UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the Period Ended December 31, 1994
OR
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the Transition Period From to
Commission file number 1-652
UNIVERSAL CORPORATION
(Exact name of registrant as specified in its charter)
State or other jurisdiction of incorporation or organization - VIRGINIA
I.R.S. Employer Identification Number - 54-0414210
Address of principal executive offices - 1501 NORTH HAMILTON STREET
RICHMOND, VIRGINIA 23230
Registrant's telephone number, including area code - (804) 359-9311
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Common Stock, No par value - 35,016,585 shares outstanding as of
February 9, 1995
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three and Six Months Ended December 31, 1994 and 1993
<TABLE>
Three Months Six Months
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Sales and other operating revenues $963,745 $866,774 $1,619,769 $1,557,313
Cost of goods sold 842,903 750,703 1,409,523 1,324,283
Selling, general and administrative 85,084 73,103 151,268 148,330
Interest 15,171 14,343 30,071 30,212
943,158 838,149 1,590,862 1,502,825
Income before income taxes and
other items 20,587 28,625 28,907 54,488
Income taxes 7,497 9,568 10,299 17,486
Minority interests 42 391 162 304
Income from consolidated operations 13,048 18,666 18,446 36,698
Equity in net income of
unconsolidated affiliates 1,901 1,544 2,371 1,971
Income before cumulative effect of
change in accounting principle 14,949 20,210 20,817 38,669
Cumulative effect of change in
accounting principle (29,406)
Net income $14,949 $20,210 $20,817 $9,263
Per common share
Income before cumulative effect
of change in accounting principle $.43 $.57 $.59 $1.09
Cumulative effect of change in
accounting principle (.83)
Net income $.43 $.57 $.59 $ .26
Retained earnings - Beginning of period $317,344 $341,523
Net income 20,817 9,263
Cash dividends declared ($.49-1994; $.46-1993) (17,162) (16,392)
Retained earnings - End of period $320,999 $334,394
Average common shares outstanding 35,005,823 35,632,238
</TABLE>
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Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
December 31, June 30,
1994 1994
<S>
ASSETS <C> <C>
Current
Cash and cash equivalents $ 65,718 $164,520
Accounts and notes receivable 500,646 368,989
Accounts receivable - unconsolidated affiliates 84,686 28,113
Inventories at lower of cost or market:
Tobacco 474,906 436,033
Lumber and building products 112,126 83,441
Agri-products 58,416 60,132
Other 8,765 8,753
Prepaid income taxes 8,773 10,095
Deferred income taxes 5,547 5,530
Other current assets 16,497 20,423
Total current assets 1,336,080 1,186,029
Real estate, plant and equipment - at cost
Land 31,834 22,607
Buildings 187,883 166,111
Machinery and equipment 359,470 350,426
579,187 539,144
Less accumulated depreciation 286,273 269,955
292,914 269,189
Other assets
Goodwill 126,009 124,286
Other intangibles 24,534 27,089
Investments in unconsolidated affiliates 39,109 26,298
Deferred income taxes 3,789 3,494
Other noncurrent assets 30,536 30,658
223,977 211,825
$1,852,971 $1,667,043
</TABLE>
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Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
December 31, June 30,
1994 1994
<S> <S> <S>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Notes payable and overdrafts $550,142 $531,209
Accounts payable 233,309 199,280
Accounts payable - unconsolidated affiliates 33,440 34,810
Customer advances and deposits 173,862 51,671
Accrued compensation 15,378 13,366
Provision for restructuring 9,500 15,500
Income taxes payable 6,223 6,217
Current portion long-term obligations 32,416 15,947
Total current liabilities 1,054,270 868,000
Long - term obligations 285,583 298,117
Postretirement benefits other than pensions 48,387 48,969
Other long - term liabilities 54,335 57,156
Deferred income taxes 16,706 12,361
Minority interests 4,741 4,966
Shareholders' equity
Preferred stock $100 par, 8%
cumulative, authorized 75,000 shares,
issued and outstanding 4 shares
Additional preferred stock, no par
value, authorized 5,000,000 shares,
none issued or outstanding
Common stock, no par value, authorized
50,000,000 shares, issued and
outstanding 35,016,585 shares
(35,001,185 at June 30, 1994) 75,523 75,287
Retained earnings 320,999 317,344
Foreign currency translation adjustments (7,573) (15,157)
Total shareholders' equity 388,949 377,474
$1,852,971 $1,667,043
</TABLE>
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Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1994 and 1993
<TABLE>
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $20,817 $9,263
Adjustments to reconcile net income
to net cash provided by operating activities 23,900 30,500
Cumulative effect of change in accounting
principle 29,406
Changes in operating assets and liabilities
net of effects from purchase of businesses (74,319) (227,592)
Net cash used in operating activities (29,602) (158,423)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (14,900) (13,300)
Purchase of businesses (net of cash acquired) (60,600) (8,700)
Other 2,100 (3,500)
Net cash used in investing activities (73,400) (25,500)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of short-term debt - net 14,100 131,100
Repayment of short-term debt classified
as long-term June 30,1993 (100,000)
Issuance of long-term debt 6,700 115,000
Issuance of common stock 200
Dividends paid (16,800) (15,700)
Net cash provided by financing activities 4,200 130,400
Net decrease in cash and cash equivalents (98,802) (53,523)
Cash and cash equivalents at beginning of period 164,520 119,693
CASH AND CASH EQUIVALENTS AT END OF PERIOD $65,718 $66,170
</TABLE>
5
<PAGE>
Universal Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1994
All figures contained herein are unaudited and stated in
thousands of dollars
1) The Company's operating segments of domestic and foreign tobacco,
lumber and building products and agri-products are seasonal by nature.
Therefore, the results of operations for the six month period ended
December 31, 1994 are not necessarily indicative of results to be
expected for the year ending June 30, 1995. All adjustments necessary
to fairly state the results for such period have been included and were
of a normal recurring nature.
2) At December 31, 1994, total exposure under guarantees issued for
banking facilities of unconsolidated affiliates was $12 million. Other
contingent liabilities approximate $109 million and relate principally
to Common Market guarantees.
3) The lower effective tax rate for last year was due to the reversal
of taxes accrued on non-repatriated earnings that were permanently
reinvested in certain foreign subsidiaries, and a greater proportion of
earnings taxed at less than the full statutory rate.
4) The Company recognized in June 1994 a pre-tax restructuring charge
of $17.5 million related to the consolidation of tobacco operations and
a reduction in the number of employees. The charge included $16 million
for the expected costs of severance payments related to approximately
700 employees throughout the Company. As of December 31, 1994, payments
of $8 million, primarily for severance and related costs of
approximately 500 employees, had been recorded as a reduction of the
restructuring provision.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Current assets and current liabilities increased $150 million
and $186 million, respectively, at December 31, 1994 compared to June
30, 1994, primarily due to the seasonal requirements of the Company's
domestic tobacco operations, and a recent acquisition in the lumber and
building products segment. Domestic tobacco balances at December 31,
generally reflect current U.S. burley crop purchasing and processing
activity, and any unshipped current year flue-cured crop. This has the
effect of increasing working capital needs compared to June 30, which is
the low point for U.S. requirements. Working capital for lumber and
building products included approximately $36 million of current assets
and $9 million of current liabilities related to a first quarter
softwood distributor acquisition. The acquisition was financed with
short-term borrowings.
In July 1994, the Brazilian government implemented a new
monetary policy. Subsequently the U.S. dollar declined in value
relative to the real, the new Brazilian currency. The exchange ratio of
the dollar to the real could lead to material swings in foreign exchange
gains and losses. In addition, if the real does not devalue at a rate
in line with Brazilian inflation, there will be significant dollar cost
increases for the next crop. At December 31, it was estimated the
increase in tobacco costs due to revaluation and inflation on the
upcoming crop will be between 30% - 40%. At this point, the prospects
for timely devaluation of the real are not strong. The overall
potential earnings impact cannot be determined at this time due to the
affect of future exchange and inflation rates, and negotiation of sales
prices with customers on the 1995 crop.
The Company's liquidity position at December 31, 1994, remains
strong. In the current year payments of approximately $8 million have
been made for severance and other costs related to the Company's
restructuring plan announced in June 1994. The Company has also reduced
its capital expenditure requirements over the last few years and
continues to do so in the current year.
Results of Operations
'Sales and Other Operating Revenues' increased $97 million and
$62 million in the quarter and six-month period respectively. Tobacco
sales improved principally due to increased shipments in the quarter,
while lumber and building products revenues benefited from the inclusion
of acquired operations. Agri-product revenues were comparable to last
year in both periods. Improvements in sales of a number of
agri-products offset a decline in revenues related to the Company's
decision last year to discontinue coffee trading activity.
Gross profits in the quarter were up $5 million to $121million
in the quarter, and down $23 million to $210 million for the six months
ended December 31, 1994. Both the quarter and year-to-date amounts
include $2.7 million of inventory writedowns due to sharply depressed
economic circumstances in Eastern Europe which has led to significantly
reduced sales activity in the region. In the quarter, tobacco gross
profits were down slightly due to the mix of customers and continued
pressure on margins. Lumber and building products gross profits
improved on the strength of new outlets compared to last year.
