SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
COMMISSION FILE NUMBER
VIVENDI UNIVERSAL 401(k) PLAN
800 Third Avenue
New York, New York 10022
(Full title of the plan and the address of the plan)
Vivendi Universal
42, avenue de Friedland
75380 Paris Cedex 08, France
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
REQUIRED INFORMATION
1. Not Applicable.
2. Not Applicable.
3. Not Applicable.
4. The Vivendi Universal 401(k) Plan (the "Vivendi Universal Plan") is
subject to the requirements of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Attached hereto are the
financial statements of the Vivendi Universal Plan for the fiscal
year ended December 31, 2003 prepared in accordance with the
financial reporting requirements of ERISA.
EXHIBITS
1. Financial statements of the Vivendi Universal Plan for the fiscal
year ended December 31, 2003 prepared in accordance with the
financial reporting requirements of ERISA.
2. Consent of McGladrey & Pullen, LLP, independent accountants.
3. Certification furnished pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on their behalf by the undersigned
hereunto duly authorized.
VIVENDI UNIVERSAL 401(k) PLAN
By /s/ Robert Greenberg
--------------------------------
Robert Greenberg
Senior Vice President - Global
Compensation and Benefits,
Vivendi Universal US Holding Co.
Date: July 9, 2004
Exhibit 1
VIVENDI UNIVERSAL 401(k) PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2003
CONTENTS
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Independent Auditor's Report 1
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Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 11
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INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of
Vivendi Universal 401(k) Plan
We have audited the accompanying statements of net assets available for
benefits of Vivendi Universal 401(k) Plan as of December 31, 2003 and 2002,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 2003. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial status of Vivendi Universal 401(k) Plan
as of December 31, 2003 and 2002, and the changes in its financial status for
the year ended December 31, 2003 in conformity with United States generally
accepted accounting principles.
New York, New York /s/ McGladrey & Pullen, LLP
June 23, 2004 ---------------------------
McGladrey & Pullen, LLP is an independent member firm of
RSM International, an affiliation of independent accounting
and consulting firms.
1
VIVENDI UNIVERSAL 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
2003 2002
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Net assets held in trust by Vanguard
Fiduciary Trust Company (Note 7) $ 454,496,869 $ 373,446,560
----------------------------------
Contribution receivable:
Employer 4,271 -
Participants 11,005 -
----------------------------------
15,276 -
----------------------------------
Net Assets Available for Benefits $ 454,512,145 $ 373,446,560
==================================
See Notes to Financial Statements.
2
VIVENDI UNIVERSAL 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2003
--------------------------------------------------------------------------------
Additions in net assets attributed to:
Investment income:
Net appreciation in fair value of investments (Note 7) $ 60,193,197
Interest and dividend income 11,632,525
---------------
71,825,722
---------------
Contributions:
Participating employees 32,160,577
Participating companies 11,495,862
---------------
43,656,439
---------------
Transfer of assets from affiliated plans (Note 2) 190,193
Other additions 327,274
---------------
Total additions 115,999,628
---------------
Deductions from net assets attributed to:
Benefits paid (34,934,043)
---------------
Total deductions (34,934,043)
---------------
Net increase in net assets available for benefits 81,065,585
---------------
Net assets available for benefits:
Beginning of year 373,446,560
---------------
End of year $ 454,512,145
===============
See Notes to Financial Statements.
3
VIVENDI UNIVERSAL 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 1. DESCRIPTION
The following brief description of Vivendi Universal 401(k) Plan (the "Plan")
is provided for general information purposes only. Participants should refer
to the plan document for more complete information.
General: The Plan is a defined contribution plan established as of August 1,
1985 by Joseph E. Seagram, & Sons, Inc. (the "Company") and is subject to the
applicable provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
The Plan was administered by Joseph E. Seagram & Sons, Inc. through an
Administrative Committee appointed by the Board of Directors of the Company.
