<PAGE> 1
NOTICE OF ANNOUNCEMENT OF SETTLEMENT RATES FOR
7.50% ADJUSTABLE CONVERSION-RATE EQUITY SECURITY UNITS
December 21, 2000
Holders of 7.50% Adjustable Conversion-rate Equity Security Units:
Pursuant to Section 507 of the Purchase Contract Agreement, dated as of
June 21, 1991 (the "Purchase Contract Agreement"), between The Seagram Company
Ltd. ("Seagram") and The Bank of New York, as purchase contract agent, as
supplemented by the Supplemental Agreement, dated as of December 8, 2000,
entered into by Vivendi Universal, Seagram hereby notifies you that, as a result
of the combination among Seagram, Vivendi and CANAL+ (the "Vivendi merger") on
December 8, 2000 to form Vivendi Universal and as required by the Purchase
Contract Agreement, the settlement rate for its 7.50% Adjustable Conversion-rate
Equity Security Units (the "units") has been fixed at 0.7535 American depositary
shares of Vivendi Universal ("Vivendi Universal ADSs") per purchase contract.
The settlement rate has been calculated pursuant to the provisions set
forth in the Purchase Contract Agreement. Under the terms of the Purchase
Contract Agreement, the combination of Seagram with Vivendi and CANAL+
constituted a "reorganization event." Upon such an event, each holder of units
became entitled to receive, on the stock purchase date with respect to each
purchase contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such reorganization event by a holder of
Seagram common shares, adjusted to reflect the settlement rate, as if the stock
purchase date had occurred immediately prior to the reorganization event.
Holders of Seagram common shares received 0.8 Vivendi Universal ADSs for each
Seagram common share (the "exchange ratio") in the Viviendi merger. Accordingly,
Seagram has determined that:
(A) the stock purchase date for purposes of making such
calculation is December 8, 2000, the date the Vivendi merger
became effective;
(B) the average trading price (the average of the closing prices
per share of Seagram common stock on each of the twenty
consecutive trading days ending on the last trading day
immediately preceding the assumed stock purchase date) was
$53.2188 per share;
(C) because the average trading price of $53.2188 is less than the
threshold appreciation price ($60.15) but greater than the
stated amount ($50.125), the settlement rate is a fractional
share per purchase contract equal to the stated amount divided
by the average trading price (rounded upward or downward to
the nearest 1/10,000th of a share), and thus the settlement
rate is equal to 0.9419 of a share of Seagram common stock per
purchase contract; and
<PAGE> 2
2
(D) as a result of the Vivendi merger, holders of units are now
entitled to receive 0.7535 Vivendi Universal ADSs per purchase
contract based on a settlement rate of 0.9419 of a share of
Seagram common stock per purchase contract and the exchange
ratio of 0.8 Vivendi Universal ADSs for each Seagram common
share as set forth below:
<TABLE>
<S> <C> <C> <C>
Settlement Rate x Exchange Ratio = 0.9419 Common Shares x 0.8 Vivendi Universal ADSs = 0.7535 Vivendi Universal ADSs
-------------------- -------------------------- -----------------------------
Purchase Contract 1 Common Share Purchase Contract
</TABLE>
As a result of the Vivendi merger and as required by the Purchase
Contract Agreement, the early settlement rate for the units has been fixed at
0.6667 Vivendi Universal ADSs per purchase contract. As specified in the
Purchase Contract Agreement, this early settlement rate is calculated by
multiplying the exchange ratio (0.8 Vivendi Universal ADSs per Seagram common
share) by the pre-reorganization event early settlement rate (0.83333 of a
Seagram common share per purchase contract).
The final settlement date for the purchase contracts underlying the
units remains June 21, 2002.
