8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: August 6, 2010

(Date of earliest event reported)

UNIVERSAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Virginia	001-00652	54-0414210
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

9201 Forest Hill Avenue	23235
Richmond, Virginia	(Zip Code)
(Address of Principal Executive Offices)

Registrant's telephone number, including area code:

(804) 359-9311

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Item 1.01.                      Entry into a Material Definitive Agreement.

On  August 6, 2010, Universal Corporation (the “Company”), and its subsidiary, Universal Leaf Tabacos Ltda. (“ULTL”), finalized agreements with the United States Department of Justice (the “DOJ”) to resolve the DOJ’s investigation into possible violations by the Company of certain provisions of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”).  Also, on  August 6, 2010, the Company finalized agreements with the United States Securities and Exchange Commission (the “SEC”) to resolve the SEC’s investigation into possible violations by the Company of certain provisions of the FCPA.  Each agreement is subject to the approval of the federal district court having jurisdiction in each case, and there can be no assurance that either agreement will be approved.

The investigation into possible violations of the FCPA by the Company was previously disclosed in the Company’s March 13, 2006 press release.  The press release is attached as Exhibit 99.1 to the Company’s Form 8-K filed March 14, 2006 with the SEC.

DOJ Agreement

On  August 6, 2010, the DOJ filed in the United States District Court for the Eastern District of Virginia, Richmond Division, a two-count criminal information (the “Information”) against ULTL alleging conspiracy to violate the FCPA and violations of the anti-bribery provisions of the FCPA.  In connection with the filing of the Information, ULTL, and the Company on behalf of ULTL, entered into a plea agreement with the DOJ, effective August 6, 2010 (the “Plea Agreement”).  Pursuant to the Plea Agreement, ULTL agrees, among other things, to plead guilty to the charges set forth in the Information, to continue to cooperate with the DOJ and other federal, state, local, or foreign law enforcement agencies, and to cooperate with an independent DOJ-approved corporate mo nitor for a period of three years.  In exchange, the DOJ agrees not to file additional charges against ULTL or the Company for any conduct disclosed to the DOJ.  The fine that ULTL, the DOJ and the Company will recommend to the court under the Plea Agreement is $4.4 million, payable in one lump sum.

The Company has also entered into a non-prosecution agreement with the DOJ in connection with the resolution of the FCPA investigation (the “NPA”).  The NPA requires, as a condition to non-prosecution, that the Company meet the conditions of the NPA for a period of three years.  These conditions include, among other things, that the Company engage an independent corporate monitor and strengthen its compliance, bookkeeping and internal control standards and procedures.

A copy of the Plea Agreement and the NPA are filed as Exhibits 10.1 and 10.2, respectively, to this report and are incorporated by reference herein.

SEC Agreement

On August 6, 2010, the SEC filed in the United States District Court for the District of Columbia a complaint (the “SEC Complaint”), a consent of the Company (the “Consent”) and a proposed final judgment against the Company (the “Final Judgment”).  The

SEC Complaint alleges civil violations of the FCPA’s anti-bribery, internal controls and books and records provisions.  Without admitting or denying the allegations in the SEC Complaint, the Company consented to the filing of the SEC Complaint and entry of the Final Judgment to resolve the SEC’s investigation.    The Final Judgment permanently enjoins the Company from violating the provisions of the FCPA set forth in the SEC Complaint.  It also requires the Company to pay disgorgement in the amount of $3,125,905.00 plus prejudgment interest thereon in the amount of $1,455,371.51.

Copies of the Consent and the Final Judgment are filed as Exhibit 10.3 to this report and are incorporated by reference herein.

Failure by the Company or ULTL to comply with the terms and conditions of the NPA, the Plea Agreement or the Final Judgment could result in resumed prosecution and other regulatory sanctions.

Item 8.01.                      Other Events.

On August 6, 2010, the Company issued a press release announcing that it had finalized agreements with the DOJ and SEC resolving their investigation into matters involving the U.S. Foreign Corrupt Practices Act.  A copy of the press release is filed as Exhibit 99.1 to this report and is incorporated herein by reference.

Item 9.01.                      Financial Statements and Exhibits.

(d)           Exhibits.

The following exhibits are filed herewith:

10.1	Plea Agreement between Universal Leaf Tabacos Ltda., Universal Corporation and the United States Department of Justice.
10.2	Non-Prosecution Agreement between Universal Corporation and the United States Department of Justice.
10.3	Consent of Defendant Universal Corporation and Final Judgment as to Defendant Universal Corporation.
99.1	Press Release by the Company.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		UNIVERSAL CORPORATION
		(Registrant)
Date:  August 6, 2010	By:	/s/ Preston D. Wigner
		Preston D. Wigner
		Vice President, General Counsel & Chief Compliance Officer

EXHIBIT INDEX

Exhibit No.	Description
10.1	Plea Agreement between Universal Leaf Tabacos Ltda., Universal Corporation and the United States Department of Justice.
10.2	Non-Prosecution Agreement between Universal Corporation and the United States Department of Justice.
10.3	Consent of Defendant Universal Corporation and Final Judgment as to Defendant Universal Corporation.
99.1	Press Release by the Company.

EX-10.1

Exhibit 10.1

 IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Richmond Division

UNITED STATES OF AMERICA,	)	Criminal No. 3:10-cr-00225-REP
	)
	)
v.	)
	)
UNIVERSAL LEAF TABACOS LTDA.,	)
	)
Defendant.	)
	)
	)

PLEA AGREEMENT

Pursuant to Rule 11(c)(1)(b) of the Federal Rules of Criminal Procedure, the United States of America, by and through the Fraud Section of the Criminal Division of the United States Department of Justice (“Department of Justice” or the “Department”) and the United States Attorney’s Office for the Eastern District of Virginia (“USAO”), and the defendant, Universal Leaf Tabacos Ltda.(“Universal Brazil” or “Defendant”), a Brazilian corporation, by its undersigned attorneys, and Universal Corporation, on behalf of its wholly owned subsidiary Universal Brazil, hereby submit and enter into this Plea Agreement (“Agreement”).  The terms and conditions of this Agreement ar e as follows:

The Defendant’s Agreement

           1.           Defendant agrees to waive indictment and plead guilty to a two-count Criminal Information filed in the Eastern District of Virginia charging Defendant with conspiracy to commit an offense against the United States, in violation of Title 18, United States Code, Section 371, that is, to violate the Foreign Corrupt Practices Act (“FCPA”), as amended, Title 15, United States Code, Sections 78dd-1, et seq. (Count One), and with violating the anti-bribery provisions

of the FCPA, Title 15, United States Code, Section 78dd-3 (Count Two).  Defendant further agrees to persist in that plea through sentencing and, as set forth below, to fully cooperate with the Department.

           2.           Defendant understands and agrees that this Agreement is between the Department, USAO, Defendant, and Universal Corporation on behalf of Defendant, and does not bind any other division or section of the Department of Justice or any other federal, state, or local prosecuting, administrative, or regulatory authority.  Nevertheless, the Department and USAO will bring this Agreement and the cooperation of Defendant, its direct or indirect affiliates, and its parent corporation to the attention of other prosecuting authorities or other agencies, if requested.

           3.           Defendant agrees that this Agreement will be executed by an authorized corporate representative.  Defendant further agrees that the Certificate of Corporate Resolutions attached as Appendix A was duly adopted by the Board of Directors of Universal Brazil, and represents that the signatures on this Agreement by Universal Brazil and its counsel are authorized by the Board of Directors of Universal Brazil.

           4.           Defendant, and Universal Corporation, on behalf of Universal Brazil, agree that each has the full legal right, power, and authority to enter into and perform all of its obligations under this Agreement.

           5.           Defendant agrees that any fine or restitution imposed by the Court will be due and payable within ten (10) business days from the date of sentencing, and Defendant will not attempt to avoid or delay payments.  Defendant further agrees to pay the Clerk of the Court for

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the United States District Court for the Eastern District of Virginia the mandatory special assessment of $400 per count within five (5) business days from the date of sentencing.

           6.           Defendant and Universal Corporation agree that if either of them, or any of their direct or indirect affiliates or subsidiaries, issues a press release in connection with this Agreement, Universal Brazil or Universal Corporation shall first consult the Department and USAO to determine whether (a) the text of the release is true and accurate with respect to matters between the Department and Defendant; and (b) the Department has no objection to the release.

           7.           Defendant agrees that in the event it sells, merges, or transfers all or substantially all of its business operations as they exist as of the date of this Agreement, whether such sale(s) is/are structured as a stock or asset sale, merger, or transfer, Defendant shall include in any contract for sale, merger, or transfer, a provision fully binding the purchaser(s) or any successor(s) in interest thereto to the obligations described in this Agreement.

           8.           Defendant agrees to abide by all terms and obligations of this Agreement as described herein, including but not limited to the following:

a. to plead guilty as set forth in this Agreement;

b. to abide by all sentencing stipulations contained in this Agreement;

c.  to appear, through its duly appointed representatives, as ordered for all Court appearances;

d. to commit no further crimes;

e. to be truthful at all times with the Court;

f.  to cooperate with the independent corporate monitor referenced in paragraph 21(d) of this Agreement as described in Appendix C;

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g. to implement a compliance and ethics programs designed to detect and prevent violations of the FCPA, other anti-corruption laws, and all applicable foreign bribery laws, as described in Appendix D; and

h. to pay the applicable fine and special assessment.

           9.           Defendant further agrees to cooperate with the Department, USAO, and with any other federal, state, local, or foreign law enforcement agency as directed by the Department and USAO.  This cooperation includes, but is not limited to:

                      a.           Providing and/or ensure that the Department and USAO is given access to all officers, directors, employees, agents, and consultants of Universal Brazil or any of its direct or indirect affiliates, subsidiaries, or its parent corporation for interviews and testimony in the United States relating to the illegal payments described in the attached Appendix B (Statement of Facts); and

            b.           Providing access to copies of non-privileged original documents and records relating to such payments if requested to do so.

The United States’ Agreement

           10.           In exchange for the guilty plea of Defendant and the complete fulfillment of all of its obligations under this Agreement, and in exchange for the agreement of its parent company, Universal Corporation, to assume all of the obligations set forth in the Non-Prosecution Agreement, the Department and USAO agree that they will not file additional criminal charges against Defendant or any of its direct or indirect affiliates, subsidiaries, or its parent corporation relating to the conduct disclosed to the Department and USAO as of the date of this Agreement.  This Agreement will not close or preclude the investigation or prosecution of any natural

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persons, including any officers, directors, employees, agents, or consultants of Defendant who may have been involved in any of the matters set forth in the Information, Statement of Facts, or in any other matters.

Factual Basis

           11.           Defendant is pleading guilty because it is guilty of the charges contained in the Information.  Defendant agrees and stipulates that the factual allegations set forth in the Information are true and correct, that it is responsible for the acts of its officers and employees described in Appendix B (Statement of Facts), and that the Statement of Facts accurately reflects its criminal conduct.

Defendant’s Waiver of Rights, Including Right to Appeal

           12.           The Defendant represents to the Court that it is satisfied that its undersigned attorneys have rendered effective assistance. The Defendant understands that by entering into this Agreement, it surrenders certain rights as provided in this Agreement. The Defendant understands that the rights of a defendant include the following:

a.           If the Defendant persisted in a plea of not guilty to the charges, the Defendant would have the right to a speedy jury trial with the assistance of counsel. The trial may be conducted by a judge sitting without a jury if the Defendant, the United States, and the court all agree.

b.           At a trial, the United States would be required to present witnesses and other evidence against the Defendant. The Defendant would have the opportunity to confront those witnesses and its attorney would be allowed to cross-examine them. In turn, the Defendant could, but would not be required to, present witnesses and other evidence on his own behalf. If

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the witnesses for the Defendant would not appear voluntarily, it could require their attendance through the subpoena power of the court.

c.           At a trial, no inference of guilt could be drawn from the Defendant's refusal to present evidence. However, if the Defendant desired to do so, it could present evidence on its behalf.

 13.Defendant knowingly, intelligently, and voluntarily waives its right to appeal the conviction in this case.  Defendant similarly knowingly, intelligently, and voluntarily waives the right to appeal the sentence imposed by the Court.  In addition, Defendant knowingly, intelligently, and voluntarily waives the right to bring a collateral challenge pursuant to 28 U.S.C. § 2255, challenging either the conviction or the sentence imposed in this case, except for a claim of ineffectiv e assistance of counsel.  Defendant waives all defenses to the offenses  charged based on the statute of limitations and venue with respect to any prosecution that is not time-barred on the date that this Agreement is signed in the event that: (a) the conviction is later vacated for any reason; (b) Defendant violates this Agreement; or (c) the plea is later withdrawn.  The Department is free to take any position on appeal or any other post-judgment matter.

Penalty Range

           14.           The statutory maximum sentence that the Court can impose for a violation of Title 18, United States Code, Section 371 is a fine of $500,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest, Title 18, United States Code, Sections 3571(c)(3) and (d); five years’ probation, Title 18, United States Code, Section 3561(c)(1); and a mandatory special assessment of $400, Title 18, United States Code, Section 3013(a)(2)(B).  The statutory maximum sentence that the Court can impose for a violation of Title 15, United States

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Code, Section 78dd-3 is a fine of $2,000,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest, Title 15, United States Code, Section 78dd-3(e)(1)(A), Title 18, United States Code, Section 3571(d); five years’ probation, Title 18, United States Code, Section 3561(c)(1); and a mandatory special assessment of $400, Title 18, United States Code, Section 3013(a)(2)(B).  The statutory maximum sentences for multiple counts can be aggregated and run consecutively.

Sentencing Factors

           15.           The parties agree that pursuant to United States v. Booker, 543 U.S. 220 (2005), the Court must determine an advisory sentencing guideline range pursuant to the United States Sentencing Guidelines.  The Court will then determine a reasonable sentence within the statutory range after considering the advisory sentencing guideline range and the factors listed in Title 18, United States Code, Section 3553(a).  The parties’ agreement herein to any guideline sentencing factors constitutes proof of those factors sufficient to satisfy the applicable burden of proof.

           16.           The parties stipulate that the 2004 United States Sentencing Guidelines apply to this matter and to the factual predicates set forth below and that the following is the proper application of the Sentencing Guidelines to the offense alleged in the Information:

 17.The Department, USAO, and Defendant agree that an application of the Sentencing Guidelines  to determine the applicable fine range yields the following analysis:

a.   Base Offense.  Based upon USSG § 2C1.1, the total offense level is 30, calculated as follows:

(a)(2)	Base Offense Level	12
(b)(1)	Specific Offense Characteristic

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	(More than one bribe)	+2
(b)(2)	Specific Offense Characteristic
	(Value of Benefit Received between
	$1 million and $2.5 million)	+16
TOTAL		30

b.   Base Fine.  Based upon USSG § 8C2.4(a)(1), the base fine is $10,500,000 (fine corresponding to the Base Offense level as provided in Offense Level Table).  

c.   Culpability Score.  Based upon USSG § 8C2.5, the culpability score is 3, calculated as follows:  

(a) Base Culpability Score 5

(b)(3) The organization had 200 or more

employees and tolerance of the

offense by substantial authority personnel

was pervasive throughout the organization +3

(g) The organization (A) prior to an imminent

threat of disclosure or government investigation;

and (B) within a reasonable amount of time after

becoming aware of the offense, reported the

offense, fully cooperated, and clearly demonstrated

recognition and affirmative acceptance of

responsibility for its criminal conduct - 5

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 TOTAL   3

d.   Calculation of Fine Range.

Base Fine $10,500,000

Multipliers, culpability score of 3 (U.S.S.G. § 8C2.6):       0.6 – 1.2

FineRange (U.S.S.G. § 8C2.7):  $6,300,000 – $12,600,000

Sentencing Recommendation

               18.           Fine.  Assuming Universal Brazil accepts responsibility as explained above, the parties will recommend the imposition of a fine in the amount of $4,400,000 payable to the Clerk of the Court for the United States District Court for the Eastern District of Virginia.  The parties further agree that this amount shall be paid as a lump sum within ten (10) business days after imposition of sentence in this matter.  Universal Brazil acknowledges that no tax deduction may be sought in connection with the payment of any part of this $4,400,000 fine.

19.           Universal Brazil agrees to pay a monetary penalty in the amount of $4,400,000, or approximately 30% below the bottom of the applicable Sentencing Guidelines fine range of $6,300,000.  The parties agree that such a reduction is appropriate based on the following factors:

a.           Universal Corporation and Universal Brazil’s extensive cooperation during the course of the investigation, including the provision of relevant documents and information;

b.           Universal Corporation and Universal Brazil’s substantial assistance with other related Department investigations regarding the bribery of foreign government officials as described in Appendix B; and

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c.           Universal Corporation and Universal Brazil’s remedial efforts, including enhancing the companies’ compliance resources and compliance policies, procedures, and internal controls.

           20.Mandatory Special Assessment.  Defendant shall pay to the Clerk of the Court for the United States District Court for the Eastern District of Virginia within (5) business days of the time of sentencing the mandatory special assessment of $400 per count.

           21. The parties have agreed that the disposition described herein represents an appropriate disposition of the case based upon the following factors:

                      a. By entering and fulfilling the obligations under this Agreement, Defendant has demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct.

                      b.The plea underlying this Agreement is a result of the voluntary disclosure made by Universal Brazil and its parent corporation Universal Corporation, through their counsel, to the Department and the disclosure of evidence obtained as a result of the investigation subsequently conducted through their counsel., and the extraordinary cooperation by Universal Brazil and its parent Universal Corporation throughout the Department’s inves tigation.

                      c..At the time of the initial disclosure, the conduct was unknown to the Department.

                      d.By entering into a Non-Prosecution Agreement with the Department and USAO, Universal Corporation, Universal Brazil’s parent corporation, has, among other things, agreed to: (i) implement a compliance and ethics program designed to detect and prevent

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violations of the FCPA, other anti-corruption laws, and all applicable foreign bribery laws throughout its operations, including those of Universal Brazil, subsidiaries, affiliates, and successors as described in Appendix D; and (ii) engage an independent corporate monitor as described in Appendix C.  

           22.The parties agree not to seek any adjustments to, or departures from, the agreed upon payment of $4,400,000 as set forth herein.

           23.Organizational Probation.  The parties agree that a three (3) year term of organizational probation is appropriate in this case and shall include, as conditions of probation: (a) the engagement of an independent corporate monitor as described in Appendix C, (b) the maintenance of a corporate compliance program as described in Appendix D; and any other conditions ordered by the Court.

           24. The Defendant understands that the Court is not bound by the recommendations of the parties or those made in any pre-sentence report.  Because this Agreement is made under Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure, Defendant may not withdraw any guilty plea or rescind this Agreement if the Court does not follow the agreements or recommendations herein.

Waiver of Presentence Investigation and Consolidation of Plea and Sentencing

           25. The parties agree, subject to the Court’s approval, to waive the requirement for a presentence report, pursuant to Federal Rule of Criminal Procedure 32(c)(1)(A), based on a finding by the Court that the record contains information sufficient to enable the Court to meaningfully exercise its sentencing power.  However, the parties agree that in the event the Court orders the preparation of a presentence report prior to sentencing, such order will not affect

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the agreement set forth herein.  Additionally, if the Court directs the preparation of a presentence report, the Department will fully inform the preparer of the presentence report and the Court of the facts and law related to Defendant’s case.

           26.           The parties further agree to request that the Court combine the entry of the plea and sentencing into one proceeding.  However, the parties agree that in the event the Court orders that the entry of the guilty plea and sentencing hearing(s) occur at separate proceedings, such an order will not affect the agreement set forth herein.

Breach of Agreement

           27.           If Defendant, or Universal Corporation, breaches the terms of this Agreement, or commits any new criminal offense between signing this Agreement and sentencing, the United States is relieved of its obligations under this Agreement, but Defendant may not withdraw its guilty plea.  Whether Defendant has breached any provision of this Agreement shall be determined solely by the United States.

           28.           In the event of a breach of this Agreement by Defendant, should the United States elect to pursue any criminalcharge or any civil or administrative action that was not filed as a result of this Agreement, then:

 a.           Defendant agrees that any applicable statute of limitations is tolled between the date of Defendant’s signing of this Agreement and the discovery by the United States of any breach by Defendant;

 b.           Defendant understands that the United States will be free to use against Universal Brazil or Universal Corporation, directly and indirectly, in any criminal or civil

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proceeding any of the information or materials provided by Universal or Universal Brazil pursuant to this agreement, as well as the admitted Statement of Facts attached hereto;

 c.           Defendant expressly acknowledges and incorporates by reference the Tolling Agreement and Tolling Agreement Extensions that have previously been entered into between Universal Corporationand the United States; and

 d.           Defendant waives all defenses based on the statute of limitations, any claim of preindictment delay, or any speedy trial claim with respect to any such prosecution or action, except to the extent that such defenses existed as of the date of the signing of this Agreement.

Complete Agreement

           29.           This document contains the full extent of the agreement between the parties. There are no other promises or agreements, express or implied.  Any modification of this Agreement shall be valid only if set forth in writing in a supplemental or revised plea agreement signed by all parties.

FOR UNIVERSAL LEAF
TABACOS LTDA:	/s/ Preston D. Wigner
	Preston D. Wigner
	Attorney-in-Fact
	Universal Leaf Tabacos LTDA
	Rodovia BR 471 – KM 129,800
	P.O. Box 1025
	Distrito Industrial
	96835-642 Santa Cruz Do Sul
	Rio Grande Do Sul, Brazil

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FOR UNIVERSAL CORPORATION:		/s/ Preston D. Wigner
		Preston D. Wigner
		Vice President, General Counsel, Secretary,
		and Chief Compliance Officer
		Universal Corporation
		9201 Forest Hill Avenue
		Stony Point II Building
		Richmond, VA 23235
FOR THE DEPARTMENT:		DENIS J. MCINERNEY
		Chief
		Fraud Section, Criminal Division
		NEIL H. MACBRIDE
		U.S. Attorney
		U.S. Attorney’s Office for the
		Eastern District of Virginia
	By:	/s/ Stacey K. Luck
		Stacey K. Luck
		Senior Trial Attorney
		Fraud Section, Criminal Division
		U.S. Department of Justice
		1400 New York Avenue, N.W.
		Washington, D.C. 20005
	By:	/s/ Michael S. Dry
		Michael S. Dry
		Assistant United States Attorney
		United States Attorney’s Office
		Eastern District of Virginia
		1800 East Main Street
		Richmond, Virginia 23219

Filed at Richmond, Virginia on August 6, 2010.

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OFFICER’S CERTIFICATE

            I have read this Agreement and carefully reviewed every part of it with counsel for Universal Leaf Tabacos Ltda. (“Universal Brazil”).  I understand the terms of this Agreement and voluntarily agree, on behalf of Universal Brazil, to each of its terms.  Before signing this Agreement on behalf of Universal Brazil, I consulted with the attorney for Universal Brazil.  The attorney fully advised me of the rights of Universal Brazil, of possible defenses, the sentencing guidelines provisions, and of the consequences of entering into this Agreement.

            I have carefully reviewed this Agreement with the Board of Directors of Universal Brazil.  I have advised, and caused outside counsel for Universal Brazil to advise, the Board fully of the rights of Universal Brazil, of possible defenses, and of the consequences of entering into the Agreement.

            No promises or inducements have been made other than those contained in this Agreement.  Furthermore, no one has threatened or forced me to enter into this Agreement.  I am also satisfied with the attorneys’ representation in this matter.

