SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
UNIVERSAL CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
<PAGE>
[UNIVERSAL CORPORATION LOGO]
ANNUAL MEETING OF SHAREHOLDERS
September 22, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual
Meeting of Shareholders of Universal Corporation, which is to
be held in the Company's Headquarters Building located at
Hamilton Street at Broad, Richmond, Virginia, on Tuesday,
October 28, 1997, commencing at 2:00 p.m. At the meeting, you
will be asked to elect two Directors to serve a three-year
term and to approve the Universal Corporation 1997 Executive
Stock Plan.
Whether or not you plan to attend the meeting, it is
important that your shares be represented and voted at the
meeting. Therefore, you are requested to complete, sign, date
and mail your proxy promptly in the enclosed postage-paid
envelope.
Sincerely,
/s/ HENRY H. HARRELL
HENRY H. HARRELL
Chairman and Chief
Executive Officer
<PAGE>
UNIVERSAL CORPORATION
P.O. BOX 25099
RICHMOND, VIRGINIA 23260
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Universal Corporation (the
"Company"), will be held in the Company's Headquarters Building located at
Hamilton Street at Broad, Richmond, Virginia, on Tuesday, October 28, 1997, at
2:00 p.m., for the following purposes:
(1) To elect two Directors to serve for a three-year term;
(2) To approve the Universal Corporation 1997 Executive Stock Plan; and
(3) To act upon such other matters as may properly come before the meeting
or any adjournments thereof.
Only holders of record of shares of the Company's Common Stock at the close
of business on September 8, 1997, shall be entitled to vote at the meeting.
Please sign and promptly mail the enclosed proxy to insure the presence of
a quorum at the meeting.
By Order of the Board of Directors,
James M. White, III
Secretary
September 22, 1997
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of the Company. A
shareholder may revoke the proxy at any time prior to its use, but proxies
properly executed and received by the Secretary prior to the Annual Meeting, and
not revoked, will be voted.
The Company will pay all of the costs associated with the proxy
solicitation. Proxies are being solicited by mail and may also be solicited in
person or by telephone or telegraph by Directors, officers and employees of the
Company. The Company will reimburse banks, brokerage firms, and other
custodians, nominees, and fiduciaries for their reasonable expenses in
forwarding proxy materials to the beneficial owners of the shares of the
Company's Common Stock. It is contemplated that additional solicitation of
proxies will be made by D. F. King & Co., Inc., 77 Water Street, New York, New
York 10005, at an anticipated cost to the Company of $4,000, plus reimbursement
of out-of-pocket expenses.
This Proxy Statement will be mailed to registered holders of the Company's
Common Stock on or about September 22, 1997.
VOTING RIGHTS
The Company had outstanding, as of September 8, 1997, 35,139,138 shares of
Common Stock entitled to one vote per share. A majority of the shares entitled
to vote, represented in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. Only shareholders of record at
the close of business on September 8, 1997, will be entitled to vote.
The Company is not aware of any matters that are to come before the meeting
other than those described in this Proxy Statement. However, if other matters do
properly come before the meeting, it is the intention of the persons named in
the enclosed proxy card to vote such proxy in accordance with their best
judgment.
PROPOSAL ONE
ELECTION OF DIRECTORS
Two Directors are to be elected at the 1997 Annual Meeting for a term of
three years. Eight other Directors have been elected to terms expiring in 1999
or 1998, as indicated below. The following pages set forth certain information
for each nominee and each incumbent Director as of June 30, 1997. All of the
nominees and incumbent Directors listed below were previously elected Directors
by the shareholders. Wallace L. Chandler, a Director from 1965 to 1997, has
reached retirement age and will not stand for reelection.
The election of each nominee for Director requires the affirmative vote of
the holders of a plurality of the shares of Common Stock cast in the election of
Directors. Votes that are withheld and shares held in street name ("Broker
Shares") that are not voted in the election of Directors will not be included in
determining the number of votes cast. Unless otherwise specified in the
accompanying form of proxy, it is intended that votes will be cast for the
election of all of the nominees as Directors. If, at the time of the Annual
Meeting, any nominee should be unavailable to serve as a Director, it is
intended that votes will be cast, pursuant to the enclosed proxy, for such
substitute nominee as may be nominated by the Board of Directors, or the Board
of Directors may reduce the number of Directors. Each nominee has consented to
being named in the Proxy Statement and to serve if elected.
<PAGE>
NOMINEES FOR ELECTION WHOSE TERMS EXPIRE IN 2000
HENRY H. HARRELL, 58, is Chairman and Chief Executive Officer of the
Company and of Universal Leaf Tobacco Company, Incorporated ("Universal Leaf"),
a subsidiary of the Company, positions he has held for more than five years. He
is a Director of Jefferson Bankshares, Inc. Mr. Harrell is Chairman of the
Executive Committee and a member of the Finance Committee. He has been a
Director since 1984.
HUBERT R. STALLARD, 60, is President and Chief Executive Officer of Bell
Atlantic-Virginia, Inc. (telecommunications), a position he has held for more
than five years. He is a Director of Trigon Healthcare, Inc. and Bell
Atlantic-Virginia, Inc. Mr. Stallard is a member of the Audit Committee and the
Pension Investment Committee and has been a Director since 1991.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
NOMINEES SET FORTH ABOVE.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1999
WILLIAM W. BERRY, 65, retired as Chairman of the Board of Directors of
Dominion Resources, Inc. (public utility holding company) on December 30, 1992.
He is a Director of Scott & Stringfellow Financial Corp. and Ethyl Corporation.
Mr. Berry is Chairman of the Executive Compensation Committee and a member of
the Executive Committee and the Pension Investment Committee. He has been a
Director since 1986.
RONALD E. CARRIER, 65, is President of James Madison University, a position
he has held for more than five years. He is Vice Chairman and a Director of
Leader Federal Savings Bank. Dr. Carrier is Chairman of the Audit Committee and
a member of the Executive Compensation Committee. He has been a Director since
1979.
LAWRENCE S. EAGLEBURGER, 67, is Senior Foreign Policy Advisor to the law
firm of Baker, Donelson, Bearman & Caldwell. He served as Secretary of State
from December 1992 to January 1993, and Deputy Secretary of State from January
1989 to December 1992. Mr. Eagleburger is a Director of COMSAT Corporation,
Corning Incorporated, Dresser Industries, Inc., Jefferson Bankshares, Inc.,
Phillips Petroleum Company and Stimpsonite Corporation. He is a member of the
Audit Committee and has been a Director since 1993.
RICHARD G. HOLDER, 66, retired as Chairman of the Board and Chief Executive
Officer of Reynolds Metals Company (aluminum and other products) on October 1,
1996. He is a Director of CPC International Inc. Mr. Holder is a member of the
Executive Committee and the Executive Compensation Committee and has been a
Director since 1992.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE IN 1998
JOSEPH C. FARRELL, 61, is Chairman, President and Chief Executive Officer
of The Pittston Company (coal, mineral products and transportation and security
services), positions he has held for more than five years. He is a Director of
The Pittston Company and Aeroquip-Vickers, Inc. Mr. Farrell is a member of the
Audit Committee and has been a Director of the Company since 1996.
CHARLES H. FOSTER, JR., 54, is Chairman and Chief Executive Officer of
Lawyers Title Corporation (title insurance holding company) and of Lawyers Title
Insurance Corporation, positions he has held for more than five years. He is a
Director of Lawyers Title Corporation. Mr. Foster is a member of the Finance
Committee and the Pension Investment Committee. He has been a Director since
1995.
ALLEN B. KING, 51, is President and Chief Operating Officer of the Company
and of Universal Leaf, positions he has held for more than five years. He is
Chairman of the Finance Committee and a member of the Executive Committee. Mr.
King has been a Director since 1989.
JOHN D. MUNFORD, II, 69, retired as Vice Chairman of Union Camp Corporation
(forest products manufacturer) in April 1993. He is a Director of Cadmus
Communications Corporation, Pulaski Furniture Corporation and Caraustar
Industries, Inc. Mr. Munford is Chairman of the Pension Investment Committee and
a member of the Audit Committee. He has been a Director since 1988.
