stockholders Prior to Offering Offered After Offering
- ------------ ------------------ ---------------- ---------------
<S> <C> <C> <C>
Douglas C. Ahlers(1) 423,917 423,917 0
Robert C. Allen, II(2) 95,261 95,261 0
Gerald M. O'Connell(3) 423,917 423,917 0
Kraft Enterprises LTD 9,526 9,526 0
TOTAL
</TABLE>
- -------------------------
(1) President, Relationship Technology Group and Director of TN Technologies
Holding Inc., a majority owned subsidiary of the Company.
(2) President, Modem Media and Director of TN Technologies Holding Inc., a
majority owned subsidiary of the Company.
(3) President, Chief Operating Officer and Director of TN Technologies Holding
Inc., a majority owned subsidiary of the Company.
-6-
<PAGE>
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that they intend
to sell all or a portion of the Shares offered hereby from time to time in
transactions on one or more exchanges, including the NYSE, or in the over-the-
counter market or otherwise, at prices and at terms then prevailing or at prices
related to the then current market prices, or in negotiated transactions. The
Shares may be sold by one or more of the following: (a) a block trade in which
the broker or dealer is engaged and will attempt to sell the Shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; and (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
In effecting sales, brokers or dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate in the resales. The Shares
may be sold from time to time by the Selling Stockholders, or by pledgees,
donees, transferees or other successors in interest.
In connection with distributions of the Shares or otherwise, the Selling
Stockholders may enter into hedging transactions with brokers-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares registered hereunder in the course of hedging the positions they
assume with Selling Stockholders. The Selling Stockholders may also sell the
Shares short and redeliver the Shares to close out such short positions. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the Shares
registered hereunder. The Selling Stockholders may also pledge the Shares
registered hereunder to a broker or dealer and upon a default the broker or
dealer may effect sales of the pledged Shares pursuant to this Prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholders in amounts to be
negotiated in connection with the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act, in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any securities covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
The Company and the Selling Stockholders have each agreed to indemnify the
other against certain liabilities, including certain liabilities under the
Securities Act.
There can be no assurance that any of the Selling Stockholders will sell
any or all of the Shares offered by them hereunder.
-7-
<PAGE>
DESCRIPTION OF CAPITAL STOCK
As of March 24, 1997, the authorized capital stock of the Company consisted
of 50,000,000 shares of Common Stock, par value $.33-1/3 per share, and
100,000 shares of Preferred Stock, par value $1.00 per share.
COMMON STOCK
As of March 24, 1997, there were 24,757,710 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. The
holders of Common Stock are not entitled to cumulative voting rights with
respect to the election of directors, and as a consequence, minority
stockholders will not be able to elect directors on the basis of their votes
alone. Subject to preferences that may be applicable to any then outstanding
shares of Preferred Stock, holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefore. In the event of a liquidation, dissolution, or
winding up of the Company, holders of the Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities and the liquidation
preference of any then outstanding Preferred Stock. Holders of Common Stock have
no preemptive rights and no right to convert their Common Stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are fully paid and
nonassessable.
PREFERRED STOCK
The Board of Directors has the authority, without further action by the
stockholders, to issue up to 100,000 shares of Preferred Stock in one or more
series and to fix the rights, preferences, privileges, and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms, and the number of
shares constituting any series or the designation of such series, without any
further vote or action by stockholders. The issuance of Preferred Stock could
adversely affect the voting power of holders of Common Stock and the likelihood
that such holders will receive dividend payments and payments upon liquidation
and could have the effect of delaying, deferring, or preventing a change in
control of the Company. The Board of Directors has designated and reserved for
issuance 30,000 shares of Preferred Stock as Series A Junior Participating
Preferred Stock. See "Preferred Stock Purchase Rights."
