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
MP3.COM 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 MP3.com 401(k) Plan (the "MP3.com 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
MP3.com 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 MP3.com Plan for the fiscal year ended
December 31, 2002 prepared in accordance with the financial reporting
requirements of ERISA.
2. Consent of Ernst & Young, 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.
MP3.COM PLAN
By /s/ Larry Levinson
-----------------------------------
Larry Levinson
Senior Vice President - Human Resources
Vivendi Universal Net USA Group, Inc.
Date: June 26, 2003
Exhibit 1
AUDITED FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
MP3.com 401(k) Plan
Year ended December 31, 2002 with Report of Independent Auditors
MP3.com
401(k) Plan
Audited Financial Statements and
Supplemental Schedules
Year ended December 31, 2002
Contents
Report of Independent Auditors...............................................1
Financial Statements
Statements of Net Assets Available for Benefits as of
December 31, 2002 and 2001..............................................2
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2002....................................3
Notes to Financial Statements................................................4
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2002................................................10
Schedule G, Part III - Schedule of Nonexempt Transactions
for the year ended December 31, 2002...................................11
Report of Independent Auditors
MP3.com as Plan Administrator of
MP3.com 401(k) Plan
We have audited the accompanying statements of net assets available for
benefits of MP3.com 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
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the 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 Plan at
December 31, 2002 and 2001, and the changes in its net assets available for
benefits for the year ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedules
of assets (held at end of year) as of December 31, 2002, and of nonexempt
transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of
the Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/Ernst & Young, LLP
San Diego, California
June 26, 2003
MP3.com
401(k) Plan
Statements of Net Assets Available for Benefits
December 31,
2002 2001
------------------------------------------
Investments, at fair value $ 2,711,887 $ 2,053,726
Employee contributions receivable 95,633 -
------------------------------------------
Net assets available for benefits $ 2,807,520 $ 2,053,726
==========================================
See accompanying notes.
3
MP3.com
401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
Additions:
Employee contributions $ 1,453,105
Rollover contributions 22,535
Interest and dividends 65,307
-------------------
Total additions 1,540,947
Deductions:
Net depreciation in fair value of investments 605,616
Distributions to participants 83,565
Transfer out 97,972
-------------------
Total deductions 787,153
-------------------
Net increase 753,794
Net assets available for benefits at:
Beginning of year 2,053,726
-------------------
End of year $ 2,807,520
===================
See accompanying notes.
MP3.com
401(k) Plan
Notes to Financial Statements
December 31, 2002
1. SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The financial statements of MP3.com 401(k) Plan (the "Plan") are prepared 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 requires management to make
estimates that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in registered investment company mutual funds are valued at quoted
market prices, which represent the net asset value of shares held by the Plan
at year-end. Units of the Retirement Savings Trust are valued at the net asset
value at year-end. The shares of Vivendi Universal common stock are valued at
quoted market prices at year-end. The participant loans are valued at their
outstanding balance, which approximates fair value.
The Vivendi Universal Common Stock Fund consists of the underlying company
stock and a short-term cash component to provide liquidity for daily trading.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. Capital gain distributions are included in interest and
dividend income. The realized gain or losses on investments is included with
net depreciation in fair value of investments.
BENEFITS
Benefits are recorded when paid.
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN
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.
GENERAL
The Plan is a defined contribution profit sharing and retirement plan covering
all eligible employees of MP3.com (the "Company"). The effective date of the
Plan was July 1, 2000. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
The Company pays most administrative expenses of the Plan. Certain investment
management fees and other charges paid to the trustee are offset against fund
performance in the net appreciation (depreciation) section of the statement of
changes in net assets available for benefits and are not, therefore, separately
reflected as administrative expenses.
The Plan is exposed to credit risk in the event of default by the issuers of the
investments to the extent of amounts recorded on the statement of net assets
available for benefits.
Effective June 2002, the trustee and recordkeeper of the Plan was changed from
Prudential Retirement Services to The Vanguard Group.
ELIGIBILITY
The Plan covers all employees of the Company. There is no service requirement.
Employees may elect to join the Plan on the first day of the month after their
date of hire.
CONTRIBUTIONS
Each year, participants may contribute from 1% to 20% of pretax compensation, as
defined in the Plan and subject to the annual limits of the Internal Revenue
Code. The Company may contribute to the Plan subject to its own discretion;
however, no such contributions were made in 2002.
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions,
the participant's share of the employer's contributions, if any, and the
Plan's earnings or losses. The benefit to which a participant is allowed is
limited to the vested balance in his account.
VESTING
Participants are immediately vested in their elective contributions and
employer contributions, plus actual earnings thereon, and such amounts are
nonforfeitable.
PARTICIPANTS NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to 50% of their vested account balance. The total of all
outstanding loans from all defined contribution plans sponsored by the Company
or its affiliates may not exceed $50,000 less the highest outstanding loan
balance within the prior 12 months. Loan transactions are treated as a
transfer from (to) the investment fund to (from) the loan fund. Loan terms
range from one to five years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account
and bear interest at a rate equal to the prime rate on the first business day
of the month as published by The Wall Street Journal plus one percentage
point. Interest rates range from 5.25% to 10.5% at December 31, 2002.