2
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STOCK OWNERSHIP
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by (i) each person or group
known by the Company to beneficially own more than 5% of the outstanding shares
of the Company's Common Stock, (ii) each Director or nominee, (iii) each
executive officer listed in the Summary Compensation Table and (iv) all
Directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES(1),(2),(3) PERCENT OF CLASS
- ---------------------------------------------------------------------------------
<S> <C> <C>
Wellington Management Company, LLP 3,072,400(4) 8.76%
75 State Street
Boston, Massachusetts 02109
William W. Berry 6,355 *
Ronald E. Carrier 6,400 *
Wallace L. Chandler 20,010 *
Lawrence S. Eagleburger 5,200 *
Joseph C. Farrell 1,800 *
Charles H. Foster, Jr. 3,800 *
Henry H. Harrell 97,954 *
Richard G. Holder 6,100 *
Allen B. King 36,382 *
John D. Munford, II 6,425 *
Hartwell H. Roper 29,395 *
Hubert R. Stallard 6,169 *
William L. Taylor 11,185 *
Dirk G. Cohen Tervaert 500 *
All Directors and executive 257,774 *
officers as a group (15 persons)
</TABLE>
*Percentage of ownership is less than 1% of the outstanding shares of
Common Stock of the Company.
(1)Except as otherwise noted, the number of shares of Common Stock of the
Company shown in the table is as of June 30, 1997.
(2)The number of shares of Common Stock of the Company shown in the table
does not include shares that certain officers of the Company may acquire upon
the exercise of stock options that, except under extraordinary circumstances,
are automatically exercisable at not less than six month intervals when at least
a minimum stock price appreciation has occurred.
(3)The number of shares of Common Stock of the Company shown in the table
includes 93,770 shares held for Directors and executive officers in the
Employees' Stock Purchase Plan of Universal Leaf and 55,100 shares that certain
Directors and executive officers of the Company have the right to acquire
through the exercise of stock options within 60 days following June 30, 1997.
The number of shares above also includes 550 shares that are jointly or solely
held by minor children or other children living at home or held in fiduciary
capacities. Such shares may be deemed to be beneficially owned by the rules of
the Securities and Exchange Commission but inclusion of the shares in the table
does not constitute admission of beneficial ownership.
The Employees' Stock Purchase Plan of Universal Leaf held 1,331,693 shares
or 3.8% of the shares of Common Stock outstanding on June 30, 1997. Each
participant in the Plan has the right to instruct Signet Trust Company, trustee
for the Plan, with respect to the voting of shares allocated to his or her
account. The trustee, however, may use its discretion in voting any shares for
which it receives no instructions.
3
<PAGE>
(4)The number of shares of Common Stock of the Company shown in the table
is as of December 31, 1996, as reported in a Schedule 13G dated January 24,
1997, filed with the Securities and Exchange Commission by Wellington Management
Company, LLP ("Wellington"). According to the Schedule 13G, such shares are
owned by investment advisory clients of Wellington and no such client is known
to have an ownership interest with respect to more than 5% of the outstanding
shares of the Company's Common Stock. Wellington reported that it has shared
power to vote 1,318,000 of the shares and shared power to dispose or direct the
disposition of all 3,072,400 of the shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's Directors and executive officers are required under Section
16(a) of the Securities Exchange Act of 1934 to file reports of ownership and
changes in ownership of Common Stock of the Company with the Securities and
Exchange Commission and the New York Stock Exchange. Copies of those reports
must also be furnished to the Company.
Based solely on a review of the copies of reports furnished to the Company
and the written representations of its Directors and executive officers, the
Company believes that during the preceding fiscal year all filing requirements
applicable to Directors and executive officers were satisfied.
COMMITTEES
The standing committees of the Board of Directors are the Executive
Committee, the Finance Committee, the Audit Committee, the Pension Investment
Committee and the Executive Compensation Committee. There is no nominating
committee. The Executive Committee, which is subject to the supervision and
control of the Board of Directors, has been delegated substantially all of the
powers of the Board of Directors in order for the Executive Committee to act
between meetings of the Board. The Finance Committee, which is subject to the
supervision and control of the Board of Directors, has the responsibility of
establishing the financial policies of the Company and its subsidiaries. The
responsibilities of the Audit Committee include the review of the scope and the
results of the work of the independent public accountants and internal auditors,
the review of the adequacy of internal accounting controls, and the
recommendation to the Board of Directors as to the selection of independent
public accountants. The Pension Investment Committee establishes the pension
investment policies, selects investment advisors and monitors the performance of
pension investments of the Company and its U.S. subsidiaries. After receiving
recommendations from the Chief Executive Officer, the Executive Compensation
Committee fixes the compensation of officers and makes awards under the
Company's incentive compensation plans.
During the fiscal year ended June 30, 1997, there were five meetings of the
Board of Directors, ten meetings of the Executive Committee, no meeting of the
Finance Committee, three meetings of the Audit Committee, four meetings of the
Pension Investment Committee and two meetings of the Executive Compensation
Committee. All Directors attended 75 percent or more of the total number of
meetings of the Board of Directors and all committees of the Board on which they
served.
DIRECTORS' COMPENSATION
Each Director who is not an officer of the Company receives an annual
retainer of $18,000, a fee of $1,000 for each Board meeting attended and a fee
of $1,000 for each committee meeting attended.
The Outside Directors' 1994 Deferred Income Plan permits a non-employee
Director to defer all or a portion of his compensation. Deferred amounts are
deemed hypothetically invested as designated by the Director in any of five
investment options selected by the Company for purposes of calculating a market
return for accounting purposes. The Company may, but is not required to, invest
the deferred amounts in a Company-owned life insurance product with parallel
investment options. Subject to certain restrictions, the Director may elect at
the time of
4
<PAGE>
deferral to take cash distributions, in whole or in part, from his account
either prior to or following termination of service.
On May 2, 1991, the Board of Directors approved a Restricted Stock Plan for
Non-Employee Directors (the "Directors' Stock Plan") under which each
non-employee Director is awarded 700 shares of restricted Common Stock of the
Company annually following the Annual Meeting of Shareholders, provided that no
Director may receive more than 2,100 shares under the Directors' Stock Plan. The
restrictions on shares awarded under the Directors' Stock Plan lapse in the
event the Director becomes disabled, dies, is not nominated for reelection or is
not reelected. A total of 20,000 shares of Common Stock of the Company is
authorized for issuance under the Directors' Stock Plan, and the number of
shares authorized and issued under the Directors' Stock Plan will be adjusted
for stock dividends, stock splits and certain other corporate events that may
occur in the future.
In October 1994, the shareholders approved the 1994 Stock Option Plan for
Non-Employee Directors (the "Directors' Option Plan"). Pursuant to the
Directors' Option Plan, each non-employee Director receives an option to
purchase 1,000 shares of Common Stock of the Company on the first business day
following the Annual Meeting of Shareholders. The exercise price of all options
granted under the Directors' Option Plan is the fair market value of the Common
Stock on the date of grant. All of the options become exercisable six months
after the date of grant and expire ten years from the date of grant. Shorter
expiration periods may apply in the event an optionee dies, becomes disabled or
resigns from or does not stand for reelection to the Board. A total of 100,000
shares of Common Stock of the Company is authorized for issuance under the
Directors' Option Plan, and the number of shares authorized and issued under the
Directors' Option Plan will be adjusted for stock dividends, stock splits and
certain other corporate events that may occur in the future.
Each Director is eligible to participate in a Directors' Matching Gifts
Program in which the Company matches Directors' contributions to charities. The
maximum amount which can be matched in any fiscal year is $5,000 per Director.
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
The Company's executive compensation and benefits program is administered
by the Executive Compensation Committee (the "Committee"), which is composed
entirely of non-employee Directors. The goal of the program is to attract,
motivate, reward and retain the management talent required to achieve the
Company's business objectives, at compensation levels that are fair and
equitable and competitive with those of comparable companies. This goal is
furthered by the Committee's policy of linking compensation to individual and
corporate performance and by encouraging significant stock ownership by senior
management in order to align the financial interests of management with those of
the shareholders.