            I certify that I am an officer of Universal Brazil and that I have been duly authorized by Universal Brazil to execute this Agreement on behalf of Universal Brazil.

Date:  August 6, 2010	UNIVERSAL LEAF TABACOS LTDA
	By:	/s/ Preston D. Wigner
		Preston D. Wigner

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OFFICER’S CERTIFICATE

I have read this Agreement and carefully reviewed every part of it with counsel for Universal Corporation (“Universal”).  I understand the terms of this Agreement and voluntarily agree, on behalf of Universal, to each of its terms.  Before signing this Agreement on behalf of Universal, I consulted with the attorney for Universal.  The attorney fully advised me of the rights of Universal, of possible defenses, the sentencing guidelines provisions, and of the consequences of entering into this Agreement.

I have carefully reviewed this Agreement with the Board of Directors of Universal.  I have advised, and caused outside counsel for Universal to advise, the Board fully of the rights of Universal, of possible defenses, and of the consequences of entering into the Agreement.

No promises or inducements have been made other than those contained in this Agreement.  Furthermore, no one has threatened or forced me to enter into this Agreement.  I am also satisfied with the attorney’s representation in this matter.

I certify that I am an officer of Universal and that I have been duly authorized by Universal to execute this Agreement on behalf of Universal.

Date:  August 6, 2010

UNIVERSAL CORPORATION
By:	/s/ Preston D. Wigner
	Preston D. Wigner

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CERTIFICATE OF COUNSEL

            We are counsel for Universal Corporation and Universal Leaf Tabacos Ltda. (collectively referred to herein as “Universal”) in the matter covered by this Agreement.  In connection with such representation, we have examined relevant Universal documents and have discussed this Agreement with the Board of Directors of Universal.  Further, we have carefully reviewed every part of this Agreement with the Board of Directors and General Counsel of Universal.  We have fully advised them of Universal’s rights, of possible defenses, the sentencing guidelines provisions, and of the consequences of entering into this Agreement.  Ba sed on our review of the foregoing materials and discussions, we are of the opinion that Universal’s representative has been duly authorized to enter into this Agreement on behalf of Universal.  This Agreement has been duly and validly authorized, executed, and delivered on behalf of Universal and is a valid and binding obligation of Universal.  To our knowledge, Universal’s decision to enter into this Agreement is an informed and voluntary one.

Date:  8/6/2010	/s/ Patrick R. Hanes
	Patrick R. Hanes, Esq.
	Edward J. Dillon, Esq.
	Williams Mullen
	200 South 10th Street
	Richmond, Virginia 23219

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APPENDIX A

CERTIFICATE OF CORPORATE RESOLUTIONS

A copy of the executed Certificate of Corporate Resolutions is annexed hereto as “Appendix A.”

UNIVERSAL LEAF TABACOS LTDA.

CERTIFICATE OF CORPORATE RESOLUTIONS

I, Airton Luis Hentschke, Brazilian, [personal information redacted], do hereby certify that I am the Director President of Universal Leaf Tabacos Ltda., a Brazilian limited company, headquartered at Rodovia BR 471 Km 129.8, unnumbered, in Distrito Industrial, in the City of Santa Cruz do Sul, State of Rio Grande do Sul, and that the following is an accurate excerpt of certain resolutions adopted by the Directors of Universal Leaf Tabacos Ltda. at a meeting held on April 30, 2010, at which a quorum was present:

WHEREAS, Universal Leaf Tabacos Ltda. (“Universal Brazil”), through its parent company, Universal Corporation (“Universal”),  has been engaged in discussions with the United States Department of Justice (the “Department”) and the United States Securities and Exchange Commission in connection with possible violations of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”); and

WHEREAS, in order to resolve such discussions with the Department, the Department has proposed that Universal Brazil and Universal enter into a Plea Agreement with the Department, a copy of which is attached hereto as Exhibit A (the “Plea Agreement”); and

WHEREAS, the terms of the Plea Agreement, among other things, require that (i) the Department, Universal Brazil and Universal recommend to the United States District Court for the Eastern District of Virginia (the “Court”) a fine of $4.4 million as the amount that is appropriate under the circumstances to resolve fully the matter with the Department, with the Court retaining under the law the final determination of the appropriate fine to be imposed, and (ii) Universal retain an independent corporate monitor for a term of three years; and

WHEREAS, the Directors of Universal Brazil find it to be in the best interests of Universal Brazil to resolve the matters with the Department on the terms and conditions set forth below.

NOW, THEREFORE, BE IT:

RESOLVED, that Preston D. Wigner, United States citizen, [personal information redacted], the Vice President, General Counsel, Secretary and Chief Compliance Officer of Universal (the “Attorney-in-Fact”), be, and he hereby is, appointed as Universal Brazil’s attorney-in-fact with full power of substitution and with full power and authority to do all things necessary on behalf of Universal Brazil to resolve the matters with the Department, including but not limited to appearing in

Court  to enter  a guilty plea on  behalf of Universal  Brazil as contemplated by the Plea Agreement  and accepting the sentence of the Court;

and be it

FURTHER RESOLVED, that the Plea Agreement be, and it hereby is, approved and adopted in all respects in substantially the form as set forth in Exhibit A; that all of the ancillary documents and agreements that are contemplated by the Plea Agreement in connection with resolving the matters with the Department be, and they hereby are, approved and adopted in all respects and that all of the transactions related to the resolution of such matters be, and they hereby are, approved and adopted in all respects; and be it

FURTHER RESOLVED, that Airton Luis Hentschke, a director of Universal Brazil (the “Director”), and the Attorney-in-Fact be, and each of them hereby is, authorized and directed, in the name and on behalf of Universal Brazil, to execute the Plea Agreement and the ancillary documents and agreements that are contemplated by the Plea Agreement, with such modifications as they shall approve, and to deliver the same to the Department, such execution and delivery conclusively to evidence the due authorization and approval thereof by Universal Brazil; and be it

FURTHER RESOLVED, that the Director and the Attorney-in-Fact be, and each of them hereby is, authorized and directed, in the name and on behalf of Universal Brazil, to execute and deliver, or cause to be executed and delivered, such additional or other agreements, documents, certificates and instruments, and to take any and all steps and to do all things that they may deem necessary or advisable in order to effect the purposes of each and all of the foregoing resolutions, and to pay or authorize the payment of any and all fines, fees and expenses in connection therewith; and be it

FURTHER RESOLVED, that any actions taken by the Director, the Attorney-in-Fact and any officers, attorneys or agents of Universal Brazil prior to the date of this meeting that are within the authority conferred hereby are hereby ratified, confirmed and approved in all respects as the acts and deeds of Universal Brazil.

I further certify that the aforesaid resolutions have not been amended or revoked in any respect and remain in full force and effect on the date of this certification.

IN WITNESS WHEREOF, I have executed this Certificate on April 30, 2010.

/s/ Airton Luis Hentschke

Director President

POWER OF ATTORNEY

THIS POWER OF ATTORNEY, dated as of April 30, 2010, is made by Universal Leaf Tabacos Ltda., a Brazilian limited company, headquartered at Rodovia BR 471 Km 129.8, unnumbered, in Distrito Industrial, in the City of Santa Cruz do Sul, State of Rio Grande do Sul (“Universal Brazil”), by its legal representative, and appoints and constitutes Preston D. Wigner, United States citizen, [personal information redacted], and the Vice President, General Counsel, Secretary and Chief Compliance Officer of Universal Corporation, as its true and lawful attorney-in-fact (the “Attorney-in-Fact”), and provides as follows:

A.           Universal Brazil, through its parent company, Universal Corporation, a Virginia corporation (“Universal”), has been engaged in discussions with the United States Department of Justice (the “Department”) in connection with possible violations of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”); and

B.           In order to resolve such discussions with the Department, the Department has proposed that Universal Brazil and Universal enter into a Plea Agreement with the Department, a copy of which is attached to the resolutions adopted by the Directors of Universal Brazil on April 30, 2010 (the “Plea Agreement”); and

C.           The terms of the Plea Agreement, among other things, require that the Department, Universal Brazil and Universal recommend to the court a fine of $4.4 million as the amount that is appropriate under the circumstances, with the court retaining under the law the final determination of the appropriate fine to be imposed; and

D.           The undersigned Directors of Universal Brazil find it to be in the best interests of Universal Brazil to appoint Preston D. Wigner as Universal Brazil’s attorney-in-fact to resolve the matters with the Department.

NOW, THEREFORE, the undersigned Directors, on behalf of Universal Brazil, hereby make, constitute and appoint, irrevocably, subject to the terms hereof, Preston D. Wigner as Universal Brazil’s true and lawful attorney-in-fact with full power and authority, for Universal Brazil and in Universal Brazil's name, place and stead, to do all things hereinafter set forth as follows:

1.           The Attorney-in-Fact is hereby empowered, in his sole discretion, to do all things necessary to resolve the matters with the Department on behalf of Universal Brazil, including but not limited to:

(a) appearing in the United States District Court for the Eastern District of Virginia to consent to the filing of a two-count criminal information against Universal Brazil by the Department, waving indictment on the charges stated in the criminal information, entering a plea of guilty as to all charges stated in the criminal information and accepting the sentence of the Court; and

(b) recommending to the United States District Court for the Eastern District of Virginia a fine of $4.4 million as the amount that is appropriate under the circumstances; and

(c) executing the Plea Agreement and the ancillary documents and agreements that are contemplated by the Plea Agreement, with full power to make and approve any

changes therein, including additions and amendments thereto, and delivering the same to the Department; and

(d) in general, executing and delivering, or causing to be executed and delivered, such additional or other agreements, documents, certificates and instruments, with full power to make and approve any changes therein, including additions and amendments thereto, and taking any and all steps and doing all things that he may deem necessary or advisable, in his sole discretion, in order to resolve the matters with the Department, including the payment or authorization of the payment of any and all fines, fees and expenses in connection therewith.

2.           The Attorney-in-Fact is hereby empowered to determine, in his sole discretion, the time or times when, the purposes for, or the manner in which, any power herein conferred shall be exercised and the provisions of any instrument or document which may be executed by him pursuant hereto.

3.           All authority conferred hereby shall be deemed granted and conferred in contemplation and furtherance of the interests of Universal Brazil.  This Power of Attorney is irrevocable.

4.           This Power of Attorney shall terminate on April 30, 2015.

5.           Universal Brazil hereby agrees to indemnify and hold harmless the Attorney-in-Fact against any and all expenses, losses, claims, damages or liabilities, joint or several, to which he may become subject insofar as such expenses, losses, claims, damages or liabilities (or actions in respect thereof), arise out of or are based upon any action taken or omitted to be taken by said Attorney-in-Fact pursuant hereto, except if such expenses, losses, claims, damages or liabilities shall result from the willful misconduct or a knowing violation of the criminal law by the Attorney-in-Fact.

6.           The Attorney-in-Fact shall have full power of substitution hereunder.  Such substitution shall be effected by notice thereof to Universal Brazil, signed by the Attorney-in-Fact as well as by his successor Attorney-in-Fact.  The provisions of Section 5 shall apply to any successor Attorney-in-Fact.

7.           This Power of Attorney for all purposes shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia.

IN WITNESS WHEREOF, the undersigned Directors sign their names as of the date first written above.

Santa Cruz do Sul
/s/ Airton Luis Hentschke
Name:	Airton Luis Hentschke
Title:	Director President
/s/ Julio Cesar Mantovani
Name:	Julio Cesar Mantovani
Title:	Finance Director

UNIVERSAL CORPORATION

CERTIFICATE OF CORPORATE RESOLUTIONS

I, Preston D. Wigner, do hereby certify that I am the Secretary of Universal Corporation, a company incorporated in Virginia, and that the following is an accurate excerpt of certain resolutions adopted by the Board of Directors of Universal Corporation at a meeting held on May 20, 2010, at which a quorum was present:

WHEREAS, Universal Corporation (the “Company”) has been engaged in discussions with the United States Department of Justice (the “Department”) and the United States Securities and Exchange Commission in connection with possible violations of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”); and

WHEREAS, in order to resolve such discussions with the Department, the Department has proposed that the Company and Universal Leaf Tabacos Ltda., a Brazilian limited company (“Universal Brazil”), one of the Company’s indirectly-owned subsidiaries, enter into a Plea Agreement with the Department, a copy of which is attached hereto as Exhibit A (the “Plea Agreement”); and

WHEREAS, Universal Brazil’s Board of Directors has approved the Plea Agreement; and

WHEREAS, the terms of the Plea Agreement, among other things, require that (i) the Department, the Company and Universal Brazil recommend to the United States District Court of the Eastern District of Virginia (the “Court”) a fine of $4.4 million as the amount that is appropriate under the circumstances to resolve fully the matters with the Department, with the Court retaining under the law the final determination of the appropriate fine to be imposed, and (ii) the Company retain an independent corporate monitor for a term of three years; and

WHEREAS, in connection with the Plea Agreement, the Department has agreed to enter into a Non-Prosecution Agreement with the Company, a copy of which is attached hereto as Exhibit B (the “Non-Prosecution Agreement”); and

WHEREAS, the Board of Directors finds it to be in the best interests of the Company to resolve the matters with the Department on the terms and conditions set forth below.

NOW, THEREFORE, BE IT:

RESOLVED, that Preston D. Wigner, the Vice President, General Counsel Secretary and Chief Compliance Officer of the Company (the “Attorney-in-Fact”), be, and he hereby is, appointed as the Company’s attorney-in-fact with full power of substitution and with full power and authority to do all things necessary on behalf of the Company to resolve the matters with the Department, including

but not limited to appearing in Court to enter a guilty plea on behalf of Universal Brazil as contemplated by the Plea Agreement and accepting the sentence of the Court on behalf of Universal Brazil; and be it

FURTHER RESOLVED, that the Plea Agreement be, and it hereby is, approved and adopted in all respects in substantially the form as set forth in Exhibit A; that all of the ancillary documents and agreements that are contemplated by the Plea Agreement in connection with resolving the matters with the Department be, and they hereby are, approved and adopted in all respects and that all of the transactions related to the resolution of such matters be, and they hereby are, approved and adopted in all respects; and be it

FURTHER RESOLVED, that George C. Freeman III, the Chairman, President and Chief Executive Officer of the Company, David C. Moore, the Senior Vice President and Chief Financial Officer of the Company, and William K. Brewer, the Executive Vice President and Chief Operating Officer of the Company (collectively, the “Proper Officers”) and the Attorney-in-Fact be, and each of them hereby is, authorized and directed, in the name and on behalf of the Company, to execute the Plea Agreement and the ancillary documents and agreements that are contemplated by the Plea Agreement, with such modifications as they shall approve, and to deliver the same to the Department, such execution and delivery conclusively to evidence the due authorization and approval thereof by the Company; and be it

FURTHER RESOLVED, that the Non-Prosecution Agreement be, and it hereby is, approved and adopted in all respects in substantially the form as set forth in Exhibit B; that all of the ancillary documents and agreements that are contemplated by the Non-Prosecution Agreement in connection with resolving the matters with the Department be, and they hereby are, approved and adopted in all respects and that all of the transactions related to the resolution of such matters be, and they hereby are, approved and adopted in all respects; and be it

FURTHER RESOLVED, that the Proper Officers and the Attorney-in-Fact be, and each of them hereby is, authorized and directed, in the name and on behalf of the Company, to execute the Non-Prosecution Agreement and the ancillary documents and agreements that are contemplated by the Non-Prosecution Agreement, with such modifications as the Proper Officers and the Attorney-in-Fact executing the same shall approve, and to deliver the same to the Department, such execution and delivery conclusively to evidence the due authorization and approval thereof by the Company; and be it

FURTHER RESOLVED, that the Proper Officers and the Attorney-in-Fact be, and each of them hereby is, authorized and directed, in the name and on behalf of the Company, to execute and deliver, or cause to be executed and delivered, such additional or other agreements, documents, certificates and instruments, and to take any and all steps and to do all things that they may deem

2

necessary or advisable in order to effect the purposes of each and all of the foregoing resolutions, and to pay or authorize the payment of any and all fines, fees and expenses in connection therewith; and be it

FURTHER RESOLVED, that any actions taken by the Proper Officers, the Attorney-in-Fact and any officers, attorneys or agents of the Company prior to the date of this meeting that are within the authority conferred hereby are hereby ratified, confirmed and approved in all respects as the acts and deeds of the Company.

I further certify that the aforesaid resolutions have not been amended or revoked in any respect and remain in full force and effect on the date of this certification.

IN WITNESS WHEREOF, I have executed this Certificate on August 5, 2010.

/s/ Preston D. Wigner

Preston D. Wigner, Secretary

COMMONWEALTH OF VIRGINIA	)
	)
CITY OF RICHMOND	)

The foregoing instrument was acknowledged before me, Karoline M. Barbie, Notary Public, this 5th day of  August, 2010, by Preston D. Wigner, Secretary, who is personally known to me.  Preston D. Wigner voluntarily acknowledged this instrument as  resolutions of Universal Corporation, on behalf of the corporation.

/s/ Karoline M. Barbie
	Notary Public
Registration Number:	7045379
My commission expires:	9/30/10
[Notary Seal]

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APPENDIX B

STATEMENT OF FACTS

The following Statement of Facts is incorporated by reference as part of (a) the Non-Prosecution Agreement between the Fraud Section, Criminal Division of the United States Department of Justice (“the Fraud Section”), the United States Attorney’s Office for the Eastern District of Virginia (“USAO”) (collectively referred to as “the Department”), and Universal Corporation (“Universal”), and (b) the Plea Agreement between the Department and Universal Leaf Tabacos Ltda. (“Universal Brazil”).  The Department, Universal, and Universal Brazil agree that the following facts are true and correct:

I.   Relevant Entities and Individuals

 1.Universal Corporation (“Universal”) was a Virginia corporation headquartered in Richmond, Virginia. Universal, through its subsidiaries, was a worldwide purchaser and supplier of processed leaf tobacco.  Universal issued and maintained a class of publicly-traded securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, Title 15, United States Code, Section 78l, and publicly traded on the New York Stock Exchange.  Universal was required to file periodic reports with the Un ited States Securities and Exchange Commission (“SEC”) under Section 13 of the Securities Exchange Act, Title 15, United States Code, Section 78m.  Accordingly, Universal was an “issuer” within the meaning of the Foreign Corrupt Practices Act (“FCPA”), Title 15, United States Code, Section 78dd-1(a).  By virtue of its status as an issuer within the meaning of the FCPA, Universal was required to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflected the transactions and disposition of assets of Universal and its subsidiaries, including those of Universal Brazil.

 2.Universal Leaf Tabacos Ltda. (“Universal Brazil”), a wholly owned subsidiary of Universal, was a Brazilian corporation, headquartered in Santa Cruz do Sul, Brazil. Universal Brazil was a “person” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.  As more fully described herein, individuals and entities affiliated with and acting on behalf of Universal Brazil while in the territory of the United States, used and caused the use of the mails and means and instrumentalities o f interstate commerce and performed other acts in furtherance of an offer, promise, authorization, or payment of money or anything of value to foreign government officials for the purpose of assisting in obtaining or retaining business for, or directing business to, any person all within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.

 3.Universal Leaf Tobacco Company, Incorporated (“Universal Leaf Tobacco”), a wholly owned subsidiary of Universal, was a Virginia corporation, headquartered in Richmond, Virginia.  Universal Leaf Tobacco was a “domestic concern” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2.

 4.LATCO, Inc. (“LATCO”) was a Virginia corporation and a wholly owned subsidiary of Universal.  LATCO was an entity used by Universal Brazil to make commission payments to its sales agents, in addition to other purposes.  LATCO’s accounts were consolidated annually into Universal’s year-end results.  LATCO was a “domestic concern” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2.

 5.The Thailand Tobacco Monopoly (“TTM”) was a Thai government-owned tobacco monopoly located in Bangkok, Thailand.  The Government of Thailand established the TTM, an agency and instrumentality of the government, to manage and control the government-owned tobacco industry in Thailand.  The TTM supervised the cultivation of domestic tobacco

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crops, the purchase of tobacco imports and the manufacture of cigarettes and other tobacco products in Thailand.  Employees and representatives of the TTM were “foreign officials” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3(f)(2)(A).

 6.Employee A, a U.S. citizen, was the President of Universal Brazil.

 7.Employee B, a Brazilian citizen, was the Commercial Director for Universal Brazil.

 8.Employee C, a Brazilian citizen, was a Sales Manager for Universal Brazil.  Employee C was the account manager for the TTM account from 2000 to 2003.

 9.Employee D, a Zimbabwean citizen, was a Sales Director for Universal Brazil.  Employee D supported Employee C on the TTM account from 2000 to 2002.

 10.Employee E, a Brazilian citizen, was the Finance Director for Universal Brazil.

 11.Employee F, a Brazilian citizen, was the Export Superintendent for Universal Brazil.

 12.Employee G, a Brazilian citizen, was a Sales Manager for Universal Brazil.  Employee G took over the TTM account from Employee C and was the TTM account manager from 2003 to 2004.

 13.Employee H, a Zimbabwean citizen, was the Sales Director for Universal Leaf Asia.  Employee H played a supporting role to Universal Brazil for accounts in Asia, including the TTM account.  Employee H was an acquaintance of Agent X, and Agent X included Employee H in communications regarding kickback payments to TTM representatives.

 14.Employee I, a Brazilian citizen, was an account manager in Brazil.

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 15.Employee J, a U.S. citizen, was a Vice President of Universal Leaf Tobacco.  Between June 2000 and August 2001, Employee J approved wiring instructions for payments to Agent X requested by Universal Brazil to be paid by LATCO.

 16.Employee K, a U.S. citizen, was the Controller of Universal.  In September 2002, Employee K approved wiring instructions for a payment to Agent X requested by Universal Brazil to be paid by LATCO.

 17. Employee L, a U.S. citizen, was the Director of Financial Accounting for Universal Leaf Tobacco.  Between September 2003 and December 2004, Employee L approved wiring instructions for payments from LATCO to Agent X requested by Universal Brazil.

 18.Agent X was a Thai national who was hired by Universal Brazil in early 2000 as its sales agent to facilitate the company’s sale of processed leaf tobacco to the TTM.

 19.Corporation Y was a competitor of Universal Brazil and Corporation Z.  Corporation Y entered into an agreement with Universal Brazil and Corporation Z to jointly pay kickbacks to representatives of the TTM in exchange for securing orders for the sale of processed leaf tobacco to the TTM for itself, Universal Brazil, and Corporation Z.

 20.Corporation Z was a competitor of Universal Brazil and Corporation Y.  Corporation Z entered into an agreement with Universal Brazil and Corporation Y to jointly pay kickbacks to representatives of the TTM in exchange for securing orders for the sale of processed leaf tobacco to the TTM for itself, Universal Brazil, and Corporation Y.

II.           The Kickback Scheme

 21.From in or around March 2000, to in or around July 2004, the TTM awarded Universal Brazil five (5) orders for the sale of Brazilian leaf tobacco.  To obtain these orders,

4

between June 2000 and December 2004, Universal Brazil paid approximately $697,800 in kickbacks to representatives of the TTM through Agent X.

 22.The scheme was initiated in or about March 2000, at or about the time representatives of the TTM traveled to Brazil to visit potential suppliers of tobacco, including Universal Brazil, Corporation Y, and Corporation Z.  Agent X accompanied the TTM representatives during their visit to facilitate the sales discussions.

 23.On March 11, 2000, Employee A hosted a dinner for the TTM delegation at his home in Brazil, which was attended by Agent X, Employee B, Employee C, and Employee D.

