EXHIBIT 10.14
UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED
1994 DEFERRED INCOME PLAN
Universal Leaf Tobacco Company, Incorporated (the "Sponsor")
hereby establishes a non-qualified deferred compensation program
for certain employees as described herein. The following shall
constitute the terms and conditions of the 1994 Deferred Income
Plan, effective July 1, 1994.
A. Purpose and Administration
1. Statement of Purpose
The purpose of the 1994 Deferred Income Plan (the "Plan") is to
provide certain officers of Universal Leaf Tobacco Company,
Incorporated, of its parent, Universal Corporation, and of
certain of its domestic subsidiaries as are listed on Schedule A
attached hereto, and as amended from time to time
("Participating Subsidiaries") (individually and collectively,
the "Company") with recurrent opportunities to defer receipt of
a portion of salary and amounts earned pursuant to the
applicable Management Performance Plan of the Company (the
"MPP"). Such deferrals, until a date certain in the future,
would apply to amounts which otherwise would be payable
currently.
2. Top Hat Plan
The Sponsor intends that the Plan constitute an unfunded "top
hat" plan maintained for the purpose of providing deferred
compensation to a select group of management employees, within
the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Security Act of 1974, as amended from time
to time, and the rules and regulations thereunder ("ERISA").
3. Plan Administration
Full power and authority to construe, interpret and administer
the Plan and to change requirements for eligibility and
investment options shall be vested in the Executive Committee of
the Sponsor (the "Committee"). The Committee shall have the
authority to make determinations provided for or permitted to be
made under the Plan and to establish such rules and regulations,
if any, that the Committee deems necessary and appropriate for
the ongoing administration and operation of the Plan.
B. Eligibility
4. Eligible Employees
Participants in this plan shall consist of the following
corporate officers: (a) Officers of Universal Corporation, (b)
Corporate Directors and above of the Sponsor, (c) Vice
Presidents and above of Participating Subsidiaries, and (d)
Assistant Vice Presidents who are also assistant general
managers at processing plants of Participating Subsidiaries
(collectively referred to hereinafter as "Participants").
C. Deferral Elections
5. Agreements
The initial deferral agreement (the "Initial Agreement"), in a
form approved by the Committee shall be executed by the Company
and each Participant to effectuate the deferrals described in
Section 6(a) below. Subsequent deferral agreements (the
"Subsequent Agreements"), in a form approved by the Committee
shall be executed by the Sponsor and each Participant to
effectuate the deferrals described in Section 6(b) below (the
Initial Agreement and the Subsequent Agreements are collectively
referred to herein as the "Deferral Agreements"). Execution of
the Deferral Agreements between the Company and each Participant
shall constitute the sole means for each Participant to
effectuate deferral elections pursuant to the Plan.
6. Deferral Elections
(a) Initial Deferral
Each Participant may elect in writing to defer an amount of
salary up to a maximum of seventy-five percent (75%) for the
initial deferral period of July 1, 1994 through December 31,
1995 (the "Initial Deferral Period"). There are two separate
deferral elections for the Initial Deferral Period. The first
election is for the period July 1, 1994 to December 31, 1994,
and the second election is for calendar year 1995. Each
Participant may also elect in writing to defer up to one hundred
percent (100%) of his or her MPP award for the Sponsor's fiscal
year beginning July 1, 1994 and ending June 30, 1995, which is
generally payable in September of 1995 (the "1995 MPP Award"),
or all of his or her 1995 MPP award in excess of a designated
sum, if any. The election with respect to salary for the
Initial Deferral Period and/or the 1995 MPP Award shall be made
in the month of June 1994.
(b) Subsequent Deferrals
Each Participant may elect in writing to defer an amount of
salary up to a maximum of twenty-five percent (25%) for
subsequent calendar year deferrals (the "Subsequent Deferral
Period"). Each Participant may also elect in writing to defer
either (i) up to one hundred percent (100%) of his or her MPP
Award for the Sponsor's subsequent fiscal years which are
generally payable the September after the conclusion of the
fiscal year (the "Subsequent MPP Awards"), or (ii) all of a
Subsequent MPP Award in excess of a designated sum, if any. The
election with respect to salary for the Subsequent Deferral
Period and/or a Subsequent MPP Award shall be made in the month
of June prior to the July 1 beginning of the Sponsor's fiscal
year in which any MPP Award is earned and, therefore, prior to
the calendar year in which any of the salary is earned.
