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, 2002
COMMISSION FILE NUMBER
VIVENDI UNIVERSAL GAMES, INC. 401(k) PLAN
800 Third Avenue
New York, New York 10022
(Full title of the plan and the address of the plan)
Vivendi Universal S.A.
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,
2002 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, 2002 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/ Virginia Kelley
-----------------------------------
Vice President -
Compensation and Benefits
Vivendi Universal Games, Inc.
Date: July 1, 2003
EXHIBIT I
Vivendi Universal Games, Inc.
401(k) Plan
Financial Report
December 31, 2002
C O N T E N T S
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INDEPENDENT AUDITOR'S REPORT 1
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FINANCIAL STATEMENTS
Statements of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4-8
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SUPPLEMENTAL SCHEDULE
Schedule of assets held for investment purposes at end of year 9
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INDEPENDENT AUDITOR'S REPORT
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 and supplemental schedule of the Vivendi Universal Games, Inc. 401(k)
Plan (formerly known as Havas Interactive, Inc. Savings Incentive 401(k) Plan)
as of December 31, 2002 and 2001 and the related statement of changes in net
assets available for benefits for the year ended December 31, 2002. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financials statements based
on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 for 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, 2002 and 2001 and the
changes in net assets available for benefits for the year ended December 31,
2002 in conformity with accounting principles generally accepted in the United
States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes at end of year as of December 31, 2002, are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements, but are supplementary information required
by the United States Department of Labor Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. This
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.
/s/McGladrey & Pullen, LLP
Pasadena, California
May 22, 2003
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
2002 2001
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Assets
Investments (Note 3) $27,740,891 $27,637,046
Contributions receivable:
Employer 53,056 46,935
Other employer (Note 6) 385,000 385,000
Participants 153,601 160,898
----------- -----------
591,657 592,833
Net assets available for benefits $28,332,548 $28,229,879
=========== ===========
See Notes to Financial Statements.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002
Additions to net assets attributed to:
Investment income:
Net (depreciation) in fair value of investments (Note 3) $(5,398,434)
Interest and dividend income 794,262
------------
(4,604,172)
------------
Contributions:
Participants 5,687,645
Employer 1,917,559
Rollovers 228,787
------------
7,833,991
------------
Total additions 3,229,819
------------
Deductions from net assets attributed to:
Benefits paid 3,103,272
Administrative fees 23,878
------------
Total deductions 3,127,150
------------
Net increase in net assets available for benefits 102,669
Net assets available for benefits:
Beginning of year 28,229,879
------------
End of year $28,332,548
============
See Notes to Financial Statements.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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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.
Investment Valuation 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, Vivendi Universal Entertainment LLLP, Vivendi 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.
Purchases and sales of securities are accounted for on a trade date basis with
the average cost basis used fordetermining 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 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,
2002, the Company's matching contributions totaled $1,917,559. These
contributions are funded at every payroll period. No discretionary
contributions were made to the Plan for the year ended December 31, 2002.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 2. PLAN DESCRIPTION, CONTINUED
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, 2002 the forfeiture balance was $185,955 and
during the year ended December 31, 2002, administrative costs of $23,878 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.
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, 2002 and 2001 were as
follows:
2002 2001
----------------------------------
Assets
Investments held in trust at fair values determined
by quoted market prices:
Stable income fund
Vanguard retirement savings trust $ 114,767,339 $ 121,870,473
Bond fund
PIMCO total return fund, class A shares 79,554,475 116,050,435
S&P 500 index fund
Vanguard 500 Index 93,164,861 168,991,669
Managed equity fund
Vanguard value index fund 32,572,758 45,758,762
Growth equity fund
Vanguard growth index fund 28,762,827 20,321,155
Vivendi Universal stock fund
Vivendi Universal ADSs 10,311,547 34,029,544
Collective short term investment fund 59,299 553,319
The Coca-Cola company stock fund
The Coca-Cola company common stock - 1,561,089
Collective short term investment fund - 108,353
Dreyfus small company value fund
Berger small company value fund 27,857,496 46,493,358
Morgan Stanley Instit. International
Morgan Stanley Instit. International 16,815,317 19,032,529
Dresdner global technology fund
Dresdner RCM global technology fund 4,538,911 10,590,173
Loans to participants 7,782,487 8,457,476
-----------------------------------
Total investments $ 416,187,317 $ 593,818,335
===================================
VIVENDI UNIVERSAL 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 consist of the
following classification of assets and liabilities as of December 31, 2002:
2002
--------------------
Vivendi Universal ADSs $ 10,260,622
Collective short term investment fund 59,299
Receivables:
Income receivable 65
Accounts receivable 79,022
--------------------
Total assets 10,399,008
--------------------
Liabilities:
Accounts payable (25,919)
Accrued trustee fee (2,243)
--------------------
Total liabilities (28,162)
--------------------
Vivendi Universal Stock Fund net asset value $ 10,370,846
====================
As of December 31, 2002 and 2001, the Plan's interest in net assets held in
the Master Trust available for benefits in the individual investment funds
were as follows:
2002 2001
-------------------------------------
Berger SmCap V Fund-Investor $ 2,699,161 -
Dresdner RCM Global Tech 48,732 -
MSIFT - International Equity Portfolio Class B 1,811,077 -
PIMCO Total Return 3,820,300 -
Vanguard 500 Index 8,312,080 -
Vanguard Growth Index 6,049,002 -
Vanguard Retirement Savings Trust 3,348,360 -
Vanguard Value Index 1,188,321 -
Vivendi Universal Stock Fund 86,450 -
Cash - $ 27,314,818
Loan Fund 377,408 332,228
------------------------------------
Total $ 27,740,891 $ 27,637,046
====================================
VIVENDI UNIVERSAL 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note 3. Assets Held in Master Trust
Investments held in trust are maintained at fair values determined by quoted
market prices. During 2002, the Plan's investments (including investments
bought, sold, and held during the year) depreciated in value by $5,398,434, of
which, $5,383,448 was attributable to registered investment companies and
$14,986 was attributable to the Vivendi Universal Stock Fund.