 24.After the dinner, Agent X informed, at least, Employee C and D that for Universal Brazil to secure a sales order with the TTM, Universal Brazil would have to pay “special expenses” to TTM representatives.  The term “special expenses” was understood by the employees and Agent X to refer to kickbacks to certain TTM representatives.  The employees and Agent X also understood that the kickbacks would be paid to ensure that only those tobacco suppliers that paid the kickbacks would be awarded sales orders.

 25.On March 29, 2000, Employee C informed Agent X that Universal Brazil would pay the kickbacks to the TTM representatives to secure the orders and the company’s market share of the sales to the TTM.

 26.On March 29, 2000, the TTM awarded Universal Brazil and Corporations Y and Z orders for the sale of Brazilian leaf tobacco.

 27.Beginning in or about July 2000 and continuing until in or about 2004, in order to generate the funds to pay the kickbacks to the TTM representatives, Universal Brazil, Corporation Y, and Corporation Z, through communications among their employees and respective sales agents, agreed that a specified amount would be added to their individual sales

5

prices for processed leaf tobacco.  Universal Brazil entered into this agreement with Corporations Y and Z with an understanding that all three companies would use the excess funds from the sales they secured from the TTM to remit payments to their respective agents who would then pay the kickbacks to the TTM representatives.

 28.Each year between 2000 and 2004, after the TTM purchased tobacco from Universal Brazil, Universal Brazil sent Agent X multiple commission payments, including: (a) a standard commission payment relating to the assistance Agent X provided in finalizing the order; and (b) an additional payment to be used to pay the kickbacks to the TTM representatives.  Agent X directed Universal Brazil to transfer the kickback payments to separate bank accounts and under different names than the bank accounts to which the standard commissio n payments were transferred.  As a result, the kickback payments were paid to accounts in Thailand and Hong Kong that were not associated with Agent X’s name, and the standard commission payments were paid to accounts in Thailand and Germany to accounts that included (or were associated with) Agent X’s name.

 29.Internally, at Universal Brazil, to process the payments, each year the account manager would prepare a cost sheet which outlined the sales expenses for each order.  The cost sheet contained separate line items for “commission” payments and “special expenses.”

 30.Knowing that “special expenses” were included in the costs for the sales to the TTM, Employees A and B approved the sales.

 31.After the sales to the TTM were finalized and money was received from the customer, the TTM account manager would submit a form to Employee E, the Financial Director, to make the standard commission payments and the kickback payments to Agent X.  Employee E reviewed the payment requests and authorized them.

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 32.After Employee E authorized the payments, Employee F sent instructions to individuals in Richmond, Virginia, who processed and recorded payments for LATCO to pay Agent X.  In 2000 and sometimes thereafter, the kickback payments were described in the instructions as sales commissions.  During 2001 and 2003through 2004, the kickback payments were characterized in the instructions as “special expenses.”

 33.Employee E, Employee J, Employee K, and Employee L, recorded the kickback payments as “commission” payments to Agent X.

A.           Tobacco Sales to the TTM from 2000 - 2004

 34.Each year, Universal Brazil account managers and Agent X worked together to negotiate the sales orders with the TTM representatives.  Once the orders were negotiated, senior executives from Universal Brazil approved and executed the orders and employees from Universal and Universal Leaf Tobacco assisted in the transfer of the kickback payments to Agent X.

1.  The 2000 Sales Contract

 35.As described above, in or about March 2000, Agent X informed, at least, Employees C and D that to secure an order with the TTM, kickbacks payments would have to be paid.

 36.On March 23, 2000, Employee C sent a facsimile to Agent X confirming that Universal Brazil would pay the kickbacks and providing a chart breaking down the price of the sales offer to the TTM.  The price included kickbacks or “special charges.”  The facsimile stated that Universal Brazil and Corporation Y would offer at the same sale price as suggested by Agent X and include extra money to be used to pay kickbacks to the TTM representatives.

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 37.On or after March 23, 2000, Employees A and B were made aware that “special expenses” were included in the costs for the sales to the TTM and approved the sales.

 38.On March 29, 2000, the TTM awarded Universal Brazil a sales order valued at approximately $1,617,904.  The price included the kickback payments to be paid to the TTM representatives.

 39.On May 4, 2000, Universal Brazil delivered the agreed upon shipment of tobacco leaf to the TTM in Bangkok, Thailand.

 40.Between on or about June 12 and July 6, 2000, Employee C and Employee E signed internal documents authorizing the payment of multiple commission payments, including the “special expense” payments, to Agent X.

 41.On June 12, 2000, Employee B and Employee E sent a facsimile from Brazil to Employee J, located in Richmond, Virginia, directing Employee J to wire transfer Agent X $50,000, described as a commission payment, from LATCO into a Bangkok bank account that was not in Agent X’s name or associated with Agent X’s business.  The $50,000 was to be used to pay part of the kickback payment to the TTM representatives in exchange for the award of the sales contract.

 42.On July 6, 2000, Employee F sent a facsimile from Brazil to Employee J, located in Richmond, Virginia, directing Employee J to wire transfer another $50,000, described as a sales commission, from LATCO to the same Bangkok bank account as the prior $50,000 payment.   The $50,000 was to be used to pay the remainder of the kickback payment to the TTM representatives in exchange for the award of the sales contract.

 43.On July 7, 2000, Universal Brazil paid Agent X approximately $70,752 from Universal Brazil’s Brazilian bank account into a bank account, in Agent X’s name, in Germany.

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The payment was Agent X’s standard commission payment which represented 5 percent of the total value of the sale to the TTM.

 44. On June 15, 2000 and July 10, 2000, Employee J directed the payments requested on June 12 and July 6, 2000, to be transferred to the Bangkok bank account.

2.       The 2001 Sales Contract

 45.Between in or about January 2001 and April 2001, Employee C negotiated an order with the TTM with Agent X’s assistance.

 46.On April 2, 2001, Employee C sent a facsimile from Universal Brazil’s office to the TTM Managing Director in Thailand providing a bid for the sale of processed leaf tobacco for the 2001 crop.  The bid contained an amount intended to be used to pay kickbacks to TTM’s Managing Director and other TTM representatives.

 47. Between April 2, 2001, and July 23, 2001, the TTM awarded a sales contract to Universal Brazil valued at approximately $4,560,054.  The sales prices included the kickback payments to be paid to the TTM representatives.

 48. On June 28, 2001, Agent X emailed Employee C and Employee H asking that the 50 percent “prepayment” of special expenses be remitted to an account in Hong Kong.  Agent X instructed that Universal Brazil should not mention Agent X’s name in the remittance instruction.

 49.On July 5, 2001, Employee F sent a facsimile to Employee J, located in Richmond, Virginia, directing Employee J to pay Agent X $110,000 described as a commission payment from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.

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 50.On August 20, 2001, Employee I, an account manager in Brazil assisting with the TTM account, sent a facsimile to Employee J, located in Richmond, Virginia, directing Employee J to pay Agent X $110,000 from LATCO to the same Hong Kong bank account as the prior $110,000 payment.  The text of the facsimile noted that the $110,000 was for the “50% (Balance) of ‘special expenses’” to be paid.

 51.On July 10, 2001 and August 23, 2001, Employee J directed the payments requested on July 5 and August 20, 2001, to be transferred to the Hong Kong bank account.

3.       The 2002 Sales Contract

 52.On April 24, 2002, Agent X and the agents for Corporations Y and Z met with the Managing Director of the TTM to negotiate prices for the 2002 tobacco crop.  After the meeting, Agent X sent Employee C and Employee H an email stating that the agents and the Managing Director had agreed that the special expenses would be 45 cents per kilogram of the processed leaf tobacco purchased by the TTM.

 53.Between March 2002 and May 2002, the TTM awarded a sales contract to Universal Brazil valued at approximately $1,075,200.

 54.On September 4, 2002, Agent X sent an email to Employee G and Employee H asking to be paid the kickback payments.  In the email, Agent X wrote, “please be advised not to state ‘special expenses for TTM’ in the bank application form for remittance otherwise the Hong Kong account will have a problem.”

 55.On September 17, 2002, Employee F, located in Brazil, sent an email to Employee K, located in Richmond, Virginia, requesting that Agent X be paid $86,400 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent

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X’s business.  In the email, Employee F instructed that “no reference should be made” regarding Agent X when the money was transferred.

 56.On September 20, 2002, Employee K directed the payment requested on September 17, 2002, be transferred to the Hong Kong bank account.

4.       The 2003 Sales Contract

 57.In early 2003, Employee G replaced Employee C as the account manager for the TTM account.  Between in or about January 2003 and April 2003, Employee G, with the assistance of Agent X, negotiated Universal Brazil’s tobacco sale to the TTM for the 2003 crop.

 58.In or around April 2003, the TTM awarded a sales order to Universal Brazil valued at approximately $1,130,880.  The order price included the kickback payments to be paid to the TTM representatives.

 59.On or about September 1, 2003, Employee F sent an email to Employee L, located in Richmond, Virginia, requesting that Agent X be paid $96,000 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F explained that the “payment refers to ‘Special Expenses’ covering our sale to Thailand.”

 60.On September 5, 2003, Employee L directed the payment requested on September 1, 2003, be transferred to the Hong Kong bank account.

5.       2004 Contract

 61.In or about July 2004, Employee G, with the assistance of Agent X, negotiated Universal Brazil’s tobacco sale to the TTM for the 2004 crop.

 62.On July 13, 2004, during the negotiations, Employee G sent Agent X an email regarding the prices that should be proposed to the TTM during the bid process.  In the email,

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Employee G expressed concern that the TTM may consider bids from vendors other than Universal Brazil and Corporations Y and Z.  Employee G wrote that he wanted the same “special expenses” to be maintained.

 63.On November 25, 2004, Agent X sent an email to Employee G advising that the “special expenses” had increased from the prior year and would be paid as part of the sale.

 64.In or around November 2004, the TTM awarded a sales order to Universal Brazil valued at approximately $1,472,256.  The price included the kickback payments to be paid to the TTM representatives.

 65.On December 7, 2004, Employee F, located in Brazil, sent an email to Employee L, located in Richmond, Virginia, requesting that Agent X be paid $195,040 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F explained that the “payment refers to ‘Special Expenses’ covering our 2004 sale to Thailand Tobacco Monopoly.”  In the same email, Employee F also requested Employee L transfer more than $61,00 0 for Agent X to a German bank account as payment for Agent X’s “5% commission.”

 66.On December 10, 2004, Employee L directed the payment requested on December 7, 2004, be transferred to the Hong Kong bank account.

B.           Total Kickback Payments

 67.Between in or around June 2000 and December 2004, Universal Brazil paid approximately $697,800 in kickbacks to its agent with the intent that the money would be passed on to TTM representatives to influence the representatives to award orders to Universal Brazil for the sale of processed leaf tobacco.

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 68.The scheme ended in or about April 2005 when the TTM switched to an “electronic auction” process to award orders.  The electronic auction process increased the transparency of all of the bids received by the TTM, allowed for more open competition, and prevented Universal Brazil and Corporation Z from including additional amounts in the price of their tobacco sales, thereby eliminating the ability of the companies to mask kickback payments used to secure sales orders.

III.         Universal’s Books and Records

 69.From in or around 2000 through in or around 2004, Employee E and others falsely characterized Universal Brazil’s kickback payments to TTM representatives in Universal Brazil’s books, records and accounts as “commission payments” to Agent X.

 70.At the end of Universal’s fiscal years 2000 through 2004, the books, records and accounts of Universal’s wholly owned subsidiaries, including those of Universal Brazil containing the false characterizations of the kickback payments to TTM representatives, were incorporated into the books, records and accounts of Universal for purposes of preparing Universal’s year-end financial statements.

IV.           Universal’s Internal Controls

 71.Universal Brazil’s employees, including Employees E and F, directed that kickback payments be paid through LATCO, a wholly owned Universal subsidiary.  The financial records of LATCO were maintained with insufficient oversight or review by Universal’s legal, finance, or compliance departments and were never audited by Universal during the period from 2000 to 2004.

 72.Universal Brazil’s Finance Department and executives and employees from either Universal or Universal Leaf Tobacco, including Employee J, Employee K, and Employee L,

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approved or directed the transfer of the multiple “commission” payments to Agent X even though: (a) some of the payments were described as “special expense” payments; (b) there was no contractual basis for the payment of the additional commission amounts; (c) the payments were to accounts unassociated with the Agent; (d) the instructions that were provided when wiring the money indicated that Universal should not identify the agent or that the amounts were for “special expenses;” and (e) the payments were above the standard five (5) percent commission typically paid by Universal Brazil to its agents.

73.           Universal Brazil did not conduct sufficient due diligence prior to engaging Agent X.

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APPENDIX C

INDEPENDENT CORPORATE MONITOR

1.        Within sixty (60) calendar days of the execution of (a) the Non-Prosecution Agreement between the Fraud Section, Criminal Division of the United States Department of Justice (“the Fraud Section”) and the United States Attorney’s Office for the Eastern District of Virginia (“USAO”) (collectively referred to as the “Department of Justice” or the “Department”) and Universal Corporation (“Universal” or “the Company”) and (b) the Plea Agreement between the Department and Universal Leaf Tabacos Ltda. (“Universal Brazil”), Universal Corporation, on behalf of itself and its subsidiary Universal Brazil, agrees to engage an independent co rporate monitor (the “Monitor”) for a period of three (3) years.  The Monitor’s primary responsibility is to assess and monitor the Company’s compliance with the terms of the Non-Prosecution Agreement and the Plea Agreement (collectively referred to as the “Agreements”) so as to specifically address and reduce the risk of the recurrence of misconduct, including evaluating the Company’s corporate compliance program with respect to the Foreign Corrupt Practices Act of 1977 (“FCPA”), as amended, Title 15, United States Code, Section 78dd-1, et seq., and other relevant anti-corruption laws, and making recommendations for improvement.  Within thirty (30) calendar days after the signing of the Agreements, and after consultation with the Department, the Company will propose to the Department three candidates to serve as the Monitor. The Monitor candidates shall have, at a minimum, the f ollowing qualifications:

a.           demonstrated expertise with respect to the FCPA, including experience counseling on FCPA issues;

b.           experience designing and/or reviewing corporate compliance policies, procedures and internal controls, including FCPA-specific policies, procedures and controls;

c.           the ability to access and deploy resources as necessary to discharge the Monitor’s duties as described in the Agreements; and

d.           sufficient independence from the Company to ensure effective and impartial performance of the Monitor’s duties as described in the Agreements.

2.           The Department retains the right, in its sole discretion, to choose the Monitor from among the Monitor candidates proposed by the Company.  The Monitor’s term shall be three (3) years from the date on which the Monitor is approved by the Department, subject to extension or early termination as described in the Non-Prosecution Agreement.  The Monitor’s duties and authority, and the obligations of the Company with respect to the Monitor and the Department, are set forth below.

3.           The Company agrees that it will not employ or be affiliated with the Monitor for a period of not less than one year from the date the Monitor’s work has ended.

4.           The Monitor will review and evaluate the effectiveness of the Company’s internal controls, record-keeping, and existing or new financial reporting policies and procedures as they relate to the Company’s compliance with the books and records, internal accounting controls and anti-bribery provisions of the FCPA, and other applicable anti-corruption laws.  This review and evaluation shall include an assessment of the policies and procedures as actually implemented. The retention agreement between the Company and the Monitor will reference this Agreement and include this Agreement as an attachment so the Monitor is fully apprised of his or her duties and responsibilities.< /div>

5.           The Company shall cooperate fully with the Monitor and the Monitor shall have the authority to take such reasonable steps as, in his or her view, may be necessary to be fully informed about the compliance program and operations of the Company within the scope of his

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or her responsibilities under this Agreement.  To that end, the Company shall provide the Monitor with access to all information, documents, and records that are not subject to protection from disclosure by the attorney-client privilege or the attorney work product doctrine and facilities and/or employees that fall within the scope of responsibilities of the Monitor under this Agreement.  In the event that the Company seeks to withhold from the Monitor access to information, documents, records, facilities and/or employees of the Company on grounds that the information, documents, records, facilities and/or employees are protected by the attorney-client privilege or the attorney work product doctrine, the Company shall work cooperatively with the Monitor to resolve the matter to the satisfacti on of the Monitor.  If the matter cannot be resolved, at the request of the Monitor, the Company shall promptly provide written notice to the Monitor and the Department.  Such notice shall include a general description of the nature of the information, documents, records, facilities and/or employees that are being withheld, as well as the basis for the claim.

6.           Any disclosure by the Company to the Monitor concerning corrupt payments, related books and records and related internal controls shall not relieve the Company of its obligation truthfully to disclose such matters to the Department

7.           The parties agree that the Monitor is an independent third-party, not an employee or agent of the Company or the Department, and that no attorney-client relationship shall be formed between the Company and the Monitor.

8.           The Company agrees that:

a.      The Monitor shall assess whether the Company’s existing policies, procedures, and internal controls are reasonably designed to detect and prevent violations of the FCPA and other applicable anti-corruption laws.

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b.      The Monitor shall assess, monitor, and evaluate the Company’s compliance with the terms of the Agreements.

c.      The Monitor shall oversee the Company’s implementation of and adherence to all existing, modified or new policies, procedures, or internal controls relating to FCPA compliance, including the minimum policies and procedures set forth in Appendix D.

d.      The Monitor shall ensure that the Policies and Procedures are appropriately designed to accomplish their goals.

e. During the three (3) year term, the Monitor shall conduct an initial review and prepare an initial report, followed by two follow-up reviews and reports as described below:

(i)           With respect to each of the three (3) reviews, after initial consultations with the Company and the Department, the Monitor shall prepare a written work plan for each review, which shall be submitted at least sixty (60) days in advance to the Company and the Department for comment.  In order to conduct an effective initial review and to understand fully any existing deficiencies in the existing policies, procedures, and internal controls related to the FCPA and other applicable anti-corruption laws, the Monitor’s initial work plan shall include such steps as are reasonably necessary to develop an understanding of the facts and circumstances surrounding any violations that may hav e occurred, but the parties do not intend that the Monitor will conduct his or her own inquiry into those historical events.  Any disputes between the Company and the Monitor with respect to the work plan shall be decided by the Department in its sole discretion.

(ii)           In connection with the initial review, the Monitor shall issue a written report within one hundred twenty (120) calendar days of the engagement of the Monitor setting forth the Monitor’s assessment and, if appropriate and necessary, making

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recommendations reasonably designed to improve the Policies and Procedures of the Company for ensuring compliance with the FCPA and other applicable anti-corruption laws.  The Monitor shall provide the report to the Board of Directors of the Company and contemporaneously transmit copies to Deputy Chief, FCPA Unit, Fraud Section, Criminal Division, U.S. Department of Justice, 1400 New York Ave., N.W., Bond Building, Fourth Floor, Washington, DC 20005.  The Monitor may extend the time period for issuance of the report with prior written approval of the Department.

(iii)           Within one-hundred twenty (120) calendar days after receiving the Monitor’s report, the Company shall adopt the recommendations set forth in the report; provided, however, that within sixty (60) calendar days after receiving the report, the Company shall advise the Monitor and the Department in writing of any recommendations that the Company considers unduly burdensome, impractical, costly or otherwise inadvisable.  With respect to any recommendation that the Company considers unduly burdensome, impractical, costly or otherwise inadvisable, the Company need not adopt that recommendation within that one-hundred twenty (120) calendar day period; instead, the Company may propose i n writing an alternative policy, procedure or system designed to achieve the same objective or purpose.  As to any recommendation on which the Company and the Monitor ultimately do not agree, the views of the Company and the Monitor shall promptly be brought to the attention of the Department.  Any disputes between the Company and the Monitor with respect to the recommendations shall be decided by the Department in its sole discretion.  The Department may consider the Monitor’s recommendation and the Company’s reasons for not adopting the recommendation in determining whether the Company has fully complied with its obligations under this Agreement.

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(iv)           The Monitor shall undertake two follow-up reviews to further monitor and assess whether the policies and procedures of the Company are reasonably designed to detect and prevent violations of the FCPA and other applicable anti-corruption laws.

(v)           Within sixty (60) calendar days of initiating each follow-up review, the Monitor shall: (A) complete the review; (B) certify whether the anti-bribery compliance program of the Company, including the policies and procedures, is appropriately designed and implemented to prevent and detect violations of the FCPA and other applicable anti-corruption laws; and (C) report on the Monitor's findings in the same fashion as with respect to the initial review.

(vi)            The first follow-up review and report shall be completed by one year after the completion of the initial review. The second follow-up review and report shall be completed by one year after the completion of the first follow-up review.

(vii)           The Monitor may extend the time period for submission of the follow-up reports with prior written approval of the Department.

9.           In undertaking the assessments and reviews described above, the Monitor shall formulate conclusions based on, among other things:  (a) inspection of relevant documents, including the policies and procedures relating to the Company’s anti-corruption compliance program;  (b) onsite observation of the Company’s policies, procedures, and internal controls; (c) meetings with, and interviews of, relevant employees, directors and other persons at mutually convenient times and places; and (d) analyses, studies and testing of the Company’s anti-corruption compliance program.

10.           Should the Monitor, during the course of his or her engagement, discover credible evidence that questionable or corrupt payments or questionable or corrupt transfers of property

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or interests may have been offered, promised, paid or authorized by any Company entity or person, or any entity or person working directly or indirectly for the Company, which could potentially violate the FCPA or other applicable anti-corruption laws, or that related false books and records have been maintained, the Monitor shall promptly report such conduct to the Company’s General Counsel, its Compliance Committee, and its outside counsel for further investigation, unless the Monitor believes, in the exercise of his or her discretion, that such disclosure should be made directly to the Department.  If the Monitor refers the matter only to the Company’s General Counsel, its Compliance Committee, and its outside counsel, the Company shall promptly report the same to the Department and cont emporaneously notify the Monitor that such report has been made.  If the Company fails to make disclosure to the Department within ten (10) calendar days of the Monitor’s report of such conduct to the Company, the Monitor shall independently disclose his or her findings to the Department at the address listed in Paragraph 8(e)(ii) above.  Further, in the event that the Company, or any entity or person working directly or indirectly for the Company, refuses to provide information necessary for the performance of the Monitor’s responsibilities, the Monitor shall promptly disclose that fact to the Department.  The Company shall not take any action to retaliate against the Monitor for any such disclosures or for any other reason.  The Monitor may report other criminal or regulatory violations discovered in the course of performing his or her duties, in the same manner as described above.

11.           At least annually, and more frequently if appropriate, representatives of the Company and the Department will meet together to discuss the monitorship and any suggestions, comments or proposals for improvement the Company may wish to discuss with the Department.

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APPENDIX D

CORPORATE COMPLIANCE PROGRAM

In order to address potential deficiencies in Universal Corporation’s internal controls, policies, and procedures regarding compliance with the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. §§ 78dd-1, et seq., and other applicable anti-corruption laws, Universal Corporation (referred to as the “Company”), on behalf of itself and its wholly owned subsidiaries, including Universal Brazil, agrees to continue to conduct, in a manner consistent with all of the obligations under this Agreement, appropriate reviews of existing policies, procedures, and internal controls.

Where appropriate, the Company agrees to adopt new or modify existing policies, procedures, and internal controls in order to ensure that it maintains:  (a) a system of internal accounting controls designed to ensure that the Company makes and keeps fair and accurate books, records, and accounts; and (b) a rigorous anti-corruption compliance code, standards and procedures designed to detect and deter violations of the FCPA and other applicable anti-corruption laws.  At a minimum, this should include, but ought not be limited to, the following elements:

1.           A clearly articulated corporate policy against violations of the FCPA and other applicable anti-corruption laws.

