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 GAMES, INC. 401(k) PLAN
6080 Center Drive, 10th Floor
Los Angeles, CA 90045
(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 Games, Inc. 401(k) Plan (the "VU Games 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 VU Games 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 VU Games 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 GAMES, INC. 401(k) PLAN
By /s/ Mark J. Halacy
---------------------------------------
Mark J. Halacy
Executive Vice President -
Human Resources
Vivendi Universal Games, Inc.
Date: July 12, 2004
Exhibit 1
VIVENDI UNIVERSAL GAMES, INC. 401(k) PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
VIVENDI UNIVERSAL GAMES, INC.
401(K) PLAN
Financial Report
December 31, 2003
C O N T E N T S
------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
------------------------------------------------------------------------------
FINANCIAL STATEMENTS
Statements of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4-10
------------------------------------------------------------------------------
SUPPLEMENTAL SCHEDULE
Schedule of assets held for investment purposes at end of year 11
------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Administrator
Vivendi Universal Games, Inc. 401(k) Plan
Los Angeles, California
We have audited the accompanying statements of net assets available for
benefits of the Vivendi Universal Games, Inc. 401(k) Plan (the 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 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 net assets available for benefits of the Vivendi
Universal Games, Inc. 401(k) Plan as of December 31, 2003 and 2002 and the
changes in net assets available for benefits for the year ended December 31,
2003 in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at end of year as of December 31, 2003 is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements, but is supplementary information required by
the United States Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated, in all material respects, in relation to the basic financial
statements taken as a whole.
Pasadena, California /s/ McGladrey & Pullen, LLP
June 14, 2004 ---------------------------
VIVENDI UNIVERSAL GAMES, INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
2003 2002
------------------------------------------------------------------------------
ASSETS
Investments (Note 3) $ 38,532,247 $ 27,740,891
----------------------------------
Contributions receivable:
Employer
53,056
Other employer (Note 6)
385,000
Participants
153,601
-----------------------------------
591,657
-----------------------------------
-----------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 38,532,247 $ 28,332,548
===================================
See Notes to Financial Statements.
VIVENDI UNIVERSAL GAMES, INC. 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2003
------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments (Note 3) $ 6,416,261
Interest and dividend income 700,786
---------------
7,117,047
---------------
Contributions:
Participants 5,208,420
Employer 1,612,739
Rollovers 271,027
---------------
7,092,186
---------------
TOTAL ADDITIONS 14,209,233
---------------
Deductions from net assets attributed to:
Benefits paid 3,964,534
Administrative fees 45,000
---------------
TOTAL DEDUCTIONS 4,009,534
---------------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 10,199,699
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 28,332,548
---------------
End of year $ 38,532,247
===============
See Notes to Financial Statements.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------------
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
THE PLAN'S SIGNIFICANT ACCOUNTING POLICIES ARE AS FOLLOWS:
BASIS OF ACCOUNTING: The financial statements of the Vivendi Universal Games,
Inc. 401(k) Plan (the "Plan") are prepared under the accrual method of
accounting.
USE OF ESTIMATES: The preparation of financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS AND INCOME RECOGNITION: The assets are held in trust
by Vanguard Fiduciary Trust Company (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 the Vivendi
Universal's affiliates, at December 31, 2003, which were Vivendi Universal,
Vivendi Universal Games, Inc., MP3.com, and Rush Associated Labels.
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 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.
Purchases and sales of investments are recorded on a trade-date basis with the
average cost basis used for determining the cost of investments sold. Interest
income is recorded on a 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 2. PLAN DESCRIPTION
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
The Plan, formerly known as the Havas Interactive , Inc. Savings Incentive
401(k) Plan, became effective January 1, 2000 through an amendment and
restatement of the Sierra On-Line, Inc. 401(k) Plan and Trust, which was
adopted effective April 1, 1989. The Plan was amended and restated, effective
January 1, 2002 as the Vivendi Universal Games, Inc. 401(k) Plan.
