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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 15, 2000
True North Communications Inc.
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(exact name of registrant as specified in its charter)
Delaware 1-5029 36-1088162
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
101 East Erie Street, Chicago, Illinois 60611-2897
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 425-6500
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(Not Applicable)
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Former name or former address, if changed since last report
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Item 5. Other Events
As previously disclosed, on May 5, 1998 Publicis S.A., a greater than
5% shareholder and Publicis Communication (together, "Publicis"), filed
counterclaims in international arbitration proceedings which had been instituted
by True North with the London Court of International Arbitration. Publicis
sought damages in the amount of 382 million French Francs (approximately $62
million) for among other things, the alleged breaches of the May 1997 Separation
Agreement (the "Separation Agreement") between the parties and other actions
which Publicis alleged created liabilities associated with the arbitration
proceedings. The counterclaims followed True North's direct claims against
Publicis in the amount of $106 million for alleged breaches by Publicis of its
obligations under the Separation Agreement and for additional compensation for
its investment in Publicis Communication. The alleged breaches related
principally to the merger of Publicis S.A. and Publicis Communication. The
parties also submitted claims for their respective attorney's fees and expenses.
True North and Publicis appeared before the arbitration tribunal from September
27 through October 10, 1999 and presented evidence with regard to their
respective claims.
On February 15, 2000 the arbitration tribunal issued its decision
which ruled that Publicis' conduct in connection with the Publicis Communication
merger constituted a breach of Publicis' obligations to True North under the
Separation Agreement. No damages were awarded. The arbitrators stated that their
inability to determine damages did not excuse Publicis' conduct in breaching the
Separation Agreement. In addition, the tribunal ordered Publicis to provide True
North with tax and financial information it had withheld also in breach of the
Separation Agreement.
The arbitration tribunal rejected Publicis' claims against True North
for alleged breaches of the Separation Agreement and other actions which
Publicis alleged created liabilities associated with the arbitration proceedings
and therefore did not award any damages for such claims to Publicis. The
tribunal ordered Publicis and True North to each pay coordination fees to the
other resulting in a net payable by True North to Publicis of approximately
$900,000. The arbitration tribunal also ordered the parties to share the costs
of the arbitration and to each pay their respective attorney's fees and
expenses. True North has provided for these costs in its 1999 financial results.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRUE NORTH COMMUNICATIONS INC.
By
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Kevin J. Smith
Senior Vice President
Chief Accounting Officer
Dated: February 18, 2000
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