2.           A system of financial and accounting procedures, including a system of internal accounting controls, designed to ensure the maintenance of fair and accurate books, records and accounts.

3.           Promulgation of a compliance code, standards and procedures designed to reduce the prospect of violations of the FCPA, other applicable anti-corruption laws, and the Company’s compliance code.  These standards and procedures should apply to all directors, officers, and

employees and, where necessary and appropriate, outside parties acting on behalf of the Company in a foreign jurisdiction, including agents, consultants, representatives, distributors, teaming partners, and joint venture partners (collectively referred to as “agents and business partners”).

4.           The assignment of responsibility to one or more senior corporate officials of the Company for the implementation and oversight of compliance with policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws.  Such corporate official(s) shall have the authority to report matters directly to the Audit Committee of the Board of Directors of the Company.

5.           Mechanisms designed to ensure that the Company’s policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws are effectively communicated to all directors, officers, and, where necessary and appropriate, employees agents and business partners.  This should include:  (a) periodic training for all directors and officers and, where necessary and appropriate, employees, agents, and business partners; and (b) annual certifications with regard to this training by all directors and officers and, where necessary and appropriate, employees, agents, and business partners.

6.           An effective system for reporting suspected criminal conduct and/or violations of the compliance policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws for directors, officers, and, where necessary and appropriate, employees, agents, and business partners.

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7.           Appropriate disciplinary procedures to address, among other things, violations of the FCPA, other applicable anti-corruption laws, and the Company’s compliance code, standards and procedures by the Company’s directors, officers, and employees.

8.           Appropriate due diligence requirements pertaining to the retention and oversight of agents and business partners.

9.           Where necessary and appropriate, standard provisions in agreements, contracts, and renewals thereof with all agents and business partners that are reasonably calculated to prevent violations of the FCPA and other applicable anti-corruption laws, which may, depending upon the circumstances, include:  (a) anti-corruption representations and undertakings relating to compliance with the FCPA and other applicable anti-corruption laws; (b) rights to conduct audits of the books and records of the agent or business partner to ensure compliance with the foregoing; and (c) rights to terminate an agent or business partner as a result of any violation of anti-corruption laws or breach of representations and undertakings related to such matters.

10.           Periodic testing of the Company’s policies, procedures, and internal controls designed to evaluate their effectiveness in detecting and reducing violations of anti-corruption laws and the Company’s applicable compliance code, policies, and procedures.

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EX-10.2 3 ex10-2.htm NON-PROSECUTION AGREEMENT BETWEEN UNIVERSAL CORPORATION AND THE UNITED STATES DEPARTMENT OF JUSTICE

Exhibit 10.2

[DOJ LOGO]

                                                                           U.S. Department of Justice

                                                                            Criminal Division

August 3, 2010

Patrick R. Hanes, Esq.

Williams Mullen

200 South 10th Street

Richmond, Virginia 23219

           Re:           Universal Corporation

Dear Mr. Hanes:

On the understandings specified below, the United States Department of Justice, Criminal Division, Fraud Section (the “Fraud Section”) and the United States Attorney’s Office for the Eastern District of Virginia (the “USAO”) (collectively, the “Department of Justice” or the “Department”) will not criminally prosecute Universal Corporation (“Universal”) or any of its subsidi aries except as set forth in the Plea Agreement with respect to Universal Leaf Tabacos Ltda. (“Universal Brazil”), for any crimes (except for criminal tax violations, as to which the Department does not make any agreement) related to the making of  improper payments, by employees and agents of Universal and/or its subsidiaries to officials of the Government of Thailand in connection with Universal Brazil’s efforts to secure business, namely, to secure the improper sale of leaf tobaccoto the Thailand Tobacco Monopoly, from 2000 to 2004, and the accounting and record-keeping associated with these improper payments, as described in Appendix A (Statement of Facts).  The Department enters into this Non-Prosecution Agreement based, in part, on the following factors: (a) Universal’s discovery of the violations through its own internal hotline process; (b) timely, voluntary, and complete disclosure of the facts described in Appendix A (the “Statement of Facts”); (c) Universal’s extensive, thorough, real-time cooperation with the Department and the U.S. Securities and Exchange Commission (“SEC”); and (d) the remedial efforts already undertaken and to be undertaken by Universal.

It is understood that Universal admits, and accepts and acknowledges responsibility for, the conduct of its subsidiaries set forth in Appendix A, and agrees not to make any public statement contradicting Appendix A.

If Universal fully complies with the understandings specified in this Non-Prosecution Agreement, including all appendices hereto (collectively referred to as the “Agreement”), no information given by or on behalf of Universal voluntarily as of the date of this Agreement or at the request of the Department (or any other information directly or indirectly derived therefrom) will be used against Universal or its subsidiaries, with the exception of Universal Brazil as set forth in the Plea Agreement, in any criminal tax prosecution.  This Agreement does not provide any protection against prosecution for any crimes except as set forth above, and applies only to Universal and its subsidiaries and not to any other entities except as set forth in this Agreement or to any individuals.  Universal expressly understands that the protections provided under this

Agreement shall not apply to any acquirer or successor entities unless and until such acquirer or successor formally adopts and executes this Agreement.

           This Agreement shall have a term of three (3) years and seven (7) days effective on the date Universal Brazil enters its plea of guilty, except in the event that the Department determines, in its sole discretion, that Universal has knowingly violated any provision of this Agreement, an extension of the term of the Agreement may be imposed by the Department for up to a total additional time period of one year.  Any extension of the Agreement extends all terms of this Agreement for an equivalent period.  Conversely, in the event the Department finds, in its sole discretion, that there exists a change in ci rcumstances sufficient to eliminate the need for the corporate compliance monitor described in Appendix B, and that the other provisions of this Agreement have been satisfied, the term of the Agreement may be terminated early.

 It is understood that for the term of this Agreement, subject to extension or early termination as described above, Universal shall: (a) commit no crimes as defined under applicable U.S. and state laws; and (b) truthfully and completely disclose non-privileged information with respect to the activities of Universal, its subsidiaries, officers and employees, and others concerning all matters about which the Department inquires of it, which information can be used for any purpose, except as otherwise limited in this Agreement; and (c) bring to the Department’s attention all federal criminal conduct by, or criminal investigations of, Universal or any of its senior managerial employees that comes to the attention of Universal or its senior management, as well as any administrative proceeding, civil or criminal action brought by any U.S. or foreign governmental authority that alleges fraud by or against Universal.

           Until the date upon which all investigations and prosecutions arising out of the conduct described in this Agreement are concluded, whether or not they are concluded within the term of this Agreement, Universal shall in any such investigation or prosecution: (a) cooperate fully with the Department, the Federal Bureau of Investigation, the SEC, and any other law enforcement agency designated by the Department; (b) assist the Department by providing logistical and technical support for any meeting, interview, grand jury proceeding, or any trial or other court proceeding; (c) use its best efforts promptly to secure the attendance and truthful statements or testimony of any officer, agent, or employee at any meeting or interview or before the grand jury or at any trial or other court proceeding; and (d) provide the Department, upon request, all non-privileged information, documents, records, or other tangible evidence about which the Department or any designated law enforcement agency inquires.

           It is understood that Universal will engage an independent corporate monitor, as set forth in Appendix B.  It is further understood that Universal will strengthen its compliance, bookkeeping, and internal control standards and procedures, as set forth in Appendix C.

           It is understood that, if the Department determines that Universal has committed any crimes after signing this Agreement, that Universal has given false, incomplete, or misleading testimony or information at any time, or Universal otherwise has violated any provision of this Agreement, Universal shall thereafter be subject to prosecution for any federal violationof which the Department has knowledge, including perjury and obstruction of justice.  Any such prosecution that is not time-barred by the applicable statute of limitations on the date of the

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signing of this Agreement may be commenced against Universal, notwithstanding the expiration of the statute of limitations between the signing of this Agreement and the expiration of the term of this Agreement plus one year.  Universal also expressly acknowledges and incorporates by reference the Tolling Agreement and Tolling Agreement Extensions that have previously been entered into between Universal and the Department.  Thus, by signing this Agreement, Universal agrees that the statute of limitations with respect to any prosecution that is not time-barred on the date that this Agreement is signed, including all time tolled by the Tolling Agreement and Tolling Extensions, shall be tolled for the term of this Agreement plus one year.

           It is understood that, if the Department determines that Universal has committed any crime after signing this Agreement, that Universal has given false, incomplete, or misleading testimony or information, or that Universal otherwise has violated any provision of this Agreement: (a) all statements made by Universal to the Department or other designated law enforcement agents, including Appendix A hereto, and any testimony given by Universal before a grand jury or other tribunal, whether prior or after to the signing of this Agreement, and any leads from such statements or testimony, shall be admissible in evidence in any criminal proceeding brought against Universal, its subsidiaries, employe es, and/or agents; and (b) Universal shall assert no claim under the United States Constitution, any statute, Rule 410 of the Federal Rules of Evidence, or any other federal rule that such statements or any leads therefrom should be suppressed.  By signing this Agreement, Universal waives all rights in the foregoing respects.

           It is understood that Universal Brazil has agreed to pay a monetary penalty in the amount of $4,400,000.  Universal agrees to pay this monetary penalty to the United States Treasury on behalf of Universal Brazil if for any reason Universal Brazil has not paid this amount within ten days of the sentencing of Universal Brazil.  The $4,400,000 penalty is final and shall not be refunded.  Furthermore, nothing in this Agreement shall be deemed an agreement by the Department that the $4,400,000 amount is the maximum penalty that may be imposed in any future prosecution, and the Department is not precluded from arguing in any future prosecution that the Court should im pose a higher fine, although the Department agrees that under those circumstances, it will recommend to the Court that any amount paid under this Agreement should be offset against any fine the Court imposes as part of a future judgment against Universal.  Finally, the parties agree that any criminal penalty that might be imposed by the Court on, or otherwise paid by, Universal Brazil in connection with its guilty plea and plea agreement entered into simultaneously herewith will be deducted from Universal’s payment obligation under this Agreement.  Universal acknowledges that no tax deduction of any of the Universal Brazil monetary penalty may be sought in connection with its payment under this Agreement. 

 It is further understood that this Agreement does not bind any federal, state, local, or foreign prosecuting authority other than the Department.  The Department will, however, bring the cooperation of Universal to the attention of other prosecuting and investigative offices, if requested by Universal.

         It is further understood that Universal and the Department may disclose this Agreement to the public.

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           With respect to this matter, from the date of execution of this Agreement forward, this Agreement supersedes all prior, if any, understandings, promises, and/or conditions between the Department and Universal.  No additional promises, agreements, or conditions have been entered into other than those set forth in this Agreement and none will be entered into unless in writing and signed by all parties.

	Sincerely,
	DENIS J. MCINERNEY
	Chief, Fraud Section
By:	/s/ Stacey K. Luck
	Stacey K. Luck
	Senior Trial Attorney, Fraud Section
	NEIL H. MACBRIDE
	United States Attorney
By:	/s/ Michael S. Dry
	Michael S. Dry
	Assistant United States Attorney

AGREED AND CONSENTED TO:

Universal Corporation

By:	/s/ Preston D. Wigner	August 6, 2010
	Preston D. Wigner	Date
	Vice President, General Counsel, Secretary,
	and Chief Compliance Officer
APPROVED:
By:	/s/ Patrick R. Hanes	August 6, 2010
	Patrick R. Hanes, Esq.	Date
	Williams Mullen
	Attorney for Universal Corporation

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APPENDIX A

STATEMENT OF FACTS

The following Statement of Facts is incorporated by reference as part of (a) the Non-Prosecution Agreement between the Fraud Section, Criminal Division of the United States Department of Justice (“the Fraud Section”), the United States Attorney’s Office for the Eastern District of Virginia (“USAO”) (collectively referred to as “the Department”), and Universal Corporation (“Universal”), and (b) the Plea Agreement between the Department and Universal Leaf Tabacos Ltda. (“Universal Brazil”).  The Department, Universal, and Universal Brazil agree that the following facts are true and correct:

I. Relevant Entities and Individuals

1.           Universal Corporation (“Universal”) was a Virginia corporation headquartered in Richmond, Virginia. Universal, through its subsidiaries, was a worldwide purchaser and supplier of processed leaf tobacco.  Universal issued and maintained a class of publicly-traded securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, Title 15, United States Code, Section 78l, and publicly traded on the New York Stock Exchange.  Universal was required to file periodic reports with the United States Securities and Exchange Commission (“SEC”) under Section 13 of the Securities Exchange Act, Title 15, United States Code, Section 78m.  Accordingly, Universal was an “issuer̶ 1; within the meaning of the Foreign Corrupt Practices Act (“FCPA”), Title 15, United States Code, Section 78dd-1(a).  By virtue of its status as an issuer within the meaning of the FCPA, Universal was required to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflected the transactions and disposition of assets of Universal and its subsidiaries, including those of Universal Brazil.

2. Universal Leaf Tabacos Ltda. (“Universal Brazil”), a wholly owned subsidiary of Universal, was a Brazilian corporation, headquartered in Santa Cruz do Sul, Brazil.

Universal Brazil was a “person” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.  As more fully described herein, individuals and entities affiliated with and acting on behalf of Universal Brazil while in the territory of the United States, used and caused the use of the mails and means and instrumentalities of interstate commerce and performed other acts in furtherance of an offer, promise, authorization, or payment of money or anything of value to foreign government officials for the purpose of assisting in obtaining or retaining business for, or directing business to, any person all within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.

3.           Universal Leaf Tobacco Company, Incorporated (“Universal Leaf Tobacco”), a wholly owned subsidiary of Universal, was a Virginia corporation, headquartered in Richmond, Virginia.  Universal Leaf Tobacco was a “domestic concern” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2.

4.           LATCO, Inc. (“LATCO”) was a Virginia corporation and a wholly owned subsidiary of Universal.  LATCO was an entity used by Universal Brazil to make commission payments to its sales agents, in addition to other purposes.  LATCO’s accounts were consolidated annually into Universal’s year-end results.  LATCO was a “domestic concern” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2.

5.           The Thailand Tobacco Monopoly (“TTM”) was a Thai government-owned tobacco monopoly located in Bangkok, Thailand.  The Government of Thailand established the TTM, an agency and instrumentality of the government, to manage and control the government-owned tobacco industry in Thailand.  The TTM supervised the cultivation of domestic tobaccocrops, the purchase of tobacco imports and the manufacture of cigarettes and other tobacco products in Thailand.  Employees and representatives of the TTM were “foreign official s” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3(f)(2)(A).

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6. Employee A, a U.S. citizen, was the President of Universal Brazil.

7. Employee B, a Brazilian citizen, was the Commercial Director for Universal Brazil.

8. Employee C, a Brazilian citizen, was a Sales Manager for Universal Brazil.  Employee C was the account manager for the TTM account from 2000 to 2003.

9. Employee D, a Zimbabwean citizen, was a Sales Director for Universal Brazil.  Employee D supported Employee C on the TTM account from 2000 to 2002.

10. Employee E, a Brazilian citizen, was the Finance Director for Universal Brazil.

11. Employee F, a Brazilian citizen, was the Export Superintendent for Universal Brazil.

12. Employee G, a Brazilian citizen, was a Sales Manager for Universal Brazil.  Employee G took over the TTM account from Employee C and was the TTM account manager from 2003 to 2004.

13.           Employee H, a Zimbabwean citizen, was the Sales Director for Universal Leaf Asia.  Employee H played a supporting role to Universal Brazil for accounts in Asia, including the TTM account.  Employee H was an acquaintance of Agent X, and Agent X included Employee H in communications regarding kickback payments to TTM representatives.

14.           Employee I, a Brazilian citizen, was an account manager in Brazil.

15.Employee J, a U.S. citizen, was a Vice President of Universal Leaf Tobacco.  Between June 2000 and August 2001, Employee J approved wiring instructions for payments to Agent X requested by Universal Brazil to be paid by LATCO.

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16.           Employee K, a U.S. citizen, was the Controller of Universal.  In September 2002, Employee K approved wiring instructions for a payment to Agent X requested by Universal Brazil to be paid by LATCO.

17.           Employee L, a U.S. citizen, was the Director of Financial Accounting for Universal Leaf Tobacco.  Between September 2003 and December 2004, Employee L approved wiring instructions for payments from LATCO to Agent X requested by Universal Brazil.

18.           Agent X was a Thai national who was hired by Universal Brazil in early 2000 as its sales agent to facilitate the company’s sale of processed leaf tobacco to the TTM.

19.           Corporation Y was a competitor of Universal Brazil and Corporation Z.  Corporation Y entered into an agreement with Universal Brazil and Corporation Z to jointly pay kickbacks to representatives of the TTM in exchange for securing orders for the sale of processed leaf tobacco to the TTM for itself, Universal Brazil, and Corporation Z.

20.           Corporation Z was a competitor of Universal Brazil and Corporation Y.  Corporation Z entered into an agreement with Universal Brazil and Corporation Y to jointly pay kickbacks to representatives of the TTM in exchange for securing orders for the sale of processed leaf tobacco to the TTM for itself, Universal Brazil, and Corporation Y.

II.           The Kickback Scheme

21.           From in or around March 2000, to in or around July 2004, the TTM awarded Universal Brazil five (5) orders for the sale of Brazilian leaf tobacco.  To obtain these orders, between June 2000 and December 2004, Universal Brazil paid approximately $697,800 in kickbacks to representatives of the TTM through Agent X.

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22.           The scheme was initiated in or about March 2000, at or about the time representatives of the TTM traveled to Brazil to visit potential suppliers of tobacco, including Universal Brazil, Corporation Y, and Corporation Z.  Agent X accompanied the TTM representatives during their visit to facilitate the sales discussions.

23.           On March 11, 2000, Employee A hosted a dinner for the TTM delegation at his home in Brazil, which was attended by Agent X, Employee B, Employee C, and Employee D.

24.           After the dinner, Agent X informed, at least, Employee C and D that for Universal Brazil to secure a sales order with the TTM, Universal Brazil would have to pay “special expenses” to TTM representatives.  The term “special expenses” was understood by the employees and Agent X to refer to kickbacks to certain TTM representatives.  The employees and Agent X also understood that the kickbacks would be paid to ensure that only those tobacco suppliers that paid the kickbacks would be awarded sales orders.

25.           On March 29, 2000, Employee C informed Agent X that Universal Brazil would pay the kickbacks to the TTM representatives to secure the orders and the company’s market share of the sales to the TTM.

26.           On March 29, 2000, the TTM awarded Universal Brazil and Corporations Y and Z orders for the sale of Brazilian leaf tobacco.

27.           Beginning in or about July 2000 and continuing until in or about 2004, in order to generate the funds to pay the kickbacks to the TTM representatives, Universal Brazil, Corporation Y, and Corporation Z, through communications among their employees and respective sales agents, agreed that a specified amount would be added to their individual sales prices for processed leaf tobacco.  Universal Brazil entered into this agreement with Corporations Y and Z with an understanding that all three companies would use the excess funds

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from the sales they secured from the TTM to remit payments to their respective agents who would then pay the kickbacks to the TTM representatives.

28.           Each year between 2000 and 2004, after the TTM purchased tobacco from Universal Brazil, Universal Brazil sent Agent X multiple commission payments, including: (a) a standard commission payment relating to the assistance Agent X provided in finalizing the order; and (b) an additional payment to be used to pay the kickbacks to the TTM representatives.  Agent X directed Universal Brazil to transfer the kickback payments to separate bank accounts and under different names than the bank accounts to which the standard commission payments were transferred.  As a result, the kickback payments were paid to accounts in Thailand and Hong Kong that were not associated with Agent X’s name, and the standard commission payments were p aid to accounts in Thailand and Germany to accounts that included (or were associated with) Agent X’s name.

29.           Internally, at Universal Brazil, to process the payments, each year the account manager would prepare a cost sheet which outlined the sales expenses for each order.  The cost sheet contained separate line items for “commission” payments and “special expenses.”

30.           Knowing that “special expenses” were included in the costs for the sales to the TTM, Employees A and B approved the sales.

31.          After the sales to the TTM were finalized and money was received from the customer, the TTM account manager would submit a form to Employee E, the Financial Director, to make the standard commission payments and the kickback payments to Agent X.  Employee E reviewed the payment requests and authorized them.

32.After Employee E authorized the payments, Employee F sent instructions to individuals in Richmond, Virginia, who processed and recorded payments for LATCO to pay Agent X.  In

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2000 and sometimes thereafter, the kickback payments were described in the instructions as sales commissions.  During 2001 and 2003through 2004, the kickback payments were characterized in the instructions as “special expenses.”

33.           Employee E, Employee J, Employee K, and Employee L, recorded the kickback payments as “commission” payments to Agent X.

A.           Tobacco Sales to the TTM from 2000 - 2004

34.           Each year, Universal Brazil account managers and Agent X worked together to negotiate the sales orders with the TTM representatives.  Once the orders were negotiated, senior executives from Universal Brazil approved and executed the orders and employees from Universal and Universal Leaf Tobacco assisted in the transfer of the kickback payments to Agent X.

1. The 2000 Sales Contract

35.           As described above, in or about March 2000, Agent X informed, at least, Employees C and D that to secure an order with the TTM, kickbacks payments would have to be paid.

36.           On March 23, 2000, Employee C sent a facsimile to Agent X confirming that Universal Brazil would pay the kickbacks and providing a chart breaking down the price of the sales offer to the TTM.  The price included kickbacks or “special charges.”  The facsimile stated that Universal Brazil and Corporation Y would offer at the same sale price as suggested by Agent X and include extra money to be used to pay kickbacks to the TTM representatives.

37.On or after March 23, 2000, Employees A and B were made aware that “special expenses” were included in the costs for the sales to the TTM and approved the sales.

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38.           On March 29, 2000, the TTM awarded Universal Brazil a sales order valued at approximately $1,617,904.  The price included the kickback payments to be paid to the TTM representatives.

39.           On May 4, 2000, Universal Brazil delivered the agreed upon shipment of tobacco leaf to the TTM in Bangkok, Thailand.

40.           Between on or about June 12 and July 6, 2000, Employee C and Employee E signed internal documents authorizing the payment of multiple commission payments, including the “special expense” payments, to Agent X.

41.           On June 12, 2000, Employee B and Employee E sent a facsimile from Brazil to Employee J, located in Richmond, Virginia, directing Employee J to wire transfer Agent X $50,000, described as a commission payment, from LATCO into a Bangkok bank account that was not in Agent X’s name or associated with Agent X’s business.  The $50,000 was to be used to pay part of the kickback payment to the TTM representatives in exchange for the award of the sales contract.

42.           On July 6, 2000, Employee F sent a facsimile from Brazil to Employee J, located in Richmond, Virginia, directing Employee J to wire transfer another $50,000, described as a sales commission, from LATCO to the same Bangkok bank account as the prior $50,000 payment.   The $50,000 was to be used to pay the remainder of the kickback payment to the TTM representatives in exchange for the award of the sales contract.

43.           On July 7, 2000, Universal Brazil paid Agent X approximately $70,752 from Universal Brazil’s Brazilian bank account into a bank account, in Agent X’s name, in Germany.  The payment was Agent X’s standard commission payment which represented 5 percent of the total value of the sale to the TTM.

