UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ x ] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Period Ended September 30, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Transition Period From_________________to___________________
Commission file number 1-652
UNIVERSAL CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
VIRGINIA 54-0414210
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1501 North Hamilton Street, Richmond, Virginia 23230
---------------------------------------------- -----
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code - (804) 359-9311
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------- ---------
Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock as of the latest practicable date:
Common Stock, No par value - 33,665,806 shares
outstanding as of November 6, 1998
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2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three Months Ended September 30, 1998 and 1997
(In thousands of dollars, except per share data)
<CAPTION>
September 30, September 30,
1998 1997
<S> <C> <C>
Sales and other operating revenues $ 879,285 $1,023,156
Costs and expenses
Cost of goods sold 742,701 880,921
Selling, general and administrative expenses 78,314 78,437
--------------------------------------------
Operating income 58,270 63,798
Equity in pretax earnings of unconsolidated affiliates 570 3,745
Interest expense (15,542) (13,802)
--------------------------------------------
Income before income taxes and other items 43,298 53,741
Income taxes 16,021 21,306
Minority interests 220 (338)
--------------------------------------------
--------------------------------------------
Net income $ 27,057 $ 32,773
==============================================================================================================
--------------------------------------------
Earnings per share $ .79 $ .93
==============================================================================================================
--------------------------------------------
Diluted earnings per share $ .78 $ .93
==============================================================================================================
Retained earnings - Beginning of period 526,715 424,298
Net income 27,057 32,773
Cash dividends declared ($.28 - 1998; $.265 - 1997) (9,448) (9,312)
--------------------------------------------
Retained earnings - End of period 544,324 447,759
--------------------------------------------
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3
Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
September 30, June 30,
1998 1998
-------------------- ----------------------
ASSETS
Current
Cash and cash equivalents $ 87,621 $ 79,835
Accounts receivable 396,013 392,821
Advances to suppliers 83,003 104,439
Accounts receivable - unconsolidated affiliates 11,582 49,343
Inventories - at lower of cost or market:
Tobacco 603,616 541,822
Lumber and building products 91,820 97,071
Agri-products 76,086 89,990
Other 29,095 33,162
Prepaid income taxes 6,613 18,347
Deferred income taxes 4,175 3,794
Other current assets 18,181 19,665
-------------------------------------------------
Total current assets 1,407,805
1,430,289
Property, plant and equipment - at cost
Land 30,216 29,951
Buildings 230,023 219,594
Machinery and equipment 476,437 466,177
-------------------------------------------------
736,676 715,722
Less accumulated depreciation 395,089 385,967
-------------------------------------------------
341,587 329,755
Other assets
Goodwill 119,987 120,889
Other intangibles 19,522 18,586
Investments in unconsolidated affiliates 87,121 87,052
Other noncurrent assets 74,037 70,134
-------------------------------------------------
300,667 296,661
-------------------------------------------------
$2,050,059 $2,056,705
=========================================================================================================================
See accompanying notes.
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4
Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
September 30, June 30,
1998 1998
-------------------- ----------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Notes payable and overdrafts $ 543,424 $ 586,450
Accounts payable 250,081 285,994
Accounts payable - unconsolidated affiliates 12,101 17,116
Customer advances and deposits 255,099 125,311
Accrued compensation 18,019 24,706
Income taxes payable 19,727 27,693
Current portion of long-term obligations 30,678 34,251
-------------------------------------------------
Total current liabilities 1,129,129
1,101,521
Long-term obligations 246,675 263,140
Postretirement benefits other than pensions 44,219 44,535
Other long-term liabilities 46,232 40,909
Deferred income taxes 20,275 27,065
Minority interests 31,833 31,668
Shareholders' equity
Preferred stock, no par value, authorized 5,000,000
shares none issued or outstanding
Common stock, no par value, authorized 50,000,000
shares, issued and outstanding 33,875,606 shares
(34,866,406 at June 30, 1998) 26,250 61,544
Retained earnings 544,324 526,715
Accumulated other comprehensive income (38,878) (40,392)
-------------------------------------------------
Total shareholders' equity 531,696 547,867
-------------------------------------------------
$ 2,050,059 $ 2,056,705
==========================================================================================================================
See accompanying notes.
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5
Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended September 30, 1998 and 1997
(In thousands of dollars)
<CAPTION>
September 30, September 30,
1998 1997
-------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $27,057 $ 32,773
Adjustments to reconcile net income to net
cash provided by operating activities 5,600 15,400
Changes in operating assets and liabilities net of
effects from purchase of businesses 105,929 (1,641)
----------------------------------------------
Net cash provided by operating activities 138,586 46,532
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (20,000) (13,100)
----------------------------------------------
Net cash used in investing activities (20,000) (13,100)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term debt, net (43,000) (15,600)
Repayment of long-term debt (23,000) (20,000)
Purchases of common stock (35,300)
Dividends paid (9,500) (9,300)
----------------------------------------------
Net cash used in financing activities (110,800) (44,900)
----------------------------------------------
Net increase (decrease) in cash and cash equivalents 7,786 (11,468)
Cash and cash equivalents at beginning of year 79,835 109,070
-------------------- --------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 87,621 $ 97,602
===================================================================================================================
</TABLE>
<PAGE>
6
Universal Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
All figures contained herein are unaudited.
1) The operations of domestic and foreign tobacco, lumber and building products,
and agri-products segments are seasonal. Therefore, the results of operations
for the three-month period ended September 30, 1998, are not necessarily
indicative of results to be expected for the year ending June 30, 1999. All
adjustments necessary to state fairly the results for such period have been
included and were of a normal recurring nature.
2) Contingent liabilities: at September 30, 1998, total exposure under
guarantees issued for banking facilities of unconsolidated affiliates was
approximately $10 million. Other contingent liabilities approximate $45 million
and relate principally to performance bonds and Common Market Guarantees. The
Company's Brazilian subsidiaries have been notified by the tax authorities of
proposed adjustments to the income tax returns filed in prior years. The total
proposed adjustments, including penalties and interest, approximate $50 million.
The Company believes the Brazilian tax returns filed were in compliance with the
applicable tax code. The numerous proposed adjustments vary in complexity and
amounts. While it is not feasible to predict the precise amount or timing of
each proposed adjustment, the Company believes that the ultimate disposition
will not have an material adverse effect on the Company's consolidated financial
position or results of operations.
3) As of July 1, 1998 the Company adopted Statement of Financial Accounting
Standards No. 130,"Reporting Comprehensive Income" (SFAS 130). The adoption of
this statement had no impact on the Company's net income or shareholders'
equity. SFAS 130 establishes new rules for the reporting and display of
comprehensive income and its components. SFAS 130 requires foreign currency
translation adjustments to be included in other comprehensive income. Amounts in
prior year financial statements have been reclassified to conform to SFAS 130.
Three months ended September 30, 1998 1997
-------------- --------------
(in thousands of dollars)
Net income $27,057 $32,773
Foreign currency translation adjustment 1,514 (6,887)
-------------- --------------
Comprehensive income $28,571 $25,886
============== ==============
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7
4) The following table sets forth the computation of earnings per share
and diluted earnings per share.
Three months ended September 30, 1998 1997
------------- --------------
Net income (in thousands of dollars) $27,057 $32,773
------------- --------------
Denominator for earnings per share:
Weighted average shares 34,391,290 35,139,137
Effect of dilutive securities:
Employee stock options 92,553 190,460
------------- --------------
Denominator for diluted earnings per share 34,483,843 35,329,597
Earnings per share $.79 $.93
============= ==============
Diluted earnings per share $.78 $.93
============= ==============
5) The lower estimated effective tax rate in fiscal year 1999 is due to the
anticipated mix of foreign and domestic earnings and management's current
assessment of pending and contested tax issues.
<PAGE>
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
Working capital at September 30 was $279 million compared to $329
million at June 30, 1998. The decline in working capital was due to a
combination of lower current assets, which were down $22 million, and an
increase in current liabilities of $27 million. The working capital accounts
fluctuate between September and June primarily due to seasonality. In the U.S.,
tobacco working capital needs are normally at their lowest point at June 30. In
the first quarter of the fiscal year, the U.S. flue-cured tobacco markets open
and tobacco is purchased and shipped to factories for processing. Inventories
generally rise with increases in the total of notes payable and/or customer
advances. The mix of notes payable and customer advances is dependent on both
the Company's and its customers' borrowing capabilities, interest rates and
exchange rates. The Company does not purchase material quantities of tobacco in
the United States on a speculative basis; thus the increase in inventory
represents tobacco that has been committed to customers.
