<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 7, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TRUE NORTH COMMUNICATIONS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 36-1088161
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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
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:
THEODORE J. THEOPHILOS
EXECUTIVE VICE PRESIDENT OF CORPORATE DEVELOPMENT
AND BUSINESS AFFAIRS
TRUE NORTH COMMUNICATIONS INC.
101 EAST ERIE STREET
CHICAGO, IL 60611-2897
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
by the Selling Stockholders.
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
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, $.33 1/3 par value
(2)(3) 111,438 shares $27.03 $3,012,169.10 $837.38
</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933 based on the average of
the high and low prices per share of the Registrant's Common Stock on the
New York Stock Exchange as reported in the consolidated reporting system
on December 2, 1998.
(2) Includes 111,438 associated preferred stock purchase rights ("Rights") to
purchase 1/2,000 of a share of Series B Junior Participating Preferred
Stock, par value $1.00 per share. Rights initially are attached to and
trade with the Common Stock of Registrant. The value attributable to such
Rights, if any, is reflected in the market price of the Common Stock.
(3) Pursuant to Rule 416 under the Securities Act of 1933, there is also
registered hereby an indeterminate number of securities that may be issued
with respect to such shares of Common Stock as a result of stock splits,
stock dividends or similar transactions.
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.
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<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER _7, 1998
PROSPECTUS
111,438 SHARES
TRUE NORTH COMMUNICATIONS INC.
COMMON STOCK
The shares offered hereby are 111,438 issued and outstanding shares of
Common Stock of True North Communications Inc., which are owned by 10-20
Corporation (the "Selling Stockholder"), and which will be sold from time to
time by the Selling Stockholder for its account.
The Selling Stockholder has advised us that it intends to sell the Shares in
one or more ordinary brokerage transactions on the New York Stock Exchange at
market prices prevailing at the time of such sale (subject to customary or
negotiated brokerage commissions). We will not receive any of the proceeds
from the sale of the Shares by the Selling Stockholder.
Our Common Stock is listed on the New York Stock Exchange under the symbol
"TNO." On December 3, 1998, the closing price of our Common Stock on the New
York Stock Exchange was $26 15/16 per share.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this Prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
----------------
The information in this Prospectus is not complete and may be changed. The
Selling Stockholder may not sell these Securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Prospectus is not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any state where the offer or sale is not
permitted.
December , 1998.
<PAGE>
THE COMPANY
In December 1994, True North Communications Inc. ("True North") succeeded
Foote, Cone & Belding Communications, Inc. as the holding company for Foote,
Cone & Belding. In December 1997, through the merger of a subsidiary of True
North with Bozell, Jacobs, Kenyon & Eckhardt, Inc., True North almost doubled
its size by adding Bozell Worldwide, Temerlin McClain and certain specialized
communications businesses to its network.
True North offers full-service advertising through two separate, independent
global agency networks: Foote, Cone & Belding Worldwide and Bozell Worldwide
which by themselves and through their respective subsidiaries and affiliates,
independently operate separate advertising agency networks worldwide. Their
primary business is to create marketing communications for their clients'
goods and services across the spectrum of advertising and promotion media.
Each of the agency networks has its own clients and competes with the other in
certain markets. True North also operates two other independent full-service
agencies, Temerlin McClain and Tierney & Partners, Inc. In addition, True
North owns certain marketing services and specialty advertising companies
through the True North Diversified Services Companies, and certain interactive
marketing companies through TN Technologies Inc. True North's corporate
headquarters are located at 101 East Erie Street, Chicago, Illinois 60611 and
its telephone number is (312) 425-6500.
SELLING STOCKHOLDER
True North delivered the Shares to the Selling Stockholder as part of the
consideration for the purchase of substantially all of the assets of Market
Growth Resources, Inc. (now known as 10-20 Corporation, the Selling
Stockholder) pursuant to an Asset Purchase Agreement dated as of November 16,
1995 (the "Asset Purchase Agreement") and amended by a First Amendment to
Asset Purchase Agreement and Termination of Operations Agreement dated as of
June 25, 1998 by and among Market Growth Resources, Inc., True North, the
Selling Stockholder and certain individuals (the "First Amendment"). Pursuant
to the terms of the First Amendment, True North agreed to use its best efforts
to cause the Shares to be registered for the purpose of the resale thereof
prior to January 1, 1999 and to keep the registration statement related to
this Prospectus effective until July 1, 1999 (or such earlier time as all of
the Shares are sold).
