SEAGRAM CO LTD, S-3, 1999-05-13

SEAGRAM CO LTD
S-3, 1999-05-13
BEVERAGES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 13, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
THE SEAGRAM COMPANY LTD. --
LA COMPAGNIE SEAGRAM LTEE JOSEPH E. SEAGRAM & SONS, INC.
(EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)

<TABLE>
<S> <C>
CANADA INDIANA
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
NONE 13-1285240
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
1430 PEEL STREET 375 PARK AVENUE
MONTREAL, QUEBEC, CANADA H3A 1S9 NEW YORK, NEW YORK 10152
(514) 849-5271 (212) 572-7000
</TABLE>

(ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING AREA CODES, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)

ROBERT W. MATSCHULLAT
JOSEPH E. SEAGRAM & SONS, INC.
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(212) 572-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANTS' AGENT FOR SERVICE AND AUTHORIZED REPRESENTATIVE OF THE SEAGRAM
COMPANY LTD. IN THE UNITED STATES)
COPIES TO:

<TABLE>
<S> <C>
GEORGE R. KROUSE, JR., ESQ. ROBERT E. BUCKHOLZ, JR., ESQ.
SARAH E. COGAN, ESQ. SULLIVAN & CROMWELL
SIMPSON THACHER & BARTLETT 125 BROAD STREET
425 LEXINGTON AVENUE NEW YORK, NEW YORK 10004
NEW YORK, NEW YORK 10017-3909
</TABLE>

-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
-------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [ ]
-------------------------
<PAGE> 2

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
PROPOSED
MAXIMUM
AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF OFFERING REGISTRATION
SECURITIES TO BE REGISTERED PRICE(E)(F) FEE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stock Purchase Units............................... $1,150,000,000 $319,700
Debt Securities(a)................................. -- --
Common Shares(b)................................... -- --
Stock Purchase Contracts(c)........................ -- --
Guarantees(d)...................................... -- --
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>

(a) No separate consideration will be received by Joseph E. Seagram & Sons, Inc.
Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no
registration fee is required.

(b) No separate consideration will be received by The Seagram Company Ltd.
Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no
registration fee is required.

(c) No separate consideration will be received by The Seagram Company Ltd.
Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no
registration fee is required.

(d) No separate consideration will be received by The Seagram Company Ltd.
Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no
registration fee is required.

(e) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.

(f) Exclusive of accrued interest, distributions and dividends, if any.

The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the Registration Statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 3

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED MAY 13, 1999

Units
THE SEAGRAM COMPANY LTD.
% Adjustable Conversion-rate Equity Security Units
------------------------

Each unit consists of a contract to purchase common shares of The Seagram
Company Ltd., and a subordinated deferrable note of its subsidiary, Joseph E.
Seagram & Sons, Inc., that is guaranteed by The Seagram Company Ltd. You will
receive from each unit:

- interest payments at the rate of % per year, paid quarterly,

- contract fee payments at the rate of an additional % per year,
paid quarterly,

- on , 2002, between and 1 common share of The
Seagram Company Ltd., depending on the average trading price of the
common shares at that time.

You may use the proceeds of a remarketing of the notes to satisfy your
payment obligation under the contracts, which is due on , 2002. You
may also elect to deliver treasury securities or cash to satisfy that
obligation, in which case the notes will be returned to you.

The interest rate on the notes will be reset on , 2002. We
can defer payments of interest for up to 5 years and contract fees for up to 3
years. Amounts that we defer will bear interest at the rate of % until
, 2002, and at the reset interest rate on the notes after that
date.

You may not separate the notes from the contracts, except in limited
circumstances. The notes and contracts will therefore trade together as units.
We will apply to list the units on the New York Stock Exchange. Our common
shares are listed on the New York Stock Exchange under the symbol "VO". The last
reported sale price on the New York Stock Exchange on May 12, 1999 was $59 3/16
per share.

Investing in the units involves risks described beginning on page 7.
------------------------

NEITHER THE SEC NOR ANY SECURITIES COMMISSION HAS APPROVED THESE SECURITIES
OR DETERMINED THAT THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Per Unit Total
------------ ------------
<S> <C> <C>
Initial public offering price of units................... $ $
Underwriting discount....................................
Proceeds to us, before expenses..........................
</TABLE>

We have granted the underwriters the right to purchase up to
additional units to cover any over-allotments.
------------------------

GOLDMAN, SACHS & CO.
------------------------

Prospectus dated 1999.
<PAGE> 4

[INSIDE FRONT COVER]

PHOTOGRAPHS OF SEAGRAM'S RECORDED MUSIC
PRODUCTS, FILMS, THEME PARKS AND
BEVERAGE ALCOHOL PRODUCTS
<PAGE> 5

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information and financial statements and notes to the financial statements
appearing elsewhere in or incorporated by reference into this prospectus.

THE SEAGRAM COMPANY LTD.

We operate in two global business segments: entertainment and spirits and
wine. The entertainment segment produces and distributes recorded music and
motion picture, television and home video products throughout the world. It also
operates theme parks and retail stores. The spirits and wine segment produces
and markets distilled spirits, wines, coolers, beers and mixers in more than 190
countries and territories.

BUSINESS STRATEGY

We have transformed ourselves into a leading entertainment company with a
first-tier global spirits and wine business. Our objective is to enhance
shareholder value by executing the following strategies:

- - CAPITALIZE ON OUR LEADING POSITION IN THE MUSIC INDUSTRY: With the completion
of the PolyGram acquisition, we are the world's largest music company with a
22% market share (based on 1998 unit sales) and have the #1 position in every
major region in the world, including North America, South America, Europe and
Asia, and in every major music genre, including Hip-Hop, R&B, rock, country,
jazz and classical. We also have the largest music catalog in the world.

- - DEVELOP E-COMMERCE FOR MUSIC DISTRIBUTION: Our strategy is to be at the
forefront of the development of music distribution through e-commerce and
electronic delivery. We are actively participating in the development of
worldwide standards for the protection of digitized music which will allow
the commercial sale and distribution of music over the internet and all
future broadband channels. In April 1999, Seagram and BMG formed GetMusic, an
on-line music alliance, to create internet sites to promote and sell music.

- - PURSUE SIGNIFICANT POTENTIAL COST-SAVINGS FROM THE UNIVERSAL/POLYGRAM
COMBINATION: The PolyGram acquisition combined two of the leading music
companies with top record labels across all music genres and complementary
distribution capabilities. This combination has created the potential for
significant cost savings through consolidation of labels, manufacturing and
distribution facilities and corporate overhead reductions. We expect these
cost savings to reach $300 million annually by fiscal year 2001.

- - EXPAND BRANDED THEME PARKS: Recently, we have significantly expanded our
branded theme parks in North America, and made investments in Europe and
Asia. This month, in Orlando, Florida, we will open with our partner
Universal Studios Islands of Adventure, a second major theme park, and
CityWalk, a dining, retail and entertainment complex. The new theme park
features attractions that draw on such well-known entertainment names as
Jurassic Park, Dr. Seuss and Marvel Comic Super Heroes. With the expected
opening of The Portofino Bay Hotel in September 1999 and two additional
hotels in 2000 and 2001, adjacent to Universal Studios Florida and Universal
Studios Islands of Adventure, we expect to create a world-class destination

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<PAGE> 6

resort, Universal Studios Escape. In May 1999 we added Terminator 2:3D at our
California theme park, Universal Studios Hollywood. We acquired an interest
in and manage Universal's Port Aventura, a theme park near Barcelona, Spain.
The Universal Studios Japan theme park is under construction and is scheduled
to open in Osaka in 2001.

- - ENHANCE FILMED ENTERTAINMENT RETURNS: We have a valuable library of 3,000
feature films. We are committed to increasing its value through our current
development, production and marketing of motion pictures. We also plan to
seek to reduce the capital used in our motion picture business through
increased co-financing and co-production arrangements. In addition, we are
using our television library of nearly 24,000 episodes and our motion picture
library to gain equity stakes in new television channels internationally,
particularly in Europe.

- - STRENGTHEN STAKE IN DOMESTIC TELEVISION: In February 1998, we combined our
domestic television businesses with Home Shopping Network to form USA
Networks, a public company in which we own a 45% effective interest. USA
Networks has strong positions in programming, broadcast and cable
distribution, and e-commerce. As of May 12, 1999, the market value of this
investment was approximately $5.9 billion.

- - GROW OUR KEY SPIRITS AND WINE BRANDS AND MARKETS: It is our objective to grow
our key global brands: Chivas Regal, Crown Royal, Captain Morgan, Martell
Cognac and ABSOLUT VODKA. We have also identified the United States, Germany,
Spain, the United Kingdom, Japan and Korea as priority established markets.
We also see growth potential in Brazil, Russia, Poland, China and India. We
are a leading producer and importer of fine wines in North America. We expect
to benefit from a recovery in the Asian markets and continued strong demand
in North America.

2
<PAGE> 7

THE OFFERING

THE UNITS

COMPONENTS OF UNITS

Each unit consists of a contract to purchase common shares of Seagram and a
subordinated deferrable note of Joseph E. Seagram & Sons, Inc., a subsidiary of
Seagram which we refer to as JES. The notes are guaranteed by Seagram. You will
receive from each unit:

- - interest payments at the rate of % per year, paid quarterly,

- - contract fee payments at the rate of an additional % per year, paid
quarterly,

- - on , 2002, between and 1 common share of Seagram,
depending on the average trading price of the common shares at that time.

The notes will be pledged to secure the unit holder's obligations to
Seagram to purchase the common shares under the contracts.

You may not separate the notes from the contracts. The notes and contracts
will therefore trade together as units.

SETTLEMENT RATE

The number of common shares you will receive for each unit will be
determined by one of the following settlement rates:

- - If the average trading price equals or exceeds $ , you will receive
common shares.

- - If the average trading price is less than $ but greater than
$ , you will receive common shares having a value, based on
the average trading price, equal to $ .

- - If the average trading price is less than or equal to $ , you will
receive 1 common share.

The average trading price used to determine the settlement rate will be the
average closing price of the common shares during a 20-trading day period ending
on , 2002. The settlement rate will be subject to anti-dilution
adjustment in case of stock splits, stock dividends, or other events affecting
the common shares. You can find more information about the settlement rate
starting on page .

SETTLEMENT MECHANICS

REMARKETING OF NOTES. On , 2002 the remarketing agent will
remarket the notes and use the proceeds to purchase substitute collateral. After
the notes have been remarketed, the interest rate on the notes will be reset at
the rate determined by the remarketing agent.

You may elect not to participate in the remarketing and retain the notes
underlying the units by delivering treasury securities as substitute collateral.

EARLY SETTLEMENT. You may settle the purchase contracts underlying your
units at any time prior to , 2002, by delivering $ in cash
per unit. You will receive common shares per unit and the notes
underlying the units upon delivery of the cash.

THE NOTES

The notes will:

- bear interest at an annual rate of % prior to , 2002, and
at the reset rate after that date, paid quarterly, subject to the
deferral provisions described below,

- mature on , 2004, and

- not be redeemable prior to maturity.

The interest rate on the notes will be reset on , 2002 in
connection with the remarketing of the notes described above.

3
<PAGE> 8

JES may defer payments of interest on the notes. Any deferred payments of
interest will bear additional interest at an annual rate equal to the deferral
rate of % prior to , 2002, and at the reset rate thereafter.

OTHER TERMS OF THE UNITS

CONTRACT FEES. Seagram may defer contract fee payments for up to 3 years
at a deferral rate of % per year.

LISTING. We will apply to list the units on the NYSE.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The notes will be subject
to the regulations concerning contingent payment debt instruments. As such, you
will be subject to federal income tax on the accrual of original issue discount
in respect of the notes. In addition, the contract fees and deferred contract
fees may be taxed to you as ordinary income, when received or accrued, in
accordance with your method of accounting. Because there is no statutory,
judicial or administrative authority directly addressing the tax treatment of
the units or instruments similar to the units, you are urged to consult your own
tax advisor concerning the tax consequences of an investment in the units.

OTHER OFFERING

Seagram is also offering approximately $ billion of common shares
in a separate public offering. The offerings are not conditioned on each other.

SUMMARY FINANCIAL DATA
(US$ IN MILLIONS EXCEPT PER SHARE)
(UNAUDITED)

The historical consolidated financial data presented below is unaudited.
The pro forma financial data shows the effect of the acquisition of PolyGram as
if it had been consummated on July 1, 1997.

4
<PAGE> 9

<TABLE>
<CAPTION>
ACTUAL PRO FORMA
NINE MONTHS NINE MONTHS
FISCAL YEARS ENDED ENDED ENDED
JUNE 30, MARCH 31, MARCH 31,
------------------ ----------- -----------
1997 1998 1999 1999
------- ------- ----------- -----------
<S> <C> <C> <C> <C>
Operating income
Entertainment
Music.................................. $ (58) $ (44) $ (80) $ 121
Filmed entertainment................... 157 229 (119) (194)
Recreation & other..................... 31 24 31 31
Gain on sale of Putnam................. 64 -- -- --
------- ------- ------- -------
Entertainment............................. 194 209 (168) (42)
Spirits and wine.......................... 663 464 438 438
Restructuring charge...................... -- -- (405) --
Corporate................................. (138) (120) (68) (68)
------- ------- ------- -------
Total operating income...................... $ 719 $ 553 $ (203) $ 328
======= ======= ======= =======
Interest, net and other..................... $ 147 $ 228 $ 301 $ 526
Net income (loss)........................... $ 502 $ 946 $ 739 $ (155)
Basic earnings (loss) per share............. $ 1.36 $ 2.70 $ 2.00 $ (0.39)
Diluted earnings (loss) per share........... $ 1.35 $ 2.68 $ 2.00 $ (0.39)
FINANCIAL POSITION DATA
(AT END OF PERIOD)
Current assets.............................. $ 6,131 $ 6,971 $ 8,786
Total assets................................ $20,447 $22,179 $35,699
Net debt.................................... $ 2,227 $ 2,704 $ 8,450
Minority interest........................... $ 1,851 $ 1,915 $ 1,878
Shareholders' equity........................ $ 9,422 $ 9,316 $12,057
Shares outstanding at period end
(thousands)............................... 365,281 347,132 401,796
CASH FLOW DATA
Cash flow from operating activities....... $ 664 $ (241) $ 387
Capital expenditures...................... $ (393) $ (410) $ (314)
Other investing activities, net........... $ 2,101 $ 1,109 $(5,356)
Dividends paid............................ $ (239) $ (231) $ (181)
Depreciation and amortization............. $ 393 $ 416 $ 506 592
SUPPLEMENTAL INFORMATION
EBITDA
Entertainment
Music.................................. $ 72 $ 90 $ 208 $ 722
Filmed entertainment................... 373 463 (67) (131)
Recreation & other..................... 158 159 92 92
------- ------- ------- -------
Entertainment............................. 603 712 233 683
Spirits and wine.......................... 810 590 536 536
------- ------- ------- -------
Total EBITDA................................ $ 1,413 $ 1,302 $ 769 $ 1,219
======= ======= ======= =======
Net income from continuing operations, plus
amortization.............................. $ 584 $ 405 $ 231 $ 460
Net income from continuing operations, plus
amortization, per share................... $ 1.58 $ 1.16 $ .63 $ 1.16
</TABLE>

5
<PAGE> 10

Summary financial data includes earnings before interest, taxes,
depreciation and amortization ("EBITDA"), which we believe is an appropriate
measure of our operating performance, given the significant goodwill associated
with our acquisitions. However, EBITDA should be considered in addition to, not
as a substitute for operating income, net income, cash flows and other measures
of financial performance in accordance with generally accepted accounting
principles.
6
<PAGE> 11

RISK FACTORS

Before purchasing units, you should carefully consider the following risk
factors relating to the units.

YOU WILL BEAR THE ENTIRE RISK OF A DECLINE
IN THE PRICE OF THE COMMON SHARES

The market value of the common shares you receive on , 2002 (which
we refer to as the "stock purchase date") may be materially different from the
price you pay for those common shares. If the average trading price of the
common shares on the stock purchase date is less than $ (that is, less
than the closing price of the common shares on the date of this prospectus), you
will, on the stock purchase date, be required to purchase common shares at a
loss. Accordingly, a holder of units assumes the entire risk that the market
value of the common shares may decline. Any such decline could be substantial.

YOU WILL RECEIVE ONLY A PORTION OF ANY
APPRECIATION IN THE COMMON
SHARE PRICE

The number of common shares that will be issued upon settlement may decline
by up to % as the market value of the common shares increases. Therefore,
your opportunity for equity appreciation will be less than if you invested
directly in common shares. In addition, if the average trading price of the
common shares at the stock purchase date exceeds $ but falls below
$ , you will receive no equity appreciation on the common shares.

THE MARKET PRICE FOR THE COMMON
SHARES IS UNPREDICTABLE

It is impossible to predict whether the market price of the common shares
will rise or fall. Many factors influence the trading prices of the common
shares. These factors include changes in our financial condition, results of
operations and prospects and complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally, the
stock exchanges on which the common shares are traded and the market segments of
which we are a part.

YOU MAY SUFFER DILUTION OF THE COMMON SHARES ISSUABLE UPON SETTLEMENT OF
PURCHASE CONTRACTS

The number of common shares issuable upon settlement is subject to
adjustment only for stock splits and combinations, stock dividends and certain
other specified transactions. The number of common shares issuable upon
settlement of each purchase contract is not subject to adjustment for other
events, such as employee stock option grants, offerings of common shares for
cash or in connection with acquisitions or certain other transactions, which may
adversely affect the price of the common shares. The terms of the units do not
restrict our ability to offer common shares in the future or to engage in other
transactions that could dilute the common shares. We have no obligation to
consider the interests of the holders of the units for any reason.

YOU HAVE NO RIGHTS AS COMMON SHAREHOLDERS

Until you acquire common shares upon settlement of your purchase contract,
you will have no rights with respect to the common shares, including voting
rights, rights to respond to tender offers and rights to receive any dividends
or other distributions on the common shares. Upon settlement of your purchase
contract, you will be entitled to exercise the rights of a holder of common
shares only as to actions for which the record date occurs after the settlement
date.

YOUR NOTES WILL BE SUBORDINATED

The obligations of JES under the notes will be unsecured and subordinate
and rank

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<PAGE> 12

junior in right of payment to all present and future senior indebtedness of JES.
JES cannot make payments of principal of or interest on the notes if:

- JES is in default under any payment obligation with respect to senior
indebtedness beyond any applicable grace period,

- JES is otherwise in default with respect to any senior indebtedness
permitting the holders of the senior indebtedness to accelerate the
maturity of the senior indebtedness, or

- any judicial proceeding is pending with respect to any default with
respect to senior indebtedness.

Seagram's guarantees of the notes will be subordinated to present and
future senior indebtedness of Seagram in the same manner.

Neither the indenture nor the master unit agreement, which governs the
terms of the units, places any limitation on the amount of additional secured or
unsecured debt, including senior indebtedness, that may be incurred by Seagram
or JES or any of their subsidiaries.

YOUR PLEDGED SECURITIES
WILL BE ENCUMBERED

Although holders of units will be beneficial owners of the underlying
pledged securities, those pledged securities will be pledged with the collateral
agent to secure the obligations of the holders under the purchase contracts.
Therefore, for so long as the purchase contracts remain in effect, holders will
not be allowed to withdraw their pledged securities from this pledge arrangement
except in the limited circumstances described in this prospectus.

WE WILL HAVE THE OPTION
TO DEFER PAYMENTS

JES will have the right to defer interest payments on the notes at any time
or from time to time. However, deferred payments will bear additional interest
at a rate per year equal to % until , 2002, and at the reset
rate thereafter (compounding quarterly) until paid.

Seagram will have the right to defer the payment of contract fees on the
purchase contracts at any time or from time to time. However, deferred payments
of contract fees will bear additional contract fees at a rate per year equal to
% (compounding quarterly) until paid. You will have no right to
receive contract fees, including deferred contract fees, if the purchase
contracts are terminated. The purchase contracts will terminate if Seagram
experiences certain events of bankruptcy, insolvency, or reorganization.

If we exercise our right to defer payments of interest or contract fees,
the market price of the units is likely to decrease. In addition, the mere
existence of the right to defer payments may cause the market price of the units
to be more volatile than the market prices of other securities that are not
subject to such deferrals.

MASTER UNIT AGREEMENT NOT QUALIFIED UNDER TRUST INDENTURE ACT; LIMITED
OBLIGATIONS OF UNIT AGENT

Although the notes included in the units will be issued pursuant to an
indenture qualified under the Trust Indenture Act, the master unit agreement
relating to the units will not be qualified under the Trust Indenture Act. The
unit agent under the master unit agreement, who will act as the agent and the
attorney-in-fact for the holders of the units, will not be qualified as a
trustee under the Trust Indenture Act. Accordingly, holders of the units will
not have the benefits of the protections of the Trust Indenture Act. Under the
terms of the master unit agreement, the unit agent will

8
<PAGE> 13

have only limited obligations to the holders of the units.

YOU WILL HAVE OID INCOME

For United States federal income tax purposes, the notes will be classified
as contingent payment debt instruments. As a result, they will be considered to
be issued with original issue discount or OID, which each holder will be
required to include in income during the holder's period of ownership of the
notes, subject to certain adjustments. Additionally, holders will be required to
recognize ordinary income on all or a portion of any gain realized on a sale of
notes or any gain attributable to notes on a sale of units before maturity.

