SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
[ X ] Annual report pursuant to section 15(d) of the Securities Exchange Act of
1934 [fee required] for the fiscal year ending December 31, 1996.
OR
[ ] Transition report pursuant to section 15(d) of the Securities Exchange
Act of 1934 [no fee required]
Commission file number 1-652
A. Full title of the Plan:
EMPLOYEES' STOCK PURCHASE PLAN OF UNIVERSAL LEAF TOBACCO COMPANY,
INCORPORATED AND DESIGNATED AFFILIATED COMPANIES
B. Name of the issuer of the securities held pursuant to the plan
and the address of its principle executive office:
UNIVERSAL CORPORATION
1501 NORTH HAMILTON STREET
RICHMOND, VIRGINIA 23260
(804) 359-9311
1
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
EMPLOYEES' STOCK PURCHASE PLAN
OF UNIVERSAL LEAF TOBACCO
COMPANY, INCORPORATED AND
DESIGNATED AFFILIATED COMPANIES
DATE: June 24, 1997 /s/ Hartwell H. Roper
-------------- ---------------------
Hartwell H. Roper
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Universal Leaf Tobacco Company, Inc.
2
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FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
EMPLOYEES' STOCK PURCHASE PLAN OF
UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED
AND DESIGNATED AFFILIATED COMPANIES
YEARS ENDED DECEMBER 31, 1996 AND 1995
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Financial Statements
and Supplemental Schedules
Years ended December 31, l996 and 1995
with Report of Independent Auditors
TABLE OF CONTENTS
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Page
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<S> <C>
Report of Independent Auditors............................................................1
Financial Statements
Statements of Net Assets Available for Plan Benefits, With Fund Information...............2
Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information.....3
Notes to Financial Statements.............................................................4
Supplemental Schedules Schedules
---------
Item 27a - Schedule of Assets Held for Investment Purposes................................1
Item 27d - Schedule of Reportable Transactions............................................2
</TABLE>
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
Human Resources and Retirement Committee,
Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
We have audited the accompanying statements of net assets available for plan
benefits of the Employees' Stock Purchase Plan of Universal Leaf Tobacco
Company, Incorporated and Designated Affiliated Companies (the Plan) as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1996. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1996 and 1995, and the changes in its net assets available for plan
benefits for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The Fund Information in
the statement of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Ernst & Young LLP
Richmond, Virginia
June 20, 1997
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Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Statements of Net Assets Available for Plan Benefits, With Fund Information
<TABLE>
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DECEMBER 31, 1996
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Fund Information
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Non-Participant
Participant Directed Directed
-------------------------------------------------------
Universal Lawyers Title Universal
Corporation Corporation Fixed Corporation
Common Common Income Common
Stock Fund Stock Fund Fund Stock Fund Total
-------------------------------------------------------------------
<S> <C>
Common stock of Universal
Corporation, at market:
1,331,520 shares $19,938,159 $ - $ - $22,836,921 $42,775,080
Common stock of Lawyers
Title Corporation, at market:
45,066 shares - 884,420 - - 884,420
Investment in a fund consisting
of guaranteed investment
contracts; 761,304 units - - 761,304 - 761,304
Temporary cash investments 374 - 4,076 429 4,879
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Net assets available for plan benefits $19,938,533 $884,420 $765,380 $22,837,350 $44,425,683
===================================================================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------------------------------------------------------------------
Fund Information
----------------------------------------------------------
Non-Participant
Participant Directed Directed
----------------------------------------------------------
Universal Lawyers Title Universal
Corporation Corporation Fixed Corporation
Common Common Income Common
Stock Fund Stock Fund Fund Stock Fund Total
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<S> <C>
Common stock of Universal
Corporation, at market:
1,401,209 shares $16,195,968 $ - $ - $17,958,502 $34,154,470
Common stock of Lawyers
Title Corporation, at market:
68,024 shares - 1,300,959 - - 1,300,959
Investment in a fund consisting
of guaranteed investment
contracts; 666,674 units - - 666,674 - 666,674
Temporary cash investments 3,671 - 2,435 4,071 10,177
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Net assets available for plan benefits $16,199,639 $1,300,959 $669,109 $17,962,573 $36,132,280
========================================================================
</TABLE>
See accompanying notes.