Principal and interest is paid through bi-weekly payroll deductions.
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
PAYMENT OF BENEFITS
Upon termination of service for any reason, a participant's account is generally
distributed in a single lump-sum payment upon request. At the Plan sponsor's
option, if the account balance is $5,000 or less, the entire balance may be
distributed.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company 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 the event of Plan termination,
participants remain fully vested in their accounts.
3. INVESTMENTS
During 2002, the Plan's investments (including investments purchased, sold, as
well as held during the year) appreciated (depreciated) in fair value as
determined by quoted market prices as follows:
Net Realized and Unrealized
Appreciation (Depreciation)
in Fair Value of Investments
-----------------------------
Common stock $ 2,606
Mutual funds (608,221)
-----------------------------
Total $ (605,615)
=============================
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The fair value of individual investments that represent 5% or more of the Plan's
net assets is as follows:
December 31,
2002 2001
------------------------------
------------------------------
Berger SMCAP V Fund $ 438,817 $ -
Pimco Total Return Fund 266,724 -
Dresdner RCM Global Tech 285,645 -
Morgan Stanley Institutional International 311,305 -
Vanguard Value Index Fund Investment 264,282 -
Vanguard Growth Index Fund Investment 416,518 -
Vanguard 500 Index Investment 416,253 -
Vanguard Retirement Savings Trust 249,494 -
Oppenheimer Global Fund A - 199,344
Van Kampen Aggressive Growth A Fund - 205,617
John Hancock Technology Fund - 151,834
Massachusetts Investors Fund - 108,444
Van Kampen Emerging Growth A - 198,962
AIM Premier Equity Fund A - 101,452
Prudential Stock Index Fund Z - 241,872
Alliance Technology - 210,722
Prudential Management Assets A - 100,772
Franklin Small Capital Growth - 108,350
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has applied for but has not received a determination letter from the
Internal Revenue Service stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code"). However, the plan administrator
believes that the Plan is qualified and, therefore, the related trust is exempt
from taxation.
5. RECONCILIATIONS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 at December 31, 2002:
Net assets available for benefits per the financial
statements $ 2,807,520
Contributions receivable (95,633)
----------------
Net assets available for benefits per the Form 5500 $ 2,711,887
================
The following is a reconciliation of contributions per the financial statements
to the Form 5500 for the year ended December 31, 2002:
Employee contributions per the financial statements $ 1,453,105
Receivable at end of year (95,633)
-----------------
Employee contributions per the Form 5500 $ 1,357,472
=================
Supplemental Schedules
Schedule I
MP3.com
401(k) Plan
Employer ID #52-2337436, Plan 002
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
Current
(a) Identity of Issue Description of Asset Value
19,322.629 shares
Berger SMCAP V Fund $ 438,817
Pimco Total Return Fund 24,997.603 shares 266,724
* VU Stock Fund 6,300.430 shares 25,958
Dresdner RCM Global Tech 15,878.007 shares 285,645
Morgan Stanley Institutional International 21,410.242 shares 311,305
* Vanguard Value Index Fund Investment 18,039.726 shares 264,282
* Vanguard Growth Index Fund Investment 20,878.073 shares 416,518
* Vanguard 500 Index Investment 5,129.426 shares 416,253
* Vanguard Retirement Savings Trust 249,494.210 shares 249,494
* Participant loans 5.25% to 10.50% interest, various maturities 36,891
----------------
$2,711,887
================
* Indicates party-in-interest
Schedule II
MP3.com 401(k) Plan
Employer ID # 52-2337436, Plan 002
Schedule G, Part III -- Schedule of Nonexempt Transactions
Year ended December 31, 2002
Relations to Plan, Current
Identity of Party Employer, or Other Value of
Involved Party-In-Interest Description of Transactions Cost of Asset of Asset Net Gain
-----------------------------------------------------------------------------------------------------------------------------------
MP3.com Employer/Plan Sponsor Loan to the employer in the form of late $34,679 $34,812 $133
remittance of participant deferrals and/or
loan repayments for the pay period ended
November 2, 2002
Exhibit 2
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 333-72270, 333-89744, 333-89754, 333-87622, 333-64754,
333-51654, 333-48966, 333-47440, 333-81830) and (Form F-3 No. 333-81578)
pertaining to the 401(k) Plan of MP3.com of our report dated June 26, 2003,
with respect to the financial statements and schedules of the MP3.com 401(k)
Plan included in this Annual Report (Form 11-K) for the year ended December
31, 2002.
By /s/ Ernst & Young LLP
--------------------------
Ernst & Young LLP
San Diego, California
June 26, 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 MP3.com 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: June 30, 2003 By: /s/Jean-Rene Fourtou
-----------------------
Jean-Rene Fourtou
Chief Executive Officer
Dated: June 30, 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.