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<PAGE> 14

DESCRIPTION OF SEAGRAM

ENTERTAINMENT

Our entertainment business is conducted through two units:

- - Universal Music Group which produces and distributes recorded music throughout
the world in all major genres including Hip-Hop, R&B, rock, jazz, country and
classical, and

- - Universal Studios Group which consists of our filmed entertainment (including
international television) and recreation and other businesses.

Matsushita Electric Industrial Co., Ltd. has an approximate 8.1% ownership
interest in the entities which own Universal Music Group and Universal Studios
Group.

MUSIC ENTERTAINMENT

Universal Music Group is the largest recorded music company in the world.
Universal Music Group was formed in December 1998 when we completed the
acquisition of PolyGram and includes the music business of both Universal and
PolyGram.

Universal Music Group develops, markets and sells recorded music through a
network of subsidiaries, joint ventures and licensees in 59 countries around the
world. Universal Music Group also manufactures, recorded music and manufactures,
sells and distributes videos in the United States and internationally and
publishes music.

Universal Music Group's record companies create and market all genres of
recorded music, principally on compact discs and cassettes. Universal Music
Group's music appears on such labels as:

- - MCA, Universal Records, MCA Nashville, Blue Thumb, Geffen, DGC, GRP, Impulse!,
Rising Tide, DreamWorks Records and Interscope (50% owned) and its family of
labels including Almo Sounds and Outpost Records;

- - former PolyGram popular labels such as A&M, Def Jam (60% owned), Island,
Mercury, Mercury Nashville, Verve, Motown and Polydor; and

- - leading classical labels Decca Record Company, Deutsche Grammophon and
Philips.

Our subsidiaries and affiliates manufacture and distribute recorded music
for all of the labels in the Universal Music Group, affiliated label ventures,
and third party labels such as ZMM, Hollywood, Thump and others, and distribute
video product for Universal Music Group and others. We administer the release,
marketing and sale of recorded music in all major markets outside the United
States. We also release soundtrack albums for motion pictures and licenses music
for a wide variety of uses including recorded music, compilations,
videocassettes, videodiscs, video games, radio, television and motion pictures.

A music record company depends to a significant degree on its ability to
sign and retain artists who will appeal to popular taste over a period of time.
We believe that the scope and diversity of our popular music labels, repertoire
and catalogs allows us to respond to shifts in audience tastes. The United
States and the United Kingdom continue to be the source of approximately 60% of
international popular repertoire. From time to time certain national acts, such
as Andrea Bocelli from Italy, Aqua from Denmark, and Bjork from Iceland, appeal
to a wider international market. If

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<PAGE> 15

you include, however, the United States and the United Kingdom, sales of
locally-signed artists in their home territories, still represent 70% of
worldwide recorded music sales. Our leading local market position in almost
every major region provides a critical competitive advantage in this growing
segment.

Artists who are currently, directly or through third parties, under
contract with Universal Music Group for one or more important territories
include:

<TABLE>
<S> <C>
Bryan Adams Elton John
All Saints Melissa Etheridge
Aqua Hanson
Erykah Badu LL Cool J
Beastie Boys Reba McEntire
Beck Metallica
The Bee Gees Nine Inch Nails
Bjork Luciano Pavarotti
Mary J. Blige Sting
Blues Traveller Shania Twain
Andrea Bocelli Texas
Bon Jovi U2
Boyz II Men Stevie Wonder
The Cranberries Trisha Yearwood
Sheryl Crow
</TABLE>

We also own the largest catalog of recorded music in the world, with
legendary performers from the United States, the United Kingdom and around the
world, including:

<TABLE>
<S> <C>
ABBA Buddy Holly
Louis Armstrong Bob Marley and the
Jimmy Buffet Wailers
Patsy Cline Nirvana
John Coltrane 2 Pac
Ella Fitzgerald Diana Ross and the
Marvin Gaye Supremes
Jimi Hendrix Andrew Lloyd Webber
Billie Holliday The Who
</TABLE>

Sales from this catalog account for approximately 25% of our total recorded
music revenues each year.

Top selling albums in 1998 were recorded by:

<TABLE>
<S> <C>
All Saints Padre
Andrea Bocelli Marcelo Rossi (Brazil)
Boyzone Sheryl Crow
The Bee Gees Terra Samba (Brazil)
DMX U2
Glay 2 Pac
Jay-Z Rob Zombie
Lighthouse Family Shania Twain
Method Man Chumbawamba
</TABLE>

Universal Music Group had a total of 48 albums which each sold over one
million units in 1998.

We also own the Verve Group, including GRP and Impulse!, the world's
leading jazz labels whose artists include:

<TABLE>
<S> <C>
Herbie Hancock Diana Krall
Joe Henderson Wayne Shorter
Charlie Haden McCoy Tyner
</TABLE>

We estimate that the worldwide market for classical music represented
approximately 4% in retail value of the total music market in 1998. Universal
Music Group holds the leading position in the classical music market, accounting
for approximately 40% of worldwide sales, through its ownership of three major
classical label companies: Decca/London (based in the United Kingdom), Deutsche
Grammophon (based in Germany), and the Philips Music Group (based in The
Netherlands).

Top selling classical albums in 1998 were:

Andrea Bocelli
John Tesh
Braveheart Soundtrack
RELATED ACTIVITIES

MUSIC PUBLISHING. Music publishing involves the acquisition of rights to,
and exploitation of, musical compositions (as compared with recordings).
Principal sources of revenue are mechanical reproduction royalties from the
reproduction of musical works on sound carriers and license fees from radio and
television

11
<PAGE> 16

broadcasting and public performance of musical works.

We enter into agreements with composers and authors of musical compositions
for the purpose of exploiting the compositions through licensing for use in
sound recordings, films, videos and by way of live performances and
broadcasting. In addition, we license compositions for use in printed sheet
music and song folios. We also license and acquire catalogues of musical
compositions from third parties such as other music publishers and composers and
authors who have retained or re-acquired rights.

Our publishing catalog includes more than 660,000 titles that are owned or
controlled by it, making Universal Music Group the world's third largest music
publisher. Of these titles, approximately 35% are currently generating revenues.
Writers represented include:

<TABLE>
<S> <C>
Jerome Kern Glen Ballard
Leonard Bernstein Members of the
Andrew Lloyd Webber Cranberries
Tim Rice Bon Jovi
U2
</TABLE>

OTHER MUSIC RELATED ACTIVITIES. Universal Music Group is at the forefront
of the development of music distribution through e-commerce and electronic
delivery. Universal Music Group recently announced a long-term agreement with
InterTrust Technologies Corporation for a digital rights management platform for
e-commerce and electronic delivery, and is actively participating in the SDMI
Forum, an extensive group of content, consumer electronics, hardware, software
and internet companies who have joined to develop and define worldwide standards
for the protection of music and other digitizeable intellectual property. In
April 1999, Universal Music Group and BMG formed GetMusic.com, an on-line music
alliance, to create internet sites to promote and sell music. GetMusic.com will
have access to a combined database of 50 million customers worldwide, and will
offer exclusive artist information, exclusive interviews, and the ability to
chat on-line with artists and their fans.

FILMED ENTERTAINMENT

Universal Studios' filmed entertainment business

- produces and distributes films worldwide in the theatrical, home video
and television markets;

- produces and distributes television episodic and made for television
programming in the international market;

- operates and has ownership interests in a number of international
channels including:

The Sci-Fi Channel Europe
USA Latin America and Brazil
13th Street
Action and suspense channels in
France, Germany and Spain
(launch date June 1999), and
Studio Universal, a movie channel
in Italy;

- engages in the licensing of merchandising rights and film property
publishing rights;

- engages in certain other activities through its ownership of the joint
venture and equity interests described below.

Universal Studios produces feature length films for initial theatrical
exhibition and television programming for international television markets.
Major motion pictures produced by us over the past several years include Nutty
Professor and Liar, Liar, and more recently such box office hits as Patch Adams
with Robin Williams, Life starring Eddie Murphy and Martin Lawrence and The
Mummy starring Brendan Fraser. Current upcoming important releases include
Bowfinger starring Eddie Murphy and Steve Martin, Notting Hill with Julia
Roberts and Hugh Grant, Mystery Men starring Ben Stiller and American Pie. In

12
<PAGE> 17

addition, we produce animated and live action children's and family programming
for networks, basic cable and local television stations as well as home video.

The arrangements under which we produce, distribute and own theatrical
films, vary widely. Other parties may participate in varying degrees in revenues
or other contractually defined amounts. We control worldwide distribution of our
theatrical product, except where we act as a subdistributor in specified
territories or contracts for specified territories or for specifically defined
distribution rights.

Generally, we distribute theatrical films in the theatrical, pay television
and home video markets. Subsequently, we make theatrical films available for
broadcast on basic cable distribution throughout the world. The theatrical
license agreements with theater operators are on an individual picture basis,
and rentals under these agreements are generally a percentage of the theater's
receipts with, in some instances, a minimum guaranteed amount.

We distribute our theatrical product in the United States and Canada to
motion picture theaters. Theatrical distribution throughout the rest of the
world is primarily conducted by United International Pictures, which is equally
owned by Universal Studios, Metro-Goldwyn-Mayer Inc. and an affiliate of Viacom
Inc. We distribute product to all forms of the television medium in the United
States, Canada and other major international markets. Television distribution of
our 24,000 episode library in the United States is handled by USANi LLC
(approximately 50% owned by Universal) and throughout the rest of the world
primarily by Universal Studios. Universal Studios distributes television product
produced by USANi LLC and Universal Studios' own current library of television
programming in international markets. We market videocassettes and digital
videodiscs in the United States and internationally.

At March 31, 1999, Universal Studios owned an effective 45% interest in USA
Networks and an approximate 26% interest in Loews Cineplex Entertainment
Corporation, which exhibits theatrical films principally in the United States
and Canada, and a 49% interest in United Cinemas International Multiplex B.V.,
which operates motion picture theaters outside of the United States and Canada.

RECREATION AND OTHER

Universal Studios owns and operates Universal Studios Hollywood, a theme
park based on Universal Studios' filmed entertainment businesses and located at
Universal City, California. Adjacent to Universal Studios Hollywood is Universal
CityWalk, an integrated retail/entertainment zone which offers shopping, dining,
cinemas and entertainment. Universal Studios CityWalk is currently being
expanded from 300,000 to 400,000 square feet. We have a 50% interest in
Universal City Florida Partners, a joint venture which owns Universal Studios
Florida, a theme park on approximately 440 acres owned by the joint venture in
Orlando, Florida. Universal City Development Partners, a partnership in which we
have a 50% interest, is developing an additional theme park, Universal Studios
Islands of Adventure, and Universal Studios CityWalk, a nighttime entertainment
complex, on approximately 385 acres of land owned by the partnership and
adjacent to Universal Studios Florida. Universal Studios Islands of Adventure's
grand opening celebration is scheduled for May 28 through Memorial Day, May 31,
1999. Additionally, we have a 25% interest in a joint venture which is currently
developing three hotels adjacent to the Orlando theme parks. The first hotel,
The Portofino Bay Hotel, is scheduled to open in September 1999. The theme
parks, Universal Studios CityWalk and hotels together comprise the newest
Orlando multi-day entertainment resort, Universal Studios Escape. In 1998, we
purchased Wet 'n Wild Orlando, the highest attended

13
<PAGE> 18

water park in the United States adjacent to Universal Studios Escape. Since
October 1998, construction has been underway for Universal Studios Japan in
Osaka, Universal Studios's first theme park venture outside the United States.
Opening is scheduled for 2001. We also own a 37% interest in, and manage,
Universal's Port Aventura, S.A., a theme park located on 2000 acres on the
Mediterranean coast of Spain near Barcelona.

In addition, we are involved in other businesses including the operation of
retail gift stores and the development of entertainment software. We own Spencer
Gifts which operates approximately 640 retail gift stores throughout North
America through three groups of stores: the Spencer, DAPY and Glow gift shops.
Spencer, DAPY and Glow sell novelties, electronics, accessories, books and trend
driven products. Universal Studios also develops entertainment software
including the Crash Bandicoot and Spyro game series and owns an approximate 26%
interest (at March 31, 1999) in Interplay Entertainment, an entertainment
software developer.

SPIRITS AND WINE

Our spirits and wine business, directly and through affiliates and joint
ventures in more than 40 countries and territories, produces, markets and
distributes more than 225 brands of distilled spirits, more than 180 brands of
wines, Champagnes, Ports and 225 brands of distilled spirits, more than 180
brands of wines, Champagnes, Ports and Sherries, and more than 48 brands of
coolers, beers, mixers and other low-alcohol adult beverages, which are sold in
over 190 countries and territories. Some of these products are sold worldwide
and others only in the geographic area where they are produced. In addition to
marketing our own brands, we also distribute distilled spirit, wine and beer
brands owned by others.

Some of our best-known brand names include:

- Crown Royal and Seagram's V.O. Canadian whiskies

- Seagram's 7 Crown blended whiskey

- Four Roses Bourbon

- Chivas Regal, Royal Salute and Passport Scotch Whiskies

- The Glenlivet and Glen Grant single malt Scotch Whiskies

- Martell Cognacs

- Seagram's Extra Dry Gin

- Captain Morgan and Myers's rums

- Mumm and Perrier-Jouet Champagnes

- Sterling Vineyards California Wines

We also distribute ABSOLUT VODKA, owned by V&S Vin & Sprit, in the United States
and in most major international markets.

We import into the United States fine wines, principally French wines and
Champagnes, and produce and market premium California and other wines. Among the
wines we produce and market are:

- Mumm and Perrier-Jouet Champagnes

- Sterling Vineyards California Wines

- Tessera California Wines

- Mumm Cuvee Napa California Sparkling Wine

- Sandeman Ports and Sherries

- Matheus Muller

- Mumm German sekt

The Monterey Vineyard California wines and Barton & Guestier (B&G) French wines
are produced for us.

We also market low-alcohol and non-alcohol adult beverages. Seagram's
Coolers are sold in a variety of fruit and mixed drink flavors. Its mixer line
includes ginger ale, club soda, tonic water and

14
<PAGE> 19

seltzer. We are the exclusive U.S. importer of Grolsch Beer, owned by Royal
Grolsch N.V., and of Steinlager Beer, owned by Lion Nathan Limited.

USE OF PROCEEDS

JES estimates that the net proceeds to it from the units offering will be
approximately $ million. Seagram also plans to sell common shares in a
separate public offering. Assuming completion of the common share offering by
Seagram, Seagram estimates that it will receive net proceeds of approximately
$ billion from that offering. The net proceeds of the offerings will be
used:

- to repay borrowings under our bank credit facilities of approximately
$ million due June 14, 2001,

- to repay commercial paper borrowings of approximately $ million
with maturities ranging up to 350 days and
- for general corporate purposes.
The borrowings under the bank credit facilities were incurred in connection
with the acquisition of PolyGram and bear interest at a floating rate (currently
5.625% per annum). The commercial paper bears interest at a floating rate
(currently 5.5% per annum).

PRICE RANGE OF COMMON SHARES

The common shares are traded on the New York Stock Exchange under the
symbol "VO". The following table sets forth, for the periods indicated, the high
and low sales prices reported by the New York Stock Exchange, and the dividends
per common share.

<TABLE>
<CAPTION>
SCL COMMON SHARES
-----------------------------
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
FISCAL 1997
First Quarter.................................. $38.38 $30.88 0.150
Second Quarter................................. $41.88 $35.25 0.165
Third Quarter.................................. $42.75 $38.00 0.165
Fourth Quarter................................. $41.88 $35.75 0.165
FISCAL 1998
First Quarter.................................. $41.13 $33.94 0.165
Second Quarter................................. $37.63 $30.25 0.165
Third Quarter.................................. $39.75 $31.44 0.165
Fourth Quarter................................. $46.69 $36.81 0.165
FISCAL 1999
First Quarter.................................. $41.94 $28.69 0.165
Second Quarter................................. $38.38 $25.13 0.165
Third Quarter.................................. $51.25 $37.81 0.165
Fourth Quarter (through May 12, 1999).......... $65.00 $49.81 0.165
</TABLE>

15
<PAGE> 20

CAPITALIZATION

The following table sets forth as of March 31, 1999 (1) the historical
capitalization of Seagram, (2) the pro forma adjustments for this offering and
the concurrent common share offering and (3) the capitalization of Seagram
giving pro forma effect to the offerings and the application of the estimated
net proceeds as described in "Use of Proceeds." The table should be read in
conjunction with Seagram's financial statements, the notes thereto and the other
financial data and statistical information included or incorporated by reference
in this prospectus.

<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
--------------------------------------
PRO FORMA PRO FORMA
ACTUAL ADJUSTMENTS AS ADJUSTED
------- ----------- --------------
(MILLIONS OF DOLLARS, EXCEPT
SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net debt......................................... 8,450 (1,500)(a) 6,950
Minority interest................................ 1,878 1,878
Shareholder's equity............................. 12,057 1,500(a) 13,557
------- ------- -------
Total capitalization............................. $22,385 -- $22,385
======= =======
</TABLE>

- ---------------
(a) Reflects issuance of $1 billion of % adjustable conversion-rate equity
security units and $1.5 billion of common shares, the net proceeds of which
will be used to repay existing borrowings.

16
<PAGE> 21

RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
FIVE-MONTH
TRANSITION NINE MONTHS
FISCAL YEARS ENDED PERIOD FISCAL FISCAL ENDED
JANUARY 31, ENDED YEAR ENDED YEAR ENDED MARCH 31,
------------------ JUNE 30, JUNE 30, JUNE 30, -----------
1994 1995 1996 1996 1997 1998 1998 1999
---- ---- ---- ---------- ---------- ---------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SEAGRAM
Ratio of earnings to fixed charges...... 1.93 1.69 1.73 1.21 3.21 5.10 5.88 (a)
Pro forma ratio of earnings to fixed
charges............................... -- -- -- -- -- 2.28 -- (c)

JES
Ratio of earnings to fixed charges...... 2.03 1.94 1.52 (b) 1.71 1.10 1.34 1.09
</TABLE>

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

(a) Fixed charges exceeded earnings by $430 million for the nine month period
ended March 31, 1999.

(b) Fixed charges exceeded earnings by $37 million for the transition period
ended June 30, 1996.

For these ratios, "earnings" was determined by adding "fixed charges"
(excluding capitalized interest) and minority interest in net income to income
from continuing operations after eliminating equity in undistributed earnings.
"Fixed charges" consists of interest on all indebtedness (including capitalized
interest), amortization of debt discount and expenses and an interest factor
attributable to rentals.

17
<PAGE> 22

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

Seagram's selected historical consolidated financial data presented below
as of June 30, 1998 1997 and for the fiscal years then ended were derived from
the Seagram's historical consolidated financial statements and the notes thereto
contained in Seagram's Annual Report on Form 10-K for the fiscal year ended June
30, 1998, as amended, which is incorporated herein by reference, and have been
audited by PricewaterhouseCoopers LLP, independent accountants. In addition,
Seagram's selected historical consolidated financial data presented below for
the five month transition period ended June 30, 1996 and the fiscal years ended
January 31, 1996 and 1994 were derived from Seagram's historical consolidated
financial statements for the fiscal years ended January 31, 1995 and 1994,
respectively, which have been audited by PricewaterhouseCoopers LLP. The data
presented as of March 31, 1999 and 1998 and for the nine months ended March 31,
1999 and March 31, 1998 are derived from Seagram's unaudited consolidated
financial statements contained in Seagram's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1999, which is incorporated herein by reference. As
a result of Seagram's sale of Tropicana Products, Inc. and Seagram's global
juice business, Seagram's Consolidated Financial Statements report the results
of Tropicana as discontinued operations. The data presented below should be read
in conjunction with Seagram's consolidated financial statements.

Seagram's consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles which conform in
all material respects to Canadian generally accepted accounting principles.
Except as otherwise noted, figures are in millions of U.S. dollars.