2
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Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Statement of Changes in Net Assets Available for Plan Benefits, With Fund
Information
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
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Fund Information
--------------------------------------------------------
Non-Participant
Participant Directed Directed
--------------------------------------------------------
Universal Lawyers Title Universal
Corporation Corporation Fixed Corporation
Common Common Income Common
Stock Fund Stock Fund Fund Stock Fund Total
--------------------------------------------------------------------
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Investment income:
Net appreciation in market value
of investments $ 4,949,386 $ 18,532 $ - $5,621,519 $10,589,437
Cash dividends 671,875 - - 756,857 1,428,732
Interest 3,919 - 45,555 4,414 53,888
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5,625,180 18,532 45,555 6,382,790 12,072,057
Contributions:
Employer - - - 1,525,781 1,525,781
Employee 1,437,291 - 111,135 - 1,548,426
Credits from forfeitures - - - 22,645 22,645
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7,062,471 18,532 156,690 7,931,216 15,168,909
Withdrawals and forfeitures of
employees' accounts (3,407,047) (257,573) (60,419) (3,150,467) (6,875,506)
Transfer among funds 83,470 (177,498) - 94,028 -
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Net increase (decrease) 3,738,894 (416,539) 96,271 4,874,777 8,293,403
Net assets available for plan benefits:
December 31, 1995 16,199,639 1,300,959 669,109 17,962,573 36,132,280
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December 31, 1996 $19,938,533 $ 884,420 $765,380 $22,837,350 $44,425,683
====================================================================
</TABLE>
See accompanying notes.
3
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Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Notes to Financial Statements
Years ended December 31, l996 and 1995
1. DESCRIPTION OF THE PLAN
A complete description of Plan provisions including those relating to vesting,
withdrawals and distributions is contained in the Summary Plan Description and
the Plan document which has been filed with the Securities and Exchange
Commission. Copies of these documents and the prospectus relating to the Plan
are available from the Universal Corporation Benefits Department. The following
summary should be read in conjunction with the aforementioned documents.
GENERAL
The Plan is a defined contribution plan sponsored by Universal Leaf Tobacco
Company, Incorporated (the Sponsor) for the benefit of certain salaried
employees of the sponsor and designated affiliated companies (Employers). The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
CONTRIBUTIONS
After one year of service, employees may elect to contribute 1% to 5% of their
total pay (including overtime and bonuses) by means of monthly payroll
deductions. Employers match 100% of employee contributions except to the extent
that the employer contribution is reduced by forfeitures from withdrawing
participants.
Employees may elect to invest in the Universal Corporation Common Stock Fund,
Fixed Income Fund or to divide their contributions equally between the two
funds. Employers' contributions are invested only in the Universal Corporation
Common Stock Fund.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions, the
Employer's matching contribution and credit from forfeitures and an allocation
of the Plan's investment income. The benefit to which a participant is entitled
is the benefit that can be provided from the participant's account.
4
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Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
Participants are fully vested in participant contributions and in Employer
contributions in the event of retirement, disability or death. Otherwise,
vesting in the Employer contributions occurs according to the following
schedule:
YEARS OF SERVICE VESTING PERCENTAGE
------------------- ---------------------------
0-4 0%
5 100%
BENEFITS
Participants who retire or become disabled may receive a distribution in a
single lump sum or in annual installments over a period not to exceed ten years.
TERMINATION
While the sponsor has not expressed any intent to terminate the Plan, it is free
to do so at any time, subject to the provisions of ERISA. In the event of Plan
termination, participants will become fully vested in their accounts.
LAWYERS TITLE CORPORATION SHARES
During October 1991, each participant elected to either sell or hold all Lawyers
Title Corporation shares distributed to them as a dividend from Universal
Corporation in conjunction with the spin off of the Lawyers Title subsidiary.
Participants continuing to hold Lawyers Title Corporation shares may elect to
sell 100% of their holdings as part of their regular semi-annual elections and
have the proceeds invested in Universal Corporation Common Stock. No additional
investments in Lawyers Title Corporation Common Stock are permitted under the
Plan.
5
<PAGE>
Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Pursuant to an IRS Ruling and applicable Treasury Regulations, participants were
required to allocate their tax basis in the Universal Corporation Common Stock
held at the time of the distribution between their Universal Corporation Common
Stock and Lawyers Title Corporation Common Stock (including any fractional share
interest) in proportion to their relative fair market values at that time. Based
on the average of the high and low trading prices of Universal Corporation
Common Stock and Lawyers Title Corporation Common Stock on October 1, 1991,
95.343 percent of the basis was allocated to Universal Corporation Common Stock
and 4.657 percent was allocated to Lawyers Title Corporation Common Stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
The Plan's investments are held by a bank-administered trust fund. Investments
in the Common Stock Funds are carried at market value based upon quotations from
the New York Stock Exchange. Dividends are recorded on the record date, and
interest is accrued as earned.