Generally, the Company's international tobacco operations conduct
business in U.S. dollars, thereby limiting foreign exchange risk to local
production and overhead costs. Agri-product and lumber operations enter into
foreign exchange contracts to hedge firm purchase and sales commitments for
terms of less than six months. Interest rate risk is limited because customers
in the tobacco business usually pre-finance purchases or pay market rates of
interest for inventory purchased for their accounts.
The Company continues to purchase its common stock pursuant to a $100
million buyback plan announced in May 1998. In the first quarter of fiscal 1999,
the Company purchased a total of 992 thousand shares for $35.3 million.
Cumulative share purchases as of November 6, 1998 were 1.7 million shares for
$64.9 million. The liquidity and capital resources of the Company at September
30, 1998 remain adequate to support the Company's foreseeable operating needs.
Results of Operations
- ---------------------
'Sales and Other Operating Revenues' decreased $144 million or 14% in
the quarter. Tobacco revenues decreased by $135 million in the quarter due to
lower green tobacco costs in Brazil and Africa and the timing of shipments in
the U.S., Africa and dark tobacco operations. Revenues for lumber and building
products and agri-products were each down less than 4% in the quarter.
Gross profit (revenues less cost of sales) in the quarter decreased 4%
to $137 million principally due to lower results in tobacco operations. A number
of operating regions results were lower due to shipment timing, which resulted
from some customer shipments made in the fourth quarter of last year instead of
the current year's first quarter. U.S. tobacco volumes bought and processed in
the quarter were down slightly compared to last year and, in the prior year,
there were more shipments of old crop tobacco. In addition, gross margins in
Argentina were negatively impacted by the quality of the crop. Brazilian
operations benefited from a higher proportion of the smaller 1998 crop shipped
in the first quarter of fiscal 1999. Lumber and building product gross margins
remain under pressure on comparable sale volumes and lower prices. Agri-products
gross profits were up principally on improved tea results.
Interest expense increased in the quarter due a change in the method of
funding working capital in Brazil. The Company's estimated effective tax rate in
fiscal year 1999 is approximately 37% compared to 40% in the first quarter last
year. The decline compared to last year's estimated rate in the quarter is due
to the anticipated mix of foreign and domestic earnings and management's current
assessment of pending and contested tax issues.
<PAGE>
9
The outlook for the balance of the year remains good, although timing
issues as well as variations in the relative earnings contributions of the
company's operating territories could still affect quarterly comparisons. Higher
tobacco earnings should be recorded in the United States and Africa reflecting
larger volumes expected in both areas. However, the U.S. burley crop has been
affected by dry weather in recent weeks and both quantity and quality of the
crop are uncertain at this time. On the other hand, Brazilian results should be
somewhat lower because of the significant declines in last year's flue-cured and
burley crops due to excessive rains. Dark tobacco earnings will also be down for
the year, due to lower leaf prices resulting from a surplus of certain types of
cigar leaf and the impact of heavy rains in Indonesia which have significantly
reduced cigar wrapper yields and leaf quality. Wrapper tobacco continues to be
in short supply.
Improved results are expected from Universal's lumber and building
products operations in the Netherlands as prices appear to be stabilizing,
particularly for softwood, and recent dollar/guilder exchange rate developments
have been favorable. At the same time, concerns are beginning to be expressed
that the problems in Asia, the former Soviet Union and Latin America could lead
to an economic slow down in Europe in the months ahead, which could affect
lumber usage. Agri-products are expected to do well for the year.
Since the Company's last report, the world economic situation has
continued to deteriorate, which has the possibility of impacting numerous
businesses, including the tobacco merchant business. However, at this writing
prospects remain good for the remainder of the year and management is optimistic
that earnings from continuing operations in the range of $3.70 to $3.90 per
share can be achieved.
As reported in the Company's 1998 Annual Report on Form 10-K (refer to
Management's Discussion and Analysis of Financial Condition and Results of
Operations, Year 2000), the Company has developed a plan to mitigate the effects
of the year 2000 problem on its operations. At the time of the report it was
expected that by December 31, 1998 all of the Company's business locations would
complete the assessment and remediation phases of the plan's internal aspects.
Currently several business locations are not expected to complete the
remediation phase until June 30, 1999. However, this delay should not have a
material adverse effect on the Company's plan. In conjunction with the Company's
contingency plan regarding the year 2000 issue, each operating region has begun
identifying potential risk areas and the probability of a disruption to business
operations.
As of September 30, 1998, the Company had spent approximately $5
million of the $5.7 million estimated cost to address the Y2K problem. The
Company does not expect the total cost of becoming Y2K compliant with respect to
its internal technology to be material to its consolidated financial condition
or results of operations.
Reference is made to Items 1 and 7 and the Notes to the Consolidated
Financial Statements in Item 8 of the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1998, and "Management's Discussion and Analysis
of Financial Conditions and Results of Operations - Other Information Regarding
Trends and Management's Actions - Factors That May Affect Future Results" in the
Annual Report regarding important factors that would cause actual results to
differ materially from those contained in any forward-looking statement made by
or on behalf of the Company, including forward-looking statements contained in
Item 2 of this Form 10-Q.
<PAGE>
10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders
The Company held its annual meeting of its shareholders on
October 27, 1998 to elect three directors to serve three-year terms each and one
director to serve a two-year term, and to increase the number of authorized
shares of the Company's common stock. The names of the four directors and the
number of votes cast for each of them are list below:
Name of Director Votes For Votes Withheld
---------------- --------- --------------
Joseph C. Farrell (two-year term) 28,456,712 161,466
Charles H. Foster, Jr. (three-year term) 28,964,664 153,514
Allen B. King (three-year term) 28,916,049 202,129
Jeremiah J. Sheehan (three-year term) 28,956,183 161,995
The directors whose terms continued after the meeting are William W. Berry, Dr.
Ronald E. Carrier, Lawrence S. Eagleburger, Henry H. Harrell, Richard G. Holder,
and Hubert R. Stallard.
The number of shares voted as follows for the increase of authorized shares of
the Company's common stock:
For Abstained Against
--- --------- -------
26,455,208 2,507,402 155,568
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
--------
10.32 Amended and Restated Universal Corporation Outside Directors'
Deferred Income Plan dated as of October 1, 1998.*
10.33 Amended and Restated Universal Leaf Tobacco Company, Incorporated
1994 Deferred Income Plan dated as of July 1, 1998.*
12 Statements Regarding Computation of Ratio of Earnings to Fixed
Charges.*
27 Financial Data Schedule.*
b. Reports on Form 8-K
-------------------
(i) The Company filed a current Report on Form 8-K on September 8,
1998 describing the receipt of a subpoena from the Philadelphia
Office of the Antitrust Division of the U.S. Department of
Justice.
(ii) The Company filed a current Report on Form 8-K on August 10, 1998
announcing the Company's earnings for its fiscal year ended June
30, 1998.
* Filed Herewith
<PAGE>
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 9, 1998 UNIVERSAL CORPORATION
---------------------------------------------
(Registrant)
/s/ Hartwell H. Roper
---------------------------------------------
Hartwell H. Roper, Vice President and
Chief Financial Officer
/s/ William J. Coronado
---------------------------------------------
William J. Coronado, Controller
(Principal Accounting Officer)
EXHIBIT 10.32
UNIVERSAL CORPORATION
OUTSIDE DIRECTORS' DEFERRED INCOME PLAN
Universal Leaf Tobacco Company, Incorporated (the "Company") hereby
restates, effective as October 1, 1998, the Outside Directors' 1994 Deferred
Income Plan, with the plan restated as the Universal Corporation Outside
Directors' Deferred Income Plan (the "Plan"). The Plan is and shall remain,
unless later amended, a non-qualified deferred compensation program for the
non-employee directors of Universal Corporation (the "Outside Directors"). The
following shall constitute the terms and conditions of the restated Plan,
effective as of October 1, 1998, unless as otherwise provided.
A. Purpose and Administration
1. Statement of Purpose. The purpose of the Plan is to provide the
Outside Directors with recurrent opportunities to defer receipt of a portion of
their compensation as directors. Such deferrals, until a selected date certain
in the future, would apply to amounts which otherwise would be payable
currently.
2. Top Hat Plan. The Company intends that the Plan constitute an
unfunded "top hat" plan, within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended
from time to time ("ERISA"), and the rules and regulations thereunder,
maintained for the purpose of providing deferred compensation to the Outside
Directors. This plan shall not cover any person who is, or otherwise becomes, an
employee of the Company or its affiliated entities.