Year-to-date the reduction in tobacco gross profits was due to Brazilian
operations experiencing a significant decline in margins on current and
old crop sales. Sales of old crop tobacco, that had been written down
in the prior fiscal year, were nominally profitable and had the effect
of reducing the overall profit margins reported. Margins on current crop
sales were lower, despite benefits from restructuring, because of
reduced overall volumes and continued pressure from customers on
pricing. For the six month period the volume of U.S. flue-cured and
burley tobacco bought was up, while processing volumes were comparable
with last year. Domestic
7
<PAGE>
gross profits were down year-to-date due to a
shift in processing mix to lower margin business as well as reduced
margins on certain sales. Agri-product gross profits were up slightly in
the quarter and six month periods due to improvements in sunflower seed
and rubber trading as well as comparative improvements realized from
having discontinued coffee activities.
'Selling, general and administrative expenses' increased $12
million in the quarter and $3 million year-to-date. The fiscal 1995
quarter and year-to-date amounts included a $3.8 million provision
against customer obligations related to Eastern Europe. The quarter
also included approximately $3 million related to the inclusion of the
lumber companies acquired over the past year. For the year-to-date
comparison these increases were partially offset by reduced tobacco
shipping expenses. 'Interest expense' reflects the positive impact of a
reduction in inventory levels since the prior year which offset
increased interest rates in the U.S. that resulted primarily from moves
by the Federal Reserve. 'Income Taxes' in the prior year reflected an
effective tax rate that was lower than that of fiscal 1995 due to the
reversal of taxes previously accrued on earnings from certain foreign
subsidiaries and a greater proportion of earnings taxed at less than
full statutory rates.
Although the Company does not expect to equal fiscal 1994's
annual earnings from continuing operations, excluding effects of
restructuring provisions, there are some favorable trends. Tobacco
industry conditions are generally improving as anticipated with
projected crop sizes more nearly in line with demand and worldwide
inventory positions being reduced. The Company's restructuring program
is very much on track, and the reshaping of operations in Eastern Europe
and elsewhere should result in further restructuring during this fiscal
year.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.10 Universal Corporation 1989 Executive Stock Plan, as
amended on December 1, 1994
10.17 Universal Corporation 1994 Stock Option and
Accumulation Agreement
10.18 Universal Corporation 1994 Stock Option Plan for
Non-Employee Directors
10.19 Universal Corporation Non-Employee Director
Non-Qualified Stock Option Agreement
(b) Reports on Form 8-K
Form 8-K filed on January 24, 1995. The form describes a press
release issued by the Registrant on January 16, 1995 announcing that
earnings from continuing operations for fiscal year 1995 are expected to
be below management's previous estimate.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: February 9, 1995 UNIVERSAL CORPORATION
(Registrant)
/ s / Hartwell H. Roper
Hartwell H. Roper, Vice President and
Chief Financial Officer
/ s / William J. Coronado
William J. Coronado, Controller
(Principal Accounting Officer)
10
<PAGE>
Exhibit 10.10
UNIVERSAL CORPORATION
1989 EXECUTIVE STOCK PLAN
(As Amended on December 1, 1994)
Article 1
DEFINITIONS
1.01 Affiliate means any "subsidiary" or "parent corporation"
(within the meaning of Section 424 of the Code) of the Company.
1.02 Agreement means a written agreement (including any
amendment or supplement thereto) between the Company and a
Participant specifying the terms and conditions of a Grant or an
Award issued to such Participant.
1.03 Award means an award of Common Stock and/or Restricted
Stock.
1.04 Board means the Board of Directors of the Company.
1.05 Change of Control means and shall be deemed to have taken
place if: (i) a third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the beneficial owner of shares of the Company having 20 percent
or more of the total number of votes that may be cast for the
election of Directors of the Company; or, (ii) as the result of,
or in connection with, any cash tender or exchange offer, merger
or other business combination, sale of assets or contested
election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were Directors of the Company
before the Transaction shall cease to constitute a majority of
the Board of the Company or any successor to the Company.
1.06 Change of Control Date is the date on which an event
described in (i) or (ii) of Section 1.05 occurs.
1.07 Code means the Internal Revenue Code of 1986, and any
amendments thereto.
1.08 Committee means the Executive Compensation Committee of
the Board.
1.09 Common Stock means the Common Stock of the Company.
1.10 Company means Universal Corporation.
1.11 Fair Market Value means, on any given date, the closing
price of a share of Common Stock as reported on the New York
Stock Exchange composite tape on such day or, if the Common
Stock was not traded on the New York Stock Exchange on such day,
then on the next preceding day that the Common Stock was traded
on such exchange, all as reported by such source as the
Committee may select.
<PAGE>
1.12 Grant means the grant of an Option.
1.13 Incentive Stock Option means an Option that is intended to
qualify as an "incentive stock option" under Section 422 of the
Code.
1.14 Non-Qualified Stock Option means an option other than an
Incentive Stock Option.
1.15 Option means a stock option that entitles the holder to
purchase from the Company a stated number of shares of Common
Stock at the price set forth in an Agreement.
1.16 Option Price means the price per share for Common Stock
purchased on the exercise of an Option as provided in Article VI.
1.17 Participant means an employee of the Company or of a
Subsidiary, including an employee who is a member of the Board,
who satisfies the requirements of Article IV and is selected by
the Committee to receive a Grant or an Award.
1.18 Plan means the Universal Corporation 1989 Executive Stock
Plan, as amended.
1.19 Restricted Stock means shares of Common Stock awarded to a
Participant under Article IX. Shares of Common Stock shall
cease to be Restricted Stock when, in accordance with the terms
of the applicable Agreement, they become transferable and free
of substantial risks of forfeiture.
1.20 Rule 16b-3 means Rule 16b-3, as promulgated by the
Securities and Exchange Commission under Section 16(b) of the
Securities Exchange Act of 1934, as amended from time to time.
1.21 Securities Broker means the registered securities broker
acceptable to the Company who agrees to effect the cashless
exercise of an Option pursuant to Section 8.04 hereof.
1.22 Subsidiary means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company
if each of the corporations in the chain (other than the last
corporation) owns stock possessing at least 50 percent of the
total combined voting power of all classes of stock in one of
the other corporations in such chain.
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Article II
PURPOSES
The Plan is intended to assist the Company in recruiting and
retaining key employees with ability and initiative by enabling
employees who contribute significantly to the Company or an
Affiliate to participate in its future success and to associate
their interests with those of the Company and its shareholders.
The Plan is intended to permit the award of Common Stock and
Restricted Stock, and the issuance of Options qualifying as
Incentive Stock Options or Non-Qualified Stock Options as
designated by the Committee at time of grant. No Option that is
intended to be an Incentive Stock Option, however, shall be
invalid for failure to qualify as an Incentive Stock Option
under Section 422 of the Code but shall be treated as a
Non-Qualified Stock Option.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee
shall have authority to issue Grants and Awards upon such terms
(not inconsistent with the provisions of this Plan) as the
Committee may consider appropriate. The terms of such Grants
and Awards may include conditions (in addition to those
contained in this Plan) on (i) the exercisability of all or any
part of an Option and (ii) the transferability or forfeitability
of Restricted Stock. In addition, the Committee shall have
complete authority to interpret all provisions of this Plan; to
prescribe the form of Agreements; to adopt, amend, and rescind
rules and regulations pertaining to the administration of the
Plan; and to make all other determinations necessary or
advisable for the administration of this Plan. To fulfill the
purposes of the Plan without amending the Plan, the Committee
may also modify any Grants or Awards issued to Participants who
are nonresident aliens or employed outside of the United States
to recognize differences in local law, tax policy or custom.
The express grant in the Plan of any specific power to the
Committee shall not be construed as limiting any power or
authority of the Committee. Any decision made, or action taken,
by the Committee or in connection with the administration of
this Plan shall be final and conclusive. All expenses of
administering this Plan shall be borne by the Company.
Article IV
ELIGIBILITY
4.01 General. Any employee of the Company or of any
Subsidiary (including any corporation that becomes a Subsidiary after
the adoption of this Plan) who, in the judgment of
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<PAGE>
the Committee, has contributed significantly or can be expected to
contribute significantly to the profits or growth of the Company or a
Subsidiary may receive one or more Awards or Grants, or any combination
or type thereof. Directors of the Company who are employees are
eligible to participate in this Plan. A person who is a member of the
Committee may not be issued Awards or Grants while he is a member of the
Committee.
4.02 Grants and Awards. The Committee will designate
individuals to whom Grants and/or Awards are to be issued and
will specify the number of shares of Common Stock subject to
each such Grant or Award. All Grants or Awards issued under
this Plan shall be evidenced by Agreements which shall be
subject to applicable provisions of this Plan and to such other
provisions as the Committee may adopt. No Participant may be
granted Options that are Incentive Stock Options (under all
Incentive Stock Option Plans of the Company and Affiliates)
which are first exercisable in any calendar year for stock
having an aggregate Fair Market Value (determined as of the date
an Option is granted) exceeding $100,000. A Participant may not
receive Grants and Awards under this Plan with respect to more
than 200,000 shares of Common Stock during any calendar year.
