SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
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:
<TABLE>
<CAPTION>
<S> <C>
[ ] 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 Rule 14a-
11(c) or Rule 14a-12
</TABLE>
UNIVERSAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the 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)(1) 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:
..................................................................
<PAGE>
[ ] Fee paid previously with preliminary materials.
.........................................................................
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
..................................................................
(2) Form, Schedule or Registration Statement no.:
..................................................................
(3) Filing Party:
..................................................................
(4) Date Filed:
..................................................................
<PAGE>
[Universal Corporation Logo]
--------------
ANNUAL MEETING OF SHAREHOLDERS
--------------
September 24, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 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 27, 1998, commencing at 2:00 p.m. At the meeting, you will
be asked to elect three Directors to serve a three-year term and one Director to
serve a two-year term, and to approve a proposed amendment to the Company's
Articles of Incorporation. The amendment would increase the number of authorized
shares of Common Stock from 50 million to 100 million in order to provide for
future needs of your Company.
Your Board of Directors recommends you VOTE FOR the proposed amendment
to the Articles of Incorporation for the reasons set forth in the accompanying
Proxy Statement. The affirmative vote of a majority of the outstanding shares of
Common Stock must approve this action.
The right to vote your shares at the Annual Meeting is an important
shareholder right and should be exercised by you in person or by proxy
regardless of the number of shares you hold. Whether or not you plan to attend
the meeting, please 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 27, 1998, at
2:00 p.m., for the following purposes:
(1) To elect three Directors to serve a three-year term and one
Director to serve a two-year term;
(2) To amend the Company's Articles of Incorporation to increase
the authorized number of shares of Common Stock from 50 million
to 100 million; 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, 1998, 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 24, 1998
<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, telegraph, telefacsimile or other means of electronic
transmission 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 24, 1998.
VOTING RIGHTS
The Company had outstanding, as of September 8, 1998, 34,123,206 shares
of Common Stock, each of which is 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, 1998, 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
Three Directors are to be elected at the 1998 Annual Meeting for a term
of three years and one Director is to be elected for a term of two years. Six
other Directors have been elected to terms expiring in 2000 or 1999, as
indicated below. The following pages set forth certain information for each
nominee and each incumbent Director as of June 30, 1998. All of the nominees and
incumbent Directors listed below were previously elected Directors by the
shareholders except Jeremiah J. Sheehan, who was elected by the Board effective
January 1, 1998. John D. Munford, II, a Director from 1988 to 1998, 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. Each nominee
has consented to being named in the Proxy Statement and to serve if elected.
<PAGE>
Nominees for Election Whose Terms Expire in 2001
CHARLES H. FOSTER, JR., 55, is Chairman and Chief Executive Officer of
LandAmerica Financial Group, Inc. (formerly 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 LandAmerica Financial
Group, Inc. Mr. Foster is a member of the Finance Committee and the Pension
Investment Committee. He has been a Director since 1995.
ALLEN B. KING, 52, is President and Chief Operating 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 Chairman of the Finance Committee and a member of the Executive Committee.
Mr. King has been a Director since 1989.
JEREMIAH J. SHEEHAN, 59, is Chairman of the Board and Chief Executive
Officer of Reynolds Metals Company (aluminum and other products). From 1994 to
October 1996, he was President and Chief Operating Officer, and from 1993 to
1994, he was Executive Vice President, Fabricated Products of Reynolds Metals
Company. Mr. Sheehan is a Director of Reynolds Metals Company and Union Camp
Corporation. He is a member of the Audit Committee and has been a Director since
January 1, 1998.
Nominee for Election Whose Term Expires in 2000
JOSEPH C. FARRELL, 62, retired as Chairman, President and Chief
Executive Officer of The Pittston Company (coal, mineral products and
transportation and security services) on March 1, 1998. He is a Director of
Aeroquip-Vickers, Inc. Mr. Farrell is a member of the Audit Committee and has
been a Director since 1996.
The Board of Directors recommends that the shareholders vote for the
nominees set forth above.
Incumbent Directors Whose Terms Expire in 2000
HENRY H. HARRELL, 59, is Chairman and Chief Executive Officer of the
Company and of Universal Leaf, positions he has held for more than five years.
He is Chairman of the Executive Committee and a member of the Finance Committee.
Mr. Harrell has been a Director since 1984.
HUBERT R. STALLARD, 61, 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.
