SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
UNIVERSAL CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[UNIVERSAL CORPORATION LOGO]
ANNUAL MEETING OF SHAREHOLDERS
September 22, 1995
Dear Shareholder:
You are cordially invited to attend the 1995 Annual Meeting of Shareholders
of Universal Corporation, which is to be held in the Company's Headquarters
Building located at Hamilton Street at Broad, Richmond, Virginia, on Tuesday,
October 24, 1995, commencing at 2:00 p.m. At the meeting, you will be asked to
elect three Directors to serve a three-year term.
Whether or not you plan to attend the meeting, it is important that your
shares be represented and voted at the meeting. Therefore, you are requested to
complete, sign, date and mail your proxy promptly in the enclosed postage-paid
envelope.
Sincerely,
/s/ Henry H. Harrell
HENRY H. HARRELL
Chairman and Chief
Executive Officer
<PAGE>
UNIVERSAL CORPORATION
P.O. BOX 25099
RICHMOND, VIRGINIA 23260
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Universal Corporation (the
"Company"), will be held in the Company's Headquarters Building located at
Hamilton Street at Broad, Richmond, Virginia, on Tuesday, October 24, 1995, at
2:00 p.m., for the following purposes:
(1) To elect three Directors to serve for a three-year term; and
(2) To act upon such other matters as may properly come before the meeting
or any adjournments thereof.
Only holders of record of shares of the Company's Common Stock at the close
of business on September 6, 1995, shall be entitled to vote at the meeting.
Please sign and promptly mail the enclosed proxy to insure the presence of
a quorum at the meeting.
By Order of the Board of Directors,
James M. White, III
Secretary
September 22, 1995
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of the Company. A
shareholder may revoke the proxy at any time prior to its use, but proxies
properly executed and received by the Secretary prior to the Annual Meeting, and
not revoked, will be voted.
The Company will pay all of the costs associated with the proxy
solicitation. Proxies are being solicited by mail and may also be solicited in
person or by telephone or telegraph by Directors, officers and employees of the
Company. The Company will reimburse banks, brokerage firms, and other
custodians, nominees, and fiduciaries for their reasonable expenses in
forwarding proxy materials to the beneficial owners of the shares of the
Company's Common Stock. It is contemplated that additional solicitation of
proxies will be made by D. F. King & Co., Inc., 77 Water Street, New York, New
York 10005, at an anticipated cost to the Company of $4,000, plus reimbursement
of out-of-pocket expenses.
This Proxy Statement will be mailed to registered holders of the Company's
Common Stock on or about September 22, 1995.
VOTING RIGHTS
The Company had outstanding, as of September 6, 1995, 35,030,314 shares of
Common Stock entitled to one vote per share. A majority of the shares entitled
to vote, represented in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. Only Common Stockholders of
record at the close of business on September 6, 1995, will be entitled to vote.
The Company is not aware of any matters which are to come before the
meeting other than those described in this Proxy Statement. However, if other
matters do properly come before the meeting, it is the intention of the persons
named in the enclosed proxy card to vote such proxy in accordance with their
best judgment.
ELECTION OF DIRECTORS
Three Directors are to be elected at the 1995 Annual Meeting for a term of
three years. Seven other Directors have been elected to terms expiring in 1997
or 1996, as indicated below. The following pages set forth certain information
for each nominee and each incumbent Director as of June 30, 1995. All of the
nominees and incumbent Directors listed below were previously elected Directors
by the shareholders. Charles H. Foster, Jr., who was a member of the Board of
Directors until the spin-off of Lawyers Title Corporation from the Company in
October 1991, is again standing for election. Elmon T. Gray, a Director from
1977 to 1995, and Thomas R. Towers, a Director from 1966 to 1995, have reached
retirement age and will not stand for reelection.
The election of each nominee for Director requires the affirmative vote of
the holders of a plurality of the shares of Common Stock cast in the election of
Directors. Votes that are withheld and shares held in street name ("Broker
Shares") that are not voted in the election of Directors will not be included in
determining the number of votes cast. Unless otherwise specified in the
accompanying form of proxy, it is intended that votes will be cast for the
election of all of the nominees as Directors. If, at the time of the Annual
Meeting, any nominee should be unavailable to serve as a Director, it is
intended that votes will be cast, pursuant to the enclosed proxy, for such
substitute nominee as may be nominated by the Board of Directors. Each nominee
has consented to being named in the Proxy Statement and to serve if elected.
<PAGE>
NOMINEES FOR ELECTION WHOSE TERMS EXPIRE IN 1998
CHARLES H. FOSTER, JR., 52, is Chairman and Chief Executive Officer of
Lawyers Title Corporation (title insurance holding company) and of Lawyers Title
Insurance Corporation. From 1990 until the spin-off of Lawyers Title Corporation
from the Company in October 1991, he was Vice President of the Company. From
January 1990 to April 1991, Mr. Foster was Vice Chairman and Chief Executive
Officer of Lawyers Title Insurance Corporation. He is a Director of Lawyers
Title Corporation.
ALLEN B. KING, 49, is President and Chief Operating Officer of the Company
and of Universal Leaf Tobacco Company, Incorporated ("Universal Leaf"), a
subsidiary of the Company. From October 22, 1991 to October 27, 1992, he was
President and prior to October 22, 1991, he was Executive Vice President of the
Company and of Universal Leaf. Mr. King is Chairman of the Finance Committee and
a member of the Executive Committee. He has been a Director since 1989.