The officers and directors of the Selling Stockholder have been employees of
True North since the closing of the transactions contemplated by the Asset
Purchase Agreement. The Selling Stockholder is the beneficial owner of 111,438
shares of True North common stock.
PLAN OF DISTRIBUTION
True North has been advised by the Selling Stockholder that it intends to
sell all or a portion of the Shares offered hereby from time to time in
ordinary brokerage transactions on the NYSE at market prices prevailing at the
time of such sale (subject to customary or negotiated brokerage commissions)
using such broker-dealers as may enter into arrangements with the Selling
Stockholder. The Selling Stockholder will pay all brokerage commissions
applicable to such transactions. True North will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholder.
There can be no assurance that the Selling Stockholder will sell any or all
of the Shares offered by it hereunder.
The Selling Stockholder and any broker executing selling orders on behalf of
the Selling Stockholder may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933. Commissions received by any such broker
may be deemed to be underwriting commissions under the Securities Act of 1933.
2
<PAGE>
LEGAL MATTERS
The validity of the Shares being offered hereby and certain other legal
matters will be passed upon for True North by Suzanne S. Bettman, Vice
President and Assistant General Counsel of True North.
EXPERTS
The consolidated financial statements of True North and its subsidiaries
included (or incorporated by reference) in True North's Annual Report on Form
10-K for the year ended December 31, 1997 have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated herein in reliance upon the authority of
Arthur Andersen LLP as experts in giving said reports.
The consolidated statements of operations, cash flows and stockholders'
equity of Bozell, Jacobs, Kenyon & Eckhardt, Inc. and subsidiaries for the two
years ended March 31, 1997, were audited by KPMG Peat Marwick LLP, independent
certified public accountants, and are included in the consolidated financial
statements of True North Communications Inc. for the two years ending December
31, 1996. The reports of KPMG Peat Marwick LLP on the statements of
operations, cash flows and stockholders' equity of Bozell, Jacobs, Kenyon &
Eckhardt, Inc. and subsidiaries for the two years ended March 31, 1997, are
incorporated by reference in reliance upon the authority of KPMG Peat Marwick
LLP as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
True North files reports, proxy statements and other information with the
SEC. You may inspect and copy such reports, proxy statements and other
information at the public reference facilities maintained by the SEC at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information. Such materials also
may be accessed electronically by means of the SEC's web site at
http://www.sec.gov.
True North has filed a Registration Statement relating to the offering
described in this Prospectus. As allowed by SEC rules, this Prospectus does
not contain all of the information which you can find in the Registration
Statement. You are referred to the Registration Statement and the Exhibits
thereto for further information. This document is qualified in its entirety by
such other information.
The SEC allows True North to "incorporate by reference" information into
this Prospectus, which means that we can disclose important information to you
by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this Prospectus,
except for any information superseded by information in this Prospectus. This
Prospectus incorporates by reference the documents set forth below that have
been previously filed with the SEC. These documents contain important
information about True North's business and finances.
1. True North's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
2. True North's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998;
3. True North's Current Report on Form 8-K dated November 4, 1998;
4. The description of True North's capital stock contained in True North's
Registration Statement on Form S-4 filed on November 26, 1997,
Registration No. 333-41189, and any amendment or report filed for the
purposes of updating such description;
5. The description of True North's Preferred Stock Purchase Rights
contained in True North's Registration Statement on Form 8-A filed on
November 5, 1998 and any amendment or report filed for the purpose of
updating such description; and
3
<PAGE>
6. All other reports filed pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934 since December 31, 1997.
This Prospectus also incorporates by reference additional documents that may
be filed by True North with the SEC between the date of this Prospectus and
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold. Any statement contained in this Prospectus or in a document
incorporated by reference 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 document which is also incorporated by reference modifies or supersedes
such statement.
You may obtain copies of such documents which are incorporated by reference
in this Prospectus (other than exhibits thereto which are not specifically
incorporated by reference herein), without charge, upon written or oral
request to the Secretary of True North at 101 East Erie Street, Chicago,
Illinois 60611-2897,
(312) 425-6500. In order to ensure delivery of documents, any request therefor
should be made not later than five business days prior to making an investment
decision.
You should rely only on the information contained or incorporated by
reference in this Prospectus. We have not authorized anyone to provide you
with information that is different from what is contained in this Prospectus.
