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, 2001
COMMISSION FILE NUMBER
THE SEAGRAM 401(k) PLAN
375 Park Avenue
New York, New York 10152
(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 Seagram 401(k) Plan (the "Seagram 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 Seagram Plan
for the fiscal year ended December 31, 2001 prepared in accordance with the
financial reporting requirements of ERISA.
EXHIBITS
1. Financial statements of the Spencer Plan for the fiscal year ended December
31, 2001 prepared in accordance with the financial reporting requirements
of ERISA.
2. Consent of McGladrey & Pullen, LLP, independent accountants.
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.
THE SEAGRAM 401(k) PLAN
By /s/ Ann M. Giambusso
----------------------------------
Ann M. Giambusso
Vice President - Human Resources,
Vivendi Universal
Date: July 12, 2002
Exhibit 1
THE SEAGRAM 401(k) PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
CONTENTS
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INDEPENDENT AUDITOR'S REPORT 1
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Statement 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
The Seagram 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of The Seagram 401(k) Plan as of December 31, 2001, and the related statement of
changes in net assets available for benefits for the year ended December 31,
2001. 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 audit. The statement of net assets available for
benefits of The Seagram 401(k) Plan as of December 31, 2000 was audited by other
auditors whose report, dated June 15, 2001, expressed an unqualified opinion on
that statement.
We conducted our audit 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 audit provides 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 Seagram
401(k) Plan as of December 31, 2001 and the changes in net assets available for
benefits for the year ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America.
/s/ McGladrey & Pullen, LLP
-----------------------------
McGladrey & Pullen, LLP
New York, New York
July 9, 2002
1
THE SEAGRAM 401 (k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2000
2001 2000
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Net assets held in trust by Bank of
New York (Note 10) $174,117,695 $185,560,263
--------------------------------
Liabilities - -
--------------------------------
Net Assets Available for Benefits $174,117,695 $185,560,263
================================
SEE NOTES TO THE FINANCIAL STATEMENTS.
THE SEAGRAM 401 (k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2001
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Additions:
Additions in net assets attributed to:
Contributions
Participating employees $ 9,246,398
Participating companies 3,795,561
------------
13,041,959
------------
Investment income:
Net appreciation in fair value of investments (15,452,526)
Dividends and interest 6,936,886
------------
(8,515,640)
------------
Total additions 4,526,319
Deductions:
Deductions to net assets sttributed to:
Participant withdrawals (15,968,887)
------------
Net (decrease) (11,442,568)
Net assets available for benefits:
Beginning of year 185,560,263
---------------
End of year $174,117,695
===============
SEE NOTES TO THE FINANCIAL STATEMENTS.
3
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed in the preparation of the financial statements
of The Seagram 401(k) Plan (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 changes therein, and disclosure of
contingent assets and liabilities. Accordingly, actual results may differ from
those estimates.
Investment Valuation: The assets are held in trust by Bank of New York
(Trustees) in the Joseph E. Seagram & Sons, Inc. Master Trust Agreement (Master
Trust) which also includes assets of the 401(k) plans of the Company's
affiliates, Universal Studios, Inc., UMG Manufacturing and Logistics, Inc. and
Spencer Gifts, Inc. Effective July 1, 1999, the assets of the PolyGram Holding,
Inc. Deferred Savings and Investment Plan for Employees were added to the Master
Trust. The related investment income and appreciation in fair value represents
allocations to the Plan based upon the ratio of the Plan's assets to total
Master Trust Assets.
On December 8, 2000, The Seagram Company, Ltd. (parent of Joseph E. Seagram &
Sons, Inc.) Vivendi S.A. and Canal Plus S.A. completed a series of transactions
pursuant to which the three companies combined into Vivendi Universal S.A. Upon
the completion of the merger transactions, shareholders of The Seagram Company
Ltd. (other than those exercising dissenters' rights), including the Trustee on
behalf of the Plan, received, for each common share of The Seagram Company Ltd.
held, 0.80 Vivendi Universal ADS or a combination of 0.80 non-voting
exchangeable shares of Vivendi Universal's Canadian subsidiary, Vivendi
Universal Exchangeco, and an equal number of voting rights in Vivendi Universal.