JOHN D. MUNFORD, II, 67, retired as Vice Chairman of Union Camp Corporation
(forest products manufacturer) in April 1993. From April 1991 to April 1993, he
was Vice Chairman, and prior to April 1991, he was Executive Vice President of
Union Camp Corporation. Mr. Munford is a Director of Cadmus Communications
Corporation, Pulaski Furniture Corporation and Caraustar Industries Inc. He is
Chairman of the Pension Investment Committee and a member of the Audit
Committee. Mr. Munford has been a Director since 1988.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
NOMINEES SET FORTH ABOVE.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1997
WALLACE L. CHANDLER, 68, retired as Vice Chairman of the Company and of
Universal Leaf on December 31, 1989. He is a Director of Lawyers Title
Corporation, Aon Asset Management Fund, Inc. and Life of Virginia Series Fund,
Inc. Mr. Chandler has been a Director since 1965.
HENRY H. HARRELL, 56, is Chairman and Chief Executive Officer of the
Company and of Universal Leaf. Prior to October 22, 1991, he was President and
Chief Executive Officer of the Company and of Universal Leaf. He is a Director
of Jefferson Bankshares, Inc. Mr. Harrell is Chairman of the Executive Committee
and a member of the Finance Committee. He has been a Director since 1984.
HUBERT R. STALLARD, 58, is President and Chief Executive Officer of Bell
Atlantic-Virginia, Inc. (formerly Chesapeake and Potomac Telephone Company of
Virginia), a position he has held for more than five years. He is a Director of
NationsBank of Virginia, N.A. and Bell Atlantic-Virginia, Inc. Mr. Stallard is a
member of the Audit Committee and the Pension Investment Committee and has been
a Director since 1991.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1996
WILLIAM W. BERRY, 63, retired as Chairman of the Board of Directors of
Dominion Resources, Inc. (public utility holding company) on December 30, 1992.
He is a Director of Scott & Stringfellow, Inc., Albemarle Corporation and Ethyl
Corporation. Mr. Berry is Chairman of the Executive Compensation Committee and a
member of the Executive Committee and the Pension Investment Committee. He has
been a Director since 1986.
RONALD E. CARRIER, 63, is President of James Madison University, a position
he has held for more than five years. He is a Director of Leader Federal Savings
Bank. Dr. Carrier is Chairman of the Audit Committee and a member of the
Executive Compensation Committee. He has been a Director since 1979.
2
<PAGE>
LAWRENCE S. EAGLEBURGER, 65, is Senior Foreign Policy Advisor to the law
firm of Baker, Donelson, Bearman & Caldwell. He served as Secretary of State
from December 1992 to January 1993, and Deputy Secretary of State from January
1989 to December 1992. Mr. Eagleburger is a Director of COMSAT Corporation,
Dresser Industries, Inc., Phillips Petroleum Company, Jefferson Bankshares, Inc.
and Stimpsonite Corporation. He is a member of the Audit Committee and has been
a Director since 1993.
RICHARD G. HOLDER, 64, is Chairman of the Board and Chief Executive Officer
of Reynolds Metals Company (aluminum products). From 1988 to May 1, 1992, he was
President and Chief Operating Officer of Reynolds Metals Company. Mr. Holder is
a Director of Reynolds Metals Company and CPC International, Inc. He is a member
of the Audit Committee and the Executive Compensation Committee and has been a
Director since 1992.
STOCK OWNERSHIP
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by (i) each person or group
known by the Company to beneficially own more than 5% of the outstanding shares
of the Company's Common Stock, (ii) each Director or nominee, (iii) each
executive officer listed in the Summary Compensation Table and (iv) all
Directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES(1,2,3) PERCENT OF CLASS
<S> <C> <C>
Wellington Management Company 4,988,130(4) 14.25%
75 State Street
Boston, Massachusetts 02109
The Goldman Sachs Group, L.P. 2,173,800(5) 6.21
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
William W. Berry 4,184 *
Ronald E. Carrier 4,400 *
Wallace L. Chandler 20,920 *
Lawrence S. Eagleburger 2,500 *
Charles H. Foster, Jr. 400 *
Jaap Godthelp 400 *
Elmon T. Gray 5,900 *
Henry H. Harrell 111,590 *
Richard G. Holder 4,100 *
Allen B. King 26,198 *
John D. Munford, II 4,296 *
Hartwell H. Roper 23,925 *
Hubert R. Stallard 4,007 *
William L. Taylor 8,978 *
Thomas R. Towers 47,573 *
All eighteen Directors and 325,628 *
executive officers as a group
</TABLE>
*Percentage of ownership is less than 1% of the outstanding shares of
Common Stock of the Company.
3
<PAGE>
(1) Except as otherwise noted, the number of shares of Common Stock of the
Company shown in the table is as of June 30, 1995.
(2) The number of shares of Common Stock of the Company shown in the table
does not include shares which certain officers of the Company may acquire upon
the exercise of stock options that except under extraordinary circumstances are
automatically exercisable at not less than six month intervals when at least a
minimum stock price appreciation has occurred.
(3) The number of shares of Common Stock of the Company shown in the table
includes 111,077 shares held for Directors and executive officers in the
Employees' Stock Purchase Plan of Universal Leaf and 71,100 shares which certain
Directors and executive officers of the Company have the right to acquire
through the exercise of stock options within 60 days following June 30, 1995.
The number of shares above also includes 606 shares, which are jointly or solely
held by minor children or other children living at home or held in fiduciary
capacities. Such shares may be deemed to be beneficially owned by the rules of
the Securities and Exchange Commission but inclusion of the shares in the table
does not constitute admission of beneficial ownership.