18
<PAGE> 23

THE SEAGRAM COMPANY LTD.
(US$ IN MILLIONS EXCEPT PER SHARE)
(UNAUDITED)

<TABLE>
<CAPTION>
FIVE-
MONTH
TRANSITION UNAUDITED
FISCAL YEARS ENDED PERIOD FISCAL YEARS NINE MONTHS ENDED
JANUARY 31, ENDED ENDED JUNE 30, MARCH 31,
--------------------------- JUNE 30, ----------------- -----------------
1994 1995 1996 1996 1997 1998 1998 1999
------- ------- ------- ---------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Revenues............................. $ 4,724 $ 4,994 $ 7,787 $ 4,112 $10,354 $ 9,474 $ 7,372 $ 8,789
Operating income..................... $ 622 $ 614 $ 435 $ 93 $ 719 $ 553 $ 538 $ (203)
Interest, net and other.............. $ 275 $ 317 $ 195 $ 99 $ 147 $ 228 $ 183 $ 301
Gain on sale of Time Warner shares... $ -- $ -- $ -- $ -- $ 154 $ 926 $ 433 $ --
Gain on USAi transaction............. $ -- $ -- $ -- $ -- $ -- $ 360 $ 360 $ --
Equity earnings (losses) from
unconsolidated companies........... $ 18 $ 14 $ 47 $ 35 $ 62 $ (45) $ (40) $ 129
Income from continuing operations
before the cumulative effect of
accounting change.................. $ 249 $ 170 $ 144 $ 67 $ 445 $ 880 $ 571 $ (330)
Income (loss) from discontinued
Tropicana operations, after tax.... 34 24 30 18 57 66 51 (3)
Gain on sale of discontinued
Tropicana operations, after tax.... -- -- -- -- -- -- -- 1,072
Discontinued DuPont activities, after
tax................................ 96 617 3,232 -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Income before cumulative effect of
accounting change.................. 379 811 3,406 85 502 946 622 739
Cumulative effect of accounting
change, after tax.................. -- (75) -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Net income........................... $ 379 $ 736 $ 3,406 $ 85 $ 502 $ 946 $ 622 $ 739
======= ======= ======= ======= ======= ======= ======= =======
FINANCIAL POSITION DATA
(AT END OF PERIOD)
Current assets....................... $ 3,532 $ 3,938 $ 6,194 $ 6,307 $ 6,131 $ 6,971 $ 7,001 $ 8,786
Common stock of DuPont............... 3,154 3,670 631 651 1,034 1,228 1,118 955
Common stock of Time Warner.......... 1,769 2,043 2,356 2,228 1,291 -- 847 --
Other noncurrent assets.............. 1,754 1,773 10,230 10,328 10,257 12,246 11,696 25,958
Net assets of discontinued Tropicana
operations......................... 1,220 1,270 1,549 1,693 1,734 1,734 1,672 --
------- ------- ------- ------- ------- ------- ------- -------
Total assets................ $11,429 $12,694 $20,960 $21,207 $20,447 $22,179 $22,334 $35,699
======= ======= ======= ======= ======= ======= ======= =======
Current liabilities.................. $ 2,776 $ 3,865 $ 3,557 $ 4,383 $ 3,087 $ 4,709 $ 5,092 $ 8,796
Long term indebtedness............... $ 3,051 $ 2,838 $ 2,889 $ 2,562 $ 2,478 $ 2,225 $ 2,152 $ 7,073
Total liabilities.................... $ 6,428 $ 7,174 $ 9,788 $10,163 $ 9,174 $10,948 $11,210 $21,764
Minority interest.................... -- 11 1,844 1,839 1,851 1,915 1,902 1,878
Shareholders' equity................. 5,001 5,509 9,328 9,205 9,422 9,316 9,222 12,057
------- ------- ------- ------- ------- ------- ------- -------
Total liabilities and
shareholders' equity...... $11,429 $12,694 $20,960 $21,207 $20,447 $22,179 $22,334 $35,699
======= ======= ======= ======= ======= ======= ======= =======
CASH FLOW DATA
Cash flow from operating
activities....................... $ 370 $ 370 $ 222 $ 315 $ 664 $ (241) $ 18 $ 387
Capital expenditures............... $ (118) $ (124) $ (349) $ (245) $ (393) $ (410) $ (257) $ (314)
Other investing activities, net.... $(1,556) $ (341) $ 2,260 $ (346) $ 2,101 $ 1,109 $ 596 $(5,356)
Dividends paid..................... $ (209) $ (216) $ (224) $ (112) $ (239) $ (231) $ (173) $ (181)
</TABLE>

19
<PAGE> 24

DISCUSSION AND ANALYSIS OF SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
AND SUPPLEMENTAL FINANCIAL INFORMATION

The discussion and analysis which follows is derived from the management's
discussion and analysis of financial condition and results of operations
included in our Form 10-Q for the fiscal quarter ended March 31, 1999, which is
incorporated herein by reference. The discussion presented below should be read
in conjunction with the Form 10-Q.

RESULTS OF OPERATIONS

This discussion includes revenues and operating income for the three lines
of business within the entertainment segment: music, filmed entertainment and
recreation and other. This discussion also includes information about our share
of the results of investments in companies which are not consolidated with the
results of Seagram. Investments in these companies are reported as "Equity
earnings from unconsolidated companies". We believe this information will help
you to better understand Seagram's business results.

This information also includes earnings before interest, taxes,
depreciation and amortization from consolidated companies, referred to as
"EBITDA." Because of the significant goodwill associated with our acquisitions,
we believe EBITDA is an appropriate measure of operating performance. However,
you should note that EBITDA is not a substitute for operating income, net
income, cash flows and other measures of financial performance as defined by
U.S. generally accepted accounting principals.

Seagram acquired PolyGram on December 10, 1998. The results for the nine
months ended March 31, 1999 include the PolyGram results from the date of
acquisition. The discussion also includes pro forma financial information which
shows the effect of the PolyGram acquisition and the USA transactions as if they
had occurred at July 1, 1997. The USA transactions are:

- the acquisition on October 21, 1997 of an incremental 50% interest in the
USA Networks partnership for $1.7 billion,

- the sale on February 12, 1998 of a 50% interest in USA Networks to USA
Networks, Inc., and

- the contribution of the remaining 50% in USA Networks, the majority of
the televisions assets of Universal Studios, Inc. and 50% of the
international operations of USA Networks to USANi LLC.

In exchange for the contribution, Universal Studios, Inc. received a 10.7%
interest in USAi and a 45.8% exchangeable interest in USANi LLC.

20
<PAGE> 25

THE SEAGRAM COMPANY LTD.
(US$ IN MILLIONS EXCEPT PER SHARE)
(UNAUDITED)

<TABLE>
<CAPTION>
ACTUAL PROFORMA
NINE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
------------------ ------------------
1998 1999 1998 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues
Entertainment
Music.................................................. $ 1,096 $ 2,409 $ 4,661 $ 4,994
Filmed Entertainment................................... 2,333 2,141 2,739 2,588
Recreation & Other..................................... 544 618 544 618
------- ------- ------- -------
Entertainment............................................. 3,973 5,168 7,944 8,200
Spirits & Wine............................................ 3,399 3,621 3,399 3,621
------- ------- ------- -------
Total Revenues.............................................. $ 7,372 $ 8,789 $11,343 $11,821
======= ======= ======= =======
Operating Income (Loss)
Entertainment
Music.................................................. $ (23) $ (80) $ (32) $ 121
Filmed Entertainment................................... 217 (119) 71 (194)
Recreation & Other..................................... 29 31 29 31
------- ------- ------- -------
Entertainment............................................. 223 (168) 68 (42)
Spirits & Wine............................................ 374 438 374 438
Restructuring Charge -- Entertainment..................... -- (405) -- --
Corporate................................................. (59) (68) (59) (68)
------- ------- ------- -------
Total Operating Income (Loss)............................... 538 (203) 383 328
Interest, Net & Other....................................... 183 301 457 526
Gain on sale of Time Warner shares.......................... 433 -- 433 --
Gain on USAi Transaction.................................... 360 -- 360 --
Provision (benefit) for Income Taxes........................ 489 (18) 399 76
Minority Interest........................................... 48 (27) 22 3
Equity Earnings (Losses) from Unconsolidated Companies...... (40) 129 4 122
------- ------- ------- -------
NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS............ $ 571 $ (330) $ 302 $ (155)
======= =======
Income (loss) from Discontinued Operations.................. 51 (3)
Gain on Sale of Discontinued Operations..................... -- 1,072
------- -------
NET INCOME.................................................. $ 622 $ 739
======= =======
EARNINGS PER SHARE -- Basic
Income (loss) from Continuing Operations.................. $ 1.63 $ (0.90) $ 0.76 $ (0.39)
Income (loss) from Discontinued Operations................ 0.14 (0.01)
Gain on sale of Discontinued Operations................... -- 2.91
------- -------
$ 1.77 $ 2.00
======= =======
EARNINGS PER SHARE -- Diluted
Income (loss) from Continuing Operations.................. $ 1.62 $ (0.90) $ 0.75 $ (0.39)
Income (loss) from Discontinued Operations................ 0.14 (0.01)
Gain on sale of Discontinued Operations................... -- 2.91
------- -------
$ 1.76 $ 2.00
======= =======
Net cash provided by operating activities................... $ 18 $ 387
Net cash provided by (used for) investing activities........ $ 339 $(5,670)
Net cash provided by financing activities................... $ 471 $ 5,082
</TABLE>

21
<PAGE> 26

SUPPLEMENTAL FINANCIAL INFORMATION
ACTUAL REVENUES AND EBITDA
(US$ IN MILLIONS)
(UNAUDITED)

<TABLE>
<CAPTION>
REVENUES EBITDA
------------------- ------------------
NINE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
------------------- ------------------
1998 1999 1998 1999
------ ------- ------ ------
<S> <C> <C> <C> <C>
Entertainment
Music
Consolidated Companies........................... $1,096 $ 2,409 $ 72 $ 208
Unconsolidated Companies......................... 56 49 5 4
------ ------- ------ ------
Total............................................ 1,152 2,458 77 212
Filmed Entertainment
Consolidated Companies........................... 2,333 2,141 293 (67)
Unconsolidated Companies......................... 775 1,287 93 278
------ ------- ------ ------
Total............................................ 3,108 3,428 386 211
Recreation & Other
Consolidated Companies........................... 544 618 83 92
Unconsolidated Companies......................... 217 192 41 62
------ ------- ------ ------
Total............................................ 761 810 124 154
Entertainment
Consolidated Companies........................... 3,973 5,168 448 233
Unconsolidated Companies......................... 1,048 1,528 139 344
------ ------- ------ ------
Total Entertainment.............................. 5,021 6,696 587 577
------ ------- ------ ------
Spirits & Wine
Consolidated Companies........................... 3,399 3,621 525 536
Unconsolidated Companies......................... 175 115 2 5
Charge for Asia.................................. (60) --
------ ------- ------ ------
Total Spirits & Wine............................. 3,574 3,736 467 541
------ ------- ------ ------
Total Company
Consolidated Companies........................... 7,372 8,789 973 769
Unconsolidated Companies......................... 1,223 1,643 141 349
Charge for Asia.................................. (60) --
------ ------- ------ ------
Total............................................ $8,595 $10,432 $1,054 $1,118
Unconsolidated Companies Adjustment................... (141) (349)
Depreciation Expense.................................. (174) (212)
Amortization of Intangibles & Step-Up of Assets....... (147) (294)
Restructuring Charge -- Entertainment................. -- (405)
Corporate Expenses.................................... (54) (61)
------ ------
Operating Income (Loss)............................... $ 538 $ (203)
====== ======
</TABLE>

22
<PAGE> 27

SUPPLEMENTAL FINANCIAL INFORMATION
PRO FORMA REVENUES AND EBITDA
(US$ IN MILLIONS)
(UNAUDITED)

<TABLE>
<CAPTION>
REVENUES EBITDA
-------------------------- --------------------------
NINE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
-------------------------- --------------------------
1998 1999 1998 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Entertainment
Music
Consolidated Companies........................ $ 4,661 $ 4,994 $ 593 $ 722
Unconsolidated Companies...................... 56 49 5 4
------- ------- ------ ------
Total......................................... 4,717 5,043 598 726
Filmed Entertainment
Consolidated Companies........................ 2,739 2,588 133 (131)
Unconsolidated Companies...................... 1,134 1,287 199 278
------- ------- ------ ------
Total......................................... 3,873 3,875 332 147
Recreation & Other
Consolidated Companies........................ 544 618 83 92
Unconsolidated Companies...................... 217 192 41 62
------- ------- ------ ------
Total......................................... 761 810 124 154
Entertainment
Consolidated Companies........................ 7,944 8,200 809 683
Unconsolidated Companies...................... 1,407 1,528 245 344
------- ------- ------ ------
Total Entertainment........................... 9,351 9,728 1,054 1,027
------- ------- ------ ------
Spirits & Wine
Consolidated Companies........................ 3,399 3,621 525 536
Unconsolidated Companies...................... 175 115 2 5
Charge for Asia............................... (60) --
------- ------- ------ ------
Total Spirits & Wine.......................... 3,574 3,736 467 541
------- ------- ------ ------
Total Company
Consolidated Companies........................ 11,343 11,821 1,334 1,219
Unconsolidated Companies...................... 1,582 1,643 247 349
Charge for Asia............................... -- -- (60) --
------- ------- ------ ------
Total......................................... $12,925 $13,464 1,521 1,568
Unconsolidated Companies Adjustment............................................ (247) (349)
Depreciation Expense........................................................... (228) (238)
Amortization of Goodwill & Step-Up of Assets................................... (609) (592)
Corporate Expenses............................................................. (54) (61)
------ ------
Operating Income............................................................... $ 383 $ 328
====== ======
</TABLE>

23
<PAGE> 28

Revenues increased 19 percent in the nine months ended March 31, 1999
compared to the same period in 1998. This was primarily due to the PolyGram
acquisition and improved spirits and wine results. The nine month results
include a $405 million pre-tax restructuring charge for the integration of
PolyGram into the existing music and film operations. Operating income of $538
million in the nine months of the prior year also included a $60 million charge
for Asia Pacific spirits and wine operations. Excluding those charges, operating
income declined 66 percent in the nine month period. The decrease reflects the
higher amortization and depreciation expense associated with the PolyGram
acquisition. Disappointing box office release of several motion pictures also
contributed to the decline.

For the nine months ended March 31, 1999, EBITDA from consolidated and
unconsolidated companies increased six percent to $1,118 million on total
revenues of $10.4 billion. Excluding the $60 million charge for Asia Pacific
spirits and wine operations from last year's results, EBITDA from consolidated
and unconsolidated companies was flat for the nine months ended March 31, 1999.

On a pro forma basis for consolidated companies, revenues increased 4
percent in the nine months ended March 31, 1999 to $11.8 billion. Operating
income was $328 million for the nine months ended March 31, 1999 compared with
$383 million for the same period in 1998. Excluding the $60 million charge for
Asia Pacific spirits and wine operations in the prior year, pro forma operating
income was down 26 percent for the nine months. For the nine months, pro forma
EBITDA decreased 4 percent. Excluding the $60 million charge for Asia Pacific
spirits and wine operations in the prior year, pro forma EBITDA declined 9
percent. The decline in pro forma operating income and EBITDA in the nine month
period is primarily due to the poor performance of the filmed entertainment
business, which more than offset improvements in all other businesses.

RESTRUCTURING CHARGE

Seagram recorded a restructuring charge in the second quarter of $405
million. This charge relates to our efforts to streamline entertainment
operations after the acquisition of PolyGram. The charge related entirely to
Seagram's global music and film production, financial, marketing and
distribution operations. It included:

- severance,

- rationalization of facilities and labels,

- termination of artists and distribution contracts, and

- costs related to exiting film production arrangements and properties in
development.

Music operations account for the majority of the charge. We exclude this
restructuring charge when discussing EBITDA and pro forma results.

The components of the $405 million charge are:

- $126 million for severance and other employee related costs,

- $128 million for facility and label rationalization,

- $151 million of contract termination and other costs.

The severance and other employee-related costs provide for a reduction of
approximately 1,200 employees worldwide. This reduction is due to facility
closures, elimination of duplicate positions and streamlining of operations in
order to obtain cost reductions. The facility rationalization costs provide for
domestic and international lease terminations and the write-off of the net book
value of furniture, fixtures and equipment and leasehold improvements for

24
<PAGE> 29

vacated properties. The costs of contract terminations are comprised primarily
of:

- artists' contracts,

- distribution contracts,

- story property commitments, and

- term deals.

The cash element of the charge is approximately $318 million. The noncash
element of the charge is approximately $87 million. As of March 31, 1999, cash
payments of approximately $47 million have been made against the charge. As of
that date, approximately $11 million of non-cash elements were used. We
anticipate these activities will be substantially completed by December 31,
1999.

ENTERTAINMENT

The entertainment segment contributed $5.2 billion to revenues in the nine
months ended March 31, 1999, an increase of 30 percent compared to the same
period in 1998. The increase was primarily due to the acquisition of PolyGram,
partially offset by lower filmed entertainment revenues. There was an operating
loss of $168 million for the nine months ended March 31, 1999 versus income of
$223 million for the same period in 1998. The decline in operating income was
primarily due to increased amortization and depreciation expense from the
PolyGram acquisition and disappointing motion picture results.

The prior year consolidated results include USA Networks from October 21,
1997 until February 12, 1998, during which time our interest was 100 percent. In
the current year, following the USA Transactions, our interest is approximately
50 percent of USANi LLC. The results of USANi LLC are included in equity
earnings in unconsolidated companies. Equity in earnings from unconsolidated
companies increased to $129 million in the nine months ended March 31, 1999
versus losses last year of $37 million. The increase in equity earnings reflects
the improved operating results in the businesses of USANi LLC and the impact of
the USA Transactions. In addition, we benefited from improved operating results
at Loews Cineplex Entertainment Corporation ("Loews Cineplex") in the nine month
period ended March 31, 1999 compared to Cineplex Odeon Corporation (owned in the
prior year).

On a pro forma basis, revenues increased three percent in the nine months
ended March 31, 1999 to $8.2 billion. There was an operating loss of $42 million
for the nine months ended March 31, 1999 versus income of $68 million in the
same period in 1998.

MUSIC

Consolidated Operations

Actual revenues more than doubled in the nine month period ended March 31,
1999. There was an operating loss of $80 million for the nine month period,
compared to a loss of $23 million for the same period in 1998. EBITDA almost
tripled in the nine month period ended March 31, 1999 compared to the prior
year. The significant increases in revenues and EBITDA are largely due to the
PolyGram acquisition. The decline in operating income is primarily due to higher
amortization and depreciation expenses from the PolyGram acquisition.

On a pro forma basis, revenues increased seven percent in the nine months
ended March 31, 1999. This increase was due to improved sales of higher priced
units. Pro forma operating income was $121 million for the nine months ended
March 31, 1999 compared to a loss of $32 million for the same period in 1998.
Pro forma EBITDA increased 22 percent in the nine months ended March 31, 1999
compared to the same period in 1998. These improvements are due to Seagram's
progress in integrating PolyGram and Universal Music and eliminating costs.

25
<PAGE> 30

Unconsolidated Operations

The equity in earnings from unconsolidated companies was income of $4
million for the nine months ended March 31, 1999, was unchanged compared to the
same period in 1998. Unconsolidated companies include Universal Concerts Canada
and Universal/PACE Amphitheaters Group, L.P. Both companies are concert joint
ventures and are not material to Universal Music Group.

FILMED ENTERTAINMENT

Consolidated Operations

Filmed Entertainment revenues declined 8 percent in the nine month period
ended March 31, 1999 compared to the same period in 1998. Operating income
decreased on a nine-month basis from income of $217 million in the prior year to
a loss of $119 million in the current year. The prior year nine-month results
included operating income of $76 million for USA Networks from October 21, 1997
until February 12, 1998. In the current year the contribution of USANi LLC is
included in equity from unconsolidated companies and not in consolidated
operations. The Motion Picture Group results declined because of the
disappointing box office performance of current year releases such as Virus,
edTV, Meet Joe Black and Babe: Pig in the City. Also, comparisons with last
year's results are difficult since those results benefited from the carryover of
The Lost World: Jurassic Park and Liar, Liar. International Television and
Library results declined year-on-year due to start-up costs relating to the new
international channels and lower television library sales. On a nine-month
basis, EBITDA from consolidated companies declined from $293 million in the
prior year to a loss of $67 million in the current year. The prior year results
included $97 million of EBITDA related to USA Networks, which was consolidated
from October 21, 1997 until February 12, 1998. There is no contribution from USA
Networks in consolidated EBITDA in the current year.

On a pro forma basis, Filmed Entertainment includes the results of PolyGram
Filmed Entertainment in the motion picture group and the prior year results
reflect the USA Transactions as though they had both occurred at July 1, 1997.
On a pro forma basis, revenues declined six percent in the nine month period
ended March 31, 1999 to $2.6 billion. EBITDA was a loss of $131 million for the
nine months ended March 31, 1999 compared to income of $133 million in the prior
year. Operating income on a nine-month basis decreased from income of $71
million in the prior year to a loss of $194 million in the current year.

The poor response to edTV materially diminished Filmed Entertainment's
outlook for the year. However, with the success of Life and a promising slate
for the remainder of this calendar year -- including The Mummy, Notting Hill and
American Pie -- the Motion Picture Group expects to improve its box office
performance. Even though we expect to improve box office results, we anticipate
a loss in the fourth quarter in line with the loss for the third quarter, and it
will be several quarters before our film business returns to profitability.

Unconsolidated Operations

The equity in earnings from unconsolidated companies increased from a loss
of $26 million for the nine month period in the prior year to income of $127
million in the current year. Revenues from unconsolidated companies increased 66
percent over the prior nine months. EBITDA tripled in the nine month period. The
significant improvement is due primarily to improved operating results in the
businesses of USANi LLC. It is also due to the impact of including USANi's
results in equity in earnings from unconsolidated companies for all of the
current year. In the prior year, Seagram owned 100 percent of USA Networks for
the period from October 21, 1997 to February 12, 1998. During that period, the
results were included in consolidated oper-

26
<PAGE> 31

ations, not in equity in earnings from unconsolidated companies. In addition,
Seagram benefited from improved operating results at Loews Cineplex in the nine-
month period compared to Cineplex Odeon Corporation (owned in the prior year).
In addition to USANi LLC and Loews Cineplex, the unconsolidated companies
principally include United Cinemas International Multiplex B.V., Cinema
International Corporation N.V., Cinema International B.V. and Brillstein Grey
Entertainment.

RECREATION AND OTHER

Consolidated Operations

Revenues for recreation and other increased 14 percent in the nine month
period ended March 31, 1999. Operating income increased seven percent to $31
million on a nine-month basis. EBITDA increased 11 percent in the nine month
period. These increases reflects the success of the Crash Bandicoot and Spyro
video games and improved sales by Spencer Gifts. This was partially offset by
the weakness of Universal Studios Hollywood. Attendance at the theme park in
Hollywood declined 10 percent for the nine months ended March 31, 1999, largely
due to the impact of the Asian economic and currency crisis on tourism. There
was essentially no change in per capita spending at the park year-on-year.