On December 21, 2001, Vivendi Universal, S.A., Diageo, PLC and Pernod Ricard
completed a series of transactions which resulted in the stock sale of Joseph E.
Seagram & Sons, Inc. to Diageo, PLC. Under the terms of the sale and purchase
agreement, assets and liabilities relating to the U.S. active spirits and wine
employees were to be transferred to the respective 401(k) plans of Diageo's and
Pernod Ricard's U.S. affiliates.
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 assets value; and the
common shares are recorded at the closing price reported on the composite tape
of the New York Stock Exchange on the valuation date.
Purchase and sales of securities are accounted for on a trade 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.
4
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 2. DESCRIPTION OF THE PLAN
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").
Effective October 15, 2001, the Plan sponsorship was assigned to Vivendi
Universal U.S. Holding Co. ("VU").
The Plan covers employees of the Company and certain of its United States
subsidiaries (collectively, the "Participating Companies") whose annual base
salary or regular wages, (excluding overtime, bonuses, commissions or other
special or contingent payments) exceeds $15,793 as of December 31, 1998
(increased on the last day of each year by 4%) and who are either (i) salaried
employees, or (ii) hourly employees not employed in a classification designated
by the Participating Companies from time to time, excluding various categories
of employees specified in the Plan including, but not limited to, persons
represented by a collective bargaining agent, persons employed on a special
basis, and persons employed by an operating unit of the Participating Companies
to which the Plan has not been extended.
The Plan provides benefits to participants based upon amounts voluntarily
contributed to participant accounts by the participants and amounts contributed
under certain circumstances, by the Participating Companies (See Note 3). Under
the Plan, a participant is not provided with any fixed benefit. The ultimate
benefit to be received by the participant depends on the amounts contributed,
the investment results and other adjustments, and the participant's vested
interest at termination of employment (See Note 4).
With respect to each participant, contributions are allocated among four
accounts specified in the Plan: pre-tax account, company match account,
after-tax account and rollover account (the "Accounts"). Such contributions are
invested as designated by the participants in one or more of the investment
funds options, and are accumulated and invested in the Master Trust. Plan assets
are solely available for the benefit of and for the liabilities incurred on
behalf of employees covered by the Plan. The Plan is administered by the Joseph
E. Seagram & Sons, Inc. through an Administrative Committee appointed by the
Board of Directors of the Company. Effective October 15, 2001, the
administration of the Plan was assigned to VU. VU administers the Plan through
an Administrative Committee appointed by the Board of Directors of VU.
In addition, the thrift Plan for the Employees of the Wine Spectrum Companies
(the "Wine Spectrum Plan") was merged with the Plan in 1987. The eligible
employees of the Wine Spectrum Plan became members of the Plan. As a result of
the merger, the Plan retains the Coca-Cola Company Stock held by the Wine
Spectrum Plan; however, no election may be made to transfer any funds into the
Coca-Cola Company Stock Fund.
5
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 3. CONTRIBUTIONS
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. Effective January 1, 1999, 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 was increased 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 will accept into participants' rollover Accounts cash received by
participants from a qualified plan within the time prescribed by applicable law
("Rollover Contributions").
The Participating Companies may take discretionary contributions in an amount to
be determined by the Participating Companies. The Participating Companies have
not made discretionary contributions since the inception of the Plan.
NOTE 4. 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 vests in the funds held in his or
her company match account in accordance with the following vesting schedule:
Years of service Vested Percentage
-------------------------------------------------------------------------------
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%
6
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 4. VESTING (CONTINUED)
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.
The Participating Companies used $110,495 in forfeitures to offset their
contributions during the year ended December 31, 2001.
Under the terms of the sale and purchase agreement relating to the stock sale of
Joseph E. Seagrams & Sons, Inc., as mentioned in Note 1, active spirits and wine
employees were fully vested in their account balances on December 21, 2001.
NOTE 5. DISTRIBUTIONS
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 (See Note 4). Benefits are recorded when paid.
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 in such participants'
vested interest in the Plan is entitled to continue to receive investment income
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.
NOTE 6. 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 the administrative
committee. 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.
7
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 7. TAX STATUS OF PLAN
The Internal revenue Service has ruled by a letter dated April 20, 2000 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 8. RELATED PARTY TRANSACTIONS
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.