4.03 Reload Options. The Committee shall have the authority to
specify at the time of Grant that an optionee shall be granted
the right to a further Non-Qualified Stock Option (a "Reload
Option") in the event such optionee exercises all or a part of
an Option, including a Reload Option (an "Original Option"), by
surrendering in accordance with Section 8.02 hereof already
owned shares of Common Stock in full or partial payment of the
Option Price under such Original Option. Each Reload Option
shall be granted on the date of exercise of the Original Option,
shall cover a number of shares of Common Stock not exceeding the
whole number of shares of Common Stock surrendered in payment of
the Option Price under such Original Option, shall have an
Option Price equal to the Fair Market Value on the date of Grant
of such Reload Option, shall expire on the stated expiration
date of the Original Option and shall be subject to such other
terms and conditions as the Committee may determine.
4.04 Designation of Option as an Incentive Stock Option or a
Non-Qualified Stock Option. The Committee will designate at the
time an Option is granted whether the Option is to be treated as
an Incentive Stock Option or a Non-Qualified Stock Option. In
the absence, however, of any such designation, such Option shall
be treated as a Non-Qualified Stock Option.
Article V
STOCK SUBJECT TO PLAN
The maximum number of shares of Common Stock available for
Grants (other than Grants of Reload Options) and Awards under the Plan
shall be 2,000,000. The maximum number of shares of Common Stock
available for Grants of Reload Options under the Plan shall be 500,000,
which amount, beginning on July 1, 1993 and ending on June 30, 1998,
shall be increased in each fiscal year of the Company by an amount equal
to two percent (2%) of the
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total number of shares of Common Stock outstanding as of the
first day of each such fiscal year. Each such maximum number of
shares of Common Stock is subject to adjustment (after taking
into account the preceding annual increase in the maximum number
of shares of Common Stock available for Grants of Reload
Options) as provided in Article X. Shares of Common Stock
subject to Grants and Awards under the Plan may be authorized
but previously unissued shares of Common Stock or previously
issued shares of Common Stock reacquired by the Company. The
grant of a Reload Option under the Plan, by restoring an option
opportunity on the number of shares of Common Stock surrendered
to exercise an Original Option, will encourage a Participant to
maximize his ownership interest in the Company without reducing
the percentage interests of shareholders.
If any shares of Restricted Stock are forfeited for which the
Participant did not receive any benefits of ownership (other
than voting rights), or if any Option (other than a Reload
Option) terminates without being exercised, shares of Common
Stock subject to such Grants or Awards shall be available for
distribution in connection with Grants (other than Grants of
Reload Options) or Awards under the Plan. If any Reload Option
terminates without being exercised, the shares of Common Stock
subject to such terminated Reload Option shall be available for
distribution in connection with Grants of Reload Options under
the Plan.
Article VI
OPTION PRICE
The price per share for Common Stock purchased on the exercise
of an Option shall be fixed by the Committee, but shall not be
less than the Fair Market Value on the date of grant.
Article VII
EXERCISE OF OPTIONS
7.01 Maximum Option Period. The period in which an Option may
be exercised shall be determined by the Committee on the date of
grant; provided, however that an Incentive Stock Option shall
not be exercisable after the expiration of 10 years from the
date the Incentive Stock Option was granted.
7.02 Non-Transferability.
(a) Except as specifically provided in an Option
Agreement pursuant to subsection (b) below, any Option granted under
this Plan shall be non-transferable except by will or by the laws of
descent and distribution. During the lifetime of a Participant to whom
an Incentive Stock Option is granted, the Incentive Stock Option may be
exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien,
obligation or liability of such Participant.
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(b) In addition to non-transferable Options, the
Committee may grant Non-Qualified Stock Options that are transferable,
without payment of consideration, to immediate family members of the
optionee, to a trust for the benefit of such family members or to a
partnership whose only partners are such family members. The Committee
may also amend outstanding Non-Qualified Stock Options to provide for
such transferability. The transferee of an Option shall be subject to
all conditions applicable to the Option prior to its transfer. The
Agreement granting the Option shall set forth the transfer conditions
and restrictions. The Committee may impose on any transferable Option
and on stock issued upon the exercise of an Option such limitations and
conditions as the Committee deems appropriate. Except to the extent
otherwise permitted by Rule 16b-3, Options that are intended to be
exempt from Section 16(b) of the Securities Exchange Act of 1934, as
amended, pursuant to Rule 16b-3 may not be transferable except by will
or by the laws of descent and distribution.
7.03 Employee Status. For purposes of determining the
applicability of Section 422 of the Code (relating to incentive
stock options), or in the event that the terms of any Grant
provide that it may be exercised only during employment or
within a specified period of time after termination of
employment, the Committee may decide to what extent leaves of
absence for governmental or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions
of continuous employment.
Article VIII
METHOD OF EXERCISE
8.01 Exercise. Subject to the provisions of Articles VII and
XI, an Option may be exercised in whole at any time or in part
from time to time at such times and in compliance with such
requirements as the Committee shall determine. An Option
granted under this Plan may be exercised with respect to any
number of whole shares less than the full number for which the
Option could be exercised. Such partial exercise of an Option
shall not affect the right to exercise the Option from time to
time in accordance with this Plan with respect to remaining
shares subject to the Option.
8.02 Payment. Unless otherwise provided by the Agreement,
payment of the Option Price shall be made in cash. If the
Agreement provides, payment of all or part of the Option Price
may be made by surrendering already owned shares of Common Stock
to the Company, provided the shares surrendered have a Fair
Market Value (determined as of the day preceding the date of
exercise) that is not less than such price or part thereof. In
addition, the Committee may establish such payment or other
terms as it may deem to be appropriate and consistent with these
purposes.
8.03 Shareholder Rights. No participant shall have any
rights as a shareholder with respect to shares subject to his Option
until the date he exercises such Option.
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8.04 Cashless Exercise. To the extent permitted under the
applicable laws and regulations, at the request of the Participant and
with the consent of the Committee, the Company agrees to cooperate in a
"cashless exercise" of the Option. The cashless exercise shall be
effected by the Participant delivering to the Securities Broker
instructions to exercise all or part of the Option, including
instructions to sell a sufficient number of shares of Common Stock to
cover the costs and expenses associated therewith.
Article IX
COMMON STOCK AND RESTRICTED STOCK
9.01 Award. In accordance with the provisions of Article IV,
the Committee will designate employees to whom an award of Common Stock
and/or Restricted Stock is to be made and will specify the number of
shares of Common Stock covered by such award or awards.
9.02 Vesting. In the case of Restricted Stock, on the date
of the award, the Committee may prescribe that the Participant's rights
in the Restricted Stock shall be forfeitable or otherwise restricted for
a period of time set forth in the Agreement and/or until certain
financial performance objectives are satisfied as determined by the
Committee in its sole discretion. Subject to the provisions of Article
XI hereof, the Committee may award Common Stock to a Participant which
is not forfeitable and is free of any restrictions or transferability.
9.03 Shareholder Rights. Prior to their forfeiture in
accordance with the terms of the Agreement and while the shares
are Restricted Stock, a Participant will have all rights of a
shareholder with respect to Restricted Stock, including the
right to receive dividends and vote the shares; provided,
however, that (i) a Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of Restricted Stock,
(ii) the Company shall retain custody of the certificates
evidencing shares of Restricted Stock, and (iii) the Participant
will deliver to the Company a stock power, endorsed in blank,
with respect to each award of Restricted Stock.
Article X
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock
split-ups, subdivisions or consolidations of shares or other similar
changes in capitalization; (y) spin-offs, spin-outs, split-ups,
split-offs, or other such distribution of assets to shareholders; or (z)
direct or indirect assumptions and/or conversions of outstanding Options
due to an acquisition of the Company, then the maximum number of shares
as to which Grants and Awards may be issued under this Plan shall be
proportionately adjusted and their terms shall be adjusted as the
Committee shall determine to be equitably required, provided that the
number of shares subject to any Grant or Award shall always be a whole
number. Any determination made under this Article X by the Committee
shall be final and conclusive.
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<PAGE>
The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or
property or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion
of shares or obligations of the Company convertible into such shares or
other securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to any Grant or Award.
Article XI
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Grant shall be exercisable, no Common Stock shall be issued,
no certificates for shares of Common Stock shall be delivered, and no
payment shall be made under this Plan except in compliance with all
applicable Federal and state laws and regulations (including, without
limitation, withholding tax requirements) and the rules of all domestic
stock exchanges on which the Company's shares may be listed. The
Company may rely on an opinion of its counsel as to such compliance.
Any share certificate issued to evidence Common Stock for which a Grant
is exercised or an Award is issued may bear such legends and statements
as the Committee may deem advisable to assure compliance with Federal
and state laws and regulations. No Grant shall be exercisable, no
Common Stock shall be issued, no certificate for shares shall be
delivered, and no payment shall be made under this Plan until the
Company has obtained such consent or approval as the Committee may deem
advisable from regulatory bodies having jurisdiction over such matters.