Unconsolidated Operations

In the nine months ended March 31, 1999, the equity in earnings from
unconsolidated companies improved from a loss of $15 million in the prior year
to a loss of $2 million in the current year. Revenues from unconsolidated
companies decreased 12 percent while EBITDA increased 51 percent. The
improvement in the nine month results is largely due to a gain recognized by
Sega GameWorks L.L.C., on the sale of its game sales operation to Sega in the
first quarter. In addition to Sega GameWorks, the unconsolidated companies
include Universal Studios Florida, Port Aventura, Interplay Entertainment Corp
as well as other smaller Investments. At Universal Studios Florida, paid
attendance declined one percent year-to-date, while per capita spending
increased one percent year-to-date, principally driven by a higher admission
price.

SPIRITS AND WINE

Consolidated Operations

Revenues increased seven percent in the nine months while operating income
increased 17 percent in the nine months. Operating income in the prior year
included a $60 million charge related to operations in Asia. Excluding the
impact of this charge, operating income increased one percent for the nine
months.

Asia Pacific's revenues increased 65 percent for the nine months and
operating income increased 33 percent, as the region continues to recover from
the difficult economic conditions experienced there after the first quarter last
year. Revenues in North America were five percent higher for the nine months.
Operating income in North America was six percent higher for the nine months.
These improvements reflect higher volumes and pricing, partially offset by
increased marketing investment. Europe's revenues increased five percent in the
nine months while operating income increased two percent in the nine months. In
Latin America, the nine months revenues declined two percent and operating
income decreased 10 percent. These declines are due to the difficult economic
conditions in the region, particularly in Brazil.

In the nine months ended March 31, 1999, cost of goods sold as a percentage
of revenues increased to 53.2 percent from 52.1 percent the prior year. Selling,
general and administrative expenses as a percentage of revenues decreased to
34.2 percent from 35.4 percent due to slight reductions in both brand spending
and overhead expenses coupled with improved revenues. Total brand spending
declined one percent at constant exchange rates in

27
<PAGE> 32

the nine-month period. Brand equity spending increased three percent for the
nine months at constant exchange rates.

Spirits and wine case volumes, including unconsolidated companies,
increased two percent in the nine months.

EBITDA from consolidated companies increased 15 percent in the nine months.
Excluding the impact of the $60 million charge for Asia Pacific from the prior
year results, EBITDA would have increased two percent in the nine months.

Unconsolidated Operations

The equity in earnings of unconsolidated companies was breakeven in the
nine months compared to a loss of $3 million in the prior year period. Revenues
from unconsolidated companies declined by 34 percent in the nine months. EBITDA
more than doubled in the nine months. The year-on-year variances are primarily
due to changes in the entities that are included in unconsolidated companies. In
the current year they are Kirin-Seagram Limited in Japan and Seagram (Thailand)
Limited. In the nine months ended March 31, 1998 they also included Doosan
Seagram Co., Ltd. in Korea. As a result of an additional investment in Doosan
Seagram Co., Ltd. at the end of June 1998, that affiliate's results are now
consolidated.

CORPORATE EXPENSES AND INTEREST, NET AND OTHER

Corporate expenses were $68 million in the current year nine months as
compared to $59 million in the prior year. The year-on-year variance is
primarily due to increased costs associated with certain stock-based
compensation resulting from the change in the market value of Seagram's shares
during the period. Interest, net and other was $301 million in the current nine
months and $183 million in the prior year nine months. The increase reflects the
funding of the PolyGram acquisition.

Net Income/(Loss)

In the nine months, which includes the $1.1 billion after-tax gain on the
sale of Tropicana, net income was $739 million or $2.00 per basic share and per
diluted share. In the nine months, net income from continuing operations was a
loss of $86 million or $0.23 per share, compared with income of $153 million or
$0.44 per share in the prior year. Income from continuing operations excludes:

- the entertainment restructuring charge,

- the prior year charge for Asia Pacific spirits and wine operations,

- the gains on the sale of Time Warner shares and USAi transaction, and

- discontinued Tropicana operations.

The net income decline primarily reflects the operating income shortfall and
higher interest expense associated with funding the PolyGram acquisition, which
are partially offset by high equity earnings from unconsolidated companies.

28
<PAGE> 33

DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION

This prospectus contains or incorporates by reference statements which
constitute "forward-looking statements," in that they include statements
regarding the intent, belief or current expectations of our directors and
officers with respect to our future operating performance, both before and after
the consummation of the offerings. Such statements include any forecasts,
projections and descriptions of anticipated cost savings or other synergies. You
should be aware that any such forward-looking statements are not guarantees of
future performance and may involve risks and uncertainties, and that actual
results may differ from those set forth in the forward-looking statements as a
result of various factors including, without limitations, the actions of
competitors, future global economic conditions, market conditions, foreign
exchange rates, and operating and financial risks related to managing growth and
integrating acquired businesses), many of which are beyond our control. The
occurrence of any such factors not currently expected by us would significantly
alter the results set forth in these statements.

ACCOUNTING TREATMENT

The purchase contracts are forward transactions in the common shares. Upon
settlement of a purchase contract, Seagram will receive $ per purchase
contract and will issue the requisite number of common shares. The amount
received by Seagram will be credited to shares without par value within
shareholders' equity.

Prior to the issuance of common shares upon settlement of the purchase
contracts, it is anticipated that the units will be reflected in Seagram's
earnings per share calculations using the treasury stock method. Under this
method, the number of common shares used in calculating earnings per share is
deemed to be increased by the excess, if any, of the number of shares issuable
upon settlement of the purchase contracts over the number of shares that could
be purchased by Seagram in the market (at the average market price during the
period) using the proceeds receivable upon settlement. Consequently, it is
anticipated there will be no dilutive effect on our earnings per share except
during periods when the average market price of common shares is above the
$ .

29
<PAGE> 34

DESCRIPTION OF UNITS

The summaries of documents described below are not necessarily complete.
Copies of those documents are on file with the SEC as part of our registration
statement. See "Where You Can Find More Information" on page for
information on how to obtain copies. Because this section is a summary, it does
not describe every aspect of the units. This summary is subject to and qualified
in its entirety by reference to all the provisions of each of the underlying
agreements.

Each unit will have a stated amount of $ . Each unit will initially
consist of:

(1) a purchase contract under which

- the holder will purchase from Seagram on the stock purchase date of
, 2002, for cash in an amount equal to the stated amount,
between 0. of a share and one common share of Seagram (depending on
the average trading price of the common shares on the stock purchase
date, as described below), and

- Seagram will pay the holders of units contract fees at the contract fee
rate of 0. % of the stated amount per year as described below

(2) a note of JES, guaranteed on a subordinated basis by Seagram,

- having a principal amount equal to the stated amount,

- bearing interest at a rate of % until , 2002, and at
the reset rate thereafter, and

- maturing on , 2004.

As long as a purchase contract remains in effect, the purchase contract and the
related note cannot be separated and you may transfer them only as an integrated
unit, except in limited circumstances.

Between the date of issuance of the units and the stock purchase date, you
will therefore be entitled to receive cash payments, contract fees and interest
totalling % of the stated amount per year, payable in arrears on
, , and of each year
(unless deferred as described herein). If you do not provide cash or treasury
securities as substitute collateral to settle the underlying purchase contract,
in the manner described below in this prospectus, the proceeds from the notes
will be applied on the stock purchase date to the purchase of common shares
pursuant to the purchase contract.

You will pledge the notes underlying a unit to the collateral agent to
secure your obligations to Seagram.

Each holder, by accepting the units, will be deemed to have

- irrevocably agreed to be bound by the terms of the master unit agreement,
pledge agreement, and the purchase contracts for so long as holder
remains a holder of such units, and

- appointed the unit agent under the master unit agreement as the holder's
agent to enter into and perform the purchase contracts on behalf of the
holder.

FORMATION OF THE UNITS

At the closing of the offering of the units, the underwriters will (1)
enter into purchase contracts with Seagram and (2) purchase notes from JES for
cash. The underwriters will fund that cash payment by the sale of the units to
the initial investors. The notes will then be pledged to the collateral agent to
secure the obligations owed to Seagram under the purchase contracts. The rights
to purchase common shares under a purchase contract, together with the notes or
other pledged securities, subject to the obligations owed to Seagram under such
purchase contract, and the

30
<PAGE> 35

pledge arrangements securing the foregoing obligations, are collectively
referred to in this prospectus as a "unit".

Seagram will enter into

- - a master unit agreement with The Bank of New York, as unit agent, governing
the appointment of the unit agent as the agent and attorney-in-fact for the
holders of the units, the purchase contracts, the transfer, exchange or
replacement of certificates representing the units and certain other matters
relating to the units and

- - a pledge agreement between Seagram and the collateral agent creating a pledge
and security interest for the benefit of Seagram to secure the obligations of
holders of units under the purchase contracts.

DESCRIPTION OF THE PURCHASE CONTRACTS

Each purchase contract underlying a unit will require the holder of that
unit to purchase, and Seagram to sell, on the stock purchase date, for cash in
an amount equal to $ , a number of common shares equal to the settlement
rate. The settlement rate will be calculated as follows (subject to adjustment
as described below under "-- Anti-Dilution Adjustments"):

(a) if the average trading price is greater than or equal to the price of
$ (that is, % higher than the stated amount), the settlement rate
will be 0. ;

(b) if the average trading price is between the threshold appreciation
price and the stated amount, the settlement rate will equal the stated
amount divided by the average trading price (that is, the settlement
rate will be calculated so that the average trading price of the common
stock purchasable under each purchase contract would equal the stated
amount payable therefor, rounded to the nearest 1/10,000th of share);
and

"average trading price" means the average of the closing prices per common
share on each of the twenty consecutive trading days ending on the last trading
day before the stock purchase date.

"closing price" of a common share on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the common shares on the NYSE on such date, or if the common shares
are not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which the common shares are so listed, or if the common shares are not so listed
on a United States national or regional securities exchange, as reported by The
Nasdaq Stock Market, or if the common shares are not so reported, the last
quoted bid price of the common shares in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, or if such bid price
is not available, the market value of the common shares on such date as
determined by a nationally recognized investment banking firm retained for this
purpose by Seagram.

"trading day" means a day on which the common shares (1) are not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) have traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the common
shares.

Seagram will not issue any fractional shares pursuant to the purchase
contracts. In lieu of a fraction of a share otherwise issuable in respect of
purchase contracts

31
<PAGE> 36

being settled by a holder of units, the holder will be entitled to receive an
amount of cash equal to such fraction times the average closing price.

Cash payments on the units will accrue at a rate per year that is greater
than the current dividend yield on the common shares. However, since the number
of common shares issuable upon settlement of each purchase contract may decline
by up to approximately % as the average closing price increases, the
opportunity for equity appreciation afforded by an investment in the units is
less than that afforded by a direct investment in the common shares.

Prior to the stock purchase date, the common shares purchasable on
settlement of purchase contracts will not be deemed to be outstanding for any
purpose and you will not have any voting rights, rights to dividends or other
distributions or other rights or privileges of a shareholder of Seagram by
virtue of holding units.

SETTLEMENT

Remarketing

Unless a holder delivers the treasury consideration as described below or
cash in early settlement of the purchase contracts, the notes will be remarketed
on the remarketing date which will be the third business day preceding the last
quarterly payment date before the stock purchase date. Seagram will enter into a
remarketing agreement with a nationally recognized investment banking firm,
pursuant to which that firm will agree to use its commercially reasonable best
efforts to remarket the notes on the remarketing date at a price equal to
100.25% of the value of the treasury consideration. The remarketing agent will
retain 0.25% of the proceeds as a remarketing fee.

The "treasury consideration" in respect of any notes will consist of
treasury securities in an amount sufficient to:

- generate for the quarterly payment date falling on the stock purchase
date, an amount of cash equal to the aggregate interest that is scheduled
to be payable on those notes being remarketed on that quarterly payment
date, assuming for this purpose, even if not true, that (a) no interest
payment will then have been deferred and (b) the interest rate on the
notes remains at the initial rate;

- an amount of cash equal to the stated amount of the units which include
those notes; and

- if JES is then deferring interest payments, an amount equal to the
aggregate unpaid interest payments on those notes being remarketed
accrued to , 2002.

The remarketing agent will use the proceeds from a successful remarketing
to purchase the treasury consideration which it will deliver to the collateral
agent by noon, New York City time, on , 2002.

A holder of units may elect not to participate in the remarketing and
retain the notes underlying those units by delivering the treasury consideration
for those notes to the collateral agent not later than 10:00 a.m. on the fourth
business day prior to the remarketing date.

On the stock purchase date the unit agent will apply the proceeds of the
treasury consideration to pay the purchase price under the purchase contract.

If the remarketing agent cannot remarket the notes, a "failed remarketing"
will occur prior to the stock purchase date, and Seagram will be entitled to
exercise its rights as a secured party on the stock purchase date and, subject
to applicable law, retain the notes pledged as collateral or sell them in one or
more private sales.

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<PAGE> 37

Early Settlement

At any time not later than 10:00 a.m. on the fourth business day prior to
the remarketing date, a holder of units may settle the related purchase
contracts by delivering to the unit agent immediately available funds in an
amount equal to $ multiplied by the number of purchase contracts being
settled.

Upon early settlement, Seagram will issue, and the holder will be entitled
to receive, common shares for each unit (regardless of the market price of
the common shares on the date of early settlement), subject to adjustment under
the circumstances described under "-- Anti-Dilution Adjustments" below. The
holder will also receive the notes underlying those units. The holder's right to
receive future contract fee payments will terminate.

Early Settlement Upon Merger

Prior to the stock purchase date, if Seagram is involved in a merger in
which at least 30% of the consideration for the common shares consists of cash
or cash equivalents ("cash merger"), on or after the date of the cash merger
each holder of the units has the right to accelerate and settle the underlying
purchase contracts. We refer to this right as the "early settlement right."
Seagram will provide each of the holders with a notice of the completion of a
cash merger. The notice will specify a date on which the optional early
settlement will occur and a date by which each holder's early settlement right
must be exercised. The notice will set forth, among other things, the applicable
settlement rate and the amount of the cash, securities and other consideration
receivable by the holder upon settlement. To exercise the early settlement
right, you must deliver to the unit agent, on or before the early settlement
date, the certificate evidencing your units and payment of the applicable
purchase price in the form of a certified or cashier's check. If you exercise
the early settlement right, Seagram will deliver to you the cash, securities and
other property as set forth in the notice.

CONTRACT FEES

Seagram will be required to pay contract fees to the holders of units, as
specified above.

So long as no default in Seagram's obligations under the master unit
agreement or the pledge agreement has occurred and is continuing, Seagram will
have the right to defer the payment of contract fees at any time or from time to
time for a period not extending beyond the stock purchase date. To exercise this
right, Seagram must give the holders and the unit agent notice at least five
business days before the earlier of

(1) the date that payment would otherwise have been payable,

(2) the date Seagram is required to give notice to any securities exchange
or to holders of units of the record date or the date such payment is payable
and

(3) that record date.

During any such deferral period, Seagram may not take any of the actions that it
would be prohibited from taking during an extension period as described under
"-- Description of the Notes and Guarantees -- Option to Defer Interest Payment
Date" below.

Any deferred contract fees will bear additional contract fees at % (the
"deferral rate") (compounding on each succeeding quarterly payment date) until
paid. Contract fees payable for any period will be computed on the basis of a
360-day year consisting of twelve 30-day months. Contract fees will accrue from
the date of issuance of the units to the stock purchase date and will be payable
in arrears on the quarterly payment dates (unless deferred as described above).
If the purchase contracts are terminated, your right to receive contract fees
(including any deferred contract fees) will also terminate.

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ANTI-DILUTION ADJUSTMENTS

The formula for determining the settlement rate may be adjusted if certain
events occur, including:

(1) the payment of a stock dividend or other distributions on common
shares;

(2) the issuance to all holders of common shares of rights or warrants
entitling them to subscribe for or purchase common shares at less than the
current market price (as defined below);

(3) subdivisions of common shares (including an effective subdivision of
the common shares through reclassification of the common shares);

(4) distributions to all holders of common shares of evidences of
indebtedness of Seagram, securities, cash or other assets (excluding any
dividend or distribution covered by clause (1) or (2) above and any dividend or
distribution paid exclusively in cash);

(5) distributions consisting exclusively of cash to all holders of common
shares in an aggregate amount that, when combined with (a) other all-cash
distributions made within the preceding 12 months and (b) the cash and the fair
market value, as of the date of expiration of the tender or exchange offer
referred to below, of the consideration paid in respect of any tender or
exchange offer by Seagram or a subsidiary for the common shares concluded within
the preceding 12 months, exceeds 15% of Seagram's aggregate market
capitalization (such aggregate market capitalization being the product of the
current market price of the common shares multiplied by the number of common
shares then outstanding) on the date fixed for the determination of shareholders
entitled to receive such distribution; and

(6) the successful completion of a tender or exchange offer made by Seagram
or any subsidiary for the common shares which involves an aggregate
consideration that, when combined with (a) any cash and the fair market value of
other consideration payable in respect of any other tender or exchange offer by
Seagram or a subsidiary for the common shares concluded within the preceding 12
months and (b) the aggregate amount of any all-cash distributions to all holders
of the common shares made within the preceding 12 months, exceeds 15% of
Seagram's aggregate market capitalization on the date of expiration of such
tender or exchange offer.

The "current market price" per common share on any day means the average of
the daily closing prices for the five consecutive trading days selected by
Seagram commencing not more than 20 trading days before, and ending not later
than, the earlier of the day in question and the day before the "ex date" with
respect to the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "ex date", when used with respect to any issuance or
distribution, means the first date on which the common shares trade without the
right to receive the issuance or distribution.

Certain reclassifications, consolidations, mergers, sales or transfers of
assets or other transactions may cause the common shares to be converted into
the right to receive other securities, cash or property. If this happens, each
purchase contract would, without the consent of the holders of units, become a
contract to purchase only the kind and amount of securities, cash or other
property that the holder would be entitled to receive if the holder had settled
its purchase contract immediately before the transaction.

If at any time Seagram makes a distribution of property to its shareholders
which would be taxable to the shareholders as a dividend for United States
federal income tax purposes (that is, distributions, evidences of indebtedness
or assets of Seagram, but generally not stock dividends or rights to subscribe
to capital stock) and, pursuant to the settlement rate adjustment provisions of
the master unit agreement,

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<PAGE> 39

the settlement rate is increased, that increase may be deemed to be the receipt
of taxable income to holders of Units. See "United States Federal Income Tax
Consequences -- Adjustment to Settlement Rate".

In addition, Seagram may increase the settlement rate if our Board of
Directors deems it advisable to avoid or diminish any income tax to holders of
common shares resulting from any dividend or distribution of shares (or rights
to acquire shares) or from any event treated as a dividend or distribution for
income tax purposes or for any other reasons.

Adjustments to the settlement rate will be calculated to the nearest
1/10,000th of a share. No adjustment in the settlement rate will be required
unless the adjustment would require an increase or decrease of at least one
percent in the settlement rate. If any adjustment is not required to be made
because it would not change the settlement rate by at least one percent, then
the adjustment will be carried forward and taken into account in any subsequent
adjustment.

Seagram will be required, as soon as practicable, following the occurrence
of an event that requires or permits an adjustment in the settlement rate, to
provide written notice to the holders of units of the occurrence of that event.
Seagram will also be required to deliver a statement in reasonable detail
setting forth the method by which the adjustment to the settlement rate was
determined and setting forth the revised settlement rate.

TERMINATION

The purchase contracts, and the rights and obligations of Seagram and of
the holders of the units under the purchase contracts (including the right to
receive contract fees or deferred contract fees and the right and obligation of
the holders to purchase and Seagram to sell common shares), will automatically
terminate if Seagram becomes subject to certain events of bankruptcy, insolvency
or reorganization. Upon any termination, the pledged securities will be
distributed in the manner described below.

PLEDGED SECURITIES AND PLEDGE AGREEMENT

Under the pledge agreement, the pledged securities will be pledged to the
collateral agent, for the benefit of Seagram, to secure the obligations of
holders of units to purchase common shares under the purchase contracts. The
pledged securities will initially consist of the notes. If treasury securities
are exchanged for pledged securities upon a successful remarketing, the treasury
securities will automatically be substituted as pledged securities and the
former pledged securities will automatically be released from the pledge and
security interest created by the pledge agreement.

The rights of the holders of the units to the underlying pledged securities
will be subject to the pledge and security interest created by the pledge
agreement. No holder of units will be permitted to withdraw the pledged
securities underlying those units from the pledge arrangement except upon the
settlement or termination of the purchase contracts or as described under
"-- Description of the Purchase Contracts -- Settlement" above. Subject to the
pledge and security interest, however, each holder of units will have full
beneficial ownership of the underlying pledged securities and will be entitled
(directly or through the collateral agent) to all of the rights provided by the
pledged securities, and we will have no rights in pledged securities other than
our security interest.

QUARTERLY PAYMENTS ON PLEDGED SECURITIES

The collateral agent, upon receipt of interest payments on the pledged
securities, will distribute those payments to the unit agent, which will, in
turn, distribute that amount together with the contract fees to the holders of
units on the record date. As

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<PAGE> 40

long as the units remain in book-entry only form, the record date for any
payment will be one business day before the payment date.

SETTLEMENT OF PURCHASE CONTRACTS

On the stock purchase date, the amount paid on such treasury securities at
maturity will be released from the pledge and security interest created by the
pledge agreement and will be used to satisfy the purchase contract as specified
under "-- Description of the Purchase Contracts -- Settlement".