The Employees' Stock Purchase Plan of Universal Leaf held 1,468,262 shares
or 4.2% of the shares of Common Stock outstanding on June 30, 1995. Each
participant in the Plan has the right to instruct Signet Trust Company, trustee
for the Plan, with respect to the voting of shares allocated to his or her
account. The trustee, however, may use its discretion in voting any shares for
which it receives no instructions.
(4) Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on February 10, 1995, Wellington Management
Company as of December 31, 1994, held the shares shown in the table on behalf of
other persons who have the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of such shares. The interest of
any such person does not exceed 5% of the outstanding shares of the Company's
Common Stock. Wellington Management Company has shared power to vote 3,085,020
of the shares and shared power to dispose or direct the disposition of all
4,988,130 of the shares.
(5) The number of shares shown in the table is as of December 30, 1994, as
reported in a Schedule 13G dated September 8, 1995, filed with the Securities
and Exchange Commission by The Goldman Sachs Group, L.P., a parent holding
company, and Goldman, Sachs & Co., a broker/dealer and investment advisor. The
Goldman Sachs Group L.P. and Goldman Sachs & Co. each reported shared power to
vote 1,730,500 of the shares and shared power to dispose or direct the
disposition of all 2,173,800 of the shares.
COMMITTEES
The standing committees of the Board of Directors are the Executive
Committee, the Finance Committee, the Audit Committee, the Pension Investment
Committee and the Executive Compensation Committee. There is no nominating
committee. The Executive Committee, which is subject to the supervision and
control of the Board of Directors, has been delegated substantially all of the
powers of the Board of Directors in order for the Executive Committee to act
between meetings of the Board. The Finance Committee, which is subject to the
supervision and control of the Board of Directors, has the responsibility of
establishing the financial policies of the Company and its subsidiaries. The
responsibilities of the Audit Committee include the review of the scope and the
results of the work of the independent public accountants and internal auditors,
the review of the adequacy of internal accounting controls, and the
recommendation to the Board of Directors as to the selection of independent
public accountants. The Pension Investment Committee establishes the pension
investment policy and monitors the performance of pension investments of the
Company and its U.S. subsidiaries. After receiving recommendations from the
Chief Executive Officer, the Executive Compensation Committee fixes the
compensation of officers and makes awards under the Company's incentive
compensation plans.
4
<PAGE>
During the fiscal year ended June 30, 1995, there were five meetings of the
Board of Directors, seven meetings of the Executive Committee, one meeting of
the Finance Committee, four meetings of the Audit Committee, four meetings of
the Pension Investment Committee and three meetings of the Executive
Compensation Committee. All Directors attended 75 percent or more of the total
number of meetings of the Board of Directors and committees on which they
served.
DIRECTORS' COMPENSATION
Each Director who is not an officer of the Company receives an annual
retainer of $15,000, a fee of $1,000 for each Board meeting attended and a fee
of $750 for each committee meeting attended.
The Outside Directors' 1994 Deferred Income Plan permits a non-employee
Director to defer all or a portion of his compensation. Deferred amounts are
deemed hypothetically invested as designated by the Director in any of five
investment options selected by the Company for purposes of calculating a market
return for bookkeeping purposes. The Company may, but is not required to, invest
the deferred amounts in a Company-owned life insurance product with parallel
investment options. Subject to certain restrictions, the Director may elect at
the time of deferral to take cash distributions, in whole or in part, from his
account either prior to or following termination
of service.
On May 2, 1991, the Board of Directors approved a Restricted Stock Plan for
Non-Employee Directors (the "Directors' Stock Plan") under which each
non-employee Director is awarded 700 shares of restricted Common Stock of the
Company annually following the Annual Meeting of Shareholders, provided that no
Director may receive more than 2,100 shares under the Directors' Stock Plan. The
restrictions on shares awarded under the Directors' Stock Plan lapse in the
event the Director becomes disabled, dies, is not nominated for reelection or is
not reelected. A total of 20,000 shares of Common Stock of the Company is
authorized for issuance under the Directors' Stock Plan, and the number of
shares authorized and issued under the Directors' Stock Plan will be adjusted
for stock dividends, stock splits and certain other corporate events that may
occur in the future.
In October 1994, the shareholders approved the 1994 Stock Option Plan for
Non-Employee Directors (the "Directors' Option Plan"). Pursuant to the
Directors' Option Plan, each non-employee Director receives an option to
purchase 1,000 shares of Common Stock of the Company on the first business day
following the Annual Meeting of Shareholders. The exercise price of all options
granted under the Directors' Option Plan is the fair market value of the Common
Stock on the date of grant. All of the options become exercisable six months
after the date of grant and expire ten years from the date of grant. Shorter
expiration periods may apply in the event an optionee dies, becomes disabled or
resigns from or does not stand for reelection to the Board. A total of 100,000
shares of Common Stock of the Company is authorized for issuance under the
Directors' Option Plan, and the number of shares authorized and issued under the
Directors' Option Plan will be adjusted for stock dividends, stock splits and
certain other corporate events that may occur in the future.
Each Director is eligible to participate in a Directors' Matching Gifts
Program in which the Company matches Directors' contributions to charities. The
maximum amount which can be matched in any fiscal year is $5,000 per Director.