Effective October 15, 2001, the sponsorship and administration of the Plan was
assigned to Vivendi Universal US Holding Co. ("VU"). VU sponsors and
administers the Plan through an Administrative Committee appointed by the
Board of Directors of VU.
Eligibility: The Plan covers all employees of VU and certain of its United
States subsidiaries (collectively, the "Participating Companies") except for
the following:
o Employees covered by a collective bargaining agreement (unless the
agreement provides for membership in the 401(k) Plan).
o Employees classified as an independent contractor by VU and
employment taxes are not withheld from their compensation.
o Employees classified as a leased employee by VU.
o Non-resident aliens who receive no earned income from VU, which
constitutes income from sources within the United States as defined
in the Internal Revenue Code (with the exemption of certain
grandfathered employees).
Contributions: Each participant's account is credited with the participant's
contribution and the company's matching contribution. Plan earnings are
allocated based on participant account balances, as defined. Non-highly
compensated employees, as defined by the Plan, may elect to contribute to
their pre-tax accounts on a pre-tax basis ("Pre-Tax Contributions") and/or to
their after-tax accounts on an after-tax basis ("After-Tax Contributions")
through payroll deductions of 1% to 17% (in the aggregate) of their annual
salary (as defined in the Plan), in multiples of 1%, in any combination.
Highly compensated employees, as defined by the Plan may contribute up to 17%
in the aggregate to their pre-tax and after-tax accounts with a limit of 10%
of their pre-tax account. Pre-tax contributions and after-tax contributions
are subject to limitations imposed by federal laws for qualified retirement
plans.
The Plan provides for matching contributions by the Participating Companies
payable to the participants' company match accounts. The Participating
Companies matching contribution is equal to 60% of the first 6% of the
Participants' pre-tax and after-tax contributions made during each payroll
period. The Participating Companies contributions are subject to limitations
imposed by federal laws for qualified retirement plans.
Participants may elect to have their contributions and matching contributions
invested in a variety of investment funds. Investment elections or
contributions rate changes can be changed on any business day and must be made
in increments of 1%.
The Plan in its discretion, will accept into participants' rollover accounts
cash received by participants from a qualified plan within the time prescribed
by applicable law ("Rollover Contributions").
4
NOTE 1. DESCRIPTION OF THE PLAN (CONTINUED)
The Participating Companies may make discretionary contributions in an amount
to be determined by them. The Participating Companies have not made
discretionary contributions since the inception of the Plan.
Vesting: A participant in the Plan always has a fully vested interest in the
value of his or her contributions and rollover accounts. He or she has a
non-forfeitable right to the value of his or her company match account upon
the attainment of age 60, disability (as defined in the Plan) or death. Upon
termination of employment for any other reason, a participant's vests in the
funds held in his or her company match account in accordance with the
following vesting schedule:
YEARS OF SERVICE VESTED PERCENTAGE
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Less than 1 0%
At least 1, but less than 2 20%
At least 2, but less than 3 40%
At least 3, but less than 4 60%
At least 4, but less than 5 80%
5 or more 100%
Upon termination of employment for reasons other than the attainment of age
60, disability or death of a participant who was not fully vested in his or
her company match account, the nonvested portion of the participant's company
match account shall be forfeited. Any account forfeited shall be applied to
reduce the Participating Companies' contributions in accordance with the terms
of the Plan. Any amount forfeited shall be restored if the participant is
re-employed by a Participating Company before incurring a five year break in
service and if the participant repays to the Plan (within five years after his
or her reemployment commencement date) an amount in cash equal to the full
amount distributed to him or her from the Plan on account of termination of
employment, excluding amounts from the after-tax and rollover accounts at the
participant's election.
Forfeitures: The nonvested interest of terminated participants serves to
reduce Participating Company contributions in accordance with the terms of the
Plan. The Participating Companies used approximately $996,000 in forfeitures
to offset their contributions during the year ended December 31, 2003.