3. Plan Administration. Full discretionary power and authority to
construe, interpret and administer the Plan, and to change requirements for
eligibility and investment options, shall be vested in the Executive Committee
of the Company (the "Committee"). The Committee shall have the discretionary
authority to make determinations provided for, or permitted to be made, under
the Plan and to establish such rules and regulations, if any, that the Committee
deems necessary and appropriate for the ongoing administration and operation of
the Plan.
B. Eligibility
1. Eligible Persons. Participants in this plan shall consist solely of
the Outside Directors (individually or collectively sometimes referred to herein
as "Participant or Participants").
C. Deferral Elections
1. Agreements. The initial deferral agreement (the "Initial
Agreement"), in the form approved by the Committee (the initial version of the
form is attached to the Plan as Exhibit A), shall be executed by the Company and
each Participant to effectuate the deferrals described in Section 6(a) below.
Subsequent deferral agreements (the "Subsequent Agreements"), in the form
otherwise approved by the Committee, shall be executed by the Company and each
Participant, to effectuate the deferrals described in Section 6(b) below (the
Initial Agreement and the Subsequent Agreements are collectively referred to
herein as the "Deferral Agreements").
Execution of a Deferral Agreement between the Company and each
Participant shall constitute the sole means for each Participant to effectuate
deferral elections of compensation under the Plan. For purposes of the Plan,
"compensation" shall mean any Universal Corporation Director's fees, including
retainers and fees for Board and committee meetings (herein the "Compensation").
2. Deferral Elections.
(a) Initial Deferral. Each Participant eligible in 1994 could
elect in writing to defer an amount of Compensation, up to a maximum of one
hundred percent (100%) of Compensation, for the Plan's initial deferral period
of October 1, 1994 through September 30, 1995 (the "Initial Deferral Period" ).
(b) Subsequent Deferrals. Each Participant may elect in
writing to defer an amount of Compensation, up to a maximum of one hundred
percent (100%) of such Compensation, for the October 1 to September 30 Plan Year
next following such deferral election (the "Subsequent Deferral Period"). The
election with respect to Compensation for the Subsequent Deferral Period shall
be made in the month of September prior to the October 1 beginning of the next
Plan Year and Subsequent Deferral Period.
(c) New Participant Deferrals. Notwithstanding the September
30 deadline for deferral elections by existing Outside Directors, any new
Outside Director who is first eligible to participate in the Plan subsequent to
the beginning of a Plan Year and Subsequent Deferral Period may elect to defer
Compensation under the Plan for such Deferral Period, by filing an election with
the Company within thirty (30) days from the date on which such Outside Director
first becomes eligible to participate in the Plan. If such new Outside Director
elects not to participate for such Deferral Period, such Director may
nevertheless elect to defer Compensation for the next Subsequent Deferral Period
(beginning the next following October 1) during the next regular September
deferral election period.
D. Deferral Accounts
1. Deferral Account. The Company shall establish a deferral account in
the name of each Participant on its books and records which shall reflect, with
respect to each Plan Year, the amount of actual deferrals, and any earnings and
less any losses thereon (the "Adjustment") - as described in Section 3
hereinafter - as an unfunded liability of the Company to the Participant (such
actual deferral, plus or minus the Adjustment, is collectively referred to
herein as the "Deferral Account").
2. Irrevocability of Deferral Elections. Once a Participant elects to
defer Compensation pursuant to the terms of a deferral agreement, including
elections as to the amount and the timing and method of payment, such election
shall be irrevocably binding upon the Participant.
3. Investment Options. The Company has selected the following
investment funds for Participant designation under the Plan, which may be
modified from time to time by the Committee:
The Oppenheimer Capital Appreciation Fund;
The Oppenheimer Global Securities Fund;
The Massachusetts Mutual Equity Fund;
The Massachusetts Mutual Bond Fund;
The Massachusetts Mutual Money Market Fund;
The Dreyfus Stock Index Fund; and
The UVV Stock Index Fund.
The above funds, including any changes or additions thereto, shall be
referred to individually or collectively as an "Investment Option" or the
"Investment Options". Each Participant shall designate how each Deferral Account
(deferrals for a particular year) are to be hypothetically invested among the
Investment Options. The Company shall use the Participant's Investment Option
designations to calculate the Adjustment component of each Deferral Account. The
Participant may each change his or her investment election designation each
month, with regard to future contributions and current Deferral Accounts (either
by calling 1-800-999-6808 or by submitting an investment allocation form),
except as provided below. If a Participant changes his or her Investment Option
designation for either amounts then in a Deferral Account or future
contributions to be allocated to a Deferral Account, then (except as provided
below) such change shall supersede the previous designation for such Account,
effective as of the first day of the month following the date of such changed
election.
The Company shall begin crediting the Participant's Deferral Account
with an amount deferred by the Participant on the last day of the month in which
such Compensation otherwise would have been paid to such Participant. Further,
as to any amount later distributed from the Plan, the Company shall cease
crediting or debiting Adjustments to the Participant's Deferral Account on the
last day of the month of the applicable distribution as otherwise determined
under Section E (herein the "Valuation Date").
Notwithstanding any provisions hereof to the contrary, if a Participant
elects to hypothetically invest any portion of his or her Compensation in the
UVV Stock Index Fund, then the Company shall credit the Participant's Deferral
Account with the number of deferred stock units that are equal to 1) the amount
then to be invested in the UVV Stock Index Fund divided by the fair market value
of Universal Corporation common stock on the last day of the month in which the
related Compensation otherwise would have been paid to such Participant.
Then, until the later distribution of such Deferral Account, the number
of deferred stock units credited to the UVV Stock Index Fund portion of the
Deferral Account shall be increased on each date on which a dividend is paid on
Universal Corporation common stock. The number of additional deferred stock
units credited to the UVV Stock Index Fund portion of the Participant's Deferral
Account as a result of such deemed dividend shall be determined by (i)
multiplying the total number of deferred stock units (with fractional units
rounded off to the nearest thousandth) credited to the UVV Stock Index Fund
portion of such Deferral Account immediately before allocation of the dividend
by the per share value of the dividend (determined as of the dividend payment
date), and (ii) dividing the aggregate dividend value determined under (i) by
the fair market value of Universal Corporation common stock on the dividend
payment date.
Further, notwithstanding any provisions hereof to the contrary, a
Participant may only redirect his election of a deemed investment in the UVV
Stock Index Fund (as to any amounts previously credited to such Participant's
UVV Stock Index Fund under a Deferral Account) more than six months after (i)
electing to transfer any portion of any Deferral Account to the UVV Stock Index
Fund or (ii) transferring any amounts into any equity securities fund of
Universal Corporation under any employee benefit plan of the Company or its
affiliates.
Moreover, such Participant may only make an initial deemed investment
in the UVV Stock Index Fund, or redirect his election of deemed investment in
another Investment Option into the UVV Stock Index Fund (as to any amounts
previously credited to such Participant's other Investment Options) more than
six months after (i) electing to transfer any portion of any Deferral Account
out of the UVV Stock Index Fund (to other Investment Options) or (ii)
transferring any amounts out of any equity securities fund of Universal
Corporation under any employee benefit plan of the Company or its affiliates.
4. Plan Is Unfunded. Otherwise, while the allocation of investment
selections for each Participant shall be made among the Investment Options, the
Plan shall be and remain unfunded, and the Participants and the Plan shall have
absolutely no ownership interest in any Investment Option. The Company, for its
own account, may - but is not required to - invest the amounts represented by
the Deferral Accounts in the Investment Options (other than the UVV Stock Index
Fund, which shall remain uninvested). The Company shall be the sole owner of any
funds invested in any such Investment Option, as well as all amounts accounted
for in the Deferral Accounts, all of which shall at all times remain subject to
the claims of the Company's general, unsecured creditors.