You should not assume that the information contained in this Prospectus is
accurate as of any date other than the date of this Prospectus, and neither
the mailing of this Prospectus to stockholders nor the issuance of any
securities hereunder shall create any implication to the contrary. This
Prospectus does not offer to buy or sell securities in any jurisdiction where
it is unlawful to do so.
4
<PAGE>
PART II--INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
The following is a statement of estimated expenses of the issuance and
distribution of the securities being registered (other than underwriting
discounts and commissions) all of which are being paid by the Registrant:
<TABLE>
<S> <C>
SEC Registration Fee............................................. $837.38
NYSE listing fee................................................. 1,500
Accountant's fees and expenses................................... 2,000
Legal fees and expenses.......................................... 1,000
Miscellaneous.................................................... 162.62
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Total........................................................ $ 5,500
=======
</TABLE>
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*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, True North has
broad powers to indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act.
True North's bylaws also provide that True North will indemnify its directors,
officers, employees and other agents to the fullest extent permitted by
Delaware law.
True North's Certificate of Incorporation, as amended, provides for the
elimination of liability for monetary damages for breach of the directors'
fiduciary duty of care to True North 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 True North 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.
Furthermore, True North has secured insurance covering True North and its
directors and officers and those of its principal subsidiaries against certain
liabilities.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
<C> <S> <C>
4.1 Registrant's Restated Certificate of Incorporation, as
amended (incorporated by reference to Exhibit 3(i) to
Registrant's Form 10-K for the year ended December 31,
1994).
4.2 Certificate of Ownership and Merger changing Registrant's
name to True North Communications Inc. (incorporated by
reference to Exhibit (3)(i) to Registrant's Current Report
on Form 8-K filed December 9, 1994).
4.3 Certificate of Designation of Series B Junior
Participating Preferred Stock of True North Communications
Inc., filed in Delaware on November 5, 1998.
4.4 Registrant's Bylaws, as restated March 4, 1998
(incorporated by reference to Exhibit 4.4 to Registrant's
Post-Effective Amendment No. 1 on Form S-8 dated March 17,
1998 to Registrant's Registration Statement on Form S-4,
filed November 26, 1997 (File No. 333-41189)).
4.5 Certificate of Amendment of Restated Certificate of
Incorporation, filed in Delaware on December 30, 1997
(incorporated by reference to Exhibit 4.6 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1997).
</TABLE>
5
<PAGE>
<TABLE>
<C> <S> <C>
4.6 Rights Agreement dated as of November 4, 1998 between
Registrant and the First Chicago Trust Company of New
York, as Rights Agent (incorporated by reference to
Exhibit 4 to Registrant's Current Report on Form 8-K dated
November 4, 1998).
5.1 Opinion of Suzanne S. Bettman, Vice President, Assistant
General Counsel of Registrant.
23.1 Consent of Arthur Andersen LLP, independent public
accountants.
23.2 Consent of KPMG Peat Marwick LLP, independent certified
public accountants.
23.3 Consent of Suzanne S. Bettman, Vice President, Assistant
General Counsel of Registrant (included in Exhibit 5.1).
24.1 Power of Attorney.
99.1 First Amendment to Asset Purchase Agreement and
Termination of Operations Agreement made as of June 25,
1998, by and among Market Growth Resources, Inc. (formerly
MGR Holdings Co.), Registrant, the Selling Stockholder and
certain individuals.
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes (i) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement:
(A) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(B) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act of 1933 if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(C) 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
provided, however, that paragraphs (a)(i)(A) and (a)(i)(B) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement, (ii) that, for
purposes of determining any liability under the Securities Act of 1933, 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 and (iii) 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise,
6
<PAGE>
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 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 Act
and will be governed by the final adjudication of such issue.
7
<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 DECEMBER 7, 1998.
True North Communications Inc.
/s/ Bruce Mason
By: _________________________________
Bruce Mason
Chief Executive Officer
(Principal Executive Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON DECEMBER 7,
1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Bruce Mason Chief Executive Officer and Director
___________________________________________
Bruce Mason
/s/ Donald L. Seeley Executive Vice President, Chief Financial
___________________________________________ Officer (Principal Financial Officer)
Donald L. Seeley
/s/ Kevin J. Smith Senior Vice President, Chief Accounting
___________________________________________ Officer (Principal Accounting Officer)
Kevin J. Smith
David A. Bell* Director
___________________________________________
David A. Bell
Richard S. Braddock* Director
___________________________________________
Richard S. Braddock
Donald M. Elliman, Jr.* Director
___________________________________________
Donald M. Elliman, Jr.