Payment of Benefits: Upon termination of employment, after the attainment of
age 60 or for reason of disability or death, the participant or his or her
beneficiary shall receive the value of his or her accounts. However, if the
termination of employment is for reasons other than the attainment of age 60,
disability or death, the participant shall receive only the value of the
vested funds in his or her accounts. Benefits are recorded when paid.
5
NOTE 1. DESCRIPTION OF THE PLAN (CONTINUED)
In accordance with the procedures established by the Administrative Committee
and the terms of the Plan, certain terminated employees may elect to defer
final distribution from the Plan. Upon such election, the amount of such
participants' vested interest in the Plan is entitled to continue to receive
investment income and losses and is held by the Trustee until the date of
distribution as elected by the participants. Prior to termination of
employment, the participant may withdraw amounts from the participant's
accounts in accordance with the provisions of the Plan.
Loans to Participants: A participant may apply for loans up to the lesser of
$50,000 or 50% of the value of the vested portion of the participant's
accounts. The minimum loan amount is $1,000. The maximum repayment terms are 5
years for general purpose loans and 25 years for principal residence loans,
except that primary residence loans requested after December 31, 1999 will
have a maximum repayment term of fifteen years. Applications for loans must be
approved by Vanguard Fiduciary Trust Company, the plan trustee ("Trustee").
The amounts borrowed are transferred from the investment funds in which the
participant's accounts are currently invested. Repayment and interest thereon
are credited to the participant's current investment funds through payroll
deductions made each pay period. The interest rate for loans is based on the
prime rate on the first business day of the month in which the loan is made
plus one percentage point.
NOTE 2. SIGNIFICANT PLAN CHANGES
Effective January 1, 2002, Vivendi Universal US Holding Co. changed the name
and amended the Joseph E. Seagram & Sons, Inc. Master Trust Agreement and
changed the Plan name from The Seagram 401(k) Plan to Vivendi Universal 401(k)
Plan. As a result of the plan name change, any prior reference to "Seagram"
was changed to "Vivendi Universal" effective January 1, 2002.
In December 2001, Seagram's wines and spirits division was acquired by Diageo
S.A. and Pernod Ricard PLC. Hence, most of the participants' net assets from
the acquired division were transferred out from the Plan on February 19, 2002.
Effective March 28, 2002, Vivendi Universal 401(k) Plan - Universal Employees,
Vivendi Universal 401(k) Plan - Uni Employees, and Vivendi Universal 401(k)
Plan - Deferred Savings and Investment Plan for Employees (the "Polygram
Plan") were merged into Vivendi Universal 401(k) Plan.
On March 28, 2002, Vivendi Universal 401(k) Plan changed its trustee and
recordkeeper from Bank of New York and Hewitt Associates to Vanguard Fiduciary
Trust Company.
Effective May 1, 2002, the Interscope Records 401(k) Plan was merged into
Vivendi Universal 401(k) Plan. On June 1, 2002, the assets of Vivendi
Universal 401(k) Plan II were added to the Master Trust. Effective December
31, 2002, Vivendi Universal 401(k) Plan II merged into Vivendi Universal
401(k) Plan.
On October 8, 2003 Vivendi Universal, S.A. entered into a Business Combination
Agreement ("BCA") by and among General Electric Company, National Broadcasting
Company Holding, Inc., National Broadcasting Company, Inc. and Universal
Studio Holding III Corp. (collectively, the "Parties") to form NBC Universal
("Joint Venture"). On May 11, 2004 ("Closing Date"), the parties closed the
transactions contemplated by the BCA. As a result of such transactions,
Vivendi Universal Entertainment LLLP employees who were actively employed as
of the Closing Date became fully vested in their account balances and eligible
to receive distributions of their accounts balances.
