-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FNvynt/x8D6RUg7XxC9132RTSU6k2c0RsYl7XIwqFS5JK0u/rM9Crm7RZVMPdRJd Q26PSmwkoxafJj19Emce4w== 0000950131-98-006378.txt : 19981208 0000950131-98-006378.hdr.sgml : 19981208 ACCESSION NUMBER: 0000950131-98-006378 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19981207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRUE NORTH COMMUNICATIONS INC CENTRAL INDEX KEY: 0000037931 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 361088161 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-68485 FILM NUMBER: 98764990 BUSINESS ADDRESS: STREET 1: 101 E ERIE ST CITY: CHICAGO STATE: IL ZIP: 60611-2897 BUSINESS PHONE: 4154256500 MAIL ADDRESS: STREET 1: 101 E ERIE ST CITY: CHICAGO STATE: IL ZIP: 60611-2897 FORMER COMPANY: FORMER CONFORMED NAME: FOOTE CONE & BELDING COMMUNICATIONS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FOOTE CONE & BELDING INC DATE OF NAME CHANGE: 19720824 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 7, 1998 REGISTRATION NO. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION -------------- 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 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 -------------- 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 - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
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 - ----------------------------------------------------------------------------------------------------------- Common Stock, $.33 1/3 par value (2)(3) 111,438 shares $27.03 $3,012,169.10 $837.38
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (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. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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. 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 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 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 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: 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 ------- Total........................................................ $ 5,500 =======
- -------- *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.
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).
5 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.
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 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 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.
SIGNATURE TITLE --------- ----- /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
8
SIGNATURE TITLE --------- ----- Charles D. Peebler, Jr.* Director ___________________________________________ Charles D. Peebler, Jr. J. Brendan Ryan* Director ___________________________________________ J. Brendan Ryan Stephen T. Vehslage* Director ___________________________________________ Stephen T. Vehslage
/s/ Theodore J. Theophilos *By: ________________________________ Theodore J. Theophilos as Attorney-in-Fact 9 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------- ----------- 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.
10 EX-4.3 2 CERTIFICATE OF DESIGNATION Exhibit 4.3 CERTIFICATE OF DESIGNATION OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK OF TRUE NORTH COMMUNICATIONS INC. - -------------------------------------------------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware - -------------------------------------------------------------------------------- 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 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- 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- 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- 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- 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- 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- 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- EX-5.1 3 OPINION OF SUZANNE S. BETTMAN 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. 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 EX-23.1 4 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 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 EX-23.2 5 ACCOUNTANTS' CONSENT 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 EX-24.1 6 POWER OF ATTORNEY 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.
Name Date Signed /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
EX-99.1 7 FIRST AMENDMENT ASSET PURCHASE AGREEMENT 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. (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 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 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. 4 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. * * * * * 5 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 -----END PRIVACY-ENHANCED MESSAGE-----