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
The Company's executive compensation and benefits program is administered
by the Executive Compensation Committee (the "Committee"), which is composed
entirely of non-employee Directors. The goal of the program is to attract,
motivate, reward and retain the management talent required to achieve the
Company's business
5
<PAGE>
objectives, at compensation levels which are fair and equitable and competitive
with those of comparable companies. This goal is furthered by the Committee's
policy of linking compensation to individual and corporate performance and by
encouraging significant stock ownership by senior management in order to align
the financial interests of management with those of the shareholders.
The three main components of the Company's executive compensation program
are base salary, annual cash incentive awards under Management Performance Plans
adopted by the Company and its subsidiaries and equity participation in the form
of stock option grants and eligibility to participate in the Employees' Stock
Purchase Plan of Universal Leaf. Each year the Committee reviews the total
compensation package of each executive officer to ensure it meets the goals of
the program. As a part of this review, the Committee considers corporate
performance information, compensation survey data, the advice of consultants and
the recommendations of management.
BASE SALARY. Base salaries for executive officers are reviewed annually to
determine whether adjustments may be necessary. Factors considered by the
Committee in determining base salaries for executive officers include personal
performance of the executive in light of individual levels of responsibility,
the overall performance and profitability of the Company during the preceding
year, economic trends that may be affecting the Company, and the competitiveness
of the executive's salary with the salaries of executives in comparable
positions at companies of comparable size or operational characteristics. Each
factor is weighed by the Committee in a subjective analysis of the appropriate
level of compensation for that executive. For purposes of assessing the
competitiveness of salaries, the Committee reviews compensation data from
national surveys and selected groups of approximately 4 to 20 companies with
similar size or operational characteristics to determine ranges of total
compensation and the individual components of such compensation. Such
compensation data indicates that the Company's salary levels are below the
median of such data when compared to executive positions of similar scope and
responsibility.
Mr. Harrell became the Chief Executive Officer of the Company in 1988 and
Chairman of the Board of Directors in 1991 and has 29 years experience with the
Company. For the fiscal year beginning July 1, 1995, Mr. Harrell's base salary
was increased approximately 3% after a thorough review and evaluation by the
Committee of Mr. Harrell's personal performance in light of his management
responsibilities, the level of profitability of the Company during fiscal year
1995, and the competitiveness of Mr. Harrell's salary to those of other chief
executive officers in comparable companies.
ANNUAL CASH INCENTIVES. The Company and its principal subsidiaries have
Management Performance Plans under which key management employees may receive
annual cash incentive awards which vary from year to year based upon corporate,
business unit and individual performance. At the Committee's discretion, annual
awards based on management's recommendations are paid to eligible executives
from a "performance fund" determined primarily by the Company's pre-tax income
and return on equity. Unused carryover amounts not awarded in a previous fiscal
year may be added to the performance fund for the current fiscal year. Mr.
Harrell's cash incentive award for the 1995 fiscal year was approximately 12%
less than the award he received in 1994. Mr. Harrell's 1995 award was determined
by the Committee after consideration of the Company's income and earnings
reported for the period, the Committee's assessment of Mr. Harrell's individual
contributions to corporate performance, Mr. Harrell's vision and leadership in
the face of difficult worldwide market conditions in the tobacco industry and a
review of total cash compensation paid to chief executive officers of comparable
companies.
EQUITY PARTICIPATION. The Committee administers the Company's 1989
Executive Stock Plan, under which it has granted to key executive employees
options to purchase shares of the Company's Common Stock based upon a
determination of competitive aggregate compensation levels. The primary
objective of issuing stock options is
6
<PAGE>
to encourage significant investment in stock ownership by management and to
provide long-term financial rewards linked directly to market performance of the
Company's stock. The Committee believes that significant ownership of stock by
senior management is the best way to align the interests of management and the
shareholders, and the Company's stock incentive program is effectively designed
to further this objective.
In the fiscal year ended June 30, 1995, the Committee granted stock options
with a ten-year term to key executives at the fair market value of the Company's
Common Stock on the date of grant. Mr. Harrell received a 1995 option grant for
90,000 shares of the Company's Common Stock, based upon a review by the
Committee of total compensation and its components, including equity
participation, of chief executive officers of comparable companies. The 1995
grants were intended to meet the Committee's three-year option grant targets
and, therefore, it is anticipated that no new grants (excluding reload options
described below) will be made during the fiscal years ending June 30, 1996 and
1997. In determining the number of options to be awarded under the Plan, the
Committee may consider the amount and terms of options already held by an
executive officer. The 1995 grants included grants made under a program
instituted during the fiscal year ended June 30, 1992, to promote an increase in
the equity interest of key executives through systematic option exercises and
the retention of shares. The program requires each participant to make an
investment in the Company by contributing to the program currently owned shares
equal to at least 10% of the number of shares subject to the initial options
granted the participant under the program. Option exercises occur automatically
at not less than six-month intervals when at least a minimum stock price
appreciation has occurred.
Except under extraordinary circumstances or as otherwise determined by the
Committee, participants have agreed that the options granted under the program
during the 1995 fiscal year may be exercised only through stock-for-stock swaps,
and both the contributed shares and additional shares acquired through option
exercises under the program may not be sold by the participating executives
during the ten-year option term. Each 1995 option granted under the program
included a reload replenishment feature which entitles participants each time a
stock-for-stock exercise occurs to receive automatically a new option grant at
the fair market value of the Company's Common Stock on the date of grant. The
number of reload options granted is equal to the number of shares contributed by
a participant to effect a stock-for-stock swap. In exchange for this
replenishment feature, each participant has agreed to retain in the program
shares equaling at least the after-tax gain realized upon each exercise.
