DIMON INC, S-1, 1996-05-23

DIMON INC
S-1, 1996-05-23
FARM PRODUCT RAW MATERIALS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 23, 1996
REGISTRATION NO. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

DIMON INCORPORATED
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
VIRGINIA 2100 54-1746567
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation) Classification Code Number) Identification No.)
</TABLE>

512 BRIDGE STREET
DANVILLE, VIRGINIA 24541
(804) 792-7511

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

CLAUDE B. OWEN, JR.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
512 BRIDGE STREET
DANVILLE, VIRGINIA 24541
(804) 792-7511

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

COPIES TO:

<TABLE>
<S> <C>
Thurston R. Moore William F. Gorin
Hunton & Williams Cleary, Gottlieb, Steen & Hamilton
951 East Byrd Street One Liberty Plaza
Richmond, Virginia 23219 New York, New York 10006
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

[CAPTION]
<TABLE>

PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (2) PRICE (2)
<S> <C> <C> <C>
Common Stock, no par value........ 3,450,000 $19.0625 $65,765,625
Common Stock Purchase Rights...... 3,450,000 (3) (3)

<CAPTION>
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
<S> <C>
Common Stock, no par value........ $22,678
Common Stock Purchase Rights...... N/A
</TABLE>

(1) Includes 450,000 shares and attached Rights subject to the Underwriters'
over-allotment option.
(2) Estimated solely for the purpose of calculating the filing fee pursuant to
Rule 457(c) under the Securities Act of 1933. Based upon the average of the
high and low prices of the Company's Common Stock on May 20, 1996, as
reported in the consolidated reporting system of the New York Stock
Exchange.
(3) The Rights are attached to and trade with the Common Stock.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.

<PAGE>
DIMON INCORPORATED
CROSS-REFERENCE SHEET

PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING LOCATION IN THE PROSPECTUS REQUIRED BY ITEMS OF PART I OF FORM S-1

<TABLE>
<CAPTION>
REGISTRATION STATEMENT ITEM AND CAPTION PROSPECTUS HEADING OR LOCATION

<S> <C> <C>
1 Forepart of Registration Statement and Outside
Front Cover Page of Prospectus.................. Facing Page; Outside Front Cover

2 Inside Front and Outside Back Cover pages of
Prospectus...................................... Inside Front Cover Page; Outside Back Cover Page;
Available Information

3 Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges....................... Prospectus Summary; Risk Factors; Selected Consolidated
Financial Data

4 Use of Proceeds................................. Prospectus Summary; Use of Proceeds

5 Determination of Offering Price................. Outside Front Cover Page; Underwriting

6 Dilution........................................ Not Applicable

7 Selling Security Holders........................ Principal and Selling Stockholders

8 Plan of Distribution............................ Outside Front Cover Page; Underwriting

9 Description of Securities to be Registered...... Outside Front Cover Page; Description of Common Stock

10 Interests of Named Experts and Counsel.......... Not Applicable

11 Information with Respect to the Registrant...... Prospectus Summary; Risk Factors; Use of Proceeds; Price Range of
Common Stock and Dividends; Capitalization; Selected Consolidated
Financial Data; Management's Discussion and Analysis of Financial
Condition and Results of Operations; Business; Management; Principal
and Selling Stockholders; Description of Common Stock; Consolidated
Financial Statements

12 Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities..................................... Not Applicable
</TABLE>

<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MAY 23, 1996
3,000,000 Shares

[DIMON Logo]

Common Stock

All of the 3,000,000 shares of Common Stock of DIMON Incorporated
(the "Company") offered hereby (the "Shares") are being sold by certain
stockholders of the Company (the "Selling Stockholders"). See "Principal
and Selling Stockholders." The Company is not offering any shares for sale
hereunder and will not receive any of the proceeds from the Shares sold by
the Selling Stockholders in this offering (the "Offering").

The Common Stock is traded on the New York Stock Exchange (the
"NYSE") under the symbol "DMN." On May 20, 1996, the last reported sale
price of the Common Stock was $18.75 per share. See "Price Range of Common
Stock and Dividends."

SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNT(1) STOCKHOLDERS
<S> <C> <C> <C>
Per Share................................................. $ $ $
Total(2).................................................. $ $ $
</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933. See "Underwriting."
(2) The Selling Stockholders have granted the Underwriters an option,
exercisable within 30 days of the date hereof, to purchase up to an
additional 450,000 shares of Common Stock solely to cover
over-allotments, if any. If such option is exercised in full, the
total Price to Public, Underwriting Discount and Proceeds to Selling
Stockholders will be $ , $ and $ , respectively. See
"Underwriting."

The Shares are being offered by the several Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, and subject
to certain conditions. Delivery of the Shares is expected against payment
therefor on or about , 1996, at the offices of Wheat, First
Securities, Inc., Richmond, Virginia.

Wheat First Butcher Singer Salomon Brothers Inc

The date of this Prospectus is , 1996.

<PAGE>

[photo] [photo]

caption: Agronomist works with local caption: Buyers purchase flue-cured
growers in South America. tobacco at auction.

[DIMON LOGO]

[photo] [photo]

caption: Tobacco is monitored during caption: Customer samples are
threshing process. inspected for quality and consistency.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NYSE OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

<PAGE>

DIMON'S GLOBAL TOBACCO OPERATIONS

[MAP]

<PAGE>

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS THE CONTEXT REQUIRES OTHERWISE "DIMON" OR THE "COMPANY" REFERS TO DIMON
INCORPORATED AND ITS CONSOLIDATED SUBSIDIARIES. UNLESS OTHERWISE INDICATED, ALL
INFORMATION CONTAINED HEREIN ASSUMES NO EXERCISE OF THE UNDERWRITERS'
OVER-ALLOTMENT OPTION. SEE "UNDERWRITING."

THE COMPANY

DIMON believes it is the world's second largest independent leaf tobacco
merchant, with an estimated 30% share of the established worldwide leaf tobacco
market. The Company is engaged in two international businesses -- the
purchasing, processing and selling of leaf tobacco, primarily flue-cured, burley
and oriental tobaccos, which are the primary components of American blend
cigarettes, and the purchasing, transporting and selling of fresh-cut flowers to
wholesalers and retailers. The Company is the successor to Dibrell Brothers,
Incorporated ("Dibrell") and Monk-Austin, Inc. ("Monk-Austin"), which merged in
April 1995 (the "Merger").

Increased demand and strong brand growth have resulted in increased
production of branded American blend cigarettes in recent years. In addition,
consumption of American blend cigarettes continues to increase even in some
countries where total cigarette consumption is flat or declining. American blend
cigarettes generally contain less tar and nicotine and taste milder than
cigarettes historically consumed outside the U.S. Cigarette production in the
U.S. reached record levels in 1995, totaling 741.84 billion units, an increase
of 4.1% over 1994, according to the USDA, while exports of domestically produced
cigarettes in 1995 totaled 35.1% of cigarette production in the U.S., up from
31.8% in 1994 and 30.9% in 1993. As American blend cigarettes have continued to
gain market share, the demand for export quality flue-cured, burley and oriental
tobacco sourced and processed by leaf tobacco merchants has grown accordingly.
The world's large multinational cigarette manufacturers, with one exception,
rely on independent leaf tobacco merchants such as the Company to supply the
majority of their leaf tobacco needs. At the present time, there are four major
global leaf tobacco merchants including the Company which process, source and
ship leaf tobacco around the world.

As a result of the strong worldwide demand for tobacco products and
tightening of worldwide tobacco inventories, the global leaf tobacco industry
has experienced substantial improvement in profitability in the nine months
ended March 31, 1996. These factors, together with the increasing demand for
American blend cigarettes and improved efficiency resulting from the Merger,
have contributed to substantial improvement in the Company's net revenue,
operating margins and net income. For the nine months ending March 31, 1996,
compared to the same period in 1995, the Company's net revenue increased 7.5% to
$1.7 billion from $1.5 billion, while operating income and net income increased
to $74.2 million and $32.1 million as compared to $48.1 million and $9.8
million, respectively, for the same period last year. The global leaf tobacco
industry is currently recovering after experiencing a disruption in demand and
reduction in pricing during 1993 and 1994 which was primarily the result of
legislation (the "75/25 Rule"), which was later repealed, requiring that
cigarettes manufactured in the U.S. for domestic consumption and export contain
at least 75% domestically grown tobacco.

The Company sells tobacco predominantly to the large multinational
cigarette manufacturers including Philip Morris Companies, Inc., Japan Tobacco,
Inc., RJR Tobacco Company, Inc., Lorillard Tobacco Company, Reemstma
Cigarettenfabriken GmbH and Rothmans International PLC. The Company, through its
predecessors, generally has maintained relationships with its customers for over
forty years. In fiscal 1995, the Company shipped approximately 37% of its
tobacco sales to customers in the U.S., approximately 27% to customers in Europe
and the remainder to customers located in Asia, South America and elsewhere.

The Company has developed an extensive international network through which
it purchases and sells tobacco grown globally. The Company purchases tobacco in
approximately 26 countries, generally at auction or directly from growers. The
Company believes it has access to a diverse supply of tobacco grown in a number
of regions throughout the world and can respond quickly to factors that may
cause fluctuations in the quality, yield or price of tobacco grown in any one
region. The tobacco purchased by the Company is processed at 17 facilities
around the world. In addition to facilities in Virginia and North Carolina, the
Company owns or has an interest in processing facilities in Brazil and Zimbabwe,
the two most significant non-U.S. exporters of flue-cured tobacco, Malawi and
Mexico, two of the leading non-U.S. exporters of burley tobacco, and Greece and
Turkey, the leading exporters of oriental tobacco. The Company also has
processing facilities in Italy and Germany. In addition, the Company has entered
into contracts, joint ventures and other arrangements for the purchase of
tobacco grown in substantially all other countries that produce export-quality
flue-cured and burley tobaccos, including Argentina, Canada, China, India and
Tanzania.

<PAGE>
BUSINESS STRATEGY

The Company's primary business objective is to capitalize on growth in
worldwide consumption of American blend cigarettes by becoming the low-cost,
preferred supplier of leaf tobacco to the large multinational manufacturers of
American blend cigarettes. To achieve this objective, the Company has designed a
strategy to position itself to meet the needs of its cigarette manufacturing
customers throughout the world by expanding its global operations directly in
the major tobacco exporting countries and by forming strategic partnerships with
its major customers in countries with emerging tobacco production. The Company's
ability to respond to the global expansion and changing needs of the large
multinational cigarette manufacturers is a critical factor in developing and
expanding customer relationships. The principal components of the Company's
business strategy are as follows:

INCREASE THE COMPANY'S OPERATIONS IN LOW-COST TOBACCO GROWING REGIONS. To
ensure breadth and depth of supply of tobacco, particularly the tobaccos used in
American blend cigarettes, the Company has expanded and plans to continue to
expand its operations in South America, Africa and China, the largest production
areas of flue-cured and burley tobaccos outside of the U.S. In 1995, the Company
signed an agreement with the China National Tobacco Corporation to provide
additional access to tobacco sources and a state-of-the-art processing facility
in the province of Yunnan. The Company also made acquisitions in 1995 in
Bulgaria, Greece and Turkey, which the Company believes positions DIMON as the
largest worldwide merchant of oriental tobaccos. The Company intends to utilize
both its agronomy expertise in helping to develop low-cost sources of American
blend quality tobaccos and its existing relationships with the major
multinational cigarette manufacturers to gain market share in these growth
regions.

CAPITALIZE ON OUTSOURCING TRENDS. The Company anticipates further
outsourcing of leaf tobacco purchasing and processing by cigarette
manufacturers. This outsourcing trend is driven by (i) higher margins in
cigarette production, (ii) the increasing sophistication required in sourcing
leaf tobacco on a global basis and (iii) continued privatization of tobacco and
cigarette production operations in other countries. In 1994, the Company began
providing all leaf tobacco auction buying in the U.S. for RJR, the second
largest cigarette producer in the U.S. More recently, the Company began to
purchase and process all of Lorillard's auction market tobacco requirements in
the U.S.

IMPROVE EFFICIENCY AND REDUCE OPERATING COSTS. In connection with the
Merger, the Company initiated a restructuring plan for its operations. The plan
was designed to eliminate unprofitable locations, consolidate duplicative
processing facilities, reduce the salaried workforce, improve operating
efficiencies and increase regional unit accountability. This initiative resulted
in the recognition of various charges in fiscal 1995, aggregating $17.8 million,
and in the first nine months of fiscal 1996, aggregating $5.6 million. These
charges, together with additional anticipated charges of $6 million to $9
million in the fourth quarter of fiscal 1996, are expected to reduce the
Company's annual operating costs and expenses by approximately $25 million in
fiscal 1997 when the benefits are expected to be fully realized.

EXPAND OPERATIONS IN NEW MARKETS. During the last decade, several of the
large multinational cigarette manufacturers have expanded their global
operations, particularly into Central and Eastern Europe and the former Soviet
Union, in order to increase their access to and penetration of new markets. The
Company believes this will increase demand for local sources of leaf tobacco and
local tobacco processing due to the semi-perishable nature of unprocessed
tobacco and the existence of domestic content laws in certain foreign countries.
The Company believes these factors will cause manufacturers to place greater
reliance on the services of financially strong leaf tobacco merchants with the
ability to source and process tobacco on a global basis and to help develop
higher quality local sources of leaf tobacco.

THE OFFERING

<TABLE>
<S> <C>
Shares offered by the Selling Stockholders.............................. 3,000,000 shares
Common Stock to be outstanding after this Offering...................... 42,348,609 shares (1)
Use of Proceeds......................................................... The Company will not receive any of the proceeds of
this Offering
NYSE Symbol............................................................. DMN
</TABLE>

(1) Excludes 1,250,105 shares of Common Stock issuable as of April 30, 1996 upon
the exercise of outstanding stock options at a weighted average exercise
price of approximately $16.65 per share, of which options to purchase
738,146 shares are exercisable as of April 30, 1996. Under the treasury
stock method of computation, the issued options represent 43,537 Common
Stock equivalents based on the closing price of the Common Stock on April
30, 1996.

<PAGE>
REFINANCING PLAN

Concurrent with the execution of its business strategy, the Company has
implemented a refinancing plan (the "Refinancing Plan") designed to reduce its
financial leverage, decrease its reliance on short-term uncommitted lines of
credit and diversify its sources of debt financing. The Refinancing Plan
consists of (i) the call for redemption in March 1996 of the Company's
approximately $54.3 million principal balance of 7 3/4% Convertible Subordinated
Debentures due 2006 (the "7 3/4% Debentures"), (ii) the sale of $125 million
% Senior Notes due 2006 (the "Notes"), expected to be completed in May 1996,
and (iii) the execution of a $240 million Credit Agreement, dated as of March
15, 1996 (the "New Credit Facility"), replacing the Company's $250 million
credit facility (the "Former Credit Facility").

SUMMARY HISTORICAL FINANCIAL INFORMATION

The following table presents summary selected historical consolidated
financial information of the Company, as of the dates and for the periods
indicated. The historical financial data for the year ended June 30, 1995, have
been derived from the Company's financial statements which, except as they
relate to the former Dibrell's financial statements as of June 30, 1994, and for
each of the two years in the period ended June 30, 1994, have been audited by
Price Waterhouse LLP, independent accountants, and by Ernst & Young LLP,
independent accountants, insofar as they relate to the former Dibrell's
financial statements referred to above. The summary financial information should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Company's financial statements and
notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED MARCH 31 YEAR ENDED JUNE 30
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1996 1995 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA: (UNAUDITED)
Net sales of goods and services........... $1,663,661 $1,547,534 $1,927,749 $1,449,078 $1,680,616 $1,698,314
Gross profit.............................. 182,533 142,990 170,233 131,792 222,788 216,832
Restructuring and merger costs............ 5,568 -- 25,955 -- -- --
Operating income.......................... 74,229 48,107 11,476 14,481 110,831 106,094
Income (loss) from continuing operations
before income taxes, minority interest,
equity in net income of investee
companies, extraordinary items and
cumulative effect of accounting
changes................................. 52,119 24,313 (22,164) (5,355) 95,687 74,299
Income (loss) from continuing operations
before extraordinary items and
cumulative effect of accounting
changes................................. 30,740 9,763 (30,165) (8,490) 65,287 55,607
Net income (loss)......................... $ 32,140 $ 9,763 $ (30,165) $ (8,490) $ 64,504 $ 58,180
Earnings (loss) per share, primary (1).... $ 0.83 0.26 (0.79) (0.22) 1.74 1.64
Weighted average shares outstanding,
primary................................. 38,739 38,082 38,100 38,091 37,072 35,354
Earnings (loss) per share, fully-diluted
(2)(3).................................. $ 0.80 -- -- -- 1.63 1.47
Weighted average shares outstanding,
fully-diluted........................... 42,467 42,294 42,355 42,297 41,310 39,626

OTHER DATA:
Gross Margin.............................. 11.0% 9.2% 8.8% 9.1% 13.3% 12.8%
Operating Margin.......................... 4.5% 3.1% 0.6% 1.0% 6.6% 6.2%
Tobacco inventory......................... $ 343,484 $ 295,724 $ 410,431 $ 403,211 $ 324,768 $ 289,201
Depreciation and amortization............. 24,234 21,891 31,852 28,862 24,559 24,087
Capital Expenditures...................... 20,609 18,845 35,892 32,382 42,232 34,818

(IN THOUSANDS, EXCEPT PER SHARE DATA) 1991
<S> <C>
INCOME STATEMENT DATA:
Net sales of goods and services........... $1,633,019
Gross profit.............................. 193,122
Restructuring and merger costs............ --
Operating income.......................... 88,861
Income (loss) from continuing operations
before income taxes, minority interest,
equity in net income of investee
companies, extraordinary items and
cumulative effect of accounting
changes................................. 56,956
Income (loss) from continuing operations
before extraordinary items and
cumulative effect of accounting
changes................................. 34,106
Net income (loss)......................... $ 28,904
Earnings (loss) per share, primary (1).... 0.82
Weighted average shares outstanding,
primary................................. 35,175
Earnings (loss) per share, fully-diluted
(2)(3).................................. 0.81
Weighted average shares outstanding,
fully-diluted........................... 35,491
OTHER DATA:
Gross Margin.............................. 11.8%
Operating Margin.......................... 5.4%
Tobacco inventory......................... $ 209,541
Depreciation and amortization............. 14,813
Capital Expenditures...................... 24,334
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS
ENDED MARCH 31
1996 1995
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital....................................................................................... $ 298,762 $ 203,177
Total assets.......................................................................................... 1,011,291 987,456
Total debt............................................................................................ 388,710 474,582
Stockholders' equity.................................................................................. 311,232 283,229
</TABLE>

(1) Includes non-recurring restructuring and merger costs of $.14 and $.68 per
share for the nine months ended March 31, 1995, and the fiscal year ended
June 30, 1995, respectively.

(2) Includes non-recurring restructuring and merger-related costs of $.13 per
share for the nine months ended March 31, 1995.

(3) Anti-dilutive for the nine months ended March 31, 1995 and the years ended
June 30, 1995 and 1994.

<PAGE>
RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS,
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS IN
EVALUATING AN INVESTMENT IN THE SHARES OFFERED HEREBY. THIS PROSPECTUS CONTAINS
CERTAIN FORWARD-LOOKING STATEMENTS. THE COMPANY WISHES TO CAUTION READERS THAT
THE FOLLOWING IMPORTANT FACTORS, AMONG OTHER THINGS, IN SOME CASES HAVE
AFFECTED, AND IN THE FUTURE COULD AFFECT, THE COMPANY'S ACTUAL RESULTS AND COULD
CAUSE THE COMPANY'S ACTUAL RESULTS FOR 1996 AND BEYOND, TO DIFFER MATERIALLY
FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY, OR ON BEHALF OF,
THE COMPANY.

VARIABILITY OF ANNUAL AND QUARTERLY FINANCIAL RESULTS

The comparability of the Company's financial results, particularly the
quarterly financial results, may be significantly affected by fluctuations in
tobacco growing seasons and customer instructions with regard to the shipment of
processed tobacco. The cultivation period for tobacco is dependent upon a number
of factors, including the weather and other natural events, and the Company's
processing schedule can be significantly altered by variations in harvesting
periods.

Further, it is not possible to predict with precision the timing of orders
or shipments, and the Company may from time to time in the ordinary course of
business keep a significant amount of processed tobacco in inventory for its
customers to accommodate their inventory management and other needs. Sales and
revenue recognition by the Company and its subsidiaries is based on the passage
of ownership, usually with shipment of product. Since individual shipments may
represent significant amounts of revenue, the Company's quarterly and annual
financial results may vary significantly depending on its customers' needs and
shipping instructions. In particular, because deliveries of Brazilian tobacco
are made at the end of the fourth fiscal quarter of each year or the beginning
of the first quarter of the following year, significant amounts of revenue and
operating profits may shift from fiscal year to fiscal year. See "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
"Business -- Tobacco -- Seasonality" and "Business -- Flowers -- Seasonality."

GOVERNMENTAL INTERVENTION

In recent years, governmental entities in the U.S. at all levels have taken
or have proposed actions that may have the effect of reducing consumption of
cigarettes. These activities have included: (i) the U.S. Environmental
Protection Agency's decision to classify tobacco environmental smoke as a "Group
A" (known human) carcinogen; (ii) restrictions on the use of tobacco products in
public places and places of employment including a proposal by the U.S.
Occupational Safety and Health Administration to ban smoking in the work place;
(iii) proposals by the U.S. Food and Drug Administration to sharply restrict
cigarette advertising and promotion and to regulate nicotine as a drug; (iv)
increases in tariffs on imported tobacco; (v) proposals to increase the U.S.
excise tax on cigarettes; (vi) the recently announced policy of the U.S.
government to link certain federal grants to the enforcement of state laws
banning the sale of tobacco products to minors and (vii) recent filings of
lawsuits against cigarette manufacturers by several U.S. states seeking
reimbursement of Medicaid and other expenditures claimed to have been made by
such states to treat diseases allegedly caused by cigarette smoking. It is not
possible to predict the extent to which governmental activities might affect the
Company's business.

In 1993, Congress enacted a law (the 75/25 Rule) requiring that all
domestically manufactured cigarettes contain at least 75% domestically grown
tobacco. Although that law was repealed in 1995 and was replaced with import
quotas designed to assist domestic tobacco growers, the law had the effect of
drastically decreasing demand for foreign tobacco in the domestic production of
cigarettes. It is not possible to predict the extent to which future
governmental activities might affect the Company's business.

A number of foreign countries have also taken steps to restrict or prohibit
cigarette advertising and promotion, to increase taxes on cigarettes and to
discourage cigarette smoking. In some cases, such restrictions are more onerous
than those in the U.S. For example, advertising and promotion of cigarettes has
been banned or severely restricted for a number of years in Australia, Canada,
Finland, France, Italy, Singapore and a number of other countries. It is
impossible to predict the extent to which restrictions on advertising might
affect the Company's business.

SMOKING AND HEALTH ISSUES

Reports and speculation with respect to the alleged harmful physical
effects of cigarette smoking have been publicized for many years and, together
with restrictions on cigarette advertisements, requirements that warning
statements be placed on cigarette packaging and in advertising, increased taxes
on tobacco products and controls in certain foreign countries on production and
prices, decreased social acceptance of smoking and increased pressure from
anti-smoking groups have had an ongoing adverse effect on sales of tobacco
products. In addition, litigation is pending against the leading U.S.
manufacturers

<PAGE>
of consumer tobacco products seeking damages for health problems alleged to have
resulted from the use of tobacco in various forms. It is not possible to predict
the outcome of such litigation or what effect adverse developments in pending or
future litigation against manufacturers might have on the business of the
Company.

RELIANCE ON SIGNIFICANT CUSTOMERS

The Company's customers are manufacturers of cigarette and tobacco products
located in approximately 60 countries around the world. Several of these
customers individually account for a significant portion of the Company's sales
in a normal year, and the loss of any one or more of such customers could have a
material adverse effect on the Company's results of operations. Approximately
46% and 53% of the Company's consolidated tobacco sales for the nine months
ended March 31, 1996, and fiscal 1995, respectively, were made to 33 customers
that the Company believes are owned or under common control of Japan Tobacco,
Inc. ("Japan Tobacco"), Philip Morris Companies, Inc. ("Philip Morris"), or RJR
Tobacco Company, Inc. ("RJR"), each of which contributed in excess of 10% of
consolidated tobacco sales, with Philip Morris and RJR accounting for
significantly larger portions of the Company's sales than Japan Tobacco. See
"Business -- Tobacco -- Operations -- Selling."

INTERNATIONAL BUSINESS RISKS

The Company's international operations are subject to international
business risks, including unsettled political conditions, expropriation, import
and export restrictions, exchange controls, inflationary economies and currency
risks and risks related to the restrictions of repatriation of earnings or
proceeds from liquidated assets of foreign subsidiaries. In certain countries,
the Company has advanced substantial sums or guaranteed local loans or lines of
credit in substantial amounts for the purchase of tobacco from growers. Risk of
repayment is normally limited to the tobacco season, and the maximum exposure
occurs within a shorter period.

The Company's tobacco business is generally conducted in U.S. dollars, as
is the business of the industry as a whole. Accordingly, there is minimal
currency risk related to the sale of tobaccos. However, local country operating
costs, including the purchasing and processing costs for tobaccos, are subject
to the effects of exchange fluctuations of the local currency against the U.S.
dollar. The Company attempts to minimize such currency risks by matching the
timing of its working capital borrowing needs against the tobacco purchasing and
processing funds requirements in the currency of the country of tobacco origin.
Fluctuations in the value of foreign currencies can significantly affect the
Company's operating results. See Note J to the Company's Consolidated Financial
Statements for the year ended June 30, 1995, included herein.

The Company has expanded its international operations in areas where the
export of tobacco has increased due to increased demand for lower-priced
tobacco. In particular, the Company has a significant concentration of its
purchasing, processing and exporting operations in southern Brazil. In recent
years, Brazil's economic problems have received wide publicity, and that country
has taken and is expected to continue to take various actions relating to
foreign currency exchange controls and adjustments for devaluation of the
currency and inflation. While such controls generally influence the amount of
cash dividends remitted from Brazil and such adjustments can adversely affect
the Company's processing costs, they have not and are not expected to adversely
affect the Company's ability to export tobacco from Brazil. However, the
Company's sales and operating profits from South America decreased significantly
in fiscal 1994. While sales recovered in fiscal 1995, operating profits did not
recover to the same extent, primarily due to Brazil's monetary policy adopted in
July 1994. This policy, along with the weakened U.S. dollar, caused the dollar
cost of the 1995 Brazilian crop to increase by 40% over the cost of the 1994
crop. As a result, even though the worldwide oversupply of tobacco has been
reduced and uncertainties in the U.S. import market related to government
regulation have eased, operating profits from the Company's South American sales
have not rebounded to the levels they reached in 1993. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

SIGNIFICANT SHAREHOLDERS

Upon completion of the Offering, members of the Monk family will own
approximately 25% of the Company's Common Stock. If they determined to vote
together, subject to the restrictions regarding proxy solicitations contained in
the Company's shareholder rights plan, described herein, the Monk family would
be able to exercise substantial influence on the outcome of any issues submitted
to a vote of the Company's stockholders, including election of the Company's
Board of Directors, adoption of amendments to the Company's Articles of
Incorporation and approvals of mergers or sales of the Company's assets. See
"Principal and Selling Stockholders" and "Description of Capital Stock -- Rights
Plan."

RESTRICTIONS ON DIVIDENDS

Under the terms of the Indenture, dated , 1996, between the Company
and Crestar Bank, as trustee, relating to the Notes (the "Indenture"), the
Company will not be permitted to make certain restricted payments, including
cash dividends on its common stock, under certain circumstances. The Company
generally may make such restricted payments, provided that (i) the Company is
not in default under the Indenture, (ii) the Company is able to incur at least
$1.00 of additional indebtedness under a consolidated interest coverage ratio
test set forth in the Indenture, and (iii) the aggregate amount of the

<PAGE>
payments to be made is less than the total of (a) $20.0 million, (b) 50% of the
Company's consolidated net income for the period from April 1, 1996, through the
end of the Company's most recent fiscal quarter and (c) the net cash proceeds
from the sale by the Company of any equity securities or debt securities that
are converted into equity securities. As of May 15, 1996, the Company was
permitted to make restricted payments, including cash dividends on its Common
Stock, of up to $20 million.

USE OF PROCEEDS

All of the Shares offered hereby are being offered and sold by the Selling
Stockholders. Accordingly, the Company will not receive any of the proceeds from
this Offering.

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

The Company's Common Stock is traded on the NYSE under the symbol "DMN."
The Common Stock began trading on the NYSE on April 3, 1995. The following table
sets forth for the periods indicated the high and low sales prices of the Common
Stock as reported by the NYSE and the amount of dividends declared per share for
the periods indicated.

<TABLE>
<CAPTION>
DIMON
COMMON STOCK DIVIDENDS
HIGH LOW DECLARED (1)
<S> <C> <C> <C>
Fiscal Year 1996
Fourth Quarter (through May 20)........................................... 19 1/2 16 1/8 --
Third Quarter............................................................. 20 7/8 16 .135
Second Quarter............................................................ 18 3/4 13 3/4 .135
First Quarter............................................................. 17 5/8 14 5/8 .135

Fiscal Year 1995(1)
Fourth Quarter............................................................ 18 5/8 14 .135
</TABLE>
<TABLE>
<CAPTION>
DIBRELL MONK-AUSTIN
COMMON STOCK (2) COMMON STOCK (4)
HIGH-LOW (3) HIGH-LOW
<S> <C> <C>
Third Quarter............................................................. $14 2/3 -10 2/3 $13 1/4 -11 5/8
Second Quarter............................................................ 14 5/6 -13 15 -12 7/8
First Quarter............................................................. 13 1/2 - 9 1/4 15 -12 1/4

Fiscal Year 1994
Fourth Quarter............................................................ 12 5/6 - 8 5/6 16 5/8 -12
Third Quarter............................................................. 18 -12 1/3 19 1/8 -15 3/8
Second Quarter............................................................ 21 1/2 -16 3/16 17 -13 1/2
First Quarter............................................................. 20 1/2 -15 1/3 16 -13

<S> <C>
Third Quarter............................................................. .090
Second Quarter............................................................ .090
First Quarter............................................................. .090

Fiscal Year 1994
Fourth Quarter............................................................ .085
Third Quarter............................................................. .085
Second Quarter............................................................ .085
First Quarter............................................................. .085
</TABLE>

(1) Dividends declared through the third quarter of 1995 represent dividends of
Dibrell. Monk-Austin paid no dividends.

(2) Prior to April 1, 1995, Dibrell common stock was traded on The Nasdaq
National Market.

(3) Adjusted to reflect the issuance of 1.5 shares of DIMON Common Stock for
each share of Dibrell common stock in the Merger.

(4) Prior to April 1, 1995, Monk-Austin common stock was traded on the NYSE.

The last sale price of the Common Stock as reported on the NYSE on May 20,
1996, was $18.75. As of May 20, 1996, there were approximately 1,300 holders of
record of the Common Stock. Management of the Company believes that there are in
excess of 3,600 beneficial holders of its Common Stock. The Company pays
dividends quarterly.

The Company is subject to certain restrictions on its ability to pay
dividends on its Common Stock under the Indenture. See "Risk
Factors -- Restrictions on Dividends."

<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
NINE MONTHS
ENDED MARCH 31 YEAR ENDED JUNE 30
1996 1995 1995 1994 1993 1992 1991
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
INCOME STATEMENT DATA:
Net sales of goods and services.... $1,663,661 $1,547,534 $1,927,749 $1,449,078 $1,680,616 $1,698,314 $1,633,019
Cost of goods and services sold.... 1,481,128 1,404,544 1,757,516 1,317,286 1,457,828 1,481,482 1,439,897
Gross profit....................... 182,533 142,990 170,233 131,792 222,788 216,832 193,122
Selling, general and administrative
expenses......................... 102,736 94,883 132,802 117,311 111,957 110,738 104,261
Restructuring and merger-related
costs............................ 5,568 -- 25,955 -- -- -- --
Operating income................... 74,229 48,107 11,476 14,481 110,831 106,094 88,861
Interest income.................... 6,687 6,631 7,512 7,025 5,716 4,931 9,531
Interest expense................... 38,036 34,139 45,231 35,117 38,128 42,837 40,306
Other income (expense), net........ 9,239 3,714 4,079 8,256 17,268 6,111 (1,130)
Income (loss) from continuing
operations before income taxes,
minority interest, equity in net
income of investee companies,
extraordinary items and
cumulative effect of accounting
changes.......................... 52,119 24,313 (22,164) (5,355) 95,687 74,299 56,956
Income taxes....................... 20,847 13,157 5,980 2,767 31,173 23,590 24,587
Income (loss) applicable to
minority interest................ 242 272 216 466 486 214 541
Equity in net income of investee
companies (net of taxes)......... (290) (1,121) (1,805) 98 1,259 5,112 2,278
Income (loss) from continuing
operations before extraordinary
items and cumulative effect of

accounting changes............... 30,740 9,763 (30,165) (8,490) 65,287 55,607 34,106
Extraordinary items (1)............ 1,400 -- -- -- -- 2,573 (5,202)
Cumulative effect of accounting
changes (2)...................... -- -- -- -- (783) -- --
Net income (loss).................. $ 32,140 $ 9,763 $ (30,165) $ (8,490) $ 64,504 $ 58,180 $ 28,904
Earnings (loss) per share,
primary (3)...................... $ 0.83 0.26 (0.79) (0.22) 1.74 1.64 0.82
Weighted average shares
outstanding, primary............. 38,739 38,082 38,100 38,091 37,072 33,354 35,175
Earnings (loss) per share, fully-
diluted (4)(5)................... $ 0.80 -- -- -- 1.63 1.47 0.81
Weighted average shares
outstanding, fully-diluted....... 42,467 42,294 42,355 42,297 41,310 39,626 35,491

OTHER DATA:
Gross Margin....................... 11.0% 9.2% 8.8% 9.1% 13.3% 12.8% 11.8%
Operating Margin................... 4.5% 3.1% 0.6% 1.0% 6.6% 6.2% 5.4%
Tobacco inventory.................. $ 343,484 $ 295,724 $ 410,431 $ 403,211 $ 324,768 $ 289,201 $ 209,541
Depreciation and amortization...... 24,234 21,891 31,852 28,862 24,559 24,087 14,813
Capital Expenditures............... 20,609 18,845 35,892 32,382 42,232 34,818 24,334
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NINE MONTHS
ENDED MARCH 31 YEAR ENDED JUNE 30
1996 1995 1995 1994 1993 1992 1991
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>

(IN THOUSANDS, EXCEPT PERCENTAGES AND RATIOS)
BALANCE SHEET DATA:
Working capital................................... $ 298,762 $203,177 $ 277,597 $ 217,667 $242,600 $218,405 $177,355
Total assets...................................... 1,011,291 987,456 1,093,608 1,043,816 998,520 940,266 798,450
Total debt........................................ 388,710 474,582 594,192 515,133 482,838 542,006 454,099
Stockholders' equity.............................. 311,232 283,229 238,806 288,314 308,149 222,962 172,254
</TABLE>

(1) Extraordinary items include a reserve on Iraqi receivables of ($5.2) million
and ($3.6) million, net of tax, in 1991 and 1992, respectively, a reduction
of foreign income tax arising from utilization of prior years' operating
losses of $6.2 million in 1992 and a partial recovery against the 1992 Iraqi
extraordinary trade receivable reserve of $1.4 million, net of tax, in the
six months ended December 31, 1995.

(2) Cumulative effect of accounting changes includes postretirement benefit
plans of ($9.7) million, net of tax, and income taxes of $9.0 million in
1993.

(3) Includes non-recurring restructuring and merger costs of $.14 and $.68 per
share for the nine months ended March 31, 1996, and the fiscal year ended
June 30, 1995, respectively.

(4) Includes non-recurring restructuring and merger costs of $.13 per share for
the nine months ended March 31, 1996.

(5) Anti-dilutive for the nine months ended March 31, 1995 and the years ended
June 30, 1995 and 1994.

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company is engaged in two business segments: the purchasing, processing
and selling of leaf tobacco and the purchasing and selling of fresh-cut flowers.

The Company believes that it is the world's second largest independent
purchaser and processor of leaf tobacco. Approximately 80% and 75% of the
Company's revenues in fiscal 1995 and fiscal 1994, respectively, were derived
from its tobacco operations. The Company's tobacco operating profits fluctuate
from year to year, primarily due to changes in worldwide supply and demand and
government regulations. See "Risk Factors -- Variability of Annual and Quarterly
Financial Results."

The Company's tobacco business is generally conducted in U.S. dollars, as
is the business of the industry as a whole. Accordingly, there is minimal
currency risk related to the sale of tobaccos. However, local country operating
costs, including the purchasing and processing costs for tobaccos, are subject
to the effects of exchange fluctuations of the local currency against the U.S.
dollar. The Company attempts to minimize such currency risks by matching the
timing of its working capital borrowing needs against the tobacco purchasing and
processing funds requirements in the individual countries of tobacco origin.
Fluctuations in the value of foreign currencies can significantly affect the
Company's operating results. See "Risk Factors -- International Business Risks"
and Note J to the Company's Consolidated Financial Statements for the year ended
June 30, 1995, included herein.

The remainder of the Company's revenues are derived from purchasing and
selling fresh-cut flowers. Florimex has two principal operations, importing,
exporting and wholesaling fresh-cut flowers, and exporting fresh-cut flowers
purchased primarily from the major flower auctions in The Netherlands.
Approximately 20% of the Company's 1995 revenues were derived from its flower
operations.

On April 1, 1995, Dibrell and Monk-Austin merged into DIMON. The Merger has
been accounted for as a pooling of interests and all consolidated financial
statements have been restated to include the historical results of operations of
both Dibrell and Monk-Austin including the effects of conforming the accounting
policies of the two former entities. Recorded assets and liabilities have been
carried forward at their historical book values.

In connection with the Merger, the Company initiated a restructuring plan
including both the tobacco and flower businesses. The plan is designed to
eliminate unprofitable locations, consolidate duplicative processing facilities,
reduce the salaried workforce, improve operating efficiencies and increase
regional unit accountability. This initiative resulted in the recognition of
various charges in fiscal 1995, aggregating $17.8 million, and the first nine
months of fiscal 1996, aggregating $5.6 million. These charges, together with
additional anticipated charges of $6 million to $9 million in the fourth quarter
of fiscal 1996, are expected to reduce the Company's annual operating costs and
expenses by approximately $25 million in fiscal 1997 when the benefits are
expected to be fully realized.

Concurrent with the execution of its business strategy, the Company
implemented the Refinancing Plan designed to reduce its financial leverage,
decrease its reliance on short-term uncommitted lines of credit and diversify
its sources of debt financing. The Refinancing Plan consists of (i) the call for
redemption in March 1996 of the 7 3/4% Debentures, (ii) the sale of the Notes,
expected to be completed in May 1996, and (iii) the execution of the New Credit
Facility, replacing the Former Credit Facility.

<PAGE>
RESULTS OF OPERATIONS

The following table expresses items in the Statement of Consolidated Income
as a percentage of sales for each of the three most recent fiscal years and for
the nine-month periods ended March 31, 1996 and 1995. Any reference in the table
and the following discussion to any given year is a reference to the Company's
fiscal year ended June 30.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
MARCH 31 YEAR ENDED JUNE 30
1996 1995 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net sales of goods and services.............................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods and services sold.............................................. 89.0 90.8 91.2 90.9 86.7
Gross margin................................................................. 11.0 9.2 8.8 9.1 13.3
Selling, general and administrative expenses................................. 6.2 6.1 6.9 8.1 6.7
Restructuring and merger related costs....................................... 0.3 -- 1.3 -- --
Operating income............................................................. 4.5 3.1 0.6 1.0 6.6
Other income (expense) -- net (1)............................................ (1.3) (1.5) (1.8) (1.4) (0.9)
Income (loss) before income taxes, minority interest, equity in net income of
investee companies and cumulative effect of accounting changes............. 3.1 1.6 (1.2) (0.4) 5.7
Income taxes................................................................. 1.3 0.9 0.3 0.2 1.9
Equity in net income of investee companies................................... -- (0.1) (0.1) -- 0.1
Extraordinary items.......................................................... 0.1 -- -- -- --
Cumulative effect of accounting changes...................................... -- -- -- -- (0.1)
Net income (loss)............................................................ 1.9% 0.6% (1.6)% (0.6)% 3.8%
</TABLE>

(1) Includes other income, interest and sundry and other deductions, interest
and sundry.

COMPARISON OF NINE MONTHS ENDED MARCH 31, 1996 TO SIX MONTHS ENDED MARCH 31,
1995

Net sales of goods and services for the nine month period ended March 31,
1996 were $1.664 billion, an increase of 7.5% from $1.548 billion for the nine
month period ended March 31, 1995. Net sales from tobacco operations increased
8.3%, to $1.367 billion in the nine month period ended March 31, 1996 from
$1.261 billion in the corresponding period in 1995. The increase in tobacco
sales was due to higher average prices and increased quantities of foreign grown
tobacco and increased service revenues from U.S. tobacco, partially offset by
lower average prices for U.S. grown tobacco. The increase in average prices of
foreign grown tobacco, increased quantities of foreign grown tobacco, and
increased service revenues accounted for $78.2 million, $47.1 million, and $42.7
million of the increase in tobacco revenues, respectively, offset by a $67.6
million decrease due to lower average prices for U.S. grown tobacco. The
increased foreign tobacco sales were primarily the result of higher tobacco
sales in Africa and Europe.

Net sales from flower operations increased 3.8%, from $286.1 million in the
nine month period ended March 31, 1995 to $296.9 million for the nine month
period ended March 31, 1996. This increase in flower sales was primarily due to
the effects of applying U.S. dollar exchange rates to the European flower
operations.

Cost of sales and expenses, including selling, general and administrative
expenses and restructuring and merger related costs for the nine month period
ended March 31, 1996 were $1.589 billion, an increase of 6.0% from $1.499
billion for the nine month period ended March 31, 1995. This increase included
$5.6 million in restructuring charges in the nine month period ended March 31,
1996. Cost of sales and expenses for the tobacco operations increased 6.6% in
the nine month period ended March 31, 1996 over the corresponding period in
1995, primarily due to the higher net sales in the period of tobacco grown in
Africa and Europe. The gross profit for the tobacco operations increased 31.2%
for the nine month period ended March 31, 1996 over the corresponding period in
1995, primarily due to increased sales and gross margins on the operations in
Europe and increased gross margins for the operations in South America and
Africa. The Company's gross margin for tobacco operations improved to 11.1% for
the nine month period ended March 31, 1996 from 9.2% for the corresponding
period in 1995, due to higher gross margins in the U.S. and Brazilian tobacco
operations.

<PAGE>
Cost of sales and expenses for the flower operations increased 1.9% in the
nine month period ended March 31, 1996 over the corresponding period in 1995,
primarily due to increased sales. The Company's gross margin for flower
operations improved to 10.3% for the nine month period ended March 31, 1996 from
9.5% for the corresponding period in 1995, due to lower costs in the European
flower operations.

Corporate expenses increased $5.4 million, or 68.0%, for the nine month
period ended March 31, 1996 from the corresponding period in 1995, primarily due
to increased bonuses accrued, professional expenses, and costs related to
revolving credit facilities and restructuring costs related to severance which
will reduce the number of employees on the corporate staff.

Other income, interest and sundry, increased $5.3 million, or 47.7%, for
the nine month period ended March 31, 1996 from the corresponding period in
1995, primarily due to the increase in sundry income. The increase in sundry
income is primarily due to the tobacco operations and the $3.7 million gain on
the sale of its 50% interest in an unconsolidated Brazilian affiliate.

Other deductions, primarily interest expense, increased $3.7 million, or
10.5%, for the nine month period ended March 31, 1996 from the corresponding
period in 1995. Interest expense increased $3.9 million, primarily due to
increased average short-term borrowings.

The effective tax rate decreased to 40.0% for the nine month period ended
March 31, 1996 from 54.1% for the corresponding period in 1995, based on
estimates of taxable income projected for each year. The higher effective tax
rate in 1995 was due to tax and monetary regulations in Brazil.

Equity in net loss of the tobacco investee companies decreased $0.8
million, or 74.1%, for the nine month period ended March 31, 1996 from the
corresponding period in 1995. The decrease is primarily due to the Company's
investee in Brazil which was sold during fiscal 1996.

COMPARISON OF THE YEAR ENDED JUNE 30, 1995 TO THE YEAR ENDED JUNE 30, 1994

The Company's net sales of goods and services in 1995 were $1.928 billion,
an increase of 33.0% from $1.449 billion in 1994. Net sales from tobacco
operations increased 42.8%, from $1.082 billion in 1994 to $1.544 billion in
1995, primarily due to higher prices and increased production primarily from the
U.S. and Brazil. The higher tobacco prices and increased production quantities
from the U.S. accounted for $88.1 million and $248.5 million, respectively,
while the increased production quantities from Brazil accounted for
substantially all of the increase from Brazil. The Company's increase in net
sales of U.S. tobacco was primarily attributable to the Company's 1994 agreement
to purchase the U.S. tobacco needs for RJR. The increased sales of tobacco from
Brazil resulted from the sales of uncommitted stocks from prior year crops.

Net sales of flowers increased 4.4%, from $367.5 million in 1994 to $383.6
million in 1995. The increase in the Company's sales of flowers was primarily
due to the favorable effect of applying U.S. dollar exchange rates to European
operations, but these favorable effects were partially offset by decreased sales
of certain North American operations that were closed during the year. The
application of exchange rates increased sales by $35.5 million and the closing
of operations decreased sales by $15.7 million.

Cost of sales and expenses of the Company's tobacco operations increased
42.9% in 1995 from 1994 due primarily to the 42.8% increase in net sales. The
world oversupply of tobacco, which began in fiscal 1993, started to improve in
fiscal 1995 as indicated by the improvement in the tobacco operating margin
(operating income), before restructuring and merger related costs. As a percent
of net sales, operating margins increased to 3.2% in 1995 compared to 1.8% in
1994. See "Business -- Tobacco -- The Tobacco Leaf Industry -- Recent Market
Conditions." However, sales prices continued to be negatively affected by the
oversupply, causing the Company to reduce the carrying amount of its tobacco
inventory at year end by $9.2 million, reflecting the revaluation of that
inventory at the lower of its cost or market value.

Cost of sales and expenses of the flower operations increased by 6.0% in
1995 from 1994 primarily due to the sales increase of 4.4% and increased bad
debts associated with flower operations now closed and other costs, inclusive of
restructuring costs. The flower operating income decreased from 0.3% of net
sales in 1994 to (1.2)% of net sales in 1995, primarily due to decreased gross
margins of both the U.S. operations that were closed and the Baardse operations
and by increased costs mentioned above. Corporate expenses increased $3.7
million, or 64.9%, to $9.4 million in 1995 from $5.7 million in 1994, due
primarily to increased personnel costs and legal and professional expenses in
1995 and reversals of prior accruals in 1994 for stock appreciation rights and
certain stock options.

Restructuring charges for the tobacco and flower operations amounted to
$15.2 million and $2.6 million, respectively. The charges are comprised of $12.6
million for employee separations, $2.8 million for facility closures, $2.4
million for asset

<PAGE>
writedowns and other items. In addition the Company incurred $8.1 million for
merger related charges for legal, accounting and financial advisors.

Other income, interest and sundry, decreased $2.3 million in 1995. The
decrease relates to the Company's tobacco operations, resulting from the gain on
the sale of substantially all of the operating assets of Korean American Tobacco
Company in 1994 and decreased rental income.

