SEAGRAM CO LTD, DEF 14A, 1996-09-19

SEAGRAM CO LTD
DEF 14A, 1996-09-19
BEVERAGES

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement

/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(c)(2))

/X/ Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

THE SEAGRAM COMPANY LTD.
(Name of Registrant as Specified In Its Charter)

-------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

(4) Proposed maximum aggregate value of transaction:

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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

(3) Filing Party:

(4) Date Filed:

<PAGE> 2

THE SEAGRAM COMPANY LTD.

LOGO

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of The Seagram Company Ltd. (the "Corporation") will be held at the
Marriott Chateau Champlain, 1 Place du Canada, in the City of Montreal, Province
of Quebec, on Wednesday, the 30th day of October, 1996, at 11:30 a.m. (E.S.T.)
for the following purposes:

1. To receive the Report of Directors and Consolidated Financial
Statements of the Corporation for the five month transition period ended
June 30, 1996;

2. To elect directors;

3. To consider and, if deemed advisable, to approve the Corporation's
Senior Executive Short-Term Incentive Plan, the text of which is set
forth in Schedule A to the accompanying Proxy Circular;

4. To appoint auditors;

5. To consider and vote upon a shareholder proposal described in the
attached Proxy Circular; and

6. To transact such other business as may properly come before the
Meeting.

Montreal, Quebec, September 19, 1996. BY ORDER OF THE BOARD OF DIRECTORS,

/s/ Michael C. L. Hallows

MICHAEL C. L. HALLOWS

Secretary

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

IMPORTANT

SHAREHOLDERS WHO ARE UNABLE TO ATTEND THE MEETING IN PERSON ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED FOR THAT PURPOSE.

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

On peut se procurer l'edition francaise de cet avis de l'assemblee, de la
procuration et de la circulaire de sollicitation de procurations en ecrivant au
Secretaire, La Compagnie Seagram Ltee, 1430, rue Peel, Montreal (Quebec) H3A
1S9.
<PAGE> 3

THE SEAGRAM COMPANY LTD.
1430 Peel Street
Montreal, Quebec, Canada H3A 1S9
------------------------------------

ANNUAL MEETING OF SHAREHOLDERS

PROXY CIRCULAR

This Proxy Circular is furnished to shareholders in connection with the
solicitation by the Board of Directors of The Seagram Company Ltd. (the
"Corporation") of proxies to be voted at the Annual Meeting of Shareholders of
the Corporation (the "Meeting") to be held at the time and place and for the
purposes set forth in the accompanying notice and at any and all adjournments
thereof. There is enclosed herewith a notice of the Meeting and proxy for use at
the Meeting. There is also enclosed a copy of the Report of Directors and
Consolidated Financial Statements of the Corporation for the five month
transition period ended June 30, 1996 (the "Transition Period"), to be placed
before the shareholders at the Meeting pursuant to the requirements of the
Canada Business Corporations Act, but such Report is not deemed to be proxy
soliciting material. Except as otherwise stated, the information contained
herein is given as of August 31, 1996. The approximate date this Proxy Circular
will be first mailed to shareholders is September 19, 1996. Only the holders of
record of common shares (the "Shares") of the Corporation at the close of
business on September 12, 1996 will be entitled to receive notice of the
Meeting.

All dollar amounts stated herein are expressed in United States currency
except where otherwise indicated.

SOLICITATION OF PROXIES

THE ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF THE
CORPORATION and the expenses of solicitation of proxies will be borne by the
Corporation. The solicitation will be made primarily by mail, but officers and
regular employees of the Corporation may also solicit proxies by telephone,
telegraph, facsimile or in person. The Corporation also has retained D. F. King
& Co., Inc. to assist in soliciting proxies for a fee of $5,500 plus
reimbursement of reasonable out-of-pocket expenses. In connection with its
general engagement to provide shareholder services for the Corporation, The R-M
Trust Company also assists in soliciting proxies in Canada.

APPOINTMENT OF PROXIES

EACH SHAREHOLDER MAY APPOINT A PERSON (WHO NEED NOT BE A SHAREHOLDER) OTHER
THAN THE PERSONS NAMED IN THE ENCLOSED PROXY TO REPRESENT HIM OR HER AT THE
MEETING BY INSERTING SUCH PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE
ENCLOSED PROXY OR BY COMPLETING ANOTHER PROPER PROXY. IN EITHER CASE, SUCH
COMPLETED PROXY SHOULD BE RETURNED IN THE ENCLOSED ENVELOPE PROVIDED FOR THAT
PURPOSE FOR DELIVERY BEFORE THE MEETING OR SHOULD BE DELIVERED TO THE SECRETARY
OF THE CORPORATION AT 1430 PEEL STREET, MONTREAL, QUEBEC, NOT LATER THAN 5 P.M.
ON TUESDAY, OCTOBER 29, 1996.

REVOCATION OF PROXIES

A shareholder giving a proxy pursuant to this solicitation may revoke such
proxy by instrument in writing executed by the shareholder or by his attorney
duly authorized in writing or, if the shareholder is a corporation, by an
officer or attorney thereof duly authorized, and deposited either at the
executive offices or the registered office of the Corporation at any time up to
and including the last business day preceding the day of the Meeting, or any
adjournment thereof, or with the Chairman of the Meeting on the day of the
Meeting, or any adjournment thereof.

VOTING OF THE SHARES AT THE MEETING

The persons named in the enclosed proxy will vote the Shares in respect of
which they are appointed in accordance with the directions of the shareholder
appointing them. IN THE ABSENCE OF SUCH DIRECTIONS, SUCH SHARES WILL BE VOTED
(I) FOR THE ELECTION OF DIRECTORS, (II) FOR THE APPROVAL OF THE CORPORATION'S
SENIOR EXECUTIVE SHORT-TERM INCENTIVE PLAN AS SET FORTH IN SCHEDULE A TO THIS
PROXY CIRCULAR, (III) FOR THE APPOINTMENT OF AUDITORS AND (IV) AGAINST THE
SHAREHOLDER PROPOSAL SET FORTH IN THIS PROXY CIRCULAR, AS STATED UNDER THE
APPLICABLE HEADINGS IN THIS PROXY CIRCULAR.

1
<PAGE> 4

The enclosed proxy confers discretionary authority upon the persons named
therein with respect to amendments to or variations of matters identified in the
notice of Meeting and with respect to such other matters as may properly come
before the Meeting. Management does not intend to present any other matters for
action at the Meeting and has no knowledge that any person intends to present
any matters that may be properly presented at the Meeting. However, if any other
matters properly come before the Meeting, the persons named in the proxy shall
vote the Shares represented by such proxies in accordance with their judgment on
such matters.

Holders of Shares listed as shareholders at the close of business on
September 12, 1996 will be entitled to one vote for each Share held, except that
if such a holder subsequently transfers the ownership of a Share and the
transferee establishes that he or she owns such Share and requests not later
than ten days before the Meeting that he or she be included on the shareholders'
list, such transferee (and not his or her transferor) will be entitled to vote
such Share at the Meeting. As of August 31, 1996, the Corporation had
outstanding 370,491,354 Shares, and there were outstanding currently exercisable
options to acquire an additional 19,132,400 Shares.

SHARE OWNERSHIP

PRINCIPAL HOLDERS OF SHARES

As of August 31, 1996, descendants of the late Samuel Bronfman and trusts
established for their benefit beneficially owned directly or indirectly an
aggregate of 133,606,168 Shares, constituting approximately 36.06% of the
outstanding Shares, and held currently exercisable options to acquire an
additional 2,438,220 Shares. This amount includes the Shares owned by the
following persons, who are the only persons known by the Corporation to own
beneficially, or exercise control or direction over, more than 5% of the
outstanding Shares as of August 31, 1996.

<TABLE>
<CAPTION>
Percentage
Number of Shares
Beneficial Owner of Shares Outstanding
- ----------------------------------------------------------- -------------- -----------
<S> <C> <C>
EDGAR MILES BRONFMAN TRUST................................. 62,554,604(1) 16.88%
CHARLES ROSNER BRONFMAN TRUST,
CHARLES BRONFMAN FAMILY TRUST AND
CHARLES ROSNER BRONFMAN FAMILY TRUST....................... 58,300,000(2) 15.74%
</TABLE>

- ---------------
(1) Includes 61,068,088 Shares owned indirectly by the Edgar Miles Bronfman
Trust, 375 Park Avenue, New York, New York, a trust established for the
benefit of Edgar M. Bronfman and his descendants (the "EMBT"), through its
99% interest in Bronfman Associates, a partnership of which Edgar M.
Bronfman is the managing general partner, and 1,486,516 Shares owned
directly by the PBBT/Edgar Miles Bronfman Family Trust, a trust established
for the benefit of Edgar M. Bronfman and his descendants (the "PBBT/EMBFT").
The trustees of the EMBT and the PBBT/EMBFT include Edgar M. Bronfman, Edgar
Bronfman, Jr. and John L. Weinberg.

(2) Includes 8,700,000 Shares owned by the Charles Rosner Bronfman Trust (the
"CRBT"), 24,800,000 Shares owned by the Charles Rosner Bronfman Family Trust
(the "CRBFT"), each c/o Goodman Phillips & Vineberg, 1501 McGill College
Avenue, Montreal, Quebec, and 24,800,000 Shares owned by the Charles
Bronfman Family Trust (the "CBFT"), c/o Goodman Phillips & Vineberg, 430
Park Avenue, New York, New York. The CRBT, the CBFT and the CRBFT are trusts
established for the benefit of Charles R. Bronfman and his descendants. The
trustees of the CRBT include Charles R. Bronfman, Phyllis Lambert and
Senator E. Leo Kolber. The trustees of the CRBFT include Arnold M. Ludwick.

In addition, as of August 31, 1996 Phyllis Lambert owned indirectly
1,000,000 Shares and trusts for the benefit of the family of the late Minda de
Gunzburg, members of her immediate family and a charitable foundation of which a
member of her immediate family is among the directors owned directly or
indirectly an aggregate of 10,550,140 Shares.

Edgar M. Bronfman, Charles R. Bronfman, Phyllis Lambert and the late Minda
de Gunzburg are siblings. Edgar M. Bronfman and Charles R. Bronfman are
directors and officers of the Corporation. Edgar Bronfman, Jr. is a son of Edgar
M. Bronfman and a director and officer of the Corporation and Samuel Bronfman II
is a son of Edgar M. Bronfman and a director of the Corporation. Senator E. Leo
Kolber and John L. Weinberg are directors of the Corporation, and Arnold M.
Ludwick is an officer of the Corporation. John L. Weinberg will not be standing
for re-election at the Meeting.

2
<PAGE> 5

Pursuant to a voting trust agreement dated August 3, 1984, as amended (the
"Bronfman voting trust agreement"), Charles R. Bronfman serves as voting trustee
for Shares beneficially owned directly or indirectly by the EMBT, the
PBBT/EMBFT, the CRBT, the CBFT, the CRBFT and a charitable foundation, of which
Charles R. Bronfman and Arnold M. Ludwick are among the directors, that owned
594,164 Shares as of August 31, 1996. The Bronfman voting trust agreement has a
term of 20 years and contains no restrictions on the right of the voting trustee
to vote the deposited Shares. As of August 31, 1996, 121,448,768 Shares were
subject to the Bronfman voting trust agreement.