The Plan is a defined contribution plan covering all nonunion, full-time,
U.S.-based employees of Vivendi Universal Games, Inc. (the "Company") and its
subsidiaries who have satisfied the eligibility requirements as defined in the
Plan. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). The Plan Administrator of the Plan is Vivendi
Universal Games, Inc.
CONTRIBUTIONS: Participants may elect to contribute from 1% to 15% of their
eligible pretax annual compensation as defined in the Plan. Participants may
also roll over amounts representing distributions from other qualified benefit
or contribution plans. The Company contributes a matching contribution of 50%
of the participant's annual deferral. The maximum participant contribution
eligible for the match is 6% of the participant's annual compensation. The
Company may also make discretionary matching and profit sharing contributions,
which are determined by the Company each year. For the year ended December 31,
2003 the Company's matching contributions totaled $1,612,739. These
contributions are funded at every payroll period. No discretionary
contributions were made to the
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------------
NOTE 2. PLAN DESCRIPTION, CONTINUED
Plan for the year ended December 31, 2003.
PARTICIPANT ACCOUNTS Each participant account is credited with the
participant's contribution and allocations of the Company's contributions and
Plan earnings. Allocations are based on participant compensation or account
balances, as defined in the Plan. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account balance.
VESTING: Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's contributions plus earnings
thereon is based on years of service at a rate of 20% per year, with 100%
vesting after five years of service. Upon normal retirement (age 65), death or
disability, participants become fully vested in all benefits.
FORFEITURES: The Plan provides for forfeitures of terminating participants'
nonvested accounts to be used to pay the administrative expenses of the Plan.
The Plan also allows for these accounts to reduce the employer matching
contributions. At December 31, 2003 the forfeiture balance was $108,394 and
during the year ended December 31, 2003, administrative costs of $45,000 were
paid out of the forfeiture balance.
PAYMENT OF BENEFITS: Benefits may be distributed upon retirement, death,
disability or other termination of employment. Benefits equal to the
participant's vested account balance may be paid in a lump sum or
installments, depending on certain factors as described in the Plan and at the
participant's election.
LOANS TO PARTICIPANTS: Participants may borrow from their vested accounts a
minimum of $1,000 up to a maximum of 50% of the vested account balance, not to
exceed $50,000. Loans are repaid at a fixed reasonable rate of interest
through payroll deduction, within five years or, in the event the loan is used
to acquire a dwelling as a principal residence, within 15 years.
PLAN TERMINATION: Although it has not expressed any intent to do so, the
Company has the right under the Plan to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, participants will
become 100% vested in their accounts.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------------
NOTE 3. ASSETS HELD IN MASTER 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
-----------------------------------
Investments held in trust at fair values
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 ADS 15,283,684 10,311,547
Collective short term investment fund 75,982 59,299
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 10,168,163 4,538,911
Loans to participants 6,544,012 7,782,487
-------------------------------------
Total investments $ 497,316,581 $ 416,187,317
=====================================
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------------
NOTE 3. ASSETS HELD IN MASTER TRUST (CONTINUED)
The Vivendi Universal Stock Fund held in the Master Trust consists of the
following classification of assets and liabilities as of December 31, 2003 and
2002:
2003 2002
---- ----
Vivendi Universal ADS $ 15,247,816 $ 10,260,622
Collective short term investment fund 75,982 59,299
Receivables:
Income receivable 30 65
Accounts receivable 41,661 79,022
---------------- --------------
Total assets 15,365,489 10,399,008
Liabilities:
Accounts payable (2,324) (25,919)
Accrued trustee fee (3,499) (2,243)
---------------- --------------
Total liabilities (5,823) (28,162)
---------------- --------------
Vivendi Universal Stock Fund net asset
value $ 15,359,666 $ 10,370,846
================ ==============
As of December 31, 2003 and 2002, the Plan's interest in net assets held in
the Master Trust available for benefits in the individual investment funds
were as follows:
2003 2002
---------------------------------------------
Berger SmCap V Fund-Investor $ 4,321,939 $ 2,699,161
Dresdner RCM Global Tech 338,400 48,732
MSIFT - International Equity Portfolio Class B 2,668,835 1,811,077
PIMCO Total Return 4,240,117 3,820,300
Vanguard 500 Index 11,900,541 8,312,080
Vanguard Growth Index 8,649,269 6,049,002
Vanguard Retirement Savings Trust 3,927,786 3,348,360
Vanguard Value Index 1,908,370 1,188,321
Vivendi Universal Stock Fund 144,810 86,450
Loan Fund 432,180 377,408
-----------------------------------------------
Total $ 38,532,247 $ 27,740,891
===============================================
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------------
NOTE 3. ASSETS HELD IN MASTER TRUST, CONTINUED
Investments held in trust are maintained at fair values determined by quoted
market prices. Investments within the Master Trust are maintained by the
Trustee/Master Trustee with separate plan identity, such that the associated
income on each plan's investments is credited to each respective plan on a
specific identification basis.