Assets of the Fixed Income Fund are primarily invested in the Stable Value Fund
I, a pooled fund of guaranteed investment contracts issued by life insurance
companies and managed by Signet Trust Company. The guaranteed investment
contracts are valued at cost, which approximates market value. The rate of
return of the fund is based on the crediting rate of the underlying guaranteed
investment contracts. These contracts generally provide for a fixed rate of
return over the term of the contract. During 1996 the average yield for the fund
was 6.5% (6.7% in 1995), and at December 31, 1996 and 1995 the average yield was
approximately 6.5%.
ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
6
<PAGE>
Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Notes to Financial Statements (continued)
3. INCOME TAXES
The Plan has been determined by the Internal Revenue Service to be qualified
under Section 401(a) of the Internal Revenue Code and the related trust to be
exempt from taxation under Section 501(a). Continued qualification of the Plan
will depend on continued operation under the approved form. The Plan has been
amended since receiving the tax determination letter; however, Universal Leaf
Tobacco Company, Incorporated is not aware of any series of events or course of
actions that may have adversely affected the qualified status of the Plan.
Until such time as a participant or his beneficiary withdraws from the Plan, no
income tax is payable by the participant on contributions made by his employer
on his behalf or interest and dividends added to his account. The income tax
ramifications to employees with respect to the Plan are described in the
Prospectus covering the Plan which is available to all employees.
4. RELATED PARTY TRANSACTIONS
The administrative expenses of the Plan, which include Trustee's fees of $54,015
and $55,176 during the years ended December 31, l996 and 1995, respectively, are
paid by the Sponsor and are not included in the accompanying financial
statements.
Under the provisions of the Plan, shares of Universal Corporation Common Stock
may be purchased from employees, including officers, at the closing price on the
New York Stock Exchange on the date of purchase. Purchases from employees
totaled $1,029,958 and $740,976 during the years ended December 31, 1996 and
1995, respectively. Included in these amounts are purchases from officers which
amounted to $256,435 and $142,967 during the years ended December 31, l996 and
1995, respectively.
7
<PAGE>
Supplemental Schedules
<PAGE>
Schedule 1
Item 27a - Schedule of Assets Held for
Investment Purposes
<PAGE>
SCHEDULE 1
Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
MARKET
NAME AND TITLE COST VALUE
- --------------------------------------------- ----------------------------
UNIVERSAL CORPORATION COMMON STOCK FUND
Common stock of Universal Corporation* $25,616,021 $42,775,080
Temporary cash investments 803 803
----------------------------
$25,616,824 $42,775,883
============================
LAWYERS TITLE CORPORATION COMMON STOCK FUND
Common stock of Lawyers Title Corporation $ 153,852 $ 884,420
============================
FIXED INCOME FUND
Stable Value Fund I $ 761,304 $ 761,304
Temporary cash investments 4,076 4,076
----------------------------
$ 765,380 $ 765,380
============================
*Indicates party-in-interest to the Plan.
<PAGE>
Schedule 2
Item 27d - Schedule of Reportable
Transactions
<PAGE>
SCHEDULE 2
Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
Item 27d- Schedule of Reportable Transactions
December 31, 1996
<TABLE>
<CAPTION>
CURRENT
VALUE OF ASSET
IDENTITY OF PARTY PURCHASE SELLING COST OF ON NET GAIN
INVOLVED DESCRIPTION PRICE PRICE ASSET TRANSACTION OR (LOSS)
DATE
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of Transactions in Excess of 5% of Plan Assets
- ------------------------------------------------------------------------
<S> <C>
Signet Trust Co. Purchased shares of The Virtus Money
Market Fund II at $1/share through a
series of 48 individual transactions $3,628,230
Signet Trust Co. Sold shares of The Virtus Money
Market Fund II at $1/share through a
series of 135 individual transactions $3,320,947 $3,320,947 $3,320,947 -
** Purchased 160,921 shares of Universal
Stock at various prices in a series of
240 transactions $4,257,247
</TABLE>
There were no category (i), (ii), or (iv) reportable transactions during 1996.
** Transaction made on market.
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-21781) pertaining to the Employees' Stock Purchase Plan of Universal
Leaf Tobacco Company, Incorporated, and Designated Affiliated Companies and in
the related Prospectus of our report dated June 20, 1997, with respect to the
financial statements and schedules of the Employees' Stock Purchase Plan of
Universal Leaf Tobacco Company, Incorporated, and Designated Affiliated
Companies included in this Annual Report (Form 11-K) for the year ended December
31, 1996.
Ernst & Young LLP
Richmond, Virginia
June 20, 1997