In addition to stock option grants, eligible executive officers participate
in the Employees' Stock Purchase Plan of Universal Leaf to the maximum extent
permitted by the terms of that Plan, thereby increasing on a voluntary basis
their equity participation in the Company.
TAX CONSIDERATIONS. The Omnibus Budget Reconciliation Act of 1993 ("OBRA
93") established certain criteria for the tax deductibility of compensation in
excess of $1 million paid to the Company's executive officers. In light of this
tax law, it is the policy of the Committee to modify where practicable the
Company's executive incentive plans so as to maximize the tax deductibility of
compensation paid to its executive officers. Accordingly, in the fiscal year
ended June 30, 1995, the Company's 1989 Executive Stock Plan was amended to
include a fixed limit on the number of stock incentives (including options) that
may be granted to any individual in any calendar year and a requirement that the
exercise price for a stock option shall not be less than the fair market value
of a share of the Company's Common Stock on the date of grant. Any future gains
realized upon the exercise of stock options granted under such Plan will qualify
as "performance-based compensation" (as defined by OBRA 93) and be fully
deductible by the Company.
The Committee does not propose at the present time to amend the Management
Performance Plans of the Company and its subsidiaries to comply with the OBRA 93
requirements. It is not anticipated that compensation
7
<PAGE>
in excess of $1 million will be paid to any individual during the fiscal year
ending June 30, 1996. Moreover, the qualifying amendments to these plans would
limit the Committee's discretion to make awards based on individual performance
factors and other factors as the Committee may determine, from time to time, to
be relevant. The Committee believes that the flexibility to adjust annual cash
incentive awards upward or downward is an important feature of the Management
Performance Plans and one which serves the best interests of the Company by
allowing the Committee to recognize and motivate individual executive officers
as circumstances warrant.
Executive Compensation Committee
William W. Berry, Chairman
Ronald E. Carrier
Elmon T. Gray
Richard G. Holder
8
<PAGE>
PERFORMANCE GRAPH
The graph compares the cumulative total return on Common Stock of the
Company for the last five fiscal years with the total return of the Standard &
Poors Midcap 400 Stock Index and the Media General Tobacco Industry Group Index
assuming the investment of $100 on June 30, 1990 and the reinvestment of all
dividends. Included in fiscal year 1992 was a special dividend of $1.34 per
share representing the value to the Company's shareholders of the spin-off of
Lawyers Title Corporation in October 1991.
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Universal Corporation $100.00 $137.31 $203.73 $197.78 $163.13 $184.23
Media General Tobacco Index $100.00 $130.73 $159.06 $123.52 $130.35 $181.96
S&P Midcap 400 $100.00 $112.83 $133.77 $163.94 $163.55 $200.08
</TABLE>
9
<PAGE>
EXECUTIVE COMPENSATION
The individuals named below include the Company's Chairman and Chief
Executive Officer and the other four executive officers of the Company who were
the most highly compensated executive officers of the Company for the 1995
fiscal year. Information is provided for the fiscal years ended on June 30 of
the years shown.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
NAME AND PRINCIPAL FISCAL YEAR OTHER ANNUAL UNDERLYING ALL OTHER
POSITION ENDED 6/30 SALARY($) BONUS($)(1) COMPENSATION($)(2) OPTIONS(#) COMPENSATION($)(5)
<S> <C> <C> <C> <C> <C> <C>
Henry H. Harrell 1995 $444,230 $202,000 -- 100,143(3) $ 90,619
Chairman and Chief 1994 429,210 230,000 -- 0 98,319
Executive Officer 1993 361,655 355,000 -- 19,934(4) 80,193
Allen B. King 1995 313,673 139,000 -- 92,193(3) 50,388
President and Chief 1994 302,263 156,000 -- 0 52,985
Operating Officer 1993 255,737 240,000 -- 14,125(4) 41,728
Jaap Godthelp 1995 264,015 161,000 -- 0 0
Former Chairman, 1994 323,920 190,000 -- 0 0
Deli Universal 1993 302,476 147,996 -- 0 0
William L. Taylor 1995 265,570 77,500 -- 59,404(3) 37,570
Vice President and 1994 255,370 84,700 -- 0 38,051
Chief Administrative 1993 243,260 121,000 -- 8,658(4) 32,724
Officer
Hartwell H. Roper 1995 188,790 64,000 -- 51,815(3) 26,501
Vice President and 1994 181,590 70,000 -- 0 29,105
Chief Financial 1993 171,050 100,000 -- 7,493(4) 26,969
Officer
</TABLE>
(1) Cash incentive bonuses awarded by the Executive Compensation Committee
under Management Performance Plans of the Company and its principal
subsidiaries.
(2) None of the named executive officers received perquisites or other
personal benefits in excess of the lesser of $50,000 or 10% of his total salary
and bonus.
(3) The following number of options granted to each of the named executive
officers in the 1995 fiscal year were reload options granted under the automatic
exercise program described above in "Report of Executive Compensation
Committee": Mr. Harrell, 10,143; Mr. King, 7,193; Mr. Taylor, 4,404; and Mr.
Roper, 3,815.
(4) The options granted to the named executive officers in the 1993 fiscal
year were reload options granted under the automatic exercise program described
above in "Report of Executive Compensation Committee."