Article XII
GENERAL PROVISIONS
12.01 Effect on Employment. Neither the adoption of this
Plan, its operation, nor any documents describing or referring to this
Plan (or any part thereof) shall confer upon any employee any right to
continue in the employ of the Company or a Subsidiary or in any way
affect any right and power of the Company or a Subsidiary to terminate
the employment of any employee at any time with or without assigning a
reason therefor.
12.02 Unfunded Plan. The Plan, insofar as it provides for a
Grant, is not required to be funded, and the Company shall not be
required to segregate any assets that may at any time be represented by
a Grant under this Plan.
12.03 Change of Control. At the discretion of the Committee,
a Participant's interest in Restricted Stock may be made nonforfeitable
and transferable as of a Change of Control Date. The Committee may also
provide in an Agreement that a Participant may elect, by written notice
to the Company within 60 days after a Change of Control Date, to
receive, in exchange for shares that were Restricted Stock immediately
before the Change of Control Date, a cash
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payment equal to the Fair Market Value of the shares surrendered on the
last business day the Common Stock is traded on the New York Stock
Exchange prior to receipt by the Company of such written notice.
Notwithstanding any other provision in this Plan to the contrary, unless
the Committee provides otherwise in an Agreement, a Grant may be
exercised immediately in full upon a Change of Control.
12.04 Rules of Construction. Headings are given to the
articles and sections of this Plan for ease of reference. The
reference to any statute, regulation, or other provision of law
shall be construed to refer to any amendment to or successor of
such provision of law.
12.05 Amendment. The Board may amend or terminate this Plan
from time to time; provided, however, that no amendment may become
effective until shareholder approval is obtained if the amendment (i)
materially increases the aggregate number of shares that may be issued
pursuant to Options and Common Stock and Restricted Stock awards, (ii)
materially increases the benefits to Participants under the Plan, or
(iii) materially changes the class of employees eligible to become
Participants. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Grant or Award
outstanding at the time such amendment is made, except such an amendment
made to cause the Plan to qualify for the Rule 16b-3 exemption. No
amendment shall be made if it would disqualify the Plan from the
exemption provided by Rule 16b-3. The Committee may amend the terms of
any Grant or Award theretofore issued under this Plan, prospectively or
retrospectively, and include in such amendment the right of the
Committee to pay a Participant cash in lieu of shares of Common Stock
upon the termination (by exercise or otherwise) of an Option, but no
such amendment shall impair the rights of any Participant without the
Participant's consent except such an amendment made to cause the Plan,
or Grant or Award, to qualify for the exemption provided by Rule 16b-3.
12.06 Duration of Plan. No Grant or Award may be issued under
this Plan before July 1, 1989, or after June 30, 1998; provided,
however, a Grant of a Reload Option may be issued after June 30, 1998,
upon the exercise of an Original Option as provided in Section 4.03
hereof. Grants and Awards issued on or after July 1, 1989, but on or
before June 30, 1998, and Grants of Reload Options issued after June 30,
1998 upon the exercise of an Original Option as provided in Section 4.03
hereof, shall remain valid in accordance with their terms.
12.07 Shareholder Approval. This Plan was initially approved
by the Board of Directors of the Company, effective as of July 1, 1989,
and was approved by the shareholders of the Company entitled to vote at
the 1989 Annual Meeting of Shareholders. Amendments to the Plan were
approved by the Board of Directors of the Company, effective as of
October 27, 1992, and by the shareholders of the Company entitled to
vote at the 1992 Annual Meeting of Shareholders. Amendments to the Plan
were approved by the Board of Directors of the Company, effective as of
October 25, 1994, and by the shareholders of the Company entitled to
vote at the 1994 Annual Meeting of Shareholders. Amendments to the Plan
were approved by the Board of Directors of the Company effective as of
December 1, 1994.
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Exhibit 10.17
UNIVERSAL CORPORATION
1994 STOCK OPTION AND EQUITY ACCUMULATION AGREEMENT
THIS AGREEMENT, dated this 1st day of December 1994, between
Universal Corporation, a Virginia corporation ("the Company") and
____________ (the "Optionee"), is made pursuant and subject to the
provisions of the Company's 1989 Executive Stock Plan, as amended, which
is incorporated herein by reference, and any future amendments thereto
(the "Plan"). All terms used herein that are defined in the Plan shall
have the same meanings given them in the Plan.
1. Grant of Long Term Option and Reload Options. Pursuant
to the Plan, and upon action taken by the Executive Compensation
Committee (the "Committee") of the Board of Directors of the Company on
December 1, 1994, the Company grants to the Optionee, subject to the
terms and conditions of the Plan and subject further to the terms and
conditions set forth herein, the right and option to purchase __________
shares of Common Stock (the "Long Term Option") and the Reload Options
as described in subparagraph 5E. The Long Term Option and Reload
Options are non-qualified stock options. The option price of the Long
Term Option shall be the Fair Market Value of Common Stock at the close
of business on December 1, 1994, or $21.50 per share.
2. Expiration Date. The expiration date of the Long Term
Option and any Reload Options granted hereunder shall be December 1,
2004 (the "Expiration Date").
3. Date Options Become Exercisable. Any Option granted
hereunder may not be exercised until at least six months after the date
of grant thereof.
<PAGE>
4. Eligibility to Participate. In order to participate and
receive the Options granted under this Agreement, the Optionee must sign
and return a copy of this Agreement by January 31, 1995.
5. Automatic Exercise Program.
A. Method of Automatic Exercise. Until the
Automatic Exercise Program terminates as provided in subparagraph 5G,
the Optionee authorizes the Company on any Automatic Exercise Date (as
hereinafter defined), including the Initial Exercise Date (as
hereinafter defined), automatically to exercise the lowest price Long
Term or Reload Options granted the Optionee under this Agreement only by
means of a stock-for-stock swap using shares of Common Stock then
credited to the Optionee's Account (as hereinafter defined). On the
Initial Exercise Date, such Options shall be automatically exercised to
purchase the number of shares of Common Stock which can be purchased
from shares of Common Stock credited to the Optionee's Account. With
respect to subsequent Automatic Exercise Dates, the Optionee authorizes
the Company to automatically exercise such Options for the amount of
shares of Common Stock which can be purchased from shares of Common
Stock held in the Optionee's Account received on previous Automatic
Exercise Dates and shares of Common Stock, if any, contributed to
Optionee's Account pursuant to subparagraph 5D, less the number of
shares, if any, sold for payment of taxes under subparagraph 5F. The
automatic exercise shall only occur if the Fair Market Value on the
Automatic Exercise Date exceeds by one percent (1%) or more the exercise
price of the lowest priced Option held by the Optionee under this
Program (the "Automatic Exercise Criterion"). The Optionee grants the
Company or any of its officers the power of attorney to endorse and
transfer the share certificates credited to the Optionee's
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Account in accordance with the Automatic Exercise Program. The power of
attorney shall cease upon the termination of the Optionee's
participation in the Automatic Exercise Program.
B. Other Options Granted by Universal to the
Optionee. Options granted to the Optionee under agreements other than
this Agreement or the Universal Corporation 1991 Stock Option and Equity
Accumulation Agreement (the "1991 Agreement") are not eligible to be
included in the Automatic Exercise Program under this Agreement and the
1991 Agreement.
C. Automatic Exercise Dates; Amendment of 1991
Agreement. The initial automatic exercise date under the Automatic
Exercise Program for Options granted under this Agreement shall be June
1, 1995, or the first business day thereafter on which the Automatic
Exercise Criterion is met (the "Initial Exercise Date"), and subsequent
automatic exercise dates for such Options shall occur upon the first
business day on which the New York Stock Exchange trades stock which
occurs after a six month interval has elapsed since the last such
automatic exercise date, or the first business day thereafter on which
the Automatic Exercise Criterion is met (the "Automatic Exercise
Date(s)"); provided, however, that any Automatic Exercise Date for
Options granted under this Agreement or the 1991 Agreement shall be at
least six months after the last Automatic Exercise Date for any such
Options. Subparagraph 5C of the 1991 Agreement is amended to read as
follows:
C. The initial automatic exercise date under the Automatic
Exercise Program shall be November 1, 1992, or the first
business day thereafter on which the Automatic Exercise
Criterion is met (the "Initial Exercise Date"), and
subsequent automatic exercise dates shall occur upon the
first business day on which the New York Stock Exchange
trades stock which occurs after a six month interval has
elapsed since the last automatic exercise date, or the first
business day thereafter on which the Automatic Exercise
Criterion is met (the "Automatic Exercise Date(s)");
provided, however, that any Automatic Exercise Date for
Options granted
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under this Agreement or the Universal Corporation 1994 Stock
Option and Equity Accumulation Agreement shall be at least
six months after the last Automatic Exercise Date for any
such Options.
D. Method of Payment Under Automatic Exercise
Program. Other than the payment on the Initial Exercise Date from shares
of Common Stock then credited to the Optionee's Account pursuant to the
1991 Agreement, payment by the Optionee under the Automatic Exercise
Program shall be only from shares of Common Stock received from the
previous exercise under the Program and from additional shares of Common
Stock delivered to Optionee's Account as provided in this subparagraph
5D.