E. Distributions
1. Pre-Deferral Irrevocable Payment Election. A Participant may
irrevocably elect to receive the distribution of a Deferral Account, established
with respect to a particular Plan Year's deferral, under one selected option
from the following alternatives:
(a) in a one-time partial distribution of a specified amount
as of a specified future Valuation Date that is more than five (5) years from
the date of execution of the related Deferral Agreement, with the remainder to
be distributed, as elected, in accordance with either subsection (c), (d), (e)
or (f) below, and with such partial distribution to be made on or before the
fifteenth day of the month following the specified Valuation Date;
(b) in a lump sum distribution of the entire related Deferral
Account on a specified future Valuation Date that is more than five (5) years
from the date of execution of the related Deferral Agreement, with payment made
on or before the fifteenth day of the month following the specified Valuation
Date;
(c) upon termination of service as an Outside Director, in a
lump sum distribution, with payment made on or before the fifteenth day of the
month following the Valuation Date next following termination of service;
(d) upon termination of service as an Outside Director, in
annual installment payments for a specified period of up to fifteen (15) years,
beginning or before the fifteenth day of the month following the Valuation Date
next following termination of service and continuing (to be paid) on each
subsequent anniversary date thereafter. Under this method, for example (assuming
a fifteen year payment election), the first year's distribution amount will
equal one-fifteenth (1/15) of the total accumulated Deferral Account under the
election, the second year's distribution will equal one-fourteenth (1/14) of the
remaining Deferral Account, and so forth;
(e) upon an anniversary of the Participant's termination of
service as an Outside Director selected by the Participant under the deferral
election (for example, 2 years after termination of service), in annual
installment payments thereafter for a specified period of up to fifteen (15)
years, beginning on or before the fifteenth day of the month following the
applicable anniversary date's Valuation Date and continuing to be paid as of
each subsequent anniversary of the Valuation Date thereafter. Under this method,
for example (assuming a fifteen year payment election), the first year's
distribution amount will equal one-fifteenth (1/15) of the total accumulated
Deferral Account, the second year's distribution will equal one-fourteenth
(1/14) of the remaining Deferral Account, and so forth; or
(f) upon the later of 1) termination of service as an Outside
Director or 2) a specified future date that is more than five (5) years from the
date of execution of the related Deferral Agreement, in annual installment
payments for a specified period of up to fifteen (15) years, beginning on or
before the fifteenth day of the month following the applicable specified or
post-termination Valuation Date, and continuing (to be paid) on each subsequent
anniversary date thereafter. Under this method, for example (assuming a fifteen
year payment election), the first year's distribution amount will equal
one-fifteenth (1/15) of the total accumulated Deferral Account, the second
year's distribution will equal one-fourteenth (1/14) of the remaining Deferral
Account, and so forth.
Otherwise, if any Participant files an otherwise sufficient deferral
election for any year that fails to properly select a distribution option, and
such distribution selection is not corrected by the deferral election deadline
for that year, then the Participant shall be deemed irrevocably to have selected
option (c), distribution upon termination of service as an Outside Director in a
lump sum distribution, with payment made on or before the fifteenth day of the
month following the applicable post-termination Valuation Date.
Further, notwithstanding the Participant's election of an irrevocable
deferred lump sum or deferred installment payment from the options above, the
distribution of any remaining Deferral Account to a Participant shall be
accelerated in the event of his or her permanent disability (under Section 2
below), death (under Section 3 below) or a "Change of Control", as defined
hereinafter (under Section 4 below); and, such distribution may be accelerated
in the event of an "Unforeseeable Emergency", as defined hereinafter (under
Section 5 below).
2. Payment in Event Participant Becomes Permanently Disabled. In the
event a Participant terminates service as an Outside Director as a result of
"total and permanent disability", in accordance with that term as otherwise
defined in the Company long term disability benefits plan, the accelerated
method of payment of such Participant's remaining Deferred Accounts under this
Plan shall be a lump sum distribution, with payment made on or before the
fifteenth day of the month following the Valuation Date coinciding with or next
following the determination of the Participant's total disability.
3. Payment in Event of Participant's Death. In the event a Participant
dies prior to the elected date for any payment (or remaining payment) of any
Deferral Account, the accelerated method of payment of a Participant's then
remaining Deferred Accounts shall be a lump sum distribution to the
beneficiary(ies) previously designated in writing by the Participant, with
payment made on or before the fifteenth day of the month following the Valuation
Date coinciding with or next following the Participant's death.
Each Participant shall designate in writing a beneficiary (or
beneficiaries) to whom the death benefits hereunder are to be paid (should the
Participant die prior to receiving complete distribution of his or her Deferral
Accounts). A Participant may change his or her beneficiary designation at any
time, by filing a revised and executed beneficiary designation form with the
Committee (which shall only be effective upon receipt by the Committee).
If a Participant fails to designate any beneficiary as provided for
above, if no designated beneficiary survives the Participant or if each
designated beneficiary dies before the distribution of all payments otherwise
due hereunder with respect to any deceased Participant, the Company shall pay
any remaining Deferral Accounts of the Participant to the Participant's estate.
4. Payment in Event of Change of Control. Upon the Occurrence of a
"Change of Control", as defined below, with respect to either a Participant who
continues to serves as an Outside Director or a Participant who has terminated
service as an Outside Director (whether receiving payments currently hereunder
or with deferred payments pending under prior elections), the Company shall pay
such Participant his or her remaining Deferral Accounts in a lump sum
distribution, with payment made on or before the fifteenth day of the month
following the Valuation Date coinciding with or next following the date of the
Change of Control.
For the purpose of this Plan, a "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended, (the "Exchange Act"))(hereunder a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (i) the then outstanding shares of Common Stock of
Universal Corporation (the "Outstanding Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of Universal Corporation
entitled to vote generally in the election of directors of Universal Corporation
(the "Outstanding Voting Securities"); provided that, however, for purposes of
this subsection (a), the following acquisitions shall not constitute a Change of
Control hereunder: (i) any acquisition directly from Universal Corporation, (ii)
any acquisition by Universal Corporation, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by Universal Corporation
or any corporation controlled by Universal Corporation or (iv) any acquisition
by any corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (c) below;
(b) Individuals who, as of October 1, 1994, constitute the
Board of Directors of Universal Corporation (the "Incumbent Board") cease, for
any reason, to constitute at least a majority of such Board; provided, however,
that any individual becoming a director subsequent to October 1, 1994, whose
election, or nomination for election, by the shareholders of Universal
Corporation, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board of Directors of Universal Corporation;
(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all, or substantially all, of the assets of
Universal Corporation (a "Business Combination") in each case, unless, following
such Business Combination: (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which, as a result of such transaction, owns Universal Corporation
or all or substantially all of the assets of Universal Corporation, either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding Common Stock and Outstanding Voting Securities, as the case may
be; (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of Universal
Corporation or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination and the combined voting power of the then outstanding
voting securities of such corporation, except to the extent that such ownership
existed prior to the Business Combination; and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the shareholders of Universal Corporation of a
complete liquidation or dissolution of Universal Corporation.
5. Payment in Event of Unforeseeable Emergency.
(a) A distribution of a portion of a Participant's Deferral
Account because of an Unforeseeable Emergency shall be permitted only to the
extent required by the Participant to satisfy the Participant's emergency need.
Whether an Unforeseeable Emergency hereunder has occurred will be determined
solely by the Committee, which has the complete and exclusive discretion and
authority to make such determination. Distributions in the event of an
Unforeseeable Emergency may be made by and with the approval of the Committee,
upon written request submitted by the Participant.
b) An "Unforeseeable Emergency" hereunder is defined as a
severe financial hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or of a dependent of the
Participant, loss of the Participant's property due to casualty or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the Participant's control. The circumstances that will constitute an
Unforeseeable Emergency will depend upon the facts of each situation, but, in
any event, any distribution under this Section shall not exceed the remaining
amount required by the Participant to resolve the hardship after: (i)
reimbursement or compensation through insurance or otherwise; (ii) obtaining
liquidation of the Participant's assets, to the extent such liquidation would
not itself cause a severe financial hardship; and (iii) suspension of current
deferrals under the Plan.
F. Participants ' Rights
1. Participant Rights in the Unfunded Plan. Any liability of the
Company to any Participant with respect to any benefit hereunder shall be based
solely upon the contractual obligations created by the Plan and the related
Deferral Agreements (collectively, the "Agreements"). No such obligation shall
be deemed to be secured by any pledge or any encumbrance on any property of the
Company. No Participant shall have any rights under the Plan other than those of
a general unsecured creditor of the Company. Any assets segregated or otherwise
identified by the Company for the purpose of paying benefits pursuant to the
Plan nevertheless remain general corporate assets subject to the claims of the
general creditors of the Company, and are not held in trust by the Company for
the benefit of Plan Participants.
2. Benefits Not Assignable. Except as otherwise provided for under
Section E.3., each Participant's rights under the Plan shall be non-transferable
and non-assignable. Subject to the exceptions provided under this Plan, no
benefit which shall be payable to any person (including a Participant or
Beneficiary) shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge. Any such attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge such
benefits shall be void. Further, no such benefit shall in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements or torts of
any such person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized, except to such extent
as may be required by law.