Incumbent Directors Whose Terms Expire in 1999
WILLIAM W. BERRY, 66, 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, 66, is President of James Madison University, a
position he has held for more than five years. He is Chairman of the Audit
Committee and a member of the Executive Compensation Committee. Dr. Carrier has
been a Director since 1979.
LAWRENCE S. EAGLEBURGER, 68, is Senior Foreign Policy Advisor to the
law firm of Baker, Donelson, Bearman & Caldwell, a position he has held for more
than five years. He served as United States Secretary of State from December
1992 through January 1993, Acting Secretary of State from August 1992 to
December 1992, and Deputy Secretary of State from February 1989 to August 1992.
Mr. Eagleburger is a Director of COMSAT Corporation, Corning Incorporated,
Dresser Industries, Inc., Phillips Petroleum Company and Stimpsonite
Corporation. He is a member of the Audit Committee and has been a Director since
1993.
2
<PAGE>
RICHARD G. HOLDER, 67, retired as Chairman of the Board and Chief
Executive Officer of Reynolds Metals Company on October 1, 1996. He is a
Director of Corn Products International, Inc. and Bestfoods. Mr. Holder is a
member of the Executive Committee and the Executive Compensation Committee and
has been a Director since 1992.
STOCK OWNERSHIP
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by (i) each Director or
nominee, (ii) each executive officer listed in the Summary Compensation Table
and (iii) all Directors and executive officers as a group. No person known to
the Company beneficially owns more than 5% of the outstanding shares of Common
Stock.
<TABLE>
<CAPTION>
Name of Beneficial Owner Number of Shares 1,2,3 Percent of Class
- ---------------------------------------------------------------------------------------
<S> <C> <C>
William W. Berry 7,546 *
Ronald E. Carrier 7,400 *
Lawrence S. Eagleburger 6,200 *
Joseph C. Farrell 4,400 *
Charles H. Foster, Jr. 5,500 *
Henry H. Harrell 93,988 *
Richard G. Holder 7,100 *
Allen B. King 58,998 *
John D. Munford, II 7,568 *
Hartwell H. Roper 41,597 *
Jeremiah J. Sheehan 1,000 *
Hubert R. Stallard 7,348 *
William L. Taylor 25,614 *
Jack M.M. van de Winkel 17,500 *
All Directors and executive officers 331,394 *
as a group (16 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, 1998.
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 94,354 shares held for certain Directors and executive officers
in the Employees' Stock Purchase Plan of Universal Leaf and 67,100 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,
1998. The number of shares above also includes 1,250 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 1,238,753
shares or 3.6% of the shares of Common Stock outstanding on June 30, 1998. Each
participant in the Plan has the right to instruct Wachovia Bank, N.A., trustee
for the Plan, with respect to the voting of shares allocated to his or her
account. The trustee, however, will vote any shares for which it receives no
instructions in the same proportion as those shares for which it has received
instructions.
3
<PAGE>
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, as amended, 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, 1998, there were five meetings of
the Board of Directors, seven meetings of the Executive Committee, three
meetings of the Finance Committee, three meetings of the Audit Committee, three
meetings of the Pension Investment Committee and three meetings of the Executive
Compensation Committee. All Directors attended 75% or more of the total number
of meetings of the Board of Directors and all committees of the Board on which
they served, except Mr. Eagleburger.
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 (the "Directors' DIP")
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 investment options selected by the Company for purposes of
calculating a market return for accounting purposes. In 1998, the Directors' DIP
was amended to add a Deferred Stock Unit Fund comprised of Deferred Stock Units
to the investment options. Each Deferred Stock Unit represents a hypothetical
share of the Company's Common Stock and fluctuates in value with the market
price of the stock. The portion of a Director's Deferral Account which is
invested in the Deferred Stock Unit Fund is increased by the number of Deferred
Stock Units which could be purchased with Common Stock dividends paid by the
Company. With respect to investment options other than the Deferred Stock Unit
Fund, the Company may, but is not required to, invest the deferred amounts in a
Company-owned life insurance product with parallel investment options. Subject
to certain restrictions, the Director may elect at the time of deferral to take
cash distributions, in whole or in part, from his Deferral Account either prior
to or following termination of service.
4
<PAGE>
Pursuant to the Restricted Stock Plan for Non-Employee Directors and
the 1997 Executive Stock Plan, each non-employee Director is awarded 700 shares
of restricted Common Stock of the Company annually following the Annual Meeting
of Shareholders. No Director may receive in the aggregate more than 2,100 shares
of restricted Common Stock under these plans. The restrictions lapse in the
event the Director becomes disabled, dies, is not nominated for reelection or is
not reelected. The number of shares issued to non-employee Directors will be
adjusted for stock dividends, stock splits and certain other corporate events
that may occur in the future.