6
NOTE 2. SIGNIFICANT PLAN CHANGES (CONTINUED)
Detail of asset transfers in and out of the Plan during the year ended
December 31, 2002 was as follows:
Total net assets transferred-in from:
Vivendi Universal 401 (k) - Uni Employees $ 401,325
Vivendi Universal 401 (k) - Universal Employees 346,045,494
Vivendi Universal 401 (k) - Deferred Savings
and Investment Plan for Employees 52,658,427
Vivendi Universal 401 (k) Plan II 41,218,331
Interscope 401 (k) Plan 2,543,468
---------------
442,867,045
---------------
Total net assets transferred-out to:
Diageo S.A./Pernod Ricard PLC -
---------------
NET ASSET TRANSFERS $442,867,045
===============
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed in the preparation of the financial
statements of the Plan conform with accounting principles generally accepted
in the United States of America. The more significant accounting policies are:
Basis of Accounting: The accompanying financial statements of the Plan are
maintained on the accrual basis of accounting.
Use of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of additions and deductions during the reporting period. Actual results may
differ from those estimates.
Investment Valuation and Income Recognition: The assets are held in trust by
Trustee in the Vivendi Universal US Holding Co. Master Trust Agreement (Master
Trust), amended and restated on January 1, 2002, which also includes assets of
the 401(k) plans of Vivendi Universal's affiliates, Vivendi Universal
Entertainment LLLP, Spencer Gifts Inc., Vivendi Universal Games, Inc., and
MP3.com.
Investment securities are recorded and valued as follows: United States
government obligations are recorded at fair value based on the current market
yields; temporary investments in short-term investment funds are recorded at
cost which in the normal course approximates market value; securities
representing units of other funds are recorded at net asset value of shares
held by the Plan at year-end; and the Vivendi Universal ADSs are stated at the
closing price reported on the composite tape of the New York Stock Exchange on
the valuation date.
7
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Purchases and sales of securities are accounted for on a trade date basis with
the average cost basis used for determining the cost of investments sold.
Interest income is recorded on an accrual basis. Income on securities
purchased under agreements to resell is accounted for at the repurchase rate.
Payment of Benefits: Benefits are recorded when paid.
NOTE 4. TAX STATUS OF PLAN
The Internal Revenue Service has ruled by a letter dated September 10, 2002
that the Plan is qualified under Section 401(a) of the Internal Revenue
Service Code, as amended. So long as the Plan continues to be so qualified, it
is not subject to Federal income taxes. Although the Plan has been amended
since receiving the determination letter, the Plan Administrator and the
Plan's tax counsel believe the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
NOTE 5. RELATED PARTY TRANSACTIONS
Some of the Plan expenses including trustee, custodial, and certain
recordkeeping fees, are paid by VU, and personnel and facilities of VU are
used by the Plan at no charge.
NOTE 6. PLAN TERMINATION
Although it has not expressed an intent to do so, the Board of Directors of VU
has the right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In case of
termination, the rights of participants to their accounts shall be fully
vested as of the date of termination.
During 2004, the Plan had a partial termination due to the sale of a
subsidiary of VU. The details of this transaction are discussed in Note 2.
8
NOTE 7. ASSETS HELD IN TRUST
The assets of the Plan are invested in the Master Trust held by the Trustee
where the assets of other related employee benefit plans of affiliates are
invested on a commingled basis. Net Assets held in the Master Trust for
Vivendi Universal US Holding Co. as of December 31, 2003 and 2002 were as
follows:
2003 2002
-----------------------------
ASSETS
Investments held in trust at fair valued determined by
quoted market prices:
Stable income fund
Vanguard retirement savings trust* $ 114,730,572 $ 114,767,339
Bond fund
PIMCO total return fund, class A shares* 77,846,563 79,554,475
S&P 500 index fund
Vanguard 500 Index* 122,466,442 93,164,861
Managed equity fund
Vanguard value index fund* 46,032,509 32,572,758
Growth equity fund
Vanguard growth index fund* 41,264,474 28,762,827
Vivendi Universal stock fund
Vivendi Universal ADSs 15,359,666 10,370,846
Dreyfus small company value fund
Berger small company value fund* 39,678,131 27,857,496
Morgan Stanley Instit. International
Morgan Stanley Instit. International 23,226,049 16,815,317
Dresdner global technology fund
Dresdner RCM global technology fund 10,168,164 4,538,911
Loans to participants 6,544,012 7,782,487
---------------------------------
TOTAL INVESTMENTS $ 497,316,582 $ 416,187,317
=================================
*Represents greater than 5% of net assets
The Plan's interest in the Master Trust's net assets as of December 31, 2003
and 2002 was 91.39% and 89.73%, respectively.