G. The Company's Reservation of Rights
1. Amendment or Termination of Plan. The Company retains the right, at
any time and in its sole and exclusive discretion, to amend or terminate the
Plan, in whole or in part, without restriction. Any amendment of the Plan shall
be approved by the Board of Directors of the Company or its authorized delegate,
shall be in writing and shall be communicated within thirty (30) days of its
adoption to the Participants. Notwithstanding the above, the Committee shall
have and retain the authority to change the requirements of eligibility and to
modify the Investment Options hereunder.
Notwithstanding the above, no amendment of the Plan shall substantially
impair or curtail the Company's contractual obligations under the Plan arising
from Deferral Agreements previously executed as to deferrals completed and
benefits accrued prior to such amendment.
Further, notwithstanding any other provision herein to the contrary, in
the event of Plan termination, full payment of all remaining Deferral Accounts
shall be completed not later than the last business day of the third calendar
month following the month in which the Plan termination is made effective.
H. Claims Procedures and Committee Determinations
1. Claims Procedure. Any claim by a Participant or his or her
Beneficiary (hereafter the "Claimant") for benefits shall be submitted in
writing to the Committee. The Committee shall be responsible for deciding
whether such claim is payable, or the claimed relief otherwise is allowable,
under the provisions and rules of the Plan (a "Covered Claim"). The Committee
otherwise shall be responsible for providing a full review of the Committee's
decision with regard to any claim, upon a written request.
Each claimant or other interested person shall file with the Committee
such pertinent information as the Committee may specify, and in such manner and
form as the Committee may specify; and, such person shall not have any rights or
be entitled to any benefits, or further benefits, hereunder, as the case may be,
unless the required information is filed by the Claimant or on behalf of the
Claimant. Each Claimant shall supply, at such times and in such manner as may be
required, written proof that the benefit is covered under the Plan. If it is
determined that a Claimant has not incurred a Covered Claim or if the Claimant
shall fail to furnish such proof as is requested, no benefits, or no further
benefits, hereunder, as the case may be, shall be payable to such Claimant.
Notice of any decision by the Committee with respect to a Claim
generally shall be furnished to the Claimant within ninety (90) days following
the receipt of the claim by the Committee (or within ninety (90) days following
the expiration of the initial ninety (90) day period in any case where there are
special circumstances requiring extension of time for processing the claim). If
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished by the Committee to the
Claimant.
Commencement of benefit payments shall constitute notice of approval of
a claim to the extent of the amount of the approved benefit. If such claim shall
be wholly or partially denied, such notice shall be in writing. If the Committee
fails to notify the Claimant of the decision regarding his or her claim in
accordance with the "Claims Procedure" provisions, the claim shall be "deemed"
denied; and, the Claimant then shall be permitted to proceed with the claims
review procedure provided for herein.
Within sixty (60) days following receipt by the Claimant of notice of
the claim denial, or within sixty (60) days following the date of a deemed
denial, the Claimant may appeal denial of the claim by filing a written
application for review with the Committee. Following such request for review,
the Committee shall fully review the decision denying the claim. The decision of
the Committee then shall be made within sixty (60) days following receipt by the
Committee of a timely request for review (or within one hundred and twenty (120)
days after such receipt, in a case where there are special circumstances
requiring an extension of time for reviewing such denied claim). The Committee
shall deliver its decision to the Claimant in writing. If the decision on review
is not furnished within the prescribed time, the claim shall be deemed denied on
review.
2. Committee Determinations Final. For all purposes under the Plan, the
decision with respect to a claim (if no review is requested) and the decision
with respect to a claims review (if requested), shall be final, binding and
conclusive on all Participants, Beneficiaries and other interested parties, as
to all matters relating to the Plan and Plan benefits. Further, each claims
determination under the Plan shall be made in the absolute and exclusive
discretion and authority of the Committee.
I. Miscellaneous Provisions
1. Plan Year. The Plan Year shall begin on October 1 each year and end
on September 30 of the following year.
2. Tax Withholding. The Company shall withhold from any payment made by
it under the Plan such amount or amounts as may be required for purposes of
complying with the tax withholding or other provisions of the Internal Revenue
Code of 1986, as amended, the Social Security Act, as amended, or any federal,
state or local income or employment tax provision; or otherwise, for purposes or
paying any estate, inheritance or other tax attributable to any amounts payable
hereunder.
3. Participant's Incapacity. If, in the Committee's opinion, a
Participant or other person entitled to receive benefits under the Plan is in
any way incapacitated so as to be unable to manage his or her financial affairs,
then the Committee may make such payment(s) into a separate, interest-bearing
account established for the benefit of, and on behalf of, the Participant or
other recipient, for release at such time as a claim is made by a conservator or
other person legally charged with the care of his or her person or of his or her
estate, as applicable. Thereafter, any benefits payable under the Plan shall be
made to such conservator or other person legally charged with the care of his or
her person or estate.
4. Independence of Plan. Except as otherwise expressly provided herein,
this Plan shall be independent of, and in addition to, any other agreement for
the provision of services or rights that may exist, from time to time, between
the parties hereto.
5. Responsibility for Legal Effect. Neither the Committee nor the
Company makes any representations or warranties, express or implied, or assumes
any responsibility, concerning the legal, tax or other implications or effects
of this Plan.
6. Successors, Acquisitions, Mergers, Consolidations. The terms and
conditions of the Plan and each Deferral Agreement thereunder shall inure to the
benefit of, and bind, the Company and the Participants, and their successors,
assigns and personal representatives.
7. Controlling Law. The Plan shall be construed in accordance with the
laws of the Commonwealth of Virginia to the extent not preempted by laws of the
United States of America.
WITNESS the following signature this 9th day of November, 1998.
/s/ William L. Taylor
---------------------------
William L. Taylor, Vice President
UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED
1994 DEFERRED INCOME PLAN
Universal Leaf Tobacco Company, Incorporated (the "Sponsor") hereby
amends and restates, effective as of July 1, 1998, except as otherwise
provided for herein, the Universal Leaf Tobacco Company, Incorporated 1994
Deferred Income Plan, a non-qualified deferred compensation program for a select
group of management employees, as otherwise provided for herein. The following
shall constitute the terms and conditions of the amended and restated 1994
Deferred Income Plan, restated effective as of July 1, 1998, except as
otherwise effective as provided for below.
A. Purpose and Administration
1. Statement of Purpose
The purpose of the 1994 Deferred Income Plan, as restated, (the "Plan")
is to provide a select group of officers of Universal Leaf Tobacco Company,
Incorporated ("ULT"), Universal Corporation ("Universal") and certain of
Universal's domestic subsidiaries, as listed on Schedule A of the Plan as
attached hereto and amended from time to time (the "Participating Subsidiaries")
(such entities also sometimes referred to, individually or collectively, as the
"Company"), with recurrent opportunities to defer receipt of a portion of salary
and amounts to be earned pursuant to the applicable Management Performance Plan
of the Company (together herein the "MPP"). Such deferrals hereunder (for a
particular year), until a date certain in the future, will apply to amounts
which otherwise would be payable currently (that is, in the year when such
salary or MPP award would normally be determined, provided and paid).
2. Top Hat Plan
The Sponsor intends that the Plan will constitute an unfunded "top hat"
plan, maintained for the purpose of providing deferred compensation benefits to
a select group of management employees of the Company, within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Security Act
of 1974 ("ERISA"), and the rules and regulations issued thereunder, as amended
from time to time.
3. Plan Administration
Full power and authority to construe, interpret and administer the
Plan, and to change the requirements for eligibility and investment options,
shall be vested solely and exclusively in the Executive Committee of the Sponsor
(herein the "Committee"). The Committee shall have complete and exclusive
discretion and authority to administer and interpret the Plan, to make
determinations provided for, or permitted to be made, under the Plan and to
establish such Plan rules and regulations, if any, that the Committee deems
necessary or appropriate for the ongoing administration and operation of the
Plan.
B. Eligibility
1. Eligible Employees
Participants in this Plan shall consist of the following
corporate officers:
(a) Officers of Universal;
(b) Corporate Directors and above of ULT;
(c) Vice Presidents and above of Participating Subsidiaries;
and
(d) Assistant Vice Presidents who are also Assistant General
Managers at processing plants of Participating Subsidiaries.
Upon participation, such officers are collectively referred to
herein as the "Participants".
C. Deferral Elections
1. Agreements
The initial deferral agreement (the "Initial Agreement"), in a
form approved by the Committee, shall be executed by the Company and each
Participant to effectuate the deferrals described in Section 2(a) below.