Under the 1994 Stock Option Plan for Non-Employee Directors (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
Plan will be adjusted for stock dividends, stock splits and certain other
corporate events that may occur in the future.
As part of its overall program of charitable giving, the Company offers
the Directors participation in a Directors' Charitable Contribution Program. The
Program is funded by life insurance policies purchased by the Company on the
Directors. The Directors derive no financial or tax benefits from the Program,
because all insurance proceeds and charitable tax deductions accrue solely to
the Company. However, following the death of a Director, the Company will donate
up to $1,000,000 to one or more qualifying charitable organizations recommended
by that Director. The donation(s) will be made by the Company in ten equal
annual installments, with the first installment to be made at the later of the
Director's retirement from the Board or age 70; the remaining nine installments
will be paid annually beginning immediately after the Director's death.
Each Director is also 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 usually 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
5
<PAGE>
Company, and the competitiveness of the executive's salary with the salaries of
executives in comparable positions at companies of comparable size or
operational characteristics. Each factor is weighed by the Committee in a
subjective analysis of the appropriate level of compensation for that executive.
For purposes of assessing the competitiveness of salaries, the Committee reviews
compensation data from national surveys and selected groups of 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 32 years experience with
the Company. For the fiscal year beginning July 1, 1998, 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 1999 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. For the 1998 fiscal year, with respect to the
named executive officers based in the United States, the fund was based on the
change in economic profit from the 1997 level, where economic profit is defined
as consolidated earnings before interest and taxes minus a capital charge equal
to the weighted average cost of capital times average funds employed. Mr.
Harrell's cash incentive award for the 1998 fiscal year was approximately 60%
more than the award he received in 1997. Mr. Harrell's 1998 award was determined
by the Committee after consideration of the Company's record earnings and
significant improvement in economic profit 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 and
1997 Executive Stock Plans, under which it has granted to key executive
employees options to purchase shares 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.
In the 1998 fiscal year, the Committee granted 589,000 stock options to
15 key executives under a program instituted during the 1992 fiscal year to
promote an increase in the equity interest of such 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. 48,000 shares of restricted stock were
also awarded in the 1998 fiscal year to executives participating in the program
to match, on a one-for-one basis, shares of Common Stock held outside of and
contributed by such participants to the program between the award date and
December 15, 1997. The exercise price of the options granted in the 1998 fiscal
year was the fair market value of the Common Stock on the date of grant. All of
the options cannot be exercised until six months after the date of grant and
expire ten years from such date. On December 15, 1997, Mr. Harrell was awarded
7,800 shares of restricted stock to match the number of additional shares of
Common Stock he contributed to the program on that date. In the 1998 fiscal
year, he received an
6
<PAGE>
option grant for 120,000 shares of Common Stock, based upon a review by the
Committee of total compensation and its components, including equity
participation, of chief executive officers of comparable companies. Stock
options granted to key executives in the 1998 fiscal year were intended to meet
the Committee's two-year option grant targets and, therefore, it is anticipated
that no new grants (excluding reload options described below) will be made
during the fiscal year ending June 30, 1999.
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.