(c) New Participant Deferrals
Any new Employee to the Company who is eligible to participate
in the Plan subsequent to the Plan's commencement date of July
1, 1994 may elect to defer salary within thirty (30) days from
the date on which he or she first becomes eligible to
participate. Each continuing Employee who becomes eligible to
participate in the Plan subsequent to the Plan's commencement
date of July 1, 1994, may elect salary and/or MPP award
deferrals during the next regular June deferral election period.
D. Deferral Accounts
7. Deferral Account
The Company shall establish a deferral account in the name of
each Participant on the Company's books and records which shall
reflect the amount of actual deferrals plus any earnings and
less any losses thereon (the "Adjustment") as described in
Section 9 hereinafter as an unfunded liability of the Company to
the Participant (the actual deferrals plus or minus the
Adjustment is collectively referred to herein as the "Deferral
Account").
8. Irrevocability of Deferral Elections
Once a Participant elects to defer salary and/or a MPP award
pursuant to the terms of a Deferral Agreement, including
elections as to amount, timing and method of payout, such
election shall be irrevocably binding upon the Participant.
9. Investment Options
The Sponsor has selected the following initial investment funds
which may be modified from time to time by the Committee:
Oppenheimer Capital Appreciation Fund, Oppenheimer Global Fund,
Massachusetts Mutual Equity Fund, Massachusetts Mutual Bond Fund
and the Massachusetts Mutual Money Market Fund (the "Investment
Options"). Participants shall designate annually in June how
their deferrals are to be hypothetically invested among the
Investment Options. The Sponsor shall use the Participant's
Investment Option designations to calculate the Adjustment
component of the Deferral Account. The Participant may each
June change his or her investment election designation both as
to amounts then in the Deferral Account and future amounts to be
allocated to the Deferral Account. If a Participant changes his
or her Investment Option designation for either amounts then in
the Deferral Account or future amounts to be allocated to the
Deferral Account, then such change shall supersede the previous
designation effective as of the last day of the month after the
date of the changed election. The Sponsor shall begin crediting
the Participant's Deferral Account with the amount deferred by
the Participant on the last day of the month in which the salary
or MPP Award would have otherwise been paid. As to the
applicable amount distributed, the Sponsor shall cease crediting
or debiting Adjustments to the Participant's Deferral Account on
the last day of the month of the applicable distribution event
set forth in Sections 10, 11, 12, 13, 14 or 15 (the "Valuation
Date").
Allocation of investment selections shall be made among the
Investment Options. A Participant shall have absolutely no
ownership interest in any Investment Option. The Sponsor may,
but is not required to, invest the amounts represented by the
Deferral Accounts in the Investment Options. The Sponsor shall
be the sole owner of any funds invested in any such Investment
Option, as well as all amounts accounted for in the Deferral
Accounts, all of which shall at all times be subject to the
claims of the Company's general unsecured creditors.
E. Distributions
10. Pre-Deferral Irrevocable Payout Election
A Participant may irrevocably elect to receive the distribution
of the Deferral Account, as follows:
(a) in a one-time partial distribution of a specified amount on
a specified future date that is more than five (5) years from
the date of execution of the Deferral Agreement with the
remainder to be distributed in accordance with subsection (c) or
(d), and with such partial distributions to be made on or before
the fifteenth day of the month following the specified date;
and/or
(b) in a lump sum distribution of the entire Deferral Account
on a specified future date that is more than five (5) years from
the date of execution of the Deferral Agreement with payment
made on or before the fifteenth day of the month following the
specified date; or
(c) upon retirement from the Company, in a lump sum
distribution on or before the fifteenth day following the
Valuation Date; or
(d) upon retirement from the Company, in annual payments for a
period of up to fifteen (15) years beginning on or before the
fifteenth day following the Valuation Date and on each
subsequent anniversary date thereafter. Under this method, for
example, assuming a fifteen year payment election, the first
year distribution will equal one-fifteenth (1/15) of the total
Deferral Account, the second year distribution will equal
one-fourteenth (1/14) of the remaining Deferral Account, and so
forth.