(5) The amounts in the "All Other Compensation" column represent (i)
employer contributions to the Employees' Stock Purchase and the Supplemental
Stock Purchase Plans of Universal Leaf (the "Stock Purchase Plans"), (ii)
premium payments made by the Company under the Executive Insurance Program, and
(iii) interest accrued
10
<PAGE>
to participants' accounts under the Company's Deferred Income Plan (the "DIP")
to the extent such interest exceeded the applicable long-term rate under
Internal Revenue Code Section 1274(d). Employer contributions to the Stock
Purchase Plans on behalf of the executive officers listed in the Summary
Compensation Table for the 1995, 1994 and 1993 fiscal years were in the
following respective amounts: Mr. Harrell, $19,759, $21,252 and $17,748; Mr.
King, $15,456, $15,000 and $12,504; Mr. Taylor, $13,212, $12,696 and $12,096;
and Mr. Roper, $8,483, $9,000 and $8,448. The life insurance premiums paid by
the Company on behalf of such executive officers for the 1995, 1994 and 1993
fiscal years were in the following respective amounts: Mr. Harrell, $52,316,
$54,521 and $37,722; Mr. King, $27,714, $29,055 and $20,349; Mr. Taylor,
$24,358, $25,355 and $20,628; and Mr. Roper, $13,134, $13,844 and $11,380. The
accruals of interest on income deferred by such executive officers under the DIP
in excess of the applicable long-term rate under Internal Revenue Code Section
1274(d) for the 1995, 1994 and 1993 fiscal years were in the following
respective amounts: Mr. Harrell, $18,544, $22,546 and $24,723; Mr. King, $7,218,
$8,930 and $8,875; and Mr. Roper, $4,884, $6,261 and $7,141.
PENSION PLANS
Employees of the Company and certain U.S. subsidiaries are covered by a
defined benefit retirement plan, which is qualified under the Internal Revenue
Code, and a defined benefit supplemental retirement plan, which is an unfunded
plan to provide benefits in excess of limits allowed by the Internal Revenue
Code. The table below shows estimated annual benefits payable under both plans
at normal retirement (age 65) based on the average salary and bonus (as reported
in the Summary Compensation Table) for the highest consecutive three years.
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 15 20 25 30 35 40 45
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 44,305 $ 59,075 $ 73,843 $ 88,612 $103,380 $112,338 $121,295
300,000 67,819 90,425 113,032 135,639 158,245 171,681 185,117
400,000 91,332 121,777 152,221 182,666 213,109 231,024 248,939
500,000 114,846 153,128 191,410 229,692 267,974 290,368 312,762
600,000 138,359 184,480 230,599 276,719 322,839 349,711 376,584
700,000 161,873 215,831 269,788 232,746 377,703 409,055 440,406
800,000 185,386 247,182 308,977 370,773 432,568 468,398 504,228
900,000 208,899 278,533 348,166 417,800 487,433 527,741 568,050
1,000,000 232,413 309,884 387,355 464,827 542,297 587,085 631,872
1,100,000 255,926 341,236 426,544 511,853 597,162 646,428 695,694
1,200,000 279,440 372,287 465,733 558,880 652,026 705,771 759,516
</TABLE>
The credited years of service for Messrs. Harrell, King, Taylor and Roper
are twenty-nine, twenty-six, five and twenty-one, respectively.
The benefits shown in the table are calculated on the basis of a 50% joint
and survivor benefit, assuming that at retirement the age of the employee's
spouse is 62. The social security benefit will be paid in addition to the
amounts shown in the table.
Mr. Godthelp is covered by a pension plan established under the laws of the
Netherlands. The Plan, which covers employees of N. V. Deli Universal and
certain other Dutch subsidiaries, is partially funded by employer and
participant contributions. Mr. Godthelp retired on December 31, 1994 and
receives an annual pension benefit of $116,260 under the Plan.
11
<PAGE>
STOCK OPTIONS
The following tables contain information concerning grants of stock options
to executive officers listed in the Summary Compensation Table during the fiscal
year ended June 30, 1995, exercises of stock options by such executive officers
in such fiscal year and the fiscal year-end value of all unexercised stock
options held by such executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL
SECURITIES % OF TOTAL RATES OF STOCK PRICE
UNDERLYING OPTIONS GRANTED EXERCISE APPRECIATION FOR
OPTIONS TO EMPLOYEES OR BASE EXPIRATION OPTION TERM
NAME GRANTED (#) IN FISCAL YEAR PRICE ($/SH) DATE 5% ($)(2) 10% ($)(2)
<S> <C> <C> <C> <C> <C> <C>
Henry H. Harrell 90,000 13.7% $ 21.50 12/1/04 $1,057,226 $2,702,062
10,143(1) 17.0 23.375 12/1/04 100,131 285,504
Allen B. King 85,000 12.9 21.50 12/1/04 998,491 2,551,948
7,193(1) 12.1 23.375 12/1/04 71,009 202,468
William L. Taylor 55,000 8.4 21.50 12/1/04 646,082 1,651,260
4,404(1) 7.4 23.375 12/1/04 43,476 123,963
Hartwell H. Roper 48,000 7.3 21.50 12/1/04 563,854 1,441,100
3,815(1) 6.4 23.375 12/1/04 37,662 107,384
</TABLE>
(1) These options were reload options which replaced shares of the
Company's Common Stock used for stock swap option exercises under the automatic
exercise program described above in "Report of Executive Compensation
Committee."