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, 1999,
will be deductible or voluntarily deferred under the Company's Deferred Income
Plan. Moreover, the qualifying amendments to the Management Performance 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
<PAGE>
PERFORMANCE GRAPH
The graph below 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, 1993, and the reinvestment of
all dividends.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
At June 30,
Data Points ----------------------------------------------------------------------------
in Dollars 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
- --------------------------------------- ------------- ------------ ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Universal Corporation $100.00 $ 82.48 $ 93.15 $122.72 $152.56 $184.68
- --------------------------------------- ------------- ------------ ----------- ----------- ----------- -------------
Media General Tobacco Index $100.00 $ 105.53 $ 147.31 $206.57 $270.78 $262.38
- --------------------------------------- ------------- ------------ ----------- ----------- ----------- -------------
S&P Midcap 400 Index $100.00 $ 99.76 $ 122.05 $145.80 $179.81 $228.63
- --------------------------------------- ------------- ------------ ----------- ----------- ----------- -------------
</TABLE>
8
<PAGE>
EXECUTIVE COMPENSATION
The individuals named below include the Company's Chairman and Chief
Executive Officer and the other four executive officers of the Company who were
the most highly compensated executive officers of the Company for the 1998
fiscal year. Information is provided for the fiscal years ended on June 30 of
the years shown.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------- ------
Fiscal
Name Year Other Restricted Securities
and Principal Ended Annual Stock Underlying All Other
Position 6/30 Salary($) Bonus($)1 Compensation($)2 Awards($) Options(#) Compensation($)6
-------- ---- --------- --------- ---------------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Henry H. Harrell 1998 $493,825 $813,636 -- $319,800 3 182,854 4 $100,609
Chairman and Chief 1997 479,779 510,000 -- 0 27,167 5 84,971
Executive Officer 1996 454,845 383,000 -- 0 21,783 5 84,092
Allen B. King 1998 368,399 590,793 -- 239,850 3 136,380 4 57,204
President and Chief 1997 344,435 369,400 -- 0 19,261 5 49,937
Operating Officer 1996 319,592 268,000 -- 0 15,446 5 47,403
Jack M.M. van de 1998 252,500 377,000 -- 0 17,000 0
Winkel
Vice Chairman and
Executive Vice
President,
Deli Universal, Inc.
William L. Taylor 1998 285,200 293,011 -- 147,600 3 83,430 4 45,095
Vice President and 1997 276,665 183,500 -- 0 11,792 5 26,112
Chief Administrative 1996 274,320 140,000 -- 0 9,457 5 35,859
Officer
Hartwell H. Roper 1998 210,200 216,015 -- 133,250 3 74,889 4 25,677
Vice President and 1997 202,720 130,900 -- 0 10,214 5 23,749
Chief Financial 1996 194,320 102,000 -- 0 8,191 5 23,807
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 amounts in this column are the dollar values, based on a $41.00
closing price of a share of Common Stock on December 15, 1997, as reported on
the New York Stock Exchange, of the following number of shares of restricted
Common Stock awarded as of such date to the named executive officers: Mr.
Harrell, 7,800 shares; Mr. King, 5,850 shares; Mr. Taylor, 3,600 shares; and Mr.
Roper, 3,250 shares. The restricted shares matched, on a one-for-one basis,
shares of Common Stock contributed by such executives to the automatic exercise
program described above in "Report of Executive Compensation Committee" during a
limited period following the date of the award. On June 15, 1998, the restricted
shares were used for stock swap option exercises under the automatic exercise
program.
4 The following number of options granted to the named executive
officers in the 1998 fiscal year were reload options granted under the automatic
exercise program described above in "Report of Executive Compensation
Committee": Mr. Harrell, 62,854; Mr. King, 46,380; Mr. Taylor, 28,430; and Mr.
Roper, 24,889.
9
<PAGE>
5 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."
6 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 named executive
officers for the 1998, 1997 and 1996 fiscal years were in the following
respective amounts: Mr. Harrell, $22,098, $21,359 and $20,437; Mr. King,
$18,000, $17,100 and $15,900; Mr. Taylor, $14,256, $0 and $12,562; and Mr.
Roper, $9,300, $9,099 and $8,841. The life insurance premiums paid by the
Company on behalf of such executive officers for the 1998, 1997 and 1996 fiscal
years were in the following respective amounts: Mr. Harrell, $70,327, $55,633
and $49,913; Mr. King, $37,704, $30,082 and $26,323; Mr. Taylor, $30,839,
$26,112 and $23,297; and Mr. Roper, $15,170, $13,357 and $11,722. 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 1998, 1997 and 1996 fiscal years were in the following
respective amounts: Mr. Harrell, $8,184, $7,979 and $13,742; Mr. King, $1,500,
$2,755 and $5,180; and Mr. Roper, $1,207, $1,293 and $3,244.
Retirement Benefits
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>
$ 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
1,300,000 302,652 403,536 504,420 605,305 706,189 764,413 822,637
1,400,000 326,166 434,888 543,610 652,332 761,054 823,756 886,459
1,500,000 349,679 466,239 582,799 699,359 815,919 883,100 950,281
</TABLE>
The credited years of service for Messrs. Harrell, King, Taylor and
Roper are thirty-two, twenty-nine, eight and twenty-four, 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.
10
<PAGE>
Mr. van de Winkel 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, 1998, N.V. Deli
Universal contributed $39,800 to the plan on behalf of Mr. van de Winkel. His
estimated annual pension benefit under the plan assuming twenty years of service
would be $110,405.