Pursuant to a voting trust agreement dated as of May 15, 1986 (the "de
Gunzburg voting trust agreement"), Edgar M. Bronfman, Charles R. Bronfman,
Stanley N. Bergman, Guido Goldman and Leonard M. Nelson serve as voting trustees
for Shares beneficially owned directly or indirectly by trusts for the benefit
of the family of the late Minda de Gunzburg and by members of her immediate
family. Messrs. Bergman, Goldman and Nelson, whose address is c/o First Spring
Corporation, 499 Park Avenue, New York, New York, are the trustees of such
trusts. The de Gunzburg voting trust agreement has a term of 15 years and
contains no restrictions on the right of the voting trustees to vote the
deposited Shares. As of August 31, 1996, 10,549,260 Shares were subject to the
de Gunzburg voting trust agreement.

Shares owned directly or indirectly by the EMBT, the PBBT/EMBFT, the CRBT,
the CBFT, the CRBFT, the trusts established for the benefit of the family of the
late Minda de Gunzburg and by members of her immediate family, the charitable
foundations referred to above and Phyllis Lambert are subject to agreements
governing dispositions of Shares. The principal agreement, entered into as of
August 3, 1984, as amended, has a term of 20 years and permits transfers by each
of the four branches of the family within its family group. However, transfers
to third parties are subject to a right of first refusal in favour of the other
branches of the family.

SHARE OWNERSHIP OF MANAGEMENT

Set forth below is the number of Shares which each of the directors of the
Corporation and nominees for directors, each of the persons named in the
"Summary Compensation Table" and the directors and executive officers of the
Corporation as a group owned beneficially, or exercised control or direction
over, as of August 31, 1996. Each trustee of a trust or a charitable foundation
may be deemed to be the beneficial owner of the Shares held by the trust or
foundation. Because certain persons listed below serve as trustees of the same
trusts or charitable foundations, there are substantial duplications in the
number of shares and percentages shown in the table.

<TABLE>
<CAPTION>
Percentage
Number of of Shares
Beneficial Owner Shares Outstanding
- ---------------------------------------------------------------- ----------- -------------
<S> <C> <C>
Edgar M. Bronfman............................................... 63,602,760(1) 17.17%
The Hon. Charles R. Bronfman, P.C., C.C. ....................... 59,882,980(2) 16.16%
Edgar Bronfman, Jr. ............................................ 63,935,188(3) 17.26%
Samuel Bronfman II.............................................. 348,040(4) *
Matthew W. Barrett, O.C. ....................................... 1,000 *
Frank J. Biondi, Jr. ........................................... -- *
David M. Culver, C.C. .......................................... 4,400(5) *
The Honourable William G. Davis, P.C., C.C., Q.C. .............. 400 *
The Honourable Paul Desmarais, P.C., C.C. ...................... 12,000 *
Michele J. Hooper............................................... 100 *
David L. Johnston, O.C. ........................................ 400 *
The Honourable E. Leo Kolber, Senator........................... 8,704,240(6) 2.35%
Marie-Josee Kravis, O.C. ....................................... 400 *
Robert W. Matschullat........................................... 200,000(7) *
C. Edward Medland............................................... 6,000 *
Lew R. Wasserman................................................ 10,000(8) *
John L. Weinberg................................................ 62,566,604(9) 16.89%
John S. Weinberg................................................ 1,000 *
Directors and executive officers as a group..................... 125,960,548(10) 34.00%
</TABLE>

- ---------------
* Less than 1%

3
<PAGE> 6

(1) Includes 61,068,088 Shares owned indirectly by the EMBT and 1,486,516
Shares owned directly by the PBBT/EMBFT, trusts for which Mr. Bronfman
serves as a trustee, 240 Shares owned directly by Mr. Bronfman, 805,120
Shares issuable upon the exercise of currently exercisable options, 1,840
Shares owned by Mr. Bronfman's spouse, 600 Shares owned directly by his
children (other than Edgar Bronfman, Jr. and Samuel Bronfman II), 356
Shares owned by an estate for which Mr. Bronfman is an executor, and
240,000 Shares owned by a charitable foundation of which Mr. Bronfman is
among the trustees. Mr. Bronfman disclaims beneficial ownership of the
foregoing Shares, except to the extent of his beneficial interest in the
EMBT and the PBBT/EMBFT and with respect to Shares owned directly by him.
In addition, Mr. Bronfman serves as a voting trustee with respect to the
10,549,260 Shares subject to the de Gunzburg voting trust agreement with
respect to which Mr. Bronfman disclaims beneficial ownership.

(2) Includes 8,700,000 Shares owned directly by the CRBT, 24,800,000 Shares
owned directly by the CRBFT and 24,800,000 Shares owned directly by the
CBFT, trusts for which Mr. Bronfman serves as a trustee and/or voting
trustee, 302,760 Shares owned directly by Mr. Bronfman, 385,700 Shares
issuable upon exercise of currently exercisable options, 12,000 Shares
owned by Mr. Bronfman's spouse, 48,000 Shares owned directly by his
children, 356 Shares owned by an estate for which Mr. Bronfman is an
executor, and 834,164 Shares owned by two charitable foundations of which
Mr. Bronfman is among the directors or trustees. Mr. Bronfman disclaims
beneficial ownership of the foregoing Shares, except to the extent of his
beneficial interest in the CRBT and with respect to Shares owned directly
by him. In addition, Mr. Bronfman serves as the voting trustee with respect
to 62,554,604 Shares held by the EMBT and the PBBT/EMBFT subject to the
Bronfman voting trust agreement and as a voting trustee with respect to
10,549,260 Shares subject to the de Gunzburg voting trust agreement with
respect to which Mr. Bronfman disclaims beneficial ownership.

(3) Includes 61,068,088 Shares owned indirectly by the EMBT and 1,486,516
Shares owned directly by the PBBT/EMBFT, trusts for which Mr. Bronfman
serves as a trustee, 240 Shares owned directly by Mr. Bronfman, 1,139,600
Shares issuable upon exercise of currently exercisable options, 240,000
Shares owned by a charitable foundation of which Mr. Bronfman is among the
trustees and 744 Shares in which Mr. Bronfman has an indirect interest
through an investment in the Retirement Savings and Investment Plan for
Employees of Joseph E. Seagram & Sons, Inc. and Affiliates (based on the
value of such investment as of August 30, 1996). Mr. Bronfman disclaims
beneficial ownership of the foregoing Shares, except to the extent of his
beneficial interest in the EMBT and the PBBT/EMBFT and with respect to
Shares owned directly by him.

(4) Includes 240 Shares owned directly by Mr. Bronfman, 107,800 Shares issuable
upon exercise of currently exercisable options and 240,000 Shares owned by
a charitable foundation of which Mr. Bronfman is among the trustees. Mr.
Bronfman disclaims beneficial ownership of the foregoing Shares except the
Shares owned directly by him.

(5) Includes 400 Shares owned by Mr. Culver's spouse with respect to which Mr.
Culver disclaims beneficial ownership.

(6) Includes 8,700,000 Shares held by the CRBT, for which Sen. Kolber serves as
a trustee and 4,240 Shares owned directly by him. Sen. Kolber disclaims
beneficial ownership of the foregoing Shares except with respect to Shares
owned directly by him.

(7) Includes 33,500 Shares owned directly by Mr. Matschullat, 100,000 Shares
issuable upon exercise of currently exercisable options and 66,500 Shares
which are being held by a bank subject to restrictions (including the risk
of forfeiture) which lapse over a two-year period. See "Employment and
Consulting Agreements". Mr. Matschullat disclaims beneficial ownership of
the foregoing Shares except with respect to Shares owned directly by him.

(8) Includes 10,000 Shares held by a charitable foundation of which Mr.
Wasserman is chairman and with respect to which he disclaims beneficial
ownership. Mr. Wasserman serves as a trustee of a trust for the benefit of
Mr. Wasserman and his wife which holds all 65,392 outstanding shares of the
preferred stock of MCA Holding II Corp., an indirect parent of MCA INC.
("MCA") in which the Corporation has an indirect 80% common equity interest
("Holding"). Holders of such preferred stock are entitled to 8.75%
cumulative annual dividends when, as and if declared by the board of
directors of Holding. The preferred stock was issued in 1990 in connection
with the acquisition of MCA by Matsushita Electric Industrial Co., Ltd.

(9) Includes 61,068,088 Shares owned indirectly by the EMBT and 1,486,516
Shares owned directly by the PBBT/EMBFT, trusts for which Mr. Weinberg
serves as a trustee. Mr. Weinberg disclaims beneficial ownership of the
foregoing Shares except with respect to Shares owned directly by him.

(10) Includes 3,750,620 Shares issuable upon exercise of currently exercisable
options.

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<PAGE> 7

ELECTION OF DIRECTORS

NOMINEES FOR DIRECTORS

The persons named in the enclosed proxy, unless otherwise directed by the
shareholder appointing them, intend to vote at the Meeting for the election of
all the nominees whose names are set forth below. Management does not
contemplate that any of the nominees will be unable to serve as a director but,
if such inability occurs for any reason prior to the Meeting, the persons named
in the enclosed proxy reserve the right to vote, in their discretion, the Shares
represented by such proxy for the election of any other person or persons
nominated by the Board of Directors. Each director elected will hold office
until the next annual meeting of shareholders and until his or her successor is
duly elected, unless his or her office is earlier vacated in accordance with the
By-Laws of the Corporation.

Certain information is given in the following table with respect to the
nominees for directors of the Corporation. All such persons have been engaged in
the occupation or employment set forth opposite their respective names in their
current capacities for more than five years except where indicated. Statements
contained in such table with respect to each nominee are based upon information
obtained from the person concerned.