Investments within the Master Trust are maintained by the Trustee/Master
Trustee with separate plan indentity, such that the associated income on each
plan's investments is credited to each respective plan on a specific
identification basis.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
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
The Plan was amended and restated as the Vivendi Universal Games, Inc. 401(k)
Plan, effective January 1, 2002. The significant changes include the
following:
o The Plan name was changed to Vivendi Universal Games, Inc. 401(k)
Plan from the Havas Interactive, Inc. Savings Incentive 401(k) Plan
o Participants shall be allowed to change their deferral amount at any
time. Previously, changes could only be made once a month.
o The Plan adopted in-service distribution provisions for certain
employer contribution amounts not previously offered.
o The Plan will now permit one principal residence loan and one
general loan to be outstanding at the same time. Previously, only
one loan could be outstanding at any one time.
o There is no service requirement in order to receive employer
matching contributions. Previously, there was a one-year service
requirement.
o The Plan will be valued daily. Previously, the Plan was valued on
the last business day in December or any other day the
Administrative Committee designated.
o The default fund was changed from the Fidelity Asset Manager Fund
offered by Nationwide to the Vanguard Retirement Savings Trust Fund
offered by Vanguard.
Additionally, effective 2002, the Plan sponsor offers participants the option
of investing in the Vivendi Universal Stock Fund (which invests in American
Depository Shares of Vivendi Universal S. A., the Plan Sponsor's ultimate
French corporate parent), as one of their investment choices.
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 The month in which an employee receives a severance payment is
considered a month worked.
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.
NOTE 6. OTHER EVENTS
During 2002, certain participants' employment was transferred to an affiliate
of the Company. As provided for in the Plan provisions, the employees
continued to participate in the Plan.
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
provisions of the IRS's Employee Plans Compliance Resolution System. The
additional amount required for the correction is approximately $365,000 plus
earnings. Accordingly, $385,000 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 of $381,983 was
paid to the Plan.
NOTE 7. RELATED PARTY TRANSACTIONS
The Plan invests 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.
VIVENDI UNIVERSAL GAMES, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 8. RECONCILIATION OF DIFFERENCE BETWEEN THESE FINANCIAL STATEMENTS AND
THE FINANCIAL INFORMATION REQUIRED ON FORM 5500
December 31, December 31,
2002 2001
--------------------------------------------------------------------------------------------------------
Net assets available for benefits as presented in these
Financial statements $28,332,548 $28,229,879
Adjustment for employer contribution receivable (438,056) (385,000)
Adjustment for participant contribution receivable (153,601) --
------------ ------------
Net assets available for benefits per the Form 5500 $27,740,891 $27,844,879
============ ============
Year Ended
December 31,
2002
---------------
Net increase in net assets available for benefits as presented in
these financial statements 102,669
Adjustment for:
Employer contribution receivable (6,121)
Participant contribution receivable (2,687)
Prior year distributions 6,231
Participant loan receivable 4,610
Carrying value of loan balances 4,071
---------------
Net increase in net assets available for benefits as per the
Form 5500 $108,773
===============
VIVENDI UNIVERSAL GAMES, INC. 401(k) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
December 31, 2002
Master Trust for Vivendi Universal Master Trust $27,740,891
===========
* Party in interest
Exhibit 2
CONSENT OF INDEPENDENT ACCOUNTANTS
Vivendi Universal, S.A.
Vivendi Universal Games, Inc. 401(k) Plan
Los Angeles, California
We hereby consent to the incorporation by reference of our report dated May
22, 2003 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, 2002.
By /s/ McGladrey & Pullen, LLP
-----------------------------
McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
Pasadena, CA
July 1, 2003
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, 2002, 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: July 1, 2003 By: /s/ Jean-Rene Fourtou
--------------------------------
Jean-Rene Fourtou
Chief Executive Officer
Dated: July 1, 2003 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.