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44.           On June 15, 2000 and July 10, 2000, Employee J directed the payments requested on June 12 and July 6, 2000, to be transferred to the Bangkok bank account.

2.      The 2001 Sales Contract

45.           Between in or about January 2001 and April 2001, Employee C negotiated an order with the TTM with Agent X’s assistance.

46.           On April 2, 2001, Employee C sent a facsimile from Universal Brazil’s office to the TTM Managing Director in Thailand providing a bid for the sale of processed leaf tobacco for the 2001 crop.  The bid contained an amount intended to be used to pay kickbacks to TTM’s Managing Director and other TTM representatives.

47.           Between April 2, 2001, and July 23, 2001, the TTM awarded a sales contract to Universal Brazil valued at approximately $4,560,054.  The sales prices included the kickback payments to be paid to the TTM representatives.

48.           On June 28, 2001, Agent X emailed Employee C and Employee H asking that the 50 percent “prepayment” of special expenses be remitted to an account in Hong Kong.  Agent X instructed that Universal Brazil should not mention Agent X’s name in the remittance instruction.

49.           On July 5, 2001, Employee F sent a facsimile to Employee J, located in Richmond, Virginia, directing Employee J to pay Agent X $110,000 described as a commission payment from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.

50.On August 20, 2001, Employee I, an account manager in Brazil assisting with the TTM account, sent a facsimile to Employee J, located in Richmond, Virginia, directing Employee J to pay

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Agent X $110,000 from LATCO to the same Hong Kong bank account as the prior $110,000 payment.  The text of the facsimile noted that the $110,000 was for the “50% (Balance) of ‘special expenses’” to be paid.

51.           On July 10, 2001 and August 23, 2001, Employee J directed the payments requested on July 5 and August 20, 2001, to be transferred to the Hong Kong bank account.

3.      The 2002 Sales Contract

52.           On April 24, 2002, Agent X and the agents for Corporations Y and Z met with the Managing Director of the TTM to negotiate prices for the 2002 tobacco crop.  After the meeting, Agent X sent Employee C and Employee H an email stating that the agents and the Managing Director had agreed that the special expenses would be 45 cents per kilogram of the processed leaf tobacco purchased by the TTM.

53.           Between March 2002 and May 2002, the TTM awarded a sales contract to Universal Brazil valued at approximately $1,075,200.

54.           On September 4, 2002, Agent X sent an email to Employee G and Employee H asking to be paid the kickback payments.  In the email, Agent X wrote, “please be advised not to state ‘special expenses for TTM’ in the bank application form for remittance otherwise the Hong Kong account will have a problem.”

55.           On September 17, 2002, Employee F, located in Brazil, sent an email to Employee K, located in Richmond, Virginia, requesting that Agent X be paid $86,400 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F instructed that “no reference should be made” regarding Agent X when the money was transferred.

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56.           On September 20, 2002, Employee K directed the payment requested on September 17, 2002, be transferred to the Hong Kong bank account.

4.      The 2003 Sales Contract

57.           In early 2003, Employee G replaced Employee C as the account manager for the TTM account.  Between in or about January 2003 and April 2003, Employee G, with the assistance of Agent X, negotiated Universal Brazil’s tobacco sale to the TTM for the 2003 crop.

58.           In or around April 2003, the TTM awarded a sales order to Universal Brazil valued at approximately $1,130,880.  The order price included the kickback payments to be paid to the TTM representatives.

59.           On or about September 1, 2003, Employee F sent an email to Employee L, located in Richmond, Virginia, requesting that Agent X be paid $96,000 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F explained that the “payment refers to ‘Special Expenses’ covering our sale to Thailand.”

60.           On September 5, 2003, Employee L directed the payment requested on September 1, 2003, be transferred to the Hong Kong bank account.

5.      2004 Contract

61.           In or about July 2004, Employee G, with the assistance of Agent X, negotiated Universal Brazil’s tobacco sale to the TTM for the 2004 crop.

62.           On July 13, 2004, during the negotiations, Employee G sent Agent X an email regarding the prices that should be proposed to the TTM during the bid process.  In the email, Employee G expressed concern that the TTM may consider bids from vendors other than Universal Brazil and Corporations Y and Z.  Employee G wrote that he wanted the same “special expenses” to be maintained.

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63.           On November 25, 2004, Agent X sent an email to Employee G advising that the “special expenses” had increased from the prior year and would be paid as part of the sale.

64.           In or around November 2004, the TTM awarded a sales order to Universal Brazil valued at approximately $1,472,256.  The price included the kickback payments to be paid to the TTM representatives.

65.           On December 7, 2004, Employee F, located in Brazil, sent an email to Employee L, located in Richmond, Virginia, requesting that Agent X be paid $195,040 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F explained that the “payment refers to ‘Special Expenses’ covering our 2004 sale to Thailand Tobacco Monopoly.”  In the same email, Employee F also requested Employee L transfer more than $61,000 for Agent X to a German bank account as payment for Agent X’s “5% commission.”

66.           On December 10, 2004, Employee L directed the payment requested on December 7, 2004, be transferred to the Hong Kong bank account.

B.           Total Kickback Payments

67.           Between in or around June 2000 and December 2004, Universal Brazil paid approximately $697,800 in kickbacks to its agent with the intent that the money would be passed on to TTM representatives to influence the representatives to award orders to Universal Brazil for the sale of processed leaf tobacco.

68. The scheme ended in or about April 2005 when the TTM switched to an “electronic auction” process to award orders.  The electronic auction process increased the transparency of all

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of the bids received by the TTM, allowed for more open competition, and prevented Universal Brazil and Corporation Z from including additional amounts in the price of their tobacco sales, thereby eliminating the ability of the companies to mask kickback payments used to secure sales orders.

III.           Universal’s Books and Records

69.           From in or around 2000 through in or around 2004, Employee E and others falsely characterized Universal Brazil’s kickback payments to TTM representatives in Universal Brazil’s books, records and accounts as “commission payments” to Agent X.

70.           At the end of Universal’s fiscal years 2000 through 2004, the books, records and accounts of Universal’s wholly owned subsidiaries, including those of Universal Brazil containing the false characterizations of the kickback payments to TTM representatives, were incorporated into the books, records and accounts of Universal for purposes of preparing Universal’s year-end financial statements.

IV.           Universal’s Internal Controls

71.           Universal Brazil’s employees, including Employees E and F, directed that kickback payments be paid through LATCO, a wholly owned Universal subsidiary.  The financial records of LATCO were maintained with insufficient oversight or review by Universal’s legal, finance, or compliance departments and were never audited by Universal during the period from 2000 to 2004.

72.           Universal Brazil’s Finance Department and executives and employees from either Universal or Universal Leaf Tobacco, including Employee J, Employee K, and Employee L, approved or directed the transfer of the multiple “commission” payments to Agent X even though: (a) some of the payments were described as “special expense” payments; (b) there

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was no contractual basis for the payment of the additional commission amounts; (c) the payments were to accounts unassociated with the Agent; (d) the instructions that were provided when wiring the money indicated that Universal should not identify the agent or that the amounts were for “special expenses;” and (e) the payments were above the standard five (5) percent commission typically paid by Universal Brazil to its agents.

73.           Universal Brazil did not conduct sufficient due diligence prior to engaging Agent X.

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APPENDIX B

INDEPENDENT CORPORATE MONITOR

1.        Within sixty (60) calendar days of the execution of (a) the Non-Prosecution Agreement between the Fraud Section, Criminal Division of the United States Department of Justice (“the Fraud Section”) and the United States Attorney’s Office for the Eastern District of Virginia (“USAO”) (collectively referred to as the “Department of Justice” or the “Department”) and Universal Corporation (“Universal” or “the Company”) and (b) the Plea Agreement between the Department and Universal Leaf Tabacos Ltda. (“Universal Brazil”), Universal Corporation, on behalf of itself and its subsidiary Universal Brazil, agrees to engage an independent co rporate monitor (the “Monitor”) for a period of three (3) years.  The Monitor’s primary responsibility is to assess and monitor the Company’s compliance with the terms of the Non-Prosecution Agreement and the Plea Agreement (collectively referred to as the “Agreements”) so as to specifically address and reduce the risk of the recurrence of misconduct, including evaluating the Company’s corporate compliance program with respect to the Foreign Corrupt Practices Act of 1977 (“FCPA”), as amended, Title 15, United States Code, Section 78dd-1, et seq., and other relevant anti-corruption laws, and making recommendations for improvement.  Within thirty (30) calendar days after the signing of the Agreements, and after consultation with the Department, the Company will propose to the Department three candidates to serve as the Monitor. The Monitor candidates shall have, at a minimum, the f ollowing qualifications:

a.           demonstrated expertise with respect to the FCPA, including experience counseling on FCPA issues;

b.           experience designing and/or reviewing corporate compliance policies, procedures and internal controls, including FCPA-specific policies, procedures and controls;

c.           the ability to access and deploy resources as necessary to discharge the Monitor’s duties as described in the Agreements; and

d.           sufficient independence from the Company to ensure effective and impartial performance of the Monitor’s duties as described in the Agreements.

     2.           The Department retains the right, in its sole discretion, to choose the Monitor from among the Monitor candidates proposed by the Company.  The Monitor’s term shall be three (3) years from the date on which the Monitor is approved by the Department, subject to extension or early termination as described in the Non-Prosecution Agreement.  The Monitor’s duties and authority, and the obligations of the Company with respect to the Monitor and the Department, are set forth below.

3.           The Company agrees that it will not employ or be affiliated with the Monitor for a period of not less than one year from the date the Monitor’s work has ended.

4.           The Monitor will review and evaluate the effectiveness of the Company’s internal controls, record-keeping, and existing or new financial reporting policies and procedures as they relate to the Company’s compliance with the books and records, internal accounting controls and anti-bribery provisions of the FCPA, and other applicable anti-corruption laws.  This review and evaluation shall include an assessment of the policies and procedures as actually implemented. The retention agreement between the Company and the Monitor will reference this Agreement and include this Agreement as an attachment so the Monitor is fully apprised of his or her duties and responsibilities.

5.           The Company shall cooperate fully with the Monitor and the Monitor shall have the authority to take such reasonable steps as, in his or her view, may be necessary to be fully informed about the compliance program and operations of the Company within the scope of his

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or her responsibilities under this Agreement.  To that end, the Company shall provide the Monitor with access to all information, documents, and records that are not subject to protection from disclosure by the attorney-client privilege or the attorney work product doctrine and facilities and/or employees that fall within the scope of responsibilities of the Monitor under this Agreement.  In the event that the Company seeks to withhold from the Monitor access to information, documents, records, facilities and/or employees of the Company on grounds that the information, documents, records, facilities and/or employees are protected by the attorney-client privilege or the attorney work product doctrine, the Company shall work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If the matter cannot be resolved, at the request of the Monitor, the Company shall promptly provide written notice to the Monitor and the Department.  Such notice shall include a general description of the nature of the information, documents, records, facilities and/or employees that are being withheld, as well as the basis for the claim.

6.           Any disclosure by the Company to the Monitor concerning corrupt payments, related books and records and related internal controls shall not relieve the Company of its obligation truthfully to disclose such matters to the Department

7.           The parties agree that the Monitor is an independent third-party, not an employee or agent of the Company or the Department, and that no attorney-client relationship shall be formed between the Company and the Monitor.

8.           The Company agrees that:

a.      The Monitor shall assess whether the Company’s existing policies, procedures, and internal controls are reasonably designed to detect and prevent violations of the FCPA and other applicable anti-corruption laws.

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b.      The Monitor shall assess, monitor, and evaluate the Company’s compliance with the terms of the Agreements.

c.      The Monitor shall oversee the Company’s implementation of and adherence to all existing, modified or new policies, procedures, or internal controls relating to FCPA compliance, including the minimum policies and procedures set forth in Appendix D.

d.      The Monitor shall ensure that the Policies and Procedures are appropriately designed to accomplish their goals.

e. During the three (3) year term, the Monitor shall conduct an initial review and prepare an initial report, followed by two follow-up reviews and reports as described below:

(i)           With respect to each of the three (3) reviews, after initial consultations with the Company and the Department, the Monitor shall prepare a written work plan for each review, which shall be submitted at least sixty (60) days in advance to the Company and the Department for comment.  In order to conduct an effective initial review and to understand fully any existing deficiencies in the existing policies, procedures, and internal controls related to the FCPA and other applicable anti-corruption laws, the Monitor’s initial work plan shall include such steps as are reasonably necessary to develop an understanding of the facts and circumstances surrounding any violations that may have occurred, but the parties do not intend that the Monitor will conduct his or her own inquiry into those historical events.  Any disputes between the Company and the Monitor with respect to the work plan shall be decided by the Department in its sole discretion.

(ii)           In connection with the initial review, the Monitor shall issue a written report within one hundred twenty (120) calendar days of the engagement of the Monitor setting forth the Monitor’s assessment and, if appropriate and necessary, making

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recommendations reasonably designed to improve the Policies and Procedures of the Company for ensuring compliance with the FCPA and other applicable anti-corruption laws.  The Monitor shall provide the report to the Board of Directors of the Company and contemporaneously transmit copies to Deputy Chief, FCPA Unit, Fraud Section, Criminal Division, U.S. Department of Justice, 1400 New York Ave., N.W., Bond Building, Fourth Floor, Washington, DC 20005.  The Monitor may extend the time period for issuance of the report with prior written approval of the Department.

(iii)           Within one-hundred twenty (120) calendar days after receiving the Monitor’s report, the Company shall adopt the recommendations set forth in the report; provided, however, that within sixty (60) calendar days after receiving the report, the Company shall advise the Monitor and the Department in writing of any recommendations that the Company considers unduly burdensome, impractical, costly or otherwise inadvisable.  With respect to any recommendation that the Company considers unduly burdensome, impractical, costly or otherwise inadvisable, the Company need not adopt that recommendation within that one-hundred twenty (120) calendar day period; instead, the Company may propose in writing an alternative policy, procedure or system designed to achieve the same objective or purpose.  As to any recommendation on which the Company and the Monitor ultimately do not agree, the views of the Company and the Monitor shall promptly be brought to the attention of the Department.  Any disputes between the Company and the Monitor with respect to the recommendations shall be decided by the Department in its sole discretion.  The Department may consider the Monitor’s recommendation and the Company’s reasons for not adopting the recommendation in determining whether the Company has fully complied with its obligations under this Agreement.

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(iv)           The Monitor shall undertake two follow-up reviews to further monitor and assess whether the policies and procedures of the Company are reasonably designed to detect and prevent violations of the FCPA and other applicable anti-corruption laws.

(v)           Within sixty (60) calendar days of initiating each follow-up review, the Monitor shall: (A) complete the review; (B) certify whether the anti-bribery compliance program of the Company, including the policies and procedures, is appropriately designed and implemented to prevent and detect violations of the FCPA and other applicable anti-corruption laws; and (C) report on the Monitor's findings in the same fashion as with respect to the initial review.

(vi)            The first follow-up review and report shall be completed by one year after the completion of the initial review. The second follow-up review and report shall be completed by one year after the completion of the first follow-up review.

(vii)           The Monitor may extend the time period for submission of the follow-up reports with prior written approval of the Department.

9.           In undertaking the assessments and reviews described above, the Monitor shall formulate conclusions based on, among other things:  (a) inspection of relevant documents, including the policies and procedures relating to the Company’s anti-corruption compliance program;  (b) onsite observation of the Company’s policies, procedures, and internal controls; (c) meetings with, and interviews of, relevant employees, directors and other persons at mutually convenient times and places; and (d) analyses, studies and testing of the Company’s anti-corruption compliance program.

10.           Should the Monitor, during the course of his or her engagement, discover credible evidence that questionable or corrupt payments or questionable or corrupt transfers of property

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or interests may have been offered, promised, paid or authorized by any Company entity or person, or any entity or person working directly or indirectly for the Company, which could potentially violate the FCPA or other applicable anti-corruption laws, or that related false books and records have been maintained, the Monitor shall promptly report such conduct to the Company’s General Counsel, its Compliance Committee, and its outside counsel for further investigation, unless the Monitor believes, in the exercise of his or her discretion, that such disclosure should be made directly to the Department.  If the Monitor refers the matter only to the Company’s General Counsel, its Compliance Committee, and its outside counsel, the Company shall promptly report the same to the Department and contem poraneously notify the Monitor that such report has been made.  If the Company fails to make disclosure to the Department within ten (10) calendar days of the Monitor’s report of such conduct to the Company, the Monitor shall independently disclose his or her findings to the Department at the address listed in Paragraph 8(e)(ii) above.  Further, in the event that the Company, or any entity or person working directly or indirectly for the Company, refuses to provide information necessary for the performance of the Monitor’s responsibilities, the Monitor shall promptly disclose that fact to the Department.  The Company shall not take any action to retaliate against the Monitor for any such disclosures or for any other reason.  The Monitor may report other criminal or regulatory violations discovered in the course of performing his or her duties, in the same manner as described above.

11.           At least annually, and more frequently if appropriate, representatives of the Company and the Department will meet together to discuss the monitorship and any suggestions, comments or proposals for improvement the Company may wish to discuss with the Department.

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APPENDIX C

CORPORATE COMPLIANCE PROGRAM

In order to address potential deficiencies in Universal Corporation’s internal controls, policies, and procedures regarding compliance with the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. §§ 78dd-1, et seq., and other applicable anti-corruption laws, Universal Corporation (referred to as the “Company”), on behalf of itself and its wholly owned subsidiaries, including Universal Brazil, agrees to continue to conduct, in a manner consistent with all of the obligations under this Agreement, appropriate reviews of existing policies, procedures, and internal controls.

Where appropriate, the Company agrees to adopt new or modify existing policies, procedures, and internal controls in order to ensure that it maintains:  (a) a system of internal accounting controls designed to ensure that the Company makes and keeps fair and accurate books, records, and accounts; and (b) a rigorous anti-corruption compliance code, standards and procedures designed to detect and deter violations of the FCPA and other applicable anti-corruption laws.  At a minimum, this should include, but ought not be limited to, the following elements:

1.           A clearly articulated corporate policy against violations of the FCPA and other applicable anti-corruption laws.

2.           A system of financial and accounting procedures, including a system of internal accounting controls, designed to ensure the maintenance of fair and accurate books, records and accounts.

3.           Promulgation of a compliance code, standards and procedures designed to reduce the prospect of violations of the FCPA, other applicable anti-corruption laws, and the Company’s compliance code.  These standards and procedures should apply to all directors, officers, and

employees and, where necessary and appropriate, outside parties acting on behalf of the Company in a foreign jurisdiction, including agents, consultants, representatives, distributors, teaming partners, and joint venture partners (collectively referred to as “agents and business partners”).

4.           The assignment of responsibility to one or more senior corporate officials of the Company for the implementation and oversight of compliance with policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws.  Such corporate official(s) shall have the authority to report matters directly to the Audit Committee of the Board of Directors of the Company.

5.           Mechanisms designed to ensure that the Company’s policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws are effectively communicated to all directors, officers, and, where necessary and appropriate, employees agents and business partners.  This should include:  (a) periodic training for all directors and officers and, where necessary and appropriate, employees, agents, and business partners; and (b) annual certifications with regard to this training by all directors and officers and, where necessary and appropriate, employees, agents, and business partners.

6.           An effective system for reporting suspected criminal conduct and/or violations of the compliance policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws for directors, officers, and, where necessary and appropriate, employees, agents, and business partners.

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7.           Appropriate disciplinary procedures to address, among other things, violations of the FCPA, other applicable anti-corruption laws, and the Company’s compliance code, standards and procedures by the Company’s directors, officers, and employees.

8.           Appropriate due diligence requirements pertaining to the retention and oversight of agents and business partners.

9.           Where necessary and appropriate, standard provisions in agreements, contracts, and renewals thereof with all agents and business partners that are reasonably calculated to prevent violations of the FCPA and other applicable anti-corruption laws, which may, depending upon the circumstances, include:  (a) anti-corruption representations and undertakings relating to compliance with the FCPA and other applicable anti-corruption laws; (b) rights to conduct audits of the books and records of the agent or business partner to ensure compliance with the foregoing; and (c) rights to terminate an agent or business partner as a result of any violation of anti-corruption laws or breach of representations and undertakings related to such matters.

10.           Periodic testing of the Company’s policies, procedures, and internal controls designed to evaluate their effectiveness in detecting and reducing violations of anti-corruption laws and the Company’s applicable compliance code, policies, and procedures.

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EX-10.3 4 ex10-3.htm CONSENT OF DEFENDANT UNIVERSAL CORPORATION AND FINAL JUDGMENT AS TO DEFENDANT UNIVERSAL CORPORATION

Exhibit 10.3

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

SECURITIES AND EXCHANGE COMMISSION
		Plaintiff,
	v.
UNIVERSAL CORPORATION
		Defendant.

CONSENT OF DEFENDANT UNIVERSAL CORPORATION

1.           Defendant Universal Corporation (“Defendant”) waives service of a summons and the complaint in this action, enters a general appearance, and admits the Court’s jurisdiction over Defendant and over the subject matter of this action.

2.           Without admitting or denying the allegations of the complaint (except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other things:

(a)           Permanently restrains and enjoins Defendant from violation of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B)];

(b)           Orders Defendant to pay disgorgement in the amount of $3,125,905, plus prejudgment interest thereon in the amount of $1,455,371.51; and

(c)           Orders Defendant, within 60 calendar days of the entry of the Final

Judgment, to engage an independent compliance monitor (the “Monitor”) not unacceptable to the staff of the Securities and Exchange Commission for a period of three (3) years from the date of engagement to review and evaluate Defendant’s internal controls, recordkeeping, and financial

reporting policies as they relate to Defendant’s current and ongoing compliance with Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B)] and to adopt the Monitor’s recommendations.

3. Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

4. Defendant waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

5. Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendant to enter into this Consent.

6. Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set forth therein.

7. Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

8. Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms and conditions.  Defendant further agrees to provide counsel for the Commission,

2

within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment.

9.           Consistent with 17 C.F.R. § 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding.  Defendant acknowledges that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability.Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein.  Defendant further acknowledges that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations.  Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization.  This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding.  In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that it shall not be permitted to contest the factual allegations of the complaint in this action.

10.           Defendant understands and agrees to comply with the Commission's policy “not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegation in the complaint or order for proceedings.”  17 C.F.R. §202.5.  In compliance with this policy, Defendant agrees: (i) not to take any action or to make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or

3

creating the impression that the complaint is without factual basis; and (ii) that upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the complaint.  If Defendant breaches this agreement, the Commission may petition the Court to vacate the Final Judgment and restore this action to its active docket.  Nothing in this paragraph affects Defendant’s: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings in which the Commission is not a party.

11.           Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States acting in his or her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees, expenses, or costs expended by Defendant to defend against this action.  For these purposes, Defendant agrees that Defendant is not the prevailing party in this action since the parties have reached a good faith settlement.

12.           Defendant agrees that the Commission may present the Final Judgment to the Court for signature and entry without further notice.

13.           Defendant agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.

	Universal Corporation
Dated: July 19, 2010	By:	/s/ Preston D. Wigner
		Preston D. Wigner, Vice President,
		General Counsel, Secretary & Chief Compliance Officer
		9201 Forest Hill Avenue
		Richmond, VA 23235

4

On July 19, 2010, Preston D. Wigner, a person known to me, personally appeared before me and acknowledged executing the foregoing Consent with full authority to do so on behalf of Universal Corporation as its General Counsel.