W. Grant Gregory* Director
___________________________________________
W. Grant Gregory
Leo-Arthur Kelmenson* Director
___________________________________________
Leo-Arthur Kelmenson
Richard P. Mayer* Director
___________________________________________
Richard P. Mayer
Michael E. Murphy* Director
___________________________________________
Michael E. Murphy
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Charles D. Peebler, Jr.* Director
___________________________________________
Charles D. Peebler, Jr.
J. Brendan Ryan* Director
___________________________________________
J. Brendan Ryan
Stephen T. Vehslage* Director
___________________________________________
Stephen T. Vehslage
</TABLE>
/s/ Theodore J. Theophilos
*By: ________________________________
Theodore J. Theophilos
as Attorney-in-Fact
9
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S> <C>
4.1 Registrant's Restated Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3(i) to Registrant's
Form 10-K for the year ended December 31, 1994).
4.2 Certificate of Ownership and Merger changing Registrant's name
to True North Communications Inc. (incorporated by reference
to Exhibit (3)(i) to Registrant's Current Report on Form 8-K
filed December 9, 1994).
4.3 Certificate of Designation of Series B Junior Participating
Preferred Stock of True North Communications Inc., filed in
Delaware on November 5, 1998.
4.4 Registrant's Bylaws, as restated March 4, 1998 (incorporated
by reference to Exhibit 4.4 to Registrant's Post-Effective
Amendment No. 1 on Form S-8 dated March 17, 1998 to
Registrant's Registration Statement on Form S-4, filed
November 26, 1997
(File No. 333-41189)).
4.5 Certificate of Amendment of Restated Certificate of
Incorporation, filed in Delaware on December 30, 1997
(incorporated by reference to Exhibit 4.6 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1997).
4.6 Rights Agreement dated as of November 4, 1998 between
Registrant and the First Chicago Trust Company of New York, as
Rights Agent (incorporated by reference to Exhibit 4 to
Registrant's Current Report on Form 8-K dated November 4,
1998).
5.1 Opinion of Suzanne S. Bettman, Vice President, Assistant
General Counsel of Registrant.
23.1 Consent of Arthur Andersen LLP, independent public
accountants.
23.2 Consent of KPMG Peat Marwick LLP, independent certified public
accountants.
23.3 Consent of Suzanne S. Bettman, Vice President, Assistant
General Counsel of Registrant (included in Exhibit 5.1).
24.1 Power of Attorney.
99.1 First Amendment to Asset Purchase Agreement and Termination of
Operations Agreement made as of June 25, 1998, by and among
Market Growth Resources, Inc. (formerly MGR Holdings Co.),
Registrant, the Selling Stockholder and certain individuals.
</TABLE>
10
<PAGE>
Exhibit 4.3
CERTIFICATE OF DESIGNATION
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
TRUE NORTH COMMUNICATIONS INC.
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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The undersigned do hereby certify that the following resolution was
duly adopted by the Board of Directors of True North Communications Inc., a
Delaware corporation (the "Corporation"), at a meeting duly convened and held on
November 4, 1998, at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority vested in the board of
directors of the Corporation by the Restated Certificate of Incorporation, as
amended (the "Charter"), the board of directors does hereby create, authorize
and provide for the issue of a series of Preferred Stock, par value $1.00 per
share, of the Corporation, to be designated "Series B Junior Participating
Preferred Stock" (hereinafter referred to as the "Series B Preferred Stock"),
initially consisting of 45,000 shares, and to the extent that the designations,
powers, preferences and relative and other special rights and the
qualifications, limitations or restrictions of the Series B Preferred Stock are
not stated and expressed in the Charter, does hereby fix and herein state and
express such designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions thereof, as follows
(all terms used herein which are defined in the Charter shall be deemed to have
the meanings provided therein):
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series B Junior Participating Preferred Stock" and the number
of shares constituting such series shall be 45,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series B Preferred Stock with respect to dividends, the holders of shares of
Series B Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first business day of January, April,
July and October in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series B Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater
<PAGE>
of (a) $.01 or (b) subject to the provision for adjustment hereinafter set
forth, 2,000 times the aggregate per share amount of all cash dividends, plus
2,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par value $33-a
per share, of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series B Preferred Stock. In the event the Corporation
shall at any time after November 4, 1998 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each case the amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided, however, that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior to and
superior to the shares of Series B Preferred Stock with respect to dividends, a
dividend of $.01 per share on the Series B Preferred Stock shall nevertheless by
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series B Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series B Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date fixed
for the payment thereof.