TERMINATION OF PURCHASE CONTRACTS

Upon termination of the purchase contracts (see "-- Description of the
Purchase Contracts -- Termination"), the collateral agent will release the
pledged securities underlying the units to the unit agent for distribution to
the holders of the units, upon presentation and surrender of the certificates
evidencing such units. If upon such termination any holder would otherwise be
entitled to receive a principal amount of treasury securities of any series that
is not an integral multiple of $1,000, the unit agent will distribute to that
holder treasury securities of that series in a principal amount equal to the
next lower integral multiple of $1,000. The unit agent will sell the treasury
securities not otherwise distributed to the holder (together with the treasury
securities of that series not otherwise distributed to other holders) and will
distribute the net proceeds to all the holders (in accordance with their
respective interests therein).

THE MASTER UNIT AGREEMENT

GENERAL

Distributions on the units will be payable, purchase contracts will be
settled and transfers of the units will be registrable at the office of the unit
agent in the Borough of Manhattan, The City of New York. In addition, if the
units do not remain in book-entry form, payment of distributions on the units
may be made, at the option of Seagram, by check mailed to the address of the
persons shown on the unit register.

If any quarterly payment date or the stock purchase date is not a business
day, then any payment required to be made on that date must be made on the next
business day (and so long as the payment is made on the next business day,
without any interest or other payment on account of any such delay), except that
if the next business day is in the next calendar year, the payment or settlement
will be made on the prior business day with the same force and effect as if made
on the payment date. A "business day" means any day other than Saturday, Sunday
or any other day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to be closed.

If you fail to surrender the certificate evidencing your Units to the unit
agent on the stock purchase date, the common shares issuable in settlement of
the related purchase contracts will be registered in the name of the unit agent.
These common shares, together with any distributions on them, will be held by
the unit agent as agent for your benefit, until the certificate is presented and
surrendered or you provide satisfactory evidence that the certificate has been
destroyed, lost or stolen, together with any indemnity that may be required by
the unit agent and Seagram.

If the purchase contracts have terminated prior to the stock purchase date,
the related pledged securities have been transferred to the unit agent for
distribution to the holders and you fail to surrender the certificate evidencing
your units to the unit agent, the pledged securities that would otherwise be
delivered to you and any related payments will be held by the unit agent as
agent for the your benefit, until you present and surrender the certificate or
provides the evidence and indemnity described above.

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<PAGE> 41

The unit agent will not be required to invest or to pay interest on any
amounts held by it before distribution.

No service charge will be made for any registration of transfer or exchange
of the units, except for any applicable tax or other governmental charge.

MODIFICATION

The master unit agreement, the pledge agreement and the purchase contracts
may be amended with the consent of the holders of a majority of the units at the
time outstanding. However, no modification may, without the consent of the
holder of each outstanding unit affected by the modification,

(1) change any payment date,

(2) change the amount or type of pledged securities required to be pledged
to secure obligations under the units, impair the right of the holder of any
units to receive distributions on the pledged securities underlying such units
or otherwise adversely affect the holder's rights in or to pledged securities,

(3) change the place or currency of payment for any amounts payable in
respect of the units, increase any amounts payable by holders in respect of
units or decrease any other amounts receivable by holders in respect of units,

(4) impair the right to institute suit for the enforcement of any purchase
contract,

(5) reduce the number of common shares purchasable under any purchase
contract, increase the price to purchase common shares on settlement of any
purchase contract, change the stock purchase date or otherwise adversely affect
the holder's rights under any purchase contract or,

(6) reduce the above stated percentage of outstanding units the consent of
whose holders is required for the modification or amendment of the provisions of
the master unit agreement, the pledge agreement or the purchase contracts.

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Seagram will agree in the master unit agreement that it will not merge with
or into or consolidate with any other entity or sell, assign, transfer, lease or
convey all or substantially all of its properties and assets to any person, firm
or corporation unless

(1) Seagram is the continuing corporation or the successor corporation is a
corporation organized under the laws of Canada or the United States of America
or a province or state thereof;

(2) The successor entity expressly assumes the obligations of Seagram under
the principal agreements and the purchase contracts; and

(3) Seagram or such corporation is not, immediately after such merger,
consolidation, sale, assignment, transfer, lease or conveyance, in default in
the performance of any of its obligations under the purchase contracts, the
master unit agreement or the pledge agreement.

TITLE

Seagram, the unit agent and the collateral agent may treat the registered
holder of any units as the absolute owner of those units for the purpose of
making payment and settling the related purchase contracts and for all other
purposes.

REPLACEMENT OF UNITS CERTIFICATES

If physical certificates are issued, we will replace any mutilated
certificate at your expense upon surrender of that certificate to the unit
agent. We will replace certificates that become destroyed, lost or stolen at
your expense upon delivery to us and the unit agent of satisfactory evidence
that the certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the unit agent and us.

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We, however, are not required to issue any certificates representing units
on or after the stock purchase date or after the purchase contracts have
terminated. In place of the delivery of a replacement certificate following the
stock purchase date, the unit agent, upon delivery of the evidence and indemnity
described above, will deliver the common shares issuable pursuant to the
purchase contracts included in the units evidenced by the certificate, or, if
the purchase contracts have terminated prior to the stock purchase date,
transfer the pledged securities related to the units evidenced by the
certificate.

GOVERNING LAW

The master unit agreement, the pledge agreement and the purchase contracts
will be governed by, and construed in accordance with, the laws of the State of
New York.

INFORMATION CONCERNING THE UNIT AGENT

The Bank of New York will initially act as unit agent. The unit agent will
act as the agent for the holders of units from time to time. The master unit
agreement will not obligate the unit agent to exercise any discretionary
authority in connection with a default under the terms of the master unit
agreement, the pledge agreement and the purchase contracts, or the pledged
securities.

The master unit agreement will contain provisions limiting the liability of
the unit agent. The master unit agreement will contain provisions under which
the unit agent may resign or be replaced. Resignation or replacement of the unit
agent will be effective upon appointment of a successor.

The unit agent is one of a number of banks with which Seagram and its
subsidiaries maintain ordinary banking and trust relationships.

INFORMATION CONCERNING THE COLLATERAL AGENT

will initially act as collateral agent. The collateral agent
will act solely as our agent and will not assume any obligation or relationship
of agency or trust for or with any of the holders of the units except for the
obligations owed by a pledgee of property to the owner thereof under the pledge
agreement and applicable law.

The pledge agreement will contain provisions limiting the liability of the
collateral agent. The pledge agreement will contain provisions under which the
collateral agent may resign or be replaced. Such resignation or replacement
would be effective upon the appointment of a successor.

The collateral agent is one of a number of banks with which Seagram and its
subsidiaries maintain ordinary banking and trust relationships.

DESCRIPTION OF THE NOTES AND THE GUARANTEES

The notes are to be issued under the indenture. The Bank of New York will
initially act as trustee under the indenture. The indenture is qualified under
the Trust Indenture Act.

The notes will be subordinated to senior indebtedness of JES.

The notes will mature on , 2004. The notes will not be
redeemable at the option of JES prior to the maturity date.

INTEREST

Interest on the notes will accrue from the first date of issuance of the
notes at an initial rate of % prior to , 2002, and at the
reset rate thereafter. Interest will be payable quarterly in arrears on each
quarterly payment date (each, an "interest payment date"), subject to the
deferral provisions described below. Interest will be payable to the holders of
the notes on each record date, which will be one business day before the
interest

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payment date. The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. If any date on
which interest is payable is not a business day, then payment of the interest
will be made on the next business day (and if payment is made on the next
business day, without any interest or other payment as a result of such delay),
except that if the next business day is in the next succeeding calendar year,
the payment will be made on the prior business day, in each case with the same
force and effect as if made on the date such payment was originally payable.

MARKET RATE INCREASE

By 9:30 a.m., New York City time, on the remarketing date, the remarketing
agent will determine the interest rate that will be sufficient to cause the then
current aggregate market value of the notes to be at least equal to 100.25% of
the cash equivalent of the treasury consideration. The notes will thereafter
bear interest at that increased rate.

If the remarketing agent is unable to remarket all the notes tendered or
deemed tendered for purchase, a failed remarketing will be deemed to have
occurred.

The "cash equivalent of the treasury consideration" means the cash value on
the remarketing date of the treasury consideration, assuming for this purpose,
even if not true, that (1) the treasury securities included in the treasury
consideration are highly liquid treasury securities maturing on or within 35
days prior to the stock purchase date, as designated in good faith by the
remarketing agent in a manner intended to minimize the cash equivalent of the
treasury consideration) and (2) those treasury securities are valued based on
the ask-side price of the treasury securities at 9:00 a.m., New York City time,
on the remarketing date (as determined on a same day settlement basis by a
reasonable and customary means selected in good faith by the remarketing agent)
plus accrued interest to that date.

OPTION TO DEFER INTEREST PAYMENTS

So long as no event of default has occurred and is continuing, JES will
have the right under the indenture at any time during the term of the notes to
defer the payment of interest for a period not extending beyond the maturity
date. We refer to any such period of deferral as an "extension period". At the
end of an extension period, JES must pay all interest then accrued and unpaid
(together with accrued interest at the deferral rate compounded on each
succeeding Interest payment date).

During any extension period, Seagram and JES may not take any of the
prohibited actions described under "-- Certain Covenants of JES and Seagram".

Prior to the expiration of any extension period, JES may further extend the
extension period, but not beyond the maturity date. Upon the termination of any
extension period and the payment of all amounts then due on any interest payment
date, JES may elect to begin a new extension period, subject to the same
requirements as described above. No interest will be due and payable during an
extension period. JES must give the trustee written notice of its election of
any extension period (or its further extension) at least five business days
prior to the earliest of:

(1) the date the interest on the notes would have been payable except for
the election to begin or extend the extension period;

(2) the date the trustee is required to give notice to any securities
exchange or to holders of notes of the record date or the date the interest is
payable; and

(3) the record date.

The Trustee must give notice of JES' election to begin or extend a new extension
period to the holders of the notes. There is no limitation on the number of
times that

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JES may elect to begin an extension period.

CERTAIN COVENANTS OF SEAGRAM AND JES

JES will covenant that during an extension period or during the continuance of
an event of default, JES will not (a) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of JES
that rank pari passu to or junior in right of payment to the notes, or (b) make
any guarantee payments with respect to any guarantee by JES of any securities of
any of its subsidiaries if such guarantee ranks pari passu or junior in right of
payment to the notes.

Seagram will also covenant that, during an extension period or during the
continuance of an event of default, it will not (a) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of Seagram that rank pari passu or junior in right of payment to
the guarantees of the notes, or (b) make any guarantee payments with respect to
any guarantee by Seagram or any securities of Seagram if such guarantee ranks
pari passu or junior in right of payment to the notes.

Seagram will also covenant that, during an extension period or during the
continuance of an event of default, it will not declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of Seagram's capital stock, (other than dividends or
distributions in, or options, warrants or rights to subscribe for or purchase,
common shares of Seagram), (2) any declaration of a dividend in connection with
the implementation of a stockholder's rights plan, or the issuance of shares
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (3) as a result of a reclassification of Seagram
capital stock solely into shares of one or more classes or series of Seagram
capital stock or the exchange or conversion of one class or series of Seagram
capital stock for another class or series of Seagram capital stock, (4) the
purchase of fractional interests in shares of Seagram capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (5) purchases of common shares in connection
with Seagram's normal course issuer bid-purchases or the satisfaction by Seagram
of its obligations under any benefit plans for its and its subsidiaries'
directors, officers or employees or any of Seagram's dividend reinvestment
plans).

GUARANTEES

Seagram will unconditionally guarantee, on a subordinated basis, the due
and punctual payment of principal of and interest on the notes, when and as the
same shall become due and payable, whether at the maturity date, by declaration
of acceleration or otherwise. Interest and additional amounts paid by Seagram
may be subject to Canadian withholding taxes. The withholding tax rate in
respect of payments made to residents of the United States within the meaning of
the Canada-United States Income Tax Convention (1980) would be 10% by virtue of
such Convention. Seagram will further agree, however, that any amounts to be
paid by Seagram under the guarantees will be paid without deduction or
withholding for or on account of any and all present or future tax, duty,
assessment or governmental charge imposed upon or as a result of such payment by
the Government of Canada, or any province or other political subdivision or
taxing authority thereof or therein, or if deduction or withholding of any such
tax, duty, assessment or charge shall at any time be required by or on behalf of
the Government of Canada or any such province, political subdivision or taxing
authority, Seagram will pay such additional amount in respect of principal and
interest as may be necessary in order that the net amounts paid to the holders
of the notes or the Trustee, as the case may be, pursuant

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<PAGE> 45

to the guarantees after such deduction or withholding shall not be less than the
amount provided for in the notes to be then due and payable; except that no such
additional amount shall be payable in respect of any notes to any holder (a) who
is subject to such tax, duty, assessment or governmental charge in respect of
the notes by reason of his being connected with Canada otherwise than merely by
the holding or ownership of the notes, or (b) who is not dealing at arm's length
with Seagram (within the meaning of the Income Tax Act (Canada) as reenacted or
amended from time to time), or (c) with respect to any estate, inheritance,
gift, sales, transfer, personal property or any other similar tax, duty,
assessment or governmental charge, or (d) with respect to any tax, duty,
assessment or governmental charge payable otherwise than by withholding payments
in respect of the notes, or (e) with respect to any combination of the above.

SUBORDINATION

If JES distributes assets as part of its dissolution, winding up,
liquidation or reorganization, payments on the notes will be subordinated in
right of payment to the prior payment in full of all senior indebtedness. No
payment on the notes may be made at any time when:

- JES is in default under any payment obligation with respect to senior
indebtedness beyond any applicable grace period,

- JES is otherwise in default with respect to any senior indebtedness
permitting the holders of the senior indebtedness to accelerate the
maturity of the senior indebtedness, or

- any judicial proceeding is pending with respect to any default with
respect to senior indebtedness.

Seagram's guarantees of the notes will be subordinated to present and
future senior indebtedness of Seagram in the same manner.

Holders of notes will be subrogated to the rights of holders of senior
indebtedness to the extent JES makes payments on senior indebtedness upon any
distribution of assets in any such proceedings out of the distributive share of
the notes. Due to this subordination, certain creditors may recover more,
ratably, than holders of the notes in a distribution of assets upon insolvency.

The guarantees will be subordinated in right of payment to senior
indebtedness of Seagram, on terms comparable to the subordination of the notes.

"Senior indebtedness" means:

(a) indebtedness for money borrowed;

(b) indebtedness evidenced by a note, debenture, bond or other security or
instrument and indebtedness incurred, created or assumed in connection with the
acquisition of any property, other than trade accounts payable;

(c) obligations as lessee under capitalized leases, including without
limitation, leases of property made as part of any sale and lease-back
transaction; and

(d) indebtedness, obligations and liabilities of others which Seagram or
JES, as applicable, has guaranteed, endorsed or otherwise agreed to be liable
for or acquire;

except that "senior indebtedness" will not include any such indebtedness,
obligation or liability which expressly states that it is junior or subordinate
to or ranks pari passu in right of payment to the notes or guarantees.
Substantially all of the indebtedness set forth under "Capitalization", other
than

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<PAGE> 46

the Liquid Yield Option Notes, constitutes senior indebtedness. The indenture,
notes and guarantees do not limit our ability to issue additional senior
indebtedness.

CONSOLIDATION, MERGERS AND SALES OF ASSETS. Neither Seagram nor JES will
consolidate, amalgamate or merge with, or convey, transfer or lease all or
substantially all its assets to any person, unless:

- the successor corporation, in the case of JES, is a U.S. corporation or,
in the case of Seagram, is a Canadian or U.S. corporation, and assumes
the obligations evidenced by the securities or guarantees;

- immediately after the transaction, no event of default, and no event
which, after notice or lapse of time or both, would become an event of
default, has occurred and is continuing; and

- certain other conditions are met.

MODIFICATION OF THE INDENTURE

Seagram, JES and the trustee may, with the consent of the holders of at
least 50% in aggregate principal amount of the notes, modify the indenture or
the rights of the holders of the notes.

However, no modification may, without the consent of the holder of each
note:

- change the stated maturity of the notes;

- reduce the rate of payment of interest on the notes;

- reduce the principal amount of the notes or the premium, if any, on the
notes;

- change any obligation of JES to pay additional amounts;

- change the place of payment where principal and interest are payable;

- change the currency or currency unit in which the notes are payable;

- impair the right to sue for the enforcement of any such payment on or
after the maturity of the notes;

- reduce the percentage of the notes referred to above whose holders need
to consent to the modification or a waiver; or

- adversely modify the terms and conditions of the guarantees.

EVENTS OF DEFAULTS

The indenture provides that the events of default for the notes will be:

- failure to pay principal on any notes when due;

- failure to pay any interest within 30 days of the date when due;

- failure to perform for 90 days after notice any other covenant in the
indenture; and

- certain events of bankruptcy, insolvency or reorganization.

If an event of default occurs and is continuing, either the trustee or the
holders of 25% in principal amount of outstanding notes of that series may
declare the notes of that series due and payable. Seagram and JES are each
required to annually certify to the trustee that JES has fulfilled its
obligations under the indenture during the preceding year.

Holders of a majority in principal amount of the notes will be entitled to
control certain actions of the trustee under the indenture and to waive past
defaults regarding the notes. The trustee generally will not be required to act
at the request of holders, unless the holders offer the trustee reasonable
security or indemnity.

If an event of default occurs and is continuing, the trustee may use any
sums that it holds under the indenture for compensation due, as agreed by JES
and the trustee, and for reasonable expenses incurred, prior to paying the
holders of the notes.

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Before any holder of notes may sue JES for an event of default, other than
for payment on that holder's note when due, the holders of not less than 25% in
principal amount of the notes outstanding must have requested the trustee to
take action and waited 60 days for the trustee to act. If the trustee sues,
holders may not do so.

CONCERNING THE TRUSTEE

Seagram and JES have had and may continue to have banking relationships
with the trustee in the ordinary course of business.

BOOK-ENTRY SYSTEM

The Depository Trust Company (the "depositary") will act as securities
depositary for the units. The units will be issued only as fully-registered
securities registered in the name of Cede & Co. or another nominee of the
depositary. Fully-registered global security certificates, representing the
total aggregate number of units, will be issued, will be deposited with the
depositary and will bear a legend regarding restrictions on their exchanges and
registration of transfer as described below.

The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the units so long as
such units are represented by global security certificates.

The depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The depositary holds securities that its
participants deposit with it. The depositary also facilitates the settlement
among participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("direct participants"). The depositary is owned by a number of
its direct participants and by the NYSE, the American Stock Exchange, Inc., and
the National Association of Securities Dealers, Inc. Access to the depositary
system is also available to others, such as securities brokers and dealers,
banks and trust companies that clear transactions through or maintain a direct
or indirect custodial relationship with a direct participant either directly or
indirectly ("indirect participants"). The rules applicable to the depositary and
its participants are on file with the commission.

No transfer of global security certificates in whole or in part may be
registered in the name of any person other than the depositary or a nominee of
the depositary unless the depositary has notified Seagram that it is unwilling
or unable to continue as depositary for such global security certificates or has
ceased to be qualified to act as depositary under the master unit agreement or
if there occurs and continues a default by Seagram under one or more principal
agreements. All units and portions of units represented by global security
certificates will be registered in such names as the depositary may direct.

As long as the depositary or its nominee is the registered owner of the
global security certificates, such depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the global security
certificates and all units represented thereby for all purposes under the units,
purchase contracts, master unit agreement and pledge agreement. Except

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<PAGE> 48

in the limited circumstances referred to in the paragraph above, owners of
beneficial interests in global security certificates will not be entitled to
have such global security certificates or the underlying units registered in
their names, will not receive or be entitled to receive physical delivery of
certificates and will not be considered to be owners or holders of such global
security certificates or any underlying units for any purpose under the units,
purchase contracts and principal agreements. All payments on the units
represented by the global security certificates and all deliveries of pledged
securities or common shares to the holders thereof will be made to the
depositary or its nominee, as the case may be, as the holder thereof.

Ownership of beneficial interests in the global security certificates will
be limited to participants or persons that may hold beneficial interests through
institutions that have accounts with the depositary. Ownership of beneficial
interests in global security certificates will be shown only on, and the
transfer of those ownership interests will be effected only through, records
maintained by the depositary or its nominee (with respect to participants'
interests) or any such participant (with respect to interests of persons held by
such participants on their behalf). Procedures for settlement of purchase
contracts on the stock purchase date will be governed by arrangements among the
depositary, participants and persons that may hold beneficial interests through
participants designed to permit such settlement without the physical movement of
certificates. Payments, transfers, deliveries, exchanges and other matters
relating to beneficial interests in global security certificates may be subject
to various policies and procedures adopted by the depositary from time to time.
The depositary has advised Seagram that it will not take any action permitted to
be taken by a holder of units unless directed to do so by one or more
participants to whose account the depositary interests in the global security
certificates are credited and only for the number of units as to which such
participant or participants has or have given such direction. None of Seagram,
the Unit Agent nor any of their agents will have any responsibility or liability
to any aspect of the depositary's or any participant's records relating to, or
for payment made on account of, beneficial interests in global security
certificates, or for maintaining, supervising or reviewing any of the
depositary's records or any participant's records relating to such beneficial
ownership interests.

The information in this section concerning the depositary and its book-
entry system has been obtained from sources that Seagram believes to be
reliable, but Seagram does not take responsibility for its accuracy.

