SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] Annual report pursuant to section 15(d) of the Securities Exchange Act of
1934 [fee required] for the fiscal year ending December 31, 2001.
OR
[_] Transition report pursuant to section 15(d) of the Securities Exchange Act
of 1934 [no fee required]
Commission file number 1-652
A. Full title of the Plan:
EMPLOYEES' STOCK PURCHASE PLAN OF UNIVERSAL LEAF TOBACCO COMPANY,
INCORPORATED AND DESIGNATED AFFILIATED COMPANIES.
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principle executive office:
UNIVERSAL CORPORATION
1501 NORTH HAMILTON STREET
RICHMOND, VIRGINIA 23230
(804) 359-9311
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
EMPLOYEES' STOCK PURCHASE PLAN
OF UNIVERSAL LEAF TOBACCO
COMPANY, INCORPORATED AND
DESIGNATED AFFILIATED COMPANIES
DATE: June 28, 2002 /s/ Hartwell H. Roper
---------------------------------
Hartwell H. Roper
Executive Vice President and Chief
Financial Officer
Universal Leaf Tobacco Company, Inc.
EMPLOYEES' STOCK PURCHASE PLAN OF UNIVERSAL LEAF
TOBACCO COMPANY, INCORPORATED AND DESIGNATED
AFFILIATED COMPANIES
Audited Financial Statements and Supplemental Schedules
Years ended December 31, 2001 and 2000
with Report of Independent Auditors
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Audited Financial Statements and Supplemental Schedules
Years ended December 31, 2001 and 2000
Contents
Report of Independent Auditors....................................................................... 1
Financial Statements
Statements of Net Assets Available for Benefits...................................................... 2
Statement of Changes in Net Assets Available for Benefits............................................ 3
Notes to Financial Statements........................................................................ 4
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
at End of Year.................................................................................... 12
Schedule H, Line 4j - Schedule of Reportable Transactions............................................ 13
Report of Ernst & Young LLP, Independent Auditors
Human Resources Policy and Planning Team
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
We have audited the accompanying statements of net assets available for benefits
of the Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies (the Plan) as of December 31,
2001 and 2000, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2001. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes at end of year as of December 31, 2001, and
reportable transactions for the year then ended, are presented for purposes of
additional analysis and are not a required part of the financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
Richmond, Virginia
June 21, 2002
1
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Statements of Net Assets Available for Benefits
December 31
2001 2000
---------------- -----------------
Common stock of Universal Corporation $ 33,290,537 $ 41,359,681
Common stock of LandAmerica Financial Group, Inc. 242,802 719,421
Fixed income fund 967,590 1,076,402
Temporary cash investments 909 6,489
---------------- -----------------
Net assets available for benefits $ 34,501,838 $ 43,161,993
================ =================
See accompanying notes.
2
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Investment income:
Net appreciation in market value of investments $ 1,578,486
Cash dividends 1,351,866
Interest 65,165
-------------------
2,995,517
Contributions:
Employer 1,367,280
Employee 1,367,280
-------------------
2,734,560
Withdrawals and forfeitures of employees' accounts (14,390,232)
-------------------
Net decrease (8,660,155)
Net assets available for benefits:
December 31, 2000 43,161,993
-------------------
December 31, 2001 $ 34,501,838
===================
See accompanying notes.
3
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Notes to Financial Statements
Years ended December 31, 2001 and 2000
1. Description of the Plan
A complete description of Plan provisions including those relating to vesting,
withdrawals and distributions is contained in the Summary Plan Description and
the Plan document which has been filed with the Securities and Exchange
Commission. Copies of these documents and the prospectus relating to the Plan
are available from the Universal Corporation Benefits Department. The following
summary should be read in conjunction with the aforementioned documents.