Stock Options
The following tables contain information concerning grants of stock
options to executive officers listed in the Summary Compensation Table during
the fiscal year ended June 30, 1998, exercises of stock options by such
executive officers in such fiscal year and the fiscal year-end value of all
unexercised stock options held by such executive officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of % of Total
Securities Options Exercise
Underlying Granted or Base
Options to Employees Price Expiration Grant Date
Name Granted (#) in Fiscal Year 2 ($/Sh) Date Present Value 3
---- ----------- ---------------- ------ ---- ---------------
<S> <C> <C> <C> <C> <C>
Henry H. Harrell 120,000 15.2% $38.938 11/20/07 $1,461,000
10,038 1 8.6 40.188 12/01/04 115,226
9,050 1 7.8 40.188 12/01/01 83,658
43,766 1 17.0 35.313 12/01/01 355,380
Allen B. King 90,000 11.4 38.938 11/20/07 1,095,750
14,084 1 12.1 40.188 12/01/04 161,670
17,925 1 6.9 35.313 12/01/04 180,792
14,371 1 5.6 35.313 12/01/01 116,693
Jack M.M. van de Winkel 17,000 2.2 38.938 11/20/02 166,617
William L. Taylor 55,000 7.0 38.938 11/20/07 669,625
8,622 1 7.4 40.188 12/01/04 98,972
12,778 1 5.0 35.313 12/01/04 128,879
7,030 1 2.7 35.313 12/01/01 57,084
Hartwell H. Roper 50,000 6.4 38.938 11/20/07 608,750
7,468 1 6.4 40.188 12/01/04 85,702
11,289 1 4.4 35.313 12/01/04 113,861
6,132 1 2.4 35.313 12/01/01 49,792
</TABLE>
- ------------------
1 These options were reload options which replaced shares of the
Company's Common Stock used for stock swap option exercises under the automatic
exercise program described above in "Report of Executive Compensation
Committee."
2 The percentage is computed separately for the grant of original
options ($38.938 exercise price) and each grant of reload options.
3 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 $38.938 exercise price and a 11/20/07 expiration date, the model assumed a
risk free interest rate of 5.84%, a dividend yield of 3.164% and a volatility
measure of .277, which is the variance on the rate of return of the Common Stock
of the Company over the most recent 250 trading day
11
<PAGE>
period prior to the grant of the option. For options with a $40.188 exercise
price and a 12/01/04 expiration date, the model assumed a risk free interest
rate of 5.88%, a dividend yield of 3.135% and a volatility measure of .276. For
options with a $40.188 exercise price and a 12/01/01 expiration date, the model
assumed a risk free interest rate of 5.815%, a dividend yield of 3.135% and a
volatility measure of .276. For options with a $35.313 exercise price and a
12/01/01 expiration date, the model assumed a risk free interest rate of 5.810%,
a dividend yield of 3.135% and a volatility measure of .276. For options with a
$35.313 exercise price and a 12/01/04 expiration date, the model assumed a risk
free interest rate of 5.880%, a dividend yield of 3.135% and a volatility
measure of .276. For options with a $38.938 exercise price and a 11/20/02
expiration date, the model assumed a risk free interest rate of 5.800%, a
dividend yield of 3.164% and a volatility measure of .277. Because the magnitude
of any nontransferability discount is extremely difficult to determine, none was
applied in determining the value of the listed options. The grant date present
values set forth in the table are only theoretical values and may not accurately
determine present value. The actual value, if any, an optionee will realize will
depend on the excess of market value of the Company's Common Stock over the
exercise price on the date the option is exercised.
Aggregated Option Exercises in Last Fiscal Year
And FY-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)3
--------------------- --------------
Shares Acquired Value
Name on Exercise (#)1 Realized ($)2 Exercisable Unexercisable Exercisable Unexercisable
---- ---------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Henry H. Harrell 85,751 $858,367 195,103 43,766 $405,878 $90,267
Allen B. King 71,315 940,338 177,017 32,296 643,709 66,611
William L. Taylor 44,341 598,487 109,167 19,808 388,486 40,854
Hartwell H. Roper 38,824 523,826 98,218 17,421 364,701 35,931
</TABLE>
- -----------------
1 Except for 30,000 shares of the Company's Common Stock representing
the gross number of shares acquired by Mr. Harrell as the result of a cashless
exercise of options, 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, 22,897 shares; Mr.
King, 24,935 shares; Mr. Taylor, 15,911 shares; and Mr. Roper, 13,935 shares.