The three main components of the Company's executive compensation program
are base salary, annual cash incentive awards under Management Performance Plans
adopted by the Company and its subsidiaries and equity participation in the form
of stock option grants and eligibility to participate in the Employees' Stock
Purchase Plan of Universal Leaf. Each year the Committee reviews the total
compensation package of each executive officer to ensure it meets the goals of
the program. As a part of this review, the Committee considers corporate
performance information, compensation survey data, the advice of consultants and
the recommendations of management.
BASE SALARY. Base salaries for executive officers are reviewed annually to
determine whether adjustments may be necessary. Factors considered by the
Committee in determining base salaries for executive officers include personal
performance of the executive in light of individual levels of responsibility,
the overall performance and profitability of the Company during the preceding
year, economic trends that may be affecting the Company, and the competitiveness
of the executive's salary with the salaries of executives in comparable
positions at companies of comparable size or operational characteristics. Each
factor is weighed by the Committee in a subjective analysis of the appropriate
level of compensation for that executive. For purposes of assessing the
competitiveness of salaries, the Committee reviews compensation data from
national surveys and selected groups
5
<PAGE>
of companies with similar size or operational characteristics to determine
ranges of total compensation and the individual components of such compensation.
Such compensation data indicates that the Company's salary levels are below the
median of such data when compared to executive positions of similar scope and
responsibility.
Mr. Harrell became the Chief Executive Officer of the Company in 1988 and
Chairman of the Board of Directors in 1991 and has 31 years experience with the
Company. For the fiscal year beginning July 1, 1997, Mr. Harrell's base salary
was increased approximately 4% after a thorough review and evaluation by the
Committee of the competitiveness of Mr. Harrell's salary to those of other chief
executive officers of comparable companies and his request that any percentage
increase in his 1998 salary not exceed the Company's average percentage target
for salary increases and promotion adjustments for all of its salaried
employees.
ANNUAL CASH INCENTIVES. The Company and its principal subsidiaries have
Management Performance Plans under which key management employees may receive
annual cash incentive awards which vary from year to year based upon corporate,
business unit and individual performance. At the Committee's discretion, annual
awards based on management's recommendations are paid to eligible executives
from a "performance fund" determined primarily by the Company's pre-tax income
and after-tax return on equity. Mr. Harrell's cash incentive award for the 1997
fiscal year was 33% more than the award he received in 1996. Mr. Harrell's 1997
award was determined by the Committee after consideration of the Company's
record earnings reported for the period, the Committee's assessment of Mr.
Harrell's individual contributions to corporate performance, the Company's
strategic advances during the year and a review of total cash compensation paid
to chief executive officers of comparable companies.
EQUITY PARTICIPATION. The Committee administers the Company's 1989
Executive Stock Plan, under which it has granted to key executive employees
options to purchase shares of the Company's Common Stock based upon a
determination of competitive aggregate compensation levels. The primary
objective of issuing stock options is to encourage significant investment in
stock ownership by management and to provide long-term financial rewards linked
directly to market performance of the Company's stock. The Committee believes
that significant ownership of stock by senior management is the best way to
align the interests of management and the shareholders, and the Company's stock
incentive program is effectively designed to further this objective.
Stock options granted to key executives in the 1995 fiscal year were
intended to meet the Committee's three-year option grant targets and, therefore,
no new grants (excluding reload options described below) were made during the
1997 fiscal year to the executive officers listed in the Summary Compensation
Table. The 1995 grants included grants made under a program instituted during
the 1992 fiscal year to promote an increase in the equity interest of key
executives through systematic option exercises and the retention of shares. The
program requires each participant to make an investment in the Company by
contributing to the program currently owned shares equal to at least 10% of the
number of shares subject to the initial options granted the participant under
the program. Option exercises occur automatically at not less than six-month
intervals when at least a minimum stock price appreciation has occurred.
Except under extraordinary circumstances or as otherwise determined by the
Committee, participants have agreed that the options granted under the program
may be exercised only through stock-for-stock swaps, and both the contributed
shares and additional shares acquired through option exercises under the program
may not be sold by the participating executives during the ten-year option term.
Each option granted under the program included a reload replenishment feature
which entitles participants each time a stock-for-stock exercise occurs to
receive automatically a new option grant at the fair market value of the
Company's Common Stock on the date of grant. The number of reload options
granted is equal to the number of shares contributed by a participant to effect
a stock-for-stock swap. In exchange for this replenishment feature, each
participant has agreed to retain in the program shares equaling at least the
after-tax gain realized upon each exercise.
TAX CONSIDERATIONS. The Omnibus Budget Reconciliation Act of 1993 ("OBRA
93") established certain criteria for the tax deductibility of compensation in
excess of $1 million paid to the Company's executive officers. The Company's
policy is generally to preserve the federal income tax deductibility of
compensation paid. Accordingly, the Company has taken appropriate actions to
preserve the deductibility of stock options.
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The Committee does not propose at the present time to amend the Management
Performance Plans of the Company and its subsidiaries to comply with the OBRA 93
requirements. The Committee expects that all compensation payable to the
Company's executive officers during the fiscal year ending June 30, 1998, will
be deductible. Moreover, the qualifying amendments to these plans would limit
the Committee's discretion to make awards based on individual performance
factors and other factors as the Committee may determine, from time to time, to
be relevant. The Committee believes that the flexibility to adjust annual cash
incentive awards upward or downward is an important feature of the Management
Performance Plans and one which serves the best interests of the Company by
allowing the Committee to recognize and motivate individual executive officers
as circumstances warrant.
Executive Compensation Committee
William W. Berry, Chairman
Ronald E. Carrier
Richard G. Holder
7
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PERFORMANCE GRAPH
The graph compares the cumulative total return on Common Stock of the
Company for the last five fiscal years with the total return of the Standard &
Poors Midcap 400 Stock Index and the Media General Tobacco Industry Group Index
assuming the investment of $100 on June 30, 1992, and the reinvestment of all
dividends.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C>
Universal Corporation $100.00 $97.08 $80.07 $90.43 $119.13 $148.10
Media General Tobacco Index $100.00 $77.66 $81.95 $114.40 $160.41 $210.28
S&P Midcap 400 $100.00 $122.55 $122.26 $149.57 $178.67 $220.36
</TABLE>
8
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EXECUTIVE COMPENSATION
The individuals named below include the Company's Chairman and Chief
Executive Officer and the other four executive officers of the Company who were
the most highly compensated executive officers of the Company for the 1997
fiscal year. Information is provided for the fiscal years ended on June 30 of
the years shown.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
NAME AND PRINCIPAL FISCAL YEAR OTHER ANNUAL UNDERLYING ALL OTHER
POSITION ENDED 6/30 SALARY($) BONUS($)(1) COMPENSATION($)(2) OPTIONS(#) COMPENSATION($)(5)
------------------ ----------- --------- ----------- ------------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Henry H. Harrell 1997 $ 479,779 $ 510,000 -- 27,167(3) $ 84,971
Chairman and Chief 1996 454,845 383,000 -- 21,783(3) 84,092
Executive Officer 1995 444,230 202,000 -- 100,143(4) 90,619
Allen B. King 1997 344,435 369,400 -- 19,261(3) 49,937
President and Chief 1996 319,592 268,000 -- 15,446(3) 47,403
Operating Officer 1995 313,673 139,000 -- 92,193(4) 50,388
Dirk G. Cohen Tervaert 1997 231,900 278,500 -- 0 0
President and 1996 276,200 220,000 -- 0 0
Chairman of the Board, 1995 237,300 197,919 -- 0 0
Deli Universal, Inc.