-2-
<PAGE>
Section 3. Voting Rights.
The holders of shares of Series B Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to 2,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series B Preferred Stock and the holders of shares of Common Stock
shall vote collectively as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series B Preferred Stock
shall be in arrears in an amount equal to six (6) quarterly dividends thereon,
the occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series B Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock (including holders of the
Series B Preferred Stock) with dividends in arrears in an amount equal to six
(6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the holders of
Series B Preferred Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders, provided that
such voting right shall not be exercised unless the holders of ten percent (10%)
in number of shares of Preferred Stock outstanding shall be present in person or
by proxy. The absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such voting rights. At
any meeting at which the holders of Preferred Stock shall exercise such voting
right initially during an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such vacancies, if any, in the
Board of Directors as may then exist up to two (2) Directors or, if such right
is exercised at an annual meeting, to elect two (2) Directors. If the number
which may be so elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the right to make such
increase in the number of Directors as shall be necessary to permit the election
by them of the required number. After the holders of the Preferred Stock shall
have exercised their right to elect Directors in any default period and during
the continuance of such period, the number of Directors shall not be increased
or
-3-
<PAGE>
decreased except by vote of the holders of Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking senior to or pari
passu with the Series B Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
special meeting of the holders of Preferred Stock, which meeting shall thereupon
be called by the Chief Executive Officer, the President, any Senior Vice
President, any Executive Vice President, the Chief Financial Officer, the
Treasurer or the Secretary of the Corporation. Notice of such meeting and of
any annual meeting at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph (C)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him or her at his or her
last address as the same appears on the books of the Corporation. Such meeting
shall be called for a time not earlier than 10 days and not later than 50 days
after such order or request, or in default of the calling of such meeting within
50 days after such order or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no such special
meeting shall be called during the period within 50 days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and, if
applicable, other classes of capital stock of the Corporation, shall continue to
be entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as
provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders of the class of
capital stock which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of a
particular class of stock shall include Directors appointed by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of paragraph
(C)(ii) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate of incorporation
or by-laws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of
the remaining Directors.
(D) Except as set forth herein, holders of Series B Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
-4-
<PAGE>
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
capital stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except dividends paid ratably on the Series B Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any capital stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
capital stock of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series B Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series B Preferred Stock, or any shares of capital stock ranking on a
parity with the Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
-5-
<PAGE>
Section 5. Reacquired Shares.
Any shares of Series B Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of capital stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the "Series B Liquidation Preference"). Following the payment of the full
amount of the Series B Liquidation Preference, no additional distributions shall
be made to the holders of shares of Series B Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by dividing (i)
the Series B Liquidation Preference by (ii) 2,000 (as appropriately adjusted as
set forth in subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the payment of the
full amount of the Series B Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series B Preferred Stock and Common Stock,
respectively, and the payment of liquidation preferences of all other shares of
capital stock which rank prior to or on a parity with Series B Preferred Stock,
holders of Series B Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series B Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series B Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator
-6-
<PAGE>
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other capital stock or securities, cash and/or any
other property, then in any such case the shares of Series B Preferred Stock
shall at the same time be similarly exchanged or changed into an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to
2,000 times the aggregate per share amount of capital stock, securities, cash
and/or any other property (payable in kind), as the case may be, for which or
into which each share of Common Stock is exchanged or changed. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series B
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption.
The shares of Series B Preferred Stock shall not be redeemable.
Section 9. Ranking.
The Series B Preferred Stock shall rank junior to all other series of
the Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets, whether or not upon the dissolution, liquidation or
winding up of the Corporation, unless the terms of any such series shall provide
otherwise.
Section 10. Amendment.
The Charter of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series B Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding shares of
Series B Preferred Stock, voting separately as a class.
Section 11. Fractional Shares.
Series B Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series B Preferred Stock.
-7-
<PAGE>
IN WITNESS WHEREOF, True North Communications Inc. has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
Kenneth J. Ashley, its Vice President, Treasurer, and the same to be attested to
by Suzanne S. Bettman, its Assistant Secretary, this 5th day of November, 1998.
TRUE NORTH COMMUNICATIONS INC.