2 The value realized represents the difference between the exercise
price of the option and the fair market value of the Company's Common Stock on
the date of exercise.
3 The value of the unexercised options at fiscal year-end represents
the difference between the exercise price of any outstanding options and
$37.375, the closing sales price of a share of the Company's Common Stock on
June 30, 1998, as reported on the New York Stock Exchange.
Of the options shown as of the fiscal year end, options on 238,869
shares for Mr. Harrell, 206,813 shares for Mr. King, 128,975 shares for Mr.
Taylor and 114,039 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.
Contractual Obligations
To ensure that the Company will have the continued dedicated service of
certain executives notwithstanding the possibility, threat or occurrence of a
change of control, the Company has entered into change of control employment
agreements (the "Employment Agreements") with certain executives, including
Henry H. Harrell, Allen B. King, William L. Taylor and Hartwell H. Roper. The
Employment Agreements generally provide that
12
<PAGE>
if the executive is terminated other than for cause within three years after a
change of control of the Company, or if the executive terminates his employment
for good reason within such three-year period or voluntarily during the 30-day
period following the first anniversary of the change of control, the executive
is entitled to receive "severance benefits." Severance benefits include a lump
sum severance payment equal to three times the sum of his base salary and
highest annual bonus, together with certain other payments and benefits,
including continuation of employee welfare benefits and an additional payment to
compensate the executive for certain excise taxes imposed on certain change of
control payments.
The Board of Directors believes that the Employment 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 TRANSACTIONS AND RELATIONSHIPS
In December 1997, the Company made unsecured loans to executives
participating in the automatic exercise program described above in "Report of
Executive Compensation Committee" for the purchase price of shares of Common
Stock purchased by the executives and contributed to the automatic exercise
program. Interest on the stock purchase loans is payable annually at the
applicable federal rate for demand loans. All accrued and unpaid interest and
all unpaid principal on the loans is due and payable upon the earlier of (i)
demand by the Company or (ii) termination of the automatic exercise program. The
stock purchase loans made by the Company to executive officers, and the balance
thereof outstanding as of June 30, 1998, were in the following respective
amounts: Mr. Harrell, $318,606; Mr. King, $238,955; Mr. Taylor, $147,049; and
Mr. Roper, $132,753.
In December 1997, the Company also made loans to executives
participating in the automatic exercise program for the payment of withholding
taxes on the award to such executives of restricted Common Stock to match, on a
one-for-one basis, additional shares of Common Stock contributed by the
executives to the program during a limited period following the date of the
award. Interest on the tax payment loans is payable quarterly at the applicable
federal rate for demand loans for the quarter for which the interest payment
relates, from dividends paid on the restricted Common Stock. Principal on the
loans is paid from the proceeds of sale of one-half of the shares of Common
Stock representing the after-tax gain on each automatic exercise of options
covered by grants made under the program in 1997. All accrued and unpaid
interest and all unpaid principal on the loans is due and payable upon the
earlier of (i) the date the automatic exercise program terminates or (ii)
November 20, 2007. On the loan maturity date, shares of Common Stock held for
executives under the automatic exercise program may be sold to pay the Company
the amount then due and payable to the Company under the loans. The tax payment
loans made by the Company to executive officers were in the following respective
amounts: Mr. Harrell, $149,666; Mr. King, $112,250; Mr. Taylor, $69,077; and Mr.
Roper, $62,361. The balance of such loans outstanding as of June 30, 1998 were
in the following respective amounts: Mr. Harrell, $30,487; Mr. King, $0; Mr.
Taylor, $0; and Mr. Roper, $0.
In January 1998, the Company purchased 10,614 shares of Common Stock
from Mr. Harrell at a price of $43.88 per share, the fair market value on the
date of purchase, in a transaction preapproved by the Company's Board of
Directors. Proceeds of the purchase were applied by Mr. Harrell to the payment
of income taxes on the exercise of transferable options by his family trust
resulting in an increase in the total number of shares of Common Stock owned by
Mr. Harrell and his family.
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.
13
<PAGE>
Proposal Two
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The Board of Directors has unanimously approved, and recommends to the
shareholders that they adopt, an amendment to Article IV of the Articles of
Incorporation that would increase the authorized Common Stock from 50 million to
100 million shares.