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<PAGE> 49

DESCRIPTION OF CAPITAL STOCK

The following brief summary of our capital stock is not complete and is
qualified in its entirety by reference to all the provisions of our articles of
amalgamation and our by-laws.

Our authorized capital currently consists of an unlimited number of common
shares, of which 403,046,179 common shares were outstanding at April 30, 1999,
and an unlimited number of preferred shares, none of which are outstanding.

COMMON SHARES

A holder of common shares receives one vote per share at shareholder
meetings, except at meetings where only the holders of a different class or
series of shares may vote. Subject to the rights of another class or series of
shares that rank ahead of the common shares:

- - holders of common shares receive dividends when declared and paid by the Board
of Directors; and

- - if Seagram is liquidated, holders of common shares are entitled to the
remaining property of Seagram, after all prior claims are satisfied.

Shares that rank ahead of the common shares include our first preferred
shares and second preferred shares. Holders of common shares are not entitled to
any preemptive rights to acquire any other securities.

At March 31, 1999, JES, had outstanding Liquid Yield Option Notes
("LYONs"). The LYONs:

- - are guaranteed by Seagram on a subordinated basis;

- - are convertible into common shares at a conversion rate of 18.44 common shares
for each $1,000 face amount LYON (297,256 shares at March 31, 1999); and

- - mature on March 5, 2006.

At March 31, 1999, 37,550,310 common shares were potentially issuable upon
the conversion of the LYONs and the exercise of outstanding employee stock
options.

We send holders of common shares annual reports containing audited
financial statements. In addition, we send holders of common shares quarterly
reports containing unaudited financial information if they make an annual
election to receive that information.

The transfer agents and registrars for the common shares are CIBC Mellon
Trust Company and ChaseMellon Shareholder Services L.L.C.

Under Canadian income tax law, payment of dividends by us to holders of
common shares who are not Canadian residents is subject to Canadian withholding
tax. For holders who are U.S. residents, 15% of the dividends must generally be
withheld under treaty arrangements between the United States and Canada. For
holders resident in other countries, the withholding rate varies. For a U.S.
shareholder, the amount of tax withheld in Canada will generally:

- - be deductible from gross income; or

- - at the election of the taxpayer (subject to various conditions) the amount
withheld in Canada may be credited against U.S. income tax.

Dividends received by a U.S. shareholder will not qualify for the partial
dividends received deduction allowable to corporations.

This discussion provided for purposes of general information only. You
should refer to the additional information in "United States Federal Income Tax"
and "Canadian Tax Consequences."

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<PAGE> 50

PREFERRED SHARES

Preferred shares are divided into two classes, first preferred shares and
second preferred shares. For payment of dividends and the distribution of assets
in the event of the liquidation, dissolution or winding-up of Seagram:

- - first preferred shares rank in priority to common shares and second preferred
shares; and

- - second preferred shares rank in priority to common shares.

First preferred shares and second preferred shares are issuable in series.
The Board of Directors can determine the number, designation, rights,
privileges, restrictions and conditions to be attached to the preferred shares
of each series, including:

- - dividend rights;

- - voting rights;

- - conversion rights;

- - redemption and purchase provisions; and

- - restrictions on payment of dividends on common shares or any other shares
ranking junior to the shares of the series.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

In the opinion of Simpson Thacher & Bartlett, the following is an accurate
summary of the material United States federal income tax consequences of the
purchase, ownership and disposition of units, notes and common shares acquired
under a purchase contract. Unless otherwise stated, this summary applies only to
holders who purchase units in the initial offering at the issue price and who
are United States holders. In addition, this summary only applies to holders (1)
who are residents of the United States for purpose of the current Canada-United
States Income Tax Treaty (the "Treaty"), (2) whose units, notes and common
shares are not, for purposes of the Treaty, effectively connected with a
permanent establishment in Canada and (3) who otherwise qualify for the full
benefits of the Treaty. United States holders include the following:

- - a person who is a citizen or resident of the United States;

- - a corporation or partnership created or organized in or under the laws of the
United States or any state thereof or the District of Columbia;

- - an estate the income of which is subject to United States federal income
taxation, regardless of its source; or

- - a trust

- that is subject to the supervision of a court within the United States
and the control of one or more United States persons; or

- that has a valid election in effect under applicable Treasury regulations
to be treated as a United States person.

The tax treatment of a holder may vary depending on the holder's particular
situation. This summary does not deal with special classes of holders. For
example, this summary does not address:

- - tax consequences to holders who may be subject to special tax treatment, such
as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, or
tax-exempt investors;

- - tax consequences to persons that will hold units, notes or common shares
acquired under a purchase contract as a position in a "straddle," "synthetic
security", "hedge", "integrated transac-

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<PAGE> 51

tion", "conversion transaction" or "constructive sale";

- - tax consequences to holders of notes whose functional currency is not the U.S.
dollar;

- - tax consequences to shareholders, partners or beneficiaries of a holder of
units, notes or common shares acquired under a purchase contract;

- - alternative minimum tax consequences, if any; or

- - any state, local or foreign tax consequences.

IF YOU ARE NOT A UNITED STATES PERSON, YOU ARE URGED TO CONSULT YOUR OWN
TAX ADVISORS REGARDING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF AN
INVESTMENT IN UNITS, INCLUDING THE POTENTIAL APPLICATION OF UNITED STATES
WITHHOLDING TAXES.

This summary is based upon the Internal Revenue Code of 1986, as amended,
Treasury regulations (including proposed Treasury regulations) issued
thereunder, Internal Revenue Service rulings and pronouncements and judicial
decisions now in effect, all of which are subject to change, possibly on a
retroactive basis. Any such changes may be applied retroactively in a manner
that could cause the tax consequences to vary substantially from the
consequences described below, possibly adversely affecting you.

No statutory, administrative or judicial authority directly addresses the
treatment of units or instruments similar to units for United States federal
income tax purposes. As a result, no assurance can be given that the Internal
Revenue Service will agree with the tax consequences described herein. YOU ARE
URGED TO CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO YOUR TAX CONSEQUENCES OF
THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE UNITS, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.

UNITS

ALLOCATION OF PURCHASE PRICE. Your acquisition will be treated as an
acquisition of the note and the purchase contract constituting the unit. The
purchase price of each unit will be allocated between the note and the purchase
contract in proportion to their respective fair market values at the time of
purchase. Such allocation will establish your initial tax basis in the note and
the purchase contract. We will report the fair market value of each note as
$ and the fair market value of each purchase contract as $0. This
position will be binding on you (but not on the Internal Revenue Service) unless
you explicitly disclose a contrary position on a statement attached to your
timely filed United States federal income tax return for the taxable year in
which a unit is acquired. Thus, absent such disclosure, you should allocate the
purchase price for a unit in accordance with the foregoing. The remainder of
this discussion assumes that this allocation of the purchase price will be
respected for United States federal income tax purposes.

NOTES

INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT. Because of the manner in
which the interest rate on the notes is reset, the notes will be classified as
contingent payment debt instruments, subject to the "noncontingent bond method".
As discussed more fully below, the effect of such method will be (i) to require
you, regardless of your usual method of tax accounting, to use an accrual method
with respect to the notes, (ii) possibly to result in the accrual of interest
income by you in excess of interest payments actually received, and (iii)
generally to result in ordinary rather than capital treatment of any gain or
loss on the sale, exchange or redemption of the notes. See "-- Sale or
Disposition of Units". JES does not believe

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<PAGE> 52

that you will be required to recognize taxable income that differs materially
from the cash payments of interest on the notes.

Under the noncontingent bond method, you will accrue original issue
discount each year based on the "comparable yield" of the notes. The comparable
yield of the notes will generally be the rate at which JES would issue a fixed
rate debt instrument with terms and conditions similar to the notes. JES is
required to provide the comparable yield to you, and, solely for tax purposes,
is also required to provide a projected payment schedule that includes the
actual interest payments on the notes and estimates the amount and timing of
contingent payments on the notes. JES has determined that the comparable yield
is % and the projected payment schedule for the notes, per $ of
stated amount, is $ (which is the stated interest payment) for each
quarter ending on or prior to the remarketing date. The projected payment, per
$ of stated amount, at the maturity date is $ (which includes
the stated principal of the notes as well as the final interest payment).

The amount of original issue discount on a note for each accrual period is
determined by multiplying the comparable yield of the note (adjusted for the
length of the accrual period) by the note's adjusted issue price at the
beginning of the accrual period (determined in accordance with the rules set
forth in the original issue discount regulations relating to contingent payment
debt instruments). The amount of original issue discount so determined will then
be allocated on a ratable basis to each day in the accrual period that you hold
the note.

If the actual payments made on the note in a taxable year differ from the
projected contingent payments, adjustments will be made for such differences. A
positive adjustment, for the amount by which an actual payment exceeds a
projected contingent payment, will be treated as additional interest. A negative
adjustment will:

- - first, reduce the amount of interest required to be accrued in the current
year;

- - second, any negative adjustments that exceed the amount of interest accrued in
the current year will be treated as ordinary loss to the extent that your
total interest inclusions exceed the total amount of net negative adjustments
treated as ordinary loss in prior taxable years; and

- - third, any excess negative adjustments will be carried forward to offset
future income or amount realized on disposition.

You are generally bound by the comparable yield and projected payment
schedule provided by JES. However, if you believe that JES' projected payment
schedule is unreasonable, you may set your own projected payment schedule so
long as you explicitly disclose the use of such schedule and the reason
therefor. Unless otherwise prescribed by the Commissioner of the Internal
Revenue Service, such disclosure must be made in a statement attached to your
timely filed federal income tax return for the taxable year in which the note is
acquired.

ADJUSTMENT TO TAX BASIS IN NOTES. The tax basis of a note will be increased
by the amount of any interest recognized under the noncontingent bond method and
reduced by payments of interest (or principal) received with respect to the
notes. Based on JES' belief (described in "-- Interest Income and Original Issue
Discount," above) that the taxable income from the notes will equal cash
payments of interest during this period, JES believes that adjusted tax basis in
the notes as of the remarketing date will equal the initial tax basis.

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<PAGE> 53

PURCHASE CONTRACTS

INCOME FROM CONTRACT FEES AND DEFERRED CONTRACT FEES. There is no direct
authority addressing the treatment of the contract fees and deferred contract
fees under current law, and such treatment is unclear. Contract fees and
deferred contract fees may constitute taxable income to you when received or
accrued, in accordance with your method of tax accounting. To the extent Seagram
is required to file information returns with respect to contract fees or
deferred contract fees, it intends to report such payments as taxable income to
you. You should consult your own tax advisor concerning the treatment of
contract fees and deferred contract fees, including the possibility that any
such payment may be treated as a loan, purchase price adjustment, or rebate
rather than being includible in income on a current basis. The treatment of
contract fees and deferred contract fees could affect your tax basis in a
purchase contract or common shares received under a purchase contract or your
amount realized upon the sale or disposition of a unit or the termination of a
purchase contract. To the extent Canada imposes withholding taxes on the
additional contract fees, your ability to claim foreign tax credits will depend
upon the characterization for United States federal income tax purposes. Please
consult your own tax advisor. See "-- Acquisition of Common Shares under a
Purchase Contract," "-- Sale or Disposition of Units" and "-- Termination of
Purchase Contract."

ACQUISITION OF COMMON SHARES UNDER A PURCHASE CONTRACT. You generally will
not recognize gain or loss on the purchase of common shares under a purchase
contract, except with respect to any cash paid in lieu of a fractional share of
common shares. Subject to the following discussion, your aggregate initial tax
basis in the common shares received under a purchase contract generally should
equal (a) the purchase price paid for such common shares, (b) plus your tax
basis in the purchase contract (if any), and (c) less the portion of such
purchase price and tax basis allocable to the fractional share. Payments of
contract fees or deferred contract fees that have been received in cash by you
but were not includible in your income should reduce your tax basis in the
purchase contract or the common shares to be received thereunder (see "-- Income
from Contract Fees and Deferred Contract Fees" above). For tax purposes, the
holding period for common shares received under a purchase contract will
commence on the day acquired.

EARLY SETTLEMENT OF PURCHASE CONTRACT. You will not recognize gain or loss
on the receipt of your proportionate share of notes upon early settlement of a
purchase contract and you will have the same tax basis in such notes as before
such Early Settlement.

TERMINATION OF PURCHASE CONTRACT. If a purchase contract terminates, you
will recognize gain or loss equal to the difference between your amount realized
(if any) upon such termination and your adjusted tax basis (if any) in the
purchase contract at the time of such termination. Payments of contract fees or
deferred contract fees, if any, received by you but not includible in your
income should either reduce your tax basis in the purchase contract or result in
an amount realized on the termination of the purchase contract. Any contract
fees or deferred contract fees includible in your income but not paid should
increase your tax basis in the purchase contract (see "-- Income from Contract
Fees and Deferred Contract Fees" above). Any such gain or loss may be long-term
capital gain or loss depending upon the holding period of the purchase contract.
Capital gains of individuals derived in respect of capital assets held for more
than one year are taxed at a maximum rate of 20%. The deductibility of capital
losses is subject to limitations. You will not recognize gain or loss on the
receipt of your proportionate share of the notes or treasury

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<PAGE> 54

securities upon termination of the purchase contract and you will have the same
tax basis in such notes or treasury securities as before such termination.

ADJUSTMENT TO SETTLEMENT RATE. You might be treated as receiving a
constructive distribution from Seagram if (i) the settlement rate is adjusted
and as a result of such adjustment your proportionate interest in the assets or
earnings and profits of Seagram is increased and (ii) the adjustment is not made
pursuant to a bona fide, reasonable anti-dilution formula. An adjustment in the
settlement rate would not be considered made pursuant to such a formula if the
adjustment were made to compensate you for certain taxable distributions with
respect to the common shares. Thus, under certain circumstances, an increase in
the settlement rate might give rise to a taxable dividend to you even though you
would not receive any cash related thereto.

OWNERSHIP OF COMMON SHARES ACQUIRED UNDER THE PURCHASE CONTRACT.

TAXATION OF DIVIDENDS. The gross amount of dividends paid to you on common
shares (including amounts withheld to reflect Canadian withholding taxes) will
be treated as dividend income to you, to the extent paid out of current or
accumulated earnings and profits, as determined under United States federal
income tax principles. You will be required to include any such dividend in your
gross income as ordinary income on the day received by you. Such dividends will
not be eligible for the dividends received deduction allowed to corporations.

The amount of any dividend paid in Canadian dollars will equal the United
States dollar value of the Canadian received calculated by reference to the
exchange rate in effect on the date the dividend is received regardless of
whether the Canadian dollars are converted into United States dollars. If you do
not convert the Canadian dollars you receive into United States dollars on the
date of receipt, you will have a basis in the Canadian dollars equal to its
United States dollar value on the date of receipt. Any gain or loss realized on
a subsequent conversion or other disposition of the Canadian dollars will be
treated as ordinary income or loss.

The maximum rate of withholding tax on dividends paid to you pursuant to
the Treaty is 15 percent. Subject to certain conditions and limitations,
Canadian withholding taxes on dividends may be treated as foreign taxes eligible
for credit against your United States federal income tax liability. For purposes
of calculating the foreign tax credit, dividends paid on the common shares will
be treated as income from sources outside the United States and will generally
constitute "passive income" or, in the case of certain holders, "financial
services income". Special rules apply to certain individuals whose foreign
source income during the taxable year consists entirely of "qualified passive
income" and whose creditable foreign taxes paid or accrued during the taxable
year do not exceed $300 ($600 in the case of a joint return). Further, in
certain circumstances, if you (i) have held common shares for less than a
specified minimum period during which it is not protected from risk of loss,
(ii) are obligated to make payments related to the dividends or (iii) hold the
common shares in arrangements in which your expected economic profit, after
non-U.S. taxes, is insubstantial, you will not be allowed a foreign tax credit
for foreign taxes imposed on dividends paid on common shares. The rules
governing the foreign tax credit are complex. You are urged to consult your tax
advisor regarding the availability of the foreign tax credit under their
particular circumstances including the possible adverse impact on creditability
to the extent you are entitled to a refund of any Canadian tax withheld or a
reduced rate of withholding.

To the extent that the amount of any distribution exceeds our current and
accu-

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<PAGE> 55

mulated earnings and profits for a taxable year, the distribution will first be
treated as a tax-free return of capital, causing a reduction in the adjusted
basis of the common shares (thereby increasing the amount of gain, or decreasing
the amount of loss, to be recognized by you on a subsequent disposition of the
common shares), and the balance in excess of adjusted basis will be taxed as
capital gain recognized on a sale or exchange. Consequently, such distributions
in excess of our current and accumulated earnings and profits would not give
rise to foreign source income and you would not be able to use the foreign tax
credit arising from any Canadian withholding tax imposed on such distribution
unless such credit can be applied (subject to applicable limitations) against
U.S. tax due on other foreign source income in the appropriate category for
foreign tax purposes.

TAXATION OF CAPITAL GAINS

You will recognize taxable gain or loss on any sale or exchange of a common
share in an amount equal to the difference between your amount realized for the
common share and your tax basis in the common share. Such gain or loss will be
capital gain or loss. Capital gains of individuals derived with respect to
capital assets held for more than one year are taxed at a maximum rate of 20%.
The deductibility of capital losses is subject to limitations. Any gain or loss
recognized by a U.S. Holder will generally be treated as United States source
gain or loss.

SALE OR DISPOSITION OF UNITS

Upon a disposition of a unit, you will be treated as having sold, exchanged
or disposed of the purchase contract and the notes or treasury securities, as
the case may be, that constitute such unit. You generally will have gain or loss
equal to the difference between the portion of your proceeds allocable to the
purchase contract and the notes or treasury securities, as the case may be, and
your respective adjusted tax bases in the purchase contract and the notes or
treasury securities. In the case of the purchase contracts and the treasury
securities, such gain or loss generally will be capital gain or loss, except to
the extent that you are treated as having received an amount with respect to
accrued and unpaid interest on the treasury securities not previously included
in income, which will be treated as ordinary interest income, or to the extent
your are treated as having received an amount with respect to accrued contract
fees or deferred contract fees, which may be treated as ordinary income, in each
case to the extent not previously included in income. Capital gains of
individuals derived in respect of capital assets held for more than one year are
taxed at a maximum rate of 20%.The deductibility of capital losses is subject to
limitations.

Gain on the sale, exchange or retirement of a note generally will be
treated as ordinary income. Loss from the disposition of a note will be treated
as ordinary loss to the extent your prior net interest inclusions (reduced by
the total net negative adjustments previously allowed as an ordinary loss). Any
loss in excess of such amount will be treated as capital loss.

If the disposition of a unit occurs when the purchase contract has a
negative value, you should be considered to have received additional
consideration for the notes or treasury securities in an amount equal to such
negative value, and to have paid such amount to be released from your obligation
under the purchase contract. You should consult your tax advisor regarding a
disposition of a unit at a time when the purchase contract has a negative value.

Payments of contract fees or deferred contract fees that have not
previously been included in your income should either reduce your tax basis in
the purchase contract or result in an increase in the amount realized on the
disposition of the purchase contract. Any contract fees or deferred contract
fees included in your

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income but not paid should increase your tax basis in the purchase contract (see
"-- Income from Contract Fees and Deferred Contract Fees" above).

BACKUP WITHHOLDING TAX AND INFORMATION REPORTING

Payments under the units, notes or common shares, the proceeds received
with respect to a fractional share of common shares upon the settlement of a
purchase contract, and the proceeds received from the units, notes, treasury
securities or common shares may be subject to information reporting and United
States federal backup withholding tax at the rate of 31% if you fail to supply
an accurate taxpayer identification number or otherwise fail to comply with
applicable United States information reporting or certification requirements.
Any amounts so withheld will be allowed as a credit against your United States
federal income tax liability.

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CANADIAN INCOME TAX CONSEQUENCES

In the opinion of Goodman Phillips & Vineberg, Canadian income tax counsel
to [SCL and JES], the following is an accurate summary of certain Canadian
federal income tax considerations under the Income Tax Act (Canada) (the "Act")
generally applicable to holders of units, notes and common shares who are
residents of the United States for purposes of the Canada-United States Income
Tax Convention, 1980 (the "Convention") who have not been and will not be
resident or deemed to be resident in Canada at any time while they have held or
will hold any such units, notes, and common shares. Furthermore, this summary is
only applicable to such holders to whom such units, notes and common shares are
not "taxable Canadian property", as defined in the Act, and who do not use or
hold or are not deemed to use or hold such units, notes and common shares in
connection with carrying on a business in Canada.

Generally, the common shares will not be taxable Canadian property provided
that the common shares of SCL are listed on a prescribed stock exchange (which
currently includes the Toronto Stock Exchange and the New York Stock Exchange),
you do not use or hold, and are not deemed to use or hold, the common shares in
connection with carrying on a business in Canada and you, persons with whom you
do not deal at arm's length or you and such persons, have not owned (taking into
account any interest in or option in respect of the shares of SCL) 25% or more
of the issued shares of any class or series of the capital stock SCL at any time
within five (5) years preceding the date of disposition.

This summary is not applicable to you if you carry on an insurance business
in Canada and elsewhere, in respect of the units, notes and common shares that
are effectively connected with your Canadian insurance business or that are
"designated insurance property" as defined in the Act.