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<PAGE> 8

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Director
Name Age Principal occupation and other information since
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
THE HONOURABLE
WILLIAM G. DAVIS,
P.C., C.C., Q.C............ 67 Counsel to Tory Tory DesLauriers & Binnington
(attorneys). Mr. Davis is also a director of
Algoma Steel Inc., Canadian Imperial Bank of
Commerce, Corel Corporation, Dylex Limited,
First American Financial Corporation, First
American Title Insurance Company, Fleet
Aerospace Corporation, Inter-City Products
Corporation, Magna International Inc., NIKE
Canada Ltd., Olympia & York Companies U.S.A.,
Power Corporation of Canada and St. Lawrence
Cement Inc..................................... 1985
THE HONOURABLE PAUL
DESMARAIS, P.C., C.C....... 69 Chairman of the Executive Committee of Power
Corporation of Canada (a holding and management
company) since May 1996. Previously he was
Chairman and Chief Executive Officer of Power
Corporation of Canada. Mr. Desmarais is also
Chairman of the Board of Pargesa Holding S.A.
and a director of Compagnie Luxembourgeoise de
Telediffusion, Electrafina S.A., Great-West
Lifeco Inc., The Great-West Life Assurance
Company, Groupe Bruxelles Lambert S.A.,
Investors Group Inc., Parfinance, Petrofina
S.A., Power Financial Corporation and U.A.P.
(Union des Assurances de Paris)................ 1975
MICHELE J. HOOPER............ 45 Corporate Vice President, Caremark
International Inc. (a health care services
provider) since 1993. She has also served as
President of the International Business Group
of Caremark International Inc. since December
1991. Previously, she was President of Baxter
Canada, a division of Caremark International
Inc. Ms. Hooper is also a director of Dayton
Hudson Corporation and PPG Industries.......... --
DAVID L. JOHNSTON, O.C....... 55 Professor of Law at McGill University (an
educational institution) since July 1994.
Previously, he was also Principal and
Vice-Chancellor. Mr. Johnston is also a
director of CT Financial Services Inc.,
Dominion Textile Inc., Emco Limited and The CGI
Group Inc...................................... 1987
THE HONOURABLE
E. LEO KOLBER, SENATOR..... 67 Member of The Senate of Canada. He was also
Chairman of Board of Claridge Inc. (a
management company) from June, 1987 to
September, 1993. Senator Kolber is also
Chairman of the Board of Cineplex Odeon
Corporation (an entertainment company) and a
director of The Toronto-Dominion Bank.......... 1971
</TABLE>

6
<PAGE> 9

CORPORATE GOVERNANCE

GENERAL

The Committee on Corporate Governance of The Toronto Stock Exchange (the
"TSE") issued its final report (the "TSE Report") containing a series of
guidelines for improved corporate governance in Canada. In May 1995, both the
TSE and the Montreal Exchange adopted a requirement that each company
incorporated in Canada and listed on such exchanges disclose its corporate
governance practices with reference to the guidelines. In accordance with those
listing requirements, a description of the Corporation's governance practices
with reference to the guidelines set out in the TSE Report, including
differences from the guidelines, is set forth below.

BOARD OF DIRECTORS

Stewardship. The Board of Directors is responsible for the overall
stewardship of the Corporation and for oversight of management to assure
protection of shareholder interests. The Board relies upon management for the
development of the overall corporate and individual business unit strategies.
The Board evaluates the strategic direction of the Corporation, for which
management prepares annual business and longer range strategic plans.

The Board, directly and through its Audit Committee, is responsible for
identifying the principal risks of the Corporation's businesses and ensuring the
implementation of appropriate strategies and systems to manage those risks. The
Board, directly and through its Audit Committee, assesses the integrity of the
Corporation's internal controls and reviews the quality of its management
information systems.

It is the Board's responsibility to select the chief executive officer, to
evaluate the performance of the chief executive officer, and to provide for his
or her successor. The Board appoints the principal officers of the Corporation
and is responsible, directly and through its Human Resources Committee, for the
evaluation of the performance of the principal officers of the Corporation and
for development, training and succession planning for senior management.

7
<PAGE> 10

The Corporation maintains an active investor relations program. Oral and
written inquiries from shareholders, the investment community and the general
public are responded to by the Secretary of the Corporation or the Vice
President, Investor Relations of Joseph E. Seagram & Sons, Inc. ("JES"). The
Board is advised of inquiries where appropriate. The investor relations program
also includes periodic presentations to the investment community. The Board
believes that the existing program facilitates effective communication with the
Corporation's shareholders, the general public, and the investment community.
The Board, directly and through its Audit Committee, reviews the interim and
annual financial results and approves the management proxy circular.

Size and Relatedness. While the Board is currently composed of 17
directors, there are only 16 nominees seeking election at the Meeting. The Board
believes that seven of its current directors are "unrelated" to the Corporation
as defined in the TSE Report, i.e., independent of management and free from any
business or other relationship, which could, or could reasonably be perceived
to, materially interfere with the director's ability to act with a view to the
best interests of the Corporation, other than interests and relationships
arising from shareholdings. Seven directors are "related" to the Corporation
because they are members or former members of management, namely Edgar M.
Bronfman, Chairman of the Board, The Honourable Charles R. Bronfman, Co-Chairman
of the Board, Edgar Bronfman, Jr., President and Chief Executive Officer, Samuel
Bronfman II, President of The Seagram Classics Wine Company, Robert W.
Matschullat, Vice Chairman and Chief Financial Officer of the Corporation, Frank
J. Biondi, Jr., Chairman and Chief Executive Officer of MCA, and Lew R.
Wasserman, formerly Chairman and Chief Executive Officer of MCA. In addition,
three directors may be regarded as "related" in that they hold senior positions
with companies which have substantial ongoing business relationships with the
Corporation, namely Matthew W. Barrett, Chairman and Chief Executive Officer of
The Bank of Montreal, John L. Weinberg, Senior Chairman of Goldman, Sachs & Co.,
and John S. Weinberg, General Partner of Goldman, Sachs & Co. David M. Culver
and John L. Weinberg will not be standing for re-election at the Meeting.
Michele J. Hooper, who is not "related" to the Corporation, is a nominee for
election to the Board. Accordingly, if all nominees are elected, the number of
directors who may be regarded as "related" will decrease to nine. Although a
majority of the current Board may be considered to qualify as "related"
directors within the meaning of the TSE Report, a majority (11) of the
Corporation's 17 directors are not current officers or employees of the
Corporation or any of its affiliates and are therefore "outside" directors as
defined in the TSE Report. The Board believes that all members of the Board,
regardless of the existence of relationships to the Corporation, exercise
independent judgment with a view to the best interests of the Corporation, and
believes that the Corporation benefits from the knowledge, experience and mix of
skills which its directors bring to the Board. The Corporation has no
shareholder who qualifies as a "significant shareholder" within the meaning of
the TSE Report, i.e., a shareholder with the ability to exercise a majority of
the votes for the election of the Board of Directors. However, for information
regarding the shareholdings of the descendants of Samuel Bronfman, the founder
of the Corporation, and trusts established for their benefit, see "Share
Ownership".

The Chairman of the Board, Edgar M. Bronfman, while separate from the Chief
Executive Officer ("CEO"), is a related director. Mr. Bronfman served as CEO for
19 years and has been a member of the Board for 41 years. The Board believes
that since the founding family retains substantial shareholdings in the
Corporation and members of that family have been, and continue to be, primarily
responsible for the management and development of the business, their depth of
experience and commitment, as well as long-range vision and strategic focus,
constitute an invaluable resource that provides continuity for the Corporation.
For these reasons, the Board believes that the composition of the Board is both
appropriate and beneficial to the Corporation and its shareholders and that Mr.
Bronfman is the most qualified director to act as Chairman.

Functioning. The Board must approve major capital commitments,
acquisitions and expenditures which exceed established thresholds, significant
divestitures, dividends and certain changes to the Corporation's capital
structure. The Board does not have a formal Nominating Committee. In its stead,
the Board performs the functions of a nominating committee for the Corporation
and provides for timely and orderly nomination of new members capable of
contributing to the effectiveness of the Board. In considering candidates for
election to the Board, experience in operating businesses involved in the global
distribution of products or services, significant managerial leadership
capability, good judgment, business acumen and board experience with other
public companies are taken into account. The Corporation does not have a formal
process for assessing the effectiveness of the Board as a whole, the committees
of the Board and the contribution of individual directors, nor does it have
formal processes and practices to ensure the independence of the Board from
management.

8
<PAGE> 11

The Corporation educates its new directors by providing them with materials
which contain basic information about the Corporation and related matters, which
materials are updated, as appropriate. In addition, there are presentations
which include descriptions of directors' duties and responsibilities, and Board
meetings are held at various facility sites to provide the directors with
additional insight into the Corporation's businesses.

The Board has not developed formal position descriptions for the Board or
the CEO. Although the Board does not establish formal corporate objectives for
the CEO, certain portions of the compensation of the CEO are determined with
reference to established criteria. See "Report on Executive Compensation". In
addition, there is regular discussion at Board and Human Resources Committee
meetings regarding achievement by senior management of corporate and business
unit strategic objectives.

The Board recently expanded the mandate of the Human Resources Committee to
include reviewing the adequacy and form of compensation of directors and
responsibility for succession planning for senior management.

Although there is no formal procedure to enable individual directors to
engage an outside advisor at the expense of the Corporation, outside advisors
are retained from time to time to represent and advise directors, as
appropriate.

BOARD MEETINGS, COMMITTEES

During the Transition Period the Board of Directors held four meetings and
committees of the Board held a total of seven meetings. With the exception of
The Honourable Paul Desmarais, all directors attended 75% or more of the
meetings of the Board of Directors and of all the committees of the Board on
which they served during the time in which they were directors or committee
members.

The Board has established four committees to assist the Board in
effectively carrying out its responsibilities. The Audit, Human Resources and
Corporate Governance Committees, described below, are each comprised entirely of
"outside" directors, a majority of which are "unrelated". In addition, the Board
has also established an Executive Committee which is comprised of seven
directors, three of whom are "unrelated", with the authority to exercise all of
the powers of the Board in the management and direction of the operations of the
Corporation, except such acts as must by law be performed by the full Board and
any matter which the full Board retains for itself. The members of the Executive
Committee are Edgar M. Bronfman, The Honourable Charles R. Bronfman, Edgar
Bronfman, Jr., The Honourable Paul Desmarais, Senator E. Leo Kolber, Robert W.
Matschullat and C. Edward Medland. All of the committees of the Board report to
the Board on a regular basis.

Corporate Governance Committee. The members of the Corporate Governance
Committee are The Honourable William G. Davis, Chairman, David L. Johnston,
Marie-Josee Kravis and John S. Weinberg, all of whom are "outside" directors and
three of whom are "unrelated". The Corporate Governance Committee met twice
during the Transition Period. The Committee's mandate is to develop the
Corporation's approach to governance issues and the Corporation's response to
the TSE guidelines. In furtherance of this mandate, the Committee reviews and
assesses the Corporation's procedures with respect to a wide range of governance
issues identified in the TSE guidelines.

Audit Committee. The members of the Audit Committee are C. Edward Medland,
Chairman, The Honourable William G. Davis, The Honourable Paul Desmarais and
John S. Weinberg, all of whom are "outside" directors and three of whom are
"unrelated". The Committee met twice during the Transition Period. The primary
responsibilities of the Committee are to review the nature and scope of the
audit and non-audit services provided by the Corporation's independent auditors,
to review the recommendations of the independent auditors and the responses of
the Corporation's management, to review internal accounting and financial
procedures of the Corporation, to review the Corporation's annual and quarterly
financial statements, to review matters in regard to the Corporation's pension
plans, to review the Corporation's risk management and insurance plans and to
monitor the Corporation's program for compliance with policies on business
ethics. The Audit Committee assesses the integrity of the Corporation's internal
controls and reviews the quality of its management information systems.