Other deductions, primarily interest expense, increased $11.5 million in
1995, primarily due to higher borrowings because of increased average
inventories and, to a lesser extent, higher average interest rates.

The Company had tax expense in spite of the overall pre-tax loss in 1995
due to the effects of foreign tax rates, the mix of income and losses of
subsidiaries, the currency effect in Brazil and non-deductible merger expenses.

The $1.9 million decrease in equity in net income of investee companies in
1995 was due primarily to the devaluations of the local currency for the
Company's investee with operations in Zimbabwe and decreased earnings for the
operations in Malawi and Brazil.

COMPARISON OF THE YEAR ENDED JUNE 30, 1994 TO THE YEAR ENDED JUNE 30, 1993

The Company's net sales of goods and services in 1994 were $1.449 billion,
a decrease of 13.8% from $1.681 billion in 1993. Net sales from tobacco
operations decreased 17.0%, from $1.303 billion in 1993 to $1.082 billion in
1994, primarily due to lower prices and decreased quantities primarily from
Brazil, the U.S. and Argentina. The lower prices and decreased quantities of
tobacco were due to the worldwide surplus and uncertainties in the U.S. relating
to the domestic content law and the proposed increased excise taxes on
cigarettes.

The Company's net sales of flowers decreased 2.6%, from $377.4 million in
1993 to $367.5 million in 1994, primarily as an effect of applying U.S. dollar
exchange rates to the European operations.

Cost of sales and expenses of the Company's tobacco operations decreased
10.7% in 1994 from 1993 due primarily to the 17.0% decrease in sales, which was
offset partially by other increased costs due to $40.9 million in charges
related to the revaluation at the lower of cost or market of certain tobacco
inventories and advances, primarily in South America. The tobacco operating
margin (operating income) as a percent of net sales was 1.8% in 1994 compared to
8.7% in 1993. The decrease in operating margins and operating profit resulted
from decreased margins on tobacco of practically all origins due to the
worldwide surplus, uncertainties in the U.S. and the $40.9 million valuation
charges mentioned above, all of which were partially offset by increased gross
margins on tobacco from Zimbabwe.

Cost of sales and expenses of the Company's flower operations decreased by
2.0% in 1994 from 1993 primarily due to the sales decrease of 2.6% and the
inclusion, in 1993 results, of operational studies and bad debts at Baardse, all
of which were partially offset in 1994 by increased bad debts and other costs in
the U.S. operations. The cost in 1993 of operational studies and bad debts at
Baardse of $3.3 million were offset partially by increased 1994 bad debts and
other costs in the U.S. operations of $2.2 million with the decrease in sales
accounting for the balance of the decrease. The flower operating income
decreased from 1.0% of net sales in 1993 to 0.3% of net sales in 1994, primarily
due to decreased gross margins, offset by decreased costs mentioned above.
Corporate expenses decreased $0.9 million, or 13.6%, in 1994 from $6.6 million
in 1993, due primarily to reduced accruals for bonuses and reversals of prior
accruals for stock appreciation rights and certain stock options.

Other income, interest and sundry, decreased $10.0 million in 1994. The
decrease relates to the Company's tobacco operations, primarily due to items in
1993 not repeated in 1994, including currency exchange gains in Brazil and the
United Kingdom not related to operations, settlements of insurance proceeds
resulting from the Mexican flood loss and gains on sale of property and
equipment.

Other deductions, sundry, decreased $2.3 million in 1994, primarily due to
the tobacco operations and $1.4 million of charges incurred in 1993 on the
uncompleted merger with Standard Commercial Corporation.

Interest expense decreased $3.0 million in 1994, or 7.9%, from $38.1
million in 1993, primarily due to the financing of foreign tobaccos through U.S.
bank lines at rates lower than the rates available through foreign bank lines.

Due to the mix of income and losses among its subsidiaries, the Company had
tax expense in spite of the overall pre-tax loss in 1994. The Company's
effective income tax rate was 32.6% in 1993. The increase in the tax rate, due
to the August 1993, change in U.S. tax laws, had no material effect on the
Company.

<PAGE>
The decrease in equity in net income of investee companies in 1994 was due
primarily to the loss from operations of the investee located in Brazil,
partially offset by devaluations of the local currency for the Company's
investee with operations in Zimbabwe.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes items from the Company's Consolidated
Balance Sheet and the Statement of Consolidated Cash Flows.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31 YEAR ENDED JUNE 30
1996 1995 1995 1994 1993
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT FOR CURRENT RATIO) (UNAUDITED)
Cash and cash equivalents........................................ $ 12,148 $ 56,225 $ 42,326 $ 12,471 $ 16,399
Net trade receivables............................................ 195,999 175,621 182,750 164,314 217,098
Inventories and advances on purchases
of tobacco..................................................... 438,383 364,417 468,989 469,015 424,015
Total current assets............................................. 662,756 624,735 731,119 685,443 666,454
Notes payable to banks........................................... 101,288 216,431 233,736 255,607 244,051
Accounts payable................................................. 126,514 106,141 90,446 112,310 124,103
Total current liabilities........................................ 363,994 421,558 453,522 467,776 423,854
Current ratio.................................................... 1.8 to 1 1.5 to 1 1.6 to 1 1.5 to 1 1.6 to 1
Revolving credit notes and other long-term debt.................. 278,440 184,113 292,528 188,825 180,270
Convertible subordinated debentures.............................. -- 56,475 56,370 56,475 56,475
Stockholders' equity............................................. 311,232 283,229 238,806 288,314 308,149
Purchase of property and equipment............................... 20,609 18,845 35,892 32,382 42,232
Proceeds from sale of property and equipment..................... 3,273 3,286 4,877 5,991 5,220
Depreciation and amortization.................................... 24,234 21,891 31,852 28,862 24,559
</TABLE>

The purchasing and processing activities of the Company's tobacco business
are seasonal. The Company's need for capital fluctuates accordingly and, at any
of several seasonal peaks, the Company's outstanding indebtedness may be
significantly greater or lesser than at year end. The Company historically has
needed capital in excess of cash flow from operations to finance inventory and
accounts receivable and, more recently, to finance acquisitions of foreign
tobacco operations and flower operations. The Company also prefinances tobacco
crops in certain foreign countries by making cash advances to farmers prior to
and during the growing season.

The Company's working capital increased from $277.6 million at June 30,
1995, to $298.8 million at March 31, 1996. The current ratio of 1.6 to 1 at June
30, 1995, increased to 1.8 to 1 at March 31, 1996, as current liabilities
decreased at a higher percentage than the percentage decrease of current assets.
The decreases in the individual components of current assets and current
liabilities reflect a seasonal decrease in the level of tobacco operations.
Current assets decreased primarily due to the decreases in tobacco inventories
of $66.9 million and in prepaid expenses of $19.3 million, partially offset by
increases in trade receivables of $13.2 million and advances on purchases of
tobacco of $30.1 million. Tobacco inventories decreased due primarily to the
seasonal decrease in the operations in the U.S. Current liabilities decreased
primarily due to the decreases in notes payable to banks of $132.4 million,
partially offset by increases in accounts payable-other of $27.6 million and in
advances from customers of $27.4 million.

Cash and cash equivalents decreased to $12.1 million at March 31, 1996.
Cash flows provided by operating activities increased $42.8 million to $146.5
million in the nine months ended March 31, 1996 over the same period last year,
primarily due to decreased advances from customers, increased accounts payable
and increased net income, offset partially by decreased inventories and advances
on purchases of tobacco as a result of increased sales. Cash flows used by
investing activities increased $7.5 million to $9.5 million primarily due to
decreased payments on notes receivable and receivables from investees and the
purchase of subsidiary, offset partially by increased proceeds from advances.
Cash flows used by financing activities increased $109.0 million to $164.3
million due primarily to the increased repayment of debt and by the decreased
proceeds from debt.

Cash flows from operating activities decreased 81.7% to $6.8 million in
1995 as compared to 1994 and 20.6% to $37.1 million in 1994 as compared to 1993,
which was consistent with the net losses incurred in those periods. Cash flows
used by investing activities decreased $39.6 million, or 73.2%, to $14.5 million
in 1995 as compared to 1994, primarily due to the increase in payments on notes
receivable and amounts due from investees for the same period and the reduction
in issuance

<PAGE>
of notes receivable. The 1995 purchase of subsidiaries was offset with the
Company's 1994 investment in another company. Cash used by investing activities
decreased $3.2 million in 1994 primarily due to this investment, offset
primarily by the reduction in purchase of property and equipment during the
year. Cash provided by financing activities increased $21 million, or 143%, and
$9.1 million, or 167%, in 1995 as compared to 1994 and 1994 as compared to 1993,
respectively, as a result of increased proceeds from debt issuance, which was
offset partially by increased cash dividends paid to shareholders.

At June 30, 1995, the Company had seasonally adjusted lines of credit of
$1.126 billion, including $876 million of uncommitted, unsecured working capital
lines with several banks. At March 31, 1996, the Company had borrowed $101
million under these working capital lines of credit with interest rates ranging
from 5.65% to 22.5%. At March 31, 1996, the unused short-term lines of credit
amounted to $613 million, net of $162 million of letters of credit and
guarantees that reduce lines of credit. Total maximum outstanding borrowings
during the nine months ended March 31, 1996, were $745 million.

To ensure long-term liquidity, the Company entered into the $240 million
New Credit Facility effective March 15, 1996. The New Credit Facility replaced
the Company's $250 million Former Credit Facility. The Company used the Former
Credit Facility to reclassify $250 million of short-term debt to long-term debt
and did not borrow under it. The Company generally uses the New Credit Facility
to reclassify similarly $240 million of its short-term debt. The interest rates
available under the New Credit Facility depend on the type of advance selected
and are based either on the agent bank's base lending rate (which was 8.25% at
May 6, 1996, and is adjusted with changes in interest rates generally) or LIBOR
plus 0.75%, through March 15, 1997, and thereafter plus a spread of 0.45% to
1.25% based on the ratings assigned to the Company's outstanding senior debt or
on its consolidated interest coverage ratio. The New Credit Facility is subject
to certain commitment fees and covenants that among other things require the
Company to maintain minimum working capital and tangible net worth amounts,
require specific liquidity and long-term solvency ratios and restrict
acquisitions and, under certain circumstances, payment of dividends by the
Company. The New Credit Facility terminates on March 15, 1998, but may be
extended thereafter, year to year, upon approval of the Lenders. As of March 31,
1996, there were no borrowings outstanding under the New Credit Facility.

The Company has historically financed its operations through a combination
of short-term lines of credit, customer advances, cash from operations and
equity and equity-linked securities. At March 31, 1996, the Company had no
material capital expenditure commitments. The Company believes that these
sources of funds combined with the Refinancing Plan are sufficient to fund the
Company's purchasing needs for the foreseeable future, including the remainder
of fiscal 1996 and fiscal 1997.

The Company's off balance sheet financing is not material. Certain
operating leases were acquired with the acquisition of, or have been added by,
several foreign tobacco processing facilities and the flower subsidiaries.
However, most operating assets are of long-term and continuing benefit and the
Company has generally purchased these assets.

On February 9, 1996, the Company called all of the Debentures for
redemption on March 11, 1996. As of March 4, 1996, holders of Debentures had
converted approximately 99.85% of the Debentures into 4,035,969 shares of Common
Stock. The remaining Debentures were redeemed on March 11, 1996 for $89,188. The
Company funded the redemption price for these Debentures and expenses of the
redemption from working capital.

The Board of Directors of the Company, at its meeting held on February 23,
1996, declared a quarterly dividend of $0.135 cents per share.

TAX AND REPATRIATION MATTERS

The Company and its subsidiaries are subject to income tax laws in each of
the countries in which they do business through wholly-owned subsidiaries and
through affiliates. The Company makes a comprehensive review of the income tax
requirements of each of its operations, files appropriate returns and makes
appropriate income tax planning analyses directed toward the minimization of its
income tax obligations in these countries. Appropriate income tax provisions are
determined on an individual subsidiary level and at the corporate level on both
an interim and annual basis. These processes are followed using an appropriate
combination of internal staff at both the subsidiary and corporate levels as
well as independent outside advisors in review of the various tax laws and in
compliance reporting for the various operations.

Dividend distributions are regularly made from certain subsidiaries while
the undistributed earnings of certain foreign subsidiaries are not subject to
additional foreign income taxes nor considered to be subject to U.S. income
taxes unless remitted as dividends. The Company intends to reinvest such
undistributed earnings indefinitely; accordingly, no provision has been made for
U.S. taxes on those earnings. The Company regularly reviews the status of the
accumulated earnings of each of its U.S. and foreign subsidiaries and
reevaluates the aforementioned dividend policy as part of its overall financing
plans.

<PAGE>
ACCOUNTING MATTERS

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," which will be effective for the Company's fiscal year 1997
statements. SFAS No. 123 defines a fair value based method of accounting for
stock-based compensation and requires certain disclosures to be made by entities
electing not to adopt this method. The Company has not yet determined the impact
of adoption of SFAS No. 123.

<PAGE>
BUSINESS

The Company is engaged in two international businesses -- the purchasing,
processing and selling of leaf tobacco, primarily flue-cured, burley and
oriental tobaccos, which are the primary components of American blend
cigarettes, and the purchasing, transporting and selling of fresh-cut flowers to
wholesalers and retailers. The Company believes it is the world's second largest
independent worldwide leaf tobacco merchant with an estimated 30% share of the
established worldwide leaf tobacco market. The Company is the successor to
Dibrell and Monk-Austin, which merged in April 1995. The Company's address is
512 Bridge Street, Danville, Virginia 24541 and its telephone number is (804)
792-7511. See Note G to the Company's Consolidated Financial Statements for the
year ended June 30, 1995, included herein, for detailed information regarding
each of the Company's business segments.

TOBACCO

THE LEAF TOBACCO INDUSTRY

The world's large multinational cigarette manufacturers, with one
exception, rely on independent leaf tobacco merchants such as the Company to
supply the majority of their leaf tobacco needs. Leaf tobacco merchants select,
purchase, process, store, pack, ship and, in certain developing markets, provide
agronomy expertise and financing for growing leaf tobacco. At the present time,
there are four major global leaf tobacco merchants including the Company. These
four merchants source, process and ship leaf tobacco around the world, for
delivery to manufacturers of cigarettes and other tobacco products. The Company
believes that the leaf tobacco industry is characterized by the following
trends:

GROWTH OF AMERICAN BLEND CIGARETTES. As a result of increased demand and
strong brand growth, production of American blend cigarettes has increased in
recent years. In addition, worldwide consumption of American blend cigarettes
continues to increase even in some countries where total cigarette consumption
is flat or declining. American blend cigarettes contain less tar and nicotine
and taste milder than cigarettes historically consumed outside of the U.S.
Cigarette production in the U.S. reached record levels in 1995, totaling 741.84
billion units, an increase of 4.1% over 1994, according to the U.S. Department
of Agriculture. Exports of domestically produced cigarettes in 1995 totaled
35.1% of cigarette production in the U.S., up from 31.8% in 1994 and 30.9% in
1993. As American blend cigarettes have continued to gain market share, the
demand for export quality flue-cured, burley and oriental tobaccos sourced and
processed by leaf tobacco merchants has grown accordingly. Although the
consumption of cigarettes increased by 1.0% in the U.S. in 1995, in recent years
the consumption of cigarettes generally has decreased in the U.S. and in some
other countries, and may continue to decrease in the future. The Company
believes that cigarette consumption in certain other countries, however,
including those in Central and Eastern Europe and the former Soviet Union, has
increased.

GROWTH IN FOREIGN OPERATIONS OF LARGE CIGARETTE MANUFACTURERS. Several of
the large multinational cigarette manufacturers have expanded their operations
throughout the world, particularly in Central and Eastern Europe and the former
Soviet Union, in order to increase their access to and penetration of these
markets. As cigarette manufacturers expand their global operations, the Company
believes there will be increased demand for local sources of leaf tobacco and
local tobacco processing and distribution, primarily due to the semi-perishable
nature of unprocessed leaf tobacco and the existence of domestic content laws in
certain countries. The Company believes that the international expansion of the
large multinational cigarette manufacturers will cause these manufacturers to
place greater reliance on the services of financially strong leaf tobacco
merchants with the ability to source and process tobacco on a global basis and
to help develop higher quality local sources of tobacco.

GROWTH IN FOREIGN SOURCED TOBACCO. In an effort to respond to cigarette
manufacturers' increasing demand for lower cost American blend cigarette
ingredients, the major leaf tobacco merchants have made significant investments
in South America, Africa and Asia, the principal sources of flue-cured and
burley tobaccos outside the U.S. This trend is expected to continue in the
foreseeable future as the quality of foreign grown tobacco continues to improve.

IMPROVED MARKET CONDITIONS. The global leaf tobacco industry is currently
recovering after experiencing a disruption in demand and reduction in pricing
during 1993 and 1994. The disruption of the industry in the U.S. during these
years occurred primarily because of (i) the enactment of the 75/25 Rule, (ii) a
poor quality 1993 flue-cured tobacco crop in the U.S. and (iii) the introduction
of legislation in the summer of 1993 to increase significantly the federal
excise tax on cigarettes that resulted in manufacturers' reluctance to build
inventories. Concurrent with the reduction in demand for international tobaccos
related to the 75/25 Rule and lower than expected initial demand for imported
tobacco products in Central and Eastern Europe and the former Soviet Union, the
worldwide price of tobacco declined due to oversupply attributable to record
foreign

<PAGE>
tobacco crops. This combination of reduced demand and lower prices had a
negative impact on the financial performance of the leaf tobacco merchants and
resulted in significant increases in uncommitted tobacco inventories among the
merchants.

In 1994 and 1995, the demand and supply imbalance in the worldwide tobacco
market began to improve. Leaf tobacco production outside the U.S. was curtailed
in response to the high levels of uncommitted tobacco inventories. The 75/25
Rule was repealed due to its violation of GATT and was replaced by a series of
less stringent import quotas. This resulted in cigarette manufacturers in the
U.S. resuming their purchases of tobacco grown outside the U.S. The combination
of lower levels of tobacco production and increased demand had a positive impact
on worldwide tobacco prices, a corresponding positive impact on the
profitability of the industry, and resulted in significant reductions in
uncommitted tobacco inventories.

BUSINESS STRATEGY

The Company's primary business objective is to capitalize on growth in
worldwide consumption of American blend cigarettes by becoming the low-cost
preferred supplier of leaf tobacco to the large multinational manufacturers of
American blend cigarettes. To achieve this objective, the Company has designed a
strategy to position itself to meet the needs of its cigarette manufacturing
customers throughout the world by expanding its global operations directly in
the major tobacco exporting countries and by forming strategic partnerships with
its major customers in countries with emerging tobacco production. The Company's
ability to respond to the global expansion and changing needs of the large
multinational cigarette manufacturers is a critical factor in developing and
expanding customer relationships. The principal components of the Company's
business strategy are as follows:

INCREASE THE COMPANY'S OPERATIONS IN LOW-COST TOBACCO GROWING REGIONS. To
ensure breadth and depth of supply of tobacco, particularly the tobaccos used in
American blend cigarettes, the Company has expanded and plans to continue to
expand its operations in South America, Africa and China, the largest production
areas of flue-cured and burley tobaccos outside of the U.S. In 1995, the Company
signed an agreement with the China National Tobacco Corporation to provide
additional access to a state-of-the art processing facility and tobacco sources
in the province of Yunnan. The Company also made acquisitions in 1995 in
Bulgaria, Greece and Turkey, which the Company believes positions DIMON as the
largest worldwide merchant of oriental tobacco. The Company intends to utilize
its agronomy expertise in helping to develop low-cost sources of American blend
quality tobaccos and its existing relationships with the major multinational
cigarette manufacturers to gain market share in these growth regions.

CAPITALIZE ON OUTSOURCING TRENDS. The Company anticipates further
outsourcing of leaf tobacco purchasing and processing by cigarette
manufacturers. This outsourcing trend is driven by (i) higher margins in
cigarette production, (ii) the increasing sophistication required in sourcing
leaf tobacco on a global basis, (iii) and continued privatization of tobacco and
cigarette production operations in other countries. In 1994, the Company began
providing all leaf tobacco auction buying in the U.S. for RJR, the second
largest cigarette producer in the U.S. More recently, the Company began to
purchase and process all of Lorillard Tobacco Company's ("Lorillard") auction
market tobacco requirements in the U.S.

IMPROVE EFFICIENCY AND REDUCE OPERATING COSTS. In connection with the
Merger, the Company initiated a restructuring plan for its operations. The plan
was designed to eliminate unprofitable locations, consolidate duplicative
processing facilities, reduce the salaried workforce, improve operating
efficiencies and increase regional unit accountability. This initiative resulted
in the recognition of various charges in fiscal 1995, aggregating $17.8 million,
and in the first nine months of fiscal 1996, aggregating $5.6 million. These
charges, together with additional anticipated charges of approximately $6
million to $9 million in the fourth quarter of fiscal 1996, are expected to
reduce the Company's annual operating costs and expenses by approximately $25
million in fiscal 1997 when the benefits are expected to be fully realized. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Since the Merger, the Company has completed the following in
connection with its restructuring plan:

-- Consolidated the former Dibrell and Monk-Austin operations in Brazil
to operate as DIMON do Brazil and sold its 50% interest in a Brazilian
tobacco processing joint venture in November, 1995, recognizing a $3.7
million pre-tax gain;

-- Combined the former Dibrell and Monk-Austin operations in Malawi at
Centraleaf to operate as DIMON Malawi and dissolved a former Dibrell
joint venture in Malawi;

-- Combined the former Dibrell and Monk-Austin operations in Zimbabwe to
operate as DIMON Zimbabwe;

-- Revised plans for two factories in China's Yunnan Province to call for
a single plant in the city of Kunming; and

-- Closed Monk-Austin's Lake City, South Carolina plant.

<PAGE>
EXPAND OPERATIONS IN NEW MARKETS. During the last decade, several of the
large multinational cigarette manufacturers have expanded their global
operations, particularly into Central and Eastern Europe and the former Soviet
Union, in order to increase their access to and penetration of new markets. The
Company believes this will increase demand for local sources of leaf tobacco and
local tobacco processing due to the semi-perishable nature of unprocessed
tobacco and the existence of domestic content laws in certain foreign countries.
The Company believes these factors will cause manufacturers to place greater
reliance on the services of financially strong leaf tobacco merchants with the
ability to source and process tobacco on a global basis and to help develop
higher quality local sources of leaf tobacco.

THE REFINANCING PLAN

In fiscal 1996, following the completion of the Merger, the Company
implemented the Refinancing Plan, which is designed to reduce its financial
leverage, decrease its reliance on short-term uncommitted lines of credit and
diversify its sources of debt financing. The Refinancing Plan consists of the
following three components:

(Bullet) A reduction in outstanding debt achieved through the call for
redemption in March 1996 of the 7 3/4% Debentures, 99.85% of which
were converted by holders of the 7 3/4% Debentures into the
Company's Common Stock. The conversion reduced debt and increased
shareholders' equity by $54.2 million;

(Bullet) The sale of the Notes; and

(Bullet) The execution of the New Credit Facility.

The Company will use the net proceeds from the offering of the Notes to
reduce the level of borrowings under the Company's uncommitted unsecured
short-term lines of credit. The Company has historically financed its operations
through a combination of short-term lines of credit, customer advances, cash
from operations and equity and equity-linked securities. As the Company has
increased in size and scope, it has become increasingly dependent on uncommitted
short-term lines of credit. The Company believes that it is prudent to finance a
larger percentage of its working capital with longer term, more permanent
capital. The Company believes that the longer maturity of the Notes, combined
with the reduced financial leverage resulting from the conversion of the 7 3/4%
Debentures and the less restrictive terms of the New Credit Facility, will give
the Company increased financial flexibility.

OPERATIONS

The Company has developed an extensive international network through which
it purchases, processes and sells tobacco. In addition to its processing
facilities in Virginia and North Carolina, the Company owns or has an interest
in processing facilities in Brazil and Zimbabwe, the two most significant
non-U.S. exporters of flue-cured tobacco, Malawi and Mexico, two of the leading
non-U.S. exporters of burley tobacco, and Greece and Turkey, the leading
exporters of oriental tobacco. The Company also has processing facilities in
Italy and Germany. In addition, the Company has entered into contracts, joint
ventures and other arrangements for the purchase of tobacco grown in
substantially all countries that produce export-quality, flue-cured and burley
tobaccos, including Argentina, Canada, China, India and Tanzania.

PURCHASING. The Company purchases tobacco in approximately 26 countries.
Although the majority of the dollar value of tobacco sold by the Company is
produced domestically, the relative importance of tobacco grown overseas to the
Company's profitability has increased steadily. During 1995, approximately 60%
of the dollar value of tobacco purchased by the Company was purchased in the
U.S. Approximately 18%, 10% and 4% of the dollar value of tobacco purchased by
the Company during 1995 was purchased in Brazil, Zimbabwe and Malawi,
respectively. The balance of the Company's tobacco purchases during 1995 were
made in other tobacco growing countries, including Argentina, Bulgaria, Canada,
China, Germany, France, Greece, India, Italy, Mexico, Poland, the former Soviet
Union, Tanzania and Turkey. The Company believes it has access to a diverse
supply of tobacco grown in a number of regions throughout the world and can
respond quickly to factors that may cause fluctuations in the quality, yield or
price of tobacco crops grown in any one region.

Tobacco generally is purchased at auction or directly from growers. Tobacco
grown in the U.S., Canada, Malawi and Zimbabwe is purchased by the Company
principally on auction markets. The Company purchases domestic tobacco on the
flue-cured, burley and air-cured auction markets in Florida, Georgia, Kentucky,
Maryland, North Carolina, South Carolina, Tennessee and Virginia for shipment to
the Company's facilities in North Carolina and Virginia for processing to
customer specification. The Company usually purchases tobacco at the auction
markets after receiving specific customer orders or indications of customers'
upcoming needs. The Company's network of more than 100 tobacco buyers allows the
Company to cover the major auctions of flue-cured and burley tobaccos throughout
the world. These buyers are experts in differentiating

<PAGE>
hundreds of grades of tobacco based on customer specifications and preferences
that take into account, among other factors, the texture, visual appearance and
aroma of the tobacco.

In non-auction markets such as Argentina, Brazil, Greece and Turkey, the
Company purchases tobacco directly from farmers or from local entities that have
arranged for purchase from farmers. These direct purchases are often made by the
Company based upon its projection of the needs of its long-standing customers
rather than against specific purchase orders. The Company's arrangements with
farmers vary from locale to locale depending on the Company's predictions of
future supply and demand, local historical practice and availability of capital.
For example, in Brazil, the Company generally contracts to purchase a farmer's
entire tobacco crop at the market price at the time of harvest based on the
quality of the tobacco delivered. Pursuant to these purchase contracts, the
Company provides farmers with fertilizer and other materials necessary to grow
tobacco and may extend loans to farmers to finance the crop. Under longer-term
arrangements with farmers, the Company may also finance farmers' construction of
curing barns. In addition, the Company's agronomists maintain frequent contact
with farmers prior to and during the growing and curing seasons to provide
technical assistance to improve the quality and yield of the crop. In other
non-auction markets, such as Argentina and India, the Company buys tobacco from
local entities that have purchased tobacco from farmers and supervises the
processing of that tobacco by those local entities. The Company believes that
its long-standing relationships with its customers are vital to its operations
outside of the auction markets.

PROCESSING. The Company processes tobacco to meet each customer's
specifications as to quality, yield, chemistry, particle size, moisture content
and other characteristics. The Company processes purchased tobacco in its 17
tobacco facilities located throughout the world. Unprocessed tobacco is a
semi-perishable commodity that generally must be processed within a relatively
short period of time to prevent fermentation or deterioration in quality.
Accordingly, the Company has located its processing facilities in proximity to
its principal sources of tobacco.

Upon arrival at the Company's processing plants, flue-cured and burley
tobacco is first reclassified according to grade. Most of that tobacco is then
blended to meet customer specifications regarding color, body and chemistry,
threshed to remove the stem from the leaf and further processed to produce
strips of tobacco and sieve out small scrap. The Company also sells a small
amount of processed but unthreshed flue-cured and burley tobacco in loose-leaf
and bundle form to certain of its customers.

Processed flue-cured and burley tobacco is redried to remove excess
moisture so that it can be held in storage by customers or the Company for long
periods of time. After redrying, whole leaves, bundles, strips or stems are
separately packed in cases, bales, cartons or hogsheads for storage and
shipment. Packed flue-cured and burley tobacco generally is transported in the
country of origin by truck or rail, and exports are moved by ship. Prior to and
during processing, steps are taken to ensure consistent quality of the tobacco,
including the regrading and removal of undesirable leaves, dirt and other
foreign matter. Customer representatives are frequently present at the Company's
facilities to monitor the processing of their particular orders. Increased
consumption of discount and value-priced cigarettes and competition among leaf
merchants have led to improvements in processing designed to minimize waste and
thereby increase yield. Throughout the processing, Company technicians use
laboratory test equipment for quality control to ensure that the product meets
all customer specifications.

From time to time, the Company processes and stores tobacco acquired by
various stabilization cooperatives under the U.S.'s price support program. The
Company can derive significant revenues from the fees charged for such services,
particularly in years when a substantial portion of the domestic tobacco crop is
acquired by such cooperatives under the program. While these revenues are not
material to the Company's net sales, they result in additional recovery of fixed
cost which may be significant to gross profit.

SELLING. The Company sells its tobacco to manufacturers of cigarettes and
other consumer tobacco products located in about 60 countries around the world.
The Company ships tobacco to international locations designated by these
manufacturers. A majority of the shipments of tobacco are to factories of these
manufacturers that are located outside the U.S. In certain countries, the
Company also uses sales agents to supplement its selling efforts. Several of
these customers individually account for a significant portion of the Company
sales in a normal year. The loss of any one or more of such customers could have
a materially adverse effect on the tobacco business of the Company.

The consumer tobacco business in most markets is dominated by a relatively
small number of large multinational cigarette manufacturers and by government
controlled entities. Approximately 46% and 53% of the Company's consolidated
tobacco sales for the nine months ended March 31, 1995, and fiscal year 1995,
respectively, were contracted to be delivered to 33 customers which the Company
believes are owned by or under common control of Japan Tobacco, Philip Morris or
RJR

<PAGE>
and each of which contributed in excess of 10% of total tobacco sales, with
Phillip Morris and Japan Tobacco accounting for significantly larger portions of
the Company's sales than Japan Tobacco. No other customer accounts for more than
10% of the Company's sales. See " -- Global Operations -- United States" and
Note G to the Company's Consolidated Financial Statements for the year ended
June 30, 1995, included herein. The Company generally has maintained
relationships with its customers for over forty years. In fiscal 1995, the
Company delivered approximately 37% of its tobacco sales to customers in the
U.S., approximately 27% to customers in Europe and the remainder to customers
located in Asia, South America and elsewhere.

As of March 31, 1996, the Company's consolidated entities had tobacco
inventories of approximately $343 million and approximately $278 million in
commitments or indications from customers for purchases of tobacco. At March 31,
1995, those entities had tobacco inventories of approximately $296 million and
approximately $209 million in commitments or indications from customers for
purchases of tobacco. Substantially all of the March 31, 1996, orders are
expected to be delivered in fiscal 1996. The level of purchase commitments for
tobacco fluctuates from period to period and is significant only to the extent
it reflects short-term changes in demand for leaf tobacco. The Company makes
80-95% of its leaf tobacco purchases pursuant to customer orders or supply
contracts or customer indications of anticipated need, with most purchases made
based on indications. Customers are legally bound to purchase tobacco purchased
by the Company pursuant to orders, but no contractual obligation exists with
respect to tobacco purchased in response to indications. However, the Company
has done business with most of its customers for many years and has never
experienced a significant failure of customers to purchase tobacco for which
they have given indications. Other than the contracts with RJR and Lorillard
described below under " -- Global Operations -- United States," the Company has
no significant supply agreements with its customers.

The Company typically makes sales based on a customer's letter of credit,
by cash against documents or by payment against invoice. Virtually all of the
Company's sales throughout the world are denominated in U.S. dollars. While
payment for tobacco sold by the Company is usually received after the tobacco
has been processed and shipped, some customers make advances to the Company
periodically throughout the buying season as tobacco is purchased by the Company
for their accounts. Distribution of processed tobacco is made by delivery from
the Company's storage facilities directly to customers, by truck or rail to
customers' storage or manufacturing facilities or to port for shipping.

GLOBAL OPERATIONS

UNITED STATES. The Company owns and operates four processing facilities in
North Carolina and Virginia. The price of tobacco grown in the U.S. is supported
under a government price support program which also establishes quotas for
production. Consequently, U.S.-grown tobacco is typically more expensive than
tobacco grown elsewhere. Although domestic tobacco historically has accounted
for the majority of the Company's sales, the Company expects that, because of
this price differential and its generally increasing business outside of the
U.S., sales of flue-cured and burley tobacco grown in the U.S. and related
services will be less significant than in the past. The Company believes that
any short-term decline in its domestic business should be offset in the
short-term by increased foreign operations.

In late fiscal 1994, Monk-Austin entered into an agreement with RJR to
purchase all of RJR's U.S. auction market tobacco requirements. In late fiscal
1995, Dibrell entered into an agreement with Lorillard pursuant to which the
Company will purchase and process all of Lorillard's domestic auction market
tobacco requirements. Generally, the contracts establish a framework for pricing
the Company's services (which generally is negotiated with respect to crop year,
grade of tobacco leaf or type of service provided based on market prices), do
not provide for minimum purchases and are terminable upon reasonable notice. The
Company expects that purchases under these agreements will account for a
substantial portion of its tobacco purchases in the U.S. in the future.

BRAZIL. The Company believes it is one of the two largest independent leaf
tobacco merchants in Brazil. The Company exports the majority of the tobacco
that it processes in Brazil to its customers around the world. In fiscal 1995,
the Company derived approximately 24% of its tobacco revenue from its Brazilian
operations.

In fiscal 1996, the Company merged its two wholly-owned subsidiaries, Tabra
and Dibrell do Brazil to form DIMON do Brazil. DIMON do Brazil has three modern
tobacco processing facilities located in the center of Brazil's tobacco
production area. Brazil represents the Company's most significant foreign
operation in virtually all respects, including purchasing volume, processing and
storage capacities and operating income potential. Through the merger and
resulting reduction in duplicative functions and facilities the Company believes
that it will realize certain economies of scale. The Company believes that these
economies of scale and savings will be partially achieved in fiscal 1996
operating results and fully reflected in fiscal 1997 operating results.

<PAGE>
ZIMBABWE AND MALAWI. The Company exports the majority of the tobacco it
processes in Zimbabwe and Malawi to its customers around the world. In fiscal
1995, the Company derived approximately 10% of its revenue from its Zimbabwean
and Malawian operations.

In fiscal 1995, the Company combined the former Dibrell and Monk-Austin
operations in Zimbabwe and Malawi to form two wholly-owned subsidiaries, DIMON
Zimbabwe and DIMON Malawi. Through DIMON Zimbabwe the Company purchases,
processes in two facilities and exports flue-cured and burley tobacco grown in
Zimbabwe. Through DIMON Malawi the Company purchases, processes in one facility
and exports flue-cured and burley tobacco grown in Malawi.

GREECE AND TURKEY. The Company believes it is the largest exporter of
processed oriental tobacco in the world as a result of the acquisition of
additional oriental tobacco processing facilities in Greece and Turkey. Greece
and Turkey are the most important producers of oriental tobaccos. Through its
wholly-owned subsidiaries, DIMON Hellas Tobacco SA and DIMON Turk Tutun AS, the
Company buys, exports and processes, in two facilities in each country, oriental
tobacco grown in each country.

OTHER FOREIGN OPERATIONS. The Company also has foreign subsidiaries, joint
ventures and affiliates that purchase and sell tobacco grown in other countries
throughout the world. In addition, the Company owns and operates processing
facilities in Italy, Germany and Mexico.

In certain countries, such as China and India, the Company has processing
agreements with other processors to use their facilities under the supervision
of the Company's employees. In several South American countries where the
Company operates, tobacco is bought from the farmers by the processors at
negotiated prices, and it is necessary to prefinance the crop by making advances
of cash or materials to the farmers prior to and during the growing season.

TOBACCO FACILITIES

The Company operates each of its tobacco processing plants for seven to
nine months during the year to correspond with the applicable growing seasons.
While the Company believes its processing facilities are being efficiently
utilized, the Company also believes its domestic processing facilities and
certain foreign processing facilities have the capacity to process additional
volumes of tobacco if required by customer demand.

<PAGE>
The following is a listing of the various properties used in the tobacco
operations:

<TABLE>
<CAPTION>
LOCATION USE AREA IN SQUARE FEET
<S> <C> <C>
UNITED STATES
Danville, VA Storage 250,000
Danville, VA Factory 494,000
Kenbridge, VA Storage 1,469,000
Greenville, NC Factory/Storage 869,000
Farmville, NC Factory/Storage 1,136,000
Kinston, NC Factory/Storage 1,069,000
Sanford, NC Storage 121,000
Greenville, TN Storage 70,000
Mullins, SC Storage 104,000
Lake City, SC Storage 252,000

SOUTH AMERICA
Santa Cruz, Brazil Factory/Storage 1,201,000
Venancio Aires, Brazil Factory/Storage 593,000
Vera Cruz, Brazil Factory/Storage 1,833,000
Mexico City, Mexico Factory 5,000
Zacapa, Guatemala Factory 15,000

AFRICA
Lilongwe, Malawi Factory 247,000
Harare, Zimbabwe Factories(2)/Storage 1,426,000

EUROPE
Karlsruhe, Germany Factory/Storage 320,000
Izmir, Turkey Factories(2)/Storage 290,000
Sparanise, Italy Factory/Storage 742,000
Thessaloniki, Greece Factories(2)/Storage 790,000
</TABLE>

COMPETITION

The leaf tobacco industry is highly competitive. Competition among dealers
in leaf tobacco is based on the price charged for products and services as well
as the dealers' ability to meet customer specifications in the buying,
processing and financing of tobacco. The Company believes that it is well
positioned to meet this competition, particularly in view of its important
processing facilities in the U.S., Brazil and other major tobacco growing
countries. Among independent tobacco leaf merchants, the principal competitors
are Universal Corporation ("Universal"), Standard Commercial Corporation and
Intabex Holding Worldwide S.A. Of the independent leaf tobacco merchants, the
Company believes that, based on revenues, it ranks second in established
worldwide market share. The Company further believes that among independent
tobacco leaf merchants, it has the largest or second largest market share in
Brazil, Greece, Turkey, the U.S. and Zimbabwe. Universal's market share in the
U.S. is considerably greater than that of the Company.

SEASONALITY

The purchasing and processing activities of the Company's tobacco business
are seasonal. Flue-cured tobacco grown in the U.S. generally is purchased during
the five-month period beginning in July and ending in November. U.S.-grown
burley tobacco is usually purchased from late November through January or
February. Tobacco grown in Brazil usually is purchased from January through June
and delivered from May to September. Other markets around the world last for
similar periods, although at different times of the year, and as the importance
of these markets has grown the seasonality in the Company's business has
decreased.

Mature tobacco, prior to being processed and packed, is a semi-perishable
commodity. The production cycle for redrying and packing is relatively short.
For example, flue-cured tobacco in the U.S. is processed, packed and invoiced
within the same five-month period (July through November) that it is purchased.
During this period inventories of unprocessed tobacco, inventories of redried
tobacco and trade accounts receivable normally reach peak levels in succession.
Current liabilities, particularly advances from customers and short-term notes
payable to banks, normally reach their peak in this period as a means of
financing the seasonal expansion of current assets. Increasing amounts of
U.S.-grown burley and foreign tobacco are now being processed in periods other
than July through November, reducing the seasonal fluctuations in working
capital.

<PAGE>
At June 30, the end of the Company's fiscal year, the seasonal components of the
Company's working capital reflect primarily the operations related to foreign
grown tobacco.

FLOWERS

OPERATIONS

The Company's fresh-cut flower operations consist of buying flowers from
sources throughout the world and transporting them, normally by air, to
operating units for resale to wholesalers and retailers through its wholly-owned
flowers subsidiary, Florimex. For the year ended June 30, 1995, the Company's
flower operations produced approximately 20% of the Company's revenues and
represented approximately 10% of the Company's consolidated assets at year end.

Florimex operates through 51 offices in 18 countries, including Austria,
Canada, Colombia, the Czech Republic, Ecuador, France, Germany, Hungary, Italy,
Japan, Poland, The Netherlands, Spain, Switzerland, the United Kingdom and the
U.S. The activities of certain of these offices are limited to acquiring flowers
in the country of origin, but most are engaged in importation and distribution.
Florimex is also engaged in additional value-added services through the design
and assembly of floral bouquets for sale to supermarket retailers. Virtually all
offices are operated as corporate profit centers with the general manager
receiving a bonus related to the financial performance of the operation. In a
limited number of cases, the local general manager owns a minority share of the
unit's equity and participates in dividend distributions.

Florimex's Dutch exporting operations, Baardse, are headquartered in
Aalsmeer, The Netherlands, inside the premises of the world's largest flower
auction facilities. In addition to the Aalsmeer auction, Florimex routinely
acquires flowers from all principal Dutch flower auctions. Florimex's Dutch
exporting operations sell and ship product directly to Florimex's fresh-cut
flower operations and its competitors.

BUSINESS STRATEGY

The Company's business strategy for Florimex is to increase profitability
by increasing sales volume within its established distribution system,
rationalizing its cost structure and reducing credit losses. The Company
believes that its extensive global network, with buying capacity in all major
flower production markets and broad based distribution arrangements in the
world's primary wholesale and retail flower markets, gives it substantial
competitive advantages. The principal components of Florimex's business strategy
are as follows:

EXPANSION OF SALES; NEW DISTRIBUTION CHANNELS. Florimex expects to increase
its sales by focusing on areas of growing per capita consumption of flowers,
particularly in non-traditional flower consumption markets in Europe and North
America. To accomplish this objective, Florimex has recently (i) restructured
its operations in North America to concentrate on (a) the growing channels of
supermarkets and mass merchant retailers and (b) bouquet sales in the U.S. and
(ii) concentrated on sales in Europe, particularly eastern Germany and the Czech
Republic.

RATIONALIZE OPERATIONS. Florimex has realized substantial cost savings by
reducing personnel, streamlining administrative functions globally and by
eliminating its unprofitable wholesale operations in New York, Chicago and Los
Angeles.

REDUCE CREDIT LOSSES. As the timely collection of trade accounts receivable
has traditionally represented a considerable business risk to Florimex's flower
operations, trade accounts receivable reporting and credit authorization
procedures have been entirely revised. These revisions include (i) the
implementation of centralized credit reporting procedures, (ii) an overall
reassessment of customer credits, (iii) the culling of customer listings for the
various Florimex companies to concentrate on higher margin accounts, (iv)
requiring bi-monthly updates to the head office on outstanding balances and (v)
the creation of a prompt response program for customers who begin to evidence
slow payer characteristics.

SOURCES OF SUPPLY

Florimex acquires its fresh-cut flowers from more than 300 suppliers
located in more than 50 countries on five continents. Its primary sources of
supply include The Netherlands (via the Dutch auction system), Kenya (via a
renewable exclusive supplier contract effective since 1976), Columbia, Ecuador
and Thailand. Florimex purchased $33.7 million, or 11.5%, of its total purchases
in 1995 ($27.3 million, or 11.9% in 1994) from its Dutch exporting operations on
terms similar to those offered to independent parties. Florimex annually buys
approximately 30% of the flower crop grown on independent supplier farms in
Kenya. Florimex believes that its existing sources of supply are adequate at
current sales levels. Florimex also believes that its close relationships with
commercial and cargo airlines give it a competitive advantage by permitting it
to transport its products around the world expeditiously and cost effectively.

<PAGE>
CUSTOMERS AND MARKET POTENTIAL

Florimex sells to thousands of wholesalers and retailers throughout Europe,
North America and Asia. No customer accounts for a significant portion of
Florimex's sales in a normal year, and the loss of any one customer or a group
of related customers should not have a material adverse effect on Florimex's
business.

Industry statistics indicate that the annual retail sales of fresh-cut
flowers in the U.S., the largest single flower market in the world, exceed $6.5
billion. While the routine purchase of flowers is a tradition in the mature
European market, the U.S. market is growing and offers an opportunity for
significant penetration. The primary market growth in the U.S. is occurring
among supermarkets. During 1995, the Company substantially redirected its U.S.
flower resources to serve this important group of customers.

FACILITIES

Florimex has 51 different operating facilities throughout the world. The
owned properties include an international distribution warehouse in Kelsterbach,
Germany (near Frankfurt Airport), with offices and storage space of about 60,000
square feet. In Nuremberg, the headquarters of Florimex, owned properties
include office and storage space of about 300,000 square feet. At all Florimex
locations there are various properties, generally located near airports,
consisting of owned or leased offices and storage space. The storages at each
location include cooler storages of various sizes to accommodate the needs of
individual locations. The Company's management believes its flower operation
facilities, including office, distribution and warehouse facilities, are
efficiently utilized and are adequate for current and projected sales levels for
the foreseeable future.

With the acquisition of the shares of Baardse, the Company acquired various
assets related to and leased from the auctions from which it buys flowers.
Baardse has about 110,000 square feet of office and storage associated with the
Aalsmeer auction operation. Aalsmeer has the largest auction facility in The
Netherlands. A major addition to the lease was completed in 1989. Baardse also
owns glasshouses in Aalsmeer with 125,000 square feet.

All of the above property is owned, except as otherwise indicated, by the
Company, its subsidiaries or investee companies. The Company believes that the
facilities are generally well maintained and in good operating condition and are
suitable and adequate for its purposes at current and reasonably anticipated
future sales levels.

COMPETITION

Competition within the fresh-cut flower distribution industry is based on
adequate and reliable supplies of competitively priced, fresh, good quality
flowers. Prices quoted to wholesalers are volatile and often change several
times a day. Credit terms are also important. Major competitors are numerous and
vary according to market. However, no cut-flower operation, including Florimex,
has more than a small share of the worldwide market. Competition is therefore
intense. Based on its long-standing sources of supply and well-developed
purchasing and distribution facilities, Florimex believes that it competes
effectively.

SEASONALITY

Sales of fresh-cut flowers are seasonal and are significantly affected by
peak holiday demand. Generally the June through August months have low sales
levels, with sales increasing through the fall and Christmas season. Special
days, such as Valentine's Day and Mother's Day, generally result in material
sales increases in February through May.

EMPLOYEES

The Company's consolidated entities employ about 3,800 persons, excluding
seasonal employees, in its worldwide tobacco operations. In the U.S. tobacco
operations the Company's consolidated entities employ about 1,100 persons,
excluding 1,300 seasonal employees. Most seasonal employees are covered by
collective bargaining agreements with several U.S. labor unions. In the non-U.S.
tobacco operations the Company's consolidated entities employ about 2,700
persons, excluding 5,100 seasonal employees. The Company's worldwide
consolidated cut flower operation entities employ about 1,250 persons, excluding
seasonal employees. The Company considers its employee relations to be
satisfactory.

GOVERNMENT REGULATION AND ENVIRONMENTAL COMPLIANCE

<PAGE>
tobacco products in public places and places of employment including a proposal
by the U.S. Occupational Safety and Health Administration to ban smoking in the
work place; (iii) proposals by the U.S. Food and Drug Administration to sharply
restrict cigarette advertising and promotion and to regulate nicotine as a drug;
(iv) increases in tariffs on imported tobacco; (v) proposals to increase the
U.S. excise tax on cigarettes; (vi) the recently announced policy of the U.S.
government to link certain federal grants to the enforcement of state laws
banning the sale of tobacco products to minors and (vii) recent filings of
lawsuits against cigarette manufacturers by several U.S. states seeking
reimbursement of Medicaid and other expenditures by such states claimed to have
been made to treat diseases allegedly caused by cigarette smoking. It is not
possible to predict the extent to which governmental activities might affect the
Company's business.