Notwithstanding the Participant's irrevocable election, the
distribution of the Deferral Account to a Participant shall be
accelerated in the event of permanent disability (Section 11),
death (Section 12), termination of employment other than by
retirement (Section 13) or a Change of Control, as defined
hereinafter (Section 14), and may be accelerated in the event of
an Unforeseeable Emergency, as defined hereinafter (Section 15).
11. Payment in Event Participant Becomes Permanently Disabled
In the event a Participant terminates employment as a result of
permanent disability, as that term is defined in the Sponsor's
Long Term Disability Benefits Plan, the method of payment shall
be a lump sum distribution on or before the fifteenth day
following the Valuation Date.
12. Payment in Event of Participant's Death
In the event a Participant pre-deceases his or her election date
for payment of the Deferral Account or has not received all of
his or her payments, the method of payment shall be a lump sum
distribution to the beneficiary designated by the Participant on
or before the fifteenth day following the Valuation Date.
Each Participant shall designate in writing a beneficiary to
whom benefits hereunder are to be paid, if the Participant dies
prior to receiving his or her entire Deferral Account. A
Participant may change his or her beneficiary designation at any
time by filing a revised beneficiary designation form with the
Committee.
If a Participant fails to designate a beneficiary as provided
above, or if all designated beneficiaries predecease the
Participant, or die before the completion of all payments due
hereunder, the Sponsor shall pay the Deferral Account to the
Participant's estate.
13. Payment in Event of Participant's Termination of Employment
Upon termination of employment for reasons other than
retirement, permanent disability or death, the Company shall pay
the terminated Participant his or her Deferral Account in a lump
sum distribution on or before the fifteenth day following the
Valuation Date.
14. Payment in Event of Change of Control
Upon the Occurrence of a Change of Control, as defined below,
with respect to both Participants and retirees who are receiving
payments hereunder, the Company shall pay the Participant his or
her Deferral Account in a lump sum distribution on or before the
fifteenth day following the Valuation Date.
For the purpose of this Plan, a "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of Common Stock of
Universal Corporation (the "Outstanding Common Stock") or (ii)
the combined voting power of the then outstanding voting
securities of Universal Corporation entitled to vote generally
in the election of directors (the "Outstanding Voting
Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute
a Change of Control: (i) any acquisition directly from
Universal Corporation, (ii) any acquisition by Universal
Corporation, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by Universal
Corporation or any corporation controlled by Universal
Corporation or (iv) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i), (ii) and (iii)
of subsection (c); or
(b) Individuals who, as of July 1, 1994, constitute the Board
of Directors of Universal Corporation (the "Incumbent Board")
cease for any reason to constitute at least a majority of such
Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the shareholders of Universal
Corporation, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors of Universal Corporation; or
(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the
assets of Universal Corporation (a "Business Combination"), in
each case, unless, following such Business Combination, (i) all
or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities immediately prior to
such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which, as a result of such
transaction, owns Universal Corporation or all or substantially
all of Universal Corporation's assets either directly or through
one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and Outstanding
Voting Securities, as the case may be, (ii) no Person (excluding
any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of Universal
Corporation or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination, or
(d) Approval by the shareholders of Universal Corporation of a
complete liquidation or dissolution of Universal Corporation.
15. Payment in Event of Unforeseeable Emergency
(a) A distribution of a portion of the Participant's Deferral
Account because of an Unforeseeable Emergency will be permitted
only to the extent required by the Participant to satisfy the
emergency need. Whether an Unforeseeable Emergency has occurred
will be determined solely by the Committee. Distributions in
the event of an Unforeseeable Emergency may be made by and with
the approval of the Committee upon written request by a
Participant.
(b) An "Unforeseeable Emergency" is defined as a severe
financial hardship to the Participant resulting from a sudden
and unexpected illness or accident of the Participant or of a
dependent of the Participant, loss of the Participant's property
due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond
the Participant's control. The circumstances that will
constitute an unforeseeable emergency will depend upon the facts
of each case, but, in any event, any distribution under this
Section shall not exceed the remaining amount required by the
Participant to resolve the hardship after (i) reimbursement or
compensation through insurance or otherwise, (ii) obtaining
liquidation of the Participant's assets, to the extent such
liquidation would not itself cause a severe financial hardship,
or (iii) suspension of deferrals under the Plan.