Human Resources Committee. The members of the Human Resources Committee
are David M. Culver, Chairman, Matthew W. Barrett, David L. Johnston, Senator E.
Leo Kolber, Marie-Josee Kravis and John L. Weinberg, all of whom are "outside"
directors and four of whom are "unrelated". The Committee met three times during
the Transition Period. Its principal functions are to supervise development of
management resources, to review the annual compensation of all officers of the
Corporation and selected officers and employees of

9
<PAGE> 12

subsidiary companies, to review the form and adequacy of the compensation of
directors, and to review all executive and director compensation plans and major
changes to existing employee benefit plans. The Committee is also responsible
for reviewing the succession plan for senior management.

COMPENSATION OF DIRECTORS

The Corporation's directors, other than those who are employees of the
Corporation, are paid Cdn. $35,000 (approximately U.S. $25,600) a year plus a
fee of Cdn. $1,500 (approximately U.S. $1,100) for each Board and committee
meeting attended, and are reimbursed for travel expenses incurred in connection
therewith. Committee chairmen receive an additional Cdn. $4,500 (approximately
U.S. $3,300) per year. Directors who are employees of the Corporation or its
subsidiaries do not receive compensation by reason of their membership on, or
attendance at meetings of, the Board or committees thereof. Effective as of
November 1, 1996, directors will receive an annual retainer of U.S. $35,000
(plus U.S. $4,500 for committee chairmen) and a fee of U.S. $1,500 for each
meeting attended.

Effective November 1, 1996, non-employee directors will receive at least
50% of their annual fees in Shares or Share equivalents pursuant to The Seagram
Company Ltd. Stock Plan for Non-Employee Directors. Under the plan, each
non-employee director may elect to receive either 50% or 100% of his or her
annual fee in Shares or deferred share units. If a director elects to receive
Shares, the applicable retainer amount (net of withholding taxes) will be used
to purchase Shares on the open market. The Shares will be delivered promptly to
the director. If a director elects to receive deferred share units, units
representing the value of Shares will be credited to the director's account
based on the market value of a Share on the annual crediting date. Deferred
share units will be paid to the director, along with the value of dividends as
if reinvested in additional Shares, after termination of Board service. Payment
will be made in Shares or cash, net of tax withholding, based on the then market
value of the Shares. Fees for attending Board and committee meetings and/or for
serving as a Board committee chairman may also be received in deferred share
units at the election of non-employee directors.

10
<PAGE> 13

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation of the Corporation's chief
executive officer and each of the Corporation's four other most highly
compensated executive officers with respect to the Transition Period and each of
the Corporation's two preceding full fiscal years.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
----------------------------------------------------------------------------------
Awards Payouts
----------------------------------------------
All
Other Securities Other
Annual Restricted Underlying LTIP Compensation
Year(1) Salary Bonus(2) Compensation Stock Awards Options/SARs Payouts (3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Name and
Principal
Position ($) ($) ($) (#) (#) ($) ($)
- ----------------------------------------------------------------------------------------------------------------------------------
Edgar M.
Bronfman June 30, 1996 312,500 293,750 68,893(4) 0 80,000 0 250
Chairman
of the
Board January 31, 1996 700,020 556,520 406,394 0 80,000 0 100,152
of the
Corporation
and of
JES January 31, 1995 725,018 665,020 370,811 0 85,000 0 97,856
- ----------------------------------------------------------------------------------------------------------------------------------
Charles R.
Bronfman June 30, 1996 250,000 235,000 N/A 0 69,200 N/A N/A
Co-Chairman
of the
Board
and January 31, 1996 552,000 438,840 N/A 0 69,200 N/A N/A
Chairman
of the
Executive January 31, 1995 552,000 524,400 N/A 0 70,000 N/A N/A
Committee
of the
Corporation
- ----------------------------------------------------------------------------------------------------------------------------------
Edgar
Bronfman,
Jr. June 30, 1996 416,675 1,175,000 0 0 1,000,000 0 0
President
and
Chief
Executive January 31, 1996 902,700 731,720 88,384 0 0 0 17,487
Officer of
the
Corporation January 31, 1995 846,745 840,750 135,152 0 646,000 0 14,186
and of JES
- ----------------------------------------------------------------------------------------------------------------------------------
Robert W.
Matschullat June 30, 1996 312,500 312,500 0 0 0 0 188
Vice
Chairman January 31, 1996 250,000 250,000 0 66,500(6) 445,500 0 1,188
and Chief
Financial
Officer of
the
Corporation
and of
JES(5)
- ----------------------------------------------------------------------------------------------------------------------------------
Frank J.
Biondi,
Jr. June 30, 1996 189,744 853,846 56,712 0 1,500,000 0 0
Chairman
and
Chief
Executive
Officer of
MCA(7)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Corporation changed its fiscal year end to June 30, effective June 30,
1996. The table reflects information for the five month transition period
ended June 30, 1996 and the two preceding full fiscal years ended January
31, 1996 and 1995.

(2) Awards in respect of the Transition Period were approved by the Human
Resources Committee on September 3, 1996.

(3) Amounts in this column reflect the aggregate value of the contributions by
the Corporation's subsidiaries under the Retirement Savings and Investment
Plan for Employees of Joseph E. Seagram & Sons, Inc. and Affiliates and the
current dollar value benefit of the premiums paid under the JES Insurance
and Salary Continuation Programs.

(4) Other Annual Compensation for the Transition Period includes $68,640 for
financial counseling services.

(5) Mr. Matschullat became Vice Chairman and Chief Financial Officer of the
Corporation and of JES on October 1, 1995.

(6) On October 1, 1995, JES awarded Mr. Matschullat a special one-time grant of
100,000 Shares, 66,500 of which were subject to certain restrictions
("Restricted Shares"). As of June 30, 1996, the 66,500 Restricted Shares had
a market value of $2,236,063. Restrictions on 33,250 of the Restricted
Shares will lapse on each of October 1, 1996 and October 1, 1997. Mr.
Matschullat is entitled to receive any dividends declared upon the
Restricted Shares.

(7) Mr. Biondi became Chairman and Chief Executive Officer of MCA on April 23,
1996.

11
<PAGE> 14

OPTION/SAR GRANTS IN TRANSITION PERIOD

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Potential Realizable Value
Number of at Assumed Annual Rates
Securities % of Total of Stock Price Appreciation
Underlying Options/SARs Exercise for Option Term
Options/SARs Granted to or Base ---------------------------------------
Granted Employees in Price Expiration 0% 5% 10%
Name (#) Fiscal Year ($) Date ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Edgar M. Bronfman 80,000 (1) 1% 33.3750 March 13, 2006 0 1,679,136 4,255,280
- ----------------------------------------------------------------------------------------------------------------------------------
Charles R. Bronfman 69,200 (1) 1% 33.3750 March 13, 2006 0 1,452,453 3,680,822
- ----------------------------------------------------------------------------------------------------------------------------------
Edgar Bronfman, Jr. 750,000 (2) 11% 36.8125 February 13, 2006 0 17,363,260 44,002,163
250,000 (2) 4% 48.9606 February 13, 2006 0 2,750,728 11,630,363
- ----------------------------------------------------------------------------------------------------------------------------------
Robert W. Matschullat 0 N/A N/A N/A 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Frank J. Biondi, Jr. 1,000,000 (3) 15% 33.6250 April 22, 2006 0 21,146,426 53,589,508
500,000 (3) 7% 47.0750 April 22, 2006 0 3,848,213 20,069,754
- ----------------------------------------------------------------------------------------------------------------------------------
All Shareholders (4) 0 7,888,864,926 19,992,048,829
- ----------------------------------------------------------------------------------------------------------------------------------
Gain to Named Executive Officers as a Percentage of Gain to all Shareholders 0% 0.61% 0.69%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Options to purchase Shares which were granted on March 14, 1996 and become
exercisable in equal installments over a three-year period beginning on the
first anniversary of the date of grant.

(2) Options to purchase Shares which were granted on February 14, 1996 and
become exercisable in equal installments over a five-year period beginning
on the first anniversary of the date of grant.

(3) Options to purchase Shares which were granted on April 23, 1996 when Mr.
Biondi joined MCA and become exercisable in equal installments over a five-
year period beginning on the first anniversary of the date of grant.

(4) The potential realizable gain to all shareholders is calculated based on
373,059,014 shares outstanding and a fair market value of $33.625 per Share
on June 30, 1996.

AGGREGATED OPTION/SAR EXERCISES IN TRANSITION PERIOD AND
TRANSITION PERIOD-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS AT
ACQUIRED ON VALUE FISCAL YEAR-END FISCAL YEAR-END
EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($) (#) ($)
- -----------------------------------------------------------------------------------------------------
Edgar M. Bronfman 0 0 805,120/80,000 8,545,417/20,000
- -----------------------------------------------------------------------------------------------------
Charles R. Bronfman 0 0 385,700/69,200 2,269,055/17,300
- -----------------------------------------------------------------------------------------------------
Edgar Bronfman, Jr. 0 0 1,785,600/1,900,000 1 0,661,900/5,906,250
- -----------------------------------------------------------------------------------------------------
Robert W.
Matschullat 0 0 100,000/345,500 0/0
- -----------------------------------------------------------------------------------------------------
Frank J. Biondi, Jr. 0 0 0/1,500,000 0/0
- -----------------------------------------------------------------------------------------------------
</TABLE>

12
<PAGE> 15

PENSION, BENEFIT EQUALIZATION, SALARY CONTINUATION AND SEVERANCE PLANS

JES maintains a pension plan for employees (including Edgar M. Bronfman,
Edgar Bronfman, Jr., Robert W. Matschullat and other officers) of JES and its
U.S. subsidiaries. Benefits under this plan are based upon salary as reported in
the "Summary Compensation Table", and are subject to statutory limitations as to
maximum amounts payable. A separate benefit equalization plan provides for
additional payments on an unfunded basis with respect to awards payable under
the Management Incentive Plan of JES and amounts in excess of statutory
limitations for certain senior executives of JES, including Edgar M. Bronfman,
Edgar Bronfman, Jr. and Robert W. Matschullat. The benefit equalization plan
also grants to participating senior executive employees credit for one year of
additional service (up to a maximum of 15 years) for each year of actual
service, up to a combined aggregate of 35 years of service (up to 40 years under
certain circumstances), provided that such employees have attained the age of 65
(or earlier under certain circumstances) and have accumulated at least ten years
of service for purposes of the pension plan. The estimated annual pension
benefits (calculated on a straight-life basis) payable on retirement to eligible
employees at or after age 65 under the plans as currently in effect at an
assumed average covered compensation during any five years of the last ten years
of employment in which the covered compensation was the highest are shown below.