William L. Taylor 1997 276,665 183,500 -- 11,792(3) 26,112
Vice President and 1996 274,320 140,000 -- 9,457(3) 35,859
Chief Administrative 1995 265,570 77,500 -- 59,404(4) 37,570
Officer
Hartwell H. Roper 1997 202,720 130,900 -- 10,214(3) 23,749
Vice President and 1996 194,320 102,000 -- 8,191(3) 23,807
Chief Financial 1995 188,790 64,000 -- 51,815(4) 26,501
Officer
</TABLE>
(1) Cash incentive bonuses awarded by the Executive Compensation Committee
under Management Performance Plans of the Company and its principal
subsidiaries.
(2) None of the named executive officers received perquisites or other
personal benefits in excess of the lesser of $50,000 or 10% of his total salary
and bonus.
(3) The options granted to the named executive officers in the 1997 and
1996 fiscal years were reload options granted under the automatic exercise
program described above in "Report of Executive Compensation Committee."
(4) The following number of options granted to each of the named executive
officers in the 1995 fiscal year were reload options granted under the automatic
exercise program described above in "Report of Executive Compensation
Committee": Mr. Harrell, 10,143; Mr. King, 7,193; Mr. Taylor, 4,404; and Mr.
Roper, 3,815.
(5) The amounts in the "All Other Compensation" column represent (i)
employer contributions to the Employees' Stock Purchase and the Supplemental
Stock Purchase Plans of Universal Leaf (the "Stock Purchase Plans"), (ii)
premium payments made by the Company under the Executive Insurance Program, and
(iii) interest accrued to participants' accounts under the Company's Deferred
Income Plan (the "DIP") to the extent such interest exceeded the applicable
long-term rate under Internal Revenue Code Section 1274(d). Employer
contributions to the Stock Purchase Plans on behalf of the executive officers
listed in the Summary Compensation Table for the 1997, 1996 and 1995 fiscal
years were in the following respective amounts: Mr. Harrell, $21,359, $20,437
and $19,759; Mr. King, $17,100, $15,900 and $15,456; Mr. Taylor, $0, $12,562 and
$13,212; and Mr. Roper, $9,099,
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<PAGE>
$8,841 and $8,483. The life insurance premiums paid by the Company on behalf of
such executive officers for the 1997, 1996 and 1995 fiscal years were in the
following respective amounts: Mr. Harrell, $55,633, $49,913 and $52,316; Mr.
King, $30,082, $26,323 and $27,714; Mr. Taylor, $26,112, $23,297 and $24,358;
and Mr. Roper, $13,357, $11,722 and $13,134. The accruals of interest on income
deferred by such executive officers under the DIP in excess of the applicable
long-term rate under Internal Revenue Code Section 1274(d) for the 1997, 1996
and 1995 fiscal years were in the following respective amounts: Mr. Harrell,
$7,979, $13,742 and $18,544; Mr. King, $2,755, $5,180 and $7,218; and Mr. Roper,
$1,293, $3,244 and $4,884.
PENSION PLANS
Employees of the Company and certain U.S. subsidiaries are covered by a
defined benefit retirement plan, which is qualified under the Internal Revenue
Code, and a defined benefit supplemental retirement plan, which is a
non-qualified plan to provide benefits in excess of limits allowed by the
Internal Revenue Code. The table below shows estimated annualized benefits
payable under both plans at normal retirement (age 65) based on the average
salary and bonus (as reported in the Summary Compensation Table) for the highest
consecutive three years. The actuarial equivalent of benefits under the
supplemental retirement plan is payable in a lump sum upon retirement.
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40 45
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 44,004 $ 58,672 $ 73,340 $ 88,008 $102,675 $111,633 $120,590
300,000 67,517 90,023 112,529 135,035 157,540 170,977 184,413
400,000 91,031 121,375 151,718 182,062 212,405 230,320 248,235
500,000 114,544 152,725 190,907 229,088 267,270 289,664 312,058
600,000 138,058 184,077 230,096 276,115 322,135 349,007 375,880
700,000 161,571 215,429 269,285 323,143 377,000 408,351 439,702
800,000 185,085 246,780 308,475 370,170 431,865 467,695 503,525
900,000 208,598 278,131 347,664 417,197 486,730 527,038 567,347
1,000,000 232,112 309,482 386,853 464,224 541,595 586,382 631,170
1,100,000 255,625 340,834 426,042 511,251 596,460 645,726 694,992
1,200,000 279,139 372,185 465,231 558,278 651,324 705,070 758,815
</TABLE>
The credited years of service for Messrs. Harrell, King, Taylor and Roper
are thirty-one, twenty-eight, seven and twenty-three, respectively.
The benefits shown in the table are calculated on the basis of a 50% joint
and survivor benefit, assuming that at retirement the age of the employee's
spouse is 62. The social security benefit will be paid in addition to the
amounts shown in the table.
Mr. Cohen Tervaert is covered by a pension plan established under the laws
of the Netherlands. The plan, which covers employees of N.V. Deli Universal and
certain other Dutch subsidiaries, is partially funded by employer and
participant contributions. During the fiscal year ended June 30, 1997, N.V. Deli
Universal contributed $38,136 to the plan on behalf of Mr. Cohen Tervaert. His
estimated annual pension benefit under the plan assuming twenty-nine years of
service would be $160,324.
STOCK OPTIONS
The following tables contain information concerning grants of stock options
to executive officers listed in the Summary Compensation Table during the fiscal
year ended June 30, 1997, exercises of stock options by such executive officers
in such fiscal year and the fiscal year-end value of all unexercised stock
options held by such executive officers.
10
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE
OPTIONS TO EMPLOYEES OR BASE EXPIRATION GRANT DATE
NAME GRANTED (#)(1) IN FISCAL YEAR PRICE ($/SH) DATE PRESENT VALUE(2)
---- -------------- -------------- ------------ ---------- ----------------
<S> <C> <C> <C> <C> <C>
Henry H. Harrell 12,378 19.9% $ 29.375 12/1/04 $ 92,439
14,789 21.2 35.375 12/1/04 157,621
Allen B. King 8,776 14.1 29.375 12/1/04 65,539
10,485 15.1 35.375 12/1/04 111,749
William L. Taylor 5,373 8.6 29.375 12/1/04 40,126
6,419 9.2 35.375 12/1/04 68,414
Hartwell H. Roper 4,654 7.5 29.375 12/1/04 34,756
5,560 8.0 35.375 12/1/04 59,258
</TABLE>
(1) All options granted in the last fiscal year were reload options which
replaced shares of the Company's Common Stock used for stock swap option
exercises under the automatic exercise program described above in "Report of
Executive Compensation Committee."
(2) The Black-Scholes option pricing model was used to determine the "Grant
Date Present Value" of the options listed in the table. For options with a
$29.375 exercise price, the model assumed a risk free interest rate of 6.08%, a
dividend yield of 3.914% and a volatility measure of .257, which is the variance
on the rate of return of the Common Stock of the Company over the most recent
250 trading day period prior to the grant of the option. For options with a
$35.375 exercise price, the model assumed a risk free interest rate of 6.56%, a
dividend yield of 3.461% and a volatility measure of .289. Because the magnitude
of any nontransferability discount is extremely difficult to determine, none was
applied in determining the value of the listed options. The grant date present
values set forth in the table are only theoretical values and may not accurately
determine present value. The actual value, if any, an optionee will realize will
depend on the excess of market value of the Company's Common Stock over the
exercise price on the date the option is exercised.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION> NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED OPTIONS AT FY-END (#) AT FY-END ($)(3)
ON EXERCISE VALUE ----------------------------- -----------------------------
NAME (#)(1) REALIZED ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Henry H. Harrell 39,786 $ 419,279 156,977 14,789 $ 1,066,094 $ 0
Allen B. King 29,241 333,781 133,763 10,485 829,413 0
William L. Taylor 17,902 204,344 83,467 6,419 517,521 0
Hartwell H. Roper 15,506 176,998 74,014 5,560 473,103 0
</TABLE>
(1) The number of shares of the Company's Common Stock included in this
column represents the gross amount of shares issued in exchange for shares
already owned by the officers listed in the table used to pay the exercise price
of options exercised by them in the last fiscal year. The following is the net
amount of shares of Common Stock acquired by each of these officers as a result
of such exercises, after deducting already-owned shares swapped but including
shares sold to pay taxes: Mr. Harrell, 12,619 shares; Mr. King, 9,980 shares;
Mr. Taylor, 6,110 shares; and Mr. Roper, 5,292 shares.