In 1993, Congress enacted a law requiring that all domestically
manufactured cigarettes contain at least 75% domestically grown tobacco.
Although that law was repealed in 1995 and was replaced with import quotas
designed to assist domestic tobacco growers, the law drastically disrupted
demand for foreign tobacco in the domestic production of cigarettes. It is not
possible to predict the extent to which future governmental activities might
affect the Company's business.

Compliance with federal, state and local provisions which have been enacted
or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment have not had, and are
not anticipated to have, any material effect upon the competitive position of
the Company.

LEGAL PROCEEDINGS

Neither the Company nor any of its subsidiaries is currently involved in
any material litigation nor, to their knowledge, is any material litigation
currently threatened against them.

<PAGE>
MANAGEMENT

DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY

The directors and principal officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Claude B. Owen, Jr. 50 Chairman of the Board and Chief Executive Officer
Albert C. Monk III 56 President and Director
John M. Hines 56 Executive Vice President and Director
Richard D. O'Reilly 46 Senior Vice President-Human Resources
James A. Cooley 45 Vice President and Treasurer
Brian J. Harker 45 Senior Vice President (of DIMON International)
R. Stuart Dickson 66 Director
Norman A. Scher 58 Director
Willie G. Barker, Jr. 59 Director
James E. Johnson, Jr. 66 Director
Joseph L. Lanier, Jr. 64 Director
Robert T. Monk, Jr. 48 Director
Louis N. Dibrell, III 51 Director
Henry F. Frigon 61 Director
Dr. Thomas F. Keller 64 Director
</TABLE>

CLAUDE B. OWEN, JR. was elected Chairman of the Board and Chief Executive
Officer of the Company on October 21, 1994. He also served as Chairman, Chief
Executive Officer and President of Dibrell from July 1993 until the effective
time of the Merger and as Chairman of the Board and Chief Executive Officer of
Dibrell from February 1990 until July 1993. Mr. Owen also serves as a director
for American National Bankshares, Inc. and Richfood Holdings, Inc.

ALBERT C. MONK III was elected President of the Company on October 21, 1994
and President and Chief Executive Officer of DIMON International on January 23,
1995. He also served as Chairman, Chief Executive Officer and President of
Monk-Austin beginning from November 8, 1994 until the effective time of the
Merger, Chief Executive Officer and President of Monk-Austin since 1992 and
President of Monk-Austin since 1990. Mr. Monk is the first cousin of Robert T.
Monk, Jr.

JOHN M. HINES was elected Executive Vice President of the Company on
February 22, 1995. He will retire from the Company effective July 1, 1996 but
will continue to serve as a consultant to the Company for two years. He also
served as Executive Vice President and Chief Financial Officer of Monk-Austin
from 1990 to the effective time of the Merger.

RICHARD D. O'REILLY was appointed Senior Vice President -- Human Resources
May 16, 1995. From 1989 to 1995, he served as Vice President -- Human Resources
at Sweetheart Cup Company, Chicago, Illinois.

JAMES A. COOLEY was appointed Vice President and Treasurer on April 1,
1995. He also served as Vice President and Treasurer of Dibrell from January
1994 to the effective time of the Merger, and Vice President-Tax of Dibrell from
October 1988 to January 1994.

BRIAN J. HARKER was appointed Senior Vice President of DIMON International
on April 1, 1995. He served as Senior Vice President-Director International
Operations of Monk-Austin from July 1991 to April 1995. Prior thereto he served
as Vice President of Monk-Austin.

R. STUART DICKSON, a director of the Company since November 17, 1995, has
been Chairman of the Executive Committee of Ruddick Corporation since February
1994. Ruddick Corporation owns Harris-Teeter Supermarkets and A&E Mills, a
leading thread producer. He also served as Chairman of the Board of Ruddick from
1968 to 1994. Mr. Dickson also serves as a director of First Union Corporation,
PCA International, Inc., Textron, Inc. and United Dominion Industries.

NORMAN A. SCHER, a director of the Company since April 1, 1995, has been
Executive Vice President and Chief Financial Officer of Tredegar Industries,
Inc. since July 1989. Tredegar is a manufacturer of plastics and metal products.

WILLIE G. BARKER, JR., a director of the Company since April 1, 1995, is
currently retired. He served as President and Chief Operating Officer of Dibrell
from February 1989 to June 1993. Mr. Barker also serves as a director of Mutual
Savings & Loan Company.

<PAGE>
JAMES E. JOHNSON, JR., a director of the Company since April 1, 1995, has
been a partner of Womble Carlyle Sandridge & Rice, PLLC (a law firm based in
Charlotte, North Carolina) since 1989.

JOSEPH L. LANIER, JR., a director of the Company since April 1, 1995, is
currently Chairman and Chief Executive Officer of Dan River, Inc. Mr. Lanier is
also a director of SunTrust Banks, Inc., Flowers Industries, Inc. and Torchmark
Corporation.

ROBERT T. MONK, JR., director of the Company since April 1, 1995, is
currently Senior Vice President of DIMON International. He served as Vice
President and Director of Processing Operations of Monk-Austin since 1990. Mr.
Monk is the first cousin of Albert C. Monk III.

LOUIS N. DIBRELL, III, a director of the Company since April 1, 1995, is
currently a Senior Vice President of DIMON International, Inc. Prior thereto he
served as Senior Vice President of Dibrell.

HENRY F. FRIGON, a director of the Company since April 1, 1995, is
currently retired. Prior to his retirement he served as Executive Vice President
and Chief Financial Officer of Hallmark Cards, Inc. since December 1990. Mr.
Frigon also serves as a director of H&R Block, Inc., Circle K Stores and Group
Technologies Corporation.

DR. THOMAS F. KELLER, director of the Company since April 1, 1995, is Dean
and R.J. Reynolds Industries Professor, at the Fuqua School of Business at Duke
University in Durham, North Carolina. He has also served as a director of
American Business Products, LADD Furniture, Inc., Nations Funds Trust, Mentor
Series Trust, Hatteras Income Securities, Inc., and Wendy's International, Inc.

THOMAS H. FAUCETT, the Company's Chief Financial Officer, will retire
effective July 1, 1996. Until that time, Mr. Faucett will serve in an advisory
capacity.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

Two meetings of the Company's Board of Directors were held between March
31, 1995, the date the initial full Board of Directors was initially elected,
and June 30, 1995, the end of the Company's fiscal year. No Director attended
less than 75% of the total number of meetings held by (i) the Board of Directors
and (ii) all committees of the Board on which the Director served.

The business of the Company is under the general management of a Board of
Directors as provided by the laws of Virginia, the Company's state of
incorporation. The Company's Articles of Incorporation and By-Laws provide for
an Executive Committee, composed of four directors which, unless limited by a
resolution of the Board and except to the extent limited by law, has authority
to act in all matters that the full Board may act upon when the Board is not in
session. The Executive Committee reports all of its actions to the full Board of
Directors at its next meeting. The Executive Committee is currently composed of
Claude B. Owen, Jr. (Chairman) and Willie G. Barker, Jr. (the "Dibrell
Executives") and Albert C. Monk III and John M. Hines (the "Monk-Austin
Executives"). Pursuant to the Company's Articles, if, at any time prior to the
1996 annual meeting of shareholders, a director resigns or retires from the
Executive Committee or otherwise becomes unable or unwilling to serve as a
member of the Executive Committee, then (1) if such departing member is a
Dibrell Executive, only a person designated by the Continuing Dibrell Directors
(as defined in the Company's Articles) shall be eligible to fill the vacancy
resulting from such departure, and (2) if such departing member is a Monk-Austin
Executive, only a person designated by the Continuing Monk-Austin Directors (as
defined in the Company's Articles) shall be eligible to fill the vacancy
resulting from such departure. The Executive Committee met twice between March
31, 1995, and June 30, 1995.

In addition to the Executive Committee, the Board of Directors has
designated two other standing committees, the Executive Compensation Committee
and the Audit Committee.

The Board's Executive Compensation Committee is composed of Norman A. Scher
as Chairman, James E. Johnson, Jr., Dr. Thomas F. Keller and Joseph L. Lanier,
Jr. The Executive Compensation Committee's basic functions are to review the
effectiveness of the management compensation plans of the Company, to set the
compensation of the Chief Executive Officer and the managers reporting to the
Chief Executive Officer, to review and approve the management incentive systems
of the Company and the awards granted thereunder and to administer the Company's
stock option plans. The Executive Compensation Committee did not meet between
March 31, 1995, and June 30, 1995.

The Board's Audit Committee is composed of Dr. Thomas F. Keller as
Chairman, Henry F. Frigon, James E. Johnson, Jr. and Joseph L. Lanier, Jr. The
Committee is authorized to consult with the Company's outside auditors and
recommend the selection of such auditors for each fiscal year. The Audit
Committee's basic functions are to assist the Board of Directors in preserving
the integrity of the financial information published by the Company through the
review of financial

<PAGE>
and accounting controls and policies, financial reporting requirements,
alternative accounting principles that could be applied and the quality and
effectiveness of the independent accountants and the Company's internal
auditors. The Audit Committee did not meet between March 31, 1995, and June 30,
1995.

The Company's Articles provide that the Board of Directors shall establish
a Nominating Committee consisting of four members to nominate candidates to be
elected to the Board of Directors at the 1996 annual meeting of shareholders.
Only a director who is an Independent Director (as defined below) and who has
been designated to serve on the Nominating Committee by the Dibrell Designees or
the Monk-Austin Designees will be eligible to so serve, provided, that neither
the Dibrell Designees nor the Monk-Austin Designees may designate more than two
members of the Nominating Committee. Under the Company's Articles, the
nominating Committee is required to use its best efforts to cause at least 50%
of the directors of the Company in office immediately after the 1996 annual
meeting of shareholders to be Independent Directors. "Independent Director"
means any director of the Company who (1) is not a present or former employee of
the Company, Dibrell or Monk-Austin, (2) does not beneficially own 5% or more of
the outstanding voting shares of the Company and (3) is not an "affiliate" or
"associate" (as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or any successor provision) of any person who is
a present or former employee of the Company, Dibrell or Monk-Austin or who
beneficially owns 5% or more of the outstanding voting shares of the Company.
The Board of Directors has not yet elected the members of the Nominating
Committee.

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

The following table presents information relating to total compensation of
the Chief Executive Officer and the other executive officers of the Company
during the fiscal years ended June 30, 1995, 1994 and 1993. Prior to April 1,
1995, Messrs. Owen and Faucett were employed by Dibrell and Messrs. A.C. Monk
III and Hines were employed by Monk-Austin.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION
OTHER ANNUAL AWARDS PAYOUTS ALL OTHER
FISCAL SALARY BONUS COMPENSATION(1) OPTIONS/ LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $ $ SARS(#) PAYOUTS $ $
<S> <C> <C> <C> <C> <C> <C> <C>
Claude B. Owen, Jr. 1995 391,800 -- -- 30,000 -- 30,118(3)
Chairman of the Board and 1994 340,300 -- -- 12,600 -- 30,080
Chief Executive Officer and 1993 315,000 236,250 -- 13,230 -- 28,974
Director
Albert C. Monk III 1995 205,000 175,000 -- -- -- 15,421(4)
President and Director 1994 195,000 225,000 -- -- -- 26,872
1993 180,000 220,000 -- -- -- 28,805
John M. Hines (7) 1995 185,000 650,000 -- -- -- 12,469(5)
Executive Senior Vice 1994 165,000 200,000 -- -- -- 26,872
President and Director 1993 150,000 180,000 114,263(2) 40,000 -- 28,811
Thomas H. Faucett (8) 1995 163,000 -- -- 10,800 -- 17,978(6)
Senior Vice President, Chief 1994 156,000 -- -- 10,800 -- 17,886
Financial Officer 1993 150,000 67,500 -- 12,600 -- 16,888
</TABLE>

(1) None of the named executive officers received other annual compensation with
an aggregate value in excess of $50,000 or 10% of the total of combined
salary and bonus for fiscal year 1995.

(2) Represents amounts paid to compensate Mr. Hines for taxable income
recognized as a result of his exercise of Monk-Austin stock options.

<PAGE>

<TABLE>
<CAPTION>
CORPORATE PENSION
MATCH EQUALIZATION
401(K) DEFERRED PLAN
FISCAL PLANS COMP. PREMIUMS TOTAL
NAME YEAR $ $ $ $
<S> <C> <C> <C> <C> <C>
(3) Claude B. Owen, Jr. 1995 2,149 12,144 15,825 30,118
1994 2,111 12,144 15,825 30,080
1993 1,005 12,144 15,825 28,974

(4) Albert C. Monk III 1995 15,421 -- -- 15,421
1994 26,872 -- -- 26,872
1993 28,805 -- -- 28,805

(5) John M. Hines 1995 12,469 -- -- 12,469
1994 26,872 -- -- 26,872
1993 28,811 -- -- 28,811

(6) Thomas H. Faucett 1995 2,153 -- 15,825 17,978
1994 2,061 -- 15,825 17,886
1993 1,063 -- 15,825 16,888
</TABLE>

(7) Mr. Hines will retire from the Company effective July 1, 1996.

(8) Mr. Faucett will retire from the Company effective July 1, 1996.

STOCK OPTION GRANTS

In connection with the Merger, the Company assumed Dibrell's 1990 and 1994
Omnibus Stock Incentive Plans, Monk-Austin's Long-Term Stock Investment Plan,
and all of the instruments outstanding under those plans, and adopted the DIMON
Incorporated Omnibus Stock Incentive Plan. Future grants will be made under the
Company's plan. The table below contains information concerning the grants of
stock options made during fiscal year 1995 under Dibrell's 1994 Omnibus Stock
Incentive Plan to the named executive officers (only Messrs. Owen and Faucett
were eligible to participate in this plan). No grants were made during fiscal
year 1995 to Messrs. A. C. Monk III or Hines under the Monk-Austin Long-Term
Incentive Plan or to any of the executive officers under the Company's plan.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS GRANT DATE
% OF TOTAL ($/SH) PRESENT VALUE (2)
NUMBER OF OPTIONS/SARS EXERCISE BLACK-SCHOLES
OPTIONS/SAR GRANTED TO OR BASE EXPIRATION PRICING
GRANTED (1) EMPLOYEES PRICE DATE VALUATION
<S> <C> <C> <C> <C> <C>
Claude B. Owen, Jr. 30,000 11.50% $11.50 8/25/04 $ 114,000
Albert C. Monk III -- -- -- -- --
John M. Hines -- -- -- -- --
Thomas H. Faucett 10,800 4.14% $11.50 8/25/04 $ 41,040
</TABLE>

(1) All option grants consisted of incentive and nonqualified stock options.
These grants become exercisable on August 26, 1997.

(2) The exercise price was set at the closing price of Dibrell Common Stock on
the date of the grant which was $11.50 per share, as adjusted in connection
with the Merger. Utilizing the Black-Scholes valuation method, a value of
$3.80 per share was determined. The Black-Scholes Model is a complicated
mathematical formula widely used to value exchange traded options. However,
stock options granted under the plan differ from exchange-traded options in
three key respects: the options are long-term, nontransferable and subject
to vesting restrictions while exchange-traded options are short-term and can
be exercised or sold immediately in a liquid market. In applying the
Black-Scholes pricing model, the Company has assumed an option term of ten
years, an annual dividend yield for the Company's Common Stock of 3.2
percent, a riskless rate of return of 7% and a stock price volatility of
0.96 (based on the variance of return for the Common Stock over the 60
trading days prior to June 30, 1994). No adjustment has been made to reflect
the non-transferability of options granted under the plan. Consequently,
because the Black-Scholes Model is adapted to value the options set forth in
the table and is assumption based, it may not accurately determine the grant
date present value. The actual value, if any, an optionee will realize will
depend on the excess of the market value of the Common Stock over the
exercise price on the date the option is exercised.

OPTION/SAR EXERCISES AND HOLDINGS

The following table sets forth information with respect to the named
executive officers concerning the exercise of options during fiscal year 1995
and unexercised options and SARs held by them on June 30, 1995:

<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS
VALUE OPTIONS/SARS AT FISCAL YEAR AT FISCAL YEAR END
SHARES ACQUIRED REALIZED END EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
ON EXERCISE $ (2) (1)(2)$
<S> <C> <C> <C> <C>
Claude B. Owen, Jr. -- -- 47,820/42,810 86,434/162,972
Albert C. Monk III -- -- 0 0
Thomas H. Faucett -- -- 25,200/22,200 33,197/59,526
John M. Hines -- -- 40,000 15,000
</TABLE>

(1) At year end June 30, 1995, the closing price of the Company's Common Stock
was $16.875.

(2) The options represented as unexercisable could not be exercised by the named
executive on June 30, 1995, and future exercisability is dependent upon the
named executive remaining in the employ of the Company until the vesting
date, which is up to three years from the grant date, subject to
acceleration for retirement, death or total disability.

EMPLOYMENT AGREEMENTS

Prior to the Merger, Dibrell and a subsidiary of Monk-Austin entered into
employment agreements with Messrs. Owen, A.C. Monk III, Hines, R.T. Monk, Jr.,
Faucett and L.N. Dibrell III. The Company agreed to honor these agreements
following the Merger. The agreements with Messrs. Owen, Faucett and Dibrell and
those with Messrs. A.C. Monk III, Hines and R.T. Monk, Jr. provide for their
employment until November 1, 1999, and June 30, 1999, respectively. All of the
agreements may be terminated early in certain circumstances and are renewable
for successive one year terms. Under the agreements, Messrs. Owen, A.C. Monk
III, Hines, R.T. Monk, Jr., Faucett and Dibrell are entitled to annual base
salaries of $391,800, $380,000, $335,000, $270,000, $163,000 and $155,000,
respectively, subject to increases to reflect cost of living adjustments, and
are eligible for cash bonuses under the Company's Cash Bonus Plan. The
agreements also provide for (a) an annual supplemental retirement benefit equal
to 50% of the executive officer's average base salary for a period of up to ten
years upon termination of the agreements for reasons other than death,
disability or cause (for Messrs. Owen, Faucett and Dibrell, reduced by amounts
payable to them under the Dibrell Pension Equalization Plan (the "PEP")), (b) an
annual death benefit equal to 25% of the executive officer's average base salary
payable to a beneficiary designated by such executive for a period of five
years, and (c) annual disability payments, for Messrs. Owen, Faucett and
Dibrell, under the Dibrell Long-Term Disability Plan and, for Messrs. A.C. Monk
III, Hines and R.T. Monk, Jr., equal to 50% of their average base salaries for a
period of ten years. The agreements further provide that from the time of
termination of such executive's employment (other than by virtue of death or for
cause) until his death, each executive will be entitled to participate in any
group health plan or program provided by the Company at the time of termination,
and the Company must use its best efforts to provide each such executive with an
individual health insurance policy if such executive is unable to participate in
such plan. The agreements may be terminated by the Company for cause and by the
executive officers for Good Reason (generally related to a failure by the Board
to elect the officer to a responsible executive position, material modifications
of the officer's duties, functions and responsibilities or breach of the
agreement by the Company). In the event of termination of employment by the
Company other than for cause, by such executive for Good Reason or upon the
expiration of the agreement, each agreement provides that the executive officer
will be entitled to receive a special severance benefit for a period of one year
after the time of termination equal to a maximum of his base salary and bonus
for the employment year just completed. The agreements further provide for the
reimbursement by the Company of reasonable business expenses. The Company is
obligated to pay any additional amounts for any taxes the executive officers
would have to pay with respect to any parachute payments under Section 280G of
the Internal Revenue Code of 1986, as amended.

RETIREMENT PLAN

The following table sets forth, as of June 30, 1995, the estimated annual
benefits payable as a straight life annuity under the Dibrell Retirement Plan
upon retirement at age 65 after specified years of Credited Service. In the
event of early retirement prior to age 65 the following benefits are subject to
reduction.

<PAGE>
ESTIMATED ANNUAL BENEFITS PAYABLE AT RETIREMENT

<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF CREDITED SERVICE
EARNINGS 10 YRS. 20 YRS. 30 YRS. 40 YRS.
<S> <C> <C> <C> <C>
$ 180,000 $19,800 $ 39,600 $ 59,400 $ 79,200
220,000 24,200 48,400 72,600 96,800
260,000 28,600 57,200 85,800 114,400
300,000 33,000 66,000 99,000 132,000
360,000 39,600 79,200 118,800 158,400
400,000 44,000 88,000 132,000 176,000
500,000 55,000 110,000 165,000 220,000
600,000 66,000 132,000 198,000 264,000
</TABLE>

Annual retirement benefits in excess of the limit established under the
Internal Revenue Code (currently $120,000 for tax qualified trusts) will be paid
from corporate assets and not the Retirement Plan. Such excess payments will be
made from the excess benefit plan described below. Benefits under the retirement
plans are computed on the basis of a life annuity with 60 months guaranteed
payments. The benefits reflected in the table are not subject to offset for
Social Security or other offset payments.

The Retirement Plan's normal retirement allowance is stated with reference
to the Participant's Final Average Earnings. A Participant's "Final Average
Earnings" are one-fifth of his or her Annual Earnings during the highest
consecutive five-year period within the immediately preceding ten-year period.
The term "Annual Earnings" includes all cash remuneration paid to a Participant
other than commissions, specified foreign service earnings, and amounts realized
under the Omnibus Stock Incentive Plan, not to exceed $150,000, the applicable
Internal Revenue Code limit for 1995. Annual Earnings are the calendar year
equivalent of salary and bonus shown in the Summary Compensation Table. The
Participant's normal retirement allowance is 1.10% of his or her Final Average
Earnings multiplied by Credited Service.

As of December 31, 1994, Messrs. Faucett and Owen had 11 and 24 years of
Credited Service under the Retirement Plan, respectively. Messrs. A.C. Monk III
and Hines were not participants in the Plan as of June 30, 1995.

Mr. Hines will retire from the Company effective July 1, 1996. Pursuant to
his employment agreement, he is entitled to a special annual retirement benefit
of $180,000 payable in equal monthly installments until June 2008.

EXCESS BENEFIT PLAN

The Company maintains an excess benefit plan that provides individuals who
participate in the Retirement Plan the difference between the benefits they
could potentially accrue under the Retirement Plan considering total
compensation and the benefits actually paid as limited by regulations imposed by
the Internal Revenue Code. Employees meeting the eligibility requirements of the
Retirement Plan and who are selected by management may participate in this plan.
Such benefits are not funded and are expensed by the Company as paid.

PENSION EQUALIZATION PLAN

Effective January 1, 1991, Dibrell established the Pension Equalization
Plan to pay selected employees unreduced early retirement benefits coordinated
with benefit payments under the Retirement Plan. Under the PEP, some
participants receive a benefit that -- when added to their Retirement Plan
benefits -- provides them with unreduced benefits if they retire on or after age
55 (with credit to 65) with 30 years of service. For other participants, the
unreduced benefits are available if they retire on or after age 60 (with credit
to 65) with 25 years of service. An unreduced benefit is payable to Messrs. Owen
and Dibrell and certain other participants if they retire on or after age 54
(with credit to 65) with 24 years of service; provided that the sum of their age
and years of service (which will not be less than the service to be completed
during the initial term of their employment agreements) is at least 82. The PEP
also provides individual account based benefits to employees determined by the
Company in its full discretion in amounts likewise determined. In all cases, a
participant's benefits are not fully vested until that participant satisfies a
"vesting contribution" provision (satisfaction can include a direct
contribution, an indirect contribution, a waiver by the Company, any combination
of the foregoing, or other measures satisfactory to the Company) in the PEP. All
benefits are funded through a trust arrangement. The PEP also allows the Company
to provide "back-up" benefits to assure benefit payments (but not to duplicate
benefit payments) under other nonqualified retirement plans.

<PAGE>
REMUNERATION OF DIRECTORS

For the year ended June 30, 1995, each Director of the Company who was not
a salaried officer was paid an annual retainer of $18,000 ($20,000 in the case
of committee chairmen) and $1,500 plus travel expenses for attendance at each
meeting of the Board and $1,000 for attendance at any committee meeting thereof
on which such Director serves.

Under the Company's Non-Employee Directors' Stock Option Plan, beginning
with the 1995 annual meeting of the Board of Directors, the Company's
non-employee directors will receive an annual grant of options to purchase 1,000
shares of the Company's Common Stock at a purchase price per share equal to the
fair market value of the Common Stock on the date of grant. The options will
have a ten-year term and generally will not be transferable.

CONSULTING AGREEMENTS

Effective July 1, 1993, Mr. Willie G. Barker, Jr., retired from Dibrell as
President and Chief Operating Officer and entered into an advisory agreement
with Dibrell under which Mr. Barker will be paid $150,000 annually until June
30, 1995, unless extended by mutual agreement. In 1994, the agreement was
extended for one year until June 30, 1996. The agreement requires that Mr.
Barker devote sufficient time to effectively observe and oversee the worldwide
tobacco operations of the Company and assist the Chief Executive Officer and
other senior executives of the Company in those areas where his advice and
assistance is requested.

Effective July 1, 1996, Mr. Hines will retire as the Company's Executive
Vice President. He has entered into a consulting agreement with the Company
under which he will be paid approximately $14,000 monthly through June 1998 in
exchange for providing consulting and advisory services relating to purchasing,
processing, storing and selling leaf tobacco.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the Executive Compensation Committee members listed above is an
officer or employee or former officer or employee of the Company or any of its
subsidiaries. None of the Company's executive officers serves on the board of
any entity of which any committee member is an executive officer or director or
on the compensation committee of the board of any entity, one of whose executive
officers serves as a director of the Company.

STOCK INCENTIVE PLANS

In 1995 the Company's stockholders approved the DIMON Incorporated Omnibus
Stock Incentive Plan (the "Incentive Plan") and the DIMON Incorporated
Non-Employee Directors' Stock Option Plan (the "Directors' Plan"). Also, as a
result of the Merger, options granted under previous plans were assumed by
DIMON.

The Incentive Plan authorizes the issuance of up to 2.0 million shares of
Common Stock (subject to increase annually by 3% of the number of shares of
Common Stock issued during such year, other than pursuant to the Incentive
Plan). The Incentive Plan authorizes the issuance of various stock incentives to
key employees of the Company or any subsidiary, including nonqualified or
incentive stock options, stock appreciation rights and shares of restricted
stock.

Stock options granted under the Incentive Plan allow for the purchase of
Common Stock at prices determined at the time the option is granted by a
committee composed of independent directors. Stock appreciation rights ("SARs")
may be granted under the Incentive Plan in relation to option grants or
independently of option grants. SARs generally entitle the participant to
receive in cash the excess of the fair market value of a share of Common Stock
on the date of exercise over the value of the SAR at the date of grant.
Restricted stock is common stock that is both nontransferable and forfeitable
unless and until certain conditions are satisfied. No options or SARs may be
granted and no restricted stock may be awarded under the Incentive Plan after
February 8, 2005.

The options and SARs become exercisable on various dates as originally
determined for the grants assumed by DIMON. Under the Incentive Plan, the
committee will determine the dates that the options and SARs become exercisable.
As of March 31, 1996 288,000 options had been awarded under the Incentive Plan,
none of which have been exercised.

A separate Directors' Plan authorizes automatic annual grants to purchase
1,000 shares to non-employee directors. Any 1995 grants will be awarded at the
meeting of the DIMON Board following the 1995 annual meeting of the shareholders
of DIMON. The option price will be equal to the fair market value of DIMON
Common Stock on the date of grant. The maximum number of shares to be issued
under the Directors' Stock Plan is 50,000 shares. Options granted under the
Directors' Stock Plan are immediately exercisable. No grants had been made under
the Directors' Stock Plan as of June 30, 1995. As of March 31, 1996, 6,000
options had been awarded under the Directors' Plan, none of which have been
exercised.

<PAGE>
The Company has elected to treat the costs of SARs as compensation charges
to the income statement with quarterly adjustments for market price
fluctuations. All other options are treated as equivalent shares outstanding.
There was a $680 charge to income in 1995, a $974 credit to income in 1994, and
an $836 charge to income in 1993 arising from adjustments in fair market values
of the SARs.

PRINCIPAL AND SELLING STOCKHOLDERS

SECURITY OWNERSHIP OF SELLING STOCKHOLDERS AND CERTAIN BENEFICIAL OWNERS

The following table sets forth information with respect to the beneficial
ownership of shares of the Common Stock as of April 30, 1996, and as adjusted to
reflect the sale of the shares offered hereby, by (i) the Selling Stockholders;
and (ii) each person (including any "group" as that term is used in Section
13(d) of the Exchange Act) who is known to the Company to be the beneficial
owner more than 5% of the outstanding shares of the Common Stock.

<TABLE>
<CAPTION>
NUMBER OF
BENEFICIAL OWNERSHIP SHARES TO BE BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING SOLD IN THE AFTER THE OFFERING(1)
NAME SHARES PERCENT OFFERING SHARES PERCENT
<S> <C> <C> <C> <C> <C>
Agnes Q. Monk 2,206,904 5.22% 1,000,000 1,206,904(1) 2.85%
301 West Church Street
Farmville, NC 27828
Albert C. Monk III(2) 2,157,603 5.10 500,000(3) 1,657,603 3.91%
504 North Main Street
Farmville, NC 27828
Robert T. Monk, Jr.(4) 2,415,494 5.71 500,000(5) 1,915,494 4.52%
300 West Church Street
Farmville, NC 27828
Emily Monk Davidson 796,336 1.88% 500,000(6) 296,336 0.70%
Linda Monk Paige 1,777,253 4.20% 500,000(7) 1,277,253 3.02%
</TABLE>

(1) Includes 553,988 shares to be sold by Wachovia Bank of North Carolina N.A.
and Agnes Q. Monk, Trust u/a December 21, 1979, with William C. Monk, Sr.
f/b/o William C. Monk, Jr. and 446,012 shares to be sold by Wachovia Bank of
North Carolina N.A. and Agnes Q. Monk, Trust u/a December 21, 1979 with
William C. Monk, Sr. f/b/o Molly G. Monk. Each such trust has agreed to sell
up to 75,000 additional shares pursuant to the Underwriters' over-allotment
option.

(2) Mr. A. C. Monk has served as President of the Company since October 21, 1995
and as President and Chief Executive Officer of DIMON International since
January 23, 1995. He served as the Chief Executive Officer of Monk-Austin
from 1992 until the Merger.

(3) Includes 180,000 shares to be sold by the Albert and Nan Gray Monk
Charitable Remainder Trust. Mr. Monk has agreed to sell up to 75,000
additional shares pursuant to the Underwriters' overallotment option.

(4) Mr. R. T. Monk has been a director of the Company since 1995 and is the
Senior Vice President of DIMON International. He was Vice President and
Director of Processing Operations for Monk-Austin prior to the Merger.

(5) Includes 250,000 shares, 190,000 shares and 60,000 shares to be sold by the
R. T. Monk Trust u/a f/b/o R. T. Monk, Jr., the R. T. Monk, Jr. Revocable
Trust and the R. T. Monk, Jr. Charitable Trust, respectively. The R. T.
Monk, Jr. Revocable Trust and the R. T. Monk Trust u/a f/b/o R. T. Monk, Jr.
have each agreed to sell up to 37,500 additional shares pursuant to the
Underwriters' over-allotment option.

(6) Ms. Davidson has agreed to sell up to 75,000 additional shares pursuant to
the Underwriters' over-allotment option.

(7) Ms. Paige has agreed to sell up to 75,000 additional shares pursuant to the
Underwriters' over-allotment option.

<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT

The following table provides information as of April 30, 1996, as to shares
of Common Stock beneficially owned by each Director, the Chief Executive Officer
and the executive officers listed in the Summary Compensation Table and by all
Directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES WITH
SHARES WITH SHARED VOTING
NAME OF BENEFICIAL OWNER OR SOLE VOTING AND TOTAL PERCENT OF CLASS
NUMBER OF PERSONS IN AND INVESTMENT INVESTMENT NUMBER OF (IF MORE THAN 1%)
GROUP POWER(1) POWER SHARES (2)
<S> <C> <C> <C> <C>
Willie G. Barker, Jr. 376,110 54,000 430,110 1.02%
Louis N. Dibrell, III 454,200 -- 454,200 1.07
R. Stuart Dickson -- -- -- --
Henry F. Frigon -- -- -- --
John M. Hines 40,000 51,200 91,200 --
James E. Johnson, Jr. 1,000 -- 1,000 --
Thomas F. Keller 2,000 1,000 3,000 --
Joseph L. Lanier, Jr. 7,500 3,000 10,500 --
Albert C. Monk, III 2,157,603 -- 2,157,603 5.10
Robert T. Monk, Jr. 2,415,494 -- 2,415,494 5.71
W. C. Monk 1,740,058 -- 1,740,058 4.11
Claude B. Owen, Jr. 180,452 96,396 276,848 --
Norman A. Scher 10,122 -- 10,122 --
23 officers and Directors as
a group 7,384,539 205,596 7,590,135 17.95
</TABLE>

(1) The amounts in this column include shares of Common Stock with respect to
which the following persons have the right to acquire beneficial ownership
within 60 days of April 30, 1996: Mr. Barker, 48,030 shares; Mr. Dibrell,
30,744 shares; Mr. Hines, 40,000 shares; Mr. Owen, 56,430 shares; and the
officers and Directors as a group, 298,954 shares.

(2) Percentages determined include shares to which certain persons have the
right to acquire within 60 days of April 30, 1996.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue up to 125,000,000 shares of Common
Stock, no par value per share, and up to 10,000,000 shares of Preferred Stock,
no par value per share. As of April 30, 1996, there were 42,348,609 outstanding
shares of Common Stock and no outstanding shares of Preferred Stock.

COMMON STOCK

Each share of Common Stock is entitled to one vote on all matters submitted
to a vote at any meeting of shareholders. Holders of Common Stock are entitled
to receive dividends when, as and if declared by the Board of Directors out of
funds legally available therefor and, upon liquidation, to receive pro rata all
assets, if any, of the Company available for distribution after the payment of
necessary expenses and all prior claims. Holders of Common Stock have no
preemptive, redemption, conversion, subscription or sinking fund rights, and all
outstanding shares of Common Stock are, and the share of Common Stock offered by
the Company here will be, fully paid and nonassessable. Holders of Common Stock
have no right to cumulate votes in the election of directors. The rights and
privileges of holders of Common Stock are subject to any preferences provided
for by resolution of the Board of Directors for any series of Preferred Stock
that the Company may issue in the future.

PREFERRED STOCK

Under the Company's Amended and Restated Articles of Incorporation (the
"Articles"), the Board of Directors may issue shares of Preferred Stock in one
or more series as may be determined by the Board of Directors, which may
establish, from time to time, the number of shares to be included in each
series, may fix the designation, powers, preferences and rights of the shares of
each such series and any qualifications, limitations or restrictions thereof,
and may increase or decrease the

<PAGE>
number of shares of any series without any further vote or action by the
shareholders. Any Preferred Stock so issued may rank senior to the Common Stock
with respect to the payment of dividends or amounts upon liquidation,
dissolution or winding up of the Company, or both. In addition, any such shares
of Preferred Stock may have class or series voting rights. Under certain
circumstances, the issuance of Preferred Stock or the existence of the unissued
Preferred Stock may tend to discourage or render more difficult a merger or
other change in control of the Company. No shares of Preferred Stock have been
issued and the Company has no present plans to issue any shares of Preferred
Stock.

RIGHTS PLAN

Pursuant to a Rights Agreement, dated as of March 31, 1995, between the
Company and First Union National Bank of North Carolina, as Rights Agent (the
"Rights Plan"), one right to purchase Common Stock (a "Right") is attached to
each share of Common Stock issued prior to the Distribution Date, as defined
below. Except as described below, the Rights are evidenced by certificates for
the Common Stock, and no separate certificates will be distributed.

Each Right entitles the registered holder thereof to purchase from the
Company at any time following the Distribution Date and prior to the earlier of
(a) March 31, 2005, or (b) the time at which the Rights are redeemed (the
"Expiration Date"), one share of Common Stock at a price of $65.00, as adjusted
in certain circumstances described below (the "Purchase Price").

The Rights will separate from the Common Stock and a "Distribution Date"
will occur upon the earliest of (a) the tenth business day after the date on
which there is a public announcement that a person or group of affiliated or
associated persons acting in concert has acquired either (i) beneficial
ownership of an additional 10% or more of outstanding Common Stock or (ii) that
amount of Common Stock that results in such person or group owning both (x) more
than 10% of outstanding Common Stock and (y) that percentage of Common Stock
equal to 3% or more over the percentage of outstanding Common Stock owned by
such person or group at the Effective Time (an "Acquiring Person"), provided
that "Acquiring Person" will not include (i) any person who becomes an Acquiring
Person solely as a result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by the Company or
solely as a result of acquisition of shares pursuant to benefit plans adopted by
the Board, unless and until such person shall purchase or otherwise become the
beneficial owner of additional shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock or (ii) any person who the Board
determines has become an Acquiring Person inadvertently if such person divests
as promptly as practicable a sufficient number of shares of Common Stock so that
such person would no longer be an Acquiring Person as defined under the Rights
Plan, (b) the tenth business day after the date of commencement of a tender or
exchange offer if upon consummation thereof the offeror, including affiliates
and associates, would be the beneficial owner of 10% or more of the Common Stock
(a "Tender Offer") or (c) the tenth business day after the commencement of a
proxy solicitation in which any Affiliate (as hereinafter defined) of the
Company participates, provided that such tenth business day occurs prior to the
third anniversary of the Effective Time (a "Proxy Solicitation") and further
provided that participation by an Affiliate (as defined below) in a Proxy
Solicitation shall not cause the Rights to separate or constitute a Distribution
Date during any period of time in which the Board has failed to elect a person
nominated to replace a Departing Director pursuant to Article V(A), V(C) or V(D)
of the Articles if such Affiliate, or any person who is a member of a group of
which such Affiliate is also a member, had the right to participate in the
designation of the nominee pursuant to such Article V(A), V(C) or V(D) and all
continuing directors who have the right to make such designation have voted in
favor of the election of such nominee. For purposes of the Rights Plan,
"Affiliate" means any person or group that beneficially owns 10% or more of the
shares of Common Stock then outstanding; any director of executive officer of
the Company; any person, firm or corporation that directly or indirectly
controls, is controlled by or is under common control with the Company; and any
member of the immediate family of any of the foregoing.

Until the Distribution Date (a) the Rights are evidenced by the Common
Stock certificates and may be transferred with and only with such certificates,
(b) Common Stock certificates issued after the Effective Time will contain a
notation incorporating the Rights Plan by reference and (c) the surrender for
transfer of any certificate for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. Pursuant to the Rights Plan, the Company will reserve the right to
require prior to the occurrence of a Triggering Event (as hereinafter defined)
that upon exercise of Rights, a number of Rights be exercised so that only whole
shares of Common Stock will be issued.

The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the Expiration Date, unless earlier redeemed by the
Company as described below.

<PAGE>
As soon as practicable after the Distribution Date, certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate certificates alone will
represent the Rights. Only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.

In the event that at any time following the date (a) any person becomes an
Acquiring Person or acquires 10% or more of the Common Stock in a Tender Offer
(either, a "Stock Acquisition Date") or (b) if prior to April 1998, a Proxy
Solicitation is commenced and continues for 10 business days, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of any such event, all
Rights that are, or (under certain circumstances specified in the Rights Plan)
were, beneficially owned by any Acquiring Person (or certain related parties)
or, in the case of a Proxy Solicitation, by an Affiliate who participates in
such Proxy Solicitation, will be null and void.

In the event that, at any time following the Stock Acquisition Date, the
Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation or more than 50% of Company's
assets or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as described above) will thereafter
have the right to receive, upon exercise, common stock of the acquiring company
(the "Acquiring Company") having a value equal to two times the exercise price
of the Right. The events set forth in this paragraph and in the preceding
paragraph are referred to as the "Triggering Events."

At any time following the existence of an Acquiring Person or the
commencement and continuance of a Proxy Solicitation for more than 10 business
days, the Board of Directors may, at its option, exchange all or any part of the
Rights (other than Rights held by an Acquiring Person or an Affiliate who
participates in a Proxy Solicitation) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, provided that such exchange may
not be effected at any time after any person or group acquires 50% or more of
the shares of Common Stock then outstanding.

The Purchase Price payable, and the number of other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (a) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock, (b) if
holders of the Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current market price
of the Common Stock or (c) upon the distribution to holders of the Common Stock
of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).

With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the Common Stock
on the last trading date prior to the date of exercise.

At any time prior to the close of business on the earlier of (a) the Stock
Acquisition Date or (b) the tenth business day after commencement of a Proxy
Solicitation, the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors). Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$.01 per Right redemption price.

Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the Acquiring Company as set forth above.

The provisions of the Rights Plan may be amended by the Board of Directors
in order to cure any ambiguity, to make changes which do not adversely affect
the interests of holders of Rights (excluding the interests of any Acquiring
Person or certain related persons or any Affiliate participating in a Proxy
Solicitation), or to shorten or lengthen any time period under the Rights Plan;
provided, however, that no amendment to adjust the time period governing
redemption may be made at such time as the Rights are not redeemable. The Rights
Plan may not be amended to change the redemption price, the Expiration Date, the
Purchase Price or the number of shares of Common Stock for which a Right is
exercisable, provided that at any time (a) prior to the existence of an
Acquiring Person, (b) prior to the commencement of a Tender Offer or (c) prior
to the commencement of a Proxy Solicitation, provided that such Proxy
Solicitation is commenced before the third anniversary of the Effective Time,
the Board of Directors may amend the Rights Plan to increase the Purchase Price
or extend the Expiration Date.

<PAGE>
The Rights may have the effect of delaying or preventing a change in
control of the Company by significantly increasing the cost of acquiring the
Company. If a person were to attempt to acquire control of the Company without
the approval of the Board of Directors, the Rights, should they become
exercisable, would substantially dilute the purchaser's stock position in
Company, thereby increasing the effective cost of control commensurately.

CERTAIN PROVISIONS OF THE VSCA, COMPANY ARTICLES AND COMPANY BYLAWS

GENERAL

A number of provisions of the VSCA, the Articles and the Company's Bylaws
(the "Bylaws") deal with matters of corporate governance and the rights of
shareholders. Certain of these provisions, as well as the ability of the Board
of Directors to issue shares of Preferred Stock and to set the voting rights,
preferences and other terms thereof, may be deemed to have an anti-takeover
effect and may delay or prevent takeover attempts not first approved by the
Board of Directors (including takeovers which certain shareholders may deem to
be in their best interests). These provisions also could delay or frustrate the
removal of incumbent directors or the assumption of control by shareholders. The
Company believes that these provisions are appropriate to protect the interests
of Company and all of its shareholders. The following describes the principal
provisions of the VSCA, the Articles and the Bylaws that may be deemed to have
anti-takeover effects.

CERTAIN BUSINESS COMBINATIONS

The VSCA generally requires that any merger, share exchange or sale of
substantially all of the assets of a corporation not in the ordinary course of
business be approved by at least two-thirds of the votes entitled to be cast by
each voting group entitled to vote, unless the articles of incorporation provide
for a greater or lesser vote (but in no event less than a majority of votes cast
by each such voting group at a meeting at which a quorum of the voting group
exists). The Articles generally require that any merger, share exchange or sale
of substantially all the assets of DIMON not in the ordinary course of business
be approved by at least two-thirds of the votes entitled to be cast by each
voting group that is entitled to vote on such transactions. In addition to any
vote required by the provisions of VSCA described below, the Articles provide
that any transactions with DIMON or a subsidiary of DIMON that constitutes or
involves an "Affiliated Transaction" with an "Interested Shareholder," as such
terms are defined in Section 13.1-725 of the VSCA, must be approved by a
majority of the votes entitled to be cast by the members of each voting group
that is entitled to vote on such transaction other than votes entitled to be
cast by such interested shareholder and all "affiliates" and "associates" of
such interested shareholder, as such terms are defined in Section 13.1-725 of
the VSCA, unless such affiliated transaction is approved in advance by the vote
of a majority of the members of the DIMON Board (other than such interested
shareholder and any of his affiliates and associates who may be directors at the
time of such vote). The Bylaws require the affirmative vote of two-thirds of the
directors then in office to approve any merger, statutory share exchange, sale
or other disposition of all or substantially all of DIMON's assets, or any sale,
lease, transfer, distribution or other disposition of any business constituting
a "significant subsidiary" of DIMON for purposes of Regulation S-X under the
Securities Act, or any dissolution of DIMON.

The VSCA contains provisions governing "Affiliated Transactions." These
provisions, with several exceptions discussed below, require approval of
material acquisition transactions between a Virginia corporation and any holder
of more than 10% of any class of its outstanding voting shares (an "Interested
Shareholder") by the holders of at least two-thirds of the remaining voting
shares. Affiliated Transactions subject to this approval requirement include
mergers, share exchanges, material dispositions of corporate assets not in the
ordinary course of business, any dissolution of the corporation proposed by or
on behalf of an Interested Shareholder, or any reclassification, including
reverse stock splits, recapitalization or merger of the corporation with its
subsidiaries which increases the percentage of voting shares owned beneficially
by an Interested Shareholder by more than five percent.

For three years following the time that an Interested Shareholder becomes
an owner of 10% of the outstanding voting shares, a Virginia corporation cannot
engage in an Affiliated Transaction with such Interested Shareholder without
approval of two-thirds of the voting shares other than those shares beneficially
owned by the Interested Shareholder, and majority approval of the "Disinterested
Directors." A Disinterested Director means, with respect to a particular
Interested Shareholder, a member of the board of directors who was (a) a member
on the date on which an Interested Shareholder became an Interested Shareholder
and (b) recommended for election by, or was elected to fill a vacancy and
received the affirmative vote of, a majority of the Disinterested Directors then
on the board. At the expiration of the three-year period, the statute requires
approval of Affiliated Transactions by two-thirds of the voting shares other
than those beneficially owned by the Interested Shareholder.

<PAGE>
The principal exceptions to the special voting requirement apply to
transactions proposed after the three-year period has expired and require either
that the transaction be approved by a majority of the corporation's
Disinterested Directors or that the transaction satisfy the fair-price
requirements of the statute. In general, the fair-price requirement provides
that in a two-step acquisition transaction, the Interested Shareholder must pay
the shareholders in the second step either the same amount of cash or the same
amount and type of consideration paid to acquire the Virginia corporation's
shares in the first step.

None of the foregoing limitations and special voting requirements applies
to a transaction with an Interested Shareholder (a) whose acquisition of shares
making such person an Interested Shareholder was approved by a majority of the
Virginia corporation's Disinterested Directors or (b) who was an Interested
Shareholder on the date the corporation became subject to these provisions by
virtue of its having 300 shareholders of record.

These provisions were designed to deter certain takeovers of Virginia
corporations. In addition, the statute provides that, by affirmative vote of a
majority of the voting shares other than shares owned by any Interested
Shareholder, a corporation can adopt an amendment to its articles of
incorporation or bylaws providing that the Affiliated Transactions provisions
shall not apply to the corporation. DIMON has not "opted out" of the Affiliated
Transactions provisions.