By: /s/ Kenneth J. Ashley
---------------------------------------
Name: Kenneth J. Ashley
Title: Vice President, Treasurer
(Corporate Seal)
Attest:
/s/ Suzanne S. Bettman
- -----------------------------
Name: Suzanne S. Bettman
Title: Assistant Secretary
-8-
<PAGE>
Exhibit 5.1
True North Communications Inc.
101 East Erie Street
Chicago, Illinois 60611
True North Communications Inc.
101 East Erie Street
Chicago, Illinois 60611
December 7, 1998
Ladies and Gentlemen:
This opinion is delivered to you in connection with the registration
statement on Form S-3 to be filed with the Securities and Exchange Commission on
the date hereof (the "Registration Statement") relating to the registration of
111,438 shares of common stock, $.33-1/3 par value per share, of True North
Communications Inc. (the "Company"), together with Preferred Stock Purchase
Rights (the "Rights") associated therewith for sales which may be made by a
certain stockholder of the Company (the "Registered Shares"). The terms of the
Rights are set forth in the Rights Agreement dated as of November 4, 1998
between the Company and the First Chicago Trust Company of New York, as Rights
Agent.
I, in my capacity as Vice President and Assistant General Counsel of the
Company, am familiar with the proceedings to date with respect to the proposed
sale of the Registered Shares and have examined such records, documents and
matters of law and satisfied myself as to such matters of fact as I have
considered relevant for the purposes of this opinion.
I am of the opinion that:
1. The Company is a corporation validly existing under the laws of the
State of Delaware.
2. The Registered Shares constitute validly issued, fully paid and
nonassessable shares of common stock, $.33-1/3 par value per share, of
the Company.
3. The Rights associated with the Shares will be legally issued when such
Rights shall have been duly issued in accordance with the terms of the
Rights Agreement.
I do not find it necessary for the purposes of this opinion, and
accordingly do not purport to cover herein, the application of the securities or
"blue sky" laws of the various states to the sale of the Registered Shares or
associated Rights.
This opinion is limited to the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
<PAGE>
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. I
assume no obligation to revise or supplement this opinion should the General
Corporation Law of the State of Delaware or the federal law of the United States
as presently in effect be changed by legislative action, judicial decision or
otherwise.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement and to the
references to me in the Registration Statement. In giving this consent, I do not
thereby admit that I am in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ Suzanne S. Bettman
Suzanne S. Bettman
Vice President
Assistant General Counsel
2
<PAGE>
Exhibit 23.1
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Chicago, Illinois
December 4, 1998
<PAGE>
Exhibit 23.2
[LETTERHEAD OF KPMG PEAT MARWICK]
ACCOUNTANTS' CONSENT
We consent to the use of our reports included herein and to the reference
to our firm under the heading "Experts" of the Prospectus.
/s/ KPMG Peat Marwick LLP
------------------------------------
KPMG Peat Marwick LLP
Omaha, Nebraska
December 4, 1998
<PAGE>
Exhibit 24.1
Power of Attorney
WHEREAS, True North Communications Inc., a Delaware corporation (the
"Corporation"), proposes to register 111,438 shares of common stock $.33-1/3 par
value, of the Corporation (the "Shares") with the Securities and Exchange
Commission, under the provisions of the Securities Act of 1933, as amended, by
filing a Registration Statement on Form S-3 (the "Registration Statement") with
respect to the Shares.
NOW THEREFORE, each person whose signature appears below constitutes and
appoints Bruce Mason, Donald L. Seeley and Theodore J. Theophilos, and each of
them, his or her true and lawful attorney-in-fact with full power of
substitution and resubstitution, in any and all capacities, to sign the
Registration Statement and any amendments (including post-effective amendments)
thereto and to file the same with all exhibits thereto, and other documents in
connection therewith with the authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes and he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Name Date Signed
<S> <C>
/s/ Charles D. Peebler, Jr. December 2 , 1998
- -------------------------------------- ------------------------
Charles D. Peebler, Jr.
/s/ Richard S. Braddock November 28 , 1998
- -------------------------------------- ------------------------
Richard S. Braddock
/s/ David A. Bell December 2 , 1998
- -------------------------------------- ------------------------
David A. Bell
/s/Donald M. Elliman, Jr. November 30 , 1998
- -------------------------------------- ------------------------
Donald M. Elliman, Jr.