(2) The value realized represents the difference between the exercise price
of the option and the fair market value of the Company's Common Stock on the
date of exercise.
11
<PAGE>
(3) The value of the unexercised options at fiscal year-end represents the
difference between the exercise price of any outstanding options and $31.75, the
closing sales price of a share of the Company's Common Stock on June 30, 1997,
as reported on the New York Stock Exchange.
Of the options shown as of the fiscal year end, options on 141,766 shares
for Mr. Harrell, 141,748 shares for Mr. King, 89,886 shares for Mr. Taylor and
77,974 shares for Mr. Roper, except under extraordinary circumstances, are only
exercisable automatically at not less than six month intervals when at least a
minimum stock price appreciation has occurred.
SEVERANCE AGREEMENTS
The Company has entered into severance agreements (the "Agreements") with
Henry H. Harrell, Allen B. King, William L. Taylor and Hartwell H. Roper. The
Agreements provide for payment and continued benefits if the officer's
employment is terminated within twenty-four months after a change of control,
either by the Company "for cause" or "without cause" (other than for conduct
involving moral turpitude) or by the officer as a result of a demotion or
reduction in compensation. In the event of such termination, the officer will
receive (i) termination compensation of up to two times his annual compensation
(including salary, bonuses and incentive compensation) paid or payable to him
for the last complete fiscal year prior to the change of control; (ii)
accelerated vesting of rights under the Company's Management Performance Plan
and the Employees' Stock Purchase Plan of Universal Leaf; (iii) for the portion
of the fiscal year in which his employment is terminated, a proportional share
of the cash value of awards made to him under the Management Performance Plan
for the last complete fiscal year prior to the change of control; (iv)
additional retirement benefits equal to the additional benefits, if any, he
would have received if he were credited with two additional years of service
following termination; and (v) continuation of other fringe benefits or
equivalent benefits for a period of two years. The officer's termination
compensation will be reduced by the amount of compensation he receives from
another employer within two years subsequent to such termination.
The Board of Directors believes that the Agreements benefit the Company and
its shareholders by securing the continued service of key management personnel
and by enabling management to perform its duties and responsibilities without
the distracting uncertainty associated with a change of control.
CERTAIN RELATIONSHIPS
Baker, Donelson, Bearman & Caldwell, the law firm to which Lawrence S.
Eagleburger serves as Senior Foreign Policy Advisor, is retained from time to
time to provide legal services to the Company and its subsidiaries.
PROPOSAL TWO
APPROVAL OF THE UNIVERSAL CORPORATION
1997 EXECUTIVE STOCK PLAN
The Board of Directors has adopted unanimously and recommends that the
shareholders approve the Universal Corporation 1997 Executive Stock Plan (the
"1997 Plan"). The 1997 Plan will replace the Universal Corporation 1989
Executive Stock Plan (the "1989 Plan") which, by its terms, expires on June 30,
1998. The Company's experience with stock options has convinced the Board of
Directors of the important role of stock options and other stock-based
incentives in recruiting and retaining officers, directors and key employees
with ability and initiative and in encouraging such persons to have a greater
financial investment in the Company.
The complete text of the 1997 Plan is set forth in Exhibit A to this Proxy
Statement. The following general description of the principal features of the
1997 Plan is qualified in its entirety by reference to Exhibit A.
12
<PAGE>
GENERAL INFORMATION
The 1997 Plan would authorize the Executive Compensation Committee of the
Board of Directors (the "Committee") to award shares of Common Stock, restricted
stock and stock options (collectively, "Stock Incentives") to officers,
directors and key employees of the Company and its subsidiaries who are
designated by the Committee. No determination has been made as to which of the
persons eligible to participate in the 1997 Plan (currently, approximately 25)
will receive awards under the 1997 Plan, and, therefore, the benefits to be
allocated to any individual or to various groups of participants are not
presently determinable.
If the shareholders approve the 1997 Plan, the Company will be authorized
to issue up to 2,000,000 shares of Common Stock under the 1997 Plan. Shares will
be considered to be issued under the 1997 Plan only when the shares are actually
issued to a participant. Additionally, any shares tendered or withheld in
payment of all or part of a stock option granted under the 1997 Plan or in
satisfaction of withholding tax obligations and any shares forfeited or canceled
in accordance with the terms of a grant or award under the 1997 Plan or the 1989
Plan will become available for issuance under the 1997 Plan. The 1997 Plan
provides that not more than 200,000 shares of Common Stock shall be available
for awards of Common Stock and/or restricted stock.
Under the 1989 Plan, reload options may be granted in the discretion of the
Committee at the fair market value of the Common Stock on the date of grant only
to enable an optionee to purchase during the remaining term of an existing
option the number of shares delivered to the Company as payment of the exercise
price of the existing option. In addition to the authorization of reload options
which encourage participants to maximize their ownership in the Company without
diluting the percentage ownership interest of other shareholders, there are
currently 453,190 shares of Common Stock available for Stock Incentives which
may be issued under the 1989 Plan prior to its expiration on June 30, 1998;
thereafter, any outstanding Stock Incentive under that plan may be exercised in
accordance with the terms thereof. Shares that were authorized for such Stock
Incentives under the 1989 Plan and not issued or covered by grants or awards
under the 1989 Plan as of June 30, 1998, will not be available for issuance
under the 1997 Plan.
The 1997 Plan provides that if there is a stock split, stock dividend or
other event that affects the Company's capitalization, appropriate adjustments
will be made in the number of shares that may be issued and the number of shares
and price in all outstanding grants and awards made before such event.
On August 25, 1997, the closing price for a share of the Company's Common
Stock on the New York Stock Exchange was $35.375. Through that date, 12,750
shares of restricted Common Stock and 1,137,778 exercisable non-qualified stock
options (including reload options) were covered by outstanding grants and awards
under the 1989 Plan.
GRANTS AND AWARDS UNDER THE 1997 PLAN
STOCK OPTIONS. The 1997 Plan will permit the granting of incentive stock
options ("ISOs"), which qualify for special tax treatment, non-qualified stock
options, and reload options. The exercise price for options will not be less
than the fair market value of a share of Common Stock on the date of grant. The
period in which an option may be exercised will be determined by the Committee
on the date of grant, but will not exceed 10 years in the case of an ISO.
Payment of the option exercise price may be in cash or, if the award agreement
provides, by surrendering previously owned shares of Common Stock or the Company
withholding shares of Common Stock upon exercise. The Company may also assist in
a "cashless exercise" through a broker with the consent of the Committee.
COMMON STOCK AND RESTRICTED STOCK. Shares of Common Stock and restricted
Common Stock may also be awarded. The restricted stock would vest and become
transferable upon the satisfaction of conditions set forth in the applicable
award agreement. Restricted stock awards may be subject to forfeiture if, for
example, the recipient's employment terminates before the award vests. During
the period of restriction, holders of restricted stock will have voting rights
and the right to receive dividends on their shares.
13
<PAGE>
CHANGE OF CONTROL PROVISIONS
The 1997 Plan provides that in the event of a "Change of Control" (as
defined in the plan), unless otherwise provided by the Committee in a grant or
award agreement, all stock options will become fully exercisable and the
restrictions applicable to outstanding restricted stock will lapse. The
Committee may also provide that under such circumstances holders of restricted
stock may elect to receive, in exchange for shares that were restricted stock, a
cash payment equal to the fair market value of the shares surrendered.
FEDERAL INCOME TAX CONSEQUENCES
NON-QUALIFIED STOCK OPTIONS. Non-qualified stock options granted under the
1997 Plan are not taxable to an optionee at grant but result in taxation at
exercise, at which time the individual will recognize ordinary income in an
amount equal to the difference between the option exercise price and the fair
market value of the Common Stock on the exercise date. The Company will be
entitled to deduct a corresponding amount as a business expense in the year the
optionee recognizes this income.