The VSCA also contains provisions regulating certain "control share
acquisitions," which are transactions causing the voting strength of any person
acquiring beneficial ownership of shares of a public corporation in Virginia to
meet or exceed certain threshold percentages (20%, 33 1/3% or 50%) of the total
votes entitled to be cast for the election of directors. Shares acquired in a
control share acquisition have no voting rights unless (a) the voting rights are
granted by a majority vote of all outstanding shares other than those held by
the acquiring person or any officer or employee director of the corporation, or
(b) the articles of incorporation or bylaws of the corporation provide that
these Virginia law provisions do not apply to acquisitions of its shares. The
acquiring person may require that a special meeting of the shareholders be held
to consider the grant of voting rights to the shares acquired in the control
share acquisition. These provisions were designed to deter certain takeovers of
Virginia public corporations. DIMON has not adopted an amendment to its article
of incorporation or bylaws making these provisions inapplicable to acquisition
of its shares.

PROVISIONS REGARDING BOARD OF DIRECTORS

Certain provisions of the Articles with respect to the classification of
the Board of Directors and the removal of directors could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, control of Company.

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

The Bylaws establish advance notice procedures for shareholder proposals
and the nomination, other than by or at the direction of the Board of Directors
or a committee thereof, of candidates for election as directors. With respect to
shareholder nominations for the election of directors, the Bylaws provide that,
commencing with the 1996 annual shareholders' meeting, any shareholder entitled
to vote in the election of directors generally may nominate at a meeting one or
more persons for election as a director only if written notice of such
nomination or nominations is delivered or mailed to the secretary of the Company
(a) in the case of an annual meeting of shareholders that is called for a date
that is within 30 days before or after the anniversary date of the immediately
preceding annual meeting of shareholders, not less than 50 days nor more than 75
days prior to such anniversary date and (b) in the case of an annual meeting of
shareholders that is called for a date that is not within 30 days before or
after the anniversary date of the immediately preceding annual meeting of
shareholders, or in the case of a special meeting of shareholders, not later
than the close of business on the tenth day following the day on which the
notice of meeting was mailed or public disclosure of the date of the meeting was
made, whichever occurs first. Such notification must contain the following
information to the extent known by the notifying shareholder: (a) the name, age
and address of each proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the nominee's qualifications to serve as a director; (d)
the name and residence address of the notifying shareholder; and (e) the number
of shares owned by the notifying shareholder. The secretary of the Company will
deliver such notices to the Nominating Committee of the Board of Directors, to
such other committee as may be appointed from time to time by the Board of
Directors for the purpose of recommending to the Board of Directors candidates
to serve as directors or, in the absence of any such committee, to the Board of
Directors, for review. The Nominating Committee or such other committee will
thereafter make its recommendation to the Board of Directors, and the Board of
Directors will thereafter make its determination, with respect to whether such
candidate should be nominated for election as a director. Nominations not made
in accordance with the foregoing provisions will be disregarded by the chairman
of the meeting and all votes cast for each such nominee may be disregarded.

<PAGE>
With respect to other shareholder proposals, the Bylaws provide that a
shareholder desiring to make such a proposal must give notice thereof to the
secretary of the Company, not less than 60 days before the first anniversary of
the date of the Company's proxy statement in connection with the last annual
meeting. Such notice must set forth as to each matter the shareholder proposes
to bring before the annual meeting (a) a brief description of the business
desired to be brought before the annual meeting and the reason for conducting
such business at the annual meeting, (b) the name and record address of the
shareholder proposing such business, (c) the class, series and number of the
Company's shares that are beneficially owned by the shareholder, and (d) any
material interest of the shareholder in such business. In the event that a
shareholder attempts to bring business before an annual meeting without
complying with the foregoing provisions, the chairman of the meeting may, if the
facts warrant, determine that the business was not properly brought before the
meeting in accordance with the foregoing procedures, and, if he so determines,
he will declare to the meeting and such business will not be transacted.

The foregoing provisions may preclude shareholders from bringing matters
before other shareholders at an annual or special meeting, including making
nominations for directors.

MEETINGS OF SHAREHOLDERS

Under the Bylaws, meetings of the shareholders may be called by the
chairman of the board, the president or a majority of the Board of Directors.
This provision could have the effect of delaying until the next annual
shareholders' meeting shareholder actions which are favored by the holders of a
majority of the outstanding voting securities of the Company, because such
person or entity, even if it acquired a majority of the outstanding voting
securities of the Company, would be able to take action as a shareholder (such
as electing new directors or approving a merger) only at a duly called
shareholders' meeting.

AMENDMENT OF ARTICLES AND BYLAWS

Subject to the VSCA, the Articles may be amended by the affirmative vote of
the holders of a majority of the outstanding votes entitled to be cast by each
voting group entitled to vote thereon. Notwithstanding the foregoing, the
amendment or repeal of certain provisions of the Articles relating to the
approval of certain business combinations as described below and certain other
matters require the affirmative vote of the holders of two-thirds of the votes
entitled to be cast by each voting group that is entitled to vote on such
amendment or repeal.

INDEMNIFICATION

The Articles and the Bylaws provide that directors and officers of the
Company will be indemnified by the Company to the fullest extent authorized by
Virginia law, as it now exists or may in the future be amended, against all
expenses and liabilities reasonably incurred in connection with service for or
on behalf of the Company.

LIMITATION OF LIABILITY

In addition, the Articles provides that directors of the Company will not
be personally liable for monetary damages to the Company for certain breaches of
their fiduciary duty as directors, unless they violated their duty of loyalty to
the Company or its stockholders, acted in bad faith, knowingly or intentionally
violated the law, authorized illegal dividends or redemptions or derived an
improper personal benefit from their action as directors. This provision would
have no effect on the availability of equitable remedies or non-monetary relief,
such as an injunction or rescission for breach of the duty of care. In addition,
the provision applies only to claims against a director arising out of his role
as a director and not in any other capacity (such as an officer or employee of
the Company). Further, liability of a director for violations of the federal
securities laws will not be limited by this provision.

TRANSFER AGENT

First Union National Bank of North Carolina is the Transfer Agent for the
Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

As of April 30, 1996, the Company had outstanding 42,348,609 shares of
Common Stock of which 32,757,166 are freely tradeable. Upon completion of this
Offering, all of the Shares will be freely transferable and may be resold
without further registration under the Securities Act. As of April 30, 1996, the
Company had outstanding 1,250,105 options to purchase shares of Common Stock at
a weighted average exercise price of $16.25, of which options for 738,146 shares
of Common

<PAGE>
Stock were exercisable as of April 30, 1996, at a weighted average exercise
price of $16.65. See "Management -- Stock Options."

Approximately 9,591,443 shares of the Company's Common Stock are held by
persons who may be deemed to be "affiliates" of the Company under the Securities
Act and may be resold by them only in transactions registered under the
Securities Act or permitted by the provisions of Rule 144. Persons who may be
deemed to be affiliates include individuals or entities that control, are
controlled by, or are under common control with such party and may include
certain officers, directors and principal shareholders of such party. In
general, under Rule 144 as currently in effect, a person (or persons whose
shares are aggregated) who has beneficially owned "restricted securities" for at
least two years may, under certain circumstances, resell within any three-month
period such number of shares as does not exceed the greater of 1% of the then-
outstanding shares or the average weekly trading volume during the four calendar
weeks prior to such resale. Rule 144 also permits, under certain circumstances,
the resale of shares without any quantity limitation by a person who has
satisfied a three-year holding period and who is not, and has not been for the
preceding three months, an affiliate of the Company. In addition, holding
periods of successive non-affiliate owners are aggregated for purposes of
determining compliance with these two-and three-year holding period
requirements.

The availability of shares for sale or actual sales under Rule 144 or
otherwise may have an adverse effect on the market price of the Common Stock.
Sales under Rule 144 or otherwise also could impair the Company's ability to
market additional equity securities.

Pursuant to the Merger, certain members of the Monk family, including the
Selling Stockholders, received demand and piggyback registration rights,
exercisable until April, 1998, with respect to their shares of Common Stock.

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement dated
, 1996 (the "Underwriting Agreement"), the underwriters named below
(the "Underwriters"), for whom Wheat, First Securities, Inc. ("Wheat") and
Salomon Brothers Inc ("Salomon") are acting as representatives, have severally
agreed, to purchase from the Selling Stockholders and the Selling Stockholders
have agreed to sell to the Underwriters, the respective number of Shares set
forth opposite each Underwriter's name below.

<TABLE>
<CAPTION>
NUMBER
NAME OF UNDERWRITER OF SHARES
<S> <C>
Wheat, First Securities, Inc..................................................................................
Salomon Brothers Inc..........................................................................................

Total.................................................................................................. 3,000,000
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligation is such that they are committed to purchase and pay for all the
Shares if any are purchased.

The Underwriters propose to offer the Shares directly to the public at the
public offering price set forth on the cover page of this Prospectus and to
certain securities dealers at such price less a concession not in excess of
$ per share. The Underwriters may allow, and such selected dealers may
reallow, a concession not in excess of $ per share to certain brokers
and dealers. After the offering, the price to the public, concession, allowance
and reallowance may be changed by the representatives of the Underwriters.

The Selling Stockholders have granted to the Underwriters an option,
exercisable during the 30-day period after the date of this Prospectus, to
purchase up to 450,000 additional Shares to cover over-allotments, if any, at
the same price per share as the initial Shares to be purchased by the
Underwriters from the Selling Stockholders. To the extent that the Underwriters
exercise this option, each of the Underwriters will be committed, subject to
certain conditions, to purchase such additional Shares of Common Stock in
approximately the same proportion as set forth in the above table. The
Underwriters may purchase such Shares only to cover over-allotments made in
connection with this Offering.

The Company has agreed not to issue, and all executive officers of the
Company and the Selling Stockholders have agreed not to offer, sell or contract
to sell, or otherwise dispose of, directly or indirectly, or announce an
offering of, any

<PAGE>
shares of Common Stock or other equity securities of the Company for 180 days
after the date of this Prospectus without the prior written consent of the
representatives of the Underwriters.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the Underwriters may be required to
make in respect thereof.

Wheat and Salomon have, from time to time, provided investment advisory and
investment banking services to the Company, for which they have received
customary fees. Wheat and Salomon entered into a Standby Agreement dated
February 9, 1996, with the Company in connection with the Company's call for
redemption of the 7 3/4% Debentures. No shares of Common Stock were purchased by
Wheat or Salomon pursuant to that agreement. Investors converted approximately
99.85% of the 7 3/4% Debentures into shares of Common Stock. The Company funded
the redemption price for the remaining 7 3/4% Debentures from working capital.
Additionally, Wheat served as the qualified independent underwriter for the
Company's offering of the Notes.

LEGAL MATTERS

The validity of the Shares offered hereby will be passed upon for the
Company by Hunton & Williams, Richmond, Virginia, and for the Underwriters by
Cleary, Gottlieb, Steen & Hamilton, New York, New York.

EXPERTS

The financial statements, including financial statement schedules included
in this Prospectus for the fiscal year ended June 30, 1995, except as they
relate to the former Dibrell's financial statements as of June 30, 1994, and for
each of the two years in the period ended June 30, 1994, have been audited by
Price Waterhouse LLP, independent accountants, and insofar as they relate to
former Dibrell financial statements referred to above, by Ernst & Young LLP,
independent accountants, as stated in their respective reports appearing herein,
and have been so included on the authority of such firms as experts in auditing
and accounting.

The financial statements of Austro-Turk Tutun Anonim Sirketi for the year
ended December 31, 1994, included in this Prospectus have been audited by Omer
Baylan & Associates, independent accountants, as stated in their report
appearing herein and have been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

The financial statements of Austro Hellenique de Tabac S.A. Business Unit
for the year ended December 31, 1994, included in this Prospectus have been
audited by Deloitte & Touche, independent accountants, as stated in their report
appearing herein and have been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy
statements and other information concerning the Company may also be inspected at
the offices of the New York Stock Exchange, Inc. at 20 Broad Street, New York,
New York 10005.

The Company has filed with the Commission in Washington, D.C. a
Registration Statement (herein, together with all amendments and exhibits
thereto, referred to as the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Shares to which
this Prospectus relates. As permitted by the Rules and Regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement, including the exhibits and schedules thereto. Such
documents may be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates or may be
examined without charge at the public reference facilities of the Commission.

<PAGE>

DIMON INCORPORATED AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Annual Report
Report of Independent Accountants.................................................................................... F-3
Statement of Consolidated Income for the years ended June 30, 1995, 1994 and 1993.................................... F-5
Consolidated Balance Sheets as of June 30, 1995 and 1994............................................................. F-6
Statement of Consolidated Stockholders' Equity for the years ended June 30, 1995, 1994
and 1993.......................................................................................................... F-8
Statement of Consolidated Cash Flows for the years ended June 30, 1995, 1994 and 1993................................ F-9
Notes to Consolidated Financial Statements........................................................................... F-10

Quarterly Financial Statements
Statement of Consolidated Income for the nine months ended March 31, 1996 and 1995 (unaudited)....................... F-43
Consolidated Balance Sheets as of March 31, 1996 (unaudited) and June 30, 1995....................................... F-44
Statement of Consolidated Cash Flows for the nine months ended March 31, 1996,
and 1995.......................................................................................................... F-46
Notes to Consolidated Financial Statements (unaudited)............................................................... F-47

Pro Forma Condensed Consolidated Financial Information regarding the disposition of
Rio Grande Tabacalera S.A.
Pro Forma Condensed Consolidated Statement of Operations for the year ended June 30, 1995 (unaudited)................ F-59
Pro Forma Condensed Consolidated Statement of Operations for the nine months ended
March 31, 1996 (unaudited)........................................................................................ F-60
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)........................................... F-61

Pro Forma Condensed Consolidated Financial Information regarding the acquisitions of Austro-Turk Tutun A.S. and
Austro-Hellenique De Tabac S.A.
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1994 (unaudited)....................................... F-63
Pro Forma Combined Condensed Statement of Operations for the year ended June 30, 1994 (unaudited).................... F-64
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)........................................... F-65
Report of Independent Accountant..................................................................................... F-66
Austro-Turk Tutun A.S., Balance Sheet dated December 31, 1994................................................. F-68
Austro-Turk Tutun A.S., Profit and Loss Statement for the year ended December 31, 1994........................ F-69
Austro-Turk Tutun A.S. Notes to the Financial Statements...................................................... F-70
Report of Independent Auditors....................................................................................... F-79
Austro-Hellenique De Tabac S.A. Balance Sheet dated December 31, 1994................................................ F-80
Austro-Hellenique De Tabac S.A. Profit and Loss Statements for the year ended
December 31, 1994................................................................................................. F-81
Austro-Hellenique De Tabac S.A. Notes to the Financial Statements.................................................... F-82
</TABLE>

F-1

<PAGE>
Annual Report

F-2

<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
DIMON Incorporated

In our opinion, based upon our audits and the report of other auditors, the
accompanying consolidated balance sheets and the related consolidated statements
of income, of cash flows and of changes in stockholders' equity present fairly,
in all material respects, the financial position of DIMON Incorporated and its
subsidiaries at June 30, 1995 and 1994, and the results of their operations and
their cash flows for each of the three years in the period ended June 30, 1995,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Dibrell Brothers,
Incorporated, which statements reflect total assets of $651,457,020 at June 30,
1994 and total revenues of $919,114,139 and $1,065,438,864 for the years ended
June 30, 1994 and 1993, respectively. Those statements were audited by other
auditors whose report thereon has been furnished to us, and our opinion
expressed herein, insofar as it relates to the amounts included for Dibrell
Brothers, Incorporated is based solely on the report of the other auditors. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the report of the other auditors provide a reasonable basis for the
opinion expressed above.

Price Waterhouse LLP
Raleigh, North Carolina
October 3, 1995, except as to Note R,
which is as of March 11, 1996

F-3

<PAGE>
REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
Dibrell Brothers, Incorporated

We have audited the consolidated balance sheet of Dibrell Brothers,
Incorporated and subsidiaries as of June 30, 1994, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the two
years in the period ended June 30, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Dibrell
Brothers, Incorporated and subsidiaries at June 30, 1994, and the consolidated
results of their operations and their cash flows for each of the two years in
the period ended June 30, 1994, in conformity with generally accepted accounting
principles.

As discussed in Note E and Note F to the financial statements, effective
July 1, 1992, the Company changed its methods of accounting for income taxes and
postretirement benefits other than pensions.

/s/ ERNST & YOUNG LLP

Ernst & Young LLP
Winston-Salem, North Carolina
August 26, 1994

F-4

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Income

(in thousands, except per share amounts)

<TABLE>
<CAPTION>
Years Ended June 30
1995 1994 1993
<S> <C> <C> <C>
Net sales of goods and services..................................................... $1,927,749 $1,449,078 $1,680,616
Cost of goods and services sold..................................................... 1,757,516 1,317,286 1,457,828
170,233 131,792 222,788
Selling, administrative and general expenses........................................ 132,802 117,311 111,957
Restructuring and merger related costs.............................................. 25,955 -- --
Operating Income............................................................... 11,476 14,481 110,831
Other income:
Interest.......................................................................... 7,512 7,025 5,716
Sundry............................................................................ 5,927 8,675 19,962
13,439 15,700 25,678
Other deductions:
Interest.......................................................................... 45,231 35,117 38,128
Sundry............................................................................ 1,848 419 2,694
47,079 35,536 40,822
Income (loss) before income taxes, minority interest,
equity in net income of investee companies and
cumulative effect of accounting changes........................................ (22,164) (5,355) 95,687
Income taxes........................................................................ 5,980 2,767 31,173
Income (loss) before minority interest, equity in net
income of investee companies and cumulative effect
of accounting changes.......................................................... (28,144) (8,122) 64,514
Income applicable to minority interest.............................................. 216 466 486
Income (loss) before equity in net income of investee
companies and cumulative effect of accounting changes.......................... (28,360) (8,588) 64,028
Equity in net income (loss) of investee companies (net of
U.S. tax expense of $370, 1995; $589, 1994;
$145, 1993).................................................................... (1,805) 98 1,259
Income (loss) before cumulative effect of accounting
changes........................................................................... (30,165) (8,490) 65,287
Cumulative effect of accounting changes:
Postretirement benefit plans (net of applicable
income tax benefit of $5,965).................................................. -- -- (9,746)
Income taxes........................................................................ -- -- 8,963
Net Income (Loss).............................................................. $ (30,165) $ (8,490) $ 64,504
EARNINGS PER SHARE, PRIMARY
Income (loss) before cumulative effect of accounting
changes:.......................................................................... $ (.79) $ (.22) $ 1.76
Cumulative effect of accounting changes:
Postretirement benefit plans, net of tax.......................................... -- -- (.26)
Income taxes...................................................................... -- -- .24
Net Income (Loss).............................................................. $ (.79) $ (.22) $ 1.74
EARNINGS PER SHARE, ASSUMING FULL DILUTION
Income before cumulative effect of accounting changes:.............................. $ * $ * $ 1.65
Cumulative effect of accounting changes:
Postretirement benefit plans, net of tax.......................................... * * (.24)
Income taxes...................................................................... * * .22
Net Income..................................................................... $ * $ * $ 1.63
Weighted average number of common shares
Primary........................................................................... 38,100 38,091 37,072
Assuming full dilution............................................................ 42,355 42,297 41,310
</TABLE>

See notes to consolidated financial statements

* Computation of loss per share is anti-dilutive for the fiscal years 1994 and
1995.

F-5

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet

(in thousands)

<TABLE>
<CAPTION>
June 30
1995 1994
<S> <C> <C>
ASSETS

Current assets
Cash and cash equivalents.................................................................... $ 42,326 $ 12,471
Notes receivable............................................................................. 2,002 16,531
Trade receivables, net of allowances
(1995 - $8,823, 1994 - $9,972)............................................................ 182,750 164,314
Inventories:
Tobacco................................................................................... 410,431 403,211
Other..................................................................................... 14,179 5,675
Advances on purchases of tobacco............................................................. 44,379 60,129
Recoverable income taxes..................................................................... 2,007 6,151
Prepaid expenses and other assets............................................................ 33,045 16,961
Total current assets.................................................................... 731,119 685,443
Investments and other assets
Equity in net assets of investee companies................................................... 22,622 34,407
Other investments............................................................................ 1,749 14,336
Notes receivable............................................................................. 6,107 12,616
Other........................................................................................ 28,147 16,040
58,625 77,399
Intangible assets
Excess of cost over related net assets
of businesses acquired.................................................................... 26,167 12,694
Production and supply contracts.............................................................. 36,340 42,340
Pension asset................................................................................ 4,219 2,458
66,726 57,492
Property, plant and equipment
Land......................................................................................... 19,432 17,632
Buildings.................................................................................... 135,808 117,783
Machinery and equipment...................................................................... 169,181 160,909
Allowances for depreciation.................................................................. (101,372) (86,585)
223,049 209,739
Deferred taxes and other deferred charges...................................................... 14,089 13,743
$ 1,093,608 $ 1,043,816
</TABLE>

F-6

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet -- Continued

(in thousands)

<TABLE>
<CAPTION>
June 30
1995 1994
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Notes payable to banks.......................................................................... $ 233,736 $ 255,607
Accounts payable:
Trade........................................................................................ 56,559 84,645
Officers and employees....................................................................... 20,714 18,073
Other........................................................................................ 13,173 9,592
Advances from customers......................................................................... 49,224 48,929
Accrued expenses................................................................................ 57,359 31,858
Income taxes.................................................................................... 11,199 4,846
Long-term debt current.......................................................................... 11,558 14,226
Total current liabilities.................................................................. 453,522 467,776
Long-term debt
Revolving Credit Notes and Other................................................................ 292,528 188,825
Convertible Subordinated Debentures............................................................. 56,370 56,475
348,898 245,300
Deferred credits
Income taxes.................................................................................... 10,731 11,227
Compensation and other benefits................................................................. 40,715 29,972
51,446 41,199
Minority interest in subsidiaries................................................................. 936 1,227
Commitments and contingencies..................................................................... -- --
Stockholders' equity
Preferred Stock -- no par value:
1995
Authorized shares............................. 10,000
Issued shares................................. --
Common Stock -- no par value:
1995
Authorized shares.............................125,000
Issued shares................................. 38,092
80,030 79,861
Retained earnings............................................................................... 157,880 203,615
Equity -- currency conversions.................................................................. 1,565 6,471
Additional minimum pension liability............................................................ (1,286) (1,374)
Unrealized gain (loss) on investments........................................................... 617 (259)
238,806 288,314
$1,093,608 $1,043,816
</TABLE>

See notes to consolidated financial statements

F-7

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Stockholders' Equity

(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Additional
Equity Minimum Unrealized
Common Preferred Retained Currency Pension Gain (Loss) On
Stock Stock Earnings Conversions Liability Investments
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1992.................. $37,505 $ 13,368 $170,434 $ 2,075 $ (420) $ --
Net income for the year................. 64,504
Cash dividends -- $0.26 per share....... (9,819)
Recapitalization of preferred stock..... 13,368 (13,368)
Issuance of common stock in connection
with public offering.................. 27,765
Conversion of foreign currency financial
statements............................ 1,402
Reduction in minimum pension
liability............................. 140
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 410
Stock options exercised................. 785
Balance, June 30, 1993.................. $79,833 $ -- $225,119 $ 3,477 $ (280) $ --
Net loss for the year................... (8,490)
Cash dividends -- $0.34 per share....... (13,014)
Conversion of foreign currency financial
statements............................ 2,994
Additional minimum pension liability.... (1,094)
Stock options exercised................. 28
Unrealized loss on investments.......... (259)
Balance, June 30, 1994.................. $79,861 $ -- $203,615 $ 6,471 $ (1,374) $ (259)
Net loss for the year................... (30,165)
Cash dividends -- $0.41 per share....... (15,570)
Conversion of foreign currency financial
statements............................ (4,906)
Reduction in minimum pension
liability............................. 88
Stock options exercised................. 67
Unrealized gain on investments.......... 876
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 102
Balance, June 30, 1995.................. $80,030 $ -- $157,880 $ 1,565 $ (1,286) $ 617

<CAPTION>
Total
Stockholders'
Equity
<S> <C>
Balance, June 30, 1992.................. $222,962
Net income for the year................. 64,504
Cash dividends -- $0.26 per share....... (9,819)
Recapitalization of preferred stock..... --
Issuance of common stock in connection
with public offering.................. 27,765
Conversion of foreign currency financial
statements............................ 1,402
Reduction in minimum pension
liability............................. 140
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 410
Stock options exercised................. 785
Balance, June 30, 1993.................. $308,149
Net loss for the year................... (8,490)
Cash dividends -- $0.34 per share....... (13,014)
Conversion of foreign currency financial
statements............................ 2,994
Additional minimum pension liability.... (1,094)
Stock options exercised................. 28
Unrealized loss on investments.......... (259)
Balance, June 30, 1994.................. $288,314
Net loss for the year................... (30,165)
Cash dividends -- $0.41 per share....... (15,570)
Conversion of foreign currency financial
statements............................ (4,906)
Reduction in minimum pension
liability............................. 88
Stock options exercised................. 67
Unrealized gain on investments.......... 876
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 102
Balance, June 30, 1995.................. $238,806
</TABLE>

See notes to consolidated financial statements

F-8

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Cash Flows

(in thousands)

<TABLE>
<CAPTION>
Years Ended June 30
1995 1994 1993
<S> <C> <C> <C>
Operating activities
Net Income (Loss)....................................................................... $ (30,165) $ (8,490) $ 64,504
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization......................................................... 31,852 28,862 24,559
Deferred items........................................................................ (620) 565 1,341
Loss (gain) on foreign currency transactions.......................................... 570 (1,179) (9,339)
Gain on disposition of fixed assets................................................... (1,819) (1,624) (3,234)
Undistributed (earnings) loss of investees............................................ 1,805 (99) (1,259)
Dividends received from investees..................................................... 478 577 3,756
Income applicable to minority interest................................................ 216 466 486
Bad debt expense...................................................................... 3,820 4,681 4,258
Gain on disposal of operations........................................................ -- (1,792) --
Cumulative effect of accounting changes............................................... -- -- 783
Decrease (increase) in accounts receivable............................................ 52,520 31,454 (26,476)
Decrease (increase) in inventories and advances on purchases of tobacco............... 2,156 (16,512) (51,911)
Decrease in recoverable taxes......................................................... 4,293 1,351 1,167
Decrease (increase) in prepaid expenses............................................... (3,581) (2,056) 4,085
Increase (decrease) in accounts payable and accrued expenses.......................... (58,163) 9,730 12,938
Increase (decrease) in advances from customers........................................ (3,028) 4,951 10,719
Increase (decrease) in income taxes................................................... 6,075 (8,744) 3,095
Other................................................................................. 404 (4,983) 7,309
Net cash provided by operating activities........................................... 6,813 37,158 46,781
Investing activities
Purchase of property and equipment...................................................... (27,036) (32,382) (42,232)
Proceeds from sale of property and equipment............................................ 4,877 5,991 5,220
Payments on notes receivable and receivables from investees............................. 27,541 4,477 5,408
Issuance of notes receivable............................................................ (6,329) (18,385) (17,302)
Proceeds from or (advances) for other investments and other assets...................... 4,067 (194) (7,897)
Purchase of minority interest in subsidiaries........................................... (507) -- --
Purchase of subsidiaries, $8,856 for property and equipment............................. (17,123) -- --
Purchase of shares of Standard Commercial Corporation................................... -- (13,408) (386)
Other................................................................................... -- (194) (130)
Net cash used by investing activities............................................... (14,510) (54,095) (57,319)
Financing activities
Repayment of debt....................................................................... (927,022) (279,304) (358,818)
Proceeds from debt...................................................................... 978,366 307,246 346,189
Cash dividends paid to DIMON Incorporated stockholders.................................. (15,570) (13,014) (9,818)
Cash dividends paid to minority stockholders............................................ (237) (285) (351)
Proceeds from sale of common stock...................................................... 169 28 28,298
Net cash provided by financing activities........................................... 35,706 14,671 5,500
Effect of exchange rate changes on cash................................................... (1,584) (1,662) 779
Increase (decrease) in cash and cash equivalents.......................................... 26,425 (3,928) (4,259)
Increase in cash from purchased subsidiaries.............................................. 3,430 -- --
Cash and cash equivalents at beginning of year............................................ 12,471 16,399 20,658
Cash and cash equivalents at end of year............................................ $ 42,326 $ 12,471 $ 16,399
Other information:
Cash paid during the year:
Interest.............................................................................. $ 46,768 $ 34,965 $ 34,627
Income taxes.......................................................................... 18,917 12,627 27,204
Non-cash investing and financing activities:
Capitalized leases.................................................................... -- -- 180
Conversion of debt to equity.......................................................... 102 -- 420
Exercise of stock options............................................................. -- -- 232
</TABLE>

See notes to consolidated financial statements

F-9

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(in thousands)

NOTE A -- MERGER AND SIGNIFICANT ACCOUNTING POLICIES

Merger

On October 23, 1994, Dibrell and Monk-Austin announced execution of a
definitive Agreement and Plan of Reorganization pursuant to which the businesses
of Dibrell and Monk-Austin would be combined. At special meetings on March 31,
1995, the shareholders of both Dibrell and Monk-Austin approved the Agreement
and related combination. As a result, Dibrell and Monk-Austin were merged into
DIMON Incorporated ("DIMON") and each share of Dibrell Common Stock outstanding
at the merger date was converted to 1.5 shares, and each share of Monk-Austin
Common Stock outstanding at the merger date was converted into 1.0 share of
DIMON Common Stock, resulting in 38.069 million total outstanding shares at
April 1, 1995, the effective date of the merger.

The merger qualifies as a tax free reorganization and was accounted for as a
pooling of interests. Accordingly, the Company's financial statements have been
restated to include the results of both Dibrell and Monk-Austin for all periods
presented. Recorded assets and liabilities have been carried forward to the
combined company at their historical book values.

Combined and separate results of Dibrell and Monk-Austin during the periods
preceding the merger were as follows:

<TABLE>
<CAPTION>
Dibrell Monk-Austin Adjustment Combined
<S> <C> <C> <C> <C>
Nine months ended March 31, 1995 (unaudited)
Net revenues.............................................................. $ 812,021 $ 735,653 $ (140) $1,547,534
Net income (loss)......................................................... 6,090 (6,152) 9,829 9,767
Fiscal year ended June 30, 1994
Net revenues.............................................................. $ 919,114 $ 528,256 $ 1,708 $1,449,078
Net income (loss)......................................................... (9,144) 930 (276) (8,490)
Fiscal year ended June 30, 1993
Net revenues.............................................................. $1,065,439 $ 611,433 $ 3,744 $1,680,616
Net income (loss)......................................................... 39,348 28,692 (3,536) 64,504
</TABLE>

The combined financial results presented above include adjustments made to
conform accounting policies of the two companies. The significant adjustments
impacting net income for conformity relate to the accounting for income taxes,
the treatment of grower advances in Brazil, foreign currency transaction gains
and losses and certain other inventory costing policies. All other adjustments
are reclassifications to conform financial statement presentation. Intercompany
transactions between the two companies for the periods presented were not
material.

Significant Accounting Policies

The accounts of the Company and its consolidated subsidiaries are included
in the consolidated financial statements after elimination of significant
intercompany accounts and transactions. Certain foreign consolidated
subsidiaries of the Company have fiscal year ends of March 31 and May 31 to
facilitate reporting of consolidated accounts. The Company accounts for its
investments in certain investee companies (ownership 20% - 50%) under the equity
method of accounting. Investments in certain other foreign investees and
subsidiaries which are combined with other investments are stated at cost or
less than cost since the Company does not exercise significant influence over
financial or operating policies and because of restrictions imposed on the
transfer of earnings and other economic uncertainties.

Sales and revenue recognition is based on the passage of ownership, usually
with shipment of product.

Cash equivalents are defined as temporary investments of cash with
maturities of less than 90 days.

Inventories are valued at the lower of cost or market. Inventory valuation
provisions included in cost of goods and services sold totaled approximately
$9.2 million and $40.9 million for 1995 and 1994, respectively. Costs of tobacco
inventories are generally determined by the average cost method while costs of
other inventories are generally determined by the first-in, first-out method.
Substantially all of the tobacco inventory represents finished goods. Interest
and other carrying charges on the inventories are expensed in the period in
which they are incurred.

F-10

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE A -- MERGER AND SIGNIFICANT ACCOUNTING POLICIES -- Continued

Equity in net assets of investee companies includes excess of equity over
cost in the amount of $2,244 ($2,066 in 1994) and is being amortized on a
straight-line basis over ten years.

Excess of cost over related net assets of businesses acquired is being
amortized on a straight-line basis over periods ranging from 10 to 40 years. The
accumulated amortization at June 30, 1995, is $4,283 ($2,912 at June 30, 1994).

Supply contracts include the cost allocated to two ten-year tobacco supply
agreements with R. J. Reynolds Tobacco Company (Reynolds) pursuant to which the
Company will supply Reynolds and its affiliates with specified quantities of its
required tobaccos. Each contract is being amortized over the quantities shipped
or the contract period, whichever is sooner. The accumulated amortization at
June 30, 1995, is $15,129 ($11,311 at June 30, 1994).

Production contracts include the cost allocated to contracts associated with
farmers for the future supply of their annual tobacco production. The production
contracts are being amortized primarily on a straight-line basis over ten years.
The accumulated amortization at June 30, 1995, is $9,931 ($7,360 at June 30,
1994).

Property, plant and equipment is accounted for on the basis of cost.
Provisions for depreciation are computed on a straight-line basis at annual
rates calculated to amortize the cost of depreciable properties over their
estimated useful lives. Buildings and machinery and equipment are depreciated
over ranges of 20 to 40 years and over five to ten years, respectively. The
consolidated financial statements do not include fully depreciated assets.

The Company provides deferred income taxes on temporary differences arising
from tax loss carryforwards, employee benefit accruals, depreciation, deferred
compensation and undistributed earnings of consolidated subsidiaries and
unconsolidated affiliates not permanently reinvested.

Primary earnings per share are computed by dividing earnings by the weighted
average number of shares outstanding plus any common stock equivalents during
each period. The fully diluted earnings per share calculation assumes that all
of the Convertible Subordinated Debentures were converted into Common Stock at
the beginning of the reporting period thereby increasing the weighted average
number of shares considered outstanding during each period and reducing the
after-tax interest expense. The weighted average number of shares outstanding
are further increased by common stock equivalents on employee stock options.

The Company carries its equity security investments at fair value as prepaid
expenses and other assets with any change from the average cost basis being
reflected in stockholders' equity net of the tax benefit.

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets To Be Disposed Of." The Company is
required to adopt the new method of accounting for long-lived assets no later
than the first quarter of fiscal year 1997. The Company believes that its
adoption of SFAS No. 121 will not have a material impact on its financial
position.

In October, 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123 "Accounting for Stock-Based
Compensation," which will be effective for the Company's fiscal year 1997
statements. SFAS No. 123 defines a fair value based method of accounting for
stock-based compensation and requires certain disclosures to be made by entities
electing not to adopt this method. The Company has not yet determined the impact
of adoption of SFAS No. 123.

F-11

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE B -- INVESTEE COMPANIES, RELATED PARTIES AND ACQUISITIONS

The combined summarized information for investee companies is approximately
as follows:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Current assets.................................................................. $ 84,635 $110,531 $144,235
Non-current assets.............................................................. 57,344 67,066 70,044
Current liabilities............................................................. 84,244 99,649 129,506
Non-current liabilities......................................................... 3,130 6,275 8,942
Interest of other shareholders.................................................. 31,982 37,953 39,382
Net sales....................................................................... 120,183 146,731 210,575
Gross profit.................................................................... 9,953 22,506 25,772
Net income (loss)............................................................... (1,395) 2,609 3,933
</TABLE>

Balances with related parties, primarily unconsolidated, affiliated
companies, are as follows:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Trade receivables............................................................... $ 21,258 $ 10,968 $ 8,884
Advances on purchases of tobacco................................................ 9,716 38,557 75,809
Notes receivable................................................................ 4,169 10,425 3,496
Trade payables.................................................................. 1,556 7,555 4,428
Other income: Interest.......................................................... 1,376 1,299 497
Net sales....................................................................... 12,907 16,257 13,217
Purchases of tobacco............................................................ 73,474 76,321 108,690
</TABLE>

On April 1, 1995 the Company acquired the businesses of Austro-Hellenique De
Tabac S.A. (Hellas) and Austro-Turk Tutun A.S. (Austro-Turk) for cash of $13,372
and assumption of liabilities of $3,821. Hellas and Austro-Turk have tobacco
buying, processing and selling operations in Greece and Turkey, respectively.
This acquisition has been accounted for as a purchase. The excess of cost over
businesses acquired of $17,193 will be amortized over a ten year period.

The following pro forma information has been prepared assuming that this
acquisition had taken place at the beginning of the period. The pro forma
information includes adjustments to give effect to amortization of goodwill and
interest expense on acquisition debt, together with related income tax effects.

<TABLE>
<CAPTION>
Year ended June 30, 1995
(unaudited)
<S> <C>
Net sales of goods and services...................................................................... $1,965,437
Net loss............................................................................................. 36,577
Loss per share, primary.............................................................................. .96
</TABLE>

NOTE C -- LONG-TERM DEBT

Such debt is comprised of:

<TABLE>
<CAPTION>
1995 1994
Maturing Maturing Maturing Maturing
within after within after
One Year One Year One Year One Year
<S> <C> <C> <C> <C>
Convertible Subordinated Debentures.................... $ -- $ 56,370 $ -- $ 56,475
Revolving Credit Notes................................. -- 250,000 -- 140,000
Other Long-Term Debt................................... 9,679 40,772 12,372 47,191
$ 9,679 $347,142 $12,372 $ 243,666
Capitalized Lease Obligations.......................... 1,879 1,756 1,854 1,634
$11,558 $348,898 $14,226 $ 245,300
</TABLE>

F-12

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE C -- LONG-TERM DEBT -- Continued
Payments of the debt are scheduled as follows:

<TABLE>
<CAPTION>
Convertible Revolving Other
Subordinated Credit Long-Term
Debentures Notes Debt Total
<S> <C> <C> <C> <C>
1997.............................................. $ -- $ 250,000 $12,084 $262,084
1998.............................................. -- -- 8,037 8,037
1999.............................................. -- -- 7,988 7,988
2000.............................................. -- -- 4,679 4,679
2001.............................................. -- -- 1,864 1,864
2002.............................................. -- -- 1,714 1,714
Later years....................................... 56,370 -- 4,406 60,776
$ 56,370 $ 250,000 $40,772 $347,142
</TABLE>

Other long-term debt consists of obligations of DIMON Incorporated,
Florimex, Baardse and the tobacco operations in Brazil, and is principally
payable in foreign currencies at interest rates varying from 6.35% to 14.4%.

The capitalized lease obligations are payable through fiscal 1999. Interest
rates are imputed at 7.0% to 10.7%.

To ensure long-term liquidity, DIMON has entered into a $250 million Credit
Agreement with 13 banks (the Revolver). This Revolver replaces Dibrell's
Revolving Credit Notes of $130 million and Monk-Austin's Credit Agreement of
$125 million. The Company had no borrowings under the agreement at either June
30, 1995 or 1994. However, the Company has used these facilities to classify
$250,000 ($130,000 at June 30, 1994) of working capital loans to Revolving
Credit Notes. It is the Company's intent to finance at least $250,000 on a
long-term basis. The interest rates available under the Revolver depend on the
type of advance selected. The primary advance rate is the agent bank's base
lending rate (9% at June 30, 1995). The Revolver is subject to certain
commitment fees and covenants that among other things require DIMON to maintain
minimum working capital and tangible net worth amounts, require specific
liquidity and long-term solvency ratios and restrict acquisitions and, under
certain circumstances, payment of dividends by the Company. The Revolver's
initial term is to March 31, 1997, and, pending approval by the lenders, may be
extended for up to three additional years.

The rates of interest are based upon the type of loan requested by the
Company. During the life of the agreement the interest rate could be the prime
rate or the LIBOR rate adjusted. The Company pays a commitment fee of 1/4% per
annum on any unused portion of the facility. Decisions relative to repayments
and reborrowings are made based on circumstances then existing, including
management's judgment as to the most effective utilization of funds.

On June 3, 1991, Dibrell issued $57.5 million of 7 3/4% Convertible
Subordinated Debentures due on September 30, 2006. The bonds are convertible
into shares of the Company's Common Stock at a conversion price of approximately
$13.44 at any time prior to maturity. The Debentures are subordinated in right
of payment to all existing and future senior indebtedness, as defined, of the
Company. The Debentures are redeemable at the option of the Company under
certain circumstances on or after September 30, 1994. Beginning September 30,
2002, and ending September 30, 2005, the Company is required to make payments
each year to a sinking fund in an amount sufficient to redeem 5% of the
aggregate principal amount of the securities. At June 30, 1995, principal
amounts of $1,130 have been converted into 84.1 thousand shares of the Company's
Common Stock.

NOTE D -- RETAINED EARNINGS

Consolidated retained earnings included $4,860 at June 30, 1995, for the
Company's share of undistributed net income of investee companies accounted for
on the equity method.

F-13

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE E -- INCOME TAXES

Consolidated retained earnings at June 30, 1995 and 1994 include
undistributed earnings of $101,102 and $118,247 respectively, of certain foreign
consolidated and unconsolidated subsidiaries which are not subject to additional
foreign income taxes nor considered to be subject to United States income taxes
unless remitted as dividends. The Company intends to reinvest these
undistributed earnings indefinitely; accordingly, no provision has been made for
United States taxes on such earnings.

At June 30, 1995, the Company has net operating tax loss carryforwards of
approximately $45,730 for income tax purposes that expire in 1996 and
thereafter. Those carryforwards relate primarily to the operations of Dibrell
Brothers International S.A., a 100% owned Swiss sales subsidiary of the tobacco
division, Florimex and Baardse. For tax return purposes, the Company has
available tax credit carryforwards of approximately $2,000 which will expire in
1999.

The components of income (loss) before income taxes, minority interest,
equity in net income of investee companies and cumulative effect of accounting
changes, consisted of the following:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
U.S................................................................................. $(28,293) $(1,837) $51,564
Foreign............................................................................. 6,129 (3,518) 44,123
$(22,164) $(5,355) $95,687
</TABLE>

The details of the amount shown for income taxes in the Statement of
Consolidated Income follow:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Current
Federal........................................................................... $ 4,967 $ 2,721 $17,515
State............................................................................. 73 469 1,904
Foreign........................................................................... 9,719 109 8,533
$ 14,759 $ 3,299 $27,952
Deferred
Federal........................................................................... $ (6,622) $(2,417) $ (392)
State............................................................................. (810) (546) 3
Foreign........................................................................... (1,347) 2,431 3,610
$ (8,779) $ (532) $ 3,221
Total............................................................................... $ 5,980 $ 2,767 $31,173
</TABLE>

F-14

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE E -- INCOME TAXES -- Continued

The reasons for the difference between income tax expense based on income or
(loss) before income taxes, minority interest, equity in net income of investee
companies, and cumulative effect of accounting changes, and the amount computed
by applying the statutory Federal income tax rate to such income, are as
follows:

<TABLE>
<CAPTION>
Pre-tax Income
1995 1994 1993
<S> <C> <C> <C>
Computed "expected" tax expense (benefit)............................................ $(7,757) $(1,784) $32,975
State income taxes, net of Federal income tax benefit................................ (530) (77) 1,213
Effect of foreign income taxes....................................................... 6,962 2,324 (2,365)
Brazilian tax benefit for preacquisition indexing.................................... -- -- (3,033)
U.S. taxes on foreign income, net of tax credits..................................... 1,440 524 1,042
Net operating losses without benefit................................................. 2,748 2,658 1,932
Net operating loss benefits.......................................................... (806) (762) (281)
Tax benefits derived from Foreign Sales Corporations................................. (887) (1,169) (1,309)
Excess tax basis depreciation........................................................ -- -- (327)
Meals and entertainment.............................................................. 316 200 --
Non-deductible merger expenses....................................................... 1,583 -- --
Amortization of goodwill............................................................. 1,787 799 621
Other, net........................................................................... 1,124 54 705
Actual tax expense................................................................... $ 5,980 $ 2,767 $31,173
</TABLE>

The long-term deferred tax liabilities (assets) are comprised of the
following:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax liabilities:
Fixed assets......................................................................................... $ 13,825 $ 13,073
Foreign earnings and investments..................................................................... 1,637 592
Other................................................................................................ -- 969
Gross deferred tax liabilities......................................................................... 15,462 14,634
Deferred tax assets:
Tax loss carryforwards............................................................................... (12,618) (8,219)
Postretirement and other benefits.................................................................... (9,041) (7,070)
Depreciation......................................................................................... -- (2,320)
Inventory reserves................................................................................... -- (1,767)
Reserve for bad debts................................................................................ -- (747)
Contingent liability................................................................................. (2,594) (2,594)
Foreign tax credit................................................................................... (2,000) (2,000)
Other................................................................................................ (1,333) (1,178)
Gross deferred tax assets.............................................................................. (27,586) (25,895)
Valuation allowance.................................................................................... 12,414 8,996
Net deferred tax assets................................................................................ (15,172) (16,899)
Net deferred tax liability (asset)..................................................................... $ 290 $ (2,265)
</TABLE>

The net change in the valuation allowance for deferred tax assets was an
increase of $3,418 and relates primarily to the increase in tax loss
carryforwards for which no benefit can be currently recognized.

F-15

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE F -- EMPLOYEE BENEFITS

Retirement Benefits

The Company assumed the defined Benefit Pension Plan (the Retirement Plan)
and an Excess Benefit Plan of the former Dibrell. The Retirement Plan provides
retirement benefits for substantially all of Dibrell's U.S. salaried personnel
based on years of service rendered and compensation during the last five years
of employment. The Company maintains an Excess Benefit Plan that provides
individuals who participate in the Retirement Plan the difference between the
benefits they could potentially accrue under the Retirement Plan and the
benefits actually paid as limited by regulations imposed by the Internal Revenue
Code. The Company funds these plans in amounts consistent with the funding
requirements of Federal Law and Regulations.

Certain non-U.S. plans are sponsored by certain Florimex subsidiaries
located in Italy, Austria and Germany. These plans cover substantially all of
their full-time employees. Additional non-U.S. plans sponsored by certain
tobacco subsidiaries cover substantially all of their full-time employees
located in The Netherlands, Turkey and Zimbabwe.

The following tables include both U.S. and non-U.S. plans.

Net pension cost included the following components:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost -- benefits earned during the year...................................... $ 1,528 $ 1,270 $ 1,309
Interest cost on projected benefit obligation........................................ 4,040 3,612 3,402
Return on assets -- actual........................................................... (4,596) (357) (2,741)
Amortization of transition asset at July, 1986....................................... (268) (273) (269)
Amortization of prior service costs.................................................. 704 488 481
Amortization of unrecognized loss(gain).............................................. 1,778 (2,537) (90)
Net Pension Cost................................................................... $ 3,186 $ 2,203 $ 2,092
</TABLE>

The funded status of the plans at June 30 was as follows:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Actuarial present value of accumulated benefit obligation
Vested.................................................................................... $41,935 $34,970
Nonvested................................................................................. 576 579
42,511 35,549
Benefits attributable to projected salary increases......................................... 12,077 9,800
54,588 45,349
Plan assets at fair value................................................................... 37,141 31,556
Projected benefit obligation in excess of plan assets....................................... 17,447 13,793
Unamortized transition asset (obligation)................................................... (425) 2,359
Unrecognized prior service costs............................................................ (5,283) (5,290)
Unrecognized net loss....................................................................... (1,797) (3,113)
Adjustment required to recognize minimum liability.......................................... 5,505 3,871
Net pension liability..................................................................... $15,447 $11,620
</TABLE>

For the U.S. plans, projected benefit obligations were determined using
assumed discount rates of 8% for the Retirement Plan for all three years and 8%
for the Excess Benefit Plan for 1995 and 1994 and 10% for 1993. Assumed
compensation increases were 6.5% for all three years for the Retirement Plan and
5% for 1995 and 4% for 1994 and 1993 for the Excess Benefit Plan. The assumed
long-term rate of return on plan assets for all three years was 9% for the
Retirement Plan and 8% for 1995 and 10% for 1994 and 1993 for the Excess Benefit
Plan. Plan assets consist principally of common stock and fixed income
securities. For non-U.S. plans, discount rates and assumed compensation
increases are in accordance with locally

F-16

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE F -- EMPLOYEE BENEFITS -- Continued

accepted practice. No assumed long-term rate of return is made for non-U.S. plan
assets as these plans are generally not funded.