NOTE 9. TERMINATION OF THE PLAN
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.
8
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 10. 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. The Master Trust net assets consist of the
following classification of assets and liabilities as of December 31, 2001 and
2000.
2001 2000
----------------------------------
ASSETS
Investments held in trust at fair
valued determined by quoted market prices:
Money market fund
State street yield enhanced STIF fund $ - $ 50,734,702
Stable income fund
The LaSalle income plus fund 121,870,473 55,772,944
Bond fund
PIMCO total return fund, class A shares 116,050,435 98,703,855
S&P 500 index fund
Vanguard employee benefit fund 168,991,669 205,414,392
Managed equity fund
Vanguard value index fund 45,758,762 51,700,709
Growth equity fund
Vanguard institutional index fund 20,321,155 24,538,463
Vivendi stock fund
Vivendi Universal ADSs 34,029,544 48,004,886
Collective short term investment fund 553,319 1,325,251
The Coca-Cola company stock fund
The Coca-Cola company common stock 1,561,089 2,453,770
Collective short term investment fund 108,353 67,777
Dreyfus small company value fund
Dreyfus small company value fund 46,493,358 24,883,209
MSDW international equity fund
MSDW international equity fund 19,032,529 22,109,100
Dresdner global technology fund
Dresdner RCM global technology fund 10,590,173 20,418,043
Loans to participants 8,457,476 9,280,310
-----------------------------------
Total investments $ 593,818,335 $ 615,407,411
-----------------------------------
9
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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NOTE 10. ASSETS HELD IN TRUST (CONTINUED)
Receivables
Accrued interest and dividends $ 1,586,871 $ 6,347,086
Capital gain distribution receivable 12,247,990 -
Contributions receivable 5,554 88,182
Proceeds from securities sold 157,749,273 371,263
-------------------------------
Total receivables 171,589,688 6,806,531
-------------------------------
Total assets 765,408,023 622,213,942
-------------------------------
Liabilities
Accounts payable for securities purchased 170,257,735 6,337,958
Administrative expenses 15,438 26,171
Other payables 300,242 -
Benefit payments 50,749 -
-------------------------------
Total liabilities 170,624,164 6,364,129
-------------------------------
Net assets $594,783,859 $615,849,813
===============================
As of December 31, 2001 and 2000, the equitable share of the Plan in the Master
Trust is 29.27% and 30.13% respectively.
As of December 31, 2001 and 2000, the net assets of the Master Trust available
to the Plan for benefits in the individual investment funds were as follows:
10
THE SEAGRAM 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 10. ASSETS HELD IN TRUST (CONTINUED)
2001 2000
-------------------------------
Money Market Fund $ - $ 18,171,098
Stable Income Fund 35,273,964 10,675,164
Bond Fund 19,239,009 13,355,029
S&P 500 Index Fund 50,724,501 63,734,515
Managed Equity Fund 13,280,094 15,125,385
Growth Equity Fund 7,623,267 10,215,818
Vivendi Universal ADSs Stock Fund 13,519,572 18,563,165
The Coca-Cola Company Stock Fund 1,688,368 2,522,007
Dreyfus Small Company Value Fund 18,512,124 10,277,825
MSDW International Equity Fund 7,028,461 9,287,988
Dresdner RCM Global Technology Fund 4,663,533 10,205,844
Loans to participants 2,564,802 3,426,425
-------------------------------
Total $174,117,695 $185,560,263
===============================
NOTE 11. INVESTMENT INCOME FROM MASTER TRUST
The appreciation in fair value and other income is as follows:
Investments held in trust at fair value determined by quoted market prices:
2001
---------------------------
Bond Fund $ 176,905
S&P 500 Index Fund (7,626,064)
Managed Equity Fund (2,349,689)
Growth Equity Fund (1,391,043)
Seagram Stock Fund -
Vivendi Universal ADSs Stock Fund (3,047,961)
Dreyfus Small Company Value Fund 4,406,515
MSDW International Equity Fund (1,079,099)
Dresdner RCM Global Technology Fund (3,987,487)
The Coca-Cola Company Stock Fund (554,603)
------------
Investment losses (net of investment gains) (15,452,526)
Interest and dividends 6,936,886
------------
Investment income (loss) $ (8,515,640)
============
11