This summary is based on the Act, the regulations thereunder and counsel's
understanding of the administrative policies assessing practices published by
Revenue Canada, in effect as of the date of this Prospectus. This summary takes
into account all proposed amendments to the Act and the regulations thereunder
announced by the Minister of Finance of Canada, prior to the date hereof (the
"Tax Proposals"), although no assurances can be given that the Tax Proposals
will be enacted in the form proposed, or at all. This summary does not take into
account or anticipate any other changes in law, administrative policy or
assessing practice, whether by judicial, governmental or legislative action or
decision, nor does it take into account provincial, territorial or foreign
income tax legislation or considerations, which may differ from the Canadian
federal income tax considerations described herein. No advance income tax ruling
has been sought or obtained from Revenue Canada to confirm the tax consequences
of any the transactions described herein.

This summary is of a general nature only and is not intended to be, and
should not be construed to be legal, business or tax advice to you. You should
consult your own tax advisor for advice with respect to your particular
circumstances.

For the purposes of the Act, all amounts, including dividends, must be
expressed in Canadian dollars; amounts denominated in United States dollars must
be converted into Canadian dollars based on the United States dollar exchange
rate generally prevailing at the time such amounts arise.

CONTRACT FEES

There is no specific authority addressing the Canadian tax treatment of the
contract fees under current law. This summary assumes that the contract fees,
excluding the additional contract fees

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<PAGE> 58

payable in the event that payment of the contract fees is deferred, are
commensurate with the undertaking made by such holder in agreeing to subscribe
for common shares and that such contract fees are in no way attributable to the
notes, whether on account of principal, interest or otherwise.

You will not be subject to tax under the Act in respect of the contract
fees (excluding the additional contract fees), or upon the sale or other
disposition of the units, notes and common shares (except to the extent that
proceeds of disposition payable by a resident or deemed resident of Canada
include an amount of accrued and unpaid additional contract fees).

Where you (either directly from Seagram or indirectly upon a disposition to
a resident or deemed resident of Canada where part of the proceeds of
disposition may be allocable to accrued and unpaid additional contract fees),
receive a payment of additional contract fees, the payment will be regarded as a
payment, as, on account or in lieu of payment of, or in satisfaction of interest
for Canadian tax purposes and will be subject to Canadian withholding tax under
the Convention at the rate of 10% of the gross amount of such payment, provided
such holder is the beneficial owner of such payment.

DIVIDENDS

Where such a holder of common shares receives or is deemed to receive a
dividend, such amount will generally be subject to Canadian withholding tax
under the Convention at the rate of 15% of the gross amount of such payment,
provided you are the beneficial owner of such payment.

SALE OF COMMON SHARES

You will not be subject to tax under the Act upon the sale or other disposition
of the common shares.

GUARANTEE PAYMENTS

Certain payment in respect of the Debentures made by Seagram pursuant to
the Guarantees may be subject to Canadian withholding tax under the Convention
at a rate of 10% of the gross amount of such payments, provided such holder is
the beneficial owner of such payments. In this connection, see "Guarantees" at
page --.

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<PAGE> 59

UNDERWRITING

Seagram and JES and the underwriters for the offering named below have
entered into an underwriting agreement with respect to the units being offered.
Subject to certain conditions, (1) Seagram has agreed to enter into the purchase
contracts with each of the underwriters named below underlying the respective
number of units indicated opposite its name below, (2) JES has agreed to sell to
each of the underwriters the notes underlying the respective number of units
indicated opposite its name below, and (3) each of the underwriters has
severally agreed to enter into the purchase contracts with Seagram, purchase the
notes from JES and pledge such notes under the pledge agreement.

<TABLE>
<CAPTION>
Underwriters Number of Units
- ------------ ---------------
<S> <C>
Goldman, Sachs & Co.........................................
----------
Total.............................................
==========
</TABLE>

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

The following table shows the per unit and total underwriting discounts and
commissions to be paid to the underwriters by JES.

<TABLE>
<CAPTION>
Paid by JES
-----------
<S> <C>
Per Unit.................... $
Total....................... $
</TABLE>

Units sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus. Any
units sold by the underwriters to securities dealers may be sold at a discount
of up to per unit from the initial public offering price. Those securities
dealers may resell any units purchased from the underwriters to certain other
brokers or dealers at a discount of up to per unit from the initial public
offering price. If all the units are not sold at the initial public offering
price, the underwriters may change the offering price and the other selling
terms.

JES and Seagram have agreed with the underwriters not to dispose of or
hedge any of its units, notes or common shares (other than the concurrent common
share offerings) or any securities of Seagram which are substantially similar to
the common shares, or securities convertible into or exchangeable for common
shares (other than the units offered in this offering) during the period from
the date of this prospectus continuing through the date which is days after
the date of this prospectus, except with the prior written consent of Goldman,
Sachs & Co. This agreement does not apply to any existing employee benefit
plans.

The units will be a new issue of securities with no established trading
market. Seagram intends to apply to list the units on the NYSE. The underwriters
have advised Seagram and JES that they intend to make a market in the units, but
they are not obligated to do so and may discontinue market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for the units.

In connection with the offering, the underwriters may purchase and sell the
units or common shares in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of units than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the units or the common
shares while the offering pursuant to this prospectus is in progress.

55
<PAGE> 60

The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the underwriters have repurchased units sold by
or for the account of that underwriter in stabilizing or short covering
transactions.

These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the units or the common shares. As a result, the
price of the units or the common shares may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be discontinued by the underwriters at any time. These transactions may
be effected on the NYSE, in the over-the-counter market or otherwise.

Seagram and JES estimate that their share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $ million.

Seagram and JES have agreed to indemnify the several underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.

Certain of the underwriters have acted as financial advisors to JES and
Seagram and have received customary compensation for such services. John S.
Weinberg, a Managing Director of Goldman, Sachs & Co., is also a director of
Seagram.

LEGAL MATTERS

Simpson Thacher & Bartlett, our U.S. counsel, and Goodman Phillips &
Vineberg S.E.N.C., Seagram's Canadian counsel, will provide opinions for us
regarding the validity of the securities. Barnes & Thornburg, Indiana counsel of
JES, will opine on the validity of the securities on behalf of JES. Sullivan &
Cromwell will pass upon the validity of the securities for the underwriters.

EXPERTS

The consolidated financial statements of Seagram as of June 30, 1998 and
1997 and for the years ended June 30, 1998 and 1997, the five-month period ended
June 30, 1996 and the year ended January 31, 1996 incorporated in this
prospectus by reference to Seagram's Annual Report on Form 10-K for the fiscal
year ended June 30, 1998, as amended, have been incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in accounting and auditing.

The consolidated financial statements of PolyGram as of December 31, 1997
and 1996 and for each of the years in the three year period ended December 31,
1997 incorporated in this prospectus by reference to Seagram's Form 8-K, dated
August 25, 1998, as amended, have been audited by KPMG Accountants N.V., as
stated in their report, and have been so incorporated in reliance upon the
report of that firm given on the authority of that firm as experts in accounting
and auditing.

WHERE YOU CAN FIND MORE INFORMATION

Seagram files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any reports, proxy
statements

56
<PAGE> 61

and other information filed by Seagram at the SEC's Public Reference Rooms at:

- 450 Fifth Street, NW, Washington, D.C. 20549;

- Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and

- Seven World Trade Center, New York, New York 10048.

You may also request copies of these documents, upon payment of a
duplicating fee, by writing to the Public Reference Section of the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the SEC's Public
Reference Rooms. Seagram's SEC filings are also available on the SEC's Internet
site (http://www.sec.gov).

We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, covering the securities described in this prospectus.
For further information with respect to us and those securities, you should
refer to our registration statement and its exhibits. We have summarized certain
key provisions of contracts and other documents that we refer to in this
prospectus. Because a summary may not contain all the information that is
important to you, you should review the full text of the document. We have
included copies of these documents as exhibits to our registration statement.

The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to another document that Seagram filed with the SEC. The
information incorporated by reference is an important part of this prospectus,
and information that Seagram files later with the SEC will automatically update
and supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until we sell all of the
securities.

- Seagram's Annual Report on Form 10-K for the fiscal year ended June 30,
1998, as amended;

- Seagram's Quarterly Reports on Form 10-Q for the quarterly periods ended
September 30, 1998, December 31, 1998 and March 31, 1999;

- Seagram's Current Reports on Form 8-K dated July 20, 1998, August 4,
1998, August 25, 1998, as amended, September 1, 1998, as amended,
September 8, 1998, October 30, 1998, as amended, November 13, 1998,
November 19, 1998, November 20, 1998, November 25, 1998, December 7,
1998, December 10, 1998, as amended, December 14, 1998, December 23,
1998, April 8, 1999, April 9, 1999 and May 13, 1999.

You may request a copy of Seagram's filings (other than exhibits) at no
cost, by writing or telephoning Seagram at 1430 Peel Street, Montreal, Quebec
H3A 1S9, telephone (514) 849-5271, attention: Shareholder Services.

JURISDICTION OVER SEAGRAM

Seagram is a Canadian corporation and certain of its directors and officers
and the experts referred to above are citizens or residents of countries other
than the United States. A substantial portion of the assets of Seagram and of
those persons are located outside the United States. Accordingly, it may be
difficult for investors:

- to obtain jurisdiction over Seagram and those directors and officers and
experts in courts in the United States in actions predicated on the civil

57
<PAGE> 62

liability provisions of the U.S. federal securities laws;

- to enforce against Seagram or such persons judgments obtained in such
actions;

- to obtain judgments against Seagram or those persons in original actions
in Canadian or other foreign courts predicated solely upon the U.S.
federal securities laws; or

- to enforce against Seagram or those persons in Canadian or other foreign
courts judgments of courts in the United States predicated upon the civil
liability provisions of the U.S. federal securities laws.

58
<PAGE> 63

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

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information or to make any
representation to you that is not contained in this prospectus. This prospectus
is not an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted. You should not under any circumstances assume that the
information in this prospectus is correct on any date after the date of this
prospectus.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary.............................. 1
Risk Factors......................... 7
Description of Seagram............... 10
Use of Proceeds...................... 15
Price Range of Common Shares......... 15
Capitalization....................... 16
Ratio of Earnings to Fixed Charges... 17
Selected Historical Consolidated
Financial Data..................... 18
Disclosure Regarding Forward-Looking
Information........................ 29
Accounting Treatment................. 29
Description of Units................. 30
Description of Capital Stock......... 45
United States Federal Income Tax
Consequences....................... 46
Canadian Income Tax Consequences..... 53
Underwriting......................... 55
Legal Matters........................ 56
Experts.............................. 56
Where You Can Find More Information.. 56
Jurisdiction of Seagram.............. 57
</TABLE>

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

Units
THE SEAGRAM COMPANY LTD.
% ADJUSTABLE
CONVERSION - RATE
EQUITY SECURITIES
------------------------
[SEAGRAM LOGO]
------------------------
GOLDMAN, SACHS & CO.
------------------------------------------------------
------------------------------------------------------
<PAGE> 64

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The amount of expenses in connection with the issuance and distribution of
the securities which are being newly registered hereby, other than underwriting
discounts and commissions, is estimated as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $ 319,700
Costs of printing and engraving............................. 300,000
Legal fees and expenses..................................... 350,000
Blue Sky fees and expenses.................................. 10,000
Accounting fees and expenses................................ 40,000
Trustee's fee............................................... 25,000
Rating agencies' fees....................................... 215,000
Miscellaneous............................................... 40,300
----------
Total.................................................. $1,300,000
==========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 124, Subsections (1) through (4), of the Canada Business
Corporations Act (the "Act") provides as follows:

"124. (1) Indemnification.--Except in respect of an action by or on
behalf of the corporation or body corporate to procure a judgment in its
favour, a corporation may indemnify a director or officer of the
corporation, a former director or officer of the corporation or a person
who acts or acted at the corporation's request as a director or officer of
a body corporate of which the corporation is or was a shareholder or
creditor, and his heirs and legal representatives, against all costs,
charges and expenses, including an amount paid to settle an action or
satisfy a judgment, reasonably incurred by him in respect of any civil,
criminal or administrative action or proceeding to which he is made a party
by reason of being or having been a director or officer of such corporation
or body corporate, if

(a) he acted honestly and in good faith with a view to the best
interests of the corporation; and

(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds
for believing that his conduct was lawful.

(2) Indemnification in derivative actions.--A corporation may with the
approval of a court indemnify a person referred to in subsection (1) in
respect of an action by or on behalf of the corporation or body corporate
to procure a judgment in its favour, to which he is made a party by reason
of being or having been a director or an officer of the corporation or body
corporate, against all costs, charges and expenses reasonably incurred by
him in connection with such action if he fulfils the conditions set out in
paragraphs (1)(a) and (b).

II-1
<PAGE> 65

(3) Indemnity as of right.--Notwithstanding anything in this section,
a person referred to in subsection (1) is entitled to indemnity from the
corporation in respect of all costs, charges and expenses reasonably
incurred by him in connection with the defense of any civil, criminal or
administrative action or proceeding to which he is made a party by reason
of being or having been a director or officer of the corporation or body
corporate, if the person seeking indemnity

(a) was substantially successful on the merits in his defense of the
action or proceeding, and

(b) fulfills the conditions set out in paragraphs (1)(a) and (b).

(4) Directors' and officers' insurance.--A corporation may purchase
and maintain insurance for the benefit of any person referred to in
subsection (1) against any liability incurred by him

(a) in his capacity as a director or officer of the corporation, except
where the liability relates to his failure to act honestly and in
good faith with a view to the best interests of the corporation; or

(b) in his capacity as a director or officer of another body corporate
where he acts or acted in that capacity at the corporation's
request, except where the liability relates to his failure to act
honestly and in good faith with a view to the best interests of the
body corporate."

Sections 7.02 and 7.03 of the General By-Laws of The Seagram Company Ltd.
provide as follows:

"Section 7.02--Indemnity. Without in any manner derogating from or
limiting the mandatory provisions of the Act but subject to the conditions
contained therein, the Corporation shall indemnify a director or officer of
the Corporation, a former director or officer of the Corporation, or a
person who acts or acted at the Corporation's request as a director or
officer of a body corporate of which the Corporation is or was a
shareholder or creditor, and his heirs and legal representatives, against
all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he is made
a party by reason of being or having been a director or officer of the
Corporation or such body corporate, if

(a) he acted honestly and in good faith with a view to the best
interests of the Corporation; and

(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he has reasonable grounds
for believing that his conduct was lawful.

Section 7.03--Insurance. Subject to the limitations contained in the
Act, the Corporation may purchase and maintain such insurance for the
benefit of the persons mentioned in Section 7.02, as the board may from
time to time determine."

Chapter 37 of the Business Corporation Law of Indiana, the state of
incorporation of Joseph E. Seagram & Sons, Inc., provides that, effective August
1, 1987, (i) unless limited by its articles of incorporation, a corporation
shall indemnify a director or officer (and may indemnify an employee or agent of
the corporation) who was wholly successful, on the merits or otherwise, in the
defense of any proceeding to which such person was a party because such person
is or was a director, officer, employee or agent of the corporation, as
II-2
<PAGE> 66

the case may be, against reasonable expenses incurred by such person in
connection with the proceeding and (ii) a corporation may indemnify an
individual made a party to a proceeding because the individual is or was a
director, officer, employee or agent of the corporation against liability
incurred in the proceeding if (1) the individual's conduct was in good faith;
and (2) the individual reasonably believed (A) in the case of conduct in the
individual's official capacity with the corporation, that the individual's
conduct was in its best interests; and (B) in all other cases, that the
individual's conduct was at least not opposed to its best interests; and (3) in
the case of any criminal proceeding, the individual either (A) had reasonable
cause to believe the individual's conduct was lawful; or (B) had no reasonable
cause to believe the individual's conduct was unlawful. Such indemnification
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any provision of the articles of incorporation, by-laws,
resolution, or other authorization adopted, after notice, by a majority vote of
all the voting shares then issued and outstanding.

Sections 43 through 50 of the By-Laws of Joseph E. Seagram & Sons, Inc.
provide as follows:

"43. The corporation (1) shall indemnify any person who is or was a
director, officer, or employee of the corporation or is or was serving at
the request of the corporation as a director, officer or employee of
another corporation, and (2) may indemnify any person who is or was an
agent of the corporation or is or was serving at the request of the
corporation as an agent of or participant in another corporation or as
director, officer, employee or agent of or participant in a partnership,
joint venture, trust or other enterprise, and who by reason of such fact is
or was a witness or a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, against any and all judgments,
liabilities, assessments, fines, amounts paid in settlement, costs, charges
and expenses (including attorneys' fees) of every kind and nature which
such person may actually and reasonably incur in connection with such
action, suit or proceeding (or any appeal therein). Notwithstanding the
foregoing, (a) in the event of an action, suit or proceeding brought by or
in the right of the corporation to procure a judgment in its favor, no
indemnification shall be made with respect to any claim, issue or matter as
to which the person seeking to be indemnified shall have been adjudged to
be liable for negligence or misconduct in the performance of his duty to
the corporation, unless and only to the extent that the court in which such
action or suit was brought or to which it was appealed shall determine upon
application that, despite the adjudication of liability, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for any such expenses which the court shall deem proper, and (b)
no indemnification shall be made with respect to any claim, issue or matter
as to which the person seeking to be indemnified shall have (i) been
adjudged by a court or administrative agency to have acted illegally or
improperly or (ii) made or agreed to make any payment in settlement unless
it is determined in accordance with Section 44 of these by-laws, that such
person acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The final disposition of any action, suit or
proceeding by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not of itself create a presumption
that a person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best

II-3
<PAGE> 67

interests of the corporation, nor, with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.

44. Any determination contemplated by clause (b) of Section 43 of
these by-laws shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the shareholders.

45. The indemnification provided herein shall not be deemed exclusive
of any other rights to which those seeking indemnification may be entitled
under any agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in any official capacity and as to action in
another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee, agent or
participant and shall inure to the benefit of the heirs, executors and
administrators of such a person.

46. The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of or participant in another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under the provisions of these by-laws, Section 25-202 of the General
Corporation Act of the State of Indiana or otherwise.

47. For purposes of Sections 43 through 46 of these by-laws, (1) Any
person who, while a director, officer or employee of the corporation or
while serving at the request of the corporation as a director, officer or
employee of a 'subsidiary' as hereinafter defined, acts or acted as a
fiduciary with respect to an employee benefit plan sponsored by the
corporation or by one or more subsidiaries, or with respect to a
multi-employer employee benefit plan contributed to by the corporation or
by one or more subsidiaries, shall be conclusively deemed to occupy such
fiduciary position by reason of the fact that such person is or was such
director, officer or employee. As used herein the term 'subsidiary' means a
corporation of which a majority of the shares of capital stock have the
power ordinarily and generally in the absence of contingencies to elect a
majority of the directors thereof is held by the corporation and/or one or
more subsidiaries.

(2) Any person who is or was a director, officer or employee of a
'wholly-owned subsidiary' as hereinafter defined shall be conclusively
deemed to occupy such position at the request of the corporation. As used
herein the term 'wholly-owned subsidiary' means any corporation of which
all shares of capital stock having the power ordinarily and generally in
the absence of contingencies to vote for the election of directors,
exclusive of director's qualifying shares, are held by the corporation
and/or one or more wholly-owned subsidiaries.

48. For the purposes of Sections 43 through 48 of these by-laws,
references to 'the corporation' include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a director, officer, employee
or agent of or participant in such a constituent corporation or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of or participant in another corporation,
partnership, joint venture, trust or other enterprise shall stand in the
same position under the provisions of such

II-4
<PAGE> 68

Sections with respect to the resulting or surviving corporation as he would
if he had served the resulting or surviving corporation in the same
capacity.

49. The corporation may pay expenses incurred in appearing as a
witness in or defending any action, suit or proceeding (whether civil,
criminal, administrative or investigative) before the final disposition
thereof upon receipt of an undertaking, by or on behalf of the person for
whose benefit such payment is to be made, to repay to the corporation any
excess of such payment over the indemnification from the corporation to
which such person ultimately shall be determined to be entitled under these
by-laws.

50. The invalidity or unenforceability of any provision of Sections 43
through 48 of these by-laws shall not affect the validity or enforceability
of the remaining provisions of such Sections."

The directors and officers of the Registrants are covered by insurance
policies indemnifying against certain liabilities, including certain liabilities
arising under the Securities Act, which might be incurred by them in such
capacities and against which they cannot be indemnified by the Registrants.

ITEM 16. LIST OF EXHIBITS.

Reference is made to information contained in the Exhibit Index filed as a
part of this Registration Statement.

ITEM 17. UNDERTAKINGS.

Each of the undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the foregoing
provisions, or otherwise, the Registrants have been advised that in
the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public

II-5
<PAGE> 69

policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

(4) It will reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.

II-6
<PAGE> 70

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, JOSEPH E.
SEAGRAM & SONS, INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF NEW YORK AND THE STATE OF NEW YORK, ON MAY 13,
1999.

JOSEPH E. SEAGRAM & SONS, INC.
(Registrant)

By /s/ JOHN R. PRESTON
------------------------------------
John R. Preston
Vice President and Treasurer

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED ON MAY 13, 1999 BY THE FOLLOWING PERSONS
IN THE CAPACITIES AT JOSEPH SEAGRAM & SONS, INC. INDICATED.

Principal Executive Officer:

<TABLE>
<C> <S>
* Director, President and Chief Executive
- --------------------------------------------------- Officer
(Edgar Bronfman, Jr.)
</TABLE>

Principal Financial Officer and Agent
for Service:

<TABLE>
<C> <S>
* Director, Vice Chairman and Chief Financial
- --------------------------------------------------- Officer
(Robert W. Matschullat)
</TABLE>

Principal Accounting Officer:

<TABLE>
<C> <S>
* Vice President and Controller
- ---------------------------------------------------
(Frank Merganthaler)
</TABLE>

II-7
<PAGE> 71

Directors:

<TABLE>
<C> <S>
* Director
- ---------------------------------------------------
(Edgar M. Bronfman)

* Director
- ---------------------------------------------------
(Charles R. Bronfman)

* Director
- ---------------------------------------------------
(Daniel R. Paladino)
</TABLE>

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

* By signing his name hereto, John R. Preston signs this Registration Statement
on behalf of each of the persons indicated above pursuant to a power of
attorney duly executed by such persons and filed with the Securities and
Exchange Commission.