The Company also sponsors a 401-K savings plan for most of its salaried
employees located in the United States. The Company's contributions to the plan
were $652 in 1995, $648 in 1994 and $452 in 1993.

The Company has a Profit-Sharing Plan for substantially all of the salaried
employees meeting certain eligibility requirements who were employed by
Monk-Austin. This Profit Sharing Plan is in lieu of a defined benefit pension
plan. Profit-Sharing Plan contributions are discretionary and totaled $1,043 in
1995, $1,416 in 1994 and $1,569 in 1993.

The Company is in the process of standardizing employee benefits and expects
this process to be completed in fiscal year 1996. The Company has not yet
determined its future plans for the separate benefit plans for former employees
of Dibrell and Monk-Austin. No material financial statement impact is
anticipated from this standardization.

Postretirement Health and Life Insurance Benefits

The Company provides certain health and life insurance benefits to retired
employees (and their eligible dependents) who meet specified age and service
requirements. Plan assets consist of paid up life insurance policies on certain
current retirees. The Company retains the right, subject to existing agreements,
to modify or eliminate the medical benefits.

Effective July 1, 1992 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 106, "Employer's Accounting for Postretirement Benefits
Other Than Pensions." This statement requires the accrual of the cost of
providing postretirement benefits, including medical and life insurance
coverage, during the active service period of the employee. In adopting SFAS
106, the Company elected to immediately recognize the accumulated liability,
measured at the adoption date. This accumulated liability at adoption was
$15,711 ($9,746 net of tax).

The benefit obligation was determined using an assumed discount rate of 8.0%
for 1995 and 1994 and 8.5% for 1993 and an assumed rate of increase in health
care costs, also known as the health care cost trend rate, of 13.0% for 1995 and
1994 and 15.5% for 1993. This trend rate is assumed to decrease gradually to 6%
by fiscal 2007. The assumed long-term rate of return on plan assets was 5.4% for
1995 and 1994 and 7.6% for 1993. Based on current estimates, increasing the
health care cost trend rate by one percentage point would increase the benefit
obligation by approximately $1.4 million.

The following table presents the plan's funded status at June 30 reconciled
with amounts recognized in the Company's balance sheet:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................................................. $11,104 $10,343
Fully eligible active plan participants................................................... 2,937 2,872
Other active plan participants............................................................ 4,118 3,874
Plan assets at fair value................................................................... (159) (305)
Accumulated postretirement benefit obligation in excess of plan assets...................... 18,000 16,784
Unrecognized prior service cost............................................................. (191) --
Unrecognized net gain....................................................................... 1,237 1,189
Accrued postretirement benefit cost......................................................... $19,046 $17,973
</TABLE>

F-17

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE F -- EMPLOYEE BENEFITS -- Continued
Net periodic postretirement benefit cost included the following components:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Service cost................................................................................... $ 395 $ 361
Interest cost.................................................................................. 1,348 1,338
Actual return on plan assets................................................................... 7 (17)
Net periodic postretirement benefit cost....................................................... $1,750 $1,682
</TABLE>

The Company continues to evaluate ways in which it can better manage these
benefits and control the costs. Any changes in the plan or revisions to
assumptions that affect the amount of expected future benefits may have a
significant effect on the amount of the reported obligation and annual expense.

Employees in operations located in certain foreign countries are covered by
various foreign postretirement life insurance benefit arrangements. For these
foreign plans, neither the cash-basis cost of benefits charged to income, nor
the accrual-basis cost of benefits was material in 1995, 1994 and 1993.

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION

The following description and tables present the Company's tobacco and
flower operations in different geographic areas in conformity with the Statement
of Financial Accounting Standards No. 14, "Financial Reporting for Segments of a
Business Enterprise" (SFAS 14). Geographic area information for tobacco
operations as to net sales and operating profit is based on the origin of the
product sold, and identifiable assets are classified based on the origination of
the product. Turkish tobacco is included in other origin. Geographic area
information for flower operations as to net sales and operating profit is based
on the point of sale, and identifiable assets are classified based on the point
of sale. Corporate assets consist primarily of those related to cost
investments. Export sales are defined as foreign sales of United States origin.

Tobacco

DIMON Incorporated is principally engaged in the tobacco business. The
Company and its U.S. tobacco subsidiaries buy leaf tobacco on the auction
markets in Florida, Georgia, South Carolina, North Carolina, Virginia, Kentucky,
Tennessee and Maryland for its customers. This tobacco is shipped to plants
located in Virginia and North Carolina where it is processed, packed in
hogsheads or cases and then stored until ordered shipped by the Company's
customers. The Company and its tobacco subsidiaries also are engaged in buying,
processing and exporting tobacco grown in Argentina, Brazil, China, Greece,
Guatemala, India, Italy, Malawi, Mexico, Turkey, Zimbabwe and other areas which
is sold on the world markets. The Company's investee companies are located in
Brazil, Greece, Zimbabwe and the United States. The disaggregation of entities
necessary for geographic area data requires the use of estimation techniques for
operating profit. The identifiable assets presentation does not take into
account the seasonal aspects of the tobacco business, particularly the seasonal
peak in South America.

Flowers

The Company imports, exports and distributes cut flowers through the
Florimex group, which operates through 52 offices on five continents, and
through Baardse, which is located in The Netherlands.

F-18

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued

<TABLE>
<CAPTION>
Operating
Profit (Loss)
As Defined By Identifiable
Net Sales SFAS 14 Assets
<S> <C> <C> <C>
1995
Tobacco
United States................................................................... $ 876,982 $ 17,737 $ 119,889
South America................................................................... 442,891 15,986 455,526
Asia............................................................................ 27,890 (2,975) 40,850
Africa.......................................................................... 161,455 2,706 150,736
Other........................................................................... 34,965 1,265 74,180
Worldwide supply contract....................................................... -- -- 10,770
$1,544,183 $ 34,719 $ 851,951
Flowers
Europe.......................................................................... $ 324,338 $ 2,421 $ 98,835
United States................................................................... 24,439 (6,259) 6,722
Other........................................................................... 34,789 712 4,976
$ 383,566 $ (3,126) $ 110,533
$1,927,749 $ 31,593 $ 962,484
Corporate......................................................................... (8,807) 108,502
Equity in net assets of
investee companies and
related advances: Tobacco....................................................... -- 22,622
$ 1,093,608
Operating profit
before interest expense......................................................... $ 22,786
Interest expense.................................................................. (45,231)
Dividend income................................................................... 281
Income (loss) before income taxes, minority
interest, and equity in net assets of
investee companies........................................................... $ (22,164)
</TABLE>

<TABLE>
<CAPTION>
Europe Far East Other Total

<S> <C> <C> <C> <C>
Export sales of U.S. origin................................................... $174,649 $260,310 $23,891 $458,850
</TABLE>

<TABLE>
<CAPTION>
Tobacco Flowers Total
<S> <C> <C> <C>
Depreciation and amortization................................................................. $24,034 $ 7,818 $31,852
Capital expenditures.......................................................................... $29,033 $ 6,859 $35,892
Equity in net income of investee companies.................................................... $ 1,805 $ -- $ 1,805
</TABLE>

F-19

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued

<TABLE>
<CAPTION>
Operating
Profit (Loss)
As Defined By Identifiable
Net Sales SFAS 14 Assets
<S> <C> <C> <C>
1994
Tobacco
United States................................................................... $ 541,646 $ 19,110 $ 268,910
South America................................................................... 281,472 1,905 448,428
Asia............................................................................ 34,048 (1,010) 13,177
Africa.......................................................................... 159,211 15,831 105,611
Other........................................................................... 65,166 2,576 40,993
Worldwide supply contract....................................................... -- -- 12,000
$1,081,543 $ 38,412 $ 889,119
Flowers
Europe.......................................................................... $ 294,094 $ 3,989 $ 89,241
United States................................................................... 42,304 (2,109) 10,290
Other........................................................................... 31,137 681 3,409
$ 367,535 $ 2,561 $ 102,940
$1,449,078 $ 40,973 $ 992,059
Corporate......................................................................... (11,832) 17,350
Equity in net assets of
investee companies and
related advances: Tobacco.................................................... 34,407
$ 1,043,816
Operating profit
before interest expense......................................................... $ 29,141
Interest expense.................................................................. (35,117)
Dividend income................................................................... 621
Income (loss) before income taxes, minority interest, and equity in net assets
of investee companies........................................................ $ (5,355)
</TABLE>

<TABLE>
<CAPTION>
Europe Far East Other Total
<S> <C> <C> <C> <C>
Export sales of U.S. origin................................................... $119,650 $239,881 $ 9,511 $369,042
</TABLE>

<TABLE>
<CAPTION>
Tobacco Flowers Total
<S> <C> <C> <C>
Depreciation and amortization................................................................ $21,871 $ 6,991 $28,862
Capital expenditures......................................................................... $22,354 $10,028 $32,382
Equity in net income of investee companies................................................... $ 98 $ -- $ 98
</TABLE>

F-20

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued

<TABLE>
<CAPTION>
Operating
Profit (Loss)
As Defined By Identifiable
Net Sales SFAS 14 Assets
<S> <C> <C> <C>
1993
Tobacco
United States..................................................................... $ 631,205 $ 31,737 $203,220
South America..................................................................... 433,222 87,104 490,146
Asia.............................................................................. 55,113 5,114 19,888
Africa............................................................................ 113,646 10,063 92,392
Other............................................................................. 70,027 5,030 35,260
Worldwide supply contract......................................................... -- -- 14,660
$1,303,213 $ 139,048 $855,566
Flowers
Europe............................................................................ $ 312,888 $ 5,471 $ 83,273
United States..................................................................... 39,612 476 8,765
Other............................................................................. 24,903 534 3,324
$ 377,403 $ 6,481 $ 95,362
$1,680,616 $ 145,529 $950,928
Corporate........................................................................... (12,236) 5,501
Equity in net assets of
investee companies and
related advances: Tobacco...................................................... 42,091
$998,520
Operating profit
before interest expense........................................................... $ 133,293
Interest expense.................................................................... (38,128)
Dividend income..................................................................... 522
Income (loss) before income taxes,
minority interest, and equity in net
assets of investee companies................................................... $ 95,687
</TABLE>

<TABLE>
<CAPTION>
Europe Far East Other Total
<S> <C> <C> <C> <C>
Export sales of U.S. origin................................................... $154,101 $239,244 $30,874 $424,219
</TABLE>

<TABLE>
<CAPTION>
Tobacco Flowers Total
<S> <C> <C> <C>
Depreciation and amortization................................................................. $18,563 $ 5,996 $24,559
Capital expenditures.......................................................................... $33,215 $ 9,017 $42,232
Equity in net income of investee companies.................................................... $ 1,259 $ -- $ 1,259
</TABLE>

Of the 1995, 1994 and 1993 tobacco sales, approximately 53%, 43% and 37%,
respectively, were to various tobacco customers which management has reason to
believe are now owned by or under the common control of three companies (two
companies in 1994 and 1993), each of which accounted for more than 10% of net
sales. At June 30, 1995, there was approximately $22.6 million due from the
three major tobacco customers and included in Trade receivables.

F-21

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued
The following table summarizes the net sales made to each customer for the
periods indicated:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Customer A...................................................................... $317,110 $238,370 $271,688
Customer B...................................................................... 214,622 231,852 212,595
Customer C...................................................................... 279,257 -- --
Total.................................................................... $810,989 $470,222 $404,283
</TABLE>

No customers in the flower operation accounted for more than 10% of flower
sales.

NOTE H -- SHORT-TERM BORROWING ARRANGEMENTS

The Company has lines of credit arrangements with several banks under which
the Company may borrow up to a total of $876,181 ($1,032,331 at June 30, 1994),
excluding all long-term credit agreements. These lines bear interest at rates
ranging from 4.3% to 9.8% at June 30, 1995. Unused lines of credit at June 30,
1995, amounted to $508,947 ($619,761 at June 30, 1994), net of $133,498 of
available letters of credit and guarantees that reduce lines of credit. There
were no compensating balance agreements at June 30, 1995, or 1994.

NOTE I -- CONTINGENCIES AND OTHER INFORMATION

In 1993, the Company received notices from Brazilian tax authorities of
proposed adjustments to the income tax returns of the Company's entities located
in Brazil for the calendar years ending 1988 through 1992. The approximate
proposed adjustments claim additional tax, including penalties and interest, of
$36,942, before related tax benefits for all assessed interest. The Company
believes that it has properly reported its income and paid its taxes in Brazil
in accordance with applicable laws and intends to contest the proposed
adjustments vigorously. The Company expects that the ultimate resolution of this
matter will not have a material adverse effect on the Company's consolidated
balance sheet or results of operations.

Consistent with the fiscal 1994 plan to liquidate Korean American Tobacco, a
49% owned affiliate, the Company is involved in legal negotiations related to
the final settlement and liquidating dividend. While the ultimate results of
these negotiations cannot be determined, management does not expect that the
outcome will have a material adverse effect on the Company's consolidated
balance sheet or results of operations.

The Company and certain subsidiaries have available letters of credit of
$153,380 at June 30, 1995, of which $113,181 was outstanding. These letters of
credit represent, generally, performance guarantees issued in connection with
purchases and sales of domestic and foreign tobacco.

The Company is guarantor as to certain lines and letters of credit of
affiliated companies in an amount not to exceed approximately $14,080. There was
approximately $7,388 outstanding under these guarantees at June 30, 1995.

The Company's subsidiaries have guaranteed certain loans made by Brazilian
banks to local farmers. There was approximately $20,563 outstanding under these
guarantees at June 30, 1995.

The Company enters into forward exchange contracts to hedge certain foreign
currency transactions for periods consistent with the terms of the underlying
transactions. While the forward contracts affect the Company's results of
operations, they do so only in connection with the underlying transactions. As a
result, they do not subject the Company to risk from exchange rate movements,
because gains and losses on these contracts offset losses and gains on the
transactions being hedged. At June 30, 1995, the Company had $1 million ($7
million in 1994) of U.S. dollar/Deutschmark exchange contracts outstanding, all
of which were in Deutschmarks. The forward exchange contracts generally have
maturities that do not exceed 275 days.

The Company's other off balance sheet risks are not material.

F-22

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE J -- FOREIGN CURRENCY TRANSLATION

The financial statements of foreign entities included in the consolidated
financial statements have been translated to U.S. dollars in accordance with
FASB Statement No. 52, "Foreign Currency Translation." Under that Statement, all
asset and liability accounts are translated at the current exchange rate, and
income statement items are translated at the average exchange rate for each
quarter; resulting translation adjustments, net of deferred taxes, are made
directly to a separate component of stockholders' equity. Transaction
adjustments, however, are made in the Statement of Consolidated Income. These
include realized exchange adjustments relating to assets and liabilities
denominated in foreign currencies. Financial statements of entities located in
highly inflationary economies are remeasured in U.S. dollars. The remeasurement
of and subsequent transaction adjustments are also made in the Statement of
Consolidated Income.

For 1995, the transaction adjustments netted to a loss of $570. The
transaction adjustments were gains of $1,179 and gains of $9,339 for 1994 and
1993, respectively, and were primarily related to the Company's Brazilian
operations.

NOTE K -- PREFERRED STOCK

The Board of Directors is authorized to issue shares of Preferred Stock in
series with variations as to the number of shares in any series. The Board of
Directors also is authorized to establish the rights and privileges of such
shares issued including dividend and voting rights. At June 30, 1995, no shares
had been issued.

NOTE L -- LONG-TERM LEASES

The Company, primarily through Florimex, has both capital and operating
leases. The capital leases are for land, buildings, automobiles and trucks; the
operating leases are for office equipment. Amortization is included in
depreciation expense. Minimum future obligations and capitalized amounts are as
follows:

<TABLE>
<CAPTION>
Capital Operating
Leases Leases
<S> <C> <C>
1996.................................................................................................... $ 2,059 $ 3,204
1997.................................................................................................... 1,237 2,459
1998.................................................................................................... 594 1,668
1999.................................................................................................... 69 890
2000.................................................................................................... -- 459
Later years............................................................................................. -- --
$ 3,959 $ 8,680
Less amount representing interest and deposits.......................................................... 325
Present value of net minimum lease payments............................................................. $ 3,634
Less current portion of obligations under capital leases................................................ 1,878
Long-term obligations under capital leases.............................................................. $ 1,756
Capitalized amounts
Land.................................................................................................. $ 2,871
Building.............................................................................................. 5,476
Machinery and equipment, primarily vehicles........................................................... 5,344
Accumulated amortization................................................................................ (3,548)
$10,143
</TABLE>

F-23

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE M -- STOCK INCENTIVE PLAN

At the 1995 Special Meeting of Stockholders the DIMON Incorporated Omnibus
Stock Incentive Plan (the Incentive Plan) and the DIMON Incorporated
Non-Employee Directors' Stock Option Plan (the Directors' Plan) were approved.
Also, as a result of the merger, options granted under previous plans were
assumed by DIMON.

The Incentive Plan authorizes the issuance of up to 2 million shares of
common stock (subject to increase annually by 3% of the number of shares of
common stock issued during such year, other than pursuant to the Incentive
Plan). The Incentive Plan authorizes the issuance of various stock incentives to
key employees of the Company or any subsidiary, including nonqualified or
incentive stock options, stock appreciation rights and shares of restricted
stock.

Stock options granted under the Incentive Plan allow for the purchase of
common stock at prices determined at the time the option is granted by a
committee composed of independent directors. Stock appreciation rights (SARs)
may be granted under the Incentive Plan in relation to option grants or
independently of option grants. SARs generally entitle the participant to
receive in cash the excess of the fair market value of a share of common stock
on the date of exercise over the value of the SAR at the date of grant.
Restricted stock is common stock that is both nontransferable and forfeitable
unless and until certain conditions are satisfied. No options or SARs may be
granted and no restricted stock may be awarded under the Incentive Plan after
February 8, 2005.

A separate Directors' Plan authorizes automatic annual grants to purchase
1,000 shares to non-employee directors. Any 1995 grants will be awarded at the
meeting of the DIMON Board following the 1995 annual meeting of the shareholders
of DIMON. The option price will be equal to the fair market value of DIMON
Common Stock on the date of grant. The maximum number of shares to be issued
under the Directors' Stock Plan is 50 thousand shares. Options granted under the
Directors' Stock Plan are immediately exercisable. No grants had been made under
the Directors' Stock Plan as of June 30, 1995.

The Company has elected to treat the costs of SARs as compensation charges
to the income statement with quarterly adjustments for market price
fluctuations. All other options are treated as equivalent shares outstanding.
There was a $680 charge to income in 1995, a $974 credit to income in 1994, and
an $836 charge to income in 1993 arising from adjustments in fair market values
of the SARs.

F-24

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE M -- STOCK INCENTIVE PLAN -- Continued
Information with respect to options and SARs follows:
<TABLE>
<CAPTION>
Year Ended June 30
1995 1994
<S> <C> <C>
Options outstanding at beginning of year............................................... 1,354 1,074
Options and SARs granted............................................................... 231 299
Options exercised...................................................................... (5) (12)
Options cancelled...................................................................... (40) (7)
Options outstanding at end of year..................................................... 1,540 1,354
SARs included as outstanding at end of year............................................ 498 415
Options available for future grants at end of year..................................... 500 1,665
Options and SARs exercisable at end of year............................................ 926 392
Option and SAR market prices per share:
Date of grant........................................................................ $ 11.50 $ 16.67
Exercised (at lowest and highest market prices)...................................... 14.42- 18.23-
18.25 20.67
Cancelled (at lowest and highest market prices)...................................... 11.50-
13.87 10.00

1993
<S> <C>
Options outstanding at beginning of year............................................... 455
Options and SARs granted............................................................... 708
Options exercised...................................................................... (64)
Options cancelled...................................................................... (25)
Options outstanding at end of year..................................................... 1,074
SARs included as outstanding at end of year............................................ 329
Options available for future grants at end of year..................................... 914
Options and SARs exercisable at end of year............................................ 119
Option and SAR market prices per share:
Date of grant........................................................................ $ 16.50-
22.00
Exercised (at lowest and highest market prices)...................................... 21.50-
29.00
Cancelled (at lowest and highest market prices)......................................
N/A
</TABLE>

NOTE N -- RESTRUCTURING AND MERGER RELATED COSTS

As a result of the April, 1995, merger of Dibrell and Monk-Austin,
accounted for as a pooling of interests, the Company has initiated various
activities to restructure its worldwide operations. Merger related costs
incurred and paid for legal, accounting and financial consultants were $8.1
million.

The following tables set forth the Company's restructuring provisions
provided and changes in the related reserves for fiscal 1995. The reserve
balances are included in accrued expenses and deferred compensation and other
benefits.

<TABLE>
<CAPTION>
Facilities
Employee Closure
Separations Costs Other Total
<S> <C> <C> <C> <C>
Provision for restructuring........................................... $ 12,593 $ 2,848 $2,416 $17,857
Reduced for:
Cash payments....................................................... 76 223 205 504
Asset writedowns.................................................... -- 1,493 2,211 3,704
Reserve balances at June 30, 1995..................................... $ 12,517 $ 1,132 $ -- $13,649
</TABLE>

The restructuring charges provided include approximately $2.6 million for
the closing of certain unprofitable flower facilities and related severance
costs. Those flower operations which were closed are not expected to have a
material impact on the Company's consolidated results of operations. The
remaining restructuring provision of $15.2 million addresses rationalization of
the tobacco operations through elimination of duplicative facilities and
reduction of personnel. During the quarter ended June 30, 1995, the Company
severed a total of 104 employees of which 33 were involuntarily separated. The
severed employees were primarily in the tobacco division and worked in various
departments throughout the Company. Substantially all of the restructuring
reserves will result in future cash expenditures. Additional restructuring
charges of $5 million to $10 million are anticipated during fiscal 1996, as the
Company further rationalizes its combined operations to achieve desired
efficiencies and synergies.

F-25

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE O -- CAPITAL STOCK AND RECAPITALIZATION

On November 13, 1992 and in connection with the Monk-Austin initial public
offering, Monk-Austin effected a plan of recapitalization and amended and
restated its articles of incorporation. Among other things, the amended and
restated articles of incorporation and the related articles of restatement (i)
created a new class of common stock, par value $.01 per share (Common Stock),
with one vote per share, (ii) converted all outstanding shares of the Company's
Class A and Class B common stock into an aggregate of 15,422 shares of the newly
created Common Stock, reflecting a 128 for 1 conversion ratio, and (iii)
converted all outstanding shares of Monk-Austin's 10% preferred stock into 810
shares of Common Stock. The accompanying financial statements reflect the
conversion of the Class A and Class B common stock for all periods presented and
the pooling of interests that occurred in fiscal 1995.

On November 20, 1992, Monk-Austin completed an initial public offering in
which it issued 1,881 shares of Common Stock at $16.50 per share. The Company's
gross proceeds and share of total issuance costs were $31,041 and $3,276,
respectively. Issuance costs are included as a reduction of additional paid-in
capital.

NOTE P -- FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments at June 30,
1995 is provided in the following table:

<TABLE>
<CAPTION>
Carrying Fair
Amount Value
<S> <C> <C>
Convertible Subordinated Debentures......................................................... $ 56,370 $70,462
Other Long-Term Debt........................................................................ 50,451 38,769
</TABLE>

Interest rate swap agreements with an aggregate material principal balance
of $31,285 and expiring December 31, 1996 had a negative value of $600 at June
30, 1995.

In the normal course of business, the Company is a party to financial
instruments with off balance sheet risk such as letters of credit and
guarantees. Management does not expect any material losses to result from these
instruments.

The fair value estimates presented herein are based on information
available to management at June 30, 1995, and were determined using market
information and other commonly accepted valuation methodologies.

F-26

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE Q -- SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial information is as follows:

<TABLE>
<CAPTION>
Net
Income
(Loss)(3)
Gross Net per Share of
Net Profit Income Common
Sales (Loss)(1) (Loss) Stock
<S> <C> <C> <C> <C>
1995 Fiscal Year.................................. $1,927,749 $170,233 $(30,165) $(0.79)
Fourth Quarter.............................. 380,215 27,243 (39,928)(1) (1.05)(1)
Third Quarter............................... 644,079 58,320 7,576 0.20
Second Quarter.............................. 631,503 52,627 3,709 0.10
First Quarter............................... 271,952 32,043 (1,522) (0.04)

1994 Fiscal Year.................................. $1,449,078 $131,792 $ (8,490) $(0.22)
Fourth Quarter.............................. 322,147 (2,805) (32,080)(2) (0.84)(2)
Third Quarter............................... 404,751 42,112 3,627 0.10
Second Quarter.............................. 391,199 43,932 9,199 0.24
First Quarter............................... 330,981 48,553 10,764 0.28
</TABLE>

(1) In the fourth quarter of 1995 the Company recorded charges of $9.2 million
and $26.0 million related to the valuation of certain inventories and
restructuring and merger related costs, respectively.

(2) The Company recorded a charge of $36.9 million in the fourth quarter of 1994
related to the valuation of certain tobacco inventories and advances on
purchases of tobacco.

(3) Fully diluted amounts are anti-dilutive.

NOTE R -- SUPPLEMENTAL GUARANTOR INFORMATION

DIMON International, Inc. and Florimex Worldwide, Inc. (collectively, the
"Guarantors"), wholly owned subsidiaries of DIMON Incorporated, have fully and
unconditionally guaranteed on a joint and several basis DIMON Incorporated's
obligations to pay principal, premium and interest relative to the $125,000,000
% Senior Notes due 2006. Management has determined that separate, full
financial statements of the Guarantors would not be material to investors and
such financial statements are not provided. Supplemental combining financial
information of the Guarantors is presented below:

F-27

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Year Ended June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total

<S> <C> <C> <C> <C> <C>
Net sales of goods and services................. $ 44 $1,244,301 $825,175 $ (141,771) a $1,927,749
Cost of goods and services sold................. 3,314b 1,159,466 731,863 (137,127) a 1,757,516
(3,270) 84,835 93,312 (4,644) 170,233
Selling, administrative and general............. 13,936 51,073 80,692 (12,899) a,c 132,802
Restructuring and merger related costs........ 16,891 9,487 (423) 0 25,955
(34,097) 24,275 13,043 8,255 11,476
Other income:
Interest...................................... 10,346 12,550 12,791 (28,175) a 7,512
Sundry........................................ 151 2,274 11,757 (8,255) a,c 5,927
10,497 14,824 24,548 (36,430) 13,439
Other deductions:
Interest...................................... 11,882 33,824 27,700 (28,175) a 45,231
Sundry........................................ 26 147 1,675 0 1,848
11,908 33,971 29,375 (28,175) 47,079
Income (loss) before income taxes, minority
interest and equity in net income of investee
companies..................................... (35,508) 5,128 8,216 0 (22,164)
Income taxes (benefits)......................... (8,567) 3,767 10,780 0 5,980
Income (loss) before minority interest, equity
in net income of investee companies........... (26,941) 1,361 (2,564) 0 (28,144)
Income applicable to minority interest.......... 0 0 216 0 216
Equity in net income (loss) of investee
companies, net of income taxes................ 0 348 (2,153) 0 (1,805)
Equity in net income of subsidiaries............ (3,224) (4,933) 0 8,157 0
NET LOSS........................................ $(30,165) $ (3,224) $ (4,933) $ 8,157 $ (30,165)
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Reserve for inter-company profit in ending inventories.

c. Royalty expense in SG&A and Royalty income in Other Income for Consolidated
Entities.

F-28

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................... $ 1,328 $ 1,879 $ 12,254 $ 26,865d $ 42,326
Notes receivable.............................. 30,015 851 1,136 (30,000) a 2,002
Trade receivables, net of allowances.......... 150,127 164,866 124,048 (256,291) a 182,750
Inventories:
Tobacco.................................... (5,116) b 103,294 312,253 0 410,431
Other...................................... 25 2,240 11,914 0 14,179

Advances on purchases of tobacco.............. 183,504 70,009 25,448 (234,582) a 44,379
Recoverable income taxes...................... 0 0 2,007 0 2,007
Prepaid expenses.............................. 12,499 667 19,879 0 33,045
Total current assets..................... 372,382 343,806 508,939 (494,008) 731,119
Investments and other assets
Equity in net assets of investee
companies.................................. 0 2,555 20,067 0 22,622
Consolidated subsidiaries..................... 266,381 243,970 5,007 (515,358) a 0
Other investments............................. 965 366 418 0 1,749
Notes receivable.............................. 45 1,016 5,046 0 6,107
Other......................................... 292 13,410 14,445 0 28,147
267,683 261,317 44,983 (515,358) 58,625
Intangible assets
Excess of cost over related net assets of
business acquired.......................... 388 15,209 10,570 0 26,167
Production and supply contracts............... 0 28,340 8,000 0 36,340
Pension asset................................. 3,131 1,088 0 0 4,219
3,519 44,637 18,570 0 66,726
Property, plant and equipment
Land.......................................... 1,770 1,573 16,089 0 19,432
Buildings..................................... 4,998 21,127 109,683 0 135,808
Machinery and equipment....................... 5,187 44,335 119,659 0 169,181
Allowances for depreciation................... (4,167) (25,293) (71,912) 0 (101,372)
7,788 41,742 173,519 0 223,049
Deferred taxes and other deferred charges....... 10,076 4,557 (544) 0 14,089
$661,448 $696,059 $745,467 $ (1,009,366) $1,093,608
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Reserve for inter-company profit in ending inventories.

d. To adjust for cash transfers made by DIMON Incorporated to an entity which
reports on an earlier period.

F-29

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

Notes payable................................. $ 54,400 $ 30,000 $179,336 $ (30,000) a $ 233,736
Accounts payable:
Trade...................................... 4,367 149,566 111,036 (208,410) a 56,559
Officers and employees..................... 14,643 27 6,044 0 20,714
Other...................................... 144 426 12,603 0 13,173
Advances from customers....................... 3,880 228,057 75,748 (258,461) a 49,224
Accrued expenses.............................. 4,509 13,815 42,158 (3,123) a 57,359
Income taxes.................................. (10,744) e 3,672 18,271 0 11,199
Long-term debt current........................ 4,714 628 6,216 0 11,558
Total current liabilities................ 75,913 426,191 451,412 (499,994) 453,522

Long-term debt
Revolving Credit Notes and Other.............. 264,143 2,559 25,826 0 292,528
Convertible Subordinated Debentures........... 56,370 0 0 0 56,370
320,513 2,559 25,826 0 348,898
Deferred Credits
Income taxes.................................. 70 19 10,642 0 10,731
Compensation and other benefits............... 26,146 7,642 6,927 0 40,715
26,216 7,661 17,569 0 51,446
Minority interest in subsidiaries............... 0 0 936 0 936

Stockholders' equity
Common stock.................................. 80,030 108,780 152,609 (261,389) a 80,030
Retained earnings............................. 157,880 148,455 94,791 (243,246) a 157,880
Equity-currency conversions................... 1,565 1,796 1,707 (3,503) a 1,565
Unrealized gain on investments................ 617 617 617 (1,234) a 617
Additional minimum pension liability.......... (1,286) 0 0 0 (1,286)
238,806 259,648 249,724 (509,372) a 238,806
$661,448 $696,059 $745,467 $ (1,009,366) $1,093,608
</TABLE>

a. Inter-company eliminations, including profit in inventory.

e. Current deferred tax on reserves and unallocated estimated tax payments.

F-30

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Year Ended June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)...................................... $ (30,165) $ (3,224) $ (4,933) $ 8,157a $(30,165)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization........................ 607 10,372 20,873 0 31,852
Deferred items....................................... 3,922 (3,130) (1,412) 0 (620)
Loss (gain) on foreign currency transactions......... (55) 81 544 0 570
Gain on disposition of fixed assets.................. 0 (280) (1,539) 0 (1,819)
Undistributed (earnings) loss of
investees/subsidiaries............................. 3,224 4,585 2,153 (8,157) a 1,805
Dividends received from investees.................... 0 400 78 0 478
Income applicable to minority interest............... 0 0 216 0 216
Bad debt expense..................................... 0 (30) 3,850 0 3,820
Decrease (increase) in accounts receivable........... (102,713) (33,329) 97,941 90,621a 52,520
Decrease (increase) in inventories and advances on
purchases of tobacco............................... 97,253 823 (261,577) 165,657a 2,156
Decrease in recoverable taxes........................ 1,666 0 2,627 0 4,293
Decrease (increase) in prepaid expenses.............. (8,718) 1,420 3,717 0 (3,581)
Increase (decrease) in accounts payable and accrued
expenses........................................... 5,224 7,736 (25,238) (45,885) a (58,163)
Increase (decrease) in advances from customers....... (918) (15,652) 201,799 (188,257) a (3,028)
Increase (decrease) in income taxes.................. (2,817) 7,135 1,757 0 6,075
Other................................................ 269 0 135 0 404
Net cash provided (used) by operating activities... (33,221) (23,093) 40,991 22,136 6,813
Investing Activities
Purchase of property and equipment..................... (117) (10,966) (15,953) 0 (27,036)
Proceeds from sale of property and equipment........... 0 838 4,039 0 4,877
Payments on notes receivable and receivable from
investees............................................ 15 3,516 24,010 0 27,541
Issuance of notes receivable........................... (30,000) (2,829) (3,500) 30,000a (6,329)
Proceeds from or (advances) for other investments and
other assets......................................... 5,865 (9,075) 2,601 4,676a 4,067
Purchase of minority interest in subsidiaries.......... 0 0 (507) 0 (507)
Purchase of subsidiary, $8,856 for property and
equipment............................................ 0 (17,123) 0 0 (17,123)
Net cash provided (used) by investing activities... (24,237) (35,639) 10,690 34,676 (14,510)
Financing Activities
Repayment of debt...................................... (641,100) (4,699) (281,223) 0 (927,022)
Proceeds from debt..................................... 708,995 60,000 239,371 (30,000) a 978,366
Cash dividends paid to DIMON Incorporated
stockholders......................................... (15,568) 0 (2) 0 (15,570)
Cash dividends paid to minority stockholders........... 0 0 (237) 0 (237)
Proceeds from sale of common stock..................... 169 0 0 0 169
Net cash provided (used) by financing activities... 52,496 55,301 (42,091) (30,000) 35,706
Effect of exchange rate changes on cash.................. 0 0 (1,584) 0 (1,584)
Increase (decrease) in cash and cash equivalents......... (4,962) (3,431) 8,006 26,812 26,425
Increase in cash from purchased subsidiaries............. 0 3,430 0 0 3,430
Cash and cash equivalents at beginning
of year................................................ 6,290 1,880 4,248 53 12,471
Cash and cash equivalents at end of year........... $ 1,328 $ 1,879 $ 12,254 $ 26,865 $ 42,326
</TABLE>

a. Inter-company eliminations, including profit in inventory.

F-31

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Year Ended June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total

<S> <C> <C> <C> <C> <C>
Net sales of goods and services.................. $ 42 $892,729 $708,508 $ (152,201) a $1,449,078
Cost of goods and services sold.................. 984b 832,225 634,485 (150,408) a 1,317,286
(942) 60,504 74,023 (1,793) 131,792
Selling, administrative and general.............. 6,148 51,368 69,051 (9,256) a 117,311
(7,090) 9,136 4,972 7,463 14,481
Other income:
Interest....................................... 8,046 5,953 9,502 (16,476) a 7,025
Sundry......................................... 491 3,020 5,164 0 8,675
8,537 8,973 14,666 (16,476) 15,700
Other deductions:
Interest....................................... 4,568 13,879 25,683 (9,013) a 35,117
Sundry......................................... 4,533 1,542 (5,656) 0 419
9,101 15,421 20,027 (9,013) 35,536

Income (loss) before income taxes, minority
interest, and equity in net income of investee
companies...................................... (7,654) 2,688 (389) 0 (5,355)
Income taxes (benefits).......................... (1,999) 3,067 1,699 0 2,767

Income (loss) before minority interest,
and equity in net income of
investee companies............................. (5,655) (379) (2,088) 0 (8,122)
Income applicable to minority interest........... 0 0 466 0 466
Equity in net income (loss) of investee
companies, net of income taxes................. (265) (109) 472 0 98
Equity in net income of subsidiaries............. (2,570) (2,082) 0 4,652 0

NET LOSS......................................... $ (8,490) $ (2,570) $ (2,082) $ 4,652 $ (8,490)
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Reserve for inter-company profit in ending inventories.

F-32

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents...................... $ 6,290 $ 1,880 $ 4,248 $ 53a $ 12,471
Notes receivable............................... 15 1,561 14,955 0 16,531
Trade receivables, net of allowances........... 116,086 145,363 68,535 (165,670) a 164,314
Inventories:
Tobacco..................................... (1,803) b 150,875 254,139 0 403,211
Other....................................... 0 564 5,111 0 5,675

Advances on purchases of tobacco............... 47,382 45,787 35,885 (68,925) a 60,129
Recoverable income taxes....................... 1,666 0 4,485 0 6,151
Prepaid expenses............................... 887 4,357 11,717 0 16,961
Total current assets...................... 170,523 350,387 399,075 (234,542) 685,443
Investments and other assets
Equity in net assets of investee companies..... 0 3,801 30,606 0 34,407
Consolidated subsidiaries...................... 276,731 229,756 5,007 (511,494) a 0
Other investments.............................. 14,259 43 34 0 14,336
Notes receivable............................... 60 530 12,026 0 12,616
Other.......................................... 810 11,461 3,769 0 16,040
291,860 245,591 51,442 (511,494) 77,399
Intangible assets
Excess of cost over related net assets of
business acquired........................... 399 1,886 10,409 0 12,694
Production and supply contracts................ 0 32,740 9,600 0 42,340
Pension asset.................................. 2,458 0 0 0 2,458
2,857 34,626 20,009 0 57,492
Property, plant and equipment
Land........................................... 68 3,336 14,228 0 17,632
Buildings...................................... 1,269 26,943 89,571 0 117,783
Machinery and equipment........................ 639 55,187 105,083 0 160,909
Allowances for depreciation.................... (590) (41,374) (44,621) 0 (86,585)
1,386 44,092 164,261 0 209,739

Deferred taxes and other deferred charges...... 11,246 4,608 (2,111) 0 13,743

$477,872 $679,304 $632,676 $ (746,036) $1,043,816
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Reserve for inter-company profit in ending inventories.

F-33

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable to banks........................... $ 68,500 $ 14,600 $172,507 $ 0 $ 255,607
Accounts payable:
Trade....................................... 7,229 148,216 94,626 (165,426) a 84,645
Officers and employees...................... 1,372 13,397 3,304 0 18,073
Other....................................... 200 445 8,947 0 9,592
Advances from customers........................ 937 90,865 27,331 (70,204) a 48,929
Accrued expenses............................... 2,614 6,629 22,837 (222) a 31,858
Income taxes................................... (4,910) e 2,174 7,582 0 4,846
Long-term debt current......................... 5,161 0 9,065 0 14,226
Total current liabilities................. 81,103 276,326 346,199 (235,852) 467,776
Long-term debt
Revolving Credit Notes and Other............... 27,982 133,885 26,958 0 188,825
Convertible Subordinated Debentures............ 56,475 0 0 0 56,475
84,457 133,885 26,958 0 245,300
Deferred Credits
Income taxes................................... 4,894 (2,969) 9,302 0 11,227
Compensation and other benefits................ 19,104 6,803 4,065 0 29,972
23,998 3,834 13,367 0 41,199
Minority interest in subsidiaries................ 0 0 1,227 0 1,227
Stockholders' equity
Common stock................................... 79,861 105,662 139,457 (245,119) a 79,861
Retained earnings.............................. 203,615 151,679 99,725 (251,404) a 203,615
Equity-currency conversions.................... 6,471 7,918 5,743 (13,661) a 6,471
Unrealized loss on investments................. (259) 0 0 0 (259)
Additional minimum pension liability........... (1,374) 0 0 0 (1,374)

288,314 265,259 244,925 (510,184) 288,314
$477,872 $679,304 $632,676 $ (746,036) $1,043,816
</TABLE>

a. Inter-company eliminations, including profit in inventory.

e. Current deferred tax on reserves and unallocated estimated tax payments.

F-34

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Year Ended June 30, 1994

(in thousands)
<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations
<S> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)....................................... $ (8,490) $ (2,570 ) $ (2,082) $ 4,652a
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization......................... (416) 10,508 18,770 0
Deferred items........................................ 672 (4,461 ) 4,354 0
Loss (gain) on foreign currency transactions.......... 80 120 (1,379) 0
Gain on disposition of fixed assets................... 0 (447 ) (1,177) 0
Gain on disposal of operations........................ 0 (1,792 ) 0 0
Undistributed earnings of investees/subsidiaries...... 2,835 2,190 (472) (4,652)a
Dividends received from investees..................... 0 0 577 0
Income applicable to minority interest................ 0 0 466 0
Bad debt expense...................................... (3) 0 4,684 0
Decrease (increase) in accounts receivable............ (5,838) 6,356 123,701 (92,765)a
Decrease (increase) in inventories and advances on
purchases of tobacco................................ 60,215 4,301 (149,953) 68,925a
Decrease (increase) in recoverable taxes.............. (1,472) 0 2,823 0
Decrease (increase) in prepaid expenses............... (273) (217 ) (1,566) 0
Increase (decrease) in accounts payable and accrued
expenses............................................ 5,280 22,090 (8,738) (8,902)a
Increase (decrease) in advances from customers........ 937 (101,502 ) 65,659 39,857a
Increase (decrease) in income taxes................... (8,373) 4,154 (4,525) 0
Other................................................. (281) 0 (4,702) 0
Net cash provided (used) by operating activities.... 44,873 (61,270 ) 46,440 7,115
Investing Activities
Purchase of property and equipment...................... (234) (9,897 ) (22,251) 0
Proceeds from sale of property
and equipment......................................... 0 2,023 3,968 0
Payments received on notes receivable and
receivable from investees............................. 0 7,162 6,092 (8,777)a
Advances for notes receivable........................... (75) 0 (18,310) 0
Proceeds from or advances for investees,
other investments and other assets.................... (11,082) (5,389 ) 13,677 2,600a
Purchase of shares of Standard Commercial Corporation... (13,408) 0 0 0
Other................................................... 69 0 (263) 0

Net cash provided (used) by investing activities...... (24,730) (6,101 ) (17,087) (6,177)
Financing Activities
Repayment of debt....................................... (35,016) (17,770 ) (226,518) 0
Proceeds from debt...................................... 16,605 85,403 205,238 0
Cash dividends paid to DIMON Incorporated
stockholders.......................................... (13,014) 0 0 0
Cash dividends paid to minority stockholders............ 0 0 (285) 0
Proceeds from sale of common stock...................... 28 0 0 0
Net cash provided (used) by financing activities...... (31,397) 67,633 (21,565) 0
Effect of exchange rate changes on cash................... 0 0 (1,662) 0
Increase (decrease) in cash and cash equivalents.......... (11,254) 262 6,126 938
Cash and cash equivalents at beginning of year............ 17,544 1,618 (1,878) (885)a
Cash and cash equivalents at end of year............ $ 6,290 $ 1,880 $ 4,248 $ 53

<CAPTION>
Total
<S> <C>
Operating Activities
Net Income (Loss)....................................... $ (8,490)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization......................... 28,862
Deferred items........................................ 565
Loss (gain) on foreign currency transactions.......... (1,179)
Gain on disposition of fixed assets................... (1,624)
Gain on disposal of operations........................ (1,792)
Undistributed earnings of investees/subsidiaries...... (99)
Dividends received from investees..................... 577
Income applicable to minority interest................ 466
Bad debt expense...................................... 4,681
Decrease (increase) in accounts receivable............ 31,454
Decrease (increase) in inventories and advances on
purchases of tobacco................................ (16,512)
Decrease (increase) in recoverable taxes.............. 1,351
Decrease (increase) in prepaid expenses............... (2,056)
Increase (decrease) in accounts payable and accrued
expenses............................................ 9,730
Increase (decrease) in advances from customers........ 4,951
Increase (decrease) in income taxes................... (8,744)
Other................................................. (4,983)
Net cash provided (used) by operating activities.... 37,158
Investing Activities
Purchase of property and equipment...................... (32,382)
Proceeds from sale of property
and equipment......................................... 5,991
Payments received on notes receivable and
receivable from investees............................. 4,477
Advances for notes receivable........................... (18,385)
Proceeds from or advances for investees,
other investments and other assets.................... (194)
Purchase of shares of Standard Commercial Corporation... (13,408)
Other................................................... (194)
Net cash provided (used) by investing activities...... (54,095)
Financing Activities
Repayment of debt....................................... (279,304)
Proceeds from debt...................................... 307,246
Cash dividends paid to DIMON Incorporated
stockholders.......................................... (13,014)
Cash dividends paid to minority stockholders............ (285)
Proceeds from sale of common stock...................... 28
Net cash provided (used) by financing activities...... 14,671
Effect of exchange rate changes on cash................... (1,662)
Increase (decrease) in cash and cash equivalents.......... (3,928)
Cash and cash equivalents at beginning of year............ 16,399
Cash and cash equivalents at end of year............ $ 12,471
</TABLE>

a. Inter-company eliminations, including profit in inventory.

F-35

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Year Ended June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total

<S> <C> <C> <C> <C> <C>
Net sales of goods and services................. $ 1,860 $1,074,417 $820,240 $ (215,901) a,f $1,680,616
Cost of goods and services sold................. 602b 971,284 690,115 (204,173) a 1,457,828
1,258 103,133 130,125 (11,728) 222,788
Selling, administrative and general............. 9,962 46,009 67,714 (11,728) a,f 111,957
(8,704) 57,124 62,411 0 110,831
Other income:
Interest...................................... 2,195 11,396 1,616 (9,491) a 5,716
Sundry........................................ 3,689 (2,077) 18,350 0 19,962
5,884 9,319 19,966 (9,491) 25,678
Other deductions:
Interest...................................... 7,562 15,320 24,737 (9,491) a 38,128
Sundry........................................ 1,449 35 1,210 0 2,694
9,011 15,355 25,947 (9,491) 40,822
Income (loss) before income taxes, minority
interest, equity in net income of investee
companies, subsidiary companies and cumulative
effect of accounting changes.................. (11,831) 51,088 56,430 0 95,687
Income taxes (benefits)......................... (3,535) 13,870 20,838 0 31,173

Income (loss) before minority interest, equity
in net income of investee companies and
cumulative effect of accounting changes....... (8,296) 37,218 35,592 0 64,514
Income (loss) applicable to minority interest... 0 0 486 0 486
Equity in net income (loss) of investee
companies, net of income taxes............. (146) (113) 1,518 0 1,259
Equity in net income of subsidiary companies.... 73,729 36,624 0 (110,353) a 0

Income before cumulative effect of accounting
changes....................................... 65,287 73,729 36,624 (110,353) 65,287
Post retirement benefit plans (net of tax)...... (9,746) 0 0 0 (9,746)
Income taxes.................................... 8,963 0 0 0 8,963
NET INCOME...................................... $ 64,504 $ 73,729 $ 36,624 $ (110,353) $ 64,504
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Reserve for inter-company profit in ending inventories.

f. Commission expense in SG&A and Commission income in Sales.