Subsequent deferral agreements (the "Subsequent Agreements"), in a form approved
by the Committee, shall be executed by the Sponsor and each Participant to
effectuate the deferrals described in Section 2(b) below (the Initial Agreement
and the Subsequent Agreements are collectively referred to herein as the
"Deferral Agreements"). Execution of the Deferral Agreements between the Company
and each Participant shall constitute the sole and exclusive means for each
Participant to effectuate deferral elections pursuant to the Plan.
2. Deferral Elections
(a) Initial Deferral
Each Participant, if otherwise eligible during such period,
may elect (may have elected) in writing to defer an amount of salary up to a
maximum of seventy-five percent (75%) of salary for the Plan's initial deferral
period of July 1, 1994 through December 31, 1995 (the "Initial Deferral
Period"). There are (were) two separate deferral elections for the Initial
Deferral Period. The first election is (was) for the period July 1, 1994 to
December 31, 1994, and the second election is (was) for Calendar Year 1995. Each
Participant also may elect (may have elected) in writing to defer up to one
hundred percent (100%) of his or her MPP award for the Sponsor's fiscal year
beginning July 1, 1994 and ending June 30, 1995, which is (was) payable in
September of 1995 (the "1995 MPP Award"), or all of his or her 1995 MPP award in
excess of a fixed sum designated by the Participant, if any. The election with
respect to salary for the Initial Deferral Period and/or the 1995 MPP Award
shall be made (shall have been made) in the month of June, 1994.
(b) Subsequent Deferrals
Each Participant may elect in writing to defer an amount of
salary up to a maximum of fifty percent (50%) of salary for the subsequent
calendar year (the "Subsequent Deferral Period"). Each Participant also may
elect in writing to defer either (i) up to one hundred percent (100%) of his or
her MPP Award, if any, for the Sponsor's subsequent fiscal year, which is
generally payable the September after the conclusion of the upcoming/new fiscal
year (the "Subsequent MPP Award"), (ii) up to a fixed dollar amount of such
Subsequent MPP Award, if any or (iii) such other amount of such Subsequent MPP
Award determined under an MPP deferral option otherwise approved by the
Committee in its sole discretion.
Further, effective for deferral elections to be made in 1999
for calendar year 2000 compensation, and for subsequent elections under the
Plan, the deferral election with respect to salary for the Subsequent Deferral
Period and/or the Subsequent MPP Award generally shall be made by the
Participant by the end of the month of September prior to the beginning of the
subsequent calendar year in which any related salary and MPP Award will
otherwise be determined and paid. For example, the election deferral deadline
for 1999 (for the salary otherwise payable in Calendar Year 2000, and any MPP
award otherwise finally determined and payable in September of 2000) shall be
September 30, 1999.
(c) New Participant Deferrals
Any new Employee to the Company who is eligible to participate
in the Plan subsequent to the Plan's commencement date of July 1, 1994 may elect
to defer salary within thirty (30) days from the date on which he or she first
becomes eligible to participate. Each continuing Employee who becomes eligible
to participate in the Plan subsequent to the Plan's commencement date of July 1,
1994, may elect salary and/or MPP award deferrals during the next regular annual
deferral election period.
D. Deferral Accounts
1. Deferral Account
The Company shall establish a deferral account in the name of
each Participant on the Company's books and records, which shall reflect the
amount of actual deferrals for a particular year plus any earnings and less any
losses thereon (the "Adjustment") as described in Section 3 hereinafter, as an
unfunded liability of the Company to the Participant (the actual deferral for
such year, plus or minus the Adjustment, is collectively referred to herein as
the "Deferral Account").
2. Irrevocability of Deferral Elections
Once a Participant elects to defer salary and/or an MPP award,
pursuant to the terms of a Deferral Agreement, including elections as to amount,
and timing and method of payment, such election shall be irrevocably binding
upon the Participant.
3. Investment Options
The Sponsor has selected the following initial investment
funds, which may be modified from time to time by the Committee:
The Oppenheimer Capital Appreciation Fund;
The Oppenheimer Global Fund;
The Massachusetts Mutual Equity Fund;
The Massachusetts Mutual Bond Fund;
The Massachusetts Mutual Money Market Fund; and
The Dreyfus Stock Index Fund.
The above funds, including any changes or additions thereto,
shall be referred to individually or collectively as an "Investment Option" or
the "Investment Options". The Sponsor shall use the Participant's Investment
Option designations to calculate the Adjustment component of the Deferral
Account. The Participant may each change his or her investment election
designation each month, with regard to future contributions and current
sub-accounts under the Deferral Account, either by calling 1-800-999-6808 or by
submitting an investment allocation form. If a Participant changes his or her
Investment Option designation for either amounts then in the Deferral Account or
future contributions to be allocated to the Deferral Account, then such change
shall supersede the previous designation for such sub-account, effective as of
the first day of the month following the date of such changed election.
The Sponsor shall begin crediting the Participant's Deferral
Account with the amount deferred by the Participant on the last day of the month
in which the salary or MPP Award, respectively, otherwise would have been paid
to such Participant. Further, as to any applicable amount later distributed from
the Plan, the Sponsor shall cease crediting or debiting Adjustments to the
Participant's Deferral Account on the last day of the month of the applicable
distribution event set forth in Section E (herein the "Valuation Date").
Plan Is Unfunded. Otherwise, while the allocation of
investment selections for each Participant shall be made among the Investment
Options, the Plan shall be and remain unfunded, and the Participants and the
Plan shall have absolutely no ownership interest in any Investment Option. The
Sponsor, for its own account, may, but is not required to, invest the amounts
represented by the Deferral Accounts in the Investment Options. The Sponsor
shall be the sole owner of any funds invested in any such Investment Option, as
well as all amounts accounted for in the Deferral Accounts, all of which shall
at all times be subject to the claims of the Company's general, unsecured
creditors.
E. Distributions
1. Pre-Deferral Irrevocable Payment Election
A Participant may irrevocably elect to receive the
distribution of a Deferral Account, established with respect to a particular
year's deferral, under one selected option from the following alternatives (with
options (e) and (f) available for the 1999 deferral election period and
thereafter):
(a) in a one-time partial distribution of a specified amount
on a specified future date that is more than five (5) years
from the date of execution of the related Deferral Agreement,
with the remainder to be distributed, as elected, in
accordance with either subsection (c), (d) or (e) below, and
with such partial distribution to be made on or before the
fifteenth day of the month following the specified Valuation
Date;
(b) in a lump sum distribution of the entire related Deferral
Account on a specified future date that is more than five (5)
years from the date of execution of the related Deferral
Agreement, with payment made on or before the fifteenth day of
the month following the specified Valuation Date;
(c) upon retirement from the Company in a lump sum
distribution, with payment made on or before the fifteenth day
of the month following the applicable post-retirement
Valuation Date;
(d) upon retirement from the Company, in annual installment
payments for a specified period of up to fifteen (15) years,
beginning or before the fifteenth day of the month following
the applicable post-retirement Valuation Date and continuing
(to be paid) on each subsequent anniversary date thereafter.
Under this method, for example (assuming a fifteen year
payment election), the first year's distribution amount will
equal one-fifteenth (1/15) of the total accumulated Deferral
Account, the second year's distribution will equal
one-fourteenth (1/14) of the remaining Deferral Account, and
so forth;
(e) upon an anniversary of the Participant's retirement from
the Company selected by the Participant under the deferral
election (for example, 2 years after the retirement date), in
annual installment payments thereafter for a specified period
of up to fifteen (15) years, beginning on or before the
fifteenth day of the month following the applicable
anniversary date's Valuation Date and continuing to be paid as
of each subsequent anniversary of the Valuation Date
thereafter. Under this method, for example (assuming a fifteen
year payment election), the first year's distribution amount
will equal one-fifteenth (1/15) of the total accumulated
Deferral Account, the second year's distribution will equal
one-fourteenth (1/14) of the remaining Deferral Account, and
so forth; or
(f) upon the later of 1) retirement from the Company or 2) a
specified future date that is more than five (5) years from
the date of execution of the related Deferral Agreement, in
annual installment payments for a specified period of up to
fifteen (15) years, beginning on or before the fifteenth day
of the month following the applicable specified or
post-retirement Valuation Date, and continuing (to be paid) on
each subsequent anniversary date thereafter. Under this
method, for example (assuming a fifteen year payment
election), the first year's distribution amount will equal
one-fifteenth (1/15) of the total accumulated Deferral
Account, the second year's distribution will equal
one-fourteenth (1/14) of the remaining Deferral Account, and
so forth.