  /s/ Terry L. Marks

Notary Public

Commission expires:  October 31, 2011

 [Notary Seal]

Approved as to form:

/s/ Patrick R. Hanes

Patrick R. Hanes, Esq.

Williams Mullen

200 South 10th Street, Suite 1600

Richmond, Virginia 23219

Counsel for Defendant

5

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

SECURITIES AND EXCHANGE COMMISSION
		Plaintiff,
	v.
UNIVERSAL CORPORATION
		Defendant.

FINAL JUDGMENT AS TO DEFENDANT UNIVERSAL CORPORATION

The Securities and Exchange Commission having filed a Complaint and Defendant Universal Corporation having entered a general appearance; consented to the Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:

I.

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section 30A of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78dd-1], by acting on behalf of any issuer which has a class of securities registered pursuant to Section 12 of the Exchange Act or which is required to file reports under Section 15(d) of the Exchange Act and

making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to:

(1)           any foreign official for purposes of:

(A)(i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or  instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person;

(2)           any foreign political party or official thereof or any candidate for foreign political office for purpose of:

(A)(i) influencing any act or decision of such party, official, or candidate in its or in his official capacity, (ii) inducing such party, official, or candidate to do or omit to do any act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist any issuer in obtaining or retaining business for or with, or directing business to, any person; or

(3)           any person, while knowing that all or a portion of such money or thing of

2

value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office for purposes of:

(A)(i) influencing any act or decision of such foreign official, political party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candidate to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist any issuer in obtaining or retaining business for or with, or directing business to, any person.

II.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and Defendant’s agents, servants, employees, attorneys, and all those persons in active concert and participation with them who receive actual notice of this Judgment by personal service or otherwise, and each of them, be and they hereby are permanently restrained and enjoined from violating Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)] by:

(1) failing to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflect the transactions and

3

dispositions of the assets of the issuer; or

(2) failing to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recorded as necessary (a) to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements and (b) to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

III.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREEDthat Defendant engage an independent compliance monitor (“Monitor”) not unacceptable to the staff of the Securities and Exchange Commission (“SEC”) within sixty (60) calendar days of the entry of the Final Judgment.  Defendant shall engage the Monitor for a period of three (3) years from the date of engagement.  Defendant agrees that, in the event that the SEC determines, in its sole discretion, that Defendant has knowingly violated any provision of the Consent attached hereto and incorporated by reference herein (the “Consent”) or the Final Judgment, an extension or extensions of the Monitor’s term may be imposed by the SEC, in its sole discretion, f or up to a total additional time period of one (1) year.  The Monitor shall review and evaluate, in the

4

manner set forth in the paragraphs below, Defendant’s internal controls, recordkeeping, and financial reporting policies as they relate to Defendant’s current and ongoing compliance with the books and records, internal accounting controls, and anti-bribery provisions of the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§78dd-1, et seq. (the “FCPA”), codified at Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B) and to make recommendations.  This review and evaluation shall include an assessment of the policies and procedures as actually implemented.  Defendant shall exclusively bear all costs, including compensation and expenses, associated with the retention of the Monitor.   Within thirty (30) calendar days after entry of the Final Judgment, and after consultation with the SEC, Defendant shall recommend to the SEC three qualified candidates to serve as the Monitor.

The Monitor candidates shall have, at a minimum, the following qualifications:  demonstrated expertise with respect to the FCPA, including experience counseling on FCPA issues; experience designing and/or reviewing corporate compliance policies, procedures, and internal controls, including FCPA-specific policies, procedures and internal controls; ability to access and deploy resources as necessary to discharge the Monitor’s duties as described herein; and independence from Defendant to ensure effective and impartial performance of the Monitor’s duties as described herein.

Defendant shall require the Monitor to enter into an agreement with Defendant providing that, for the period of the three (3) year engagement and for a period of two (2) years from completion of the engagement, the Monitor shall not enter into any additional employment, consultant, attorney-client, auditing, or other professional relationship with Defendant or any of

5

its affiliates, directors, officers, employees, or agents acting in their capacity as such.  The agreement shall also provide that the Monitor will require any firm with which the Monitor is affiliated or of which the Monitor is a member, and any person the Monitor engages to assist in the performance of the Monitor’s duties under the Consent and Final Judgment shall not, without prior written consent of the SEC, enter into any employment, consultant, agency, attorney-client, auditing, or other professional relationship with Defendant or any of Defendant’s affiliates, directors, officers, or employees, or agents acting in their capacity as such for the period of the engagement and for a period of two (2) years after the engagement.  To ensure the independence of the Monitor, Defendant shall not have the authority to terminate the Monitor without the prior written approval of the SEC.

The retention agreement between Defendant and the Monitor shall reference the Final Judgment and include the Final Judgment as an attachment so the Monitor is fully apprised of the Monitor’s duties and/or responsibilities.

Defendant shall cooperate fully with the Monitor and the Monitor shall have the authority to take such reasonable steps as, in the Monitor’s view, may be necessary to be fully informed about Defendant’s compliance program within the scope of the Monitor’s duties and/or responsibilities under the Final Judgment.  To that end, the Defendant shall provide the Monitor with access to all information, documents, records, facilities, and/or employees, as requested by the Monitor, that fall within the scope of the duties and/or responsibilities of the Monitor under the Final Judgment.  In the event that Defendant, or any entity or person working directly or indirectly for Defendant, refuses to provide information necessary for the performance of the Monitor’s responsibilities, the Monitor shall promptly disclose that fact to the SEC.  Defendant

6

shall not take any action to retaliate against the Monitor for any such disclosures or for any other reason.  In the event that Defendant seeks to withhold from the Monitor access to information, documents, records, facilities, and/or employees of Defendant on grounds that the information, documents, records, facilities and/or employees are protected by the attorney-client privilege or the attorney work product doctrine, Defendant shall work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If the matter cannot be resolved, the Defendant shall promptly provide written notice of the documents or information over which protection or pr ivilege is claimed to the Monitor and the SEC.  Such notice shall include a general description of the nature of the information, documents, records, facilities, and/or employees that are being withheld, as well as the basis for the claim.

Defendant and Monitor shall agree that the Monitor is an independent third-party and not an employee or agent of the Defendant.  In addition, Defendant and Monitor agree that no attorney-client relationship shall be formed between Defendant and the Monitor.

The Monitor shall assess whether Defendant’s existing policies, procedures, and internal controls are reasonably designed to detect and prevent violations of the FCPA; assess, monitor, and evaluate Defendant’s compliance with the terms of the Final Judgment; oversee Defendant’s implementation of, and adherence to, all existing, modified, or new policies, procedures, or internal controls relating to FCPA compliance; and ensure that the policies, procedures, or internal controls relating to FCPA compliance are appropriately designed to accomplish their goals.

During the three (3) year term, the Monitor shall conduct an initial review and prepare an initial report, followed by two (2) follow-up reviews and reports, as described below:

7

With respect to each of the three (3) reviews, after consultation with Defendant and the SEC, the Monitor shall prepare a written work plan for each review that shall be submitted in advance to Defendant and the SEC for comment before commencing each review.  The Defendant’s comments shall be provided to the Monitor no more than thirty (30) calendar days after receipt of the written work plan.  In order to conduct an effective initial review and to understand fully any existing deficiencies in policies, procedures, and internal controls related to the FCPA, the Monitor’s initial work plan shall include such steps as are reasonably necessary to develop an understanding of the facts and circumstances surrounding any violations that may have occurred and to assess the effectiveness of De fendant’s existing policies, procedures, and internal controls that were designed to detect, deter, and prevent violations of the FCPA.  Any dispute between Defendant and the Monitor with respect to the work plan shall be decided by the SEC in its sole discretion.

In connection with the initial review, the Monitor shall issue a written report within one hundred twenty (120) calendar days of the engagement of the Monitor, setting forth the Monitor’s assessment and making recommendations reasonably designed to improve the policies and procedures of Defendant for ensuring compliance with the FCPA.  The Monitor shall provide the report to Defendant’s Board of Directors and contemporaneously transmit copies to Charles E. Cain, Assistant Director, Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549.  The Monitor may extend the time period for issuance of the report with prior written approval of the SEC.

Within one-hundred twenty (120) calendar days after receiving the Monitor’s report, Defendant shall adopt the recommendations set forth in the report; provided, however, that

8

within sixty (60) calendar days after receiving the report, Defendant shall advise the Monitor and the SEC in writing of any recommendations that Defendant considers unduly burdensome, impractical, costly, or otherwise inadvisable.  With respect to any recommendation that Defendant considers unduly burdensome, impractical, costly, or otherwise inadvisable, Defendant shall propose in writing an alternative policy, procedure, or system designed to achieve the same objective or purpose.  Defendant shall explain why the objective or purpose of such recommendation is unduly burdensome, impractical, costly, or otherwise inadvisable.  As to any recommendation on which Defendant and the Monitor do not agree, such parties shall attempt in good faith to reach an agreement within forty-five (45) calendar days after Defendant serves the written proposal.  In the event the Defendant and the Monitor are unable to agree on an alternative proposal, the Defendant shall promptly consult with the SEC.  The SEC may make a determination as to whether Defendant shall adopt the Monitor’s recommendation or an alternative proposal, and Defendant shall abide by the SEC’s determination.  Pending such determination, Defendant shall not be required to implement any contested recommendation(s).  With respect to any recommendation that the Monitor determines cannot reasonably be implemented within one hundred and twenty (120) calendar days after receiving the report, the Monitor may extend the time period for implementation with prior written approval of the SEC.

The Monitor shall undertake two (2) follow-up reviews to further monitor and assess whether the policies and procedures of Defendant are reasonably designed to detect, deter, and prevent violations of the FCPA.

Within sixty (60) calendar days of initiating each follow-up review, the Monitor shall: (A) complete the review; (B) certify whether the anti-bribery compliance program of the

9

Defendant, including the policies and procedures, is appropriately designed and implemented to ensure compliance with the FCPA; and (C) report on the Monitor’s findings in the same fashion as with respect to the initial review.

The first follow-up review and report shall be completed by one (1) year after the initial review.  The second follow-up review and report shall be completed by one (1) year after the completion of the first follow-up review.  

The Monitor may extend the time period for submission of the follow-up reports with prior written approval of the SEC.

The Defendant shall adopt the recommendations set forth in the follow-up reports not inconsistent with the terms of the Final Judgment and no later than sixty (60) days from the receipt of the follow-up reports.

In undertaking the assessments and reviews described above, the Monitor shall formulate conclusions based on, among other things:  (a) inspection of relevant documents, including the policies and procedures relating to Defendant’s FCPA and anti-corruption compliance program;  (b) onsite observations of Defendant’s systems and procedures, including Defendant’s policies, record-keeping and internal audit procedures, and internal controls; (c) meetings with, and interviews of, relevant employees, officers, directors, and other persons at mutually convenient times and places; and (d) analyses, studies, and testing of Defendant’s FCPA and anti-corruption compliance program.

Should the Monitor, during the course of the Monitor’s engagement, discover credible evidence that questionable or corrupt payments or questionable or corrupt transfers of property or other interests may have been offered, promised, paid, or authorized by any company, entity,

10

person, or Defendant, or any entity or person working directly or indirectly for Defendant, or that any books, records, or accounts have been falsified, or that Defendant has failed to devise and maintain a system of internal accounting controls, the Monitor shall promptly report such conduct to Defendant’s General Counsel, to Defendant’s Audit Committee, to Defendant’s Compliance Committee and to Defendant’s outside counsel, and to the SEC, unless the Monitor believes, in the exercise of the Monitor’s discretion, that such disclosure should only be made directly to the SEC.  The Monitor shall report any other violations of the federal securities laws discovered in the course of performing the Monitor’s duties in the same manner as described above.

IV.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $3,125,905, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $1,455,371.51.  Defendant shall satisfy this obligation by paying $4,581,276.51 within 14 days after entry of this Final Judgment by wire transfer, certified check, bank cashier’s check, or United States postal money order payable to the Securities and Exchange Commission.  Payment by certified check, bank cashier’s check, or United States postal money order shall be delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, a nd shall be accompanied by a letter identifying Universal Corporation as a defendant in this action; setting forth the title and civil action number of this action and the name of this Court; and specifying that payment is made pursuant to this Final Judgment.  Defendant shall simultaneously transmit evidence of

11

payment to the Commission’s counsel in this action, Erica Y. Williams, Assistant Chief Litigation Counsel, Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549. Defendant shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC § 1961.  The Commission shall remit the funds paid pursuant to this paragraph to the United States Treasury.

V.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein with the same force and effect as if fully set forth herein, and that Defendant shall comply with all of the undertakings and agreements set forth therein.

VI.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.

Dated:  _______, 2010
	UNITED STATES DISTRICT JUDGE

12




EX-99.1 5 ex99-1.htm PRESS RELEASE BY THE COMPANY

Exhibit 99.1

P.O. Box 25099 Ÿ Richmond, VA 23260 Ÿ Phone: (804) 359-9311 Ÿ Fax: (804) 254-3584

PRESS RELEASE

CONTACT:	Karen M. L. Whelan		RELEASE:	Immediately
	Phone:	(804) 359-9311
	Fax:	(804) 254-3584
	Email:	investor@universalleaf.com

Universal Corporation Settles FCPA Matter

Richmond, VA, August 6, 2010 / PRNEWSWIRE

Universal Corporation (NYSE:UVV) announced today that it has finalized agreements with the United States Department of Justice and the U.S. Securities and Exchange Commission resolving the investigations that commenced with the self-reporting by the Company of certain payments to foreign government officials and other individuals in connection with business activities in several countries.  The resolution includes aggregate payments to the Department of Justice and the Securities and Exchange Commission of $8.98 million.  As previously reported, the Company has already accrued amounts from time to time since the matter arose that are adequate to cover these obligations, so the resolution will not require any charge to fiscal year 2011 financial results.

Under the Company’s agreements with the Department of Justice:

·   The Company’s Brazilian subsidiary pled guilty to Foreign Corrupt Practices Act anti-bribery provisions and conspiracy ending in 2005 and will pay a fine of $4.40 million.

·   The Company will retain an independent corporate monitor to review its compliance, bookkeeping, and internal control standards and procedures and will adopt new or modify existing policies where appropriate.

·   The Department of Justice will not prosecute the Company if, for a period of three years, the Company meets its obligations set forth in a non-prosecution agreement between the Company and the Department of Justice.

Pursuant to the Company’s agreements with the Securities and Exchange Commission, the Company consented to the entry of a final judgment with respect to the Securities and

-M  O  R  E-

Universal Corporation

Page 2 

Exchange Commission’s investigation. Under the final judgment, the Company is permanently enjoined from violating the anti-bribery, internal controls, and books and records provisions of the Foreign Corrupt Practices Act, and is required to disgorge $4.58 million in profits and prejudgment interest. That amount is included in the $8.98 million in aggregate payments mentioned earlier. In addition, Universal has agreed with the SEC to retain the independent corporate monitor under terms similar to the Company's agreement with the Department of Justice.

The agreements with the Department of Justice and the Securities and Exchange Commission have been approved by the Boards of Directors of the Company and its Brazilian subsidiary. The agreements conclude the independent investigation by Universal Corporation’s Audit Committee and the outside law firm that was retained by the Audit Committee to assist in the investigation of these matters.

George C. Freeman, III, Universal’s Chairman, President, and Chief Executive Officer, said, “Universal prides itself on conducting business with honesty and integrity. These past payments were - and are - contrary to the policies and standards of Universal and its subsidiaries. We have absolutely no tolerance for this type of activity. Our Audit Committee conducted a rigorous and thorough investigation, we voluntarily reported this matter to federal authorities, and we have fully cooperated with federal authorities at each step of the investigation.  We have since taken steps to strengthen our culture of ethical and legal compliance, and our efforts are supported by our operations around the world. Our regional management is fully committed to our culture.”

Since its discovery of the conduct at issue, Universal has instituted remedial efforts, including updating and improving its internal controls and compliance resources, policies, and procedures. The Company has named a Chief Compliance Officer, and its compliance program includes enhanced training of the Company’s employees, the expansion of existing programs, and formal due diligence programs. “Our aim,” said Mr. Freeman, “is to continue to build on these improvements to our compliance program, and to maintain the high ethical standards and culture that our shareholders, our customers, and our employees expect. Conducting our business with integrity is essential to maintaining our status as the leader in our industry.”

Headquartered in Richmond, Virginia, Universal Corporation is the world’s leading tobacco merchant and processor and conducts business in more than 30 countries. Its revenues from continuing operations for the fiscal year ended March 31, 2010, were $2.5 billion. For more information on Universal Corporation, visit its web site at www.universalcorp.com.

# # #

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EX-10.2

Exhibit 10.2

[DOJ LOGO]

                                                                           U.S. Department of Justice

                                                                            Criminal Division

August 3, 2010

Patrick R. Hanes, Esq.

Williams Mullen

200 South 10th Street

Richmond, Virginia 23219

           Re:           Universal Corporation

Dear Mr. Hanes:

On the understandings specified below, the United States Department of Justice, Criminal Division, Fraud Section (the “Fraud Section”) and the United States Attorney’s Office for the Eastern District of Virginia (the “USAO”) (collectively, the “Department of Justice” or the “Department”) will not criminally prosecute Universal Corporation (“Universal”) or any of its subsidi aries except as set forth in the Plea Agreement with respect to Universal Leaf Tabacos Ltda. (“Universal Brazil”), for any crimes (except for criminal tax violations, as to which the Department does not make any agreement) related to the making of  improper payments, by employees and agents of Universal and/or its subsidiaries to officials of the Government of Thailand in connection with Universal Brazil’s efforts to secure business, namely, to secure the improper sale of leaf tobaccoto the Thailand Tobacco Monopoly, from 2000 to 2004, and the accounting and record-keeping associated with these improper payments, as described in Appendix A (Statement of Facts).  The Department enters into this Non-Prosecution Agreement based, in part, on the following factors: (a) Universal’s discovery of the violations through its own internal hotline process; (b) timely, voluntary, and complete disclosure of the facts described in Appendix A (the “Statement of Facts”); (c) Universal’s extensive, thorough, real-time cooperation with the Department and the U.S. Securities and Exchange Commission (“SEC”); and (d) the remedial efforts already undertaken and to be undertaken by Universal.

It is understood that Universal admits, and accepts and acknowledges responsibility for, the conduct of its subsidiaries set forth in Appendix A, and agrees not to make any public statement contradicting Appendix A.

If Universal fully complies with the understandings specified in this Non-Prosecution Agreement, including all appendices hereto (collectively referred to as the “Agreement”), no information given by or on behalf of Universal voluntarily as of the date of this Agreement or at the request of the Department (or any other information directly or indirectly derived therefrom) will be used against Universal or its subsidiaries, with the exception of Universal Brazil as set forth in the Plea Agreement, in any criminal tax prosecution.  This Agreement does not provide any protection against prosecution for any crimes except as set forth above, and applies only to Universal and its subsidiaries and not to any other entities except as set forth in this Agreement or to any individuals.  Universal expressly understands that the protections provided under this

Agreement shall not apply to any acquirer or successor entities unless and until such acquirer or successor formally adopts and executes this Agreement.

           This Agreement shall have a term of three (3) years and seven (7) days effective on the date Universal Brazil enters its plea of guilty, except in the event that the Department determines, in its sole discretion, that Universal has knowingly violated any provision of this Agreement, an extension of the term of the Agreement may be imposed by the Department for up to a total additional time period of one year.  Any extension of the Agreement extends all terms of this Agreement for an equivalent period.  Conversely, in the event the Department finds, in its sole discretion, that there exists a change in ci rcumstances sufficient to eliminate the need for the corporate compliance monitor described in Appendix B, and that the other provisions of this Agreement have been satisfied, the term of the Agreement may be terminated early.

 It is understood that for the term of this Agreement, subject to extension or early termination as described above, Universal shall: (a) commit no crimes as defined under applicable U.S. and state laws; and (b) truthfully and completely disclose non-privileged information with respect to the activities of Universal, its subsidiaries, officers and employees, and others concerning all matters about which the Department inquires of it, which information can be used for any purpose, except as otherwise limited in this Agreement; and (c) bring to the Department’s attention all federal criminal conduct by, or criminal investigations of, Universal or any of its senior managerial employees that comes to the attention of Universal or its senior management, as well as any administrative proceeding, civil or criminal action brought by any U.S. or foreign governmental authority that alleges fraud by or against Universal.

           Until the date upon which all investigations and prosecutions arising out of the conduct described in this Agreement are concluded, whether or not they are concluded within the term of this Agreement, Universal shall in any such investigation or prosecution: (a) cooperate fully with the Department, the Federal Bureau of Investigation, the SEC, and any other law enforcement agency designated by the Department; (b) assist the Department by providing logistical and technical support for any meeting, interview, grand jury proceeding, or any trial or other court proceeding; (c) use its best efforts promptly to secure the attendance and truthful statements or testimony of any officer, agent, or employee at any meeting or interview or before the grand jury or at any trial or other court proceeding; and (d) provide the Department, upon request, all non-privileged information, documents, records, or other tangible evidence about which the Department or any designated law enforcement agency inquires.

           It is understood that Universal will engage an independent corporate monitor, as set forth in Appendix B.  It is further understood that Universal will strengthen its compliance, bookkeeping, and internal control standards and procedures, as set forth in Appendix C.

           It is understood that, if the Department determines that Universal has committed any crimes after signing this Agreement, that Universal has given false, incomplete, or misleading testimony or information at any time, or Universal otherwise has violated any provision of this Agreement, Universal shall thereafter be subject to prosecution for any federal violationof which the Department has knowledge, including perjury and obstruction of justice.  Any such prosecution that is not time-barred by the applicable statute of limitations on the date of the

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signing of this Agreement may be commenced against Universal, notwithstanding the expiration of the statute of limitations between the signing of this Agreement and the expiration of the term of this Agreement plus one year.  Universal also expressly acknowledges and incorporates by reference the Tolling Agreement and Tolling Agreement Extensions that have previously been entered into between Universal and the Department.  Thus, by signing this Agreement, Universal agrees that the statute of limitations with respect to any prosecution that is not time-barred on the date that this Agreement is signed, including all time tolled by the Tolling Agreement and Tolling Extensions, shall be tolled for the term of this Agreement plus one year.

           It is understood that, if the Department determines that Universal has committed any crime after signing this Agreement, that Universal has given false, incomplete, or misleading testimony or information, or that Universal otherwise has violated any provision of this Agreement: (a) all statements made by Universal to the Department or other designated law enforcement agents, including Appendix A hereto, and any testimony given by Universal before a grand jury or other tribunal, whether prior or after to the signing of this Agreement, and any leads from such statements or testimony, shall be admissible in evidence in any criminal proceeding brought against Universal, its subsidiaries, employe es, and/or agents; and (b) Universal shall assert no claim under the United States Constitution, any statute, Rule 410 of the Federal Rules of Evidence, or any other federal rule that such statements or any leads therefrom should be suppressed.  By signing this Agreement, Universal waives all rights in the foregoing respects.