F-36

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents........................ $ 17,544 $ 1,618 $ (1,878) $ (885) a $ 16,399
Notes receivable................................. 0 8,619 3,077 (8,411) a 3,285
Trade receivables, net of allowances............. 112,162 154,610 208,762 (258,437) a 217,097
Inventories:
Tobacco....................................... (2,602) b 168,843 158,527 0 324,768
Other......................................... 0 525 16,962 0 17,487

Advances on purchases of tobacco................. 105,055 31,778 32,177 (96,054) a 72,956
Recoverable income taxes......................... 194 0 4,573 0 4,767
Prepaid expenses................................. 614 4,139 4,942 0 9,695
Total current assets........................ 232,967 370,132 427,142 (363,787) 666,454
Investments and other assets
Equity in net assets of investee companies....... 0 (3,106) 39,450 0 36,344
Consolidated subsidiaries........................ 266,495 188,378 5,007 (459,880) a 0
Other investments................................ 2,264 41 51 0 2,356
Notes receivable................................. 0 635 10,455 (366) a 10,724
Other............................................ 782 5,372 16,940 0 23,094
269,541 191,320 71,903 (460,246) 72,518
Intangible assets
Excess of cost over related net assets of
business acquired............................. 405 7,984 5,663 0 14,052
Production and supply
contracts..................................... 0 37,442 6,087 0 43,529
Pension asset.................................... 2,527 0 0 0 2,527
2,932 45,426 11,750 0 60,108
Property, plant and equipment
Land............................................. 68 4,235 14,076 0 18,379
Buildings........................................ (653) 33,752 75,809 0 108,908
Machinery and equipment.......................... 682 54,285 91,979 0 146,946
Allowances for depreciation...................... (272) (41,574) (42,838) 0 (84,684)
(175) 50,698 139,026 0 189,549

Deferred taxes and other deferred charges.......... 6,706 1,112 2,073 0 9,891

$511,971 $658,688 $651,894 $ (824,033) $998,520
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Reserve for inter-company profit in ending inventories.

F-37

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

Notes payable to banks........................... $ 75,895 $(31,903) $193,625 $ 0 $237,617
Accounts payable:
Trade....................................... 114 124,783 99,192 (156,747) a 67,321
Officers and employees...................... 2,954 14,423 10,268 0 27,645
Other....................................... 0 256 1,345 0 1,601
Advances from customers.......................... 0 192,367 39,963 (206,116) a 26,214
Accrued expenses................................. 3,068 7,135 27,304 0 37,507
Income taxes..................................... 3,463e (1,980) 11,973 0 13,456
Long-term debt current........................... 5,392 0 7,081 0 12,473

Total current liabilities................... 90,886 305,081 390,751 (362,863) 423,855
Long-term debt
Revolving Credit Notes and Other................. 38,767 108,755 32,749 0 180,271
Convertible Subordinated Debentures.............. 56,475 0 0 0 56,475
95,242 108,755 32,749 0 236,746
Deferred Credits
Income taxes..................................... (760) 588 2,807 0 2,635
Compensation and other benefits.................. 18,454 4,145 3,393 0 25,992
17,694 4,733 6,200 0 28,627

Minority interest in subsidiaries.................. 0 0 1,143 0 1,143
Stockholders' equity
Common stock..................................... 79,833 80,757 115,659 (196,416) a 79,833
Retained earnings................................ 225,119 154,250 101,806 (256,056) a 225,119
Equity-currency conversions...................... 3,477 5,112 3,586 (8,698) a 3,477
Additional minimum pension liability............. (280) 0 0 0 (280)
308,149 240,119 221,051 (461,170) 308,149
$ 511,971 $658,688 $651,894 $ (824,033) $998,520
</TABLE>

a. Inter-company eliminations, including profit in inventory.

e. Current deferred tax on reserves and unallocated estimated tax payments.

F-38

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Year Ended June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss).................................... $ 64,504 $ 73,729 $ 36,624 $ (110,353) a $ 64,504
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation and amortization...................... (386) 10,099 14,846 0 24,559
Deferred items..................................... 8,306 1,855 (8,820) 0 1,341
Loss (gain) on foreign currency transactions....... (439) (99 ) (8,801) 0 (9,339)
Gain on disposition of fixed assets................ (10) (1,584 ) (1,640) 0 (3,234)
Undistributed earnings of investees/subsidiaries... (73,584) (36,512 ) (1,518) 110,355a (1,259)
Dividends received from investees.................. 0 0 3,756 0 3,756
Income applicable to minority interest............. 0 0 486 0 486
Bad debt expense................................... 0 (8 ) 4,266 0 4,258
Cumulative effect of accounting changes............ 0 0 783 0 783
Decrease (increase) in accounts receivable......... (63,263) 30,695 (108,781) 114,873a (26,476)
Decrease (increase) in inventories and advances on
purchases of tobacco............................. (61,282) 246,762 (194,221) (43,170) a (51,911)
Decrease (increase) in recoverable taxes........... 1,991 0 (824) 0 1,167
Decrease (increase) in prepaid expenses............ (379) 65 4,399 0 4,085
Increase (decrease) in accounts payable and accrued
expenses......................................... (400) 55,333 23,300 (65,295) a 12,938
Increase (decrease) in advances from customers..... 0 (160,445 ) 183,967 (12,803) a 10,719
Increase (decrease) in income taxes................ 5,938 (3,760 ) 917 0 3,095
Other.............................................. 0 0 7,309 0 7,309
Net cash provided (used) by operating
activities.................................... (119,004) 216,130 (43,952) (6,393) 46,781
Investing Activities
Purchase of property and equipment................... (166) (14,295 ) (27,771) 0 (42,232)
Proceeds from sale of property and equipment......... 54 2,100 3,066 0 5,220
Payments received on notes receivable and receivable
from investees..................................... 0 2,405 4,909 (1,906) a 5,408
Advances for notes receivable........................ 0 (1,180 ) (16,122) 0 (17,302)
Proceeds from or advances for investees, other
investments and other assets....................... 53,701 (50,033 ) (10,275) (1,290) a (7,897)
Purchase of shares of Standard Commercial
Corporation........................................ (386) 0 0 0 (386)
Other................................................ 0 0 (130) 0 (130)
Net cash provided (used) by investing activities... 53,203 (61,003 ) (46,323) (3,196) $ (57,319)
Financing Activities
Repayment of debt.................................... 0 (203,217 ) (155,601) 0 $ (358,818)
Proceeds from debt................................... 64,641 48,282 233,266 0 346,189
Cash dividends paid to DIMON Incorporated
stockholders....................................... (9,818) 0 0 0 (9,818)
Cash dividends paid to minority stockholders......... 0 0 (351) 0 (351)
Proceeds from sale of common stock................... 28,298 0 0 0 28,298
Net cash provided (used) by financing activities... 83,121 (154,935 ) 77,314 0 5,500
Effect of exchange rate changes on cash................ 0 0 779 0 779
Increase (decrease) in cash and cash equivalents....... 17,320 192 (12,182) (9,589) (4,259)
Cash and cash equivalents at beginning
of year.............................................. 224 1,426 10,304 8,704a 20,658
Cash and cash equivalents at end of year......... $ 17,544 $ 1,618 $ (1,878) $ (885) $ 16,399
</TABLE>

a. Inter-company eliminations, including profit in inventory.

F-39

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

(a) Each of the Guarantors, the Company's wholly-owned subsidiaries, DIMON
International, Inc. and Florimex Worldwide Inc., will fully and unconditionally
guarantee on a joint and several basis the performance and punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all of the
Company's obligations under the Notes and the related indenture, including its
obligations to pay principal, premium, if any, and interest with respect to the
Notes. The obligations of each Guarantor will be limited to the maximum amount
which, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
the Indenture, can be guaranteed by the relevant Guarantor without resulting in
the obligations of such Guarantor under its Guarantee constituting a fraudulent
conveyance or fraudulent transfer under applicable federal or state law. Each of
the Guarantees will be a guarantee of payment and not collection. Each Guarantor
that makes a payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in an amount pro rata, based on the
assets less liabilities of each Guarantor determined in accordance with
generally accepted accounting principles (GAAP). The Company will not be
restricted from selling or otherwise disposing of any of the Guarantors other
than DIMON International, Inc. provided that the proceeds of any such sale are
applied as required by the Indenture.

Florimex Worldwide, Inc. is the primary holding and operating company in
the U.S. and represents the lead company for the flowers segment. The cut
flowers operations consist of buying flowers from sources throughout the world
and transporting them, normally by air, to operating units for resale to
wholesalers and retailers.

DIMON International, Inc. is the primary holding and operating company in
the U.S. and represents the lead company in the Tobacco division whose
operations consist primarily of selecting, buying, processing, packing,
shipping, storage and financing tobacco.

Management has determined that separate,full financial statements of the
Guarantors would not be material to investors and such financial statements are
not provided.

(b) DIMON Incorporated and each of the Guarantors has accounted for their
respective subsidiaries on the equity basis.

(c) Certain reclassifications were made to conform all of the financial
information to the financial presentation on a consolidated basis. The principal
eliminating entries eliminate investments in subsidiaries and intercompany
balances.

(d) Included in the above balance sheets are certain related party balances
among borrower, the guarantors and non-guarantors. Due to the Company's
world-wide operations, related party activity is included in most balance sheet
accounts. The tables below set forth the significant intercompany balances for
each of the periods presented.

F-40

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

<TABLE>
<CAPTION>
June 30, 1995
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 150,153 $ 104,676 $ 20,284
Advances on Purchases............................................................ 183,503 64,284 (3,108)

Accounts Payable................................................................. (780) (138,137) (69,487)
Advances from Customers.......................................................... (3,879) (201,229) (57,605)
</TABLE>

<TABLE>
<CAPTION>
June 30, 1994
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 116,001 $ 81,726 $ (7,027)
Advances on Purchases............................................................ 47,382 25,505 21,277

Accounts Payable................................................................. (28) (132,840) (41,110)
Advances from Customers.......................................................... -- (64,028) (6,197)
</TABLE>

<TABLE>
<CAPTION>
June 30, 1993
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 110,279 $ 61,413 $ 105,370
Advances on Purchases............................................................ 105,055 25,695 31,937

Accounts Payable................................................................. (111) (116,044) (45,019)
Advances from Customers.......................................................... -- (175,755) (30,583)
</TABLE>

F-41

<PAGE>
Quarterly Financial Statements

F-42

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Income

Nine Months Ended March 31, 1996 and 1995

(in thousands, except per share amounts)

<TABLE>
<CAPTION>
(Unaudited)
1996 1995
First Nine First Nine
Months Months
<S> <C> <C>
Net sales of goods and services................................................................... $1,663,661 $1,547,534
Cost of goods and services sold................................................................... 1,481,128 1,404,544
182,533 142,990
Selling, administrative and general expenses...................................................... 102,736 94,883
Restructuring..................................................................................... 5,568 0
Operating Income........................................................................... 74,229 48,107
Other income:
Interest........................................................................................ 6,687 6,631
Sundry.......................................................................................... 9,854 4,569
16,541 11,200
Other deductions:
Interest........................................................................................ 38,036 34,139
Sundry.......................................................................................... 615 855
38,651 34,994
Income before income taxes, minority interest, equity in net income of investee
companies and extraordinary item................................................................ 52,119 24,313
Income taxes...................................................................................... 20,847 13,157
Income before minority interest, equity in net income of investee companies and extraordinary
item............................................................................................ 31,272 11,156
Income applicable to minority interest............................................................ 242 272
Equity in net income (loss) of investee companies, net of income taxes............................ (290) (1,121)
Income before extraordinary item.................................................................. 30,740 9,763
Extraordinary item:
Partial recovery of a previous extraordinary trade receivable write-off (net of
applicable income tax expense of $870).......................................................... 1,400 0
NET INCOME........................................................................................ $ 32,140 $ 9,763
Earnings Per Share, primary
Income before extraordinary item................................................................ $ .79 $ .26
Extraordinary item.............................................................................. .04 .00
Net Income...................................................................................... $ .83 $ .26
Earnings Per Share, assuming full dilution
Income before extraordinary item................................................................ $ .77 *
Extraordinary item.............................................................................. .03 *
Net Income...................................................................................... $ .80 *
Average number of shares outstanding:
Primary......................................................................................... 38,739 38,082
Assuming full dilution.......................................................................... 42,467 42,294
Cash dividends per share.......................................................................... $ .405 $ .27
See notes to consolidated financial statements
</TABLE>

* Computation of earnings per share is anti-dilutive for first nine months of
fiscal year 1995.

F-43

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet

(in thousands)

<TABLE>
<CAPTION>
March 31 June 30
1996 1995
<S> <C> <C>
(unaudited)
ASSETS
Current assets
Cash and cash equivalents....................................................................... $ 12,148 $ 42,326
Notes receivable................................................................................ 1,134 2,002
Trade receivables, net of allowances............................................................ 195,999 182,750
Inventories:
Tobacco...................................................................................... 343,484 410,431
Other........................................................................................ 20,429 14,179
Advances on purchases of tobacco................................................................ 74,470 44,379
Recoverable income taxes........................................................................ 1,320 2,007
Prepaid expenses................................................................................ 13,772 33,045
Total current assets....................................................................... 662,756 731,119
Investments and other assets
Equity in net assets of investee companies...................................................... 8,287 22,622
Other investments............................................................................... 4,242 1,749
Notes receivable................................................................................ 7,076 6,107
Other........................................................................................... 24,986 28,147
44,591 58,625
Intangible assets
Excess of cost over related net assets of business acquired..................................... 23,743 26,167
Production and supply contracts................................................................. 36,406 36,340
Pension asset................................................................................... 4,219 4,219
64,368 66,726
Property, plant, and equipment
Land............................................................................................ 20,254 19,432
Buildings....................................................................................... 141,437 135,808
Machinery and equipment......................................................................... 166,226 169,181
Allowances for depreciation..................................................................... (100,395) (101,372)
227,522 223,049
Deferred charges and taxes........................................................................ 12,054 14,089
$1,011,291 $1,093,608
</TABLE>

F-44

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet

(in thousands)

<TABLE>
<CAPTION>
March 31 June 30
1996 1995
<S> <C> <C>
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable to banks.......................................................................... $ 101,288 $ 233,736
Accounts payable:
Trade........................................................................................ 59,371 56,559
Officers and employees....................................................................... 26,411 20,714
Other........................................................................................ 40,732 13,173
Advances from customers......................................................................... 76,639 49,224
Accrued expenses................................................................................ 41,962 57,359
Income taxes.................................................................................... 8,609 11,199
Long-term debt current.......................................................................... 8,982 11,558
Total current liabilities.................................................................... 363,994 453,522

Long-term debt
Revolving Credit Notes and Other................................................................ 278,440 292,528
Convertible Subordinated Debentures............................................................. 0 56,370
278,440 348,898

Deferred credits:
Income taxes.................................................................................... 15,614 10,731
Compensation and other benefits................................................................. 41,467 40,715
57,081 51,446
Minority interest in subsidiaries................................................................. 544 936
Stockholders' equity
Serial Preferred Stock -- without par value:
<CAPTION>
Mar. 31 Jun. 30
<S> <C> <C>
Authorized shares.................................. 10,000 10,000
Issued shares...................................... -0- -0-
<CAPTION>
Common Stock -- without par value:
Mar. 31 Jun. 30
<S> <C> <C> <C> <C>
Authorized shares.................................. 125,000 125,000
Issued shares...................................... 42,349 38,092 ................... 136,693 80,030
Retained earnings............................................................................... 174,050 157,880
Equity-currency conversions..................................................................... 1,774 1,565
Additional minimum pension liability............................................................ (1,285) (1,286)
Unrealized gain on investments.................................................................. 0 617
311,232 238,806
$1,011,291 $1,093,608
</TABLE>

See notes to consolidated financial statements

F-45

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Cash Flows

Nine Months Ended March 31, 1996 and 1995

(in thousands)

<TABLE>
<CAPTION>
March 31 March 31
1996 1995
<S> <C> <C>
(unaudited)
Operating activities
Net Income.................................................................................... $ 32,140 $ 9,763
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization.............................................................. 24,234 21,891
Deferred items............................................................................. 1,193 1,750
Loss (gain) on foreign currency transactions............................................... (73) 9,835
Gain on disposition of fixed assets........................................................ (1,385) (866)
Gain on sale of investee................................................................... (3,751) 0
Gain on sale of investment................................................................. (1,090) 0
Undistributed earnings of investees........................................................ 290 1,121
Dividends received from investees.......................................................... 289 400
Income applicable to minority interest..................................................... 242 272
Bad debt expense........................................................................... 1,078 1,469
Increase in accounts receivable............................................................ (13,994) (16,431)
Increase in inventories and advances on purchases of tobacco............................... 31,102 68,280
Decrease in recoverable taxes.............................................................. 103 3,761
Decrease (increase) in prepaid expenses.................................................... 12,965 (6,819)
Increase (decrease) in accounts payable and accrued expenses............................... 34,599 10,695
Increase in advances from customers........................................................ 26,908 (16,286)
Increase in income taxes................................................................... 1,590 10,500
Other...................................................................................... 92 4,402
Net cash provided (used) by operating activities......................................... 146,532 103,737
Investing activities
Purchase of property and equipment............................................................ (20,609) (18,845)
Proceeds from sale of property and equipment.................................................. 3,273 3,286
Payments received on notes receivable and receivable from investees........................... 1,380 18,552
Advances for notes receivable................................................................. (7,892) (3,461)
Proceeds from or advances for investees, other investments and other assets................... 20,148 (1,039)
Increase in excess of cost over net assets of business acquired............................... 787 0
Purchase of minority interest in subsidiaries................................................. 0 (484)
Purchase of subsidiary........................................................................ (6,543) 0
Net cash provided (used) by investing activities......................................... (9,456) (1,991)
Financing activities
Repayment of debt............................................................................. (218,821) (151,484)
Proceeds from debt............................................................................ 67,238 106,611
Proceeds from sale of stock................................................................... 3,287 9
Cash dividends paid to minority stockholders.................................................. 0 (237)
Cash dividends paid to DIMON Incorporated stockholders........................................ (15,969) (10,190)
Net cash provided by financing activities................................................ (164,265) (55,291)
Effect of exchange rate changes on cash......................................................... (2,989) (2,701)
Increase in cash and cash equivalents........................................................... (30,178) 43,754
Cash and cash equivalents at beginning of year.................................................. 42,326 12,471
Cash and cash equivalents at end of period............................................... $ 12,148 $ 56,225
</TABLE>

See notes to consolidated financial statements

F-46

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Primary earnings (loss) per share are computed by dividing earnings (loss)
by the weighted average number of shares outstanding plus any common stock
equivalents during each period. The fully diluted earnings (loss) per share
calculation assumes that all of the Convertible Subordinated Debentures were
converted into Common Stock at the beginning of the reporting period thereby
increasing the weighted average number of shares considered outstanding
during each period. The weighted average number of shares outstanding are
further increased by common stock equivalents on employee stock options.
Also, all interest expense on the debentures for the period is added to
pre-tax income and the hypothetical additional income tax expense is
deducted.

2. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.

3. On April 1, 1995, Dibrell Brothers, Incorporated (Dibrell) and Monk-Austin,
Inc. (Monk-Austin) merged into DIMON Incorporated. The merger has been
accounted for as a pooling of interests and all prior consolidated financial
statements have been restated to include the historical results of
operations of both Dibrell and Monk-Austin including the effects of
conforming the accounting policies of the two former entities. Recorded
assets and liabilities have been carried forward at their historical book
values.

4. In June 1995, the Company provided a restructuring reserve of $17.9 million
pre-tax related primarily to eliminating duplicative facilities of tobacco
operations and a reduction in the number of employees. During the quarter
and nine months ended March 31, 1996, an additional $2.7 million and $5.6
million, respectively, pre-tax was provided for restructuring the tobacco
operations in Brazil and corporate departments, primarily for a reduction in
the number of employees, net of recoveries of $498 thousand relating
primarily to accounts receivable of closed flower locations. As of March 31,
1996, payments for the nine months of $6.8 million have been recorded as a
reduction of the restructuring reserves.

5. The results of operations for the three months and nine months ended March
31, 1996 and 1995 are not necessarily indicative of the results to be
expected for the full year and should not be relied on as a basis for
projecting year end results. The Company's operations are seasonal and
quarterly comparisons are of little value.

6. For additional information regarding accounting principles and other
financial data, see Notes to Consolidated Financial Statements in the Annual
Report on Form 10-K for the fiscal year ended June 30, 1995.

7. Certain accounts of the prior periods have been reclassified for conformity
with the financial statements of the current period.

8. The Company called the subordinated debt outstanding as of February 9, 1996,
on Form S-3 filed with the Securities and Exchange Commission. The proforma
primary earnings per share of the conversion, assuming it had taken place at
the beginning of the period, would have been $.16 for the nine months ended
March 31, 1996, or equal to the fully diluted amounts as disclosed in the
statement of consolidated income.

9. On November 7, 1995, DIMON International, Inc., a wholly owned subsidiary of
DIMON Incorporated, completed the sale of its 50% interest in Rio Grande
Tabacalera S.A. (RGT), a Brazilian processing entity, to an unrelated third
party. The Company's investment was sold for $9,000,000 in cash, recognizing
a gain on the sale of RGT of $3,113,000, net of related taxes of $630,000.

10. DIMON International, Inc. and Florimex Worldwide, Inc. (collectively, the
"Guarantors"), wholly owned subsidiaries of DIMON Incorporated, will fully
and unconditionally guarantee on a joint and several basis DIMON
Incorporated's obligations to pay principal, premium and interest relative
to the $125,000,000 % Senior Notes due 2006. Management has determined
that separate, full financial statements of the Guarantors would not be
material to investors and such financial statements are not provided.
Supplemental combining financial information of the Guarantors is presented
below:

F-47

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Nine Months Ended March 31, 1996

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Net sales of goods and services................... $ 34 $1,195,251 $777,232 $ (308,856)a $1,663,661
Cost of goods and services sold................... (5,116)b 1,123,897 671,203 (308,856)a 1,481,128
5,150 71,354 106,029 -- 182,533
Selling, administrative and general............... 8,491 55,787 44,954 (6,496)a 102,736
Restructuring..................................... 2,097 1,000 2,471 0 5,568
(5,438) 14,567 58,604 (6,496) 74,229
Other income:
Interest........................................ 22,015 6,570 6,393 (28,291)a 6,687
Sundry.......................................... 222 2,372 13,756 (6,496)a 9,854
22,237 8,942 20,149 (34,787) 16,541
Other deductions:
Interest........................................ 20,193 24,410 21,724 (28,291)a 38,036
Sundry.......................................... 50 (2) 567 -- 615
20,243 24,408 22,291 (28,291) 38,651
Income (loss) before income taxes, minority
interest and equity in net income of investee
company......................................... (3,444) (899) 56,462 0 52,119
Income taxes...................................... (1,378) (360) 22,585 0 20,847

Income (loss) before minority interest and equity
in net income of investee companies............. (2,066) (539) 33,877 0 31,272
Income applicable to minority interest............ 0 0 242 0 242
Equity in net income (loss) of investee companies,
net of income taxes............................. 0 202 (492) 0 (290)
Equity in net income of subsidiaries.............. 34,206 33,143 0 (67,349)a 0

Extraordinary item:
Partial recovery of a previous extraordinary
trade receivable write-off (net of applicable
income tax expense of $870)................... 0 1,400 0 0 1,400

NET INCOME........................................ $ 32,140 $ 34,206 $ 33,143 $ (67,349) $ 32,140
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Change in reserves for inter-company profit in ending inventory.

F-48

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 1996

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................... $ 2,580 $ 4,966 $ 20,285 $ (15,683)c $ 12,148
Notes receivable.............................. 35 489 26,343 (25,733)a 1,134
Trade receivables, net of allowances.......... 22,963 170,028 154,202 (151,194)a 195,999
Inventories:
Tobacco.................................... 0 85,310 258,174 0 343,484
Other...................................... 47 1,729 18,653 0 20,429

Advances on purchases of tobacco.............. 168,076 31,743 50,468 (175,817)a 74,470
Recoverable income taxes...................... 0 0 1,320 0 1,320
Prepaid expenses.............................. 2,133 1,113 10,526 0 13,772
Total current assets..................... 195,834 295,378 539,971 (368,427) 662,756
Investments and other assets
Equity in net assets of investee companies.... 0 6,032 2,255 0 8,287
Consolidated subsidiaries..................... 278,298 299,227 (246,960) (330,565)a 0
Other investments............................. 16,243 3,810 (10,804) (5,007)a 4,242
Notes receivable.............................. 74 910 6,092 0 7,076
Other......................................... 291 4,690 20,005 0 24,986
294,906 314,669 (229,412) (335,572) 44,591
Intangible assets
Excess of cost over related net assets of
business acquired.......................... 378 8,548 14,817 0 23,743
Production and supply contracts............... 0 27,408 8,998 0 36,406
Pension asset................................. 3,132 1,088 (1) 0 4,219
3,510 37,044 23,814 0 64,368
Property, plant and equipment
Land.......................................... 1,771 1,925 16,558 0 20,254
Buildings..................................... 4,740 25,761 110,936 0 141,437
Machinery and equipment....................... 5,039 49,411 111,776 0 166,226
Allowances for depreciation................... (4,632) (31,464) (64,299) 0 (100,395)
6,918 45,633 174,971 0 227,522

Deferred taxes and other deferred charges....... 11,821 0 233 0 12,054
Total assets............................. $512,989 $692,724 $509,577 $ (703,999) $1,011,291
</TABLE>

a. Inter-company eliminations, including profit in inventory.

c. To adjust for cash transfers made by DIMON Incorporated to an entity which
reports on an earlier period.

F-49

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 1996

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Notes payable to banks......................... $ 0 $ 350 $102,863 $ (1,925) $ 101,288
Accounts payable:
Trade....................................... 808 303,576 75,644 (320,657)a 59,371
Officers and employees...................... 14,174 6,298 5,939 0 26,411
Other....................................... 898 1,280 38,554 0 40,732
Advances from customers........................ 3,450 69,024 48,919 (44,754)a 76,639
Accrued expenses............................... 1,555 6,032 34,390 (15)a 41,962
Income taxes................................... (13,550)d 3,385 18,774 0 8,609
Long-term debt current......................... 4,286 0 4,696 0 8,982
Total current liabilities................. 11,621 389,945 329,779 (367,351) 363,994
Long-term debt
Revolving Credit Notes and
Other....................................... 162,386 1,068 114,986 0 278,440
Convertible Subordinated Debentures............ 0 0 0 0 0
162,386 1,068 114,986 0 278,440
Deferred Credits
Income taxes................................... 1,547 (4,538) 18,605 0 15,614
Compensation and other benefits................ 26,517 7,790 7,160 0 41,467
28,064 3,252 25,765 0 57,081
Minority interest in subsidiaries................ (314) 0 858 0 544
Stockholders' equity
Common stock................................... 0 16,514 31,483 (47,997)a 0
Paid in Capital................................ 136,693 144,621 (30,028) (114,593)a 136,693
Retained earnings.............................. 174,050 130,996 37,195 (168,191)a 174,050
Equity-currency conversions.................... 1,774 6,328 156 (6,484) 1,774
Unrealized loss on investments................. 0 0 (617) 617a 0
Additional minimum pension liability........... (1,285) 0 0 0 (1,285)
311,232 298,459 38,189 (336,648) 311,232
Total liabilities and equity.............. $512,989 $692,724 $509,577 $ (703,999) $1,011,291
</TABLE>

a. Inter-company eliminations, including profit in inventory.

d. Current deferred tax on reserves and unallocated estimated tax payments.

F-50

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Nine Months Ended March 31, 1996

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)..................................... $ 32,140 $ 34,206 $ 33,143 $ (67,349)a $ 32,140
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization....................... 1,730 8,048 14,456 0 24,234
Deferred items...................................... (533) 265 1,461 0 1,193
Loss (gain) on foreign currency transactions........ 46 (65 ) (54) 0 (73)
Gain on disposition of fixed assets................. (14) (227 ) (1,144) 0 (1,385)
Gain on sale of investee............................ 0 0 (3,751) 0 (3,751)
Gain on sale of investment.......................... 0 0 (1,090) 0 (1,090)
Undistributed earnings of
investees/subsidiaries............................ (34,205) (33,346 ) 492 67,349a 290
Dividends received from investee.................... 0 0 289 0 289
Income applicable to minority interest.............. 0 0 242 0 242
Bad debt expense.................................... 0 (10 ) 1,088 0 1,078
Decrease (increase) in accounts receivable.......... 132,233 (42,334 ) 1,204 (105,097)a (13,994)
Decrease (increase) in inventories and advances on
purchases of tobacco.............................. 40,031 182,069 (132,513) (58,765)a 31,102
Decrease in recoverable taxes....................... 0 0 103 0 103
Decrease (increase) in prepaid expenses............. 8,003 (473 ) 5,435 0 12,965
Increase (decrease) in accounts payable and accrued
expenses.......................................... (8,877) 211,262 (58,647) (109,139)a 34,599
Increase (decrease) in advances
from customers.................................... (429) (339,322 ) 152,952 213,707a (26,908)
Increase (decrease) in income taxes................. (3,156) 318 4,428 0 1,590
Other............................................... 0 13 79 0 92
Net cash provided (used) by operating
activities..................................... 167,249 20,404 18,173 (59,294) 146,532
Investing activities
Purchase of property and equipment.................... (111) (5,048 ) (15,450) 0 (20,609)
Proceeds from sale of property and equipment.......... 14 320 2,939 0 3,273
Payments on notes receivable and receivable from
investees........................................... 34 827 519 0 1,380
Advances for notes receivable......................... (83) (358 ) (3,184) (4,287)a (7,892)
Advances for other investments and other assets....... 5,600 (9,820 ) 28,449 (4,081)a 20,148
Decrease in excess of cost over net assets of
businesses acquired................................. 0 1,514 (727) 0 787
Purchase of subsidiary................................ 0 (6,543 ) 0 0 (6,543)
Net cash provided (used) by
investing activities........................... $ 5,454 $ (19,108 ) $ 12,546 $ (8,348) $ (9,456)
Financing Activities
Repayment of debt..................................... $ (183,968) $ (1,769 ) $ (61,159) $ 28,075a $(218,821)
Proceeds from debt.................................... 25,243 0 41,995 0 67,238
Proceeds from sale of stock........................... 3,287 0 0 0 3,287
Cash dividends paid to DIMON Incorporated
stockholders........................................ (16,013) 0 44 0 (15,969)
Net cash provided (used) by financing
activities..................................... (171,451) (1,769 ) (19,120) 28,075 (164,265)
Effect of exchange rate changes on cash................. 0 3,560 (3,568) (2,981)a (2,989)
Increase (decrease) in cash and cash
equivalents........................................... 1,252 3,087 8,031 (42,548) (30,178)
Cash and cash equivalents at beginning of year.......... 1,328 1,879 12,254 26,865 42,326
Cash and cash equivalents at end of period............ $ 2,580 $ 4,966 $ 20,285 $ (15,683) $ 12,148
</TABLE>

a. Inter-company eliminations, including profit in inventory.

F-51

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Nine Months Ended March 31, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total

<S> <C> <C> <C> <C> <C>
Net sales of goods and services................. $ 33 $1,092,975 495,445 $(40,919) a $1,547,534
Cost of goods and services sold................. 746b 1,021,103 423,614 (40,919) a 1,404,544
(713) 71,872 71,831 0 142,990

Selling, administrative and general............. 8,564 46,186 40,133 0 94,883
(9,277) 25,686 31,698 0 48,107
Other income:
Interest...................................... 18,735 9,534 1,025 (22,663) a 6,631
Sundry........................................ 64 2,642 1,863 0 4,569
18,799 12,176 2,888 (22,663) 11,200
Other deductions:
Interest...................................... 15,062 27,345 14,395 (22,663) a 34,139
Sundry........................................ 2 35 818 0 855
15,064 27,380 15,213 (22,663) 34,994
Income (loss) before income taxes, minority
interest, equity in net income of investee
company....................................... (5,542) 10,482 19,373 0 24,313
Income taxes (benefits)......................... (2,999) 5,674 10,482 0 13,157
Income (loss) before minority interest
and equity in net income of
investee companies............................ (2,543) 4,808 8,891 0 11,156
Income applicable to minority interest.......... 0 0 272 0 272
Equity in net income (loss) of investee
companies, net of income taxes................ 65 271 (1,457) 0 (1,121)
Equity in net income of subsidiaries............ 12,241 7,162 0 (19,403) a 0
NET INCOME...................................... $ 9,763 $ 12,241 $ 7,162 $(19,403) $ 9,763
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Change in reserves for inter-company profit in ending inventory.

F-52

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents........................ $109,571 $(73,452) e $ 20,105 $ 1c $ 56,225
Notes receivable................................. 15 492 911 0 1,418
Trade receivables, net of allowances............. 142,803 120,731 81,913 (169,826) a 175,621
Inventories:
Tobacco....................................... (2,548) c 122,812 177,310 (1,850) a 295,724
Other......................................... 0 446 8,939 0 9,385

Advances on purchases of tobacco................. 48,024 62,868 31,849 (83,433) a 59,308
Recoverable income taxes......................... 0 0 3,076 0 3,076
Prepaid expenses................................. 4,875 5,531 13,572 0 23,978
Total current assets........................ 302,740 239,428 337,675 (255,108) 624,735
Investments and other assets
Equity in net assets of investee companies....... 0 2,422 31,225 0 33,647
Consolidated subsidiaries........................ 285,179 244,422 5,007 (534,608) a 0
Other investments................................ 12,492 60 4 0 12,556
Notes receivable................................. 49 571 12,669 0 13,289
Other............................................ 433 10,742 12,213 0 23,388
298,153 258,217 61,118 (534,608) 82,880
Intangible assets
Excess of cost over related net assets of
business acquired............................. 390 1,862 9,635 0 11,887
Production and supply contracts.................. 0 27,934 9,600 0 37,534
Pension asset.................................... 2,458 0 0 0 2,458
2,848 29,796 19,235 0 51,879
Property, plant and equipment
Land............................................. 1,771 1,475 16,213 0 19,459
Buildings........................................ 5,015 25,194 101,405 0 131,614
Machinery and equipment.......................... 5,204 54,553 104,131 0 163,888
Allowances for depreciation...................... (2,122) (42,795) (54,713) 0 (99,630)
9,868 38,427 167,036 0 215,331
Deferred taxes and other deferred charges.......... 8,050 4,524 57 0 12,631
$621,659 $570,392 $585,121 $ (789,716) $987,456
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Change in reserves for inter-company profit in ending inventory.

c. To adjust for cash transfers made by DIMON Incorporated to an entity which
reports on an earlier period.

e. Book overdraft within consolidated cash management program.

F-53

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Notes payable.................................... $ 90,900 $ 10,000 $115,531 $ 0 $216,431
Accounts payable:
Trade......................................... 4,962 50,027 63,421 (44,937) a 73,473
Officers and employees........................ 15,075 259 3,446 0 18,780
Other......................................... 245 391 13,669 (417) a 13,888
Advances from customers.......................... 52 200,792 41,739 (200,602) a 41,981
Accrued expenses................................. 1,743 13,463 15,061 (6,783) a 23,484
Income taxes..................................... (9,411)d 10,048 15,321 0 15,958
Long-term debt current........................... 5,057 0 12,506 0 17,563
Total current liabilities................... 108,623 284,980 280,694 (252,739) 421,558
Long-term debt
Revolving Credit Notes and Other................. 153,800 3,195 27,118 0 184,113
Convertible Subordinated Debentures.............. 56,475 0 0 0 56,475
210,275 3,195 27,118 0 240,588
Deferred Credits
Income taxes..................................... 95 (1,975) 11,240 0 9,360
Compensation and other benefits.................. 19,437 7,122 5,148 0 31,707
19,532 5,147 16,388 0 41,067
Minority interest in subsidiaries.................. 0 0 1,014 0 1,014
Stockholders' equity
Common stock..................................... 79,870 108,528 150,488 (259,016) a 79,870
Retained earnings................................ 202,952 163,925 106,886 (270,811) a 202,952
Equity-currency conversions...................... 637 2,126 42 (2,168) a 637
Unrealized loss on investments................... 1,144 2,491 2,491 (4,982) a 1,144
Additional minimum pension liability............. (1,374) 0 0 0 (1,374)
283,229 277,070 259,907 (536,977) 283,229
$621,659 $ 570,392 $585,121 $ (789,716) $987,456
</TABLE>

a. Inter-company eliminations, including profit in inventory.

d. Current deferred tax on reserves and unallocated estimated tax payments.

F-54

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Nine Months Ended March 31, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)..................................... $ 9,763 $ 12,241 $ 7,162 $ (19,403) a $ 9,763
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation and amortization....................... 80 8,526 13,285 0 21,891
Deferred items...................................... (410) 1,556 604 0 1,750
Loss (gain) on foreign currency
transactions...................................... (57) 12 9,880 0 9,835
Gain on disposition of fixed assets................. 0 (279 ) (587) 0 (866)
Undistributed earnings (loss) of
investees/subsidiaries............................ (12,306) (7,433 ) 1,457 19,403a 1,121
Dividends received from investee.................... 0 0 400 0 400
Income applicable to minority interest.............. 0 0 272 0 272
Bad debt expense.................................... 0 (30 ) 1,499 0 1,469
Decrease (increase) in accounts receivable.......... 151,167 20,080 (46,093) (141,585) a (16,431)
Decrease (increase) in inventories and advances on
purchases of tobacco.............................. (1,455) 11,099 42,276 16,360a 68,280
Decrease in recoverable taxes....................... 1,666 0 2,095 0 3,761
Decrease (increase) in prepaid expenses............. (3,883) (1,280 ) (1,656) 0 (6,819)
Increase (decrease) in accounts payable and accrued
expenses.......................................... (3,727) (90,202 ) (8,886) 113,510a 10,695
Increase (decrease) in advances from customers...... (885) (70,193 ) 39,451 15,341a (16,286)
Increase (decrease) in income taxes................. (4,501) 7,874 7,127 0 10,500
Other............................................... 195 725 3,482 0 4,402
Net cash provided (used) by operating
activities..................................... 135,647 (107,304 ) 71,768 3,626 103,737
Investing Activities
Purchase of property and equipment.................... (74) (6,082 ) (12,689) 0 (18,845)
Proceeds from sale of property and equipment.......... 0 805 2,481 0 3,286
Payments received on notes receivable and receivable
from investees...................................... 11 2,083 16,458 0 18,552
Advances for notes receivable......................... 0 (1,056 ) (2,405) 0 (3,461)
Proceeds from or advances for investees, other
investments and other assets........................ 364 6,912 (4,637) (3,678) a (1,039)
Purchase of minority interest in subsidiaries......... 0 0 (484) 0 (484)
Net cash provided (used) by investing
activities..................................... 301 2,662 (1,276) (3,678) (1,991)
Financing Activities
Repayment of debt..................................... (26,486) (10,690 ) (114,308) 0 (151,484)
Proceeds from debt.................................... 4,000 40,000 62,611 0 106,611
Cash dividends paid to DIMON Incorporated
stockholders........................................ (10,190) 0 0 0 (10,190)
Cash dividends paid to minority stockholders.......... 0 0 (237) 0 (237)
Proceeds from sale of stock........................... 9 0 0 0 9
Net cash provided (used) by financing
activities..................................... (32,667) 29,310 (51,934) 0 (55,291)

Effect of exchange rate changes on cash................. 0 0 (2,701) 0 (2,701)

Increase (decrease) in cash and cash equivalents........ 103,281 (75,332 ) 15,857 (52) a 43,754
Cash and cash equivalents at beginning
of year............................................... 6,290 1,880 4,248 53a 12,471
Cash and cash equivalents at end of period........ $109,571 $ (73,452 ) $ 20,105 $ 1 $ 56,225
</TABLE>

a. Inter-company eliminations, including profit in inventory.

F-55

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

10. continued

(a) Each of the Guarantors, the Company's wholly-owned subsidiaries, DIMON
International, Inc. and Florimex Worldwide Inc., will fully and unconditionally
guarantee on a joint and several basis the performance and punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all of the
Company's obligations under the Notes and the related indenture, including its
obligations to pay principal, premium, if any,and interest with respect to the
Notes. The obligations of each Guarantor will be limited to the maximum amount
which, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
the Indenture, can be guaranteed by the relevant Guarantor without resulting in
the obligations of such Guarantor under its Guarantee constituting a fraudulent
conveyance or fraudulent transfer under applicable federal or state law. Each of
the Guarantees will be a guarantee of payment and not collection. Each Guarantor
that makes a payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in an amount pro rata, based on the
assets less liabilities of each Guarantor determined in accordance with
generally accepted accounting principles (GAAP). The Company will not be
restricted from selling or otherwise disposing of any of the Guarantors other
than DIMON International, Inc. provided that the proceeds of any such sale are
applied as required by the Indenture.

Management has determined that separate, full financial statements of the
Guarantors would not be material to investors and such financial statements are
not provided.

(b) DIMON Incorporated and each of the Guarantors has accounted for their
respective subsidiaries on the equity basis.

F-56

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

<TABLE>
<CAPTION>
March 31, 1996
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 22,940 $ 69,092 $ 70,678
Advances on Purchases............................................................ 168,076 22,451 29,996

Accounts Payable................................................................. (572) (294,488) (28,783)
Advances from Customers.......................................................... (3,450) -- (44,915)
</TABLE>

<TABLE>
<CAPTION>
March 31, 1995
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 142,803 $ 73,098 $ (45,433)
Advances on Purchases............................................................ 48,024 39,222 (3,812)

Accounts Payable................................................................. (3,787) (39,891) (1,165)
Advances from Customers.......................................................... -- (162,816) (37,786)
</TABLE>

F-57

<PAGE>
Pro Forma Condensed Consolidated Financial Information
regarding the disposition of
Rio Grande Tabacalera S.A.

F-58

<PAGE>
DIMON INCORPORATED

Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended June 30, 1995

(Dollars and shares in thousands except per share amounts)

(Unaudited)

<TABLE>
<CAPTION>
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Net sales of goods and services................................................. $1,927,749 $1,927,749
Cost of goods and services sold................................................. 1,757,516 1,757,516
170,233 170,233
Selling, administrative & general............................................... 132,802 132,802
Restructuring and merger related cost........................................... 25,955 25,955
Operating income................................................................ 11,476 11,476
Other income
Interest...................................................................... 7,512 7,512
Sundry........................................................................ 5,927 5,927
13,439 13,439
Other deductions
Interest...................................................................... 45,231 45,231
Sundry........................................................................ 1,848 1,848

47,079 47,079
Income (loss) before income taxes............................................... (22,164) (22,164)
Income taxes.................................................................... 5,980 5,980
Equity in net income (loss) of investee, net of tax............................. (1,805) $ 3,201(a) 1,396
Income applicable to minority interest.......................................... 216 216
Net income (loss)............................................................... ($ 30,165) $ 3,201 ($ 26,964)
Net income (loss) per share primary*............................................ ($ 0.79) ($ 0.71)
Weighted average number of shares outstanding................................... 38,100 38,100
</TABLE>

* Computation of fully diluted earnings per share is anti-dilutive

See accompanying notes to unaudited pro forma financial information

F-59

<PAGE>
DIMON INCORPORATED

Pro Forma Condensed Consolidated Statement of Operations

For the Nine Month Period Ended March 31, 1996

(Dollars and shares in thousands except per share amounts)

(Unaudited)

<TABLE>
<CAPTION>
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Net sales of goods and service...................................................... $1,663,661 $1,663,661
Cost of goods and services sold..................................................... 1,481,128 1,481,128
182,533 182,533
Selling, administrative & general................................................... 102,736 102,736
Restructuring and merger related cost............................................... 5,568 5,568
Operating income 74,229 74,229

Other income
Interest.......................................................................... 6,687 6,687
Sundry............................................................................ 9,854 9,854
16,541 16,541
Other deductions
Interest.......................................................................... 38,036 38,036
Sundry............................................................................ 615 615
38,651 38,651
Income before income taxes.......................................................... 52,119 52,119
Income taxes........................................................................ 20,847 20,847
Equity in net income (loss) of investee, net of tax................................. (290) $ 386(a) 96
Income applicable to minority interest.............................................. 242 242
Income before extraordinary item.................................................... 30,740 386 31,126
Extraordinary item:
Partial recovery of previous extraordinary trade receivable
write-off (net of applicable income tax expense of $870)....................... 1,400 1,400
Net income.......................................................................... $ 32,140 386 $ 32,526

Net income per share, primary....................................................... 0.83 0.84
Net income per share, assuming full dilution........................................ 0.80 0.81
Weighted average number of shares outstanding
Primary........................................................................... 38,739 38,739
Assuming full dilution............................................................ 42,467 42,467
</TABLE>

See accompanying notes to unaudited pro forma financial information.

F-60

<PAGE>
DIMON INCORPORATED

Notes to Pro Forma Condensed Consolidated Financial Statements

The registrant sold its 50% interest in Rio Grande Tabacalera S.A. ("RGT")
on November 7, 1995. RGT is a tobacco processing and export operation located in
Brazil.

a. The Pro Forma Condensed Consolidated Statements of Operations for the year
ended June 30, 1995 and the nine month period ended March 31, 1996 present
results of operations as if the interest in RGT had been sold prior to the
registrant's 1995 fiscal year by eliminating the Company's equity interest in
RGT losses incurred during those periods.

F-61

<PAGE>
Pro Forma Condensed Consolidated Financial Information
regarding the acquisition of
Austro-Turk Tutun A.S. and Austro Hellenique De Tabac S.A.