Further, if a Participant files an otherwise sufficient deferral
election for any year that fails to properly select a distribution option, and
such distribution selection is not corrected by the deferral election deadline
for that year, then the Participant shall be deemed irrevocably to have selected
option (c), distribution upon retirement from the Company in a lump sum
distribution, with payment made on or before the fifteenth day of the month
following the applicable post-retirement Valuation Date.
Otherwise, notwithstanding the Participant's election of an irrevocable
deferred lump sum or deferred installment payment from the options above,
however, the distribution of any remaining Deferral Account to a Participant
shall be accelerated in the event of his or her permanent disability (under
Section 2 below), death (under Section 3 below), termination of employment other
than by retirement (under Section 4 below) or a "Change of Control", as defined
hereinafter (under Section 5 below); and, such distribution may be accelerated
in the event of an "Unforeseeable Emergency", as defined hereinafter (under
Section 6 below).
2. Payment in Event Participant Becomes Permanently Disabled
In the event a Participant terminates employment as a result
of "total and permanent disability", as that term is defined in the Sponsor's
Long Term Disability Benefits Plan, the accelerated method of payment of a
Participant's remaining Deferred Accounts under this Plan shall be a lump sum
distribution, with payment made on or before the fifteenth day of the month
following the Valuation Date coinciding with or next following the Participant's
determination of total disability.
3. Payment in Event of Participant's Death
In the event a Participant dies prior to the elected date for
any payment of any Deferral Account, the accelerated method of payment of a
Participant's remaining Deferred Accounts shall be a lump sum distribution to
the beneficiary previously designated in writing by the Participant, with
payment made on or before the fifteenth day of the month following the Valuation
Date coinciding with or next following the Participant's death.
Each Participant shall designate in writing a beneficiary to
whom the death benefits hereunder are to be paid (should the Participant die
prior to receiving distribution of his or her entire Deferral Account). A
Participant may change his or her beneficiary designation at any time, by filing
a revised and executed beneficiary designation form with the Committee (which
shall only be effective upon receipt by the Committee).
If a Participant fails to designate any beneficiary as
provided for above, if no designated beneficiary survives the Participant or if
each designated beneficiary dies before the distribution of all payments
otherwise due hereunder with respect to any deceased Participant, the Sponsor
shall pay any remaining Deferral Accounts of the Participant to the
Participant's estate.
4. Payment in Event of Participant's Termination of Employment
Upon termination of employment for reasons other than
retirement, total and permanent disability or death, the Company shall pay the
terminated Participant his or her accumulated Deferral Accounts in a lump sum
distribution, with payment made on or before the fifteenth day of the month
following the Valuation Date coinciding with or next following the Participant's
termination.
5. Payment in Event of Change of Control
Upon the Occurrence of a "Change of Control", as defined
below, with respect to either an employed Participant or a retired Participant
who is either receiving payments hereunder or has deferred payments pending
under prior elections, the Company shall pay such Participant his or her
remaining Deferral Accounts in a lump sum distribution, with payment made on or
before the fifteenth day of the month following the Valuation Date coinciding
with or next following the date of the Change of Control.
For the purpose of this Plan, a "Change of Control" shall
mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended, (the "Exchange
Act"))(hereunder a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (i) the then outstanding shares of
Common Stock of Universal Corporation (the "Outstanding Common
Stock") or (ii) the combined voting power of the then
outstanding voting securities of Universal Corporation
entitled to vote generally in the election of directors of
Universal Corporation (the "Outstanding Voting Securities");
provided that, however, for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of
Control hereunder: (i) any acquisition directly from Universal
Corporation, (ii) any acquisition by Universal Corporation,
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Universal Corporation or any
corporation controlled by Universal Corporation or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c)
below;
(b) Individuals who, as of July 1, 1994, constitute the Board
of Directors of Universal Corporation (the "Incumbent Board")
cease, for any reason, to constitute at least a majority of
such Board; provided, however, that any individual becoming a
director subsequent to July 1, 1994, whose election, or
nomination for election, by the shareholders of Universal
Corporation, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board of Directors of
Universal Corporation;
(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all, or substantially all, of
the assets of Universal Corporation (a "Business Combination")
in each case, unless, following such Business Combination: (i)
all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding
Common Stock and Outstanding Voting Securities immediately
prior to such Business Combination beneficially own, directly
or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation
which, as a result of such transaction, owns Universal
Corporation or all or substantially all of the assets of
Universal Corporation, either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of
the Outstanding Common Stock and Outstanding Voting
Securities, as the case may be; (ii) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of Universal
Corporation or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination and the combined voting power of the then
outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to the Business
Combination; and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(d) Approval by the shareholders of Universal Corporation of a
complete liquidation or dissolution of Universal Corporation.
6. Payment in Event of Unforeseeable Emergency
(a) A distribution of a portion of a Participant's Deferral
Account because of an Unforeseeable Emergency shall be
permitted only to the extent required by the Participant to
satisfy the Participant's emergency need. Whether an
Unforeseeable Emergency hereunder has occurred will be
determined solely by the Committee, which has the complete and
exclusive discretion and authority to make such determination.
Distributions in the event of an Unforeseeable Emergency may
be made by and with the approval of the Committee, upon
written request submitted by the Participant.
b) An "Unforeseeable Emergency" hereunder is defined as a
severe financial hardship to the Participant resulting from a
sudden and unexpected illness or accident of the Participant
or of a dependent of the Participant, loss of the
Participant's property due to casualty or other similar
extraordinary and unforeseeable circumstances arising as a
result of events beyond the Participant's control. The
circumstances that will constitute an Unforeseeable Emergency
will depend upon the facts of each situation, but, in any
event, any distribution under this Section shall not exceed
the remaining amount required by the Participant to resolve
the hardship after: (i) reimbursement or compensation through
insurance or otherwise; (ii) obtaining liquidation of the
Participant's assets, to the extent such liquidation would not
itself cause a severe financial hardship; and (iii) suspension
of current deferrals under the Plan under this Section.
F. Participants' Rights
1. Participant Rights in the Unfunded Plan
Any liability of the Company to any Participant with respect
to any benefit hereunder shall be based solely upon the contractual obligations
created by the Plan and the related Deferral Agreements (collectively, the
"Agreements"). No such obligation shall be deemed to be secured by any pledge or
any encumbrance on any property of the Company. No Participant shall have any
rights under the Plan other than those of a general unsecured creditor of the
Company. Any assets segregated or otherwise identified by the Company for the
purpose of paying benefits pursuant to the Plan nevertheless remain general
corporate assets subject to the claims of the general creditors of the Company,
and are not held in trust by the Company for the benefit of Plan Participants.
2. Benefits Not Assignable
Except as otherwise provided for under Section E.3., each
Participant's rights under the Plan shall be non-transferable and
non-assignable. Subject to the exceptions provided under the Plan, no benefit
which shall be payable to any person (including a Participant or Beneficiary)
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge. Any such attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge such benefits shall
be void. Further, no such benefit shall in any manner be liable for, or subject
to, the debts, contracts, liabilities, engagements or torts of any such person,
nor shall it be subject to attachment or legal process for or against such
person, and the same shall not be recognized, except to such extent as may be
required by law.
G. The Sponsor's Reservation of Rights
1. Amendment or Termination of Plan
The Sponsor retains the right, at any time and in its sole and
exclusive discretion, to amend or terminate the Plan, in whole or in part,
without restriction. Any amendment of the Plan shall be approved by the Board of
Directors of the Sponsor, shall be in writing and shall be communicated within
thirty (30) days of its adoption to the Participants.
Notwithstanding the above, the Committee shall have the
authority to change the requirements of eligibility or to modify the Investment
Options hereunder.
Notwithstanding the above, no amendment of the Plan shall
substantially impair or curtail the Sponsor's contractual obligations under the
Plan arising from Deferral Agreements previously executed as to deferrals
completed and benefits accrued prior to such amendment.
Further, notwithstanding any other provision herein to the
contrary, in the event of Plan termination, full payment of all remaining
Deferral Accounts shall be completed not later than the last business day of the
third calendar month following the month in which the Plan termination is made
effective.
H. Claims for Benefits
1. Claims Procedure
Any claim by a Participant or his or her Beneficiary
(hereafter "Claimant") for benefits shall be submitted in writing to the
Committee. The Committee shall be responsible for deciding whether such claim is
payable, or the claimed relief otherwise is allowable, under the provisions and
rules of the Plan (a "Covered Claim"). The Committee otherwise shall be
responsible for providing a full and fair review of the Committee's decision
with regard to any claim, if requested. The Committee shall provide such full
and fair review in accordance with the requirements of ERISA, including without
limitation the requirements of Section 503 thereof.