F. Participants' Rights
16. Participant Rights in the Unfunded Plan
Any liability of the Company to any Participant with respect to
any benefit shall be based solely upon the contractual
obligations created by the Plan and the Deferral Agreements
(collectively, the "Agreements"); no such obligation shall be
deemed to be secured by any pledge or any encumbrance on any
property of the Company. No Participant shall have any rights
under the Plan other than those of a general unsecured creditor
of the Company. Assets segregated or identified by the Company
for the purpose of paying benefits pursuant to the Plan remain
general corporate assets subject to the claims of the Company's
general creditors, and are not held in trust by the Company for
the benefit of Participants.
17. Non-Assignability
Except as provided in Section 12, each Participant's rights
under the Plan shall be non-transferrable and non-assignable.
G. The Sponsor's Reservation of Rights
18. Termination or Amendment of Plan
The Sponsor retains the right, at any time and in its sole
discretion, to amend or terminate the Plan, in whole or in part.
Any amendment of the Plan shall be approved by the Board of
Directors of the Sponsor, shall be in writing and shall be
communicated within thirty (30) days of its adoption to the
Participants. Notwithstanding the above, the Committee shall
have the authority to change the requirements of eligibility or
to modify the Investment Options hereunder. No amendment of the
Plan shall substantially impair or curtail the Sponsor's
contractual obligations arising from Deferral Agreements
previously entered into for benefits accrued prior to such
amendment. Notwithstanding any other provision herein to the
contrary, in the event of Plan termination, payment of Deferral
Accounts shall occur not later than the last business day of the
third month following the month in which the termination is made
effective.
H. Claims for Benefits
19. Claims Procedure
Any claim by a Participant or his or her Beneficiary (hereafter
"Claimant") for benefits shall be submitted to the Committee.
The Committee shall be responsible for deciding whether such
claim is within the scope provided by the Plan (a "Covered
Claim") and for providing full and fair review of the decision
of such claim. In addition, the Committee shall provide a full
and fair review in accordance with ERISA, including without
limitation Section 503 thereof.
Each claimant or other interested person shall file with the
Committee such pertinent information as the committee may
specify, and in such manner and form as the Committee may
specify and provide, and such person shall not have any rights
or be entitled to any benefits or further benefits hereunder, as
the case may be, unless such information is filed by the
Claimant or on behalf of the Claimant. Each Claimant shall
supply at such times and in such manner as may be required,
written proof that the benefit is covered under the Plan. If it
is determined that a Claimant has not incurred a Covered Claim
or if the Claimant shall fail to furnish such proof as is
requested, no benefits or no further benefits hereunder, as the
case may be, shall be payable to such Claimant.
Notice of a decision by the Committee with respect to a Claim
shall be furnished to the Claimant within ninety (90) days
following the receipt of the claim by the Committee (or within
ninety (90) days following the expiration of the initial ninety
(90) day period, in a case where there are special circumstances
requiring extension of time for processing the claim). If
special circumstances require an extension of time for
processing the claim, written notice of the extension shall be
furnished by the Committee to the Claimant prior to the
expiration of the initial ninety (90) day period. The notice of
extension shall indicate the special circumstances requiring the
extension and the date by which the notice of decisions with
respect to the claim shall be furnished. Commencement of
benefit payments shall constitute notice of approval of a claim
to the extent of the amount of the approved benefit. If such
claim shall be wholly or partially denied, such notice shall be
in writing and worded in a manner calculated to be understood by
the Claimant, and shall set forth (i) the specific reason or
reasons for the denial; (ii) specific reference to pertinent
provisions of the Plan on which the denial is based; (iii) a
description of any additional material or information necessary
for the Claimant to perfect the claim and an explanation of why
such material or information is necessary; and (iv) an
explanation of the Plan's claims review procedure. If the
Committee fails to notify the Claimant of the decision regarding
his or her claim in accordance with these "Claims Procedure"
provisions, the claim shall be deemed denied and the Claimant
then shall be permitted to proceed with the claims review
procedure provided herein.