(2) The "Potential Realizable Value" columns illustrate the theoretical
gain realized by an optionee if options were exercised on December 1, 2004 with
the price of the Company's Common Stock increasing at an assumed 5% rate
compounded annually and at an assumed 10% rate compounded annually. On these
assumptions, on December 4, 2004, a share of the Company's Common Stock would be
worth $33.25 and $51.52, respectively. The inclusion of the projections at
assumed rates is not intended to forecast future appreciation in the price of
the Company's Common Stock.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS
SHARES ACQUIRED VALUE OPTIONS AT FY-END(#) AT FY-END($)(3)
NAME ON EXERCISE(#)(1) REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE
<S> <C> <C> <C> <C> <C>
Henry H. Harrell 11,027 $20,676 207,562 10,143 $ 189,125
Allen B. King 7,820 14,663 149,389 7,193 7,813
William L. Taylor 4,788 8,978 93,033 4,404 0
Hartwell H. Roper 4,147 7,776 82,299 3,815 5,000
</TABLE>
<TABLE>
<CAPTION>
NAME UNEXERCISABLE
<S> <C>
Henry H. Harrell $ 0
Allen B. King 0
William L. Taylor 0
Hartwell H. Roper 0
</TABLE>
(1) The number of shares of the Company's Common Stock included in this
column represents the gross amount of shares issued in exchange for shares
already owned by the officers listed in the table used to pay the exercise price
of options exercised by them in the last fiscal year. The following is the net
amount of shares of Common Stock acquired by each of these officers as a result
of such exercises, after deducting already-owned shares swapped but including
shares sold to pay taxes: Mr. Harrell, 884 shares; Mr. King, 627 shares; Mr.
Taylor 384 shares; and Mr. Roper, 332 shares.
(2) The value realized represents the difference between the exercise price
of the option and the fair market value of the Company's Common Stock on the
date of exercise.
(3) The value of the unexercised options at fiscal year-end represents the
difference between the exercise price of any outstanding options and $21.00, the
closing sales price of a share of the Company's Common Stock on June 30, 1995,
as reported on the New York Stock Exchange.
Of the options shown as of the fiscal year end, options on 157,705 shares
for Mr. Harrell, 154,082 shares for Mr. King, 97,437 shares for Mr. Taylor and
84,514 shares for Mr. Roper, except under ordinary circumstances, are only
exercisable automatically at not less than six month intervals when at least a
minimum stock price appreciation has occurred.
SEVERANCE AGREEMENTS
The Company has entered into severance agreements (the "Agreements") with
Henry H. Harrell, Allen B. King, William L. Taylor and Hartwell H. Roper. The
Agreements provide for payment and continued benefits if the officer's
employment is terminated within twenty-four months after a change of control,
either by the Company "for cause" or "without cause" (other than for conduct
involving moral turpitude) or by the officer as a result of a demotion or
reduction in compensation. In the event of such termination, the officer will
receive (i) termination compensation of up to two times his annual compensation
(including salary, bonuses and incentive compensation) paid or payable to him
for the last complete fiscal year prior to the change of control; (ii)
accelerated vesting of rights under the Company's Management Performance Plan
and the Employees' Stock Purchase Plan of Universal Leaf; (iii) for the portion
of the fiscal year in which his employment is terminated, a proportional share
of the cash value of awards made to him under the Management Performance Plan
for the last complete fiscal year prior to the change of control; (iv)
additional retirement benefits equal to the additional benefits, if any, he
would have received if he were credited with two additional years of service
following termination; and (v) continuation of other fringe benefits or
equivalent benefits for a period of two years. The officer's termination
compensation will be reduced by the amount of compensation he receives from
another employer within two years subsequent to such termination.
13
<PAGE>
The Board of Directors believes that the Agreements benefit the Company and
its shareholders by securing the continued service of key management personnel
and by enabling management to perform its duties and responsibilities without
the distracting uncertainty associated with a change of control.
CERTAIN RELATIONSHIPS
Baker, Donelson, Bearman & Caldwell, the law firm to which Lawrence S.
Eagleburger serves as Senior Foreign Policy Advisor, is retained from time to
time to provide legal services to the Company and its subsidiaries.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent auditors of the Company are appointed by the Board of
Directors upon the recommendation of the Audit Committee. Ernst & Young LLP, the
Company's independent auditors since 1971, has been appointed for the next
fiscal year. Representatives of Ernst & Young LLP will be present at the Annual
Meeting and are available to respond to appropriate questions and may make a
statement if they desire to do so.
PROPOSALS FOR 1996 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1996 Annual
Meeting of Shareholders must cause such proposal to be delivered, in proper
form, to the Secretary of the Company, whose address is Hamilton Street at
Broad, P.O. Box 25099, Richmond, Virginia 23260, no later than May 20, 1996, in
order for the proposal to be considered for inclusion in the Company's Proxy
Statement. The Company anticipates holding the 1996 Annual Meeting on October
22, 1996.
The Company's Bylaws also prescribe the procedure a shareholder must follow
to nominate Directors or to bring other business before shareholders' meetings.
For a shareholder to nominate a candidate for Director at the 1996 Annual
Meeting of Shareholders, notice of nomination must be received by the Secretary
of the Company not less than 60 days and not more than 90 days prior to the
meeting. The notice must describe various matters regarding the nominee and the
shareholder giving the notice. For a shareholder to bring other business before
the 1996 Annual Meeting of Shareholders, notice must be received by the
Secretary of the Company not less than 60 days and not more than 90 days prior
to the meeting. The notice must include a description of the proposed business,
the reasons therefor, and other specified matters. Any shareholder may obtain a
copy of the Company's Bylaws, without charge, upon written request to the
Secretary of the Company.