           It is understood that Universal Brazil has agreed to pay a monetary penalty in the amount of $4,400,000.  Universal agrees to pay this monetary penalty to the United States Treasury on behalf of Universal Brazil if for any reason Universal Brazil has not paid this amount within ten days of the sentencing of Universal Brazil.  The $4,400,000 penalty is final and shall not be refunded.  Furthermore, nothing in this Agreement shall be deemed an agreement by the Department that the $4,400,000 amount is the maximum penalty that may be imposed in any future prosecution, and the Department is not precluded from arguing in any future prosecution that the Court should im pose a higher fine, although the Department agrees that under those circumstances, it will recommend to the Court that any amount paid under this Agreement should be offset against any fine the Court imposes as part of a future judgment against Universal.  Finally, the parties agree that any criminal penalty that might be imposed by the Court on, or otherwise paid by, Universal Brazil in connection with its guilty plea and plea agreement entered into simultaneously herewith will be deducted from Universal’s payment obligation under this Agreement.  Universal acknowledges that no tax deduction of any of the Universal Brazil monetary penalty may be sought in connection with its payment under this Agreement. 

 It is further understood that this Agreement does not bind any federal, state, local, or foreign prosecuting authority other than the Department.  The Department will, however, bring the cooperation of Universal to the attention of other prosecuting and investigative offices, if requested by Universal.

         It is further understood that Universal and the Department may disclose this Agreement to the public.

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           With respect to this matter, from the date of execution of this Agreement forward, this Agreement supersedes all prior, if any, understandings, promises, and/or conditions between the Department and Universal.  No additional promises, agreements, or conditions have been entered into other than those set forth in this Agreement and none will be entered into unless in writing and signed by all parties.

	Sincerely,
	DENIS J. MCINERNEY
	Chief, Fraud Section
By:	/s/ Stacey K. Luck
	Stacey K. Luck
	Senior Trial Attorney, Fraud Section
	NEIL H. MACBRIDE
	United States Attorney
By:	/s/ Michael S. Dry
	Michael S. Dry
	Assistant United States Attorney

AGREED AND CONSENTED TO:

Universal Corporation

By:	/s/ Preston D. Wigner	August 6, 2010
	Preston D. Wigner	Date
	Vice President, General Counsel, Secretary,
	and Chief Compliance Officer
APPROVED:
By:	/s/ Patrick R. Hanes	August 6, 2010
	Patrick R. Hanes, Esq.	Date
	Williams Mullen
	Attorney for Universal Corporation

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APPENDIX A

STATEMENT OF FACTS

The following Statement of Facts is incorporated by reference as part of (a) the Non-Prosecution Agreement between the Fraud Section, Criminal Division of the United States Department of Justice (“the Fraud Section”), the United States Attorney’s Office for the Eastern District of Virginia (“USAO”) (collectively referred to as “the Department”), and Universal Corporation (“Universal”), and (b) the Plea Agreement between the Department and Universal Leaf Tabacos Ltda. (“Universal Brazil”).  The Department, Universal, and Universal Brazil agree that the following facts are true and correct:

I. Relevant Entities and Individuals

1.           Universal Corporation (“Universal”) was a Virginia corporation headquartered in Richmond, Virginia. Universal, through its subsidiaries, was a worldwide purchaser and supplier of processed leaf tobacco.  Universal issued and maintained a class of publicly-traded securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, Title 15, United States Code, Section 78l, and publicly traded on the New York Stock Exchange.  Universal was required to file periodic reports with the United States Securities and Exchange Commission (“SEC”) under Section 13 of the Securities Exchange Act, Title 15, United States Code, Section 78m.  Accordingly, Universal was an “issuer̶ 1; within the meaning of the Foreign Corrupt Practices Act (“FCPA”), Title 15, United States Code, Section 78dd-1(a).  By virtue of its status as an issuer within the meaning of the FCPA, Universal was required to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflected the transactions and disposition of assets of Universal and its subsidiaries, including those of Universal Brazil.

2. Universal Leaf Tabacos Ltda. (“Universal Brazil”), a wholly owned subsidiary of Universal, was a Brazilian corporation, headquartered in Santa Cruz do Sul, Brazil.

Universal Brazil was a “person” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.  As more fully described herein, individuals and entities affiliated with and acting on behalf of Universal Brazil while in the territory of the United States, used and caused the use of the mails and means and instrumentalities of interstate commerce and performed other acts in furtherance of an offer, promise, authorization, or payment of money or anything of value to foreign government officials for the purpose of assisting in obtaining or retaining business for, or directing business to, any person all within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3.

3.           Universal Leaf Tobacco Company, Incorporated (“Universal Leaf Tobacco”), a wholly owned subsidiary of Universal, was a Virginia corporation, headquartered in Richmond, Virginia.  Universal Leaf Tobacco was a “domestic concern” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2.

4.           LATCO, Inc. (“LATCO”) was a Virginia corporation and a wholly owned subsidiary of Universal.  LATCO was an entity used by Universal Brazil to make commission payments to its sales agents, in addition to other purposes.  LATCO’s accounts were consolidated annually into Universal’s year-end results.  LATCO was a “domestic concern” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-2.

5.           The Thailand Tobacco Monopoly (“TTM”) was a Thai government-owned tobacco monopoly located in Bangkok, Thailand.  The Government of Thailand established the TTM, an agency and instrumentality of the government, to manage and control the government-owned tobacco industry in Thailand.  The TTM supervised the cultivation of domestic tobaccocrops, the purchase of tobacco imports and the manufacture of cigarettes and other tobacco products in Thailand.  Employees and representatives of the TTM were “foreign official s” within the meaning of the FCPA, Title 15, United States Code, Section 78dd-3(f)(2)(A).

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6. Employee A, a U.S. citizen, was the President of Universal Brazil.

7. Employee B, a Brazilian citizen, was the Commercial Director for Universal Brazil.

8. Employee C, a Brazilian citizen, was a Sales Manager for Universal Brazil.  Employee C was the account manager for the TTM account from 2000 to 2003.

9. Employee D, a Zimbabwean citizen, was a Sales Director for Universal Brazil.  Employee D supported Employee C on the TTM account from 2000 to 2002.

10. Employee E, a Brazilian citizen, was the Finance Director for Universal Brazil.

11. Employee F, a Brazilian citizen, was the Export Superintendent for Universal Brazil.

12. Employee G, a Brazilian citizen, was a Sales Manager for Universal Brazil.  Employee G took over the TTM account from Employee C and was the TTM account manager from 2003 to 2004.

13.           Employee H, a Zimbabwean citizen, was the Sales Director for Universal Leaf Asia.  Employee H played a supporting role to Universal Brazil for accounts in Asia, including the TTM account.  Employee H was an acquaintance of Agent X, and Agent X included Employee H in communications regarding kickback payments to TTM representatives.

14.           Employee I, a Brazilian citizen, was an account manager in Brazil.

15.Employee J, a U.S. citizen, was a Vice President of Universal Leaf Tobacco.  Between June 2000 and August 2001, Employee J approved wiring instructions for payments to Agent X requested by Universal Brazil to be paid by LATCO.

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16.           Employee K, a U.S. citizen, was the Controller of Universal.  In September 2002, Employee K approved wiring instructions for a payment to Agent X requested by Universal Brazil to be paid by LATCO.

17.           Employee L, a U.S. citizen, was the Director of Financial Accounting for Universal Leaf Tobacco.  Between September 2003 and December 2004, Employee L approved wiring instructions for payments from LATCO to Agent X requested by Universal Brazil.

18.           Agent X was a Thai national who was hired by Universal Brazil in early 2000 as its sales agent to facilitate the company’s sale of processed leaf tobacco to the TTM.

19.           Corporation Y was a competitor of Universal Brazil and Corporation Z.  Corporation Y entered into an agreement with Universal Brazil and Corporation Z to jointly pay kickbacks to representatives of the TTM in exchange for securing orders for the sale of processed leaf tobacco to the TTM for itself, Universal Brazil, and Corporation Z.

20.           Corporation Z was a competitor of Universal Brazil and Corporation Y.  Corporation Z entered into an agreement with Universal Brazil and Corporation Y to jointly pay kickbacks to representatives of the TTM in exchange for securing orders for the sale of processed leaf tobacco to the TTM for itself, Universal Brazil, and Corporation Y.

II.           The Kickback Scheme

21.           From in or around March 2000, to in or around July 2004, the TTM awarded Universal Brazil five (5) orders for the sale of Brazilian leaf tobacco.  To obtain these orders, between June 2000 and December 2004, Universal Brazil paid approximately $697,800 in kickbacks to representatives of the TTM through Agent X.

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22.           The scheme was initiated in or about March 2000, at or about the time representatives of the TTM traveled to Brazil to visit potential suppliers of tobacco, including Universal Brazil, Corporation Y, and Corporation Z.  Agent X accompanied the TTM representatives during their visit to facilitate the sales discussions.

23.           On March 11, 2000, Employee A hosted a dinner for the TTM delegation at his home in Brazil, which was attended by Agent X, Employee B, Employee C, and Employee D.

24.           After the dinner, Agent X informed, at least, Employee C and D that for Universal Brazil to secure a sales order with the TTM, Universal Brazil would have to pay “special expenses” to TTM representatives.  The term “special expenses” was understood by the employees and Agent X to refer to kickbacks to certain TTM representatives.  The employees and Agent X also understood that the kickbacks would be paid to ensure that only those tobacco suppliers that paid the kickbacks would be awarded sales orders.

25.           On March 29, 2000, Employee C informed Agent X that Universal Brazil would pay the kickbacks to the TTM representatives to secure the orders and the company’s market share of the sales to the TTM.

26.           On March 29, 2000, the TTM awarded Universal Brazil and Corporations Y and Z orders for the sale of Brazilian leaf tobacco.

27.           Beginning in or about July 2000 and continuing until in or about 2004, in order to generate the funds to pay the kickbacks to the TTM representatives, Universal Brazil, Corporation Y, and Corporation Z, through communications among their employees and respective sales agents, agreed that a specified amount would be added to their individual sales prices for processed leaf tobacco.  Universal Brazil entered into this agreement with Corporations Y and Z with an understanding that all three companies would use the excess funds

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from the sales they secured from the TTM to remit payments to their respective agents who would then pay the kickbacks to the TTM representatives.

28.           Each year between 2000 and 2004, after the TTM purchased tobacco from Universal Brazil, Universal Brazil sent Agent X multiple commission payments, including: (a) a standard commission payment relating to the assistance Agent X provided in finalizing the order; and (b) an additional payment to be used to pay the kickbacks to the TTM representatives.  Agent X directed Universal Brazil to transfer the kickback payments to separate bank accounts and under different names than the bank accounts to which the standard commission payments were transferred.  As a result, the kickback payments were paid to accounts in Thailand and Hong Kong that were not associated with Agent X’s name, and the standard commission payments were p aid to accounts in Thailand and Germany to accounts that included (or were associated with) Agent X’s name.

29.           Internally, at Universal Brazil, to process the payments, each year the account manager would prepare a cost sheet which outlined the sales expenses for each order.  The cost sheet contained separate line items for “commission” payments and “special expenses.”

30.           Knowing that “special expenses” were included in the costs for the sales to the TTM, Employees A and B approved the sales.

31.          After the sales to the TTM were finalized and money was received from the customer, the TTM account manager would submit a form to Employee E, the Financial Director, to make the standard commission payments and the kickback payments to Agent X.  Employee E reviewed the payment requests and authorized them.

32.After Employee E authorized the payments, Employee F sent instructions to individuals in Richmond, Virginia, who processed and recorded payments for LATCO to pay Agent X.  In

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2000 and sometimes thereafter, the kickback payments were described in the instructions as sales commissions.  During 2001 and 2003through 2004, the kickback payments were characterized in the instructions as “special expenses.”

33.           Employee E, Employee J, Employee K, and Employee L, recorded the kickback payments as “commission” payments to Agent X.

A.           Tobacco Sales to the TTM from 2000 - 2004

34.           Each year, Universal Brazil account managers and Agent X worked together to negotiate the sales orders with the TTM representatives.  Once the orders were negotiated, senior executives from Universal Brazil approved and executed the orders and employees from Universal and Universal Leaf Tobacco assisted in the transfer of the kickback payments to Agent X.

1. The 2000 Sales Contract

35.           As described above, in or about March 2000, Agent X informed, at least, Employees C and D that to secure an order with the TTM, kickbacks payments would have to be paid.

36.           On March 23, 2000, Employee C sent a facsimile to Agent X confirming that Universal Brazil would pay the kickbacks and providing a chart breaking down the price of the sales offer to the TTM.  The price included kickbacks or “special charges.”  The facsimile stated that Universal Brazil and Corporation Y would offer at the same sale price as suggested by Agent X and include extra money to be used to pay kickbacks to the TTM representatives.

37.On or after March 23, 2000, Employees A and B were made aware that “special expenses” were included in the costs for the sales to the TTM and approved the sales.

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38.           On March 29, 2000, the TTM awarded Universal Brazil a sales order valued at approximately $1,617,904.  The price included the kickback payments to be paid to the TTM representatives.

39.           On May 4, 2000, Universal Brazil delivered the agreed upon shipment of tobacco leaf to the TTM in Bangkok, Thailand.

40.           Between on or about June 12 and July 6, 2000, Employee C and Employee E signed internal documents authorizing the payment of multiple commission payments, including the “special expense” payments, to Agent X.

41.           On June 12, 2000, Employee B and Employee E sent a facsimile from Brazil to Employee J, located in Richmond, Virginia, directing Employee J to wire transfer Agent X $50,000, described as a commission payment, from LATCO into a Bangkok bank account that was not in Agent X’s name or associated with Agent X’s business.  The $50,000 was to be used to pay part of the kickback payment to the TTM representatives in exchange for the award of the sales contract.

42.           On July 6, 2000, Employee F sent a facsimile from Brazil to Employee J, located in Richmond, Virginia, directing Employee J to wire transfer another $50,000, described as a sales commission, from LATCO to the same Bangkok bank account as the prior $50,000 payment.   The $50,000 was to be used to pay the remainder of the kickback payment to the TTM representatives in exchange for the award of the sales contract.

43.           On July 7, 2000, Universal Brazil paid Agent X approximately $70,752 from Universal Brazil’s Brazilian bank account into a bank account, in Agent X’s name, in Germany.  The payment was Agent X’s standard commission payment which represented 5 percent of the total value of the sale to the TTM.

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44.           On June 15, 2000 and July 10, 2000, Employee J directed the payments requested on June 12 and July 6, 2000, to be transferred to the Bangkok bank account.

2.      The 2001 Sales Contract

45.           Between in or about January 2001 and April 2001, Employee C negotiated an order with the TTM with Agent X’s assistance.

46.           On April 2, 2001, Employee C sent a facsimile from Universal Brazil’s office to the TTM Managing Director in Thailand providing a bid for the sale of processed leaf tobacco for the 2001 crop.  The bid contained an amount intended to be used to pay kickbacks to TTM’s Managing Director and other TTM representatives.

47.           Between April 2, 2001, and July 23, 2001, the TTM awarded a sales contract to Universal Brazil valued at approximately $4,560,054.  The sales prices included the kickback payments to be paid to the TTM representatives.

48.           On June 28, 2001, Agent X emailed Employee C and Employee H asking that the 50 percent “prepayment” of special expenses be remitted to an account in Hong Kong.  Agent X instructed that Universal Brazil should not mention Agent X’s name in the remittance instruction.

49.           On July 5, 2001, Employee F sent a facsimile to Employee J, located in Richmond, Virginia, directing Employee J to pay Agent X $110,000 described as a commission payment from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.

50.On August 20, 2001, Employee I, an account manager in Brazil assisting with the TTM account, sent a facsimile to Employee J, located in Richmond, Virginia, directing Employee J to pay

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Agent X $110,000 from LATCO to the same Hong Kong bank account as the prior $110,000 payment.  The text of the facsimile noted that the $110,000 was for the “50% (Balance) of ‘special expenses’” to be paid.

51.           On July 10, 2001 and August 23, 2001, Employee J directed the payments requested on July 5 and August 20, 2001, to be transferred to the Hong Kong bank account.

3.      The 2002 Sales Contract

52.           On April 24, 2002, Agent X and the agents for Corporations Y and Z met with the Managing Director of the TTM to negotiate prices for the 2002 tobacco crop.  After the meeting, Agent X sent Employee C and Employee H an email stating that the agents and the Managing Director had agreed that the special expenses would be 45 cents per kilogram of the processed leaf tobacco purchased by the TTM.

53.           Between March 2002 and May 2002, the TTM awarded a sales contract to Universal Brazil valued at approximately $1,075,200.

54.           On September 4, 2002, Agent X sent an email to Employee G and Employee H asking to be paid the kickback payments.  In the email, Agent X wrote, “please be advised not to state ‘special expenses for TTM’ in the bank application form for remittance otherwise the Hong Kong account will have a problem.”

55.           On September 17, 2002, Employee F, located in Brazil, sent an email to Employee K, located in Richmond, Virginia, requesting that Agent X be paid $86,400 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F instructed that “no reference should be made” regarding Agent X when the money was transferred.

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56.           On September 20, 2002, Employee K directed the payment requested on September 17, 2002, be transferred to the Hong Kong bank account.

4.      The 2003 Sales Contract

57.           In early 2003, Employee G replaced Employee C as the account manager for the TTM account.  Between in or about January 2003 and April 2003, Employee G, with the assistance of Agent X, negotiated Universal Brazil’s tobacco sale to the TTM for the 2003 crop.

58.           In or around April 2003, the TTM awarded a sales order to Universal Brazil valued at approximately $1,130,880.  The order price included the kickback payments to be paid to the TTM representatives.

59.           On or about September 1, 2003, Employee F sent an email to Employee L, located in Richmond, Virginia, requesting that Agent X be paid $96,000 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F explained that the “payment refers to ‘Special Expenses’ covering our sale to Thailand.”

60.           On September 5, 2003, Employee L directed the payment requested on September 1, 2003, be transferred to the Hong Kong bank account.

5.      2004 Contract

61.           In or about July 2004, Employee G, with the assistance of Agent X, negotiated Universal Brazil’s tobacco sale to the TTM for the 2004 crop.

62.           On July 13, 2004, during the negotiations, Employee G sent Agent X an email regarding the prices that should be proposed to the TTM during the bid process.  In the email, Employee G expressed concern that the TTM may consider bids from vendors other than Universal Brazil and Corporations Y and Z.  Employee G wrote that he wanted the same “special expenses” to be maintained.

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63.           On November 25, 2004, Agent X sent an email to Employee G advising that the “special expenses” had increased from the prior year and would be paid as part of the sale.

64.           In or around November 2004, the TTM awarded a sales order to Universal Brazil valued at approximately $1,472,256.  The price included the kickback payments to be paid to the TTM representatives.

65.           On December 7, 2004, Employee F, located in Brazil, sent an email to Employee L, located in Richmond, Virginia, requesting that Agent X be paid $195,040 from LATCO to a Hong Kong bank account that was not in Agent X’s name or associated with Agent X’s business.  In the email, Employee F explained that the “payment refers to ‘Special Expenses’ covering our 2004 sale to Thailand Tobacco Monopoly.”  In the same email, Employee F also requested Employee L transfer more than $61,000 for Agent X to a German bank account as payment for Agent X’s “5% commission.”

66.           On December 10, 2004, Employee L directed the payment requested on December 7, 2004, be transferred to the Hong Kong bank account.

B.           Total Kickback Payments

67.           Between in or around June 2000 and December 2004, Universal Brazil paid approximately $697,800 in kickbacks to its agent with the intent that the money would be passed on to TTM representatives to influence the representatives to award orders to Universal Brazil for the sale of processed leaf tobacco.

68. The scheme ended in or about April 2005 when the TTM switched to an “electronic auction” process to award orders.  The electronic auction process increased the transparency of all

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of the bids received by the TTM, allowed for more open competition, and prevented Universal Brazil and Corporation Z from including additional amounts in the price of their tobacco sales, thereby eliminating the ability of the companies to mask kickback payments used to secure sales orders.

III.           Universal’s Books and Records

69.           From in or around 2000 through in or around 2004, Employee E and others falsely characterized Universal Brazil’s kickback payments to TTM representatives in Universal Brazil’s books, records and accounts as “commission payments” to Agent X.

70.           At the end of Universal’s fiscal years 2000 through 2004, the books, records and accounts of Universal’s wholly owned subsidiaries, including those of Universal Brazil containing the false characterizations of the kickback payments to TTM representatives, were incorporated into the books, records and accounts of Universal for purposes of preparing Universal’s year-end financial statements.

IV.           Universal’s Internal Controls

71.           Universal Brazil’s employees, including Employees E and F, directed that kickback payments be paid through LATCO, a wholly owned Universal subsidiary.  The financial records of LATCO were maintained with insufficient oversight or review by Universal’s legal, finance, or compliance departments and were never audited by Universal during the period from 2000 to 2004.

72.           Universal Brazil’s Finance Department and executives and employees from either Universal or Universal Leaf Tobacco, including Employee J, Employee K, and Employee L, approved or directed the transfer of the multiple “commission” payments to Agent X even though: (a) some of the payments were described as “special expense” payments; (b) there

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was no contractual basis for the payment of the additional commission amounts; (c) the payments were to accounts unassociated with the Agent; (d) the instructions that were provided when wiring the money indicated that Universal should not identify the agent or that the amounts were for “special expenses;” and (e) the payments were above the standard five (5) percent commission typically paid by Universal Brazil to its agents.

73.           Universal Brazil did not conduct sufficient due diligence prior to engaging Agent X.

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APPENDIX B

INDEPENDENT CORPORATE MONITOR

1.        Within sixty (60) calendar days of the execution of (a) the Non-Prosecution Agreement between the Fraud Section, Criminal Division of the United States Department of Justice (“the Fraud Section”) and the United States Attorney’s Office for the Eastern District of Virginia (“USAO”) (collectively referred to as the “Department of Justice” or the “Department”) and Universal Corporation (“Universal” or “the Company”) and (b) the Plea Agreement between the Department and Universal Leaf Tabacos Ltda. (“Universal Brazil”), Universal Corporation, on behalf of itself and its subsidiary Universal Brazil, agrees to engage an independent co rporate monitor (the “Monitor”) for a period of three (3) years.  The Monitor’s primary responsibility is to assess and monitor the Company’s compliance with the terms of the Non-Prosecution Agreement and the Plea Agreement (collectively referred to as the “Agreements”) so as to specifically address and reduce the risk of the recurrence of misconduct, including evaluating the Company’s corporate compliance program with respect to the Foreign Corrupt Practices Act of 1977 (“FCPA”), as amended, Title 15, United States Code, Section 78dd-1, et seq., and other relevant anti-corruption laws, and making recommendations for improvement.  Within thirty (30) calendar days after the signing of the Agreements, and after consultation with the Department, the Company will propose to the Department three candidates to serve as the Monitor. The Monitor candidates shall have, at a minimum, the f ollowing qualifications:

a.           demonstrated expertise with respect to the FCPA, including experience counseling on FCPA issues;

b.           experience designing and/or reviewing corporate compliance policies, procedures and internal controls, including FCPA-specific policies, procedures and controls;

c.           the ability to access and deploy resources as necessary to discharge the Monitor’s duties as described in the Agreements; and

d.           sufficient independence from the Company to ensure effective and impartial performance of the Monitor’s duties as described in the Agreements.

     2.           The Department retains the right, in its sole discretion, to choose the Monitor from among the Monitor candidates proposed by the Company.  The Monitor’s term shall be three (3) years from the date on which the Monitor is approved by the Department, subject to extension or early termination as described in the Non-Prosecution Agreement.  The Monitor’s duties and authority, and the obligations of the Company with respect to the Monitor and the Department, are set forth below.

3.           The Company agrees that it will not employ or be affiliated with the Monitor for a period of not less than one year from the date the Monitor’s work has ended.