INCENTIVE STOCK OPTIONS. An employee will generally not recognize income on
receipt or exercise of an ISO so long as he or she has been an employee of the
Company or its subsidiaries from the date the option was granted until three
months before the date of exercise; however, the amount by which the fair market
value of the Common Stock at the time of exercise exceeds the option price is a
required adjustment for purposes of the alternative minimum tax applicable to
the employee. If the employee holds the Common Stock received upon exercise of
the option for one year after exercise (and for two years from the date of grant
of the option), any difference between the amount realized upon the disposition
of the stock and the amount paid for the stock will be treated as long-term
capital gain (or loss, if applicable) to the employee. If the employee exercises
an ISO and satisfies these holding period requirements, the Company may not
deduct any amount in connection with the ISO.
In contrast, if an employee exercises an ISO but does not satisfy the
holding period requirements with respect to the Common Stock acquired on
exercise, the employee generally will recognize ordinary income in the year of
the disposition equal to the excess, if any, of the fair market value of the
Common Stock on the date of exercise over the option price; and any excess of
the amount realized on the disposition over the fair market value on the date of
exercise will be taxed as long-or short-term capital gain (as applicable). If,
however, the fair market value of the Common Stock on the date of disposition is
less than on the date of exercise, the employee will recognize ordinary income
equal only to the difference between the amount realized on disposition and the
option price. In either event, the Company will be entitled to deduct an amount
equal to the amount constituting ordinary income to the employee in the year of
the premature disposition.
RESTRICTED STOCK. The federal income tax consequences of restricted stock
awards depend on the restrictions imposed on the stock. Generally, the fair
market value of the stock received will be includable in the participant's gross
income at receipt unless the property is subject to a substantial risk of
forfeiture (and is either nontransferable or after transfer remains subject to
such risk of forfeiture). In this case, taxation will be deferred until the
first taxable year the stock is no longer subject to substantial risk of
forfeiture. The employee may, however, make a tax election to include the value
of the stock in gross income in the year of receipt despite such restrictions.
Generally, the Company will be entitled to deduct the fair market value of the
stock transferred to the employee as a business expense in the year the employee
includes the compensation in income.
COMMON STOCK/CASH PAYMENTS. The fair market value of any Common Stock
awarded to a participant and any cash payments a participant receives in
connection with other Stock Incentives or as dividends on restricted stock are
taxable as ordinary income in the year received or made available to the
participant without substantial limitations or restrictions. Generally, the
Company will be entitled to deduct the amount (other than dividends) that the
participant includes as income as a business expense in the year the participant
recognizes such income.
14
<PAGE>
Section 162(m) of the Internal Revenue Code places a $1 million annual
limit on the deductible compensation of certain executives of publicly traded
corporations. The limit, however, does not apply to "qualified performance-based
compensation." The Company believes that grants of options under the 1997 Plan
will qualify for the performance-based compensation exception to the
deductibility limit, assuming that the 1997 Plan is approved by the
shareholders.
State tax consequences may in some cases differ from those described above.
Grants and awards under the 1997 Plan may in some instances be made to employees
who are subject to tax in jurisdictions other than the United States and may
result in tax consequences differing from those described above.
OTHER INFORMATION
Upon approval by the Company's shareholders, the 1997 Plan will be
effective as of July 1, 1997, and will expire on June 30, 2007, unless
terminated earlier or extended by the Board of Directors. Grants and awards
issued before the 1997 Plan expires or is terminated may extend beyond the
expiration or termination date. The Board of Directors may amend the 1997 Plan
at any time, provided that no such amendment will be made without shareholder
approval if such approval is required under any applicable law, rule or
regulation. Except for adjustments that result from events that affect the
Company's capitalization, the 1997 Plan prohibits any repricing of options
without shareholder approval. In any calendar year, no individual may receive
Stock Incentives under the 1997 Plan that cover more than 200,000 shares of the
Company's Common Stock.
The 1997 Plan provides that options granted under the plan generally are
nontransferable except by will or by the laws of descent and distribution. 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.
VOTE REQUIRED
In order for it to be adopted, the proposed 1997 Plan must be approved by
the holders of a majority of the shares of Common Stock present or represented
by properly executed and delivered proxies at the Annual Meeting. Abstentions
and Broker Shares voted as to any matter at the Annual Meeting will be included
in determining the number of shares present or represented at the Annual
Meeting. Broker Shares that are not voted on any matter at the Annual meeting
will not be included in determining the number of shares present or represented
at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF
PROPOSAL TWO.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent auditors of the Company are appointed by the Board of
Directors upon the recommendation of the Audit Committee. Ernst & Young LLP, the
Company's independent auditor since 1971, has been appointed for the next fiscal
year. Representatives of Ernst & Young LLP will be present at the Annual
Meeting, will be available to respond to appropriate questions and may make a
statement if they so desire.
PROPOSALS FOR 1998 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1998 Annual
Meeting of Shareholders must cause such proposal to be delivered, in proper
form, to the Secretary of the Company, whose address is Hamilton Street at
Broad, P.O. Box 25099, Richmond, Virginia 23260, no later than May 25, 1998, in
order for the proposal to be considered for inclusion in the Company's Proxy
Statement. The Company anticipates holding the 1998 Annual Meeting on October
27, 1998.
15
<PAGE>
The Company's Bylaws also prescribe the procedure a shareholder must follow
to nominate Directors or to bring other business before shareholders' meetings.
For a shareholder to nominate a candidate for Director at the 1998 Annual
Meeting of Shareholders, notice of nomination must be received by the Secretary
of the Company not less than 60 days and not more than 90 days prior to the
meeting. The notice must describe various matters regarding the nominee and the
shareholder giving the notice. For a shareholder to bring other business before
the 1998 Annual Meeting of Shareholders, notice must be received by the
Secretary of the Company not less than 60 days and not more than 90 days prior
to the meeting. The notice must include a description of the proposed business,
the reasons therefor, and other specified matters. Any shareholder may obtain a
copy of the Company's Bylaws, without charge, upon written request to the
Secretary of the Company.
OTHER MATTERS
THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1997,
INCLUDING FINANCIAL STATEMENTS, IS BEING MAILED TO SHAREHOLDERS WITH THIS PROXY
STATEMENT. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED JUNE 30, 1997, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCLUDING EXHIBITS, CAN BE OBTAINED WITHOUT CHARGE BY WRITING TO KAREN M. L.
WHELAN, VICE PRESIDENT AND TREASURER, UNIVERSAL CORPORATION, P.O. BOX 25099,
RICHMOND, VIRGINIA 23260.
16
<PAGE>
EXHIBIT A
UNIVERSAL CORPORATION
1997 EXECUTIVE STOCK PLAN
ARTICLE I
DEFINITIONS
1.1. AFFILIATE means any "subsidiary" or "parent corporation" (within the
meaning of Section 424 of the Code) of the Company.
1.2. 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.
1.3. AWARD means an award of Common Stock and/or Restricted Stock.
1.4. BOARD means the Board of Directors of the Company.
1.5. CHANGE OF CONTROL means and shall be deemed to have taken place if:
(i) any individual, entity or "group" (within the meaning of Sections 13(d)(3)
or 14(d)(2) of the Exchange Act) 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, other than (a) as a result of any
acquisition directly from the Company, or (b) as a result of any acquisition by
any employee benefit plans (or related trusts) sponsored or maintained by the
Company or its Subsidiaries; or (ii) there is a change in the composition of the
Board such that the individuals who, as of the date hereof, constitute the Board
(the Board as of the date hereof shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, for purposes of this Section, that any individual who
becomes a member of the Board subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such pursuant to this
provision) shall be considered as though such individual were a member of the
Incumbent Board; but, provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board shall
not be so considered as a member of the Incumbent Board; or (iii) if at any
time, (w) the Company shall consolidate with, or merge with, any other Person
and the Company shall not be the continuing or surviving corporation, (x) any
Person shall consolidate with, or merge with, the Company, and the Company shall
be the continuing or surviving corporation and in connection therewith, all or
part of the outstanding Common Stock shall be changed into or exchanged for
stock or other securities of any other person or cash or any other property, (y)
the Company shall be a party to a statutory share exchange with any other Person
after which the Company is a Subsidiary of any other Person, or (z) the Company
shall sell or otherwise transfer 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any Person or Persons.