PENSION PLAN TABLE
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Annual pension for representative
years of continuous service
<S> <C> <C> <C> <C> <C>
Five-year average -------------------------------------------------------------
final compensation 5 10 20 30 40
- -----------------------------------------------------------------------------------------
$ 400,000 $ 30,000 $ 60,000 $120,000 $179,000 $ 239,000
600,000 45,000 90,000 180,000 269,000 359,000
800,000 60,000 120,000 240,000 359,000 479,000
1,000,000 75,000 150,000 300,000 449,000 599,000
1,200,000 90,000 180,000 360,000 539,000 719,000
1,400,000 105,000 210,000 420,000 629,000 839,000
1,600,000 120,000 240,000 480,000 719,000 959,000
1,800,000 135,000 270,000 540,000 809,000 1,079,000
2,000,000 150,000 300,000 600,000 899,000 1,199,000
2,200,000 165,000 330,000 660,000 989,000 1,319,000
- -----------------------------------------------------------------------------------------
</TABLE>

At June 30, 1996, Edgar M. Bronfman was credited with 40 years (the maximum
years permitted under the plans), Edgar Bronfman, Jr., was credited with 14
years and Robert W. Matschullat was credited with nine months for purposes of
the plans. JES has agreed with Robert W. Matschullat that upon his retirement he
will receive a minimum annual pension benefit of $30,000 multiplied by the
number of years (or portions thereof) of his service to the Corporation.

JES maintains a program which provides retirement salary continuation
benefits for Edgar M. Bronfman and Edgar Bronfman, Jr. and certain other
executives of JES. If the participant retires after the age of 55 with ten or
more years of service, he will receive an amount payable annually for ten years
of up to 35% of the sum of his base salary in the last year of employment plus
the highest management incentive award previously received. Effective as of
1988, there will be no new participants in the salary continuation program and,
subject to the terms of such program, existing participants will receive
payments based on their compensation levels at January 31, 1988.

Joseph E. Seagram & Sons, Limited ("JES Limited"), a Canadian subsidiary of
the Corporation, maintains registered pension, unfunded pension and
post-retirement consulting plans for certain of the Corporation's executive
employees, including Charles R. Bronfman. These plans are substantially
equivalent to the pension, benefit equalization and retirement salary
continuation plans of JES. The estimated aggregate annual pension benefits
payable at normal retirement age, at or after age 60, under the registered and
unfunded plans as currently in effect at an assumed average salary and cash
bonus during any five years of the last ten years of employment in which the
compensation was the highest are shown below.

13
<PAGE> 16

PENSION PLAN TABLE

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual pension for representative
years of continuous service
<S> <C> <C> <C> <C> <C>
Five-year average ------------------------------------------------------------
final compensation 10 20 30 40 45
- ----------------------------------------------------------------------------------------
$ 200,000 $ 30,000 $ 60,000 $ 90,000 $120,000 $135,000
400,000 60,000 120,000 180,000 240,000 270,000
600,000 90,000 180,000 270,000 360,000 405,000
800,000 120,000 240,000 360,000 480,000 540,000
1,000,000 150,000 300,000 450,000 600,000 675,000
1,200,000 180,000 360,000 540,000 720,000 810,000
1,400,000 210,000 420,000 630,000 840,000 945,000
- ----------------------------------------------------------------------------------------
</TABLE>
At June 30, 1996, Charles R. Bronfman was credited with 45 years of service
for purposes of the plans.

JES maintains a severance pay plan (the "Severance Pay Plan") for certain
non-union employees of JES and certain of its U.S. subsidiaries, including Edgar
M. Bronfman, Edgar Bronfman, Jr. and Robert W. Matschullat. The named executive
officers are entitled to receive benefits under the Severance Pay Plan only if
their employment is terminated due to a permanent and complete closing of a
location, a job elimination, or a failure to consistently perform at a level
that meets minimum acceptable requirements. The Severance Pay Plan provides
benefits to eligible employees equal to a certain portion of their annual rate
of base salary for each year of service, subject to a maximum amount. The
maximum period of time over which benefits may be provided under the Severance
Pay Plan is 24 months.

EMPLOYMENT AND CONSULTING AGREEMENTS

In connection with his appointment as Vice Chairman and Chief Financial
Officer and a director of the Corporation and JES on October 1, 1995, Robert W.
Matschullat and JES entered into an employment agreement dated July 31, 1995
which provides that Mr. Matschullat is paid an annual salary of $750,000,
subject to upward adjustment in JES's discretion on each July 1 (provided that
the increase shall be at least 5% of his then current salary (3.75% on July 1,
1996)), and participates in all benefit plans and arrangements generally
applicable to the Corporation's senior executives, provided that he is to
receive an incentive bonus with respect to each fiscal year of the Corporation
through June 30, 1998, in an amount not less than the salary paid in respect of
such fiscal year, to receive in each calendar year commencing 1997, ten-year
options (which become exercisable after one year) to purchase 100,000 Shares at
the fair market value of such Shares on the date of grant and to receive pension
benefits described above under "Pension, Benefit Equalization, Salary
Continuation and Severance Plans". On October 1, 1995, Mr. Matschullat was
awarded (i) ten-year options to purchase 145,500 Shares and (ii) a special
one-time grant of ten-year options to purchase 300,000 Shares (of which 100,000
options were exercisable on the date of grant and of which 100,000 become
exercisable on each of October 1, 1996 and October 1, 1997 or upon his earlier
death or disability), in each case at the fair market value of the Shares on the
date of grant. On October 1, 1995, Mr. Matschullat was also awarded a special
one-time grant of 100,000 Shares, 66,500 of which (the "Restricted Shares") are
subject to forfeiture if Mr. Matschullat's employment with JES is terminated by
JES for cause or by Mr. Matschullat without good reason. All transfer and other
restrictions will lapse (i) as to 33,250 Restricted Shares, plus any equity
securities of the Corporation issued with respect thereto, on each of October 1,
1996 and October 1, 1997, and (ii) as to all remaining Restricted Shares, plus
any equity securities of the Corporation issued with respect thereto, upon Mr.
Matschullat's death or disability or the termination of his employment by JES
without cause or by him with good reason. Mr. Matschullat is entitled to receive
dividends upon and vote the Restricted Shares. If Mr. Matschullat's employment
with JES is terminated by him with good reason or by JES without cause, Mr.
Matschullat is entitled to receive (i) a payment equal to all accrued salary and
bonus amounts for any completed fiscal year, two times his then annual salary
and two times the greater of his then target bonus under the Management
Incentive Plan of JES (which must be no less than 90% of his then salary) and
his minimum bonus; (ii) continued medical, dental and life insurance coverage
under the JES Senior Executive Benefits Program until the earlier of two years
following the date of termination or his eligibility for coverage with another
employer; and (iii) full vesting of all options then held by Mr. Matschullat.

In connection with his appointment as Chairman and Chief Executive Officer
of MCA on April 23, 1996, Frank J. Biondi, Jr., MCA and the Corporation entered
into an employment agreement dated as of such date with a term ending on June
30, 2001 which provides that Mr. Biondi is paid an annual salary of $1,000,000
and

14
<PAGE> 17

participates in all benefit plans and arrangements and certain medical, life
insurance and auto plans available to MCA executives. Subject to approval by the
Corporation's shareholders of the Senior Executive Short-Term Incentive Plan set
forth in Schedule A hereto, Mr. Biondi has the opportunity to earn an annual
cash incentive bonus for each fiscal year commencing on or after July 1, 1996
targeted at $4,500,000, adjusted for inflation in future years, up to a maximum
of twice the initial target, if and to the extent applicable MCA performance
targets are met. He received an initial bonus of $853,846 for the period
commencing on April 23, 1996 and ending June 30, 1996. Mr. Biondi will receive
deferred annual compensation for the period from April 23, 1996 through June 30,
1997, at an annual rate of $300,000 (prorated for the partial year), and for
each year thereafter in an amount equal to his previous year's salary and
deferred compensation, adjusted for inflation, less $1,000,000, with such
deferred compensation to be paid in January of the first calendar year following
the fiscal year in which Mr. Biondi ceases to be an executive officer of MCA.
Mr. Biondi will receive annual grants of ten-year options (which become
exercisable after one year) to purchase 200,000 Shares at the fair market value
of such Shares on the date of grant. On April 23, 1996, Mr. Biondi was awarded a
special one-time grant of ten-year options to purchase 1,000,000 Shares at their
fair market value on the date of grant and options to purchase 500,000 Shares at
140% of such fair market value, which options become exercisable in five equal
annual installments commencing on April 23, 1997.

If Mr. Biondi's employment with MCA is terminated by him with good reason,
including the diminution of the Corporation's ownership of MCA below specified
levels or the sale of substantially all of MCA's income producing assets or
property, or by MCA without cause, Mr. Biondi's options will become exercisable
in full and Mr. Biondi will be entitled to receive (i) salary, deferred
compensation and target bonus payments for the longer of two years from such
termination date or the expiration of the term of his employment agreement, (ii)
a cash payment of between $5,000,000 and $15,000,000 depending upon when such
termination occurs, and (iii) continuation of medical, dental and insurance
coverage until the earlier of the conclusion of the continuation period or his
eligibility for coverage with another employer, with life insurance coverage
maintained until June 30, 2001. If Mr. Biondi's employment terminates by reason
of his death during the term of his employment agreement, Mr. Biondi's
beneficiary is entitled to receive salary, deferred compensation and target
bonus payments for the shorter of one year from such date or the remainder of
the term of his employment agreement. If Mr. Biondi's employment is terminated
by reason of his permanent disability, he is generally entitled to receive (i)
salary, deferred compensation and target bonus payments continuing for the
shorter of two years from such date or the remainder of the term of his
employment agreement, and (ii) 60% of salary until the earlier of his attainment
of age 65 or the end of his permanent disability, in either case, as reduced by
the amount of any other benefits otherwise payable to Mr. Biondi in connection
therewith. With respect to any of the payments described herein, if such
payments would result in the imposition of an excise tax upon Mr. Biondi under
Section 4999 of the United States Internal Revenue Code ("Code"), Mr. Biondi
shall also receive a cash payment equal to the sum of such excise taxes due by
reason of such payments, plus any amount necessary to place Mr. Biondi in the
same after-tax position as if no such excise taxes had been imposed. In
addition, MCA will provide him with a $10,000,000 life insurance benefit during
the term of the agreement. The agreement also restricts Mr. Biondi's ability to
interfere with the businesses of MCA, its subsidiaries and affiliates for two
years following the termination of his employment and, in the event his
employment is terminated by MCA for cause, by him without good reason or due to
his permanent disability, his ability to compete with such entities for the
lesser of one year following such termination or the remainder of the term of
his employment agreement.

During the Transition Period, the Corporation paid Lew R. Wasserman, a
director of the Corporation and former Chairman and Chief Executive Officer of
MCA, consulting fees in the amount of $416,667 pursuant to the terms of his
employment agreement with MCA dated as of December 6, 1988, as amended. Pursuant
to such agreement, Mr. Wasserman became a consultant and advisor to MCA on an
exclusive basis effective January 4, 1996 at an annual fee of $1,000,000 and
will serve in that capacity until his death or his election to terminate such
relationship. Under the terms of the agreement, Mr. Wasserman participated, and
while he serves as a consultant will continue to participate, in benefit plans
generally available to MCA employees and certain medical, life insurance and
auto plans available to MCA executives.