General
The Plan is a defined contribution plan sponsored by Universal Leaf Tobacco
Company, Incorporated (the Sponsor) for the benefit of certain salaried
employees of the sponsor and designated affiliated companies (Employers). The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
Contributions
After one year of service and attaining age 21, employees may elect to
contribute 1% to 5% of their total pay (including overtime and bonuses) by means
of monthly payroll deductions. Employers match 100% of employee contributions
except to the extent that the employer contribution is reduced by forfeitures
from nonvested withdrawing participants.
Employees may elect to invest in the Universal Corporation Common Stock Fund,
fixed income fund or to divide their contributions equally between the two
funds. Employers' contributions are invested only in the Universal Corporation
Common Stock Fund.
Participant accounts
Each participant's account consists of participant's contributions, the
Employer's matching contribution and credit from forfeitures and an allocation
of the Plan's investment income. The benefit to which a participant is entitled
is the benefit that can be provided from the participant's account.
4
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Vesting
Participants are fully vested in their contributions and in Employer
contributions in the event of retirement, disability or death. Otherwise,
vesting in the Employer contributions occurs according to the following
schedule:
Years of service Vesting percentage
---------------------------- ---------------------------
0-4 0%
5 100%
Benefits
Participants who retire or become disabled may receive a distribution in a
single lump sum or in annual installments over a period not to exceed the lesser
of ten years or the participant's life expectancy.
Termination
While the Sponsor has not expressed any intent to terminate the Plan, it is free
to do so at any time, subject to the provisions of ERISA. In the event of Plan
termination, participants will become fully vested in their accounts.
LandAmerica Financial Group, Inc. Shares
During 1991, each participant elected to either sell or hold all LandAmerica
Financial Group, Inc. (formerly Lawyers Title Corporation) shares distributed to
them as a dividend from the spin-off from Universal Corporation.
5
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
LandAmerica Financial Group, Inc. Shares (continued)
Participants continuing to hold LandAmerica Financial Group, Inc. shares may
elect to sell 100% of their holdings as part of their regular semi-annual
elections and have the proceeds invested in Universal Corporation Common Stock.
No additional investments in LandAmerica Financial Group, Inc. Common Stock are
permitted under the Plan.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
Investment Valuation and Income Recognition
The Plan's investments are held by a bank-administered trust fund which changed
from Wachovia to Bank of New York during 2000. Investments in the Common Stock
Funds are carried at market value based upon quotations from the New York Stock
Exchange. Dividends are recorded on the record date, and interest is accrued as
earned.
6
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Investment Valuation and Income Recognition (continued)
The fixed income fund is primarily invested in the Stable Value Fund I, a pooled
fund of investment contracts managed by Wachovia Asset Management. The
investment contracts are valued at contract value, which approximates market
value. The rate of return of the fund is based on the crediting rate of the
underlying guaranteed investment contracts. These contracts generally provide
for a fixed rate of return over the term of the contract. During 2001 the
average yield for the fund was 5.94% (6.48% in 2000), and at December 31, 2001
the crediting rating was 5.88% (6.60% at December 31, 2000).
Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. Investments
During 2001, the Plan's investments in common stock (including investments
purchased, sold, as well as held during the year) appreciated in fair value by
$1,578,486.
Information about the net assets and the significant components of changes in
net assets related to the nonparticipant-directed investments is as follows:
December 31
2001 2000
---------------- -----------------
Investments at fair value:
Universal Corporation common stock $ 33,290,537 $ 41,359,681
Temporary cash investments 909 6,489
---------------- -----------------
$ 33,291,446 $ 41,366,170
================ =================
7
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Notes to Financial Statements (continued)
3. Investments (continued)
Year ended
December 31, 2001
--------------------
Change in net assets:
Contributions $ 2,579,400
Dividends 1,349,754
Interest 8,101
Net appreciation in market value 1,724,982
Withdrawals and forfeitures (13,739,314)
Transfers between funds 2,353
--------------------
$ (8,074,724)
====================
4. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31, 2001
--------------------
Net assets available for benefits per the financial statements $ 34,501,838
Amounts allocated to withdrawn participants (28,020)
--------------------
Net assets available for benefits per the Form 5500 $ 34,473,818
====================
8
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Notes to Financial Statements (continued)
4. Differences Between Financial Statements and Form 5500 (continued)
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31, 2001
--------------------
Benefits paid to participants per the financial statements $ 14,390,232
Add: Amounts allocated on Form 5500 to withdrawn participants at December 31, 2001 28,020
Less: Amounts allocated on Form 5500 to withdrawn participants at December 31, 2000 (543,141)
--------------------
Benefits paid to participants per the Form 5500 $ 13,875,111
====================
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to year
end but not yet paid.