1.6. CHANGE OF CONTROL DATE is the date on which an event described in (i),
(ii) or (iii) of Section 1.5 occurs.
1.7. CODE means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code shall include the valid and binding governmental
regulations, court decisions and other regulatory and judicial authority issued
or rendered thereunder.
1.8. COMMISSION means the Securities and Exchange Commission or any
successor agency.
1.9. COMMITTEE means the Executive Compensation Committee of the Board.
1.10. COMMON STOCK means the Common Stock of the Company.
A-1
<PAGE>
1.11. COMPANY means Universal Corporation.
1.12. DISABILITY, with respect to a Participant, means "disability" as
defined from time to time under any long-term disability plan of the Company or
Subsidiary with which the Participant is employed.
1.13. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
1.14. 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.
1.15. GRANT means the grant of an Option.
1.16. INCENTIVE STOCK OPTION means an Option that is intended to qualify as
an "incentive stock option" under Section 422 of the Code.
1.17. NON-QUALIFIED STOCK OPTION means an Option other than an Incentive
Stock Option.
1.18. 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.
1.19. OPTION PRICE means the price per share for Common Stock purchased on
the exercise of an Option as provided in Article VI.
1.20. PARTICIPANT means an officer, director or employee of the Company or
of a Subsidiary who satisfies the requirements of Article IV and is selected by
the Committee to receive a Grant or an Award.
1.21. PLAN means the Universal Corporation 1997 Executive Stock Plan.
1.22. PRIOR PLAN means the Universal Corporation 1989 Executive Stock Plan.
1.23. 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.
1.24. RULE 16B-3 means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
1.25. SECURITIES BROKER means the registered securities broker acceptable
to the Company who agrees to effect the cashless exercise of an Option pursuant
to Section 8.4 hereof.
1.26. 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
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining
officers, directors and key employees with ability and initiative by enabling
such persons 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
A-2
<PAGE>
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. No Person shall be
appointed to or shall serve as a member of the Committee unless at the time of
such appointment and service he shall be a "non-employee director," as defined
in Rule 16b-3 and an "outside director," as defined in Section 162(m)(4)(C)(i)
of the Code. 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
4.1. GENERAL. Any officer, director or 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 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. Employee and non-employee directors of the
Company are eligible to participate in this Plan.
4.2. 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. An Option may be granted alone
or in addition to other Grants and/or Awards under the Plan. The Committee shall
have the authority to grant any Participant Incentive Stock Options,
Non-Qualified Stock Options or both types of Options; provided, however, that
Incentive Stock Options may be granted only to employees of the Company and its
subsidiaries (within the meaning of Section 424(f) of the Code). 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 determine. 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.
4.3. 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 8.2 hereof already owned
shares of Common Stock in full or partial payment of the Option
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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.
4.4. 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.
4.5. QUALIFICATION OF INCENTIVE STOCK OPTION UNDER SECTION 422 OF THE CODE.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee affected, to disqualify any Incentive Stock Option under such Section
422.
ARTICLE V
STOCK SUBJECT TO PLAN
Subject to the adjustment provisions of Article X and the provisions of (a)
through (c) of this Article V, up to 2,000,000 shares of Common Stock may be
issued under the Plan. In addition to such authorization, the following shares
of Common Stock may be issued under the Plan:
(a) Shares of Common Stock that are forfeited under the Prior Plan and
shares of Common Stock that are not issued under the Prior Plan because of
a payment of cash in lieu of shares of Common Stock, the cancellation,
termination or expiration of Grants and Awards, and/or other similar events
under the Prior Plan shall be available for issuance under this Plan.
(b) If a Participant tenders, or has withheld, shares of Common Stock
in payment of all or part of the Option Price under an Option granted under
the Plan, or in satisfaction of withholding tax obligations thereunder, the
shares of Common Stock so tendered by the Participant or so withheld shall
become available for issuance under the Plan.
(c) If shares of Common Stock that are issued under the Plan are
subsequently forfeited in accordance with the terms of the Grant or Award,
the forfeited shares of Common Stock shall become available for issuance
under the Plan.
Notwithstanding (a) above, any shares of Common Stock that are authorized
to be issued under the Prior Plan prior to the expiration of its term, but that
are not issued or covered by Grants or Awards under the Prior Plan, shall not be
available for issuance under this Plan.
Subject to the adjustment provisions of Article X, not more than 200,000
shares of Common Stock shall be issued under Awards of Common Stock and/or
Restricted Stock.
Subject to the foregoing provisions of this Article V, if a Grant or an
Award may be paid only in shares of Common Stock, or in either cash or shares of
Common Stock, the shares of Common Stock shall be deemed to be issued hereunder
only when and to the extent that payment is actually made in shares of Common
Stock. However, the Committee may authorize a cash payment under a Grant or an
Award in lieu of shares of Common Stock if there are insufficient shares of
Common Stock available for issuance under the Plan.
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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
7.1. 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.
7.2. NON-TRANSFERABILITY.
(a) Except as specifically provided in an 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.
(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 Exchange Act, pursuant to Rule 16b-3
may not be transferable except by will or by the laws of descent and
distribution.
7.3. 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
8.1. 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.
8.2. 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 (and any applicable withholding
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taxes) may be made by surrendering already owned shares of Common Stock to the
Company or by the Company withholding shares of Common Stock from the
Participant upon exercise, provided the shares surrendered or withheld 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 and any such withholding taxes. In
addition, the Committee may establish such payment or other terms as it may deem
to be appropriate and consistent with these purposes.
8.3. 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.
8.4. 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. The Committee may permit a
Participant to elect to pay any applicable withholding taxes by requesting that
the Company withhold the number of shares of Common Stock equivalent at current
Fair Market Value to the withholding taxes due.
ARTICLE IX
COMMON STOCK AND RESTRICTED STOCK
9.1. AWARD. In accordance with the provisions of Article IV, the Committee
will designate persons 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.
9.2. 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.
9.3. 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.
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
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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
12.1. 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.
12.2. 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.
12.3. CHANGE OF CONTROL. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change of Control:
(a) Unless otherwise provided by the Committee in an Agreement, any
outstanding Option which is not presently exercisable and vested as of a
Change of Control Date shall become fully exercisable and vested to the
full extent of the original Grant upon such Change of Control Date.
(b) Unless otherwise provided by the Committee in an Agreement, the
restrictions applicable to any outstanding Restricted Stock shall lapse,
and such Restricted Stock shall become free of all restrictions and
become fully vested, nonforfeitable and transferable to the full extent
of the original Award. 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 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.
(c) The Committee may, in its complete discretion, cause the
acceleration or release of any and all restrictions or conditions
related to a Grant or Award, in such manner, in the case of officers and
directors of the Company who are subject to Section 16(b) of the
Exchange Act, as to conform to the provisions of Rule 16b-3.
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12.4. 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.
12.5. RULE 16B-3 REQUIREMENTS. Notwithstanding any other provisions of the
Plan, the Committee may impose such conditions on any Grant or Award, and the
Board may amend the Plan in any such respects, as they may determine, on the
advice of counsel, are necessary or desirable to satisfy the provisions of Rule
16b-3. Any provision of the Plan to the contrary notwithstanding, and except to
the extent that the Committee determines otherwise: (a) transactions by and with
respect to officers and directors of the Company who are subject to Section
16(b) of the Exchange Act shall comply with any applicable conditions of Rule
16b-3; and (b) every provision of the Plan shall be administered, interpreted
and construed to carry out the foregoing provisions of this sentence.
12.6. AMENDMENT, MODIFICATION, AND TERMINATION. At any time and from time
to time, the Board may terminate, amend, or modify the Plan. Such amendment or
modification may be without shareholder approval except to the extent that such
approval is required by the Code, pursuant to the rules under Section 16 of the
Exchange Act, by any national securities exchange or system on which the Common
Stock is then listed or reported, by any regulatory body having jurisdiction
with respect thereto or under any other applicable laws, rules, or regulations.