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<PAGE> 18

REPORT ON EXECUTIVE COMPENSATION

The Human Resources Committee of the Board of Directors (the "Committee"),
which consists of non-employee directors, has furnished the following report on
executive compensation:

Compensation for executive officers consisted primarily of three
components: salary, short-term incentive compensation and stock-based
compensation. The general guidelines used by the Corporation to determine the
levels of these components are described below. It should be noted, however,
that the compensation of certain executive officers was governed by the terms of
employment agreements, certain of which are described above under "Employment
and Consulting Agreements".

The Corporation annually reviews compensation data from surveys conducted
by independent compensation consultants relating to approximately 35 companies
consisting primarily of Fortune 500 and similar international companies in the
food, beverage and consumer products industries and, in the case of the Chief
Executive Officer, a group of 12 Fortune 500 and similar international consumer
product and entertainment companies (the "Comparison Group"). The peer group
included in the performance graph on page 18 consists of companies of varying
sizes engaged in the beverage alcohol and food businesses, some of which are
included in the Comparison Group. The Committee believes that the Comparison
Group more accurately reflects the Corporation's competitors for executive
talent. Based on its review of the Compensation data, the Committee determines
the various components of executive compensation for each executive officer.

Salary. Salaries for executive officers are generally maintained at
competitive levels within relevant labor markets and are reviewed annually to
maintain a competitive position. In respect of the Transition Period, the
Corporation targeted base salaries in the third quartile paid by members of the
Comparison Group for similar positions. Salary was determined for each executive
based on the executive's responsibilities, skills and sustained performance.

Short-Term Incentive Compensation. Compensation under the Management
Incentive Plan of JES served as the variable component of cash compensation for
the Transition Period for participating executive officers and other employees.
For the Transition Period, the target awards of executive officers was based
upon the degree to which the Corporation and any applicable operating unit
achieved prescribed earnings objectives. Incentive awards for executive officers
were targeted at levels such that if targets were achieved, incentive awards in
combination with salary would result in executive officers earning cash
compensation at an annualized rate at approximately the 75th percentile paid by
members of the Comparison Group for similar positions. Target awards for
executive officers ranged from approximately 40% to 300% of salary in effect for
the Transition Period. Actual awards were determined at the end of the
Transition Period and ranged from 90% to 100% of such executives' targets based
on the actual performance of the Corporation or the applicable operating unit.
Executives may elect to receive their awards in the form of cash, stock units or
stock appreciation rights and may defer the payment of cash awards.

Stock-Based Compensation. The Corporation's 1992 and 1996 Stock Incentive
Plans provide an opportunity for participating executive officers and other
participating employees to benefit from the appreciation in the value of the
Shares. Options are an important element of the total compensation program.

Since under the plans the exercise price of an option cannot be less than
the fair market value of a Share on the date of grant, options produce value for
recipients only if the price of Shares increases relative to the price on the
grant date. Options generally are granted to executive officers annually, have
ten year terms (subject to early termination in certain circumstances) and,
commencing in 1996, have three-year vesting periods, although these plans
provide the Committee with the flexibility to grant options with different
vesting periods. The number of options granted to executive officers annually is
determined so that the aggregate value of base salary, targeted short-term
incentive awards and stock option grants would approximate the 75th percentile
of the aggregate value of base salary, annual bonus and stock option grants for
similar positions at companies in the Comparison Group. For this purpose, stock
options were valued using a variant of the Black-Scholes option pricing model.
In granting options annually, the amount and terms of outstanding options held
by executive officers were not taken into account.

Compensation for the Chief Executive Officer. Effective February 1, 1996,
the base salary for Edgar Bronfman, Jr. was increased to an annual rate of
$1,000,000 and his target annual incentive was set at 300% of salary. Mr.
Bronfman was awarded $1,175,000 under the Management Incentive Plan for the
Transition Period, which was less than his target. The increased annual rate of
salary approximates the median salary paid by members of the Comparison Group.
Including his bonus, Mr. Bronfman's total cash compensation on an annualized
basis is

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<PAGE> 19

between the median and the 75th percentile of total cash compensation for chief
executive officers of the Comparison Group.

The Committee continues to be of the view that a large percentage of Mr.
Bronfman's total compensation should be directly related to improvements in the
market value of the Shares, and that he be incentivized to secure for
shareholders returns which outperform the market generally. Accordingly, in 1993
the Committee approved a five-year equity-based compensation program for Mr.
Bronfman consisting of (i) an initial grant of stock options and (ii) annual
grants of stock appreciation rights ("SARs") to the extent the return on the
Shares exceeds the return on the shares included in the Standard & Poor's 500
Composite Index (the "S&P 500"). If and to the extent that an investment in
Shares produces returns which exceed those provided by the broader market, the
program permits the Committee to grant SARs to Mr. Bronfman at the end of each
of the five twelve-month periods commencing with the twelve-month period ended
January 31, 1995. At the end of each such twelve-month period, the Committee
will compare the appreciation in the value of the Shares from February 1, 1994
to the end of such twelve-month period to the appreciation in the value of the
S&P 500 for the same period. For every basis point by which the appreciation in
the value of the Shares exceeds the appreciation in the value of the S&P 500 for
such period, the Committee intends to grant Mr. Bronfman 1,000 SARs, although
the Committee has retained the discretion to increase or decrease any grant if
unanticipated events occur. The SARs will be exercisable for cash, will
terminate ten years from the date of grant and will have an exercise price equal
to the fair market value of Shares on the date of grant. The Committee does not
intend to grant any SARs for any period in which the appreciation in value of
the Shares does not exceed the appreciation in value of the S&P 500. The SAR
program did not result in any SAR grants during the Transition Period.

In light of Mr. Bronfman's individual accomplishments in connection with
the redemption of the Corporation's interest in DuPont, the acquisition of the
Corporation's interest in MCA and the acquisition of the juice and juice
beverage businesses of Dole Food Company Inc., excluding its canned pineapple
juice business, during the fiscal year ended January 31, 1996, on February 14,
1996 the Committee granted him options to purchase one million Shares, 75% of
which were granted at fair market value and 25% of which were granted at a 33%
premium to market. These options become exercisable in equal annual installments
over a five-year period beginning on the first anniversary of the date of grant.

Changes to Internal Revenue Code. Changes made to the Code which became
effective in 1994 limit JES's ability to deduct certain compensation in excess
of $1 million per year paid to certain individuals named in the Summary
Compensation Table. To the extent JES is subject to this limitation, the
Committee currently believes that the Corporation should maintain its
flexibility in designing effective compensation plans that can respond quickly
to marketplace and company needs. The Corporation's proposed Senior Executive
Short-Term Incentive Plan has been designed to meet these needs while also
satisfying the Code's deductibility requirements. The Committee will continue
from time to time to review the advisability of making changes in the
Corporation's compensation plans to reflect government mandated policies but
will not make further changes unless it feels that such changes are in the best
interests of the Corporation and its shareholders.

HUMAN RESOURCES COMMITTEE

David M. Culver, Chairman
Matthew W. Barrett
David L. Johnston
Senator E. Leo Kolber
Marie-Josee Kravis
John L. Weinberg

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<PAGE> 20

PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the cumulative
total shareholder return of the Corporation's Shares with the cumulative total
return of the S&P 500, the Toronto Stock Exchange 300 Composite Index ("TSE
300") and a peer group for the five-year period from June 30, 1991 to June 30,
1996. The graph assumes that $100 was invested on June 30, 1991 in each of the
Shares, the S&P 500, the TSE 300 and the peer group, and that all dividends were
reinvested.

In addition to the Corporation, the peer group consists of the following
companies: Adolph Coors Company, Allied Domecq PLC, Anheuser-Busch Companies,
Inc., Archer-Daniels-Midland Company, Brown-Forman Corporation, Campbell Soup
Company, ConAgra, Inc., CPC International Inc., General Mills, Inc., Grand
Metropolitan PLC, Guinness PLC, H.J. Heinz Company, Hershey Foods Corporation,
Kellogg Company, The Quaker Oats Company, Ralston Purina Company, Sara Lee
Corporation, Unilever N.V., and WM. Wrigley Jr., Co. The peer group is comprised
of companies included in the S&P Beverages (Alcoholic) Index and the S&P Foods
Index as well as certain non-U.S. companies that are not included in the S&P 500
but which compete with the Corporation's beverage alcohol business. The peer
group does not include entertainment companies because the Corporation owned its
80% interest in MCA for only thirteen months of the five-year period covered by
the following graph. The stock performance of each of the constituent companies
in the peer group is weighted on the basis of market capitalization.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE CORPORATION, S&P 500, TSE 300 AND PEER GROUP
(TWELVE MONTHS ENDED JUNE 30)

<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) SEAGRAM S&P 500 TSE 300 PEER GROUP
<S> <C> <C> <C> <C>
1991 100 100 100 100
1992 108 113 101 117
1993 104 129 122 111
1994 123 131 127 114
1995 143 165 146 131
1996 141 208 166 148
</TABLE>

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<PAGE> 21

HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Human Resources Committee is comprised of six "outside" directors,
David M. Culver, Matthew W. Barrett, David L. Johnston, Senator E. Leo Kolber,
Marie-Josee Kravis and John L. Weinberg. Certain information with respect to
entities with which certain of such members are related is set forth below.

As of August 31, 1996, MCA held an approximately 42% equity interest in
Cineplex Odeon Corporation ("Cineplex Odeon"). Pursuant to film distribution and
exhibition agreements entered into in accordance with normal business terms and
conditions, MCA receives film licensing fees from Cineplex Odeon and pays
Cineplex Odeon distribution fees. As of August 31, 1996, the CRBT and Charles R.
Bronfman, collectively, held an approximately 22% equity interest in Cineplex
Odeon. Senator E. Leo Kolber, a director of the Corporation and a trustee of the
CRBT, is a director and the Chairman of the Board of Cineplex Odeon and as of
August 31, 1996 held an approximately 2% equity interest in Cineplex Odeon.

Bank of Montreal extends credit and provides other services to the
Corporation and its subsidiaries from time to time, including serving as a
co-agent and lender pursuant to several credit agreements with the Corporation
and its subsidiaries, acting as an issuing agent and broker for commercial paper
of the Corporation and providing cash management and other services to the
Corporation and certain of its subsidiaries. Matthew W. Barrett, a director of
the Corporation, is Chairman and Chief Executive Officer of Bank of Montreal.

TRANSACTIONS WITH DIRECTORS AND OTHERS

During the Transition Period, Claridge Inc. ("Claridge") reimbursed a
subsidiary of the Corporation for use of aircraft owned by such subsidiary in
the amount of $84,513, representing Claridge's pro rata share of all applicable
operating expenses. The CRBT owns all of the shares of Claridge. Charles R.
Bronfman, 1170 Peel Street, Montreal, Quebec and Arnold M. Ludwick, 1170 Peel
Street, Montreal, Quebec, are among the directors and officers of Claridge.

During the Transition Period, the Corporation paid or accrued rent and
reimbursed expenses to Claridge in the amount of Cdn. $309,470 (and Cdn. $41,705
during the current fiscal year to August 31, 1996) with respect to use by the
Corporation of office and parking space and secretarial services.