Prior to termination of the Automatic Exercise Program as
provided in subparagraph 5G, the Optionee may elect to deliver
additional shares of Common Stock to the Company for credit to
the Optionee's Account for inclusion in the Program, provided
that the total number of all shares contributed by the Optionee
shall not exceed the maximum number of shares of Common Stock
specified in paragraph 4 of the 1991 Agreement. Such additional
shares may be delivered from time-to-time during the term of the
Program. However, for purposes of the Program, the delivery of
shares shall be made at least six (6) months prior to the
Automatic Exercise Date on which such shares shall be used for a
stock swap pursuant to the Program.
E. Reload Options. Only participants in the
Automatic Exercise Program will be eligible to receive Reload Options.
A Reload Option is an automatic grant of a new Option each time the
Company executes an automatic stock-for-stock swap exercise. The number
of shares granted in the Reload Option shall equal the number of shares
exchanged in payment of the exercise price on an Automatic Exercise
Date. The Reload Options will be fully vested six (6) months from the
date of grant and will have a term which expires on the same date as the
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Long Term Option. The exercise price for a Reload Option shall be the
Fair Market Value on the date of the Reload Option grant.
The grant of a Reload Option shall be subject to there being
sufficient shares available for such grants under the Plan. If
there are not sufficient shares available to fully meet the
obligation of the Automatic Exercise Program as described above,
then the Committee will, in its sole discretion, allocate the
available shares to participants. In addition, should the
Committee, in its sole discretion, determine that continuing to
grant Reload Options is no longer in the best interest of the
Company, it may, by means of written notice to participants,
cause the discontinuance of the granting of Reload Options.
F. Payment of Taxes Under the Automatic Exercise
Program. On the date seven (7) days after an Automatic Exercise Date,
unless at least six (6) months prior to such Automatic Exercise Date the
Optionee has given written notice to the Company, directed to the
attention of its Secretary, that he or she will pay the Company, on a
timely basis, cash for the payment of withholding taxes on the gain
realized from the exercise of the Option, the Company shall deliver from
the Optionee's Account to the broker hereinafter designated by the
Optionee, free of all restrictions, the number of whole shares of Common
Stock which best approximates the amount of such taxes. For purposes of
the preceding sentence, the Optionee designates Shearson Lehman
Brothers, Inc., Three James Center, 1051 East Cary Street, Richmond,
Virginia 23219, Account No. ____________, as his or her broker and
authorizes and directs the Company to deliver such shares to said broker
and the broker to sell the shares and remit the proceeds to the Company
for the payment of withholding taxes.
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<PAGE>
G. Termination of the Automatic Exercise Program.
The Automatic Exercise Program shall terminate upon the earlier of (i)
the date on which the Optionee gives written notice to the Company that
he or she irrevocably elects to terminate participation in such Program,
provided that such notice may not be given before the second business
day after the Initial Exercise Date; or (ii) the date Optionee's
employment with the Company is terminated; or (iii) the failure by the
Company to be in a position to grant Reload Options on any Automatic
Exercise Date pursuant to subparagraph 5E in which case the Company
shall promptly notify the Optionee.
H. Restriction on Sales and Encumbrance of Shares.
During the Optionee's participation in the Automatic Exercise Program,
the Optionee agrees that unless otherwise permitted by the Committee in
its sole discretion, (i) shares of Common Stock contributed to or
received by and on behalf of the Optionee pursuant to the Program and
(ii) shares of Common Stock representing the after-tax gain on each
automatic exercise, rounded to the nearest whole share, shall be held in
the Optionee's Account and shall not be available for sale, transfer,
pledge, hypothecation or other disposition except for tax obligations as
provided in subparagraph 5F above, and for stock-for-stock Option
exercises pursuant to this paragraph 5. All shares of Common Stock held
in the Optionee's Account shall be owned by and registered in the name
of the Optionee, and the Optionee shall have all rights of ownership
with respect thereto, including voting rights and the right to receive
dividends. Such shares shall be held by the Company and a legend on the
stock certificate(s) shall note the restrictions. The restrictions on
the shares of Common Stock held in the Optionee's Account shall lapse
upon termination of the Automatic Exercise Program as provided in
subparagraph 5G.
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<PAGE>
I. Maintenance of Shares. The Company shall
establish and maintain an individual account in the Optionee's name (the
"Optionee's Account") to hold shares of Common Stock registered in the
Optionee's name contributed to or obtained through the Automatic
Exercise Program under this Agreement and the 1991 Agreement. The
Company shall deliver a written report to the Optionee on the status of
the Optionee's Account following each Automatic Exercise Date. Upon
termination of the Automatic Exercise Program as provided in
subparagraph 5G, all shares of Common Stock held in the Optionee's
Account shall be delivered to the Optionee free of all restrictions.
6. Nonautomatic Exercises by the Optionee.
A. Subject to Automatic Exercise Program
Termination. Except for exercises under the Automatic Exercise Program
as provided in paragraph 5, the Optionee shall not be able to exercise
the Long Term and Reload Options until the earlier of (i) the date the
Program terminates as provided in subparagraph 5G or (ii) the date one
(1) year prior to the Expiration Date. On such date, such Options that
have vested pursuant to paragraph 3 and that have not been previously
exercised under the Automatic Exercise Program may be exercised in the
manner provided in this paragraph 6.
B. Nonautomatic Exercises. After termination of
the Automatic Exercise Program in accordance with subparagraphs 5G(ii)
or (iii), or on the date one (1) year prior to the Expiration Date, all
vested and unexercised Long Term and Reload options shall continue to be
exercisable by the Optionee until the earlier of the termination of the
Optionee's rights hereunder pursuant to subparagraphs 6E and 6F, or the
Expiration Date. A partial exercise of such Options pursuant to
subparagraphs 6E or 6F shall not affect Optionee's right to exercise
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<PAGE>
such Options with respect to the remaining shares, subject to the six
month vesting period set forth in paragraph 3 and the conditions of the
Plan and this Agreement. If the Optionee terminates the Automatic
Exercise Program pursuant to subparagraph 5G(i), such Options may only
be exercised in the manner provided in subparagraph 6H.
C. Method of Exercising and Payment for Shares. An
Option exercised pursuant to this paragraph 6 shall be exercised by
written notice of the Optionee delivered to the attention to the
Company's Secretary at the Company's principal office in Richmond,
Virginia. The written notice shall specify the number of shares being
acquired pursuant to the exercise of the Option when such Option is
being exercised in part pursuant to subparagraphs 6E or 6F. The
exercise date shall be the date such notice is received by the Company.
Such notice shall be accompanied by payment in full of the Option Price
for each share of Common Stock to be purchased.
D. Cashless Exercise. To the extent permitted
under the applicable laws and regulations, at the request of the
Optionee, the Company agrees to cooperate in a "cashless exercise" of a
Long Term or Reload Option pursuant to this paragraph 6. The cashless
exercise shall be effected by the Optionee delivering to the Securities
Broker instructions to exercise all or part of the Option, including
instructions to sell a sufficient number of shares of Common Stock to
cover the costs and expenses associated therewith.
E. Exercise During Employment. Subject to (i) the
provisions of subparagraph 6F which shall apply to exercise in the event
of retirement, death, disability or Committee approval, and (ii) the
provisions of subparagraph 6H which shall apply to exercise in the event
Optionee terminates his or her participation in the Automatic Exercise
Program as
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<PAGE>
provided in subparagraph 5G(i), all vested and unexercised
Long Term and Reload Options may be exercised in whole or in part during
Optionee's employment with the Company or an Affiliate from the date
such Options are exercisable pursuant to subparagraph 6B until the
earlier of the expiration of ninety (90) days from the date the
Optionee's employment with the Company or an Affiliate is terminated or
the Expiration Date; provided, however, that the Optionee's right to
exercise the Options shall terminate immediately in the event the
Optionee's employment with the Company or an Affiliate is terminated for
cause as hereinafter defined or the Optionee is in violation of the
provisions of paragraph 7 hereof. For purposes of the preceding
sentence, the Optionee's employment shall be deemed to have been
terminated for cause if the Optionee's employment is terminated as
result of fraud, dishonesty or embezzlement from the Company or an
Affiliate.
F. Exercise in the Event of Retirement, Death, or
Disability or Approval by the Committee. Subject to the provisions of
subparagraph 6H which shall apply to exercise in the event the Optionee
terminates his or her participation in the Automatic Exercise Program as
provided in subparagraph 5G(i), all unexercised Long Term and Reload
Options that have vested pursuant to paragraph 3 shall be exercisable in
whole or in part in the event that prior to the Expiration Date (i) the
Optionee retires (early, after age 55, normal, at age 65, or delayed)
or, (ii) the Optionee dies or becomes permanently and totally disabled
(as defined in the Disability Benefits Plan of Universal Leaf Tobacco
Company, Incorporated and Domestic Subsidiaries) while employed by the
Company or an Affiliate or (iii) for any reason approved by the
Committee in its absolute discretion. In the event of death, such
Options may be exercised by the Optionee's estate, or the person or
persons to whom his or her rights under this Agreement
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<PAGE>
shall pass by will or the laws of descent and distribution. Such
Options will continue to be exercisable for (x) the two-year period
beginning on the date the Optionee retires, dies or terminates
employment due to permanent and total disability, as the case may be, or
the date of Committee approval as provided in subparagraph (iii) of this
subparagraph 6F, or (y) the remainder of the period preceding the
Expiration Date, whichever is shorter.