9
NOTE 7. ASSETS HELD IN TRUST (CONTINUED)
The Vivendi Universal Stock Fund held in the Master Trust consist of the
following classification of assets and liabilities as of December 31, 2003
Vivendi Universal ADSs $ 15,247,816
Collective short term investment fund 75,982
Receivables:
Income receivable 30
Accounts receivable 45,267
--------------
Total assets 15,369,095
--------------
Liabilities:
Accounts payable (5,930)
Accrued trustee fee (3,499)
--------------
Total liabilities (9,429)
--------------
Vivendi Universal Stock Fund net asset value $ 15,359,666
==============
10
NOTE 8. INVESTMENT INCOME FROM MASTER TRUST
Investments held in trust are maintained at fair values determined by quoted
market prices. The Plan's interest in the appreciation in fair value and other
income for the year ended December 31, 2003 was as follows:
Berger SmCap V Fund-Investor $ 8,971,825
Dresdner RCM Global Tech 3,033,624
MSIFT - International Equity Portfolio Class B 4,554,584
PIMCO Total Return 280,677
Vanguard 500 Index 22,418,141
Vanguard Growth Index 6,080,051
Vanguard Retirement Savings Trust -
Vanguard Value Index 9,617,673
Vivendi Universal Stock Fund 5,236,622
---------------
Investment gains (net of investment losses) 60,193,197
Interest and dividends 11,632,525
---------------
INVESTMENT INCOME $ 71,825,722
===============
Investment Income for the Master Trust is as follows:
Berger SmCap V Fund-Investor $ 10,370,121
Dresdner RCM Global Tech 3,354,982
MSIFT - International Equity Portfolio Class B 5,283,231
PIMCO Total Return 366,219
Vanguard 500 Index 25,363,418
Vanguard Growth Index 7,906,115
Vanguard Value Index 10,157,691
Vivendi Universal Stock Fund 5,321,533
---------------
Investment gains (net of investment losses) 68,123,310
Interest and dividends 12,547,811
---------------
INVESTMENT INCOME $ 80,671,121
===============
11
Exhibit 2
CONSENT OF INDEPENDENT ACCOUNTANTS
Vivendi Universal, S.A.
Vivendi Universal 401 (k) Plan
We hereby consent to the incorporation by reference of our report dated June 23,
2004 which appears in your Annual Report on Form 11-K of Vivendi Universal
401 (k) Plan for the fiscal year ended December 31, 2003.
McGladrey & Pullen, LLP /s/ McGladrey & Pullen, LLP
New York, NY ---------------------------
July 12, 2004
Exhibit 3
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*
In connection with the Annual Report on Form 11-K of the Vivendi
Universal 401(k) Plan (the "Plan") for the fiscal year ended December 31,
2003, as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), each of the undersigned officers of Vivendi Universal S.A.
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, to such officer's knowledge, that:
1. the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Plan.
Dated: June 28, 2004 By: /s/ Jean-Rene Fourtou
---------------------------------
Jean-Rene Fourtou
Chief Executive Officer
Dated: June 28, 2004 By: /s/ Jacques Espinasse
---------------------------------
Jacques Espinasse
Chief Financial Officer
*The foregoing certification is incorporated solely for purposes of complying
with the provisions of Section 906 of the Sarbanes-Oxley Act of 2002 and is
not intended to be used for any other purpose. A signed original of this
written statement required by Section 906 has been provided to Vivendi
Universal S.A. and will be retained by Vivendi Universal S.A. and furnished to
the Securities and Exchange Commission or its staff upon request.