Goldman, Sachs & Co. from time to time performs investment banking services
and provides investment advice for the Corporation and its subsidiaries,
including acting as a dealer in the sale of commercial paper issued by JES, as a
market maker in certain securities of JES, as a broker in connection with
purchases of Shares for cancellation by the Corporation, and as managing
underwriter or participating underwriter in connection with the sale of
securities. John L. Weinberg and John S. Weinberg, 85 Broad Street, New York,
New York, are Senior Chairman and General Partner, respectively, of Goldman,
Sachs & Co.

During the Transition Period, JES paid or accrued consulting fees in the
amount of $101,250 (and $12,500 during the current fiscal year to August 31,
1996) with respect to consulting services provided to JES and its affiliates by
Henry Consultants Ltd., a company which is beneficially owned by Frank Alcock,
the father-in-law of Edgar Bronfman, Jr.

The Corporation considers the amounts paid or received with respect to the
various transactions discussed above and under "Human Resources Committee
Interlocks and Insider Participation" to be reasonable and competitive and
believes they are comparable to those which would have been paid to or received
from others.

The Corporation maintains directors' and officers' liability insurance
whereby the directors and officers of the Corporation and its subsidiaries are
insured against certain defined losses from claims against them in their
capacities as directors and officers for defined wrongful acts. The policy
covers amounts which directors and officers become obligated to pay for defined
losses up to a stipulated limit in a policy year. The aggregate limit is
U.S. $25,000,000 at an annual premium of U.S. $390,000, which was paid in
respect of the policy year which extends until September 1996. The Corporation's
deductible is U.S. $500,000.

PROPOSED SENIOR EXECUTIVE SHORT-TERM INCENTIVE PLAN

Shareholders will be asked to consider and, if deemed advisable, to approve
the Corporation's Senior Executive Short-Term Incentive Plan (the "Plan") for
certain senior executive officers of the Corporation and its subsidiaries.
Shareholder approval is required so that compensation payable pursuant to the
Plan to any "covered employee", together with certain other compensation payable
to such employee, is excluded from the $1,000,000 limit on

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<PAGE> 22

deductible compensation set forth in Section 162(m) of the Code. A "covered
employee" is an executive officer named in the "Summary Compensation Table" who
is acting in such capacity on the last day of the applicable tax year of the
Corporation and its subsidiaries.

SUMMARY OF THE PLAN

The following is a brief summary of the terms of the Plan. The summary does
not purport to be complete and is qualified in its entirety by the full text of
the Plan set forth in Schedule A to this Proxy Circular.

The purpose of the Plan is to promote the interests of the Corporation and
its shareholders by providing incentives in the form of periodic bonus awards
("Awards") to certain executive employees of the Corporation and its
subsidiaries, thereby motivating such executives to attain corporate performance
goals described below, while preserving for the benefit of subsidiaries of the
Corporation the associated U.S. federal income tax deduction.

Administration. The Plan is administered by the Human Resources Committee
of the Board of Directors, or such other persons designated by the Board of
Directors (the "Committee"). The Committee may delegate any of its duties and
powers in whole or in part to any subcommittee thereof consisting of at least
two "outside directors," as defined under Section 162(m) of the Code. The
Committee, or its delegate, will provide objective, performance-based annual
Awards for selected senior executives (the "Participants") of the Corporation,
as described below.

Awards. Within 90 days after the start of a designated performance period,
or such lesser time as permitted by the Plan, the Committee will establish the
objective performance goals for each Participant. The performance goals for
Awards will be based upon one or more of the following criteria, which may be
determined by reference to the performance of the Corporation, a subsidiary, or
a division or unit of the Corporation or subsidiary: (i) earnings before income
taxes (including earnings before interest, income taxes, depreciation and
amortization) ("EBITDA"); (ii) EBITDA or operating earnings, reduced by the cost
of capital or investment; (iii) earnings per share; and (iv) return on
investment or stockholders' equity. The performance goals may be calculated
without regard to extraordinary items to the extent permitted by Code Section
162(m).

Prior to payment of any Award, the Committee, or its delegate, will certify
that the applicable performance goals have been met. In connection with such
certification, the Committee, or its delegate, may determine to pay amounts
which are less than the Award otherwise payable for achievement of the
applicable performance goals. The Committee may base the decision to reduce the
Award on any criteria it deems relevant. Payment of an Award to a Participant
will occur only after such certification and within 75 days after the end of the
performance period to which such Award relates or as otherwise determined by the
Committee. The Committee may permit a Participant to defer payment of an Award.

Individual Limit. The total Award to any Participant with respect to any
fiscal year shall not exceed $9 million.

Amendment and Termination. The Board may at any time amend, suspend or
terminate the Plan in whole or in part. In addition, the Committee may amend the
Plan in such manner as it deems necessary to conform with requirements of future
amendments or regulations, if any, to or under the Code or other applicable
laws. An amendment, suspension or termination of the Plan will not adversely
affect the rights or obligations under any Award granted to a Participant before
the amendment, suspension or termination of the Plan.

Transfer Restrictions, Etc. A Participant's rights and interest under the
Plan generally may not be assigned, transferred or encumbered, except in the
event of a Participant's death or as may be approved by the Committee. No Award
under the Plan will be construed as giving any employee a right to continued
employment with the Corporation or its subsidiaries.

SHAREHOLDER APPROVAL

Approval of the Plan requires the affirmative vote of the holders of a
majority of the Shares present, or represented by proxy, and entitled to vote at
the Meeting.

The Board of Directors has approved the Plan and recommends that
shareholders vote for the approval of the Plan. The persons named in the
enclosed proxy accordingly intend to vote at the Meeting for the approval of the
Plan unless otherwise directed by the shareholder appointing them. The Plan is
effective as of July 1, 1996, subject to shareholder approval.

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<PAGE> 23

APPOINTMENT OF AUDITORS

The persons named in the enclosed proxy, unless otherwise directed by the
shareholder appointing them, intend to vote at the Meeting for the reappointment
of Price Waterhouse as auditors of the Corporation to hold office until the
close of the next annual meeting of shareholders and to authorize the Board of
Directors to set their remuneration. Price Waterhouse have been auditors of the
Corporation for many years. Representatives of Price Waterhouse are expected to
be present at the Meeting and will have the opportunity to make a statement, if
they desire to do so, and will be available to respond to appropriate questions
from the shareholders.

REPORT OF DIRECTORS AND FINANCIAL STATEMENTS

Pursuant to the requirements of the Canada Business Corporations Act, the
directors will place before the shareholders at the Meeting their Report and the
comparative Consolidated Financial Statements of the Corporation for the Fiscal
Year but no action with respect thereto is required or proposed to be taken by
the shareholders.

AVAILABILITY OF DISCLOSURE DOCUMENTS

The Corporation will provide to any person or company, upon request to the
Secretary of the Corporation, a copy of: (i) the latest Annual Information Form
or Transition Report on Form 10-K of the Corporation, together with one copy of
any document, or the pertinent pages of any document, incorporated therein by
reference; (ii) the comparative Consolidated Financial Statements of the
Corporation for the Transition Period, together with the report thereon of its
auditors and any interim financial statements of the Corporation filed with the
securities commissions of any province of Canada subsequent thereto; and (iii)
the Proxy Circular of the Corporation for the Meeting.

SHAREHOLDER PROPOSAL

GENERAL

E. Magnus Oppenheim, President, E. M. O. Asset Management Inc., General
Partner of E. M. O. Sterling Return LT Fund, owners of 3,000 Shares of which 100
Shares are registered, and, President, E. Magnus Oppenheim & Co., Inc.,
Registered Investment Advisors representing investment management clients owning
11,960 Shares, has advised the Corporation that he intends to propose a
resolution at the Meeting. The proposed resolution and Mr. Oppenheim's statement
in support thereof are set forth below.

RESOLVED: That the stockholders of The Seagram Company Ltd. assembled at
the annual meeting in person or by proxy, hereby request the Board of Directors
to immediately initiate a plan of action to rationalize the corporate assets in
order to unlock the inherent stock value for the benefit of all shareholders.
This plan should involve the separation by spinoff, divestiture or any other
method to separate the company into two (2) distinct and separate entities --
beverage and entertainment. All non-core holdings such as Time Warner shares and
DuPont holdings should be liquidated. Proceeds are to be used to offset
long-term debt, buy back shares and/or distribute to shareholders. Appropriate
tax strategies should be pursued. This separation should be completed before the
next annual meeting.

SUPPORTING STATEMENT

The company is not maximizing shareholder value.

1. At the 1996 Annual Meeting this proposal received 23,667,191 votes. This
translates into 9.85% of non-management shares outstanding and 14.6% of
non-management shares voted at the meeting.

2. The beverage business and the entertainment business as pursued by Seagram
are two distinct industries. Operating them as a combined entity inhibits
Seagram from receiving a proper market evaluation and recognition.
Valuation of each business is analyzed and evaluated differently. The
combination is confusing to the average shareholder and creates a hardship
for the professional analyst to evaluate.

Since the last Annual Meeting, Westinghouse, Tenneco, Manor Care and WMS
Industries have announced plans to spin off separate lines of business.

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<PAGE> 24

Non-management shareholders should make their views known to outside
members of the Board. This strategy must be publicized in order to bolster the
Seagram stock in the near future.

If you agree, please mark your ballot in favor of this resolution in the
appropriate manner, otherwise, your vote will automatically be cast against it.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL

Several major events since April 1995 have substantially changed the
Corporation. In April 1995, DuPont redeemed 156 million of its shares held by
the Corporation. The redemption transaction unlocked significant value by
providing the Corporation with $7.7 billion after-tax, plus 156 million equity
warrants. The remaining DuPont shares retained by the Corporation will allow the
Corporation to participate in DuPont's upside potential. In June 1995, the
Corporation purchased an 80% interest in MCA, one of the very few companies with
important, established brands and assets in filmed entertainment, recorded music
and site-based entertainment. During the Transition Period, the Corporation
continued to reengineer its beverage operations to better position it to achieve
its strategic growth objectives. In addition, in July 1996, DuPont repurchased
the 156 million equity warrants.

The DuPont redemption, MCA acquisition, reengineering of the Corporation's
beverage business and repurchase of the DuPont warrants demonstrate that the
Board and management will take action at the appropriate times to enhance
shareholder value. Moreover, the Board adheres strongly to the position that
determinations as to the acquisition, maintenance and disposition of the
Corporation's businesses are properly decided by the Board and management, which
have the necessary information and resources to evaluate these matters and take
action at the proper time.

SHAREHOLDER APPROVAL

Approval of the proposal requires the affirmative vote of a majority of the
votes cast by shareholders present, or represented by proxy, and entitled to
vote at the Meeting.

The Board of Directors recommends that shareholders vote against the
proposal. The persons named in the enclosed proxy accordingly intend to vote at
the Meeting against the proposal unless otherwise directed by the shareholder
appointing them.