By /s/ JOHN R. PRESTON
-----------------------------------
(John R. Preston, Attorney-in-fact)

II-8
<PAGE> 72

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE SEAGRAM
COMPANY LTD. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF MONTREAL, PROVINCE OF QUEBEC, CANADA, ON MAY 13,
1999.

THE SEAGRAM COMPANY LTD.
(Registrant)

By /s/ JOHN R. PRESTON
------------------------------------
John R. Preston
Vice President and Treasurer

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED ON MAY 13, 1999 BY THE FOLLOWING PERSONS
IN THE CAPACITIES AT THE SEAGRAM COMPANY LTD. INDICATED.

Principal Executive Officer:

<TABLE>
<C> <S>
* Director, President and Chief Executive
- --------------------------------------------------- Officer
(Edgar Bronfman, Jr.)
</TABLE>

Principal Financial Officer and Agent
for Service:

<TABLE>
<C> <S>
* Director, Vice Chairman and Chief Financial
- --------------------------------------------------- Officer
(Robert W. Matschullat)
</TABLE>

Principal Accounting Officer:

<TABLE>
<C> <S>
* Director, Vice Chairman and Chief Financial
- --------------------------------------------------- Officer
(Robert W. Matschullat)
</TABLE>

II-9
<PAGE> 73

Directors:

EDGAR M. BRONFMAN*
CHARLES R. BRONFMAN*
SAMUEL BRONFMAN II*
MATTHEW W. BARRETT*
LAURENT BEAUDOIN*
CORNELIS BOONSTRA*
RICHARD H. BROWN*
WILLIAM G. DAVIS*
ANDRE DESMARAIS*
BARRY DILLER *
MICHELE J. HOOPER*
DAVID L. JOHNSTON*
E. LEO KOLBER*
MARIE-JOSEE KRAVIS*
SAMUEL MINZBERG*
JOHN S. WEINBERG*
- -------------------------

By /s/ JOHN R. PRESTON
-----------------------------------
(John R. Preston, Attorney-in-fact)

II-10
<PAGE> 74

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement
3(a) -- Restated Articles of Incorporation of Joseph E. Seagram &
Sons, Inc. (incorporated by reference to Exhibit 4(a) to
Registration Statement on Form S-3 (No. 333-4136) of The
Seagram Company Ltd. and Joseph E. Seagram & Sons, Inc.).
(b) -- By-Laws of Joseph E. Seagram & Sons, Inc., as amended
(incorporated by reference to Exhibit 4(b) to Registration
Statement on Form S-3 (No. 333-4136) of The Seagram Company
Ltd. and Joseph E. Seagram & Sons, Inc.).
(c) -- Articles of Amalgamation dated February 1, 1995 between The
Seagram Company Ltd. and Centenary Distillers Ltd.
(incorporated by reference to Exhibit 3(a) of The Seagram
Company Ltd.'s Annual Report on Form 10-K for the fiscal
year ended January 31, 1995), as amended by Certificate and
Articles of Amendment dated May 31, 1995 (incorporated by
reference to Exhibit 3(a) of The Seagram Company Ltd.'s
Quarterly Report on Form 10-Q for the fiscal quarter ended
April 30, 1995).
(d) -- General By-Laws of The Seagram Company Ltd., as amended
(incorporated by reference to Exhibit 3(b) to The Seagram
Company Ltd.'s Quarterly Report on Form 10-Q for the fiscal
quarter ended April 30, 1996.
4(a) -- Indenture dated as of September 15, 1991, among Joseph E.
Seagram & Sons, Inc., The Seagram Company Ltd. and The Bank
of New York, as Trustee (incorporated by reference to
Exhibit 4(g) of the Current Report on Form 8-K of The
Seagram Company Ltd. dated November 8, 1991, as amended).
(b) -- Form of Master Unit Agreement, between The Seagram Company
Ltd. and The Bank of New York as agent.
(c) -- Pledge Agreement, between The Seagram Company Ltd. and The
Bank of New York, as Collateral Agent.
(d) -- Form of Unit.
(e) -- Form of Note.
5(a) -- Opinion and Consent of Simpson Thacher & Bartlett.
(b) -- Opinion and Consent of Goodman Phillips & Vineberg S.E.N.C.
(c) -- Opinion and Consent of Barnes & Thornburg.
12(a)* -- Computation of ratio of earnings to fixed charges -- The
Seagram Company Ltd.
(b)* -- Computation of ratio of earnings to fixed charges -- Joseph
E. Seagram & Sons, Inc.
23(a)* -- Consent of PricewaterhouseCoopers LLP, independent
accountants, with respect to the financial statements of The
Seagram Company Ltd.
(b)* -- Consent of KPMG Accountants N.V., independent accountants,
with respect to the financial statements of PolyGram N.V.
(c) -- Consents of Simpson Thacher & Bartlett, Goodman Phillips &
Vineberg S.E.N.C. and Barnes & Thornburg are included in
their opinions filed as Exhibits 5(a), 5(b) and 5(c),
respectively.
</TABLE>
<PAGE> 75

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <C> <S>
24(a)* -- Power of Attorney -- The Seagram Company Ltd.
(b)* -- Power of Attorney -- Joseph E. Seagram & Sons, Inc.
25 * -- Statement of Eligibility of Trustee.
</TABLE>

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

* Filed herewith.

<PAGE> 1

EXHIBIT 12(A)

THE SEAGRAM COMPANY LTD.
AND SUBSIDIARY COMPANIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNITED STATES DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO FORMA
--------------------
FIVE-MONTH FISCAL FISCAL NINE
FISCAL YEARS TRANSITION YEARS NINE MONTHS YEAR MONTHS
ENDED PERIOD ENDED ENDED ENDED ENDED ENDED
JANUARY 31, JUNE 30, JUNE 30, MARCH 31, JUNE 30, MARCH 31,
------------------ ------------ --------------- -------------- -------- ---------
1994 1995 1996 1996 1997 1998 1998 1999 1998 1999
---- ---- ---- ------------ ------ ------ ------ ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing
operations, before tax..... $347 $297 $240 $ (6) $ 726 $1,611 $1,148 $(504) 962 (198)
Add (deduct):
Dividends from equity
companies.................. 2 4 65 46 107 56 49 75 66 75
Fixed charges................ 374 432 414 173 376 406 245 442 796 685
Interest capitalized, net of
amortization............... -- (1) (2) (4) (2) (2) (1) (1) (6) (1)
---- ---- ---- ---- ------ ------ ------ ----- ------ -----
Earnings available for fixed
charges.................... $723 $732 $717 $209 $1,207 $2,071 $1,441 $ 12 $1,818 $ 561
---- ---- ---- ---- ------ ------ ------ ----- ------ -----
Fixed charges:
Interest..................... 351 408 378 151 326 357 207 393 727 618
Portion of rent expense
deemed to represent
interest factor............ 23 24 36 22 50 49 38 49 69 67
---- ---- ---- ---- ------ ------ ------ ----- ------ -----
Fixed charges................ 374 432 414 173 376 406 245 442 796 685
==== ==== ==== ==== ====== ====== ====== ===== ====== =====
Ratio of earnings to fixed
charges.................... 1.93 1.69 1.73 1.21 3.21 5.10 5.88 (a) 2.28 (b)
==== ==== ==== ==== ====== ====== ====== ===== ====== =====
</TABLE>

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

(a): Fixed charges exceeded earnings by $430 million for the nine month period
ended March 31, 1999.

(b): Pro forma fixed charges exceed pro forma earnings by $124 million for the
nine month period ended March 31, 1999.

<PAGE> 1

EXHIBIT 12(B)

JOSEPH E. SEAGRAM & SONS, INC.
AND SUBSIDIARY COMPANIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNITED STATES DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FIVE-MONTH FISCAL
TRANSITION YEARS NINE MONTHS
FISCAL YEARS PERIOD ENDED ENDED ENDED
ENDED JANUARY 31, JUNE 30, JUNE 30, MARCH 31,
--------------------- ------------ ------------- -------------
1994 1995 1996 1996 1997 1998 1998 1999
----- ----- ----- ------------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing
operations, before tax...... $ 169 $ 172 $ 82 $ (37) $ 122 $ 17 $ 41 $ 19
Add (deduct):
Dividends from equity
companies................... 1 1 3 -- 1 2 1 1
Fixed charges................. 165 183 165 70 172 182 122 226
Interest capitalized, net of
amortization................ -- (1) -- -- (1) -- -- --
----- ----- ----- ----- ----- ----- ----- -----
Earnings available for fixed
charges..................... $ 335 $ 355 $ 250 $ 33 $ 294 $ 201 $ 164 $ 246
----- ----- ----- ----- ----- ----- ----- -----
Fixed charges:
Interest...................... 146 163 145 65 159 170 113 217
Portion of rent expense deemed
to represent interest
factor...................... 19 20 20 5 13 12 9 9
----- ----- ----- ----- ----- ----- ----- -----
Fixed charges................. 165 183 165 70 172 182 122 226
===== ===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed
charges..................... 2.03 1.94 1.52 (a) 1.71 1.10 1.34 1.09
===== ===== ===== ===== ===== ===== ===== =====
</TABLE>

- ---------------
(a) Fixed charges exceed earnings by $37 million for the transition period.

<PAGE> 1

EXHIBIT 23(A)

CONSENT OF INDEPENDENT ACCOUNTANTS
OF THE SEAGRAM COMPANY LTD.

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated August 12, 1998, except as to Note 1
which is as of August 25, 1998, relating to the financial statements, which
appears in The Seagram Company Ltd.'s Annual Report on Form 10-K for the year
ended June 30, 1998, as amended. We also consent to the incorporation by
reference of our report dated August 12, 1998 relating to the financial
statement schedule, which appears in such Annual Report on Form 10-K, as
amended. We also consent to the references to us under the headings "Experts"
and "Selected Historical Consolidated Financial Data" in such Registration
Statement.

PricewaterhouseCoopers LLP
New York, New York
May 12, 1999

<PAGE> 1

EXHIBIT 23(B)

CONSENT OF INDEPENDENT AUDITORS OF POLYGRAM N.V.

We consent to incorporation by reference in the Prospectus constituting
part of the Registration Statement on Form S-3 of The Seagram Company Ltd. and
Joseph E. Seagram & Sons, Inc. of our Report dated February 11, 1998, relating
to the Consolidated Balance Sheets of PolyGram N.V. as of December 31, 1996 and
1997, and the related Consolidated Statements of Income, Consolidated Statements
of Cash Flows and Consolidated Statements of Changes in Shareholders' Equity for
each of the years in the three-year period ended December 31, 1997 of PolyGram
N.V., incorporated by reference in The Seagram Company Ltd.'s Form 8-K dated
August 25, 1998, as amended. We also consent to the reference to our firm under
the heading "Experts" in such Prospectus.

KPMG Accountants N.V.

Amsterdam, The Netherlands
May 12, 1999

<PAGE> 1
EXHIBIT 24(a)

POWER OF ATTORNEY

THE SEAGRAM COMPANY LTD.

KNOW ALL MEN BY THESE PRESENTS that the undersigned, THE SEAGRAM COMPANY
LTD., a Canadian corporation (the "Corporation"), and each of the undersigned
directors and officers of the Corporation, hereby constitute and appoint EDGAR
M. BRONFMAN, CHARLES R. BRONFMAN, EDGAR BRONFMAN, JR., ROBERT W. MATSCHULLAT,
JOHN R. PRESTON, DANIEL R. PALADINO and MICHAEL C.L. HALLOWS, and each of them
severally, his or her true and lawful attorneys and agents, with power to act
with or without the others and with full power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents and each of them may deem necessary
or desirable to enable the Corporation to comply with the United States
Securities Act of 1933, as amended, and any rules, regulations and
requirements of the United States Securities and Exchange Commission (the
"Commission") thereunder in connection with the registration under such Act of
securities to be issued by the Corporation and by any direct or indirect
subsidiary of the Corporation, the obligations of which may be guaranteed by
the Corporation, and registered by one or more Registration Statements to each
of which this Power of Attorney will be an exhibit (the "Registration
Statements"), including specifically, but without limiting the generality of
the foregoing, power and authority to sign the name of the Corporation and the
name of the undersigned, individually and in his or her capacity as a director
or officer of the Corporation, to the Registration Statements, to any and all
amendments, including post-effective amendments, to the Registration
Statements, and to any and all instruments or documents filed as a part of or
in connection with the Registration Statements and/or any such amendments, and
to file with the Commission the Registration Statements, any and all amendments
thereto, and any and all instruments or documents filed as a part of or in
connection with the Registration Statements and/or any such amendments; and
each of the undersigned hereby ratifies and confirms all that said attorneys
and agents and each of them shall do or cause to be done by virtue hereof.

This Power of Attorney may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which together shall be
deemed one and the same instrument.

IN WITNESS WHEREOF each of the undersigned has subscribed these presents
this 12th day of May, 1999.

THE SEAGRAM COMPANY LTD.

By:/S/ Edgar Bronfman, Jr.
-------------------------------------
Edgar Bronfman, Jr.
President and Chief Executive Officer

<PAGE> 2

/S/ Edgar M. Bronfman
------------------------
Edgar M. Bronfman

/S/ Charles R. Bronfman
------------------------
Charles R. Bronfman

/S/ Edgar Bronfman, Jr.
------------------------
Edgar Bronfman, Jr.

/S/ Samuel Bronfman II
------------------------
Samuel Bronfman II

/S/ Matthew W. Barrett
------------------------
Matthew W. Barrett

/S/ Laurent Beaudoin
------------------------
Laurent Beaudoin

/S/ Cornelis Boonstra
------------------------
Cornelis Boonstra

/S/ Richard H. Brown
------------------------
Richard H. Brown

/S/ William G. Davis
------------------------
William G. Davis

/S/ Andre Desmarais
------------------------
Andre Desmarais

/S/ Barry Diller
------------------------
Barry Diller

<PAGE> 3
3

/S/ Michele J. Hooper
-------------------------
Michele J. Hooper

/S/ David L. Johnston
-------------------------
David L. Johnston

/S/ E. Leo Kolber
-------------------------
E. Leo Kolber

/S/ Marie-Josee Kravis
-------------------------
Marie-Josee Kravis

/S/ Robert W. Matschullat
-------------------------
Robert W. Matschullat

/S/ Samuel Minzberg
-------------------------
Samuel Minzberg

/S/ John S. Weinberg
-------------------------
John S. Weinberg

<PAGE> 1

EXHIBIT 24(b)

POWER OF ATTORNEY

JOSEPH E. SEAGRAM & SONS, INC.

KNOW ALL MEN BY THESE PRESENTS that the undersigned, JOSEPH E. SEAGRAM &
SONS, INC., an Indiana corporation (the "Corporation"), and each of the
undersigned directors and officers of the Corporation, hereby constitute and
appoint EDGAR M. BRONFMAN, CHARLES R. BRONFMAN, EDGAR BRONFMAN, JR., ROBERT W.
MATSCHULLAT, JOHN R. PRESTON and DANIEL R. PALADINO, and each of them severally,
his or her true and lawful attorneys and agents, with power to act with or
without the others and with full power of substitution and resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents and each of them may deem necessary or desirable to enable
the Corporation to comply with the United States Securities Act of 1933, as
amended, and any rules, regulations and requirements of the United States
Securities and Exchange Commission (the "Commission") thereunder in connection
with the registration under such Act of securities to be issued by the
Corporation and The Seagram Company Ltd., and registered by one or more
Registration Statements to each of which this Power of Attorney will be an
exhibit (the "Registration Statements"), including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name
of the Corporation and the name of the undersigned, individually and in his or
her capacity as a director or officer of the Corporation, to the Registration
Statements, to any and all amendments, including post-effective amendments, to
the Registration Statements, and to any and all instruments or documents filed
as a part of or in connection with the Registration Statements and/or any such
amendments, and to file with the Commission the Registration Statements, any and
all amendments thereto, and any and all instruments or documents filed as a part
of or in connection with the Registration Statements and/or any such amendments;
and each of the undersigned hereby ratifies and confirms all that said attorneys
and agents and each of them shall do or cause to be done by virtue hereof.

This Power of Attorney may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument.

IN WITNESS WHEREOF each of the undersigned has subscribed these presents
this 12th day of May, 1999.

JOSEPH E. SEAGRAM & SONS, INC.

By: /S/ Edgar Bronfman, Jr.
-------------------------------------
Edgar Bronfman, Jr.
President and Chief Executive Officer

<PAGE> 2
2

/S/ Edgar M. Bronfman
----------------------
Edgar M. Bronfman

/S/ Charles R. Bronfman
----------------------
Charles R. Bronfman

/S/ Edgar Bronfman, Jr.
----------------------
Edgar Bronfman, Jr.

/S/ Robert W. Matschullat
------------------------
Robert W. Matschullat

/S/ Daniel R. Paladino
----------------------
Daniel R. Paladino

<PAGE> 1
Exhibit 25

========================================================================
FORM T-1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|

THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)

New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)

One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)

---------------
The Seagram Company Ltd. -
La Compagnie Seagram Ltee
(Exact name of obligor as specified in its charter)

Canada None
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)

1430 Peel Street
Montreal, Quebec, Canada H3A 1S9
(Address of principal executive offices) (Zip code)

Joseph E. Seagram & Sons, Inc.
(Exact name of obligor as specified in its charter)

Indiana 13--1285240
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)

375 Park Avenue
New York, New York 10152
(Address of principal executive offices) (Zip code)

-------------
Debt Securities
(Title of the indenture securities)

========================================================================

<PAGE> 2

1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.

- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>

Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203

Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
</TABLE>
Federal Deposit Insurance Corporation Washington, D.C. 20429

New York Clearing House Association New York, New York 10005

(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

Yes.

2. AFFILIATIONS WITH OBLIGOR.

IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

None.

16. LIST OF EXHIBITS.

EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).

1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)

4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)

6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)

7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.

<PAGE> 3

SIGNATURE

Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 12th day of May, 1999.

THE BANK OF NEW YORK

By: /s/ MICHELE L. RUSSO
-------------------
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER

<PAGE> 4

CONSOLIDATED REPORT OF CONDITION OF

THE BANK OF NEW YORK

OF ONE WALL STREET, NEW YORK, N.Y. 10286
AND FOREIGN AND DOMESTIC SUBSIDIARIES,

a member of the Federal Reserve System, at the close of business December 31,
1998, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.

<TABLE>
<CAPTION>
DOLLAR
AMOUNTS
IN THOUSANDS
--------------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........ $ 3,951,273
Interest-bearing balances................................. 4,134,162
Securities:
Held-to-maturity securities............................... 932,468
Available-for-sale securities............................. 4,279,246
Federal funds sold and Securities purchased under agreements
to resell................................................. 3,161,626
Loans and lease financing receivables:
Loans and leases, net of unearned income.................. 37,861,802
LESS: Allowance for loan and lease losses................. 619,791
LESS: Allocated transfer risk reserve..................... 3,572
Loans and leases, net of unearned income, allowance, and
reserve................................................... 37,238,439
Trading Assets.............................................. 1,551,556
Premises and fixed assets (including capitalized leases).... 684,181
Other real estate owned..................................... 10,404
Investments in unconsolidated subsidiaries and associated
companies................................................. 196,032
Customers' liability to this bank on acceptances
outstanding............................................... 895,160
Intangible assets........................................... 1,127,375
Other assets................................................ 1,915,742
Total assets................................................ $60,077,664
</TABLE>
<PAGE> 5

<TABLE>
<CAPTION>
DOLLAR
AMOUNTS
IN THOUSANDS
--------------
<S> <C>
LIABILITIES
Deposits:
In domestic offices....................................... $27,020,578
Noninterest-bearing....................................... 11,271,304
Interest-bearing.......................................... 15,749,274
In foreign offices, Edge and Agreement subsidiaries, and
IBFs................................................... 17,197,743
Noninterest-bearing....................................... 103,007
Interest-bearing.......................................... 17,094,736
Federal funds purchased and Securities sold under agreements
to repurchase............................................. 1,761,170
Demand notes issued to the U.S. Treasury.................... 125,423
Trading liabilities......................................... 1,625,632
Other borrowed money:
With remaining maturity of one year or less............... 1,903,700
With remaining maturity of more than one year through
three years............................................ 0
With remaining maturity of more than three years.......... 31,639
Bank's liability on acceptances executed and outstanding.... 900,390
Subordinated notes and debentures........................... 1,308,000
Other liabilities........................................... 2,708,852
Total liabilities........................................... 54,583,127
EQUITY CAPITAL
Common stock................................................ 1,135,284
Surplus..................................................... 764,443
Undivided profits and capital reserves...................... 3,542,168
Net unrealized holding gains (losses) on available-for-sale
securities................................................ 82,367
Cumulative foreign currency translation adjustments......... (29,725)
Total equity capital........................................ 5,494,537
Total liabilities and equity capital........................ $60,077,664
</TABLE>
<PAGE> 6

I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

Thomas J. Mastro

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

Directors

Thomas A. Reyni
Gerald L. Hassell
Alan R. Griffith