Each claimant or other interested person shall file with the
Committee such pertinent information as the Committee may specify, and in such
manner and form as the Committee may specify and provide, and such person shall
not have any rights or be entitled to any benefits, or further benefits,
hereunder, as the case may be, unless the required information is filed by the
Claimant or on behalf of the Claimant. Each Claimant shall supply, at such times
and in such manner as may be required, written proof that the benefit is covered
under the Plan. If it is determined that a Claimant has not incurred a Covered
Claim or if the Claimant shall fail to furnish such proof as is requested, no
benefits, or no further benefits, hereunder, as the case may be, shall be
payable to such Claimant.
Notice of any decision by the Committee with respect to a
Claim shall be furnished to the Claimant within ninety (90) days following the
receipt of the claim by the Committee (or within ninety (90) days following the
expiration of the initial ninety (90) day period, in any case where there are
special circumstances requiring extension of time for processing the claim). If
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished by the Committee to the
Claimant prior to the expiration of the initial ninety (90) day period. The
notice of extension shall indicate the special circumstances requiring the
extension and the date by which the notice of decisions with respect to the
claim shall be furnished. Commencement of benefit payments shall constitute
notice of approval of a claim to the extent of the amount of the approved
benefit. If such claim shall be wholly or partially denied, such notice shall be
in writing and worded in a manner calculated to be understood by the Claimant,
and shall set forth (i) the specific reason or reasons for the denial; (ii)
specific reference to pertinent provisions of the Plan on which the denial is
based; (iii) a description of any additional material or information necessary
for the Claimant to perfect the claim and an explanation of why such material or
information is necessary; and (iv) an explanation of the Plan's claims review
procedure. If the Committee fails to notify the Claimant of the decision
regarding his or her claim in accordance with the "Claims Procedure" provisions,
the claim shall be "deemed" denied and the Claimant then shall be permitted to
proceed with the claims review procedure provided herein.
Within sixty (60) days following receipt by the Claimant of
notice of the claim denial, or within sixty (60) days following the close of the
ninety (90) day period referred to herein if the Committee fails to notify the
Claimant of a decision within such ninety (90) day period, the Claimant may
appeal denial of the claim by filing a written application for review with the
Committee. Following such request for review, the Committee shall fully and
fairly review the decision denying the claim. Prior to the decision of the
Committee, the Claimant shall be given an opportunity to review pertinent
documents and submit any issues and comments to the Committee in writing. The
decision of the Committee then shall be made within sixty (60) days following
receipt by the Committee of a timely request for review (or within one hundred
and twenty (120) days after such receipt, in a case where there are special
circumstances requiring an extension of time for reviewing such denied claim).
The Committee shall deliver its decision to the Claimant in writing. If the
decision on review is not furnished within the prescribed time, the claim shall
be deemed denied on review.
For all purposes under the Plan, the decisions with respect to
a claim, if no review is requested, and the decisions with respect to a claim
review, when requested, shall be final, binding and conclusive on all
Participants, Beneficiaries and other interested parties, as to all matters
relating to the Plan and Plan benefit. Further, each claims determination under
the Plan shall be made in the absolute and exclusive discretion and authority of
the Committee.
I. Miscellaneous Provisions
1. Effect on Other Benefits
Except as otherwise required by applicable law, the salary
deferred by a Participant shall otherwise be included in the Participant's
annual compensation for purposes of calculating the Participant's bonuses and
awards, insurance and other employee benefits. However, in accordance with the
terms of any plan qualified under Section 401 of the Internal Revenue Code
maintained by the Sponsor, the amount of salary deferrals under the Plan shall
not be included as calendar year compensation in calculating the Participant's
benefits or contributions by or on behalf of the Participant. Distributions made
under the Plan shall be excluded from compensation in years paid for purposes of
calculating a Participant's bonuses and awards, insurance and other employee
benefits.
2. Plan Year
The Plan Year shall be the calendar year.
3. Tax Withholding
The Sponsor shall withhold from any payment made by it under
the Plan such amount or amounts as may be required for purposes of complying
with the tax withholding or other provisions of the Internal Revenue Code of
1986, as amended, the Social Security Act, as amended, or any federal, state or
local income or employment tax provision; or otherwise, for purposes or paying
any estate, inheritance or other tax attributable to any amounts payable
hereunder.
4. Participant's Incapacity
If, in the Committee's opinion, a Participant or other person
entitled to receive benefits under the Plan is in any way incapacitated so as to
be unable to manage his or her financial affairs, then the Committee may make
such payment(s) into a separate, interest-bearing account established for the
benefit of, and on behalf of, the Participant or other recipient, for release at
such time as a claim is made by a conservator or other person legally charged
with the care of his or her person or of his or her estate, as applicable.
Thereafter, any benefits payable under the Plan shall be made to such
conservator or other person legally charged with the care of his or her person
or estate.
5. Independence of Plan
Except as otherwise expressly provided herein, this Plan shall
be independent of, and in addition to, any other employment agreement or
employment benefit agreement, plan or rights that may exist from time to time
between the parties hereto. This Plan shall not be deemed, however, to
constitute a contract of employment between the Company and a Participant; nor
shall any provision hereof restrict the right of the Company at any time to
discharge a Participant, with or without assigning a reason therefore, or
restrict any right of a Participant to terminate his or her employment with the
Company.
6. Responsibility for Legal Effect
Neither the Committee nor the Company makes any
representations or warranties, express or implied, or assumes any responsibility
concerning the legal, tax, or other implications or effects of this Plan.
7. Successors, Acquisitions, Mergers, Consolidations
The terms and conditions of the Plan and each Deferral
Agreement thereunder shall inure to the benefit of, and bind, the Company and
the Participants, and their successors, assigns and personal representatives.
8. Controlling Law
The Plan shall be construed in accordance with the laws of the
Commonwealth of Virginia, to the extent not preempted by the laws of the United
States of America.
WITNESS the following signature this 9th day of November, 1998.
/s/ William L. Taylor
---------------------------
William L. Taylor,
Executive Vice President
<PAGE>
SCHEDULE A
DESIGNATED AFFILIATED COMPANIES
UNIVERSAL LEAF NORTH AMERICA NC, INC.
LANCASTER LEAF TOBACCO COMPANY OF PENNSYLVANIA, INC.
IMPERIAL PROCESSING DIVISION
OF
LANCASTER LEAF TOBACCO COMPANY OF PENNSYLVANIA, INC.
SOUTHERN PROCESSORS, INCORPORATED
J. P. TAYLOR COMPANY, INCORPORATED
J. P. TAYLOR TOBACCO COMPANY, INCORPORATED
TOBACCO PROCESSORS, INCORPORATED
RED RIVER FOODS, INCORPORATED
SOUTHWESTERN TOBACCO COMPANY, INCORPORATED
GOLD HARBOR COMMODITIES, INC.
EXHIBIT 12.
Universal Corporation and Subsidiaries
RATIO OF EARNINGS TO FIXED CHARGES
Three Months Ended September 30, 1998 and 1997
September 30, September 30,
(In thousands of dollars) 1998 1997
- -------------------------------------------------------------------------------
Income before income taxes and
other items $43,298 $53,741
Fixed charges 15,970 14,001
------------------ -----------------
Earnings $59,268 $67,742
================== =================
Interest $15,542 $13,802
Interest of unconsolidated affiliates 98 110
Note discount amortization 330 89
------------------ -----------------
Fixed Charges $15,970 $14,001
================== =================
Ratio of Earnings to Fixed Charges 3.7 4.8
==== ===
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000102037
<NAME> UNIVERSAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> SEP-30-1998
<CASH> 87,621
<SECURITIES> 0
<RECEIVABLES> 479,016
<ALLOWANCES> 0
<INVENTORY> 800,617
<CURRENT-ASSETS> 1,407,805
<PP&E> 736,676
<DEPRECIATION> 395,089
<TOTAL-ASSETS> 2,050,059
<CURRENT-LIABILITIES> 1,129,129
<BONDS> 246,675
<COMMON> 26,250
0
0
<OTHER-SE> 505,446
<TOTAL-LIABILITY-AND-EQUITY> 2,050,059
<SALES> 879,285
<TOTAL-REVENUES> 879,285
<CGS> 742,701
<TOTAL-COSTS> 742,701
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,542
<INCOME-PRETAX> 43,298
<INCOME-TAX> 16,021
<INCOME-CONTINUING> 27,057
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,057
<EPS-PRIMARY> .79
<EPS-DILUTED> .78
</TABLE>