G. Exercise in the Event of Liquidation or
Reorganization. In the event of a dissolution or liquidation of the
Company or a merger or consolidation in which the Company is not the
surviving corporation, the Optionee shall have the right immediately
prior to such dissolution or liquidation, or merger or consolidation, to
exercise all unexercised Long Term and Reload Options in full.
H. Exercise in the Event the Optionee Terminates
Automatic Exercise Program. In the event the Optionee irrevocably
elects to terminate his or her participation in the Automatic Exercise
Program as provided in subparagraph 5G(i), Optionee may (i) exercise
all, but not a part, of all unexercised Long Term and Reload Options
which have vested pursuant to paragraph 3 for a period of thirty (30)
days from the date the Optionee gives written notice as provided in
subparagraph 5G(i), (ii) exercise unexercised Reload Options which have
not vested pursuant to paragraph 3 for a period of thirty (30) days from
the date each such Option vests, (iii) exercise all vested and
unexercised Long Term and Reload Options in whole or in part during the
one (1) year period prior to the Expiration Date, and (iv) exercise all
vested and unexercised Long Term and Reload Options in whole or in part
pursuant to subparagraph 6F. An exercise pursuant to subparagraph
6H(iii) may only be made during the Optionee's employment with the
Company or an Affiliate.
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<PAGE>
I. Payment of Withholding Taxes. Within seven (7)
days following the date of exercise pursuant to this paragraph 6, the
Optionee shall pay to the Company in cash (or provide for the payment
of) the withholding taxes on the gain realized from the exercise of the
Option.
7. Optionee Covenants. The Optionee recognizes that over a
period of many years the Company and its Affiliates (including any
predecessors or entities from which it might have acquired goodwill)
have developed, at considerable expense, relationships with customers
and prospective customers which constitute a major part of the value of
the goodwill of the Company and the Affiliates. During the course of
his or her employment by the Company, the Optionee will have substantial
contact with these customers and prospective customers. In order to
protect the goodwill of the Company's and the Affiliates' businesses,
the Optionee covenants and agrees that, in the event of the termination
of his or her employment, whether voluntary or involuntary, he or she
shall forfeit the Options granted under this Agreement if he or she
directly or indirectly as an owner, shareholder, director, employee,
partner, agent, broker, consultant or other participant, for the period
during which such Options are exercisable:
(a) calls upon or causes to be called upon, or solicits or assists in
the solicitation of any person, firm, association, or corporation,
listed as a customer of the Company or any Affiliate on the date of
termination of the Optionee's employment, for the purpose of selling,
renting or supplying any product or service competitive with the
products or services of the Company or any
Affiliate; or
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<PAGE>
(b) performs or contracts to perform for a competitor of the Company or
any Affiliate the same or similar services he or she performed for
the Company or such Affiliate.
Subparagraphs (a) and (b) of this paragraph 7 are separate and
divisible covenants; if for any reason any one covenant is held to be
invalid or unenforceable, in whole or in part, the same shall not be
held to affect the validity or enforceability of the others, or of any
other provision of this Agreement. The period and scope of the
restrictions set forth in this paragraph 7 shall be reduced to the
maximum permitted by the law actually applied to determine the validity
of each subparagraph.
8. Fractional Shares. Fractional shares shall not be
issuable hereunder, and when any provision hereof may entitle the
Optionee to a fractional share such fraction shall be disregarded.
9. No Right to Continued Employment. This Agreement does
not confer upon the Optionee any right with respect to continuance of
employment by the Company or an Affiliate, nor shall it interfere in any
way with the right of the Company or an Affiliate to terminate his or
her employment at any time.
10. Investment Representation. The Optionee agrees that
unless such shares previously have been registered under the Securities
Act of 1933 (i) any shares of Common Stock purchased by him or her
hereunder will be purchased for investment and not with a view to
distribution or resale and (ii) until such registration, certificates
representing such shares may bear an appropriate legend to assure
compliance with such Act. This investment representation shall
terminate when such shares have been registered under the Securities Act
of 1933.
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11. Administration and Interpretation. The Plan
Administrator shall be the Company; however this Agreement shall be
operated under the supervision and authority of the Committee. The
Committee shall have the authority to terminate the Automatic Exercise
Program and the issuance of any Reload Options. Also, the Committee may
issue additional Reload Options and Long Term Options under this
Agreement if authorized by the Plan or any amendment thereto, or any
successor plan. Any interpretation of this Agreement shall be made by
the Committee. Any amendment to this Agreement must be authorized by
the Committee.
12. Change in Capital Structure. Subject to any required
action by the shareholders of the Company, the number of shares of
Common Stock covered by the Long Term and Reload Options, and the price
per share thereof, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company
resulting from a subdivision or consolidation of shares or the payment
of a stock dividend (but only on the Common Stock), a stock split-up or
any other increase or decrease in the number of such shares effected
without receipt of cash or property or labor or services by the Company.
Subject to any required action by the shareholders of the
Company, if the Company shall be the surviving corporation in any merger
or consolidation, the Long-Term and Reload Options shall pertain to and
apply to the securities to which a holder of the number of shares of
Common Stock subject to such Options would have been entitled. A
dissolution or liquidation of the Company or a merger or consolidation
in which the Company is not the surviving corporation, shall cause such
Options to terminate, provided that the Optionee shall, in such event,
have the right immediately prior to such dissolution or liquidation, or
merger or consolidation in which the Company is not the surviving
corporation, to exercise such Options.
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<PAGE>
In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its
authorized shares without par value into the same number of shares with
a different par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding
and conclusive.
Except as hereinbefore expressly provided in this paragraph 12,
the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of shares
of stock of any class or by reason of any dissolution, liquidation,
merger, or consolidation or spin-off of assets or stock of another
corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to the
Options granted under this Agreement.
The grant of the Long Term and Reload Options pursuant to this
Agreement shall not affect in any way the right or power of the Company
to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business
or assets.
13. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth
of Virginia, except to the extent that federal law shall be deemed to
apply.
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14. Conflicts. In the event of any conflict between the
provisions of the Plan as in effect on the date hereof and the
provisions of this Agreement, the provisions of the Plan shall govern.
All references herein to the Plan shall mean the Plan as in effect on
the date hereof.
15. Optionee Bound by Plan. The Optionee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions thereof.
16. Binding Effect. Subject to the limitations stated
herein and in the Plan, this Agreement shall be binding upon and inure
to the benefit of the legatees, distributees, and personal
representatives of the Optionee and the successors of the Company.
17. Nontransferability. The Long Term and Reload Options
granted under this Agreement shall be nontransferable except by will or
by the laws of descent and distribution. During the Optionee's
lifetime, such Options may be exercised only by the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
signed by a duly authorized officer, and the Optionee has affixed his or
her signature hereto.
UNIVERSAL CORPORATION OPTIONEE
By: _________________________ _________________________
[Name]
Title:________________________
Page 15
<PAGE>
Exhibit 10.18
UNIVERSAL CORPORATION
1994 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Article I
DEFINITIONS
1.01 Affiliate means any "subsidiary" or "parent corporation"
(within the meaning of Section 424 of the Code) of the Company.
1.02 Agreement means a written agreement (including any
amendment or supplement thereto) between the Company and a
Participant specifying the terms and conditions of a Grant
issued to such Participant.
1.03 Board means the Board of Directors of the Company.
1.04 Code means the Internal Revenue Code of 1986, and any
amendments thereto.
1.05 Commission means the Securities and Exchange Commission
or any successor agency.
1.06 Committee means the Executive Compensation Committee of
the Board.
1.07 Common Stock means the Common Stock of the Company.
1.08 Company means Universal Corporation.
1.09 Exchange Act means the Securities Exchange Act of 1934,
as amended from time to time, and any successor thereto.
1.10 Fair Market Value means, on any given date, the closing
price of a share of Common Stock as reported on the New York Stock
Exchange composite tape on such day or, if the Common Stock was not
traded on the New York Stock Exchange on such day, then on the next
preceding day that the Common Stock was traded on such exchange, all as
reported by such source as the Committee may select. If there is no
regular public trading market for the Common Stock, the Fair Market
Value shall be determined by the Committee in good faith.
1.11 Grant means the grant of an Option.
1.12 Non-Employee Director means a member of the Board who is
not an employee of the Company or an Affiliate and was not such an
employee within three years prior to his or her first election to the
Board.
<PAGE>
1.13 Option means a stock option that entitles the holder to
purchase from the Company under the terms of this Plan the
number of shares of Common Stock set forth in Article IV at the
Option Price.