Of the 50 million currently authorized shares of Common Stock, as of
June 30, 1998, 34,866,406 shares were issued and outstanding. The additional
shares of Common Stock for which authorization is sought would be a part of the
existing class of Common Stock and, if and when issued, would have the same
rights and privileges as the shares of Common Stock presently outstanding. No
holder of Common Stock has any preemptive rights. The Company has no plans for
the issuance of any shares of Common Stock at the present time.
The full text of Proposal Two is attached to this Proxy Statement as
Exhibit A, which shareholders are urged to read carefully.
Purposes and Effects of Proposal Two
The Board of Directors believes that an increase in the number of
shares of authorized Common Stock as contemplated by Proposal Two would benefit
the Company and its shareholders by giving the Company needed flexibility in its
corporate planning and in responding to developments in the Company's business,
including possible acquisition transactions, stock splits or stock dividends and
other general corporate purposes. Having such authorized shares available for
issuance in the future would give the Company greater flexibility and allow
shares of its Common Stock to be issued without the expense and delay of a
special shareholders' meeting.
Unless otherwise required by applicable law or regulation, the shares
of Common Stock to be authorized in Proposal Two will be issuable without
further shareholder action and on such terms and for such consideration as may
be determined by the Board of Directors. However, the New York Stock Exchange,
on which the Company's Common Stock is listed, currently requires shareholder
approval as a prerequisite to listing shares in several instances, including
acquisition transactions, where the present or potential issuance of shares
could result in an increase of 20 percent or more in the number of shares of
Common Stock outstanding.
The Board of Directors could use the additional shares of Common Stock
to discourage an attempt to change control of the Company, even though a change
in control might be perceived as desirable by some shareholders, by selling a
substantial number of shares of Common Stock to persons who have an arrangement
with the Company concerning the voting of such shares, or by distributing Common
Stock, or rights to receive such stock, to the shareholders. The Board of
Directors, however, has no present intention of issuing any shares of Common
Stock or rights to acquire Common Stock for such purposes, and there are no
arrangements with any person for the purchase of shares of Common Stock in the
event of an attempted change of control.
Vote Required
In order for it to be adopted, Proposal Two 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.
14
<PAGE>
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 1999 ANNUAL MEETING
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 1999 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 27, 1999, in
order for the proposal to be considered for inclusion in the Company's Proxy
Statement. The Company anticipates holding the 1999 Annual Meeting on October
26, 1999.
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 or to bring
other business before a meeting, notice must be received by the Secretary of the
Company not less than 60 days and not more than 90 days prior to the date of the
meeting. Based upon an anticipated date of October 26, 1999 for the 1999 Annual
Meeting of Shareholders, the Company must receive such notice no later than
August 27, 1999 and no earlier than July 28, 1999. Notice of a nomination for
Director must describe various matters regarding the nominee and the shareholder
giving the notice. Notice of other business to be brought before the meeting
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, 1998,
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, 1998, 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.
15
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
EXHIBIT A
Proposal Two
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
Article IV of the Articles of Incorporation is hereby amended by
revising the first paragraph to read as follows:
The maximum amount of capital stock of the
Corporation shall be one hundred five million seventy-five
thousand (105,075,000) shares, of which seventy-five thousand
(75,000) shares, of the par value of One Hundred Dollars
($100.00) each and a total par value of Seven Million Five
Hundred Thousand Dollars ($7,500,000), shall be eight percent
(8%) Cumulative Preferred Stock ("8% Preferred Stock"), five
million (5,000,000) shares, without par value, shall be
Additional Preferred Stock, and one hundred million
(100,000,000) shares, without par value, shall be Common
Stock.
A-1
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
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, proxies 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, 1998, at the Annual Meeting of
Shareholders to be held at 2:00 p.m. on October 27, 1998, and at any
adjournments thereof, upon the matters listed on the reverse side, 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 ALL NOMINEES AND FOR PROPOSAL 2.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on this Proxy. Attorneys-in-fact,
executors, trustees, guardians, corporate officers, etc. should give full title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
(continued, and to be DATED and SIGNED on reverse side)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ----------------------------------------------------
UNIVERSAL CORPORATION 1. Election of Directors. For All For All
Nominees Withhold Except
- ----------------------------------------------------
Charles H. Foster, Jr. _ _ _
COMMON STOCK Allen B. King |_| |_| |_|
Jeremiah J. Sheehan
Joseph C. Farrell
INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For All Except" box and strike a line through the name(s) of the nominee(s).