NOTE 4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated October 28, 2002 that the Plan is qualified and the trust
established under the Plan is tax exempt under the appropriate sections of the
Internal Revenue Code. Although the Plan has been amended since that date, the
Plan Administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal
Revenue Code.
NOTE 5. PLAN AMENDMENTS AND SUBSEQUENT EVENTS
Effective January 1, 2003, the Plan was amended for the following:
o The hours of service are credited on an equivalency method which
provides an employee with 190 hours of service for each month in
which the employee works at least one hour.
o When crediting an hour of service, the Plan will include periods in
which severance pay is paid in installments.
o Employees may rollover funds from qualified 401(a), 403 (b) and 457
(b) plans into the Plan,
o Rollovers must be deposited directly into the Plan or deposited
within 60 days of receipt of a distribution by the participant.
o Rollovers from a conduit IRA must be attributable to qualified plan
and must be the entire balance of the IRA.
o Following the Participant's death, an account in excess of $5,000
must be distributed to the Beneficiary no later than the end of the
calendar year following the fifth anniversary of the Participant's
death.
o The required minimum distribution rules were updated to reflect the
current IRS guidance and distribution tables that reflect longer
life expectancies.
Effective January 1, 2004, the Plan was amended for the following:
o For vesting purposes, a year of service shall mean a 12 consecutive
month period beginning with the employment commencement date and
ending with severance from service. This is referred to as the
"elapsed time method" of crediting service.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------------
NOTE 6. OTHER EVENTS
During 2002, the Plan Administrator discovered that certain employer matching
contributions for the years ended December 31, 2001 and 2000 were calculated
incorrectly. The Company corrected this error in accordance with the provision
of the IRS' Employee Plans Compliance Resolution System (EPCRS). The
additional amount required for the correction ($365,000), plus earnings, was
recorded as other employer contribution in 2001 and an other employer
contribution receivable was accrued at December 31, 2001 and 2002. On March
14, 2003, the actual correction amount, including earnings, which together
totaled $381,983, was paid to the Plan.
NOTE 7. RELATED PARTY TRANSACTIONS
The plan's investments in the Master Trust invest in shares of mutual funds
managed by an affiliate of Vanguard. Vanguard acts as trustee for only those
investments as defined by the Plan. Transactions in such investments qualify
as party-in-interest transactions which are exempt from the prohibited
transaction rules.
Some of the Plan expenses including trustee, custodial, and certain
recordkeeping fees, are paid by the Company, and personnel and facilities of
the Company are used by the Plan at no charge.
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
December 31, 2003 Current Value
-------------
Vanguard Fiduciary Trust Company:
Master Trust for Vivendi Universal Master Trust $ 38,532,247
===================
Exhibit 2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Vivendi Universal, S.A.
Vivendi Universal Games, Inc. 401(k) Plan
Los Angeles, CA
We hereby consent to the incorporation by reference of our report dated June
14, 2004, which appears in your Annual Report on Form 11-K of the Vivendi
Universal Games, Inc. 401(k) Plan for the fiscal year ended December 31, 2003.
By:/s/ McGladrey & Pullen, LLP
---------------------------
McGladrey & Pullen, LLP
Pasadena, California
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 Games, Inc. 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.