PREFERRED STOCK PURCHASE RIGHTS
The Company has a Shareholders' Rights Plan (the "Plan") that is designed to
protect stockholders from unfair or coercive takeover practices. Under the
Plan, one preferred stock purchase right (the "Rights") exists for each
outstanding share of Common Stock. The Rights, which expire in November 1998,
are exercisable only if a person or group acquires 20% (25% in the case of
certain affiliates) or more of the Company's Common Stock or announces a tender
offer which would result in ownership of 30% or more of the Company's Common
Stock. Each Right entitles the holder to purchase one-two-thousandth of a share
of Series A Junior Participating Preferred Stock of the Company at a purchase
price of $42.50, subject to adjustment under certain conditions. At March 24,
1997, 30,000 shares of Preferred Stock were reserved for issuance upon
exercise of these rights.
Subject to certain conditions and limitations, in the event that the Company
is acquired by a person or group, the Rights (which have not otherwise been
exercised to acquire the Company's Preferred Stock) entitle the holder to
acquire the common stock of the surviving entity at approximately 50% of fair
market value.
The Board of Directors of the Company has the flexibility to (i) redeem
outstanding Rights at a rate of $.005 per right, (ii) adjust the thresholds at
which these rights become exercisable, and, (iii) exclude other persons or
groups from triggering the exercisability of these rights.
-8-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
-------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee................................ $ 5,377
NYSE listing fee.................................... $ 4,000
Accountant's fees and expenses...................... $ 6,000
Legal fees and expenses............................. $10,000
Miscellaneous....................................... $ 5,000
------
Total..................................... $30,377
</TABLE> ------
- ------------
* Represents expenses relating to the distribution by the Selling Stockholders
pursuant to the Prospectus prepared in accordance with the requirements of
Form S-3. These expenses will be borne by the Company on behalf of the Selling
Stockholders. All amounts are estimates except for the SEC Registration Fee
and the NYSE listing fee.
Item 15. Indemnification of Directors and Officers.
-----------------------------------------
Under Section 145 of the Delaware General Corporation Law, the Company has
broad powers to indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act.
The Company's Bylaws also provide that the Company will indemnify its directors,
officers, employees and other agents to the fullest extent not prohibited by
Delaware law.
The Company's Certificate of Incorporation provides for the elimination of
liability for monetary damages for breach of the directors' fiduciary duty of
care to the Company or its stockholders. These provisions do not eliminate the
directors' duty of care and, in appropriate circumstances, equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Company or its
stockholders, for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for any transaction from which the
director derived an improper personal benefit, or for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law. The provision does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
II-1
<PAGE>
Item 16. Exhibits.
--------
Exhibit
Number
--------
5.1 Opinion of Wilson Sonsini Goodrich & Rosati
23.1 Consent of Arthur Andersen LLP, independent public accountants
23.2 Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1)
24.1 Power of Attorney
Item 17. Undertakings.
------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
II-2
<PAGE>
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on April 7, 1997.
TRUE NORTH COMMUNICATIONS INC.
By: /s/ Bruce Mason
----------------------------------------------------
Bruce Mason
Chairman and Chief Executive Officer (Principal
Executive Officer)
By: /s/ Dale F. Perona
----------------------------------------------------
Dale F. Perona
Senior Vice President, Corporate Development,
Secretary/Treasurer
By: /s/ John J. Rezich
----------------------------------------------------
John J. Rezich
Controller (Principal Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ----------- ------- ------
<S> <C> <C>
/s/ Bruce Mason Chairman of the Board and Chief Executive April 7, 1997
- ----------------- Officer (Principal Executive Officer)
Bruce Mason
*
- ----------------- Executive Vice President and Director April 7, 1997
Gregory W. Blaine
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
* Director April 7, 1997
- ---------------------
Richard S. Braddock
* Director April 7, 1997
- ---------------------
Laurel Cutler
Director April 7, 1997
- ---------------------
Maurice Levy
* Director April 7, 1997
- ---------------------
Newton N. Minow
* Director April 7, 1997
- ---------------------
J. Brendan Ryan
* Director April 7, 1997
- ---------------------
William A. Schreyer
* Director April 7, 1997
- ---------------------
Louis E. Scott
* Director April 7, 1997
- ---------------------
Stephen T. Vehslage
</TABLE>
* By: /s/ Bruce Mason
---------------------------------------------
Bruce Mason
Attorney-in-Fact
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------- ----------- ----
<S> <C> <C>
5.1 Opinion of Wilson Sonsini Goodrich & Rosati II-7
23.1 Consent of Arthur Andersen LLP, independent public accountants II-8
23.2 Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1)
24.1 Power of Attorney II-9
</TABLE>
II-6
<PAGE>
EXHIBIT 5.1
-----------
True North Communications Inc.