Within sixty (60) days following receipt by the Claimant of
notice of the claim denial, or within sixty (60) days following
the close of the ninety (90) day period referred to herein, or
if the Committee fails to notify the Claimant of the decision
within such ninety (90) day period, the Claimant may appeal
denial of the claim by filing a written application for review
with the Committee. Following such request for review, the
Committee shall fully and fairly review the decision denying the
claim. Prior to the decision of the Committee, the Claimant
shall be given an opportunity to review pertinent documents and
to submit issues and comments to the Committee in writing. The
decision of the Committee shall be made within sixty (60) days
following receipt by the Committee of the request for review (or
within one hundred and twenty (120) days after such receipt, in
a case where there are special circumstances requiring extension
of time for reviewing such denied claim). The Committee shall
deliver its decision to the Claimant in writing. If the
decision on review is not furnished within the prescribed time,
the claim shall be deemed denied on review.
For all purposes under the Plan, the decision with respect to a
claim if no review is requested and the decision with respect to
a claim if review is requested shall be final, binding and
conclusive on all interested parties as to matters relating to
the Plan.
20. Committee Determinations Final
Each determination provided for in the Plan shall be made in the
absolute discretion of the Committee. Any such determination
shall be final, binding and conclusive on all persons.
I. Miscellaneous Provisions
21. Effect on Other Benefits
Except as otherwise required by applicable law, the salary
deferred by a Participant shall be included in the Participant's
annual compensation for purposes of calculating the
Participant's bonuses and awards, insurance and other employee
benefits. However, in accordance with the terms of any plan
qualified under Section 401 of the Internal Revenue Code
maintained by the Sponsor, the amount of salary deferrals under
the Plan shall not be included as calendar year compensation in
calculating the Participant's benefits or contributions by or on
behalf of the Participant. Distributions made under the Plan
shall be excluded from compensation in years paid for purposes
of calculating a Participant's bonuses and awards, insurance and
other employee benefits.
22. Plan Year
The Plan Year shall be the calendar year.
23. Tax Withholding
The Sponsor shall withhold from any payment made by it under the
Plan such amount or amounts as may be required for purposes of
complying with the tax withholding or other provisions of the
Internal Revenue Code of 1986, as amended, or the Social
Security Act, as amended, or any federal, state or local income
or employment tax provision or for purposes or paying any
estate, inheritance or other tax attributable to any amounts
payable hereunder.
24. Participant's Incapacity
If, in the Committee's opinion, a Participant of other person
entitled to receive benefits under the Plan is in any way
incapacitated so as to be unable to manage his or her financial
affairs, then the Committee may make such payment(s) into a
separate interest-bearing account established for the benefit of
and on behalf of the Participant or other recipient, for release
at such time as a claim is made by a conservator or other person
legally charged with the care of his or her person or of his or
her estate. Thereafter, any benefits payable under the Plan
shall be made to the conservator or other person legally charged
with the care of his or her person or estate.
25. Independence of Plan
Except as otherwise expressly provided herein, this Plan shall
be independent of, and in addition to, any other employment
agreement or employment benefit agreement or plan or rights that
may exist from time to time between the parties hereto. This
Plan shall not be deemed to constitute a contract of employment
between the Company and a Participant, nor shall any provision
hereof restrict the right of the Company at any time to
discharge a Participant, with or without assigning a reason
therefore, or restrict the right of a Participant to terminate
his or her employment with the Company.
26. Responsibility for Legal Effect
Neither the Committee nor the Company makes any representations
or warranties, express or implied, or assumes any responsibility
concerning the legal, tax, or other implications of effects of
this Plan.
27. Successors, Acquisitions, Mergers, Consolidations
The terms and conditions of the Plan and each Deferral Agreement
shall inure to the benefit of and bind the Company and the
Participants, and their successors, assigns, and personal
representatives.
28. Controlling Law
The Plan shall be construed in accordance with the laws of the
Commonwealth of Virginia to the extent not preempted by laws of
the United States of America.