PROCEDURE FOR SUBMITTING SHAREHOLDER PROPOSALS

Shareholders who wish to present proposals for action at the next annual
meeting of shareholders should submit their proposals in writing to the
Secretary of the Corporation at the address of the Corporation set forth on the
first page of this Proxy Circular so that the same are received by the Secretary
no later than August 1, 1997 for inclusion in the next Proxy Circular.

GENERAL

The contents and the sending of this Proxy Circular have been approved by
resolution of the Board of Directors of the Corporation.

Montreal, Quebec, September 5, 1996

/s/ Michael C. L. Hallows

MICHAEL C. L. HALLOWS
Secretary

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<PAGE> 25

SCHEDULE A

THE SEAGRAM COMPANY LTD.
SENIOR EXECUTIVE SHORT-TERM INCENTIVE PLAN

1. PURPOSE. The purpose of the Senior Executive Short-Term Incentive Plan
(the "Plan") is to advance the interests of The Seagram Company Ltd. (the
"Company") and its shareholders by providing incentives in the form of periodic
bonus awards ("Awards") to certain senior executive employees of the Company and
its subsidiaries, thereby motivating such executives to attain corporate
performance goals articulated under the Plan.

2. ADMINISTRATION. (a) The Plan shall be administered by the Human
Resources Committee of the Company's Board of Directors, or such other persons
designated by the Company's Board of Directors (the "Committee"). The Committee
may delegate any of its duties and powers in whole or in part to any
subcommittee thereof consisting solely of at least two "outside directors," as
defined under Section 162(m) of the United States Internal Revenue Code of 1986,
as amended (the "Code").

(b) The Committee shall have the exclusive authority to select the senior
executives to be granted Awards under the Plan, to determine the size and terms
of the Awards (subject to the limitations imposed on Awards in Section 4 below),
to modify the terms of any Award that has been granted (except for any
modification that would increase the amount of the Award payable to an
executive), to determine the time when Awards will be made and the performance
period to which they relate, to establish performance objectives in respect of
such performance periods, and to certify that such performance objectives were
attained; provided, however, that any such action shall be consistent with the
applicable provisions of Section 162(m) of the Code. The Committee is authorized
to interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent the Committee deems necessary or desirable.
Any decision of the Committee in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute discretion and
shall be final, conclusive and binding on all parties concerned.

3. PARTICIPATION. Awards may be granted to senior executives of the
Company and its subsidiaries who are "covered employees", as defined in Section
162(m) of the Code, or who the Committee anticipates may become covered
employees. An Executive to whom an Award is granted shall be a "Participant".

4. AWARDS UNDER THE PLAN. (a) A Participant's Award shall be determined
based on the attainment of written performance goals approved by the Committee
for a performance period which is established by the Committee (i) while the
outcome for that performance period is substantially uncertain and (ii) no more
than 90 days after the commencement of that performance period or, if less, the
number of days which is equal to 25 percent of that performance period. The
performance goals, which must be objective, shall be based upon one or more of
the following criteria: (i) earnings before income taxes (including earnings
before interest, income taxes, depreciation and amortization) ("EBITDA"); (ii)
EBITDA or operating earnings, reduced by the cost of capital or investment
("SVA"); (iii) earnings per share; and (iv) return on investment or
shareholders' equity. The foregoing criteria may relate to the Company, one or
more of its subsidiaries or one or more of its divisions or units, or any
combination of the foregoing, and may be applied on an absolute basis and/or be
relative to one or more peer group companies or other indices, or any
combination thereof, all as the Committee shall determine. In addition, to the
degree consistent with Section 162(m) of the Code, the performance goals may be
calculated without regard to extraordinary items. The maximum amount of an Award
to any Participant with respect to a fiscal year of the Company shall be $9
million.

(b) The Committee shall determine whether the performance goals have been
met with respect to any affected Participant and, if they have, so certify and
ascertain the amount of the applicable Award. No Awards will be paid for that
performance period until such certification is made by the Committee. The amount
of the Award actually paid to any affected Participant may be less than the
amount determined by the applicable performance goal formula, at the discretion
of the Committee. The amount of the Award determined by the Committee for a
performance period shall be paid to the Participant within 75 days after the end
of that performance period or as otherwise determined by the Committee;
provided, however that a Participant may, if and to the extent permitted by the
Committee, elect to defer payment of an Award.

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<PAGE> 26

(c) The provisions of this Section 4 shall be administered and interpreted
in accordance with Section 162(m) of the Code to ensure the deductibility by the
Company or its subsidiaries of the payment of Awards.

5. AMENDMENT AND TERMINATION OF THE PLAN. (a) The Company's Board of
Directors may at any time, or from time to time, suspend or terminate the Plan
in whole or in part or amend it in such respects as the Board may deem
appropriate.

(b) No amendment, suspension or termination of the Plan shall, without the
Participant's consent, impair any of the rights or obligations under any Award
theretofore granted to a Participant under the Plan.

(c) The Committee may amend the Plan, subject to the limitations cited
above, in such manner as it deems necessary to permit the granting of Awards
meeting the requirements of future amendments, rules or regulations, if any, to
or under the Code or other applicable laws.

6. MISCELLANEOUS PROVISIONS. (a) Determinations made by the Committee under
the Plan need not be uniform and may be made selectively among eligible
individuals under the Plan, whether or not such eligible individuals are
similarly situated. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee or other person any right to continue to be
employed by or perform services for the Company or any subsidiary, and the right
to terminate the employment of or performance of services by any Participant at
any time and for any reason is specifically reserved to the Company and its
subsidiaries.

(b) Except as may be approved by the Committee, a Participant's rights and
interest under the Plan may not be assigned or transferred, hypothecated or
encumbered in whole or in part either directly or by operation of law or
otherwise (except in the event of a Participant's death) including, but not by
way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy
or in any other manner; provided, however, that, subject to applicable law, any
amounts payable to any Participant hereunder are subject to reduction to satisfy
any liabilities owed to the Company or any of its subsidiaries by the
Participant.

(c) The Company and its affiliates shall have the right to deduct from any
payment made under the Plan any federal, state, local or foreign income or other
taxes required by law to be withheld with respect to such payment.

(d) The Company is the sponsor and legal obligor under the Plan, and shall
make all payments hereunder, other than any payments to be made by any of the
subsidiaries, which shall be made by such subsidiary, as appropriate. Nothing
herein is intended to restrict the Company from charging a subsidiary that
employs a Participant for all or a portion of the payments made by the Company
hereunder. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment
of any amounts under the Plan, and rights to the payment hereunder shall be no
greater than the rights of the Company's (or subsidiary's) unsecured creditors.
All expenses involved in administering the Plan shall be borne by the Company.

(e) In addition to such other rights of indemnification as they may have as
members of the Board of Directors of the Company or the Committee, the members
of the Board, the Committee or any subcommittee shall be indemnified by the
Company against all costs and expenses reasonably incurred by them in connection
with any action taken or failure to act under or in connection with the Plan or
any Award granted thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except a judgment based upon a finding of bad
faith; provided that upon the institution of any such action, suit or
proceeding, a Committee, Board or subcommittee member shall, in writing, give
the Company notice thereof and an opportunity, at its own expense, to handle and
defend the same before such Committee or Board member undertakes to handle and
defend it on such member's own behalf.

(f) The validity, construction, interpretation, administration and effect
of the Plan and rights relating to the Plan and to Awards granted under the
Plan, shall be governed by the substantive laws, but not the choice of laws
rules, of the State of New York.

(g) The Plan shall be effective as of July 1, 1996. However, if the Plan is
not approved by the affirmative vote of holders of a majority of the shares of
the Company present, or represented by proxy, and entitled to vote at the Annual
Meeting of Shareholders of the Company to be held on October 30, 1996, or at any
adjournment thereof, the Plan and all Awards thereunder shall terminate.

24
<PAGE> 27

THE SEAGRAM COMPANY LTD.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE SEAGRAM
COMPANY LTD. (THE "CORPORATION") FOR THE ANNUAL MEETING OF SHAREHOLDERS OF THE
CORPORATION TO BE HELD OCTOBER 30, 1996, and should be read in conjunction with
the Notice of Meeting and Proxy Circular pertaining thereto.

The undersigned shareholder hereby appoints Edgar M. Bronfman, Chairman, The
Hon. Charles R. Bronfman, Co-Chairman, Edgar Bronfman, Jr., President and Chief
Executive Officer, and Robert W. Matschullat, Vice Chairman and Chief Financial
Officer, or any one of them, OR INSTEAD OF ANY OF THEM THE UNDERSIGNED HEREBY
APPOINTS

attorney or attorneys, or proxy or proxies, with full power of substitution, in
the name and on behalf of the undersigned, to attend, vote and act at the Annual
Meeting of Shareholders to be held on October 30, 1996, at the Marriott Chateau
Champlain, 1 Place du Canada, Montreal, Quebec, and at any and all adjournments
thereof, upon the following matters:

- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
- --------------------------------------------------------------------------------
a) Election of Directors

Edgar M. Bronfman, The Hon. Charles R. Bronfman, Edgar Bronfman, Jr.,
Samuel Bronfman II, Matthew W. Barrett, Frank J. Biondi, Jr.,
The Hon. William G. Davis, The Hon. Paul Desmarais, Michele J. Hooper,
David L. Johnston, Senator E. Leo Kolber, Marie-Josee Kravis, Robert W.
Matschullat, C. Edward Medland, Lew R. Wasserman and John S. Weinberg.

FOR WITHHELD FOR, except vote withheld from the
/ / / / following nominee(s)

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

b) Approval of Senior Executive Short-Term Incentive Plan

FOR AGAINST ABSTAIN
/ / / / / /

c) Appointment of Price Waterhouse as Auditors
FOR WITHHELD
/ / / /

- --------------------------------------------------------------------------------
The Board of Directors recommends a vote AGAINST
- --------------------------------------------------------------------------------
d) Shareholder Proposal

FOR AGAINST ABSTAIN
/ / / / / /

e) In their discretion, with respect to amendments or upon variations to matters
identified above or upon such other matters as may properly come before the
Meeting, hereby revoking any proxy previously given.

A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON, WHO NEED NOT BE A
SHAREHOLDER, TO REPRESENT HIM AT THE MEETING MAY DO SO by inserting such other
person's name in the space provided above.

This proxy, when properly executed, will be voted in accordance with the
directions of the undersigned shareholder. IN THE ABSENCE OF SUCH DIRECTIONS,
THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE, FOR APPROVAL OF THE
SENIOR EXECUTIVE SHORT-TERM INCENTIVE PLAN, FOR THE APPOINTMENT OF AUDITORS AND
AGAINST THE SHAREHOLDER PROPOSAL.

NOTE: When signing as attorney, executor, administrator, trustee, authorized
officer of a corporation or in any representative capacity, please insert your
title as such.

Dated..................... 1996 ...............................................
Signature of Shareholder

(If not dated, this proxy is deemed to bear the date when mailed by the
Corporation.)

PROXY
PLEASE COMPLETE AND RETURN IN THE
ENVELOPE PROVIDED.

LOGO

ACCOUNT NO. SHARES