1.14 Option Price means the price per share for Common Stock
purchased on the exercise of an Option as provided in Article IV.
1.15 Participant means a Non-Employee Director who is eligible
to receive a Grant under this Plan.
1.16 Rule 16b-3 means Rule 16b-3, as promulgated by the
Commission in Release No. 34-28869 under Section 16(b) of the
Exchange Act, effective May 1, 1991, or any successor rule as
amended from time to time.
1.17 Securities Broker means the registered securities broker
acceptable to the Company who agrees to effect the cashless
exercise of an Option pursuant to Section 7.03 hereof.
1.18 Subsidiary means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company
if each of the corporations in the chain (other than the last
corporation) owns stock possessing at least 50 percent of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
Article II
PURPOSE
This Plan is intended to associate the interests of the
Non-Employee Directors with those of the Company and its
shareholders through increased equity ownership, to assist the
Company in recruiting and retaining individuals of ability and
experience who are not employed by the Company to serve on the
Board and its committees and to provide incentive to those
individuals by enabling them to participate in the future
success of the Company.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee
shall have all the powers vested in it by the terms of the Plan, such
powers to include the authority (within the limitations described
herein) to prescribe the form of the Agreements evidencing Grants under
the terms of this Plan. The Committee shall, subject to the provisions
of the Plan, have the power to construe the Plan, to determine all
questions arising thereunder and to adopt and amend
Page 2
<PAGE>
such rules and regulations for the administration of the Plan as it may
deem desirable, consistent with the provisions of the Plan. Any
decision of the Committee in the administration of the Plan, as
described herein, shall be final and conclusive. The Committee may act
only by a majority of its members in office, except that the members
thereof may authorize any one or more of their number or the Secretary
or any other officer of the Company to execute and deliver documents on
behalf of the Committee. No member of the Committee shall be liable for
anything done or omitted to be done by such member or by any other
member of the Committee in connection with the Plan, except in
circumstances involving actual bad faith. All costs and expenses of
administering the Plan shall be borne by the Company.
Article IV
GRANTS OF OPTIONS
Every Non-Employee Director who serves on the Board during the
term of the Plan is eligible to receive Grants. Each Non-Employee
Director serving on the Board as of the effective date of this Plan
shall be granted an Option on such date. Every Non-Employee Director who
continues to serve in such capacity on the date which is the first
business day following each Annual Meeting of Shareholders during the
term of this Plan shall be granted an Option on each such date. Each
Option shall be for the purchase by the Participant of 1,000 shares of
Common Stock at a price per share equal to the Fair Market Value of a
share of the Common Stock on the date of the Grant. Each Option shall
be evidenced by an Agreement issued by the Committee in the form
prescribed by the Committee and consistent with the terms of this Plan.
Article V
AMOUNT OF STOCK
The total number of shares of Common Stock reserved and
available for issuance upon exercise of Options granted under
the Plan shall be 100,000 shares, subject to adjustment as
provided in Article VIII below. The Common Stock to be issued
may be either authorized and unissued shares, issued shares
acquired by the Company or its Subsidiaries or any combination
thereof. In the event that an Option is terminated, in whole or
in part, for any reason other than its exercise, the number of
shares of Common Stock allocated to such Option or terminated
portion thereof may be reallocated to other Options to be
granted under this Plan. In the event that the number of shares
of Common Stock available for future Grants under the Plan is
insufficient to make all automatic Grants required to be made on
such date, then all Non-Employee Directors shall share ratably
in the number of Options available for Grants under the Plan.
Page 3
<PAGE>
Article VI
EXERCISE OF OPTIONS
Each Option shall be first exercisable on the date which is six
months from the date of the grant of the Option and shall continue to be
exercisable for a term of ten years thereafter; provided however, that:
(i) subject to the six month exercisability requirement set forth above,
an Option shall be exercisable, in the event of a Participant's death
prior to exercising the Option, by his estate, or the person or persons
to whom his rights under the Option shall pass by will or the laws of
descent and distribution but only for a period of two years from the
date of the Participant's death or during the remainder of the period
preceding the expiration of the Option, whichever is shorter; (ii)
subject to the six month exercisability requirement set forth above, an
Option shall be exercisable, if a Participant becomes permanently and
totally disabled (within the meaning of Section 105(d) (4) of the Code)
while serving on the Board prior to exercising the Option, but only for
a period of two years from the date on which he ceases serving on the
Board due to such disability or during the remainder of the period
preceding the expiration of the Option, whichever is shorter; and (iii)
subject to the six month exercisability requirement set forth above, in
the event that a Participant resigns from or is not re-elected or does
not stand for re-election to the Board or in any other circumstance
approved by the Board in its sole discretion, an Option shall be
exercisable but only for a period of two years following the date of his
resignation or cessation of service on the Board, or in the period
prescribed by the Board in an approved circumstance, or during the
remainder of the period preceding the expiration of the Option,
whichever is shorter. Any Option shall be nontransferable, except by
will or by the laws of descent and distribution as set forth above.
During the lifetime of the Participant to whom an Option is granted, the
Option may be exercised only by the Participant. No right or interest
of a Participant in any Option shall be liable for, or subject to, any
lien, obligation or liability of such Participant or his estate.
Article VII
MANNER OF EXERCISE
7.01 Exercise. Subject to the provisions of Article VI, an
Option may be exercised in whole at any time or in part from time to
time. An Option granted under this Plan may be exercised with respect
to any number of whole shares less than the full number for which the
Option could be exercised. Such partial exercise of an Option shall not
affect the right to exercise the Option from time to time in accordance
with this Plan with respect to remaining shares subject to the Option.
7.02 Payment. Payment of the Option Price may be made in
cash or by surrendering previously-owned shares of Common Stock to the
Company, provided the shares surrendered have a Fair Market Value
(determined as of the day preceding the date of exercise) that is not
less than such Option Price or part thereof.
Page 4
<PAGE>
7.03 Cashless Exercise. To the extent permitted under
applicable laws and regulations, at the request of the
Participant, the Company will cooperate in a "cashless exercise"
of an Option. The cashless exercise shall be effected by the
Participant delivering to the Securities Broker instructions to
exercise all or part of the Option, including instructions to
sell a sufficient number of shares of Common Stock to cover the
costs and expenses associated therewith.
7.04 Shareholder Rights. No Participant shall have any
rights as a shareholder with respect to shares subject to an Option
until the date he exercises such Option.
Article VIII
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock
split-ups, subdivisions or consolidations of shares or other similar
changes in capitalization; (y) spin-offs, spin-outs, split-ups,
split-offs, or other such distribution of assets to shareholders; or (z)
direct or indirect assumptions and/or conversions of outstanding options
due to an acquisition of the Company, then the maximum number of shares
as to which Grants may be issued under this Plan and the number and
price of shares of Common Stock subject to Grants shall be
proportionately adjusted, and the terms of Options shall be adjusted, as
the Committee shall determine to be equitably required to retain for the
Participants the equivalent economic benefit of their Option(s). Any
determination made under this Article VIII by the Committee shall be
final and conclusive.
The issuance by the Company of shares of Common Stock or
securities convertible into shares of Common Stock, for cash or
property or for labor or services, either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with
respect to any Grant.
Article IX
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued,
no certificates for shares of Common Stock shall be delivered, and no
payment shall be made under this Plan except in compliance with all
applicable federal and state laws and regulations (including, without
limitation, withholding tax requirements, if any) and the rules of all
domestic stock exchanges on which the Company's shares may be listed.
The Company may rely on an opinion of its counsel as to such compliance.
Any share certificate issued to evidence Common Stock for which an
Option is exercised may bear such legends and statements as the
Committee may deem advisable to assure compliance with federal and state
laws and regulations. No Grant shall
Page 5
<PAGE>
be exercisable, no Common Stock shall be issued, and no certificate for
shares shall be delivered until the Company has obtained such consent or
approval as the Committee may deem advisable from regulatory bodies
having jurisdiction over such matters.
Article X
GENERAL PROVISIONS
10.01 Rules of Construction. Headings are given to the
articles and sections of this Plan for ease of reference. The reference
to any statute, regulation, or other provision of law shall be construed
to refer to any amendment to or successor of such provision of law.
10.02 Amendment. The Board may amend or terminate this Plan
from time to time; provided, however, that the Board may amend no more
often than once every six months and no amendment may become effective
until shareholder approval is obtained if the amendment would increase
the number of shares that may be issued hereunder pursuant to Options,
increase the benefits to Participants under the Plan, or change the
requirements as to eligibility for participation in the Plan. No
amendment shall, without a Participant's consent, adversely affect any
rights of such Participant under any Grant outstanding at the time such
amendment is made except if such an amendment is made to cause the Plan
or a Grant to qualify for the Rule 16b-3 exemption. No amendment shall
be made if it would disqualify the Plan from the exemption provided by
Rule 16b-3.
10.03 No Right. Neither the Plan nor any action taken
hereunder shall be construed as giving any Non-Employee Director any
right to be retained in the service of the Company.