/s/ W. Grant Gregory December 4 , 1998
- -------------------------------------- ------------------------
W. Grant Gregory
/s/ Leo-Arthur Kelmenson December 7 , 1998
- -------------------------------------- ------------------------
Leo-Arthur Kelmenson
/s/ Richard P. Mayer November 24 , 1998
- -------------------------------------- ------------------------
Richard P. Mayer
/s/ Michael E. Murphy November 23 , 1998
- -------------------------------------- ------------------------
Michael E. Murphy
/s/ J. Brendan Ryan November 24 , 1998
- -------------------------------------- ------------------------
J. Brendan Ryan
/s/ Stephen T. Vehslage November 23 , 1998
- -------------------------------------- ------------------------
Stephen T. Vehslage
</TABLE>
<PAGE>
Exhibit 99.1
FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
AND
TERMINATION OF OPERATIONS AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT AND TERMINATION OF
OPERATIONS AGREEMENT (this "Amendment and Termination") is made as of June 25,
1998, by and among Market Growth Resources, Inc.(formerly MGR Holdings Co.), a
Delaware corporation ("Buyer") True North Communications Inc., a Delaware
corporation ("True North"), 10-20 Corporation. ("Seller") and John D. Block, W.
Weston Bray, Michael H. Goodman and Michael W. Jardon (individually a
"Stockholder" and collectively, the "Stockholders").
WHEREAS, Buyer, True North, Seller and the Stockholders are parties to an
Asset Purchase Agreement, dated as of November 16, 1995 (the "Asset Purchase
Agreement");
WHEREAS, pursuant to Section 13.7 of the Asset Purchase Agreement, the
parties desire to amend certain provisions thereof;
WHEREAS, Buyer, Seller and the Stockholders are parties to an Operations
Agreement, dated as of November 16, 1995 (the "Operations Agreement");
AND WHEREAS, the parties desire to terminate the Operations Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. Amendments to Asset Purchase Agreement.
(a) Section 4.6(c) of the Asset Purchase Agreement is hereby deleted
in its entirety and the following inserted in place thereof:
"(c) In addition to Buyer's obligations under Section 4.6(a)
above, Buyer shall pay or (in the case of subsection (ii), issue and
deliver) to Seller (i) on July 1, 1998, $6,597,000 in cash, (ii) on
July 1, 1998, 111,438 shares of common stock, $.33-1/3 par value, of
True North (the "Shares") in the name of Seller and (iii) on July 1,
1999, $3,298,000 in cash plus interest thereon (calculated from July
1, 1998 until the date of payment) at a rate of 8% per annum,
compounded quarterly."
(b) Section 4.6(f) of the Asset Purchase Agreement is hereby deleted
in its entirety.
<PAGE>
(c) Section 13.4 of the Asset Purchase Agreement is hereby deleted in
its entirety and the following inserted in place thereof:
"13.4. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or
delivered and received when delivered personally (which shall be
deemed to include delivery via express courier such as Fed Ex) or
three days after having been sent by registered or certified mail
addressed as follows:
If to Buyer, to:
Market Growth Resources, Inc.
40 West 23rd Street
New York, New York 10010
Attention: Valentine J. Zammit
Facsimile: (212) 727-1739
with a copy to:
True North Communications Inc.
101 East Erie
Chicago, Illinois 60611
Attention: Assistant General Counsel
Facsimile: (312) 425-6589
If to True North, to the address and person set forth above.
If to Seller, to:
10-20 Corporation
c/o Mickey Goodman
51 West Mountain
Ridgefield, CT 06877
Facsimile: (203) 438-6288
with a copy to:
Epstein, Becker & Green
250 Park Avenue
New York, NY 10177
Attention: Lowell Lifschultz
Facsimile: (212) 661-0989
If to any Stockholder, to:
2
<PAGE>
Michael H. Goodman
51 West Mountain
Ridgefield, CT 06877
Facsimile: (203) 438-6288
Michael W. Jardon
334 Lost District Drive
New Canaan, CT 06840
John D. Block
8 Patchen Lane
Weston, CT 06883
W. Weston Bray
231 Cannon Road
Wilton, CT 06897
Facsimile: (203) 761-0105
With a copy in each case to Epstein Becker & Green as
aforesaid.
or to such other address as such party (or its designated
additional notice recipient) may indicate by a notice delivered
to the other party hereto."