5. Income Taxes
The Plan has received a determination letter from the Internal Revenue Service
dated July 7, 1995, stating the Plan is qualified under Section 401(a) of the
Internal Revenue Code (the "Code") and, therefore, the related trust is exempt
from taxation. Subsequent to this issuance of the determination letter, the Plan
was amended. Once qualified, the Plan is required to operate in conformity with
the Code to maintain its qualification. The Plan Sponsor believes the Plan is
being operated in compliance with the applicable requirements of the Code and
therefore, believes that the Plan, as amended, is qualified and the related
trust is tax exempt.
6. Related Party Transactions
The administrative expenses of the Plan, which included the trustee's fees
($37,015 in 2001) are paid by the Sponsor and are not included in the
accompanying financial statements.
9
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies
Notes to Financial Statements (continued)
6. Related Party Transactions (continued)
Under the provisions of the Plan, employees and officers may elect to sell
shares of Universal Corporation common stock to the Plan semi-monthly. The
trustee then sells the shares on the open market. Purchases from employees
totaled $458,356 during the year ended December 31, 2001. Included in this
amount are purchases from officers which amounted to $75,861.
10
Supplemental Schedules
Schedule 1
Employees'Stock Purchase Plan of Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
EIN: 54-0741848
Plan #002
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at
End of Year
December 31, 2001
Description of Investment
Including Number of
Shares, Maturity Date,
Rate of Interest,
Identity of Issue, Borrower, Collateral, Par or Market
Lessor or Similar Party Maturity Value Cost Value
------------------------------------------------------------ --------------------------------------------------------------
Universal Corporation Common Stock Fund
Common stock of Universal Corporation* 914,324 $ 23,580,506 $ 33,290,537
Temporary cash investments 909 909 909
----------------------------------
$ 23,581,415 $ 33,291,446
==================================
LandAmerica Financial Group, Inc.
Common Stock Fund
Common stock of LandAmerica Financial
Group, Inc. 8,460 ** $ 242,802
Fixed Income Fund
Investments in a fund consisting of guaranteed investment
contracts 967,590 ** 967,590
-----------------
$ 34,501,838
=================
*Indicates party-in-interest to the Plan.
** Participant - directed investment.
12
Schedule 2
Employees' Stock Purchase Plan of Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies
EIN: 54-0741848
Plan #002
Schedule H, Line 4j - Schedule of Reportable Transactions
December 31, 2001
(h) Current
Value of Asset
(a) Identity of Party (c) Purchase (d) Selling (g) Cost of on Transaction (i) Net Gain
Involved (b) Description Price Price Asset Date or (Loss)
------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of Transactions in
Excess of 5% of Plan Assets
------------------------------------------
** Universal Corporation
Stock $ 3,845,442 $ - $ 3,845,442 $ 3,845,442 $ -
- 6,308,056 3,742,922 6,308,056 2,565,134
Bank of New York Collective Short Term
Investments Fund 10,792,988 - 10,792,988 10,792,988 -
- 10,797,551 10,797,551 10,797,551 -
There were no category (i), (ii), or (iv) reportable transactions during 2001.
Columns (e) and (f) are not applicable.
** Transactions made on market.
13