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
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
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, 2003
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, 2003 prepared in accordance with the financial
reporting requirements of ERISA.
2. Consent of Ernst & Young, LLP, independent Registered Public
Accounting Firm
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 401(K) PLAN
By /s/ Robert Greenberg
-----------------------------------
Robert Greenberg
Senior Vice President - Global
Compensation and Benefits,
Vivendi Universal US Holding Co.
Date: June 28, 2004
Exhibit 1
MP3.COM 401(k) PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
MP3.com
401(k) Plan
Audited Financial Statements and
Supplemental Schedule
Year ended December 31, 2003
CONTENTS
Report of Independent Registered Public Accounting Firm.......................1
Financial Statements
Statements of Net Assets Available for Benefits as of
December 31, 2003 and 2002...............................................2
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2003.....................................3
Notes to Financial Statements.................................................4
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2003.................................................10
Report of Independent Registered Public Accounting Firm
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, 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
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 Plan at
December 31, 2003 and 2002, and the changes in its 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
financial statements taken as a whole. The accompanying supplemental schedule
of assets (held at end of year) as of December 31, 2003 is presented for
purposes of additional analysis and is not a required part of the financial
statements but is 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. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
San Diego, California
June 22, 2004
1
MP3.com
401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31,
2003 2002
----------------------------------------
Investments, at fair value $ 3,830,139 $ 2,711,887
Employee contributions receivable 19,470 95,633
----------------------------------------
Net assets available for benefits $ 3,849,609 $ 2,807,520
========================================
See accompanying notes.
2
MP3.com
401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2003
Additions:
Employee contributions $ 1,116,496
Rollover contributions 42,176
Interest and dividends 60,253
Net appreciation in fair value of investments 867,510
--------------
Total additions 2,086,435
Deductions:
Distributions to participants 868,241
Transfer out 176,105
--------------
Total deductions 1,044,346
--------------
Net increase 1,042,089 Net assets available for benefits at:
Beginning of year 2,807,520
--------------
End of year $ 3,849,609
==============
See accompanying notes.
3
MP3.com
401(k) Plan
Notes to Financial Statements
December 31, 2003
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 U.S. generally
accepted accounting principles 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 appreciation in fair value of investments.
BENEFITS
Benefits are recorded when paid.
4
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 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.
ELIGIBILITY
The Plan covers substantially 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 2003.
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.
5
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
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 5.75% at December 31, 2003.
Principal and interest is paid through bi-weekly payroll deductions.
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
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, the Plan's assets will be distributed as soon as
practicable in accordance with the Plan's provisions.
6
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
During 2003, the Plan's investments (including investments purchased, sold, as
well as held during the year) appreciated in fair value as determined by
quoted market prices as follows:
NET REALIZED AND
UNREALIZED
APPRECIATION IN FAIR
VALUE OF INVESTMENTS
----------------------
Common stock $ 13,675
Mutual funds 853,835
----------------------
Total $ 867,510
======================
The fair value of individual investments that represent 5% or more of the
Plan's net assets is as follows:
DECEMBER 31,
2003 2002
-----------------------------
Janus SMCAP V Fund $ 729,118 $ 438,817
Pimco Total Return Fund 326,041 266,724
Dresdner RCM Global Tech 503,522 285,645
Morgan Stanley Institutional International 412,435 311,305
Vanguard Value Index Fund Investment 379,293 264,282
Vanguard Growth Index Fund Investment 524,873 416,518
Vanguard 500 Index Investment 574,260 416,253
Vanguard Retirement Savings Trust 328,568 249,494
7
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The underlying non-standardized prototype plan has received an opinion letter
from the Internal Revenue Service (IRS) dated August 22, 2001 stating that the
form of the plan is qualified under Section 401(a) of the Internal Revenue
Code, and therefore, the related trust is tax exempt. In accordance with
Revenue Procedure 2002-6 and Announcement 2001-77, the Plan sponsor has
determined that it is eligible to and has chosen to rely on the current IRS
prototype plan opinion letter. Once qualified, the Plan is required to operate
in conformity with the Code to maintain its qualification. The plan
administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
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, 2003 and 2002:
December 31,
2003 2002
------------------ ------------------
Net assets available for benefits per the financial statements $ 3,849,609 $ 2,807,520
Contributions receivable - (95,633)
------------------ ------------------
Net assets available for benefits per the Form 5500 $ 3,849,609 $ 2,711,887
================== ==================
The following is a reconciliation of contributions per the financial
statements to the Form 5500 for the year ended December 31, 2003:
Year ended December 31,
2003 2002
------------------ ------------------
Employee contributions and rollover contributions per the financial $ 1,158,672 $ 1,453,105
statements
Receivable at end of year - (95,633)
------------------ ------------------
Employee contributions per the Form 5500 $ 1,158,672 $ 1,357,472
================== ==================
8
MP3.com
401(k) Plan
Notes to Financial Statements (continued)
6. SUBSEQUENT EVENTS
Effective December 31, 2003, the Plan was amended to be a "frozen" plan
whereby after January 1, 2004 no future employee contributions were permitted
to be made. Effective May 18, 2004, the assets and liabilities of the Plan
were merged into the Vivendi Universal 401(k) Plan and the Vivendi Universal
Master Trust.
9
Supplemental Schedule
Schedule II
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, 2003
(A) IDENTITY OF ISSUE DESCRIPTION OF ASSET CURRENT VALUE
--------------------------------------------------------------------------------------------------------------------------
Janus SMCAP V Fund 23,565.553 shares $ 729,118
Pimco Total Return Fund 30,442.653 shares 326,041
* VU Stock Fund 7,856.673 shares 48,868
Dresdner RCM Global Tech 16,617.879 shares 503,522
Morgan Stanley Institutional International 21,764.361 shares 412,435
* Vanguard Value Index Fund Investment 20,015.458 shares 379,293
* Vanguard Growth Index Fund Investment 21,062.336 shares 524,873
* Vanguard 500 Index Investment 5,593.256 shares 574,260
* Vanguard Retirement Savings Trust 328,567.890 shares 328,568
* Participant loans 5.25% to 5.75% interest, various maturities 3,161
----------------------
$ 3,830,139
======================
* Indicates party-in-interest
Exhibit 2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements of
Vivendi Universal S.A. (Form S-8 Nos. 333-107837, 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 22, 2004, with respect to the financial statements and
schedule of the MP3.com, Inc. 401(k) Plan included in this Annual Report (Form
11-K) for the year ended December 31, 2003.
/s/ Ernst & Young LLP
San Diego, California
June 22, 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 MP3.com 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.