10.04 Unfunded Plan. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the issuance of shares
upon exercise of any Option under the Plan and issuance of shares upon
exercise of Options shall be subordinated to the claims of the Company's
general creditors.
10.05 Acceptance. By accepting any Option or other benefit
under the Plan, each Participant and each person claiming under or
through such person shall be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, any action taken under
the Plan by the Company or the Board.
10.06 Rule 16b-3 Compliance. It is the intention of the
Company that the Plan comply in all respects with Rule 16b-3, that any
ambiguities or inconsistencies in construction of the Plan be
interpreted to give effect to such intention and that if any provision
of the Plan is found not to be in compliance with Rule 16b-3, such
provision shall be deemed null and void to the extent required to permit
the Plan to comply with Rule 16b-3. The Board may adopt rules and
regulations under, and amend, the Plan in furtherance of the intent of
the foregoing.
Page 6
<PAGE>
10.07 Term of Plan. No Grant may be issued under this Plan
before the effective date of the Plan or after the first business day
following the 2004 Annual Meeting of Shareholders (the "Termination
Date"). Grants issued on or before the Termination Date shall remain
valid in accordance with their terms.
10.08 Effective Date. This Plan has been approved by the
Board of Directors of the Company, effective as of October 25, 1994,
subject, however, to approval by the shareholders of the Company
entitled to vote at the 1994 Annual Meeting of Shareholders.
Page 7
<PAGE>
Exhibit 10.19
UNIVERSAL CORPORATION
NON-EMPLOYEE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of October 25, 1994, between Universal
Corporation, a Virginia corporation, (the "Company"), and
_____________________ ("Optionee"), is made pursuant and subject to the
provisions of the Company's 1994 Stock Option Plan for Non-Employee
Directors (the "Plan"), a copy of which is attached. All terms used
herein that are defined in the Plan shall have the same meaning given
them in the Plan.
1. Grant of Option. Pursuant to the terms of the Plan, the
Company, on October 25, 1994, granted to Optionee, subject to the terms
and conditions of the Plan and subject further to the terms and
conditions herein set forth, the right and option to purchase from the
Company all or any part of an aggregate of One Thousand (1,000) shares
of the Common Stock of the Company (the "Common Stock") at an option
price per share of $_____. Such option is to be exercisable as
hereinafter provided.
2. Terms and Conditions. This option is subject to the
following terms and conditions:
(a) Expiration Date. The Expiration Date of this
option is October 25, 2004.
(b) Exercise of Option. This option shall be
exercisable with respect to the total number of shares covered by this
option after the expiration of six (6) months from the granting of the
option. Once this option has become exercisable with respect to the
total number of shares in accordance with the preceding sentence, it
shall continue to be exercisable with respect to such shares until the
termination of Optionee's rights hereunder pursuant to paragraph 3, 4
and 5 or, otherwise, until the Expiration Date. A partial exercise of
this option shall not affect Optionee's right to exercise subsequently
this option with respect to the remaining shares that are exercisable,
subject to the six month vesting period set forth in the first sentence
of this subparagraph (b) and the conditions of the Plan and this
Agreement.
(c) Method of Exercising and Payment for Shares.
This option may be exercised only by written notice delivered to the
attention of the Company's Secretary at the Company's principal office
in Richmond, Virginia. The written notice shall specify the number of
shares being acquired pursuant to the exercise of the option when such
option is being exercised in part in accordance with subparagraph 2(b)
hereof. The exercise date shall be the date upon which such notice is
received by the Company. Such notice shall be accompanied by payment of
the option price in full for each share either in cash in United States
Dollars, or by the surrender of shares of Common Stock, or by cash
equivalent acceptable to the Company or any combination thereof having
an aggregate fair market value equal to the total option price for all
the shares being purchased.
(d) Cashless Exercise. To the extent permitted by
applicable laws and regulations, at the request of the Optionee, the
Company will cooperate in a "cashless exercise" in accordance with
Section 7.03 of the Plan.
(e) Nontransferability. This option is
nontransferable except, in the event of the Optionee's death, by will or
by the laws of descent and distribution subject to the terms hereof.
During Optionee's lifetime, this option may be exercised only by
Optionee.
3. Exercise in the Event of Death. Subject to the six
month exercisability requirement set forth in Section 2(b) hereof, this
option shall remain exercisable with respect to any shares yet
unexercised in the event that Optionee dies prior to exercising this
option in full and prior to the Expiration Date of this option. In that
event, this option may be exercised by
Page 2
<PAGE>
Optionee's estate, or the person or persons to whom his rights under
this option shall pass by will or the laws of descent and distribution.
Optionee's estate or such persons must exercise this option with respect
to the remaining shares subject to the option, if at all, within two
years of the date of Optionee's death or during the remainder of the
period preceding the Expiration Date, whichever is shorter.
4. Exercise in the Event of Permanent and Total Disability.
Subject to the six month exercisability requirement set forth in Section
2(b) hereof, this option shall remain exercisable with respect to any
shares yet unexercised if Optionee becomes permanently and totally
disabled (within the meaning of Section 105(d)(4) of the Code) while
serving on the Board prior to exercising this Option in full and prior
to the Expiration Date of this option. In such event, Optionee must
exercise this option with respect to the remaining shares subject to the
option, if at all, within two years of the date on which he ceases
serving on the Board due to permanent and total disability or during the
remainder of the period preceding the Expiration Date, whichever is
shorter.
5. Exercise After Resignation, Non-Election or Other
Approved Circumstance. Subject to the six month exercisability
requirement set forth in Section 2(b) hereof, in the event that Optionee
resigns from or is not re-elected or does not stand for re-election to
the Board or in any other circumstance approved by the Board in its sole
discretion, this option shall remain exercisable with respect to any
shares yet unexercised but must be exercised by Optionee, if at all,
within two years following the date of his resignation or cessation of
service on the Board, or within the period prescribed by the Board in an
approved circumstance, or during the remainder of the period preceding
the Expiration Date, whichever is shorter.
Page 3
<PAGE>
6. Fractional Shares. Fractional shares shall not be
issuable hereunder, and when any provision hereof may entitle Optionee
to a fractional share such fraction shall be disregarded.
7. Investment Representation. Optionee agrees that, unless
such shares shall previously have been registered under the Securities
Act of 1933, (a) any shares purchased by him hereunder will be purchased
for investment and not with a view to distribution or resale, and (b)
until such registration, certificates representing such shares may bear
an appropriate legend to assure compliance with such Act. This
investment representation shall terminate when such shares have been
registered under the Securities Act of 1933.
8. Change in Capital Structure. Subject to any required
action by the shareholders of the Company, the number of shares of
Common Stock covered by this option, and the price per share thereof,
shall be proportionately adjusted and its terms shall be adjusted as the
Committee shall determine to be equitably required for any increase or
decrease in the number of issued and outstanding shares of Common Stock
of the Company resulting from any stock dividend (but only on the Common
Stock), stock split, subdivision, combination, reclassification,
recapitalization or general issuance to holders of Common Stock of
rights to purchase Common Stock at substantially below its then fair
market value or any change in the number of such shares outstanding
effected without receipt of cash or property or labor or services by the
Company or for any spin-off, spin-out, split-up, split-off or other
distribution of assets to shareholders.
In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its
authorized shares with par value or without par value,
Page 4
<PAGE>
the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.
The grant of this option pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
9. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth
of Virginia, except to the extent that federal law shall be deemed to
apply.
10. Conflicts. In the event of any conflict between the
provisions of the Plan as in effect on the date hereof and the
provisions of this Agreement, the provisions of the Plan shall govern.
All references herein to the Plan shall mean the Plan as in effect on
the date of hereof.
11. Optionee Bound by Plan. Optionee hereby acknowledges
receipt of a copy of the Plan and agrees to be bound by all the terms
and provisions thereof.
12. Binding Effect. Subject to the limitations stated above
and in the Plan, this Agreement shall be binding upon and insure to the
benefit of the legatees, distributees, and personal representatives of
Optionee and the successors of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
signed by a duly authorized officer, and Optionee has affixed his
signature hereto.
OPTIONEE: UNIVERSAL CORPORATION
__________________________ By: _______________________________
Title: _____________________________
<TABLE> <S> <C>
<ARTICLE> 5
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<CIK> 0000102037
<NAME> UNIVERSAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 65,718
<SECURITIES> 0
<RECEIVABLES> 585,332
<ALLOWANCES> 0
<INVENTORY> 654,213
<CURRENT-ASSETS> 1,336,080
<PP&E> 579,187
<DEPRECIATION> 286,273
<TOTAL-ASSETS> 1,852,971
<CURRENT-LIABILITIES> 1,054,270
<BONDS> 285,583
<COMMON> 75,523
0
0
<OTHER-SE> 313,426
<TOTAL-LIABILITY-AND-EQUITY> 1,852,971
<SALES> 1,619,769
<TOTAL-REVENUES> 1,619,769
<CGS> 1,409,523
<TOTAL-COSTS> 1,409,523
<OTHER-EXPENSES> 151,268
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,071
<INCOME-PRETAX> 28,907
<INCOME-TAX> 10,299
<INCOME-CONTINUING> 20,817
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