F-62

<PAGE>
DIMON INCORPORATED

Pro Forma Condensed Consolidated Balance Sheet

As Of June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
Combined
DIMON Austro Austro Pro Forma Pro Forma
Incorporated Hellenique Turk Adjustment Adjusted
<S> <C> <C> <C> <C> <C>
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents.................................. $ 12,471 $ 3,154 $ 665 $ 0 $ 16,290
Trade and other accounts receivables,
net..................................................... 180,845 6,302 2,431 189,578
Tobacco inventories........................................ 403,211 19,425 11,334 433,970
Recoverable income taxes................................... 6,151 6,151
Prepaid expenses and other assets.......................... 82,765 1,833 237 84,835
Total current assets.................................. 685,443 30,714 14,667 0 730,824
Investments and other assets................................. 77,399 50 77,449
Intangible Assets............................................ 57,492 17,193(1) 74,685
Property, Plant and Equipment, net........................... 209,739 1,031 3,706 214,476
Deferred taxes and other deferred charges.................... 13,743 8 13,751
Total Assets.......................................... $1,043,816 $ 31,745 $18,431 $ 17,193 $1,111,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to banks..................................... $ 255,607 $ 19,881 $15,566 $ 13,372(1) $ 304,426
Accounts payable and accrued expenses...................... 144,168 6,987 1,058 152,213
Accrued taxes on income.................................... 4,846 1,119 5,965
Advances from customers.................................... 48,929 9,386 58,315
Current portion of long-term debt.......................... 14,226 14,226
Total current liabilities............................. 467,776 37,373 16,624 13,372 535,145
Long Term Debt............................................... 188,825 188,825
Convertible Subordinated Debentures.......................... 56,475 56,475
Deferred income taxes, compensation and other benefits....... 41,199 41,199
Minority Interests........................................... 1,227 1,227
Shareholder's Equity
Common Stock............................................... 79,861 967 (967)(1) 79,861
Retained Earnings.......................................... 203,615 (5,628) 840 4,788(1) 203,615
Cumulative translation adjustment.......................... 6,471 6,471
Minimum pension liability.................................. (1,374) (1,374)
Unrealized gain (loss) on investments...................... (259) (259)
Total shareholder's equity................................. 288,314 (5,628) 1,807 3,821 288,314
Total Liabilities and Shareholders' Equity................... $1,043,816 $ 31,745 $18,431 $ 17,193 $1,111,185
</TABLE>

See accompanying notes to unaudited pro forma financial information

F-63

<PAGE>
DIMON INCORPORATED

Pro Forma Combined Condensed Statement of Operations

For The Year Ended June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
Combined
DIMON Austro Austro Pro Forma Pro Forma
Incorporated Hellenique Turk Adjustment Adjusted
<S> <C> <C> <C> <C> <C>
(unaudited)
Net sales of goods and services.............................. $1,449,078 $ 14,963 $22,725 $ 0 $1,486,766
Cost of goods and services sold.............................. 1,317,286 13,515 11,916 1,342,717

131,792 1,448 10,809 0 144,049
Selling, administrative and general
expenses................................................... 117,311 3,016 2,216 1,719(2) 124,262
Operating income (loss)...................................... 14,481 (1,568) 8,593 (1,719) 19,787
Other income:
Interest................................................... 7,025 850 99 7,974
Sundry..................................................... 8,675 2,491 571 11,737
15,700 3,341 670 19,711
Other deductions:
Interest................................................... 35,117 6,936 1,094 862 44,009
Sundry..................................................... 419 280 7,538 8,237
35,536 7,216 8,632 862 52,246
Income (loss) before income taxes, minority interest and
equity in net income of investee companies................. (5,355) (5,443) 631 (2,581) (12,748)
Income taxes................................................. 2,767 (981) 1,786
Income (loss) before minority interest and equity in net
income of investee companies............................ (8,122) (5,443) 631 (1,600) (14,534)
Income applicable to minority interest....................... 466 466
Income (loss) before equity in net income of investee
companies (8,588) (5,443) 631 (1,600) (15,000)
Equity in net income (loss) of investee companies
(net of U.S. tax expense of $589........................ 98 98
Net income (loss)............................................ $ (8,490) $ (5,443) $ 631 $ (1,600) $ (14,902)
Net income (loss) per share, primary*........................ (.22) (.39)
Weighted average number of shares outstanding................ 38,091 38,091
</TABLE>

* Computation of fully diluted earnings per share is anti-dilutive

See accompanying notes to unaudited pro forma financial information

F-64

<PAGE>
DIMON INCORPORATED

Notes to Pro Forma Condensed Consolidated Financial Statements

The registrant acquired the businesses of Austro-Hellenique De Tabac S.A.
(Hellas) and Austro-Turk Tutan A.S. (Austro-Turk). Hellas and Austro-Turk have
buying, processing and selling operations in Greece and Turkey, respectively.

These pro forma financial statements reflect a year end of December 31,
1994 for each of the businesses acquired by the registrant and a year end of
June 30, 1994 for the registrant. It is impracticable to present these financial
statements in the manner required by Rule 11-02(c)(3) of Regulation S-X. The
registrant believes that the presentation of the financial statements in the
manner required by Rule 11-02(c)(3) of Regulation S-X would not have a material
effect on these pro forma financial statements.

1. The purchase price of Hellas and Austro-Turk was $13,372,000 for net
liabilities of $3,821,000 resulting in an excess of cost over businesses
acquired of $17,193,000.

2. The excess of cost over businesses acquired from the purchase of Hellas
and Austro-Turk will be amortized over 10 years, resulting in
amortization expense of $1,719,000. Interest expense relating to the
notes payable for the purchase was $862,000. The tax benefit resulting
from amortization of the excess of cost over businesses acquired and
interest expenses on notes payable was $981,000.

F-65

<PAGE>
[OBA Letterhead]

Austro-Turk Tutun A.S.
Sohit Fathibay Cd. No: 86
Alsancak-IZMIR
TURKEY

Dear Sirs,

We have audited the balance sheet of Austro-Turk Tutun Anorium
Sirketi as of 31 December 1994 and related statement of income for the
year then ended. Our examination was made in accordance with the generally
accepted auditing standards in the United States and accordingly included such
basis of accounting records and such other auditing procedures as we considered
necessary in the circumstances.

In our opinion, the financial statements as adjusted present a true and
fair view of the financial position of Austro-Turk Tutun A.S. at 31
December 1994 and the results of its operations for the year then ended in
conformity with acceptable accounting principles in Turkey.

We have then been commissioned by DIMON Incorporated, the new shareholder
who purchased the majority shares of Austro-Turk Tutun A.S. in June 1995
to further revise the balance sheet of December 31, 1994 and the statement of
income then ended by means of:

a. Writing off the non-essential real estate properties as of December
31, 1994,

b. Re-adjusting for the hyper-inflationary environment as required by the
Generally Accepted Accounting Principles in the United States of
America and,

c. Re-phrasing in U.S. Dollars over the rate applicable at December 31,
1994.

The financial statements thus presented serve for a specific need of
shareholders and should be referred to as a supplement to our audit report dated
January 23, 1995.

Respectfully Yours,

Omar Baylan
Partner in Charge

Istanbul, August 14, 1995

F-66

<PAGE>

AUSTRO-TURK TUTUN A.S.
AUDIT REPORT
on the Revised
BALANCE SHEET
Dated December 31, 1995 and the
STATEMENT OF INCOME
For the Period then ended for
Non-Essential Properties and Hyper-inflation

F-67

<PAGE>
AUSTRO-TURK TUTUN A.S.

Balance Sheet

Dated December 31, 1994

(Adjusted for Non-Residential Properties are Expressed in US Dollars)

<TABLE>
<CAPTION>
Notes

<S> <C> <C>
FIXED ASSETS AND LONG TERM RECEIVABLES
Participation: TRA A.S................................................................... 2 49,684.78
Tangible Fixed Assets (Net) 3 3,613,890.08
Construction in Progress................................................................. 4 92,271.57
L/T Receivables.......................................................................... 5 8,160.96

Total Fixed Assets....................................................................... 3,764,007.39

CURRENT ASSETS
Inventories.............................................................................. 6 11,358,847.04
Trade Debtors............................................................................ 7 517,507.86
Other Debtors............................................................................ 8 118,923.58
Advances................................................................................. 9 64,029.33
Receivable from Authorities.............................................................. 10 1,724,289.77
Prepaid Expenses......................................................................... 11 31,121.40
Doubtful Receivables..................................................................... 12 6,107.62
Treasury Bills........................................................................... 13 180,939.33
Bank and Cash............................................................................ 14 664,884.48

Total Current Assets..................................................................... 14,666,630.41

LIABILITIES
Expense Provisions....................................................................... 15 658,040.80
Income Provisions........................................................................ 16 (305,362.43)
Trade Credits............................................................................ 17 34,836.83
Bank Loans............................................................................... 18 15,565,261.33
Other Credits............................................................................ 19 64,321.90
Group Company Payables................................................................... 20 950,495.11
Tax Accruals............................................................................. 21 (342,154.26)

Total Liabilities........................................................................ 16,623,439.28

Net Assets............................................................................... 22 1,807,198.52
</TABLE>

Accompanying notes from 1 to 21 are integral parts of the financial statements
above

F-68

<PAGE>
AUSTRO-TURK TUTUN A.S.

Profit and Loss Statement

For The Year Ended December 31, 1994

(Adjusted for Non-Residential Properties are Expressed in US Dollars)

<TABLE>
<CAPTION>
Notes

<S> <C> <C>
Sales.................................................................................... 23 22,725,463.27
Cost of Sales............................................................................ 24 (11,916,243.73)
Gross Profit............................................................................. 10,809,219.54
Other Income............................................................................. 25 365,415.96
Income Provisions........................................................................ 26 305,362.43

Operating Expenses....................................................................... 27 (881,590.61)
Sales and Marketing Expenses............................................................. 28 (1,004,967.95)
Expense Provisions....................................................................... 29 (329,149.81)
Operating Profit......................................................................... 9,264,289.56

Financing Expenses....................................................................... 30 (8,632,717.62)
Profit Before Tax........................................................................ 31 631,572.04
Taxation-(Exempted)...................................................................... 32 0
Net Profit After Taxation................................................................ 33 631,572.04
</TABLE>

Accompanying note of 1 and those from 22 to 33 are integral parts of the
financial statements above

F-69

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Financial Statements

December 31, 1994

(Expressed in US Dollars)

1. SIGNIFICANT ACCOUNTING PRINCIPLES

The foregoing financial statements have been prepared to present the assets
and liabilities of Austro-Turk Tutun A.S. as defined in the purchase
agreement concluded between Austria Tabek Einkaufs- und Handelsorganisation Gmbh
and Dimon Incorporated in accordance with the generally accepted accounting
principles in the U.S.A.

The purchase agreement concludes that the shares of Austro-Turk Tutun
A.S. are transferred with all rights and obligations except for the
effects of sale of the non-essential properties. The audited financial
statements of Austro-Turk Tutun A.S. dated December 31, 1994 are
therefore re-adjusted to write off such assets against the owners' equity and to
adjust other accounts affected by the sale of such non-essential properties.

The accounts are maintained by the company in Turkish Lira (TL) as required
by tax laws and are adjusted by ourselves for generally accepted -- but not
required -- accounting principles in Turkey. The audited statements have then
been translated into US Dollars over the official exchange rate of USD 1 = TL
38,687 applicable at December 31, 1994 unless otherwise specified in the notes
and, no further adjustment is made on the official exchange rates as they nicely
represent the market value of US Dollars against TL at the said date.

Because the local inflation was realized over 100% in the year of 1994,
Turkey is considered a hyper-inflationary environment and, the assets booked
with historical values have been re-valued by the US Dollar values applicable at
the date of acquisition and then been subjected to adjustments such as
depreciation and amortization in order to arrive to the net value at December
31, 1994, although company books included some inflation-adjustments allowed by
tax laws.

As no revaluation is allowed on inventories by law and numerous entries
were impossible to value individually in US Dollars, the inventories are
re-valued by the average selling prices in USD in the year of 1994 less the
average gross profit realized in the same period in order to eliminate an
apparent under-valuation caused by hyper-inflation.

The adjustments thus made are further detailed below in relation to the
captions presented on the re-adjusted financial statements.

F-70

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet

December 31, 1994

(Expressed in US Dollars)

ASSETS

2. PARTICIPATIONS
Audited: 7,728.69 Adjusted: 49,684.78

Valued in USD value at the date of acquisition.

3. TANGIBLE FIXED ASSETS (NET)
Audited: 3,730,645.95 Adjusted: 3,613,890.08

<TABLE>
<S> <C>
Value in USD at the date of acquisition........................... 4,934,349.84
Less: Depreciation by straight line............................... -1,320,459.81
</TABLE>

4. CONSTRUCTION IN PROGRESS
Audited: 92,271.57 Adjusted: 92,271.57

Valued at the year-end US Dollar rate and no further adjustment is made as it is
not activated yet.

5. LONG TERM RECEIVABLES
Audited: 8,160.96 Adjusted: 8,160.96

Valued at the year-end US Dollar rate without discounting.

6. INVENTORIES
Audited: 10,782,254.40 Adjusted: 11,358,847.04

6.1. Packaging Material

<TABLE>
<S> <C>
Juto: 51,908 meters..................................... 9,327.21
Tonga Ropes: 5,804 kgs.................................. 11,291.82
Balertzma Ropes: 1,785 kgs.............................. 3,881.12
24,500.15
</TABLE>

Valued by the last purchase price in USD.

6.2. Tobacco -- Pre '93 Crop by Average Selling Price

<TABLE>
<S> <C>
AG -- 210,187 kgs x 6.04................................ 1,269,529.48
BG -- 234,583 kgs x 4.89................................ 1,147,110.87
KP -- 49,805 kgs x 2.84................................. 141,446.20
KK -- 18,054 kgs x 1.51................................. 27,446.20
KIR -- 1,405 kgs x 0.79................................. 1,109.95
Total by Average Selling Price.......................... 2,568,458.04
Discounted by Average Gross
Profit Margin (43%)..................................... -1,112,176.96
Net Value for pre '93 Crop Tobacco...................... 1,474,281.08
</TABLE>

F-71

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

6.3. Tobacco -- 93 Crop by Average Selling Price

<TABLE>
<S> <C>
AG -- 2,011,455 kgs x 4.91.............................. 9,876,244.05
BG -- 1,944,280 kgs x 3.91.............................. 7,602,134.80
KP -- 963,751 kgs x 2.07................................ 2,036,364.57
KK -- 65,235 kgs x 2.36................................. 153,954.60
KIR -- 252,000 kgs x 0.49............................... 123,480.00
Total by Average Selling Price.......................... 19,792,178.02
Discounted by Average Gross
Profit Margin (50.3%)................................... -9,955,465.55
Net Value for '93 Crop Tobacco.......................... 9,836,712.47
</TABLE>

6.4. Expenses on '94 crop tobacco is valued by the average rate of USD 1 = TL
26,662.51 for 1994 and reads USD 23,353.34.

7. TRADE DEBTORS
Audited: 517,507.86 Adjusted: 517,507.86

<TABLE>
<S> <C>
Trade Debtors -- Domestic............................... 7.86
Trade Debtors -- Abroad................................. 517,500.00
517,507.86
</TABLE>

Valued by the year-end US Dollar rate.

8. OTHER DEBTORS
Audited: 7,550,360.49 Adjusted: 118,923.58

<TABLE>
<S> <C>
Related Parties......................................... 1,513.30
Participations.......................................... 109,468.56
Other................................................... 7,439,378.63
7,550,360.49
Less: Non-Essential Sale Proceed........................ -7,431,436.91
Adjusted Other Debtors.................................. 118,923.58
</TABLE>

Valued by year-end US Dollar rate.

9. ADVANCES
Audited: 64,029.33 Adjusted: 64,029.33

<TABLE>
<S> <C>
Staff................................................... 47,347.11
Other Business Advances................................. 16,682.22
64,029.33
</TABLE>

Valued by year-end US Dollar rate.

10. RECEIVABLES FROM AUTHORITIES
Audited: 1,724,289.77 Adjusted: 1,724,289.77

<TABLE>
<S> <C>
VAT and Taxes Refundable................................ 1,682.171.35
VAT Deductable.......................................... 42,118.42
1,724,289.77
</TABLE>

Valued by year-end US Dollar rate.

F-72

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

11. PREPAID EXPENSES
Audited: 31,121.40 Adjusted: 31,121.40

Valued by year-end US Dollar rate.

12. DOUBTFUL RECEIVABLES
Audited: 6,107.62 Adjusted: 6,107.62

Valued by year-end US Dollar rate.

13. TREASURY BILLS
Audited: 180,939.33 Adjusted: 180,939.33

Valued by year-end US Dollar rate.

14. BANK AND CASH
Audited: 354,682.77 Adjusted: 664,864.48

<TABLE>
<S> <C>
Bank.................................................... 354,669.41
Cash.................................................... 13.36
354,682.77
Plus: Property transfer tax............................. 310,181.71
Adjusted Bank and Cash.................................. 664,864.48
</TABLE>

Property transfer tax paid is added on the bank position in adjustment for
non-essential properties and valued by year-end US Dollar rate.

LIABILITIES

15. EXPENSE PROVISIONS
Audited: 3,399,451.68 Adjusted: 656,040.80

<TABLE>
<S> <C>
Leaving Indemnity -- pre "94............................ 323,042.18
Leaving Indemnity -- 1994............................... 326,891.00
Doubtful Receivables.................................... 6,107.62
Taxes on Corporate Income............................... 2,743,410.87
3,399,451.67
Less: Taxes Recovered on Adjusted
Financial Statements.................................... -2,743,410.87
Expense Provisions...................................... 656,040.80
</TABLE>

Although the company realizes a profit in the period even after the proceed from
property sale is written off, no tax accrues because the company enjoys an
investment allowance.

16. INCOME PROVISIONS
Audited: (305,362.43) Adjusted: (305,362.43)

This is a forex gain accrued on forex receivables but accounted with historical
exchange rate.

17. TRADE CREDITORS
Audited: 34,836.83 Adjusted: 34,836.83

Valued by the year-end US Dollar rate.

F-73

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

18. BANK LOANS
Audited: 15,585,261.33 Adjusted: 15,565,261.33

The prefinancing foreign exchange loans with accrued interest as of December 31,
1994.

19. OTHER CREDITORS
Audited: 64,321.90 Adjusted: 64,321.90

<TABLE>
<S> <C>
Accruals for Employees.................................. 41.98
Accruals for Contractors................................ 64,279.92
64,321.90
</TABLE>

Valued at year-end US Dollar rate.

20. GROUP COMPANY PAYABLES
Audited: 950,495.11 Adjusted: 950,495.11

Accrued in US Dollar to Austria E.O. for marketing services.

21. TAX ACCRUALS
Audited: 627,163.60 Adjusted: (342,154.26)

<TABLE>
<S> <C>
Taxes Payable Including VAT............................. 627,163.60
Less: VAT on non-essential property sale................ -969,317.86
Taxes Receivable........................................ -342,154.26
</TABLE>

Taxes payable turn to be taxes receivable when adjusted for the VAT on sale of
non-essential properties.

22. NET ASSETS
Audited: 4,713,932.16 Adjusted: 1,807,198.52

<TABLE>
<S> <C>
Audited Net Assets...................................... 4,713,932.16
Less: Fixed Assets Revaluation.......................... -116,755.87
Less: Adjustment to Debtors............................. -7,431,436.92
Plus: Adjustment to Cash & Bank......................... 310,181.70
Plus: Participation Revaluation......................... 41,956.09
Plus: Inventory Revaluation............................. 576,592.64
Plus: VAT Recovered..................................... 969,317.86
Plus: Tax Provision Recovered........................... 2,743,410.87
Net Assets Adjusted..................................... 1,807,198.52
</TABLE>

F-74

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Income Statement

For The Period Ended December 31, 1994

(Expressed in US Dollars)

INCOME STATEMENT

23. SALES
Audited: 22,725,463.27 Adjusted: 22,725,463.27

<TABLE>
<S> <C>
Exports Proceed......................................... 33,407,270.02
Export Subsidy.......................................... 1,923,369.13
Rate Difference Charge.................................. 8,935.56
35,339,574.71
</TABLE>

Actual sale proceed in US Dollar is booked with the TL equivalent at the invoice
date and is valued by the year-end US Dollar rate for adjusted financial
statements.

24. COST OF SALES
Audited: (11,916,243.73) Adjusted: (11,916,243.73)

<TABLE>
<S> <C>
'91 Crop Tobacco Sold................................... 89,160.42
'92 Crop Tobacco Sold................................... 9,221,181.44
'93 Crop Tobacco Sold................................... 2,605,901.87
11,916,243.73
</TABLE>

Value by the year-end US Dollar rate.

25. OTHER INCOME
Audited: 6,162,879.10 Adjusted: 365,415.96

<TABLE>
<S> <C>
Interest Income......................................... 99,233.55
Farex Rate Income....................................... 215,327.38
Commission Income....................................... 5,860.71
Rent Income............................................. 13,903.41
Other Income............................................ 5,505.50
Profit from Asset Sales................................. 5,823,048.54
6,162,879.09
Less: Profit from Sale of
Non-essential properties................................ -5,797,463.13
Other Income Adjusted................................... 365,415.96
</TABLE>

26. INCOME PROVISIONS
Audited: 305,362.43 Adjusted: 305,362.43

Represents the foreign exchange gain on export subsidy at the year-end US Dollar
rate.

F-75

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Income Statement -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

27. OPERATING EXPENSES
Audited: (881,590.61) Adjusted: (881,590.61)

<TABLE>
<S> <C>
Admin Expenses.......................................... 403,322.44
Warehousing Expenses.................................... 241,762.58
Non-Deductable Expenses................................. 236,505.59
881,590.61
</TABLE>

Valued by the year-end US Dollar rate.

28. SALES AND MARKETING EXPENSES
Audited: (1,004,967.95) Adjusted: (1,004,967.95)

<TABLE>
<S> <C>
Marketing Fees.......................................... 903,615.03
Procedural Fees & Expenses.............................. 15,874.69
Shipping & Handling Expenses............................ 43,579.33
Freight Charges......................................... 21,047.08
FOB Expenses............................................ 20,851.81
1,004,967.95
</TABLE>

Valued by the year-end US Dollar rate.

29. EXPENSE PROVISIONS
Audited: (329,149.81) Adjusted: (329,148.81)

<TABLE>
<S> <C>
Leaving indemnity for services
belonging pre "94....................................... 323,042.18
Doubtful Receivables.................................... 6,107.62
329,149.80
</TABLE>

Valued by the year-end US Dollar rate.

30. FINANCING EXPENSES
Audited: (8,632,717.52) Adjusted: (8,632,717.52)

<TABLE>
<S> <C>
Forex Rate Losses....................................... 704,435.75
Interest on Prefinancing Loans.......................... 1,093,861.27
Forex Loss on Exports................................... 6,683,990.88
Forex Loss on Forex Interest............................ 150,429.62
8,632,717.52
</TABLE>

Valued by year and US Dollar rate.

F-76

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Income Statement -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

31. PROFIT BEFORE TAX
Audited: 6,429,035.18 Adjusted: 631,572.04

<TABLE>
<S> <C>
Audited Profit Before Tax............................... 6,429,035.18
Less: Profit from Non-Essential.........................
Assets Sale............................................. -5,797,463.13
Adjusted Profit Before Tax.............................. 631,572.05
</TABLE>

32. TAXATION
Audited: (2,743,410.87) Adjusted: (Nil)

Although there is a corporate profit after adjustments for non-essential
properties, no tax accrues because the investment allowance is greater than the
corporate profit.

33. NET PROFIT AFTER TAX
Audited: 3,685,624.31 Adjusted: 631,572.04

F-77

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.

TOBACCO BUSINESS UNIT
FINANCIAL STATEMENTS
DECEMBER 31, 1994

F-78

<PAGE>
INDEPENDENT AUDITORS REPORT

To the Shareholders of
DIMON Hellas S.A.

We have audited the accompanying balance sheet of the Austro Hellenique de
Tabac S.A. Business Unit (the Business Unit) at December 31, 1994 and the
related statement of income for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

The Business Unit has been defined as all the assets and liabilities of
Austro Hellenique de Tabac S.A. which relate to the purchase, processing and
sale of tobacco with the exception of the land, buildings and immovable fixtures
and fittings. The Profit and Loss Statement has been prepared to include all
income and expenses relating to the purchase, processing and sale of tobacco.
Since this is the first year that such statements have been prepared,
comparative figures and a Statement of Cash Flows have not been presented.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assesing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Business Unit at December 31, 1994 and
the results of its operations for the year then ended in conformity with
accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE

July 31, 1995

F-79

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Balance Sheet

December 31, 1994

(All amounts expressed in United States Dollars)

<TABLE>
<CAPTION>
Notes
<S> <C> <C>
FIXED ASSETS

Machinery......................................................................................... 899,755
Vehicles.......................................................................................... 26,220
Furniture......................................................................................... 74,131
In progress....................................................................................... 31,545
Total fixed assets........................................................................... 2 1,031,651
CURRENT ASSETS

Inventories....................................................................................... 3 19,542,061
Trade debtors..................................................................................... 4 5,259,968
Other debtors..................................................................................... 5 1,042,361
Advances.......................................................................................... 6,954
Prepayments and accrued income.................................................................... 6 1,248,291
Treasury bills.................................................................................... 459,863
Bank and cash..................................................................................... 3,153,781
Total current assets......................................................................... 30,713,279
LIABILITIES

Provisions........................................................................................ 648,093
Trade creditors................................................................................... 77,430
Bank loans........................................................................................ 19,881,079
Other creditors................................................................................... 7 5,730,253
Group company payables............................................................................ 8 9,385,710
Social security................................................................................... 1,118,749
Accruals and deferred income...................................................................... 9 531,689
Total liabilities............................................................................ 37,373,003
Net liabilities.............................................................................. (5,628,073)
</TABLE>

The accompanying notes 1 to 13 are an integral part of these financial
statements

F-80

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Profit and Loss Statements

Year Ended December 31, 1994

(All amounts expressed in United States Dollars)

<TABLE>
<CAPTION>
Notes
<S> <C> <C>
Sales............................................................................................ 14,963,370
Cost of Sales.................................................................................... (13,515,085)
Gross profit..................................................................................... 1,448,285
Other income..................................................................................... 10 2,384,697
3,832,982

Distribution costs............................................................................... (991,906)
Administration costs............................................................................. (2,024,061)
Operating profit................................................................................. 817,015

Financial costs.................................................................................. 11 (6,260,362)
Net loss before taxation......................................................................... (5,443,347)
Taxation......................................................................................... 12 --
Net loss after taxation.......................................................................... (5,443,347)
</TABLE>

The accompanying notes 1 to 13 are an integral part of these financial
statements

F-81

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements

December 31, 1994

(All amounts expressed in United States Dollars)

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared to present the assets and
liabilities of the Tobacco Business Unit (the Business Unit) of Austro
Hellenique de Tabac S.A. (the Company). The assets and liabilities have been
defined in the Purchase Agreement, dated as of April 13, 1995 (the Agreement),
by and between DIMON Incorporated (DIMON), Austria Tabakwerke AG (Austria
Tabak), Austria Tabak Einkaufs-Und Handelsorganisation GesmbH (AEO) and
Austro-Hellenique S.A. De Tabac et De Batiment (Austro-Hellenique) pursuant to
which the Business Unit was sold to Tobacco Export and Import Company, Inc., a
subsidiary of DIMON. The land, buildings and certain fixtures and fittings were
retained by Austro-Hellenique.

The profit and loss statement of the Business Unit has been prepared to
include all income and all expenses relating to the purchase, processing and
sale of tobacco. Income and expenses relating to ancillary activities have been
excluded.

The books of the company are maintained in accordance with the Greek Tax
Records Code in Greek Drachmas. For these financial statements certain
adjustments have been made to exclude non tobacco related assets, liabilities,
income and expenses as well as certain other out of book adjustments required
under U.S. generally accepted accounting principles. These statements have been
translated into United States Dollars using the exchange rate at December 31
1994 (GRD 241,49 = USD 1) for the balance sheet and the average exchange rate
(GRD 242,96 = USD 1) for the profit and loss statement. The effect of the
adjustments as of December 31, 1994 is shown in the tables which follow.

<TABLE>
<CAPTION>
Net Assets
<S> <C>
Per books.............................................................................. 4,910,550
LESS: Fixed assets not part of business unit......................................... (4,603,315)
LESS: Current assets/liabilities not part of business unit........................... (24,753)
LESS: Provision for inventories...................................................... (112,599)
LESS: Provision for debtors.......................................................... (198,338)
LESS: Provision for advances......................................................... (28,591)
LESS: Subsidies receivable........................................................... 67,202
LESS: Additional staff leaving provision............................................. (113,571)
LESS: Interest accrual............................................................... (171,405)
LESS: Additional social security accrual............................................. (14,717)
LESS: Accrued costs.................................................................. (268,835)
LESS: Profit on sales not yet invoiced............................................... (5,069,701)
Per financial statements............................................................... (5,628,073)
</TABLE>

F-82

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

1. SIGNIFICANT ACCOUNTING POLICIES -- Continued

<TABLE>
<CAPTION>
Net Profit
<S> <C>
Per books.............................................................................. 599,410
ADD: Non business unit expenses..................................................... 54,159
LESS: Non business unit income....................................................... (140,848)
LESS: Deferred interest income....................................................... (169,269)
LESS: Accrued interest expense....................................................... (227,579)
LESS: Accrued expenses............................................................... (168,240)
LESS: Write down of inventories...................................................... (221,611)
LESS: Write down of debtors.......................................................... (197,138)
LESS: Profit on non invoiced sales................................................... (5,039,027)
ADD: Accrued subsidies.............................................................. 66,796
Per financial statements............................................................... (5,443,347)
</TABLE>

Revenue Recognition

Sales are recognised on the issuance of a sales invoice. Where subsequent
to the issuance of an invoice, additional costs, primarily freight charges, are
expected to be incurred, an accrual has been made for these.

Bank and Cash

Bank and cash represent amounts held in current accounts.

Fixed Assets and Depreciation

Fixed assets are stated at cost less accumulated depreciation. Depreciation
is provided on the straight line basis over the estimated useful life of the
assets.

Inventory

Inventory is valued at the lower of cost and net realisable value. Cost is
determined on the average method. In these financial statements, inventory has
been valued at the net realisable value based on a valuation by Dimon and
Austria Tabak officials.

Foreign Currency Transactions

The accounting books of the company are maintained in Greek drachmas.
Transactions involving foreign currencies are converted into Greek drachmas
using exchange rates ruling at the time of the transactions. Amounts in foreign
currencies at the year end are converted into Greek drachmas at the rates of
exchange ruling at the year end.

Employee Retirement Reserve

According to Greek Law, the Company is obliged to indemnify those of its
employees who are either dismissed without cause or retire. The amount payable
is dependent on the employees final salary and the years of service. The amount
payable on retirement equals 40% of the amount payable on dismissal. The Company
provides 50% of the amount payable on dismissal for employees who will retire.
This amount is calculated based on the present salaries of all employees. The
charge for such costs is included in operating expenses.

F-83

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

2. FIXED ASSETS

Fixed assets comprise the following:

<TABLE>
<CAPTION>
Acc. Net Book
Cost Depr. Value
<S> <C> <C> <C>
Machinery............................................. 2,278,600 1,378,845 899,755
Vehicles.............................................. 77,272 51,052 26,220
Furniture............................................. 212,070 137,939 74,131
In Progress........................................... 31,545 -- 31,545
2,599,487 1,567,836 1,031,651
</TABLE>

Depreciation totalling USD 167,458 was charged to the income statement
during 1994.

3. INVENTORIES

These comprise the following:

<TABLE>
<S> <C>
Tobacco................................................................................. 19,425,054
Packing material........................................................................ 114,416
Advances................................................................................ 2,591
19,542,061
</TABLE>

All the tobacco has been pledged as security against the Business Unit
borrowings.

4. TRADE DEBTORS

These are made up as follows:

<TABLE>
<S> <C>
Local debtors............................................................................ 665,838
E.C. debtors............................................................................. 14,572
Other countries debtors.................................................................. 4,579,558
5,259,968
</TABLE>

5. OTHER DEBTORS

These comprise the following:

<TABLE>
<S> <C>
Training grants receivable............................................................... 150,777
Subsidies receivable..................................................................... 7,494
Restitution receivable................................................................... 884,090
1,042,361
</TABLE>

F-84

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

6. PREPAYMENTS AND ACCRUED INCOME

These comprise the following:

<TABLE>
<S> <C>
Prepayments.............................................................................. 27,663
Restitution receivable................................................................... 720,179
Subsidies receivable..................................................................... 145,469
Prepaid tax.............................................................................. 14,527
Insurance receivable..................................................................... 190,884
Training grants.......................................................................... 149,569
1,248,291
</TABLE>

7. OTHER CREDITORS

These comprise the following:

<TABLE>
<S> <C>
Payable to personnel..................................................................... 833,566
Payable to DIDAGEP....................................................................... 4,716,621
Other.................................................................................... 180,066
5,730,253
</TABLE>

8. GROUP COMPANY PAYABLES

These relate to prepayments received against future purchases and comprise
the following:

<TABLE>
<S> <C>
Payable to AEO........................................................................... 9,103,165
Payable to Austria Tabak................................................................. 282,545
9,385,710
</TABLE>

During the year sales to group companies amounted to USD 4,268.116.

9. ACCRUALS AND DEFERRED INCOME

These comprise the following:

<TABLE>
<S> <C>
Deferred interest income................................................................... 170,299
Bank tax accrual........................................................................... 124,229
Commission accrual......................................................................... 43,058
Electricity accrual........................................................................ 30,245
Other...................................................................................... 163,858
531,689
</TABLE>

F-85

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

10. OTHER INCOME

This comprises the following:

<TABLE>
<S> <C>
Subsidies and restitution................................................................ 1,996,673
Other.................................................................................... 388,024
2,384,697
</TABLE>

11. FINANCIAL COSTS

These comprise the following:

<TABLE>
<S> <C>
Interest expense......................................................................... 6,936,278
Exchange losses.......................................................................... 280,591
Interest income.......................................................................... (850,393)
Exchange gains........................................................................... (106,114)
6,260,362
</TABLE>

12. TAXATION

The Business Unit has nil taxation for the 1994 fiscal year because of the
current year loss and accumulated losses from previous years. Following the sale
of the business unit, the accumulated losses have remained with the Company and
therefore the Business Unit has no benefit from these.

13. COMMITMENTS

The Business Unit has obligations under operating leases for warehouse
space. Certain of these leases are renewed annually while the others are on a
six year lease agreement. For the annual leases, the obligation for 1995
amounted to USD 58,077. For the leases under the six year agreement the
obligation for 1995 amounted to USD 200,000 increasing by 3% annually.

F-86

<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, AGENT OR DEALER.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.

TABLE OF CONTENTS

PROSPECTUS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 6
Use of Proceeds................................ 8
Price Range of Common Stock and Dividends...... 8
Selected Consolidated Financial Data........... 9
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 11
Business....................................... 18
Management..................................... 28
Principle and Selling Stockholders............. 35
Description of Capital Stock................... 36
Shares Eligible for Future Sale................ 41
Underwriting................................... 42
Legal Matters.................................. 43
Experts........................................ 43
Available Information.......................... 43
Index to Consolidated Financial Statements..... F-1
</TABLE>

3,000,000 Shares

Common Stock

P R O S P E C T U S

Wheat First Butcher Singer

Salomon Brothers Inc

, 1996

<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Estimated expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are as
follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................................... $ 22,678
National Association of Securities Dealers fee............................................ 7,077
Blue Sky fees and expenses................................................................ 10,000
Legal fees................................................................................ 40,000
Accounting fees........................................................................... 75,000
Printing and postage expenses............................................................. 30,000
Miscellaneous expenses.................................................................... 5,245
Total.............................................................................. $190,000
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Virginia Stock Corporation Act permits and the Articles of
Incorporation of DIMON Incorporated (the "Company") require, indemnification of
the directors and officers the Company in a variety of circumstances, which may
include liabilities under the Securities Act. Under sections 13.1-697 and
13.1-702 of the Virginia Stock Corporation Act, a Virginia corporation generally
is authorized to indemnify its directors and officers in civil or criminal
actions if they acted in good faith and, in the case of criminal actions, had no
reasonable cause to believe that the conduct was unlawful. The Articles of the
Company require indemnification of directors and officers with respect to any
liability, expenses incurred by them by reason of having been a director or
officer, except in the case of willful misconduct or a knowing violation of
criminal law. The Articles of the Company provide that, to the full extent, that
the Virginia Stock Corporation Act permits elimination of the liability of
directors of officers, no director or officer of the Company shall be liable to
the Company or its shareholders for any monetary damages. The Company may
purchase insurance on behalf of directors, officers, employees and agents that
may cover liabilities under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

None.

ITEM 16. EXHIBITS

<TABLE>
<S> <C>
1.1 Form of Underwriting Agreement
3.1 Amended and Restated Articles of Incorporation of DIMON Incorporated (incorporated by reference to Appendix
VII to DIMON Incorporated's Joint Proxy Statement filed pursuant to Rule 424(b) in connection with DIMON
Incorporated's Registration Statement on Form S-4 (form 33-89780))
3.2 Amended and Restated By-Laws as amended of DIMON Incorporated (incorporated by reference to Exhibit 3.2 to
DIMON Incorporated's Registration Statement on Form S-4 (file 33-89780))
4.1 Specimen of Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to DIMON Incorporated's
Registration Statement on Form S-4 (file 33-89780))
4.2 Article III of the Amended and Restated Articles of Incorporation of DIMON Incorporated (filed as Exhibit
3.01)
4.3 Article III of the Amended and Restated By-Laws of DIMON Incorporated (filed as Exhibit 3.02)
4.4 Rights Agreement, dated as of March 31, 1995, between DIMON Incorporated and First Union National Bank of
North Carolina, as Rights Agent (incorporated by reference to Exhibit 4 to DIMON Incorporated's Current Report
on Form 8-K, dated April 1, 1995)
5.1 Opinion of Hunton & Williams
10.1 DIMON Incorporated Omnibus Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to DIMON
Incorporated's Registration Statement on Form S-4 (file No. 33-89780))
10.2 DIMON Incorporated Non-Employee Directors' Stock Option Plan (incorporated herein by reference to Exhibit 10.2
to DIMON Incorporated's Registration Statement on Form S-4 (file No. 33-89780))
10.3 Dibrell Brothers, Incorporated 1994 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to
Dibrell Brothers, Incorporated's Annual Report on Form 10-K for the fiscal year ended June 30, 1994)
</TABLE>

II-1

<PAGE>
<TABLE>
<S> <C>
10.4 Form of Interpretive Letter, dated January 11, 1995, under the Dibrell Brothers, Incorporated 1994 Omnibus
Stock Incentive Plan delivered by Dibrell Brothers, Incorporated to Claude B. Owen, Jr., T. H. Faucett, T. W.
Oakes, L. N. Dibrell, III and H. P. Green (incorporated by reference to Exhibit 10.6 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994)
10.5 Dibrell Brothers, Incorporated Retirement Plan (Excess Benefit Plan) (incorporated herein by reference to
Exhibit 10.4 to Dibrell Brothers, Incorporated's Annual Report on Form 10-K for the year ended June 30, 1987)
10.6 Dibrell Brothers, Incorporated Pension Equalization Plan (Benefit Assurance Plan) (incorporated herein by
reference to Exhibit 10.13 to Dibrell Brothers, Incorporated's Annual Report on Form 10-K for the year ended
June 30, 1991)
10.7 Long-Term Stock Investment Plan for Key Employees of Monk-Austin, Inc. (incorporated by reference to Exhibit
10.5 of Monk-Austin, Inc.'s Registration Statement on S-1 (File No. 33-51842))
10.8 Form of 1995 Declaration of Amendment to Long-Term Stock Investment Plan for Key Employees of Monk-Austin,
Inc. (incorporated herein by reference to Exhibit 10.8 to DIMON Incorporated's Registration Statement on Form
S-4 (File No. 33-89780))
10.9 Agreement for Supplemental Retirement Benefits, dated August 7, 1986, between A.C. Monk and Company, Inc. and
W. C. Monk (incorporated by reference to Exhibit 10.3 to Monk-Austin, Inc.'s Registration Statement on Form
S-1 (File No. 33-51842))
10.10 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and Albert C. Monk, III
(incorporated by reference to Exhibit 10.1 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.11 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and John M. Hines
(incorporated by reference to Exhibit 10.2 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.12 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and Robert T. Monk, Jr.
(incorporated by reference to Exhibit 10.3 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.13 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and Brian J. Harker
(incorporated by reference to Exhibit 10.4 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.14 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and James H. Felts
(incorporated by reference to Exhibit 10.5 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.15 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and E. Shelton Griffin
(incorporated by reference to Exhibit 10.6 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.16 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and Larry R. Corbett
(incorporated by reference to Exhibit 10.7 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.17 Employment Agreement, dated October 18, 1994, between Monk-Austin International, Inc. and Thomas A. Lewis
(incorporated by reference to Exhibit 10.8 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.18 Employment Agreement, dated as of December 21, 1994, effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and Claude B. Owen, Jr. (incorporated by reference to Exhibit 10.1 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994)
10.19 Employment Agreement, dated as of December 21, 1994, effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and T. H. Faucett (incorporated by reference to Exhibit 10.2 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994)
10.20 Employment Agreement, dated as of December 21, 1994, effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and T. W. Oakes (incorporated by reference to Exhibit 10.3 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994)
10.21 Employment Agreement, dated as of December 21, 1994, effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and L. N. Dibrell (incorporated by reference to Exhibit 10.4 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994)
</TABLE>

II-2

<PAGE>
<TABLE>
<S> <C>
10.22 Employment Agreement, dated as of December 21, 1994, effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and H. P. Green, III (incorporated by reference to Exhibit 10.5 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994)
10.23 Agreement with W. G. Barker, Jr. dated June 2, 1993 (incorporated by reference to Exhibit 10.12 to Dibrell
Brothers, Incorporated's Annual Report on Form 10-K for the year ended June 30, 1993), as amended by letter,
dated December 20, 1995
10.24 Credit Agreement dated as of March 15, 1996 among the Company, Nationsbank, N.A. as administrative agent,
First Union National Bank of Virginia, Bank of America National Trust and Savings Association as Co-Agents and
the lenders therein (incorporated by reference to Exhibit 10.26 to DIMON Incorporated's Registration Statement
on Form S-1 (No. 333-1288))
10.26 Guaranty Agreement, dated as of March 15, 1996 of DIMON International, Inc. and Florimex Worldwide, Inc.
(incorporated by reference to Exhibit 10.27 to DIMON Incorporated's Registration Statement on Form S-1 (No.
333-1288))
10.27 Form of Note in connection with Credit Agreement (incorporated by reference to Exhibit 10.28 to DIMON
Incorporated's Registration Statement on Form S-1 (No. 333-1288))
10.28 Purchase Agreement by and among DIMON Incorporated, Austria Tabakwerke AG, Austria Tabak Einkaufs-Und
Handelsorganisation GesmbH and Austro-Hellenique S.A. De Tabac Et De Batiment, dated April 13, 1995
(incorporated by reference to Exhibit 10.1 to DIMON Incorporated's Current Report on Form 8-K, dated June 7,
1995)
10.29 Form of Indenture, dated May , 1996 among DIMON Incorporated as issuer, DIMON International, Inc. and Florimex
Worldwide, Inc. as guarantors and Crestar Bank, as trustee (incorporated by reference to Exhibit 4.1 to DIMON
Incorporated's Registration Statement Form S-1 (No. 333-1288).
10.30 Consulting Agreement dated April 22, 1996 between DIMON Incorporated and John M. Hines (incorporated by
reference to Exhibit 10.29 to DIMON Incorporated's Registration Statement on Form
S-1 (No. 333-1288).
10.31 Second Amendment, dated April 22, 1996, to Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and John M. Hines (incorporated by reference to Exhibit 10.30 to the Company's
Registration Statement on Form S-1 (No. 333-1288)
12 Statement re Computation of Ratios (incorporated by reference to Exhibit 12 to DIMON Incorporated's
Registration Statement on Form S-1 (No. 333-1288)
21.1 List of Subsidiaries (incorporated by reference to Exhibit 12 to DIMON Incorporated's Registration Statement
on Form S-1 (No. 333-1288)
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Omer Baylan and Associates Business Consulting and Revision S.A.
23.4 Consent of Deloitte & Touche
23.5 Consent of Hunton & Williams (included in Exhibit 5)
24 Powers of Attorney of Directors and Officers of the Registrant (included on the signature pages attached
hereto)
</TABLE>

II-3

<PAGE>
ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrants will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue."

(2) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.

(3) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-4

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has duly caused this Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Danville, Commonwealth of Virginia, on May 21, 1996.

DIMON INCORPORATED
(Registrant)

By: /s/ JAMES A. COOLEY
JAMES A. COOLEY
VICE PRESIDENT AND TREASURER

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 21, 1996. Each of the directors and/or officers of
DIMON Incorporated whose signature appears below hereby appoints Claude B. Owen,
Jr. and James A. Cooley, and each of them severally, as his attorney-in-fact to
sign in his name and behalf in any and all capacities stated below and to file
with the Securities and Exchange Commission, any and all amendments, including
post-effective amendments to this registration statement, making such changes in
the registration statement as appropriate, and generally to do all things in
their behalf in their capacities as officers and directors to enable DIMON
Incorporated to comply with the provisions of the Securities Act of 1933, and
all requirements of the Securities and Exchange Commission.

<TABLE>
<CAPTION>
SIGNATURE TITLE

<S> <C>
/s/ CLAUDE B. OWEN, JR. Chairman of the Board and Chief Executive Officer
CLAUDE B. OWEN, JR.

/s/ JOHN M. HINES Executive Vice President and Director
JOHN M. HINES

/s/ JAMES A. COOLEY Vice President and Treasurer (Principal Financial Officer)
JAMES A. COOLEY

/s/ JERRY L. PARKER Vice President-Controller (Principal Accounting Officer)
JERRY L. PARKER

/s/ WILLIE G. BARKER, JR. Director
WILLIE G. BARKER, JR.

/s/ LOUIS N. DIBRELL, III Director
LOUIS N. DIBRELL, III

Director
R. STUART DICKSON

Director
HENRY F. FRIGON

Director
JAMES E. JOHNSON, JR.

</TABLE>

II-5
<TABLE>
<CAPTION>

<PAGE>

SIGNATURE TITLE

<S> <C>

Director
THOMAS F. KELLER

/s/ JOSEPH L. LANIER, JR. Director
JOSEPH L. LANIER, JR.

/s/ ALBERT C. MONK, III Director
ALBERT C. MONK, III

/s/ ROBERT T. MONK, JR. Director
ROBERT T. MONK, JR.