No termination, amendment, or modification of the Plan, other than pursuant to
Section 12.5 herein, shall in any manner adversely affect any Grant or Award
theretofore issued under the Plan, without the written consent of the
Participant. The Committee may amend the terms of any Grant or Award theretofore
issued under this Plan, prospectively or retrospectively, but no such amendment
shall impair the rights of any Participant without the Participant's written
consent except an amendment provided for or contemplated in the terms of the
Grant or Award, an amendment made to cause the Plan, or Grant or Award, to
qualify for the exemption provided by Rule 16b-3, or an amendment to make an
adjustment under Article X. Except as provided in Article X, the Option Price of
any outstanding Option may not be adjusted or amended, whether through
amendment, cancellation or replacement, unless such adjustment or amendment is
approved by the shareholders of the Company.
12.7. GOVERNING LAW. The validity, construction and effect of the Plan and
any actions taken or related to the Plan shall be determined in accordance with
the laws of the Commonwealth of Virginia and applicable federal law.
12.8. SUCCESSORS AND ASSIGNS. All obligations of the Company under the
Plan, with respect to Grants and Awards issued hereunder shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company. The Plan shall
be binding on all successors and permitted assigns of a Participant, including,
but not limited to, the estate of such Participant and the executor,
administrator or trustee of such estate, and the guardians or legal
representative of the Participant.
12.9. EFFECT ON PRIOR PLAN AND OTHER COMPENSATION ARRANGEMENTS. The
adoption of this Plan shall have no effect on Grants and Awards made or to be
made pursuant to the Prior Plan and the Company's other compensation
arrangements. Nothing contained in this Plan shall prevent the Company from
adopting other or additional compensation plans or arrangements for its
officers, directors or employees.
12.10. DURATION OF PLAN. No Grant or Award may be issued under this Plan
before July 1, 1997, or after June 30, 2007; provided, however, a Grant of a
Reload Option may be issued after June 30, 2007, upon the exercise of an
Original Option as provided in Section 4.3 hereof. Grants and Awards issued on
or after July 1, 1997, but on or before June 30, 2007, and Grants of Reload
Options issued after June 30, 2007 upon the exercise of an Original Option as
provided in Section 4.3 hereof, shall remain valid in accordance with their
terms.
12.11. EFFECTIVE DATE. This Plan has been approved by the Board of
Directors of the Company, effective as of July 1, 1997, subject, however, to
approval by the shareholders of the Company entitled to vote at the 1997 Annual
Meeting of Shareholders.
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UNIVERSAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Henry H. Harrell, Allen B. King, and
William L. Taylor and each or any of them, proxy for the undersigned,
with power of substitution, to vote all the shares of Common Stock of Universal
Corporation held of record by the undersigned on September 8, 1997, at
the Annual Meeting of Shareholders to be held at 2:00 p.m. on October 28,
1997, and at any adjournments thereof, upon the following matters as more
fully set forth in the Proxy Statement, and for the transaction of such
other business as may properly come before the Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON THE
REVERSE SIDE BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears on this proxy. Attorneys-in-Fact, executors,
trustees, guardians, corporate officers, etc. should give full title.
HAS YOUR ADDRESS CHANGED?
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(CONTINUED, AND TO BE DATED AND SIGNED ON REVERSE SIDE)
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. Election of Directors.
FOR ALL WITH- FOR ALL
NOMINEES HOLD EXCEPT
Henry H. Harrell [ ] [ ] [ ]
Hubert R. Stallard [ ] [ ] [ ]
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name of the nominee.
Your shares will be voted for the remaining nominee.
RECORD DATE SHARES:
FOR AGAINST ABSTAIN
2. Proposal to approve the Universal Corporation 1997
Executive Stock Plan. [ ] [ ] [ ]
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
Mark box at right if an address change has been noted on the reverse
side of this card. [ ]
<PAGE>
TO TRUSTEE, SAVINGS AND STOCK OWNERSHIP PLAN OF
LAWYERS TITLE INSURANCE CORPORATION
AND DESIGNATED SUBSIDIARIES
THIS VOTING INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF UNIVERSAL CORPORATION
Pursuant to Section 10.5 of the Savings and Stock Ownership Plan of Lawyers
Title Insurance Corporation and Designated Subsidiaries, you are directed to
vote, in person or by proxy, the whole shares of Common Stock of Universal
Corporation credited to the undersigned Participant's Account as of
September 8, 1997, at the Annual Meeting of Shareholders of Universal
Corporation, to be held at 2:00 p.m. on October 28, 1997, and at any
adjournments thereof, upon the following matters as more fully set forth in
the Proxy Statement, and for the transaction of such other business as may
properly come before the Meeting.
THIS VOTING INSTRUCTION WHEN PROPERLY EXECUTED WILL BE VOTED FOR ITEMS 1 AND 2
UNLESS OTHERWISE DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF
A VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE TRUSTEE, THE
WHOLE SHARES OF COMMON STOCK OF UNIVERSAL CORPORATION CREDITED TO YOUR
PARTICIPANT'S ACCOUNT WILL BE VOTED IN THE SAME PROPORTION AS THOSE SHARES
OF COMMON STOCK FOR WHICH THE TRUSTEE HAS RECEIVED PROPER VOTING INSTRUCTIONS
WITH RESPECT TO ITEMS 1 AND 2.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears on this Voting Instruction.
HAS YOUR ADDRESS CHANGED?
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(CONTINUED, AND TO BE DATED AND SIGNED ON REVERSE SIDE)
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. Election of Directors.
FOR ALL WITH- FOR ALL
NOMINEES HOLD EXCEPT
Henry H. Harrell [ ] [ ] [ ]
Hubert R. Stallard [ ] [ ] [ ]
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name of the nominee.
Your shares will be voted for the remaining nominee.
RECORD DATE SHARES:
FOR AGAINST ABSTAIN
2. Proposal to approve the Universal Corporation 1997
Executive Stock Plan. [ ] [ ] [ ]
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
Mark box at right if an address change has been noted on the reverse
side of this card. [ ]
<PAGE>
TO TRUSTEE, EMPLOYEES STOCK PURCHASE PLAN OF
UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED
AND DESIGNATED AFFILIATED COMPANIES
THIS VOTING INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF UNIVERSAL CORPORATION
Pursuant to Section 13.01 of the Employees' Stock Purchase Plan of Universal
Leaf Tobacco Company, Incorporated and Designated Affiliated Companies, you
are directed to vote, in person or by proxy, the whole shares of Common
Stock of Universal Corporation credited to the undersigned Participant's
Account as of July 31, 1997, at the Annual Meeting of Shareholders of
Universal Corporation, to be held at 2:00 p.m. on October 28, 1997, and at
any adjournments thereof, upon the following matters as more fully set forth
in the Proxy Statement, and for the transaction of such other business
as may properly come before the Meeting.
THIS VOTING INSTRUCTION WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION
IS MADE, THIS VOTING INSTRUCTION WILL BE VOTED FOR ITEMS 1 AND 2. IF A
VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE TRUSTEE,
THE TRUSTEE MAY VOTE THE SHARES AT ITS DISCRETION.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears on this Voting Instruction.
HAS YOUR ADDRESS CHANGED?
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(CONTINUED, AND TO BE DATED AND SIGNED ON REVERSE SIDE)
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. Election of Directors.
FOR ALL WITH- FOR ALL
NOMINEES HOLD EXCEPT
Henry H. Harrell [ ] [ ] [ ]
Hubert R. Stallard [ ] [ ] [ ]
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name of the nominee.
Your shares will be voted for the remaining nominee.
RECORD DATE SHARES:
FOR AGAINST ABSTAIN
2. Proposal to approve the Universal Corporation 1997
Executive Stock Plan. [ ] [ ] [ ]
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
Mark box at right if an address change has been noted on the reverse
side of this card. [ ]