101 East Erie Street
Chicago, IL 60611-2897
April 8, 1997
RE: REGISTRATION STATEMENT ON FORM S-3
----------------------------------
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 filed by you with
the Securities and Exchange Commission on April 8, 1997 (the "Registration
Statement"), in connection with the registration under the Securities Act of
1933, as amended, of up to 952,621 shares of your Common Stock, $.33-1/3 par
value per share (the "Shares"), which were issued to the Selling Stockholders
named in the Registration Statement pursuant to the Amended and Restated
Partnership Interest and Stock Purchase Agreement dated as of December 31, 1996
between you and the Selling Stockholders. We understand that the Shares may be
sold from time to time to the public by the Selling Stockholders, or their
successors in interest, as described in the Registration Statement. As special
legal counsel to you, we have examined the proceedings taken, and are familiar
with the proceedings proposed to be taken, by you in connection with the
issuance of the Shares by you to the Selling Stockholders and the sale of the
Shares to be sold by the Selling Stockholders as described in the Registration
Statement.
It is our opinion that the Shares have been legally issued and are fully
paid and non-assessable.
We are members of the Bar of the State of California only and express no
opinion as to any matter relating to the laws of any jurisdiction other than the
laws of the State of California, the General Corporation Law of the State of
Delaware and the federal laws of the United States. To the extent this opinion
addresses applicable laws of states other than the State of California, we have
not retained nor relied on the opinion of counsel admitted to the bar of such
states, but rather have relied on compilations of the laws of such states
contained in reporting services presently available to us. Without limiting the
foregoing, we express no opinion as to the securities laws of the State of
Delaware.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
II-7
<PAGE>
EXHIBIT 23.1
Consent of Independent Public Accountants
-----------------------------------------
The Board of Directors
True North Communications Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 6, 1997,
included or incorporated by reference in the True North Communications Inc. Form
10-K for the year ended December 31, 1996 and to all references to our Firm in
this registration statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 4, 1997
II-8
<PAGE>
POWER OF ATTORNEY
The undersigned does hereby constitute and appoint each of Bruce Mason and
Terry M. Ashwill, severally, acting alone and without the other, his or her
attorney-in-fact for the purpose of signing in his or her name and on his or her
behalf as a director of True North Communications Inc. (the "Company"), (i) the
Company's Annual Report on Form 10-K pursuant to the Securities Exchange Act of
1934, (ii) any registration statement filed during 1997 for the registration
under the Securities Act of 1933 of Common Stock of the Company, including the
associated Preferred Stock Purchase Rights to be issued or sold in connection
with the Company's Stock Option of Stock Purchase Plans, and (iii) the
registration statement on Form S-3 to be filed in connection with the sale of
True North Communications Inc. Common Stock by certain stockholders of the
Company, and of signing any and all amendments to said Annual Report and
registration statements and all amendments thereto as each thereof is so signed
for filing with the Securities and Exchange Commission.
Dated: January 16, 1997
/s/ J. Brendan Ryan
- --------------------------- -------------------------
John B. Balousek J. Brendan Ryan
/s/ Gregory W. Blaine /s/ William A. Schreyer
- --------------------------- -------------------------
Gregory W. Blaine William A. Schreyer
/s/ Richard S. Braddock /s/ Louis E. Scott
- --------------------------- -------------------------
Richard S. Braddock Louis E. Scott
/s/ Laurel Cutler /s/ Stephen T. Vehslage
- --------------------------- -------------------------
Laurel Cutler Stephen T. Vehslage
- --------------------------- ------------------------
Maurice Levy Craig R. Wiggins
/s/ Newton N. Minow
- ---------------------------
Newton N. Minow
II-9