RECORD DATE SHARES:
2. Proposal to increase to 100 million the For Against Abstain
number of authorized shares of Common _ _ _
Stock. |_| |_| |_|
-------- _
Please be sure to sign and date this Proxy. Date Mark box at right if an address change or comment has been noted on |_|
- ------------------------------------------- -------- the reverse side of this card.
Shareholder sign here Co-owner sign here
- ---------------------------------------------------
DETACH CARD DETACH CARD
</TABLE>
<PAGE>
UNIVERSAL CORPORATION
TO TRUSTEE, LANDAMERICA FINANCIAL GROUP, INC.
SAVINGS AND STOCK OWNERSHIP PLAN
This Voting Instruction is Solicited on Behalf of the Board of Directors of
Universal Corporation
Pursuant to Section 10.5 of the LandAmerica Financial Group, Inc. Savings and
Stock Ownership Plan, you are directed to vote, in person or by proxy, the whole
shares of Common Stock of Universal Corporation credited to the undersigned
Participant's Account as of June 30, 1998, at the Annual Meeting of Shareholders
of Universal Corporation, to be held at 2:00 p.m. on October 27, 1998, and at
any adjournments thereof, upon the matters listed on the reverse side, 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, OR IF A VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE
TRUSTEE, THE SHARES OF UNIVERSAL CORPORATION COMMON STOCK CREDITED TO YOUR
PARTICIPANT'S ACCOUNT SHALL BE VOTED IN THE SAME PROPORTION AS THOSE SHARES OF
UNIVERSAL CORPORATION COMMON STOCK FOR WHICH THE TRUSTEE HAS RECEIVED PROPER
VOTING INSTRUCTIONS WITH RESPECT TO PROPOSALS 1 AND 2.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on this Voting Instruction.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
(continued, and to be DATED and SIGNED on reverse side)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ----------------------------------------------------
UNIVERSAL CORPORATION 1. Election of Directors. For All For All
Nominees Withhold Except
- ----------------------------------------------------
Charles H. Foster, Jr. _ _ _
LANDAMERICA FINANCIAL GROUP, INC. Allen B. King |_| |_| |_|
SAVINGS AND STOCK OWNERSHIP PLAN Jeremiah J. Sheehan
Joseph C. Farrell
INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For All Except" box and strike a line through the name(s) of the nominee(s).
RECORD DATE SHARES:
2. Proposal to increase to 100 million the For Against Abstain
number of authorized shares of Common _ _ _
Stock. |_| |_| |_|
-------- _
Please be sure to sign and date this Date Mark box at right if an address change or comment has been noted on |_|
Voting Instruction. the reverse side of this card.
- ------------------------------------------ --------
Participant sign here
- ---------------------------------------------------
DETACH CARD DETACH CARD
</TABLE>
<PAGE>
UNIVERSAL CORPORATION
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, 1998, at the Annual Meeting of Shareholders of Universal Corporation,
to be held at 2:00 p.m. on October 27, 1998, and at any adjournments thereof,
upon the matters listed on the reverse side, 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, OR IF A VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE
TRUSTEE, THE SHARES OF UNIVERSAL CORPORATION COMMON STOCK CREDITED TO YOUR
PARTICIPANT'S ACCOUNT SHALL BE VOTED IN THE SAME PROPORTION AS THOSE SHARES OF
UNIVERSAL CORPORATION COMMON STOCK FOR WHICH THE TRUSTEE HAS RECEIVED PROPER
VOTING INSTRUCTIONS WITH RESPECT TO PROPOSALS 1 AND 2.
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PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
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Please sign exactly as your name(s) appear(s) on this Voting Instruction.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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(continued, and to be DATED and SIGNED on reverse side)
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|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
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UNIVERSAL CORPORATION 1. Election of Directors. For All For All
Nominees Withhold Except
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Charles H. Foster, Jr. _ _ _
EMPLOYEES' STOCK PURCHASE PLAN OF UNIVERSAL LEAF Allen B. King |_| |_| |_|
TOBACCO COMPANY, INCORPORATED AND DESIGNATED Jeremiah J. Sheehan
AFFILIATED COMPANIES Joseph C. Farrell
INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For All Except" box and strike a line through the name(s) of the nominee(s).
RECORD DATE SHARES:
2. Proposal to increase to 100 million the For Against Abstain
number of authorized shares of Common _ _ _
Stock. |_| |_| |_|
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Please be sure to sign and date this Date Mark box at right if an address change or comment has been noted on |_|
Voting Instruction. the reverse side of this card.
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Participant sign here
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DETACH CARD DETACH CARD
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