OTHER MATTERS
THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1995,
INCLUDING FINANCIAL STATEMENTS, IS BEING MAILED TO SHAREHOLDERS WITH THIS PROXY
STATEMENT. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED JUNE 30, 1995, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCLUDING EXHIBITS, CAN BE OBTAINED WITHOUT CHARGE BY WRITING TO KAREN M. L.
WHELAN, VICE PRESIDENT AND TREASURER, UNIVERSAL CORPORATION, P.O. BOX 25099,
RICHMOND, VIRGINIA 23260.
14
<PAGE>
********************************APPENDIX************************************
UNIVERSAL CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Henry H. Harrell, Allen B. King, and
William L. Taylor and each or any of them, proxy for the undersigned, with
power of substitution, to vote all the shares of Common Stock of Universal
Corporation held of record by the undersigned on September 6, 1995, at the
Annual Meeting of Shareholders to be held at 2:00 p.m. on October 24, 1995,
and at any adjournments thereof, upon the following matters as more fully set
forth in the Proxy Statement, and for the transaction for such other business
as may properly come before the Meeting:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as indicated below) for all nominees listed below
</TABLE>
Charles H. Foster, Jr., Allen B. King and John D. Munford, II
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through that nominee's name)
-------------------------------------------------------------------------------
(continued, and to be DATED and SIGNED on the other side)
(continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON THE
REVERSE SIDE BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ITEM 1.
Dated _______________________ 1995
__________________________________
(Signature)
__________________________________
(Signature)
Please sign exactly as name appears
on this proxy. Attorneys-in-Fact,
executors, trustees, guardians,
corporate officers, etc. should
give full title.
PLEASE MARK, DATE, SIGN AND MAIL IN THE ENCLOSED ENVELOPE.
<PAGE>
TO TRUSTEE, EMPLOYEES' STOCK PURCHASE PLAN OF
UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED AND DESIGNATED AFFILIATED COMPANIES
VOTING
INSTRUCTION
This Voting Instruction is Solicited on Behalf of the Board of Directors
Pursuant to Section 13.01 of the Employees' Stock Purchase Plan of Universal
Leaf Tobacco Company, Incorporated and Designated Affiliated Companies, you are
directed to vote, in person or by proxy, the whole shares of Common Stock of
Universal Corporation credited to the undersigned Participant's Account as of
July 31, 1995, at the Annual Meeting of Shareholders of Universal Corporation,
to be held at 2:00 p.m. on October 24, 1995, and at any adjournments thereof,
upon the following matters as more fully set forth in the Proxy Statement, and
for the transaction of such other business as may properly come before the
Meeting:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as indicated below) for all nominees listed below
</TABLE>
Charles H. Foster, Jr., Allen B. King and John D. Munford, II
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through that nominee's name)
(continued, and to be DATED and SIGNED on the other side)
<PAGE>
(continued from other side)
THIS VOTING INSTRUCTION WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION IS
MADE, THIS VOTING INSTRUCTION WILL BE VOTED FOR ITEM 1. IF A VOTING INSTRUCTION
IS NOT PROPERLY EXECUTED AND RECEIVED BY THE TRUSTEE, THE TRUSTEE MAY VOTE THE
SHARES AT ITS DISCRETION.
Dated _______________________ 1995
__________________________________
(Signature)
Please sign exactly as name appears
on this Voting Instruction.
PLEASE MARK, DATE, SIGN AND MAIL IN THE ENCLOSED ENVELOPE.
<PAGE>
TO TRUSTEE, SAVINGS AND STOCK OWNERSHIP PLAN OF
LAWYERS TITLE INSURANCE CORPORATION AND DESIGNATED SUBSIDIARIES
VOTING
INSTRUCTION
This Voting Instruction is Solicited on Behalf of the Board of Directors
Pursuant to Section 10.5 of the Savings and Stock Ownership Plan of Lawyers
Title Insurance Corporation and Designated Subsidiaries, you are directed to
vote, in person or by proxy, the whole shares of Common Stock of Universal
Corporation credited to the undersigned Participant's Account as of June 30,
1995, at the Annual Meeting of Shareholders of Universal Corporation, to be held
at 2:00 p.m. on October 24, 1995, and at any adjournments thereof, upon the
following matters as more fully set forth in the Proxy Statement, and for the
transaction of such other business as may properly come before the Meeting:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as indicated below) for all nominees listed below
</TABLE>
Charles H. Foster, Jr., Allen B. King and John D. Munford, II
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through that nominee's name)
(continued, and to be DATED and SIGNED on the other side)
<PAGE>
(continued from other side)
THIS VOTING INSTRUCTION WHEN PROPERLY EXECUTED WILL BE VOTED FOR ITEM 1 UNLESS
OTHERWISE DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF A
VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE TRUSTEE, THE
WHOLE SHARES OF COMMON STOCK OF UNIVERSAL CORPORATION CREDITED TO YOUR
PARTICIPANT'S ACCOUNT SHALL BE VOTED IN THE SAME PROPORTION AS THOSE SHARES OF
COMMON STOCK FOR WHICH THE TRUSTEE HAS RECEIVED PROPER VOTING INSTRUCTIONS WITH
RESPECT TO ITEM 1.
Dated ______________________ 1995
_________________________________
(Signature)
Please sign exactly as name appears
on this Voting Instruction.
PLEASE MARK, DATE, SIGN AND MAIL IN THE ENCLOSED ENVELOPE.