Director
NORMAN A. SCHER
</TABLE>

II-6

<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT PAGE
<S> <C> <C>
1.1 Form of Underwriting Agreement
3.1 Amended and Restated Articles of Incorporation of DIMON Incorporated
(incorporated by reference to Appendix VII to DIMON Incorporated's Joint
Proxy Statement filed pursuant to Rule 424(b) in connection with DIMON
Incorporated's Registration Statement on Form S-4 (form 33-89780))
3.2 Amended and Restated By-Laws as amended of DIMON Incorporated
(incorporated by reference to Exhibit 3.2 to DIMON Incorporated's
Registration Statement on Form S-4 (file 33-89780))
4.1 Specimen of Common Stock Certificate (incorporated herein by reference
to Exhibit 4.1 to DIMON Incorporated's Registration Statement on Form
S-4 (file 33-89780))
4.2 Article III of the Amended and Restated Articles of Incorporation of
DIMON Incorporated (filed as Exhibit 3.01)
4.3 Article III of the Amended and Restated By-Laws of DIMON Incorporated
(filed as Exhibit 3.02)
4.4 Rights Agreement, dated as of March 31, 1995, between DIMON Incorporated
and First Union National Bank of North Carolina, as Rights Agent
(incorporated by reference to Exhibit 4 to DIMON Incorporated's Current
Report on Form 8-K, dated April 1, 1995)
5.1 Opinion of Hunton & Williams
10.1 DIMON Incorporated Omnibus Stock Incentive Plan (incorporated herein by
reference to Exhibit 10.1 to DIMON Incorporated's Registration Statement
on Form S-4 (file No. 33-89780))
10.2 DIMON Incorporated Non-Employee Directors' Stock Option Plan
(incorporated herein by reference to Exhibit 10.2 to DIMON
Incorporated's Registration Statement on Form S-4
(file No. 33-89780))
10.3 Dibrell Brothers, Incorporated 1994 Omnibus Stock Incentive Plan
(incorporated by reference to Exhibit 10.6 to Dibrell Brothers,
Incorporated's Annual Report on Form 10-K for the fiscal year ended June
30, 1994)
10.4 Form of Interpretive Letter, dated January 11, 1995, under the Dibrell
Brothers, Incorporated 1994 Omnibus Stock Incentive Plan delivered by
Dibrell Brothers, Incorporated to Claude B. Owen, Jr., T. H. Faucett, T.
W. Oakes, L. N. Dibrell, III and H. P. Green (incorporated by reference
to Exhibit 10.6 to Dibrell Brothers, Incorporated's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1994)
10.5 Dibrell Brothers, Incorporated Retirement Plan (Excess Benefit Plan)
(incorporated herein by reference to Exhibit 10.4 to Dibrell Brothers,
Incorporated's Annual Report on Form 10-K for the year ended
June 30, 1987)
10.6 Dibrell Brothers, Incorporated Pension Equalization Plan (Benefit
Assurance Plan) (incorporated herein by reference to Exhibit 10.13 to
Dibrell Brothers, Incorporated's Annual Report on Form 10-K for the year
ended June 30, 1991)
10.7 Long-Term Stock Investment Plan for Key Employees of Monk-Austin, Inc.
(incorporated by reference to Exhibit 10.5 of Monk-Austin, Inc.'s
Registration Statement on S-1 (File No. 33-51842))
</TABLE>

II-7

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT PAGE
<S> <C> <C>

10.8 Form of 1995 Declaration of Amendment to Long-Term Stock Investment Plan
for Key Employees of Monk-Austin, Inc. (incorporated herein by reference
to Exhibit 10.8 to DIMON Incorporated's Registration Statement on Form
S-4 (File No. 33-89780))
10.9 Agreement for Supplemental Retirement Benefits, dated August 7, 1986,
between A.C. Monk and Company, Inc. and W. C. Monk (incorporated by
reference to Exhibit 10.3 to Monk-Austin, Inc.'s Registration Statement
on Form S-1 (File No. 33-51842))
10.10 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and Albert C. Monk, III (incorporated by reference
to Exhibit 10.1 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.11 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and John M. Hines (incorporated by reference to
Exhibit 10.2 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.12 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and Robert T. Monk, Jr. (incorporated by reference
to Exhibit 10.3 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.13 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and Brian J. Harker (incorporated by reference to
Exhibit 10.4 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.14 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and James H. Felts (incorporated by reference to
Exhibit 10.5 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.15 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and E. Shelton Griffin (incorporated by reference to
Exhibit 10.6 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.16 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and Larry R. Corbett (incorporated by reference to
Exhibit 10.7 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.17 Employment Agreement, dated October 18, 1994, between Monk-Austin
International, Inc. and Thomas A. Lewis (incorporated by reference to
Exhibit 10.8 to Monk-Austin, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended December 31, 1994)
10.18 Employment Agreement, dated as of December 21, 1994, effective as of
November 1, 1994, by and between Dibrell Brothers, Incorporated and
Claude B. Owen, Jr. (incorporated by reference to Exhibit 10.1 to
Dibrell Brothers, Incorporated's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)
10.19 Employment Agreement, dated as of December 21, 1994, effective as of
November 1, 1994, by and between Dibrell Brothers, Incorporated and T.
H. Faucett (incorporated by reference to Exhibit 10.2 to Dibrell
Brothers, Incorporated's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1994)
10.20 Employment Agreement, dated as of December 21, 1994, effective as of
November 1, 1994, by and between Dibrell Brothers, Incorporated and T.
W. Oakes (incorporated by reference to Exhibit 10.3 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)
</TABLE>

II-8

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT PAGE
<S> <C> <C>

10.21 Employment Agreement, dated as of December 21, 1994, effective as of
November 1, 1994, by and between Dibrell Brothers, Incorporated and L.
N. Dibrell (incorporated by reference to Exhibit 10.4 to Dibrell
Brothers, Incorporated's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1994)
10.22 Employment Agreement, dated as of December 21, 1994, effective as of
November 1, 1994, by and between Dibrell Brothers, Incorporated and H.
P. Green, III (incorporated by reference to Exhibit 10.5 to Dibrell
Brothers, Incorporated's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1994)
10.23 Agreement with W. G. Barker, Jr. dated June 2, 1993 (incorporated by
reference to Exhibit 10.12 to Dibrell Brothers, Incorporated's Annual
Report on Form 10-K for the year ended June 30, 1993), as amended by
letter, dated December 20, 1995
10.24 Credit Agreement dated as of March 15, 1996 among the Company,
Nationsbank, N.A. as administrative agent, First Union National Bank of
Virginia, Bank of America National Trust and Savings Association as
Co-Agents and the lenders therein (incorporated by reference to Exhibit
10.26 to DIMON Incorporated's Registration Statement on Form S-1 (No.
333-1288))
10.26 Guaranty Agreement, dated as of March 15, 1996 of DIMON International,
Inc. and Florimex Worldwide, Inc. (incorporated by reference to Exhibit
10.27 to DIMON Incorporated's Registration Statement on Form S-1 (No.
333-1288))
10.27 Form of Note in connection with Credit Agreement (incorporated by
reference to Exhibit 10.28 to DIMON Incorporated's Registration
Statement on Form S-1 (No. 333-1288))
10.28 Purchase Agreement by and among DIMON Incorporated, Austria Tabakwerke
AG, Austria Tabak Einkaufs-Und Handelsorganisation GesmbH and
Austro-Hellenique S.A. De Tabac Et De Batiment, dated April 13, 1995
(incorporated by reference to Exhibit 10.1 to DIMON Incorporated's
Current Report on Form 8-K, dated June 7, 1995)
10.29 Form of Indenture, dated May , 1996 among DIMON Incorporated as issuer,
DIMON International, Inc. and Florimex Worldwide, Inc. as guarantors and
Crestar Bank, as trustee (incorporated by reference to Exhibit 4.1 to
DIMON Incorporated's Registration Statement Form S-1 (No. 333-1288).
10.30 Consulting Agreement dated April 22, 1996 between DIMON Incorporated and
John M. Hines (incorporated by reference to Exhibit 10.29 to DIMON
Incorporated's Registration Statement on Form S-1 (No. 333-1288).
10.31 Second Amendment, dated April 22, 1996, to Employment Agreement, dated
October 18, 1994, between Monk-Austin International, Inc. and John M.
Hines (incorporated by reference to Exhibit 10.30 to the Company's
Registration Statement on Form S-1 (No. 333-1288)
12 Statement re Computation of Ratios (incorporated by reference to Exhibit
12 to DIMON Incorporated's Registration Statement on
Form S-1 (No. 333-1288)
21.1 List of Subsidiaries (incorporated by reference to Exhibit 12 to DIMON
Incorporated's Registration Statement on Form S-1
(No. 333-1288)
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Omer Baylan and Associates Business Consulting and Revision
S.A.
23.4 Consent of Deloitte & Touche
</TABLE>

II-9

<PAGE>

EXHIBIT
NUMBER EXHIBIT PAGE
23.5 Consent of Hunton & Williams (included in Exhibit 5)
24 Powers of Attorney of Directors and Officers of the
Registrant (included on the signature pages attached hereto)

II-10

CGS&H Draft of 5/1/96

3,000,000 SHARES(1)

DIMON INCORPORATED

COMMON STOCK

-----------------------

UNDERWRITING AGREEMENT

-----------------------

WHEAT, FIRST SECURITIES, INC.
SALOMON BROTHERS INC
c/o Wheat, First Securities, Inc.
Riverfront Plaza
901 East Byrd Street
Richmond, Virginia 23219 June __, 1996

Dear Sirs:

Certain stockholders of DIMON Incorporated, a Virginia corporation (the
"Company"), named in Schedule I hereto (the "Selling Stockholders"), propose,
subject to the terms and conditions stated herein, to sell to you (the
"Underwriters") an aggregate of 3,000,000 shares of common stock, no par value,
of the Company (the "Common Stock") and, at the election of the Underwriters, an
aggregate of 450,000 additional shares of Common Stock. The aggregate of
3,000,000 shares to be sold by the Selling Stockholders are herein called the
"Firm Securities," and the aggregate of 450,000 additional shares to be sold by
the Selling Stockholders are herein called the "Optional Securities." The Firm
Securities and the Optional Securities that the Underwriters elect to purchase
pursuant to Section 2 hereof are collectively called the "Securities."

1. Representations and Warranties.

(a) The Company represents and warrants to, and agrees with, the
Underwriters that:

___________

(1) Plus an option to purchase from the persons named in Schedule I hereto up
to 450,000 additional shares to cover over-allotments.

(i) A registration statement in respect of the Securities on
Form S-1 (File No. 333-_____) under the Securities Act of 1933, as
amended (the "Act"), and as a part thereof a preliminary prospectus,
has been filed with the Securities and Exchange Commission (the
"Commission") in the form heretofore delivered to; such registration
statement, as amended, has been declared effective by the Commission;
no other document with respect to such registration statement has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of such registration statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424 of the
rules and regulations of the Commission under the Act, being
hereinafter called a "Preliminary Prospectus", the various parts of
such registration statement, including all exhibits thereto, and
including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) of this Agreement and deemed by virtue of
Rule 430A under the Act to be part of the registration statement at the
time it was declared effective being hereinafter called the
"Registration Statement, and the final prospectus, in the form first
filed pursuant to Rule 424(b), being hereinafter called the
"Prospectus");

(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by the Underwriters through you expressly for use
therein or by the Selling Stockholders expressly for use in the
preparation of the answers therein to Item 7 of Form S-1;

(iii) The Registration Statement conforms, and the Prospectus
and any amendments or supplements thereto will conform, in all material
respects, to the requirements of the Act and the rules and regulations
of the Commission thereunder and do not and will not as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by the Underwriters through you expressly for use therein or by the
Selling Stockholders expressly for use in the preparation of the
answers therein to Item 7 of Form S-1;

(iv) Neither the Company nor any of its direct and indirect
subsidiaries (the "Subsidiaries") has sustained since the date of the
latest audited financial statements included in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
change in the outstanding capital stock, long-term debt, or short-term
debt (other than in the ordinary course of business) of the Company or
a material adverse effect on (i) the business, operations, properties,
assets, liabilities, net worth, condition (financial or otherwise) or
prospects of the Company and each of the Subsidiaries, or (ii) the
ability of the Company to perform any of its obligations under this
Agreement (a "Material Adverse Effect");

(v) The Company and each of the Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, free and clear
of all liens, encumbrances and defects except such as are described in
the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries; and any real
property and buildings held under lease by the Company or any of the
Subsidiaries are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company or such Subsidiaries;

(vi) The Company and each of the Subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, with
power and authority (corporate and other) to own or lease their
respective properties and conduct their respective businesses as
described in the Prospectus, and each have been duly qualified as a
foreign corporation for the transaction of business and are in good
standing under the laws of each other jurisdiction which requires such
qualification in which they own or lease material properties, or
conduct any material business, except where the failure to so qualify
in the aggregate would not result in a Material Adverse Effect;

(vii) The Company has an authorized capitalization as set
forth in the Prospectus; all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are fully
paid and nonassessable and conform to the description of the capital
stock of the Company contained in the Prospectus; except as described
in the Prospectus, there are no preemptive or other rights to subscribe
for or to purchase any securities of the Company; except as described
in the Prospectus, there are no warrants, options or other rights to
purchase any securities of the Company; neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating
to the registration of any securities of the Company with respect to
such filing, offering or sale, other than rights which have been waived
or satisfied;

(viii) Except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of each of the Subsidiaries are
owned by the Company, either directly or through wholly-owned
subsidiaries, free and clear of any perfected security interest and any
other security interest, claim, lien or encumbrance;

(ix) The performance of this Agreement by the Company and the
consummation of the other transactions herein contemplated will not
conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company is a party or by which any of the property or assets of the
Company is bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation of the
provisions of the Articles of Incorporation or Bylaws of the Company or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as may be required under the Act and
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters and the
clearance of such offering with the National Association of Securities
Dealers, Inc. (the "NASD");

(x) There are no legal or governmental proceedings pending to
which the Company or any of its Subsidiaries is a party or of which any
property of the Company or any of its Subsidiaries is the subject,
other than as set forth or contemplated in the Prospectus, which, if
determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate, have a Material Adverse Effect and,
to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by any governmental authorities or by any
other persons;

(xi) Price Waterhouse LLP, and Ernst & Young LLP (who have
certified certain financial statements of the Company and Dibrell
Brothers, Incorporated ("Dibrell"), respectively), are and were, with
respect to the Company and Dibrell, respectively, independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;

(xii) All employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) established, maintained or contributed to by the Company
comply in all material respects with the requirements of ERISA and no
employee pension benefit plan (as defined in Section 3(2) of ERISA) has
incurred or assumed an "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or has incurred or assumed any material
liability (other than for the payment of premiums) to the Pension
Benefit Guaranty Corporation;

(xiii) The consolidated financial statements of the Company
and Dibrell, and their respective consolidated subsidiaries, together
with related notes, as set forth in the Registration Statement present
fairly the financial position and the results of operations of the
Company and Dibrell, respectively, and their respective consolidated
subsidiaries, at the indicated dates and for the indicated periods;
such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied
throughout the periods presented except as noted in the notes thereon,
and all adjustments necessary for a fair presentation of results for
such periods have been made; and the selected financial information
included in the Prospectus presents fairly the information shown
therein and has been compiled on a basis consistent with the financial
statements presented therein;

(xiv) The Company and each Subsidiary have timely filed all
necessary federal, state and foreign income, franchise and excise tax
returns and have paid all taxes shown thereon as due, and there is no
tax deficiency that has been or, to the best knowledge of the Company,
might be asserted against the Company or any Subsidiary that might have
a Material Adverse Effect, except for any such assessment, fine or
penalty that is currently being contested in good faith and for which
the Company retains adequate reserves;

(xv) Neither the Company nor any of the Subsidiaries is in
violation of any international, federal or state law, regulation, or
treaty relating to the storage, handling, transportation, treatment or
disposal of hazardous substances (as defined in 42 U.S.C. Section 9601)
or hazardous materials (as defined by any international, federal or
state law or regulation) or other waste products, which violation may
result in a Material Adverse Effect, and the Company and each of the
Subsidiaries have received all material permits, licenses or other
approvals as may be required of them under applicable international,
federal and state environmental laws and regulations to conduct their
business as described in the Prospectus; and the Company and each of
the Subsidiaries are in compliance in all material respects with the
terms and conditions of any such permit, license or approval; neither
the Company nor any of the Subsidiaries has received any notices or
claims that it is a responsible party or a potentially responsible
party in connection with any claim or notice asserted pursuant to 42
U.S.C. Section 9601 et seq. or any state superfund law; and, to the
best knowledge of the Company, the disposal of all of the Company's and
each Subsidiary's hazardous substances, hazardous materials and other
waste products, if any, has been lawful;

(xvi) No relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company or any of the Subsidiaries on the other hand, that is required
by the Act or the Exchange Act, or by the rules and regulations under
either of such Acts to be described in the Registration Statement and
the Prospectus or documents incorporated by reference therein that is
not so described;

(xvii) Neither the Company nor any of the Subsidiaries has
taken and none of such entities will take, directly or indirectly, any
action that is designed to or that has constituted or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities;

(xviii) Each of the Company and the Subsidiaries owns or
possesses, or can acquire on reasonable terms, adequate licenses,
copyrights, trademarks, service marks and trade names (collectively,
"intellectual property") necessary to carry on its business as
presently operated by it, except where the failure to own or possess or
have the ability to acquire any such intellectual property would not,
individually or in the aggregate, have a Material Adverse Effect, and
neither the Company nor any of the Subsidiaries has received any notice
or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any intellectual property or of any
facts which would render any intellectual property invalid or
inadequate to protect the interest of the Company or any of the
Subsidiaries therein and which infringement or conflict could have a
Material Adverse Effect;

(xix) The Company holds and is operating in compliance, in
all material respects, with all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders of any
governmental or self-regulatory body required for the conduct of its
business as presently being conducted ("licenses") and all licenses are
valid and in full force and effect, and the Company is in compliance,
in all material respects, with all laws, regulations, orders and
decrees applicable to it;

(xx) The Company and the Subsidiaries maintain insurance of
the types and in the amounts that are reasonable or required for the
business operated by them, all of which insurance is in full force and
effect;

(xxi) This Agreement has been duly authorized, executed and
delivered by the Company;

(xxii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences; and

(xxiii) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required. All such contracts to
which the Company or a Subsidiary is a party constitute valid and
binding agreements of the Company and are enforceable against the
Company or a Subsidiary in accordance with the terms thereof, except as
may be limited by bankruptcy, insolvency, fraudulent transfer or other
similar laws affecting the rights and remedies of creditors generally
and subject to general principles or equity.

(b) Each of the Selling Stockholders represents and warrants to, and
agrees with, the Underwriters and the Company that:

(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by each of the Selling
Stockholders of this Agreement, the Power of Attorney (the "Power of
Attorney") and the Custody Agreement (the "Custody Agreement")
hereinafter referred to, and for the sale and delivery of the
Securities to be sold by each of the Selling Stockholders hereunder,
have been obtained, except such as may be required under the Act or
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters; and each of the
Selling Stockholders has full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Securities
to be sold by such Selling Stockholder hereunder;

(ii) A Power of Attorney and Custody Agreement have been duly
executed and delivered by each of the Selling Stockholders and
constitute valid and binding agreements of each of the Selling
Stockholders enforceable in accordance with their terms;

(iii) The sale of the Securities to be sold by each of the
Selling Stockholders hereunder and the performance of this Agreement,
the Power of Attorney and the Custody Agreement and the consummation by
each of the Selling Stockholders of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation
of any terms or provisions of, or constitute a default under, any
statute, any indenture, mortgage, deed of trust, loan agreement,
guarantee or other agreement or instrument to which any Selling
Stockholder is a party or by which any Selling Stockholder is subject,
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over any Selling Stockholder or the property
of any Selling Stockholder;

(iv) Certificates in negotiable form representing all of the
Securities to be sold by each of the Selling Stockholders hereunder
have been placed in custody under the Custody Agreement duly executed
and delivered by each of the Selling Stockholders to the custodian
under such agreement (the "Custodian"); each of the Selling
Stockholders has good and valid title to the Securities it has placed
in custody, free and clear of all liens, encumbrances, equities or
claims, and immediately prior to the Delivery Date (as hereinafter
defined) each of the Selling Stockholders will have good and valid
title to the Securities to be sold by such Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities or
claims and, upon delivery of such Securities and payment therefor
pursuant hereto, good and valid title to all of such Securities, free
and clear of all liens, encumbrances, equities or claims, will pass to
the Underwriters;

(v) No offering, sale or other disposition of any Securities
(or any securities convertible into or exercisable for such Securities)
will be made within [180] days after the date of the Prospectus,
directly or indirectly, by any Selling Stockholder, otherwise than
hereunder or without your written consent;

(vi) None of the Selling Stockholders has taken or will take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities;

(vii) Each of the Selling Stockholders is familiar with the
Registration Statement and the Prospectus and verifies that the
information set forth therein respecting him is true and complete;

(viii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982, as amended, with respect to the
transactions herein contemplated, each of the Selling Stockholders
agrees to deliver to you prior to or at the First Delivery Date (as
hereinafter defined) a properly completed and executed United States
Treasury Department form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof);

(ix) Each of the Selling Stockholders has duly executed and
delivered a Power of Attorney, in the form heretofore furnished to you,
appointing __________ as such Selling Stockholder's attorney-in-fact
(the "Attorney-in-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the Underwriters to such Selling
Stockholder as provided in Section 2 hereof, to authorize the delivery
of the Securities to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection
with the transactions contemplated by this Agreement and the Custody
Agreement;

(x) Each of the Selling Stockholders specifically agrees that
the Securities represented by the certificates held in custody for such
Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder and that the arrangements made
by such Selling Stockholder for such custody, and the appointment by
such Selling Stockholder of the Attorney-in-Fact by the Power of
Attorney, are to that extent irrevocable. Each of the Selling
Stockholders agrees that its obligations hereunder shall not be
terminated by operation of law, whether by death or incapacity, or by
the occurrence of any other event. If such Selling Stockholder should
die or become incapacitated, or if any other such event should occur,
before the delivery of any of the Securities hereunder, certificates
representing the Securities to be sold by such Selling Stockholder
hereunder shall be delivered by or on behalf of the Selling Stockholder
in accordance with the terms and conditions of this Agreement and of
the Custody Agreement, and actions taken by the Attorney-in-Fact
pursuant to the Power of Attorney shall be as valid as if such death,
incapacity or other event had not occurred, regardless of whether or
not the Custodian, the Attorney-in-Fact or any of them shall have
received notice of such death, incapacity or other event;

(xi) None of the Selling Stockholders has reason to believe
that any of the representations and warranties of the Company contained
in Section 1(a) hereof are not true and correct in all material
respects; and

(xii) Such Selling Stockholder hereby repeats and confirms as
if set forth in full herein each of the representations, warranties and
agreements made by such Selling Stockholder in the Custody Agreement
and Power of Attorney and agrees that such representations, warranties
and agreements are made hereby for the benefit of, and may be relied
upon by, (i) you, the Underwriters and Cleary, Gottlieb, Steen &
Hamilton, counsel to the Underwriters, and (ii) the Company and Hunton
& Williams, counsel to the Company and the Selling Stockholders.

2. Purchase and Sale.

Subject to the terms and conditions herein set forth, (a) each of the
Selling Stockholders, severally and not jointly, agrees to sell to the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders at a purchase price per share of
$______, the number of Firm Securities to be purchased by such Underwriter as
set forth opposite the name of such Underwriter in Schedule II hereto and (b) in
the event and to the extent that the Underwriters shall exercise the election to
purchase the Optional Securities as provided below, each of the Selling
Stockholders agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from each of the
Selling Stockholders, at the purchase price set forth in clause (a) of this
Section 2, that portion of the number of Optional Securities as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional securities) determined by multiplying such number of Optional
Securities by a fraction, the numerator of which is the maximum number of
Optional Securities that such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule II hereto, and the denominator
of which is the maximum number of the Optional Securities that all of the
Underwriters are entitled to purchase.

Each of the Selling Stockholders, as and to the extent indicated in
Schedule I hereto, hereby grants, severally and not jointly, to the Underwriters
the right to purchase at the Underwriters' election up to 450,000 Optional
Securities, at the purchase price per share set forth in the paragraph above,
for the sole purpose of covering over-allotments in the sale of the Firm
Securities. Any such election to purchase Optional Securities shall be made in
proportion to the maximum number of Optional Shares to be sold by each of the
Selling Stockholders as set forth in Schedule I hereto. Any such election to
purchase Optional Securities may be exercised no more than once by written
notice from you to the Company and the Attorney-in-Fact, given within a period
of 30 days after the date of this Agreement, setting forth the aggregate amount
of Optional Securities to be purchased and the date on which such Optional
Securities are to be delivered, as determined by you but in no event earlier
than the First Delivery Date (as defined in Section 4 hereof) or, unless you and
the Attorney-in-Fact otherwise agree in writing, earlier than three or later
than five business days after the date of such notice.

3. Offering by the Underwriters.

Upon the authorization by you of the release of the Firm Securities,
the Underwriters propose to offer the Firm Securities for sale to the public
upon the terms and conditions set forth in the Prospectus.

4. Delivery and Payment.

Certificates in definitive form for the Securities to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as Wheat, First Securities, Inc. ("Wheat, First") may request upon at
least two business days' prior notice to any Selling Stockholder, as applicable,
shall be delivered by or on behalf of such Selling Stockholder, as applicable,
to Wheat, First, for the account of each Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor. Payment of the
purchase price for the Securities shall be made to or upon the order of the
Custodian by wire transfer of same day funds. The Company shall promptly
following the Delivery Date reimburse Wheat, First. for its cost of delivering
immediately available funds, such cost to be computed at a daily rate equal to
Wheat, First's cost of overnight borrowings for each day from the Delivery Date
to the immediately following business day. The time and date of such delivery
and payment shall be, with respect to the Firm Securities, 10:00 a.m., Richmond,
Virginia time, on June __, 1996 or at such other time and date as Wheat, First
and the Company may agree upon in writing, and, with respect to the Optional
Securities, 10:00 a.m., Richmond, Virginia time, on the date specified by you in
the written notice given by you of the Underwriters' election to purchase such
Optional Securities, or at such other time and date as Wheat, First and the
Company may agree upon in writing. Such time and date for delivery of the Firm
Securities is herein called the "First Delivery Date," such time and date for
delivery of the Optional Securities, if not the First Delivery Date, is herein
called the "Second Delivery Date," and each such time and date for delivery is
herein called a "Delivery Date." Such certificates will be made available for
checking and packaging at least twenty-four hours prior to each Delivery Date at
the offices of Wheat, First Securities, Inc. at the address set forth above or
such other location designated by the Underwriters to the Company and any
Selling Stockholder.

5. Agreements of the Company.

The Company agrees with the Underwriters:

(a) To prepare the Prospectus in a form reasonably approved by you and
to file such Prospectus (or a term sheet as permitted by Rule 434(b)) pursuant
to Rule 424(b) under the Act not later than the Commission's close of business
on the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act; to make no amendment or supplement to the Registration
Statement or Prospectus prior to any Delivery Date which shall be reasonably
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
subsequent to the date of the Prospectus and for so long as the delivery of a
Prospectus is required in connection with the offering or sale of the
Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional information and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;

(b) Promptly from time to time to take such actions as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction. The Company will cooperate with the
Underwriters and the counsel for the Underwriters in connection with the filing
required to be made by the Underwriters with the NASD in connection with the
NASD's review of the offering of the Securities;

(c) To furnish the Underwriters with copies of the Registration
Statement and the Prospectus in such quantities as you may from time to time
reasonably request during such period following the date hereof that a
prospectus is required to be delivered in connection with offers or sales of
Securities, and, if the delivery of a prospectus is required during this period
and if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement the
Prospectus to comply with the Act, to notify you and upon your request to file
such document and to prepare and furnish without charge to you and to any dealer
in securities as many copies as you may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;

(d) As soon as practicable after the effective date of the Registration
Statement, to make generally available to its shareholders and to deliver to
you, an earnings statement of the Company, conforming with the requirements of
Section 11(a) of the Act and Rule 158 under the Act, covering a period of at
least 12 months beginning after the effective date of the Registration
Statement;

(e) For a period of 180 days from the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, directly or indirectly,
or announce or file for the registration of the offering of, any other shares of
Common Stock or any securities convertible into, or exchangeable for, shares of
Common Stock (other than the Securities or pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company in
effect at the Delivery Date, or pursuant to options, warrants or rights
outstanding on the date of this Agreement), without the prior written consent of
Wheat, First Securities, Inc; and

(f) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request.

6. Payment of Expenses.

The Company hereby covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's and the Selling Stockholder's
counsel and accountants in connection with the registration of the Securities
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or reproducing any Agreement Among Underwriters, this Agreement, the
Blue Sky Survey and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of Counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky Survey; (iv) the filing fees
incident to securing any required review by the NASD of the terms of the sale of
the Securities; (v) the cost of preparing stock certificates; (vi) the costs or
expenses of any transfer agent or registrar; and (vii) all expenses and fees of
the Attorney-in-Fact and the Custodian; and (viii) all other costs, expenses and
taxes incident to the sale and delivery of the Securities to be sold by such
Selling Stockholder to the Underwriters hereunder.

7. Conditions to Obligations of Underwriters.

The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Delivery Date, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and each of the Selling Stockholders herein are, at and as of such
Delivery Date, true and correct, and the condition that the Company and each of
the Selling Stockholders shall have performed all of their respective
obligations hereunder theretofore to be performed, and the following additional
conditions:

(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 5(a) of this Agreement; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;

(b) Cleary, Gottlieb, Steen & Hamilton, counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated such Delivery Date,
with respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto) and other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;

(c) Hunton & Williams, counsel for the Company, shall have furnished to
you their written opinion, dated such Delivery Date, in form and substance
satisfactory to you, to the effect that:

(i) each of the Company, DIMON International, Inc., Florimex
Worldwide, Inc., DIMON do Brasil Tabacos Ltda, DIMON Zimbabwe (PVY)
LTD, DIMON GMBH, Florimex Worldwide B.V., Florimex U.S.A. and Baardse
B.V. has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate power and
authority to own its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material
properties;

(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest and, to
the knowledge of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;

(iii) the Company's authorized equity capitalization is as
set forth in the Prospectus; the Securities conform to the description
thereof contained in the Prospectus;

(iv) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit,
which is not described or filed as required;

(vi) the Registration Statement has become effective under the
Act; any required filing of any Preliminary Prospectus and the
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b); to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and the
Registration Statement and the Prospectus (other than the financial
statements and other financial information contained therein as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
rules thereunder; and such counsel has no reason to believe that at the
effective date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

(vii) this Agreement has been duly authorized, executed and
delivered by the Company;

(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;

(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or constitute a default under any law or the
charter or by-laws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound, or any
judgment, order or decree known to such counsel to be applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries;

(x) except as otherwise set forth as in the Prospectus, no
holders of securities of the Company have rights to the registration of
such securities under the Registration Statement;

(xi) the company and each of the Subsidiaries have filed all
federal, state and foreign income tax returns which have been required
to be filed (or have received an extension with respect thereto), and
have paid, or made adequate reserves for, all taxes indicated by said
returns and all assessments received by them to the extent that such
taxes have become due and are not being contested in good faith; and

(xii) all employee benefit plans established, maintained or
contributed to by the Company or any of its subsidiaries comply in all
material respects with the requirements of the Employee Retirement
Income Security Act of 1974 ("ERISA") and no such plan has incurred or
assumed an "accumulated funding deficiency" within the meaning Sec. 302
of ERISA or has incurred or assumed any material liability to the
Pension Benefit Guarantee Corporation.

In addition, such counsel shall state that they have participated in
conferences with directors, officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
representatives of the Underwriters and counsel for the Underwriters, at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed, and, although such counsel have not
independently verified and are not passing upon and assume no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except to the extent specified
elsewhere in such opinion or with reference to such counsel), no facts have come
to the attention of such counsel that lead such counsel to believe that, at the
effective date, the Registration Statement included any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that the Prospectus includes any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel express no view with
respect to the financial statements and related notes, the financial statement
schedules or other financial, statistical and accounting information contained
or incorporated by reference in the Registration Statement or Prospectus).

In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Virginia, the State of New York or the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials. References to the Prospectus in this paragraph (b) include any
supplements thereto at the Delivery Date.

(d) Hunton & Williams, counsel for the Selling Stockholders, shall have
furnished to you their written opinion with respect to the Selling Stockholders
they represent, dated such Delivery Date, in form and substance satisfactory to
you, to the effect that:

(i) A Power of Attorney and Custody Agreement have been duly
executed and delivered by each Selling Stockholder and constitute valid
and binding agreements of such Selling Stockholder enforceable in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, moratorium or other laws affecting
creditors' rights generally and by general equity principles;

(ii) This Agreement has been duly executed and delivered by
or on behalf of each Selling Stockholder, and the sale of the
Securities to be sold by such Selling Stockholder hereunder and the
performance of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel after due inquiry to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound, or any statute, order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;

(iii) To the best of such counsel's knowledge, no consent,
approval, authorization or order of any court or governmental agency or
body is required for the consummation of the transactions contemplated
by this Agreement in connection with the Securities to be sold by such
Selling Stockholder hereunder, except such as have been obtained under
the Act and such as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of such
Securities by the Underwriters; and

(iv) Upon delivery to the Underwriters, the Underwriters will
receive good and valid title to the Securities, free and clear of all
liens, encumbrances, equities or claims; provided that the Underwriters
purchase such Securities in good faith and without notice of any
adverse claim within the meaning of the Uniform Commercial Code as in
effect in the state of North Carolina [?] [form agreement, though
governed by New York law, referenced Georgia here, i.e. state where
actual transfer events took place. should we just put in New York and
let Hunton and Williams say otherwise?]. To the best of such counsel's
knowledge, there are no such liens, encumbrances, equities or claims.

In rendering the opinion in subparagraph (iv), such counsel may rely
upon a certificate of each of the Selling Stockholders in respect of matters of
fact, provided that such counsel shall state that they believe that both you and
they are justified in relying upon such certificate;

(e) The Company shall have furnished to the Underwriters a certificate
of the Company, signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Company, dated the Delivery
Date, to the effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and that:

(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and as
of the Delivery Date with the same effect as if made on the Delivery
Date and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior
to the Delivery Date;

(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and

(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in the condition (financial or
other), earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).

(f) Each of the Selling Stockholders shall have furnished or caused to
be furnished to you at such Delivery Date certificates of each of the Selling
Stockholders reasonably satisfactory to you as to the accuracy of the respective
representations and warranties of the each of the Selling Stockholders herein at
and as of such Delivery Date, as to the performance by each of the Selling
Stockholders of all of their obligations hereunder to be performed at or prior
to such Delivery Date, as to the matters set forth in subsection (d) of this
Section and as to such other matters as you may reasonably request.

(g) On the Delivery Date, Price Waterhouse LLP shall have furnished to
the Underwriters a letter or letters, dated respectively as of the Delivery
Date, in form and substance satisfactory to the Underwriters, confirming that
they are independent accountants within the meaning of the Act and the
applicable published rules and regulations thereunder and that they have
performed a review of the unaudited financial information for the fiscal quarter
ended September 30, 1995 and the fiscal quarter ended December 31, 1995 [and the
fiscal quarter ended March 31, 1996] in accordance with Statement of Auditing
Standards No. 71 and stating in effect that:

(i) in their opinion the audited financial statements and
financial statement schedules and any pro forma financial statements
included in the Registration Statement and the Prospectus and reported
on by them comply in form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;

(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with the standards
established by the American Institute of Certified Public Accountants
of the unaudited interim financial information for the __-month period
ended ____, 1996, and as at _____, 1996, as indicated in their report
dated ____, 1996; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and executive, compensation
and audit committees of the Company and the Subsidiaries; and inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its subsidiaries as
to transactions and events subsequent to the date of the most recent
audited financial statements included in the Registration Statement and
the Prospectus, nothing came to their attention which caused them to
believe that:

(1) the unaudited financial statements included in
the Registration Statement and the Prospectus do not comply in
form in all material respects with applicable accounting
requirements of the Act and with the published rules and
regulations of the Commission with respect to registration
statements on Form S-1; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus; or

(2) with respect to the period subsequent to the date
of the most recent financial statements (other than capsule
information), audited or unaudited, included in the
Registration Statement and the Prospectus, there were, at a
specified date not more than five business days prior to the
date of the letter, any material increases in the long-term
debt of the Company and its subsidiaries, any material change
in the number of issued shares of capital stock of the
Company, any material decreases in the total assets or
stockholders' equity of the Company or any material decreases
in the excess of current assets over current liabilities of
the Company and its subsidiaries as compared with the amounts
shown on the most recent consolidated balance sheet included
in the Registration Statement and the Prospectus, or for the
period from the date of the most recent financial statements
included in the Registration Statement and the Prospectus to
such specified date there were any decreases, as compared with
the corresponding period in the preceding year in revenues,
operating income, net income before income taxes, total or per
share amounts of net income or net interest income of the
Company and its subsidiaries; except in all instances for
changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said explanation
is not deemed necessary by the Underwriters;

(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus, including the
information set forth under the caption "Capitalization" in the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation; and

(iv) on the basis of a reading of any unaudited pro forma
financial statements included in the Registration Statement and the
Prospectus (the "pro forma financial statements"); carrying out certain
specified procedures; inquiries of certain officials of the Company and
relevant other entities who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the pro forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial statements do
not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.

References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.

(h) On the Delivery Date, Ernst & Young LLP shall have delivered to the
Purchasers a letter or letters, dated as of the date of delivery, in form and
substance satisfactory to the Purchasers, confirming that they were independent
public accountants with respect to Dibrell within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and stating in effect that in their opinion, the audited financial
statements of Dibrell for the years ended June 30, 1994 and June 30, 1993 and
reported on by them comply in form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations.

(i) Subsequent to the Delivery Date or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (g) of this Section 7 or (ii) any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company and the Subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Underwriters, so material and adverse as to make it impractical or inadvisable
to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).

(j) Subsequent to the Delivery Date, there shall not have been any
decrease in the ratings of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.

(k) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading of any of the
equity securities of the Company on the New York Stock Exchange; (ii) any United
States federal or state statute, regulation, rule or order of any court,
legislative body, agency or other governmental authority shall have been
enacted, published, decreed or promulgated or any proceeding or investigation
shall have been commenced which, in your reasonable judgment, materially and
adversely affects the business or operations of the Company; (iii) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange; (iv) a general moratorium on commercial banking activities in New York
declared by either federal or New York authorities; (v) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if any such event specified in
this clause (v) would have such a materially adverse effect, in your reasonable
judgment, as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities being delivered at such Delivery Date
on the terms and in the manner contemplated in the Prospectus; or (vi) such a
material adverse change in general economic, political, financial or
international conditions affecting financial markets in the United States having
a material adverse impact on trading prices of securities in general, as, in
your reasonable judgment, makes it inadvisable to proceed with the payment for
and delivery of the Securities;

(l) The Company shall have furnished to you copies of agreements
between the Company and the directors and officers of the Company, and certain
other shareholders specified by you, in form and content satisfactory to you,
pursuant to which such persons agree not to offer, sell, or contract to sell, or
otherwise dispose of, any shares of Common Stock beneficially owned by them or
any securities convertible into, or exchangeable for, Common Stock, on or before
the 180th day after the date of this Agreement without your prior written
consent

(m) Prior to the Delivery Date, the Company shall have furnished to the
Underwriters such further information, certificates and documents as the
Underwriters may reasonably request.

If any of the conditions specified in this Section 7 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriters and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Delivery Date by the Underwriters. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.

8. Indemnification and Contribution.

(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will promptly reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating, preparing to defend or defending, or appearing as a
third-party witness in connection with, any such action or claim; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or Prospectus or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriters through you expressly
for use therein.

(b) Subject to subsection (f) of this Section, each of the Selling
Stockholders will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which the
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will promptly reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating, preparing to defend or defending, or appearing as a
third-party witness in connection with, any such action or claim; provided,
however, that none of the Selling Stockholders shall be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the Underwriters
through you expressly for use therein.

(c) Each Underwriter will indemnify and hold harmless the Company and
any Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or any Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you expressly for use
therein; and will reimburse the Company and any Selling Stockholder for any
legal or other expenses reasonably incurred by the Company and the Selling
Stockholder in connection with investigating, preparing to defend or defending,
or appearing as a third-party witness in connection with, any such action or
claim. The Company and each of the Selling Stockholders acknowledge that the
statements set forth in the last paragraph of the cover page and under the
heading "Underwriting" in the Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the Preliminary Prospectus or the
Prospectus, and you, as the Representatives, confirm that such statements are
correct.

(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have been advised by
counsel that representation of such indemnified party and the indemnifying party
may be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys together with appropriate
local counsel at any time for all indemnified parties unless such firm of
attorneys shall have reasonably concluded that one or more indemnified parties
has actual differing interests with other indemnified parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to appoint counsel to defend such action and approval by the indemnified party
of such counsel, the indemnifying party will not be liable for any settlement
entered into without its written consent and will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). Notwithstanding the immediately preceding sentence
and the first sentence of this paragraph, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement.

(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and each
of the Selling Stockholders on the one hand and the Underwriters on the other
from the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (d) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and each of
the Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company and each of the Selling Stockholders on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (after deducting the total underwriting
discount, but before deducting expenses) received by the Company and each of the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or any Selling Stockholder on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, each of the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to above in this subsection (e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations under this subsection (e) are several in proportion to
their respective underwriting obligations and not joint.

(f) The liability of each of the Selling Stockholders under this
Section 8 shall be limited to an amount equal to the initial public offering
price less the underwriting discount of the Securities sold by such Selling
Stockholder to the Underwriters.

(g) The obligations of the Company and each of the Selling Stockholders
under this Section 8 shall be in addition to any liability which the Company and
such Selling Stockholder may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company or within the meaning of the Act.

9. Default of Underwriters.

(a) If any Underwriter shall default in its obligation to purchase the
Securities that it has agreed to purchase hereunder at a Delivery Date, you may
in your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within 36 hours after such
default by any Underwriter you do not arrange for the purchase of such
Securities, then each of the Selling Stockholders shall be entitled to a further
period of 36 hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms. In the event
that, within the respective prescribed periods, you notify each of the Selling
Stockholders that you have so arranged for the purchase of such Securities, or
any of the Selling Stockholders notifies you that he has so arranged for the
purchase of such Securities, you or the Selling Stockholders shall have the
right to postpone such Delivery Date for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.

(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and each of the
Selling Stockholders as provided in subsection (a) above, the aggregate number
of such Securities that remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Securities to be purchased at such Delivery Date,
then the Selling Stockholders shall have the right to require each
non-defaulting Underwriter to purchase the number of Securities that such
Underwriter agreed to purchase hereunder at such Delivery Date and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share (based
on the number of Securities that such Underwriter agreed to purchase hereunder
at such Delivery Date) of the share of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.

(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and each of the
Selling Stockholders as provided in subsection (a) above, the aggregate number
of such Securities that remains unpurchased exceeds one-eleventh of the
aggregate number of all the Securities to be purchased at such Delivery Date
then this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase and of each of the Selling
Stockholders to sell the Optional Securities) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriters or the Selling
Stockholders, except for the expenses to be borne by the Company and the Selling
Stockholders and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.

10. Representations and Indemnities to Survive.

The respective indemnities, agreements, representations, warranties and
other statements of the Company, each of the Selling Stockholders and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriters or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company or each
of the Selling Stockholders, and shall survive delivery of and payment for the
Securities.

11. Termination and Payment of Expenses.

If this Agreement shall be terminated pursuant to Section 9 hereof or
as a result of the occurrence of an event described in subsections 7(k)(iii),
(iv), (v) or (vi) hereof, neither the Company nor any of the Selling
Stockholders shall then be under any liability to any Underwriter except as
provided in Section 6 and Section 8 hereof; but if for any other reason any
Securities are not delivered by or on behalf of any of the Selling Stockholders
as provided herein, the Company and each of the Selling Stockholders will
reimburse the Underwriters through you for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Securities not so
delivered, but neither the Company nor any Selling Stockholder shall then be
under any further liability to any Underwriter except as provided in Section 6
and Section 8 hereof.

12. Notices.

In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.

In all dealings with any Selling Stockholder, you and the Company shall
be entitled to act and rely upon any statement, request, notice or agreement on
behalf of such Selling Stockholder made or given by the Attorney-in-Fact for
such Selling Stockholder.

All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters shall be sufficient in all respects if delivered or sent by
reliable courier, first class mail, telex or facsimile transmission to Wheat,
First Securities, Inc., at Riverfront Plaza, 901 East Byrd Street, Richmond,
Virginia 23219, Attention: William L. Tyson, with a copy separately delivered to
Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, New York,
10006, Attention: William F. Gorin, Esq.; if to any Selling Stockholder shall be
sufficient in all respects if delivered or sent by mail, telex or facsimile
transmission to Hunton & Williams, One Riverfront Plaza, 951 East Byrd Street,
Richmond, Virginia, 23219-4074, Attention: Thurston R. Moore, Esq.; or if to the
Company shall be sufficient in all respects if delivered or sent by reliable
courier, first class mail, telex, or facsimile transmission to 512 Bridge
Street, Danville, Virginia, 24543, Attention: Claude B. Owen, Jr. and James A.
Cooley, with a copy separately delivered to Hunton & Williams, One Riverfront
Plaza, 951 East Byrd Street, Richmond, Virginia, 23219-4074, Attention: Thurston
R. Moore, Esq. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.

13. Successors.

This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, each of the Selling Stockholders and the Company and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each of the Selling Stockholders and each person who controls
the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.

14. Time of the Essence.

Time shall be of the essence in this Agreement.

15. Business Day.

As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.

16. Applicable Law.

This Agreement shall be construed in accordance with the laws of the
State of New York.

17. Captions.

The captions included in this Agreement are included solely for
convenience of reference and shall not be deemed to be a part of this Agreement.

18. Counterparts.

This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.

If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
among each of the Underwriters, the Company and each of the Selling
Stockholders.

Very truly yours,

DIMON INCORPORATED

By: _______________________
Name:
Title:

SELLING SHAREHOLDERS

By: _______________________
[__________________]
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named
in Schedule I to this Agreement

Accepted as of the date hereof
at Richmond, Virginia:

WHEAT, FIRST SECURITIES, INC.

By: ______________________
Name:
Title:

SALOMON BROTHERS INC

By: ______________________
Name:
Title:

<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>

Number of Optional
Securities to be Sold if
Total Number of Firm Maximum Option
Securities to be Sold Exercised

<S> <C> <C>
The Selling Stockholders:

..................................
..................................
..................................

..................................

..................................
..................................
..................................
..................................
________________

TOTAL

</TABLE>

<PAGE>

SCHEDULE II

Optional Securities to
be Purchased if
Firm Securities Maximum Option
to be Purchased Exercised
<S> <C> <C>
Wheat, First Securities, Inc......................
Salomon Brothers Inc .............................

TOTAL
</TABLE>

May 22, 1996

Board of Directors
DIMON Incorporated
512 Bridge Street
Danville, Virginia 24543-0681

DIMON Incorporated

Registration Statement on Form S-1

Ladies and Gentlemen:

We have acted as counsel to DIMON Incorporated, a Virginia corporation
(the "Company"), in connection with its Registration Statement on Form S-1, as
filed on May 22, 1996 with the Securities and Exchange Commission (the
"Registration Statement"), with respect to 3,450,000 shares (including up to
450,000 shares subject to an over-allotment option) of the Company's Common
Stock, $.01 par value (the "Common Stock"), which are proposed to be offered and
sold by certain selling stockholders as described in the Registration Statement.

In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.

Based upon the foregoing and the further qualifications stated below,
we are of the opinion that:

1. The Company is duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Virginia; and

2. The shares of Common Stock covered by the Registration Statement
have been duly authorized, legally issued and are fully paid and non-assessable.

<PAGE>

Board of Directors
May 22, 1996

Page 2

We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
statement made in reference to this firm under the caption "Legal Matters" in
the Registration Statement.

Very truly yours,

/s/ HUNTON & WILLIAMS
Hunton & Williams
07667/08049

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated October 3, 1995, except
as to Note R, which is as of March 11, 1996, relating to the financial
statements of DIMON Incorporated, which appears in such Prospectus. We also
consent to the application of such report to the Financial Statement Schedule
for the three years ended June 30, 1995 listed under Item 16(b) of this
Registration Statement when such schedule is read in conjunction with the
financial statements referred to in our report. The audits referred to in such
report also included this schedule. We also consent to the references to us
under the headings "Experts", "Summary Historical Financial Information" and
"Selected Consolidated Financial Data" in such Prospectus. However, it should be
noted that Price Waterhouse LLP has not prepared or certified such "Summary
Historical Financial Information" or "Selected Consolidated Financial Data."

Price Waterhouse LLP
Raleigh, North Carolina
May 21, 1996

EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the references to our firm under the captions "Experts",
"Summary Historical Financial Information" and "Selected Consolidated Financial
Data", and to the use of our report dated August 26, 1994, in the Registration
Statement (Form S-1) and related Prospectus of DIMON Incorporated for the
registration of 3,450,000 shares of its common stock, with respect to the
consolidated financial statements of Dibrell Brothers, Incorporated for the year
ended June 30, 1994.

Ernst & Young LLP

Winston-Salem, North Carolina
May 20, 1996

EXHIBIT 23.3

[OBA Letterhead]

CONSENT OF INDEPENDENT AUDITORS

We consent to the use in the prospectus constituting a part of the
registration statement of DIMON Incorporated of our report dated August 14,
1995, which appears in such prospectus. We also consent to the reference to us
under the heading "Experts" in such prospectus.

/s/ OMER BAYLAN

Omer BAYLAN
Partner in Charge

Istanbul, Turkey
May 22, 1996

EXHIBIT 23.4

CONSENT OF INDEPENDENT AUDITORS

We consent to the use in the prospectus constituting a part of the registration
statement of the secondary offering of DIMON Incorporated of our report dated
July 31, 1995, which appears in such prospectus.

We also consent to the reference to us under the heading "Experts" in such
prospectus.

/s/ DELOITTE & TOUCHE

Deloitte & Touche

Thessaloniki, Greece
May 22, 1996