2. Payment Pursuant to Section 4.6(c) of the Asset Purchase Agreement. On
the date hereof, (i) Buyer shall deliver to Seller the payment required to be
paid pursuant to Section 4.6(c)(i) of the Asset Purchase Agreement, as amended
hereby, by wire transfer of immediately available funds to the account of 10-20
Corporation, Chase Manhattan Bank, Wilton Branch, 33 Old Ridgefield Road,
Wilton, Connecticut 06897, ABA #021 000 021, Account: 10-20 Corporation, Account
#910-274-1700, Contact: Dennis McCarthy (203) 382-6349 and (ii) True North
shall issue and deliver to Seller the shares required to be delivered pursuant
to Section 4.6(c)(ii) of the Asset Purchase Agreement, as amended hereby.
Unless otherwise instructed by Seller, Buyer will also wire the sum to be paid
pursuant to Section 4.6(c)(iii) to the same account.
3. Restriction on Transfer of Shares; Registration of Shares. In addition
to any restrictions imposed upon Seller and its transferees by any securities
laws or regulations, Seller hereby agrees that it will not sell, assign, pledge,
transfer or otherwise convey any of the shares issued pursuant to Section
4.6(c)(ii) of the Asset Purchase Agreement, as amended hereby, prior to January
1, 1999. Following the date hereof, True North agrees to use its best efforts
to accomplish the following prior to January 1, 1999: (a) cause the resale of
such Shares to be registered under the Securities Act of 1933, as amended (until
the earlier of July 1, 1999 and the date on
3
<PAGE>
which all of the Shares have been sold thereunder) and listed on the New York
Stock Exchange for trading and (b) in connection with the foregoing, provide to
Seller any items (including a prospectus), and do and perform such other acts
and things, as may be required to allow Seller to trade the Shares on the New
York Stock Exchange. In the event that, on or before January 1, 1999, True North
shall not have succeeded in accomplishing the matters set forth in (a) and (b)
above (and notified Seller thereof), (i) Buyer shall pay to Seller (by wire
transfer of immediately available funds to the account set forth in Section 2,
unless otherwise instructed by Seller), on or before January 5, 1999, $3,298,000
plus interest thereon at a rate of 8% per annum, compounded quarterly, from the
date hereof up to and including the date of payment and (ii) Seller shall
surrender the Shares, free and clear of any liens, pledges or other
encumbrances, to Buyer.
4. Ratification. Each party ratifies and confirms its obligations under
the Asset Purchase Agreement as amended hereby and the effectiveness of the
Asset Purchase Agreement as amended hereby.
5. Reference in Other Documents. References to the Asset Purchase
Agreement in any other document shall be deemed to include a reference to the
Asset Purchase Agreement, as amended by this Amendment and Termination, whether
or not reference is made to this Amendment and Termination.
6. Termination of Operations Agreement. The Operations Agreement is hereby
terminated in its entirety and shall be of no further force or effect. The
parties thereto hereby waive any claims they may have now or in the future under
the Operations Agreement, whether currently known or unknown. As of the date
hereof and thereafter, all employees of Buyer (other than the Stockholders whose
bonus arrangements are addressed in their employment agreements) may, at the
option of True North, be eligible to receive benefits under the True North
Incentive Compensation Plan.
7. Severability. Any provision of this Amendment and Termination which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
8. Headings. The headings of subdivisions in this Amendment and
Termination are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of this Amendment and Termination.
9. Governing Law. This Amendment and Termination shall be deemed to be a
contract made under the laws of the State of Illinois and for all purposes shall
be construed in accordance with the laws of said state, without regard to
principles of conflicts of law.
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<PAGE>
10. Counterparts. This Amendment and Termination may be executed upon any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts, when
together, shall constitute one and the same agreement.
11. Entire Agreement. This Amendment and Termination contains the entire
understanding of the parties with respect to the subject matter contained herein
and supersedes all prior arrangements or understandings with respect thereto.
12. Effectiveness. Notwithstanding anything to the contrary contained
herein, this Amendment and Termination shall not be effective unless and until
the payment and shares required to be paid and delivered on July 1, 1998 shall
have been delivered in accordance with Sections 1(a) and 2(a) hereof.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Termination to be executed the day and year first written above.
Market Growth Resources, Inc.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
True North Communications Inc.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
10-20 Corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
---------------------------------
John D. Block
---------------------------------
W. Weston Bray
---------------------------------
Michael H. Goodman
---------------------------------
Michael W. Jardon
6