4.           The Monitor will review and evaluate the effectiveness of the Company’s internal controls, record-keeping, and existing or new financial reporting policies and procedures as they relate to the Company’s compliance with the books and records, internal accounting controls and anti-bribery provisions of the FCPA, and other applicable anti-corruption laws.  This review and evaluation shall include an assessment of the policies and procedures as actually implemented. The retention agreement between the Company and the Monitor will reference this Agreement and include this Agreement as an attachment so the Monitor is fully apprised of his or her duties and responsibilities.

5.           The Company shall cooperate fully with the Monitor and the Monitor shall have the authority to take such reasonable steps as, in his or her view, may be necessary to be fully informed about the compliance program and operations of the Company within the scope of his

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or her responsibilities under this Agreement.  To that end, the Company shall provide the Monitor with access to all information, documents, and records that are not subject to protection from disclosure by the attorney-client privilege or the attorney work product doctrine and facilities and/or employees that fall within the scope of responsibilities of the Monitor under this Agreement.  In the event that the Company seeks to withhold from the Monitor access to information, documents, records, facilities and/or employees of the Company on grounds that the information, documents, records, facilities and/or employees are protected by the attorney-client privilege or the attorney work product doctrine, the Company shall work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If the matter cannot be resolved, at the request of the Monitor, the Company shall promptly provide written notice to the Monitor and the Department.  Such notice shall include a general description of the nature of the information, documents, records, facilities and/or employees that are being withheld, as well as the basis for the claim.

6.           Any disclosure by the Company to the Monitor concerning corrupt payments, related books and records and related internal controls shall not relieve the Company of its obligation truthfully to disclose such matters to the Department

7.           The parties agree that the Monitor is an independent third-party, not an employee or agent of the Company or the Department, and that no attorney-client relationship shall be formed between the Company and the Monitor.

8.           The Company agrees that:

a.      The Monitor shall assess whether the Company’s existing policies, procedures, and internal controls are reasonably designed to detect and prevent violations of the FCPA and other applicable anti-corruption laws.

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b.      The Monitor shall assess, monitor, and evaluate the Company’s compliance with the terms of the Agreements.

c.      The Monitor shall oversee the Company’s implementation of and adherence to all existing, modified or new policies, procedures, or internal controls relating to FCPA compliance, including the minimum policies and procedures set forth in Appendix D.

d.      The Monitor shall ensure that the Policies and Procedures are appropriately designed to accomplish their goals.

e. During the three (3) year term, the Monitor shall conduct an initial review and prepare an initial report, followed by two follow-up reviews and reports as described below:

(i)           With respect to each of the three (3) reviews, after initial consultations with the Company and the Department, the Monitor shall prepare a written work plan for each review, which shall be submitted at least sixty (60) days in advance to the Company and the Department for comment.  In order to conduct an effective initial review and to understand fully any existing deficiencies in the existing policies, procedures, and internal controls related to the FCPA and other applicable anti-corruption laws, the Monitor’s initial work plan shall include such steps as are reasonably necessary to develop an understanding of the facts and circumstances surrounding any violations that may have occurred, but the parties do not intend that the Monitor will conduct his or her own inquiry into those historical events.  Any disputes between the Company and the Monitor with respect to the work plan shall be decided by the Department in its sole discretion.

(ii)           In connection with the initial review, the Monitor shall issue a written report within one hundred twenty (120) calendar days of the engagement of the Monitor setting forth the Monitor’s assessment and, if appropriate and necessary, making

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recommendations reasonably designed to improve the Policies and Procedures of the Company for ensuring compliance with the FCPA and other applicable anti-corruption laws.  The Monitor shall provide the report to the Board of Directors of the Company and contemporaneously transmit copies to Deputy Chief, FCPA Unit, Fraud Section, Criminal Division, U.S. Department of Justice, 1400 New York Ave., N.W., Bond Building, Fourth Floor, Washington, DC 20005.  The Monitor may extend the time period for issuance of the report with prior written approval of the Department.

(iii)           Within one-hundred twenty (120) calendar days after receiving the Monitor’s report, the Company shall adopt the recommendations set forth in the report; provided, however, that within sixty (60) calendar days after receiving the report, the Company shall advise the Monitor and the Department in writing of any recommendations that the Company considers unduly burdensome, impractical, costly or otherwise inadvisable.  With respect to any recommendation that the Company considers unduly burdensome, impractical, costly or otherwise inadvisable, the Company need not adopt that recommendation within that one-hundred twenty (120) calendar day period; instead, the Company may propose in writing an alternative policy, procedure or system designed to achieve the same objective or purpose.  As to any recommendation on which the Company and the Monitor ultimately do not agree, the views of the Company and the Monitor shall promptly be brought to the attention of the Department.  Any disputes between the Company and the Monitor with respect to the recommendations shall be decided by the Department in its sole discretion.  The Department may consider the Monitor’s recommendation and the Company’s reasons for not adopting the recommendation in determining whether the Company has fully complied with its obligations under this Agreement.

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(iv)           The Monitor shall undertake two follow-up reviews to further monitor and assess whether the policies and procedures of the Company are reasonably designed to detect and prevent violations of the FCPA and other applicable anti-corruption laws.

(v)           Within sixty (60) calendar days of initiating each follow-up review, the Monitor shall: (A) complete the review; (B) certify whether the anti-bribery compliance program of the Company, including the policies and procedures, is appropriately designed and implemented to prevent and detect violations of the FCPA and other applicable anti-corruption laws; and (C) report on the Monitor's findings in the same fashion as with respect to the initial review.

(vi)            The first follow-up review and report shall be completed by one year after the completion of the initial review. The second follow-up review and report shall be completed by one year after the completion of the first follow-up review.

(vii)           The Monitor may extend the time period for submission of the follow-up reports with prior written approval of the Department.

9.           In undertaking the assessments and reviews described above, the Monitor shall formulate conclusions based on, among other things:  (a) inspection of relevant documents, including the policies and procedures relating to the Company’s anti-corruption compliance program;  (b) onsite observation of the Company’s policies, procedures, and internal controls; (c) meetings with, and interviews of, relevant employees, directors and other persons at mutually convenient times and places; and (d) analyses, studies and testing of the Company’s anti-corruption compliance program.

10.           Should the Monitor, during the course of his or her engagement, discover credible evidence that questionable or corrupt payments or questionable or corrupt transfers of property

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or interests may have been offered, promised, paid or authorized by any Company entity or person, or any entity or person working directly or indirectly for the Company, which could potentially violate the FCPA or other applicable anti-corruption laws, or that related false books and records have been maintained, the Monitor shall promptly report such conduct to the Company’s General Counsel, its Compliance Committee, and its outside counsel for further investigation, unless the Monitor believes, in the exercise of his or her discretion, that such disclosure should be made directly to the Department.  If the Monitor refers the matter only to the Company’s General Counsel, its Compliance Committee, and its outside counsel, the Company shall promptly report the same to the Department and contem poraneously notify the Monitor that such report has been made.  If the Company fails to make disclosure to the Department within ten (10) calendar days of the Monitor’s report of such conduct to the Company, the Monitor shall independently disclose his or her findings to the Department at the address listed in Paragraph 8(e)(ii) above.  Further, in the event that the Company, or any entity or person working directly or indirectly for the Company, refuses to provide information necessary for the performance of the Monitor’s responsibilities, the Monitor shall promptly disclose that fact to the Department.  The Company shall not take any action to retaliate against the Monitor for any such disclosures or for any other reason.  The Monitor may report other criminal or regulatory violations discovered in the course of performing his or her duties, in the same manner as described above.

11.           At least annually, and more frequently if appropriate, representatives of the Company and the Department will meet together to discuss the monitorship and any suggestions, comments or proposals for improvement the Company may wish to discuss with the Department.

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APPENDIX C

CORPORATE COMPLIANCE PROGRAM

In order to address potential deficiencies in Universal Corporation’s internal controls, policies, and procedures regarding compliance with the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. §§ 78dd-1, et seq., and other applicable anti-corruption laws, Universal Corporation (referred to as the “Company”), on behalf of itself and its wholly owned subsidiaries, including Universal Brazil, agrees to continue to conduct, in a manner consistent with all of the obligations under this Agreement, appropriate reviews of existing policies, procedures, and internal controls.

Where appropriate, the Company agrees to adopt new or modify existing policies, procedures, and internal controls in order to ensure that it maintains:  (a) a system of internal accounting controls designed to ensure that the Company makes and keeps fair and accurate books, records, and accounts; and (b) a rigorous anti-corruption compliance code, standards and procedures designed to detect and deter violations of the FCPA and other applicable anti-corruption laws.  At a minimum, this should include, but ought not be limited to, the following elements:

1.           A clearly articulated corporate policy against violations of the FCPA and other applicable anti-corruption laws.

2.           A system of financial and accounting procedures, including a system of internal accounting controls, designed to ensure the maintenance of fair and accurate books, records and accounts.

3.           Promulgation of a compliance code, standards and procedures designed to reduce the prospect of violations of the FCPA, other applicable anti-corruption laws, and the Company’s compliance code.  These standards and procedures should apply to all directors, officers, and

employees and, where necessary and appropriate, outside parties acting on behalf of the Company in a foreign jurisdiction, including agents, consultants, representatives, distributors, teaming partners, and joint venture partners (collectively referred to as “agents and business partners”).

4.           The assignment of responsibility to one or more senior corporate officials of the Company for the implementation and oversight of compliance with policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws.  Such corporate official(s) shall have the authority to report matters directly to the Audit Committee of the Board of Directors of the Company.

5.           Mechanisms designed to ensure that the Company’s policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws are effectively communicated to all directors, officers, and, where necessary and appropriate, employees agents and business partners.  This should include:  (a) periodic training for all directors and officers and, where necessary and appropriate, employees, agents, and business partners; and (b) annual certifications with regard to this training by all directors and officers and, where necessary and appropriate, employees, agents, and business partners.

6.           An effective system for reporting suspected criminal conduct and/or violations of the compliance policies, procedures, and internal controls regarding the FCPA and other applicable anti-corruption laws for directors, officers, and, where necessary and appropriate, employees, agents, and business partners.

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7.           Appropriate disciplinary procedures to address, among other things, violations of the FCPA, other applicable anti-corruption laws, and the Company’s compliance code, standards and procedures by the Company’s directors, officers, and employees.

8.           Appropriate due diligence requirements pertaining to the retention and oversight of agents and business partners.

9.           Where necessary and appropriate, standard provisions in agreements, contracts, and renewals thereof with all agents and business partners that are reasonably calculated to prevent violations of the FCPA and other applicable anti-corruption laws, which may, depending upon the circumstances, include:  (a) anti-corruption representations and undertakings relating to compliance with the FCPA and other applicable anti-corruption laws; (b) rights to conduct audits of the books and records of the agent or business partner to ensure compliance with the foregoing; and (c) rights to terminate an agent or business partner as a result of any violation of anti-corruption laws or breach of representations and undertakings related to such matters.

10.           Periodic testing of the Company’s policies, procedures, and internal controls designed to evaluate their effectiveness in detecting and reducing violations of anti-corruption laws and the Company’s applicable compliance code, policies, and procedures.

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EX-10.3 4 ex10-3.htm CONSENT OF DEFENDANT UNIVERSAL CORPORATION AND FINAL JUDGMENT AS TO DEFENDANT UNIVERSAL CORPORATION

Exhibit 10.3

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

SECURITIES AND EXCHANGE COMMISSION
		Plaintiff,
	v.
UNIVERSAL CORPORATION
		Defendant.

CONSENT OF DEFENDANT UNIVERSAL CORPORATION

1.           Defendant Universal Corporation (“Defendant”) waives service of a summons and the complaint in this action, enters a general appearance, and admits the Court’s jurisdiction over Defendant and over the subject matter of this action.

2.           Without admitting or denying the allegations of the complaint (except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other things:

(a)           Permanently restrains and enjoins Defendant from violation of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B)];

(b)           Orders Defendant to pay disgorgement in the amount of $3,125,905, plus prejudgment interest thereon in the amount of $1,455,371.51; and

(c)           Orders Defendant, within 60 calendar days of the entry of the Final

Judgment, to engage an independent compliance monitor (the “Monitor”) not unacceptable to the staff of the Securities and Exchange Commission for a period of three (3) years from the date of engagement to review and evaluate Defendant’s internal controls, recordkeeping, and financial

reporting policies as they relate to Defendant’s current and ongoing compliance with Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B)] and to adopt the Monitor’s recommendations.

3. Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

4. Defendant waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

5. Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendant to enter into this Consent.

6. Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set forth therein.

7. Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

8. Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms and conditions.  Defendant further agrees to provide counsel for the Commission,

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within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment.

9.           Consistent with 17 C.F.R. § 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding.  Defendant acknowledges that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability.Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein.  Defendant further acknowledges that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations.  Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization.  This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding.  In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that it shall not be permitted to contest the factual allegations of the complaint in this action.

10.           Defendant understands and agrees to comply with the Commission's policy “not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegation in the complaint or order for proceedings.”  17 C.F.R. §202.5.  In compliance with this policy, Defendant agrees: (i) not to take any action or to make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or

3

creating the impression that the complaint is without factual basis; and (ii) that upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the complaint.  If Defendant breaches this agreement, the Commission may petition the Court to vacate the Final Judgment and restore this action to its active docket.  Nothing in this paragraph affects Defendant’s: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings in which the Commission is not a party.

11.           Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States acting in his or her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees, expenses, or costs expended by Defendant to defend against this action.  For these purposes, Defendant agrees that Defendant is not the prevailing party in this action since the parties have reached a good faith settlement.

12.           Defendant agrees that the Commission may present the Final Judgment to the Court for signature and entry without further notice.

13.           Defendant agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.

	Universal Corporation
Dated: July 19, 2010	By:	/s/ Preston D. Wigner
		Preston D. Wigner, Vice President,
		General Counsel, Secretary & Chief Compliance Officer
		9201 Forest Hill Avenue
		Richmond, VA 23235

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On July 19, 2010, Preston D. Wigner, a person known to me, personally appeared before me and acknowledged executing the foregoing Consent with full authority to do so on behalf of Universal Corporation as its General Counsel.

  /s/ Terry L. Marks

Notary Public

Commission expires:  October 31, 2011

 [Notary Seal]

Approved as to form:

/s/ Patrick R. Hanes

Patrick R. Hanes, Esq.

Williams Mullen

200 South 10th Street, Suite 1600

Richmond, Virginia 23219

Counsel for Defendant

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

SECURITIES AND EXCHANGE COMMISSION
		Plaintiff,
	v.
UNIVERSAL CORPORATION
		Defendant.

FINAL JUDGMENT AS TO DEFENDANT UNIVERSAL CORPORATION

The Securities and Exchange Commission having filed a Complaint and Defendant Universal Corporation having entered a general appearance; consented to the Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:

I.

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section 30A of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78dd-1], by acting on behalf of any issuer which has a class of securities registered pursuant to Section 12 of the Exchange Act or which is required to file reports under Section 15(d) of the Exchange Act and

making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to:

(1)           any foreign official for purposes of:

(A)(i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or  instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person;

(2)           any foreign political party or official thereof or any candidate for foreign political office for purpose of:

(A)(i) influencing any act or decision of such party, official, or candidate in its or in his official capacity, (ii) inducing such party, official, or candidate to do or omit to do any act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist any issuer in obtaining or retaining business for or with, or directing business to, any person; or

(3)           any person, while knowing that all or a portion of such money or thing of

2

value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office for purposes of:

(A)(i) influencing any act or decision of such foreign official, political party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candidate to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist any issuer in obtaining or retaining business for or with, or directing business to, any person.

II.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and Defendant’s agents, servants, employees, attorneys, and all those persons in active concert and participation with them who receive actual notice of this Judgment by personal service or otherwise, and each of them, be and they hereby are permanently restrained and enjoined from violating Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)] by:

(1) failing to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflect the transactions and

3

dispositions of the assets of the issuer; or

(2) failing to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recorded as necessary (a) to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements and (b) to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

III.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREEDthat Defendant engage an independent compliance monitor (“Monitor”) not unacceptable to the staff of the Securities and Exchange Commission (“SEC”) within sixty (60) calendar days of the entry of the Final Judgment.  Defendant shall engage the Monitor for a period of three (3) years from the date of engagement.  Defendant agrees that, in the event that the SEC determines, in its sole discretion, that Defendant has knowingly violated any provision of the Consent attached hereto and incorporated by reference herein (the “Consent”) or the Final Judgment, an extension or extensions of the Monitor’s term may be imposed by the SEC, in its sole discretion, f or up to a total additional time period of one (1) year.  The Monitor shall review and evaluate, in the

4

manner set forth in the paragraphs below, Defendant’s internal controls, recordkeeping, and financial reporting policies as they relate to Defendant’s current and ongoing compliance with the books and records, internal accounting controls, and anti-bribery provisions of the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§78dd-1, et seq. (the “FCPA”), codified at Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B) and to make recommendations.  This review and evaluation shall include an assessment of the policies and procedures as actually implemented.  Defendant shall exclusively bear all costs, including compensation and expenses, associated with the retention of the Monitor.   Within thirty (30) calendar days after entry of the Final Judgment, and after consultation with the SEC, Defendant shall recommend to the SEC three qualified candidates to serve as the Monitor.

The Monitor candidates shall have, at a minimum, the following qualifications:  demonstrated expertise with respect to the FCPA, including experience counseling on FCPA issues; experience designing and/or reviewing corporate compliance policies, procedures, and internal controls, including FCPA-specific policies, procedures and internal controls; ability to access and deploy resources as necessary to discharge the Monitor’s duties as described herein; and independence from Defendant to ensure effective and impartial performance of the Monitor’s duties as described herein.

Defendant shall require the Monitor to enter into an agreement with Defendant providing that, for the period of the three (3) year engagement and for a period of two (2) years from completion of the engagement, the Monitor shall not enter into any additional employment, consultant, attorney-client, auditing, or other professional relationship with Defendant or any of

5

its affiliates, directors, officers, employees, or agents acting in their capacity as such.  The agreement shall also provide that the Monitor will require any firm with which the Monitor is affiliated or of which the Monitor is a member, and any person the Monitor engages to assist in the performance of the Monitor’s duties under the Consent and Final Judgment shall not, without prior written consent of the SEC, enter into any employment, consultant, agency, attorney-client, auditing, or other professional relationship with Defendant or any of Defendant’s affiliates, directors, officers, or employees, or agents acting in their capacity as such for the period of the engagement and for a period of two (2) years after the engagement.  To ensure the independence of the Monitor, Defendant shall not have the authority to terminate the Monitor without the prior written approval of the SEC.

The retention agreement between Defendant and the Monitor shall reference the Final Judgment and include the Final Judgment as an attachment so the Monitor is fully apprised of the Monitor’s duties and/or responsibilities.

Defendant shall cooperate fully with the Monitor and the Monitor shall have the authority to take such reasonable steps as, in the Monitor’s view, may be necessary to be fully informed about Defendant’s compliance program within the scope of the Monitor’s duties and/or responsibilities under the Final Judgment.  To that end, the Defendant shall provide the Monitor with access to all information, documents, records, facilities, and/or employees, as requested by the Monitor, that fall within the scope of the duties and/or responsibilities of the Monitor under the Final Judgment.  In the event that Defendant, or any entity or person working directly or indirectly for Defendant, refuses to provide information necessary for the performance of the Monitor’s responsibilities, the Monitor shall promptly disclose that fact to the SEC.  Defendant

6

shall not take any action to retaliate against the Monitor for any such disclosures or for any other reason.  In the event that Defendant seeks to withhold from the Monitor access to information, documents, records, facilities, and/or employees of Defendant on grounds that the information, documents, records, facilities and/or employees are protected by the attorney-client privilege or the attorney work product doctrine, Defendant shall work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If the matter cannot be resolved, the Defendant shall promptly provide written notice of the documents or information over which protection or pr ivilege is claimed to the Monitor and the SEC.  Such notice shall include a general description of the nature of the information, documents, records, facilities, and/or employees that are being withheld, as well as the basis for the claim.

Defendant and Monitor shall agree that the Monitor is an independent third-party and not an employee or agent of the Defendant.  In addition, Defendant and Monitor agree that no attorney-client relationship shall be formed between Defendant and the Monitor.

The Monitor shall assess whether Defendant’s existing policies, procedures, and internal controls are reasonably designed to detect and prevent violations of the FCPA; assess, monitor, and evaluate Defendant’s compliance with the terms of the Final Judgment; oversee Defendant’s implementation of, and adherence to, all existing, modified, or new policies, procedures, or internal controls relating to FCPA compliance; and ensure that the policies, procedures, or internal controls relating to FCPA compliance are appropriately designed to accomplish their goals.

During the three (3) year term, the Monitor shall conduct an initial review and prepare an initial report, followed by two (2) follow-up reviews and reports, as described below:

7

With respect to each of the three (3) reviews, after consultation with Defendant and the SEC, the Monitor shall prepare a written work plan for each review that shall be submitted in advance to Defendant and the SEC for comment before commencing each review.  The Defendant’s comments shall be provided to the Monitor no more than thirty (30) calendar days after receipt of the written work plan.  In order to conduct an effective initial review and to understand fully any existing deficiencies in policies, procedures, and internal controls related to the FCPA, the Monitor’s initial work plan shall include such steps as are reasonably necessary to develop an understanding of the facts and circumstances surrounding any violations that may have occurred and to assess the effectiveness of De fendant’s existing policies, procedures, and internal controls that were designed to detect, deter, and prevent violations of the FCPA.  Any dispute between Defendant and the Monitor with respect to the work plan shall be decided by the SEC in its sole discretion.

In connection with the initial review, the Monitor shall issue a written report within one hundred twenty (120) calendar days of the engagement of the Monitor, setting forth the Monitor’s assessment and making recommendations reasonably designed to improve the policies and procedures of Defendant for ensuring compliance with the FCPA.  The Monitor shall provide the report to Defendant’s Board of Directors and contemporaneously transmit copies to Charles E. Cain, Assistant Director, Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549.  The Monitor may extend the time period for issuance of the report with prior written approval of the SEC.

Within one-hundred twenty (120) calendar days after receiving the Monitor’s report, Defendant shall adopt the recommendations set forth in the report; provided, however, that

8

within sixty (60) calendar days after receiving the report, Defendant shall advise the Monitor and the SEC in writing of any recommendations that Defendant considers unduly burdensome, impractical, costly, or otherwise inadvisable.  With respect to any recommendation that Defendant considers unduly burdensome, impractical, costly, or otherwise inadvisable, Defendant shall propose in writing an alternative policy, procedure, or system designed to achieve the same objective or purpose.  Defendant shall explain why the objective or purpose of such recommendation is unduly burdensome, impractical, costly, or otherwise inadvisable.  As to any recommendation on which Defendant and the Monitor do not agree, such parties shall attempt in good faith to reach an agreement within forty-five (45) calendar days after Defendant serves the written proposal.  In the event the Defendant and the Monitor are unable to agree on an alternative proposal, the Defendant shall promptly consult with the SEC.  The SEC may make a determination as to whether Defendant shall adopt the Monitor’s recommendation or an alternative proposal, and Defendant shall abide by the SEC’s determination.  Pending such determination, Defendant shall not be required to implement any contested recommendation(s).  With respect to any recommendation that the Monitor determines cannot reasonably be implemented within one hundred and twenty (120) calendar days after receiving the report, the Monitor may extend the time period for implementation with prior written approval of the SEC.

The Monitor shall undertake two (2) follow-up reviews to further monitor and assess whether the policies and procedures of Defendant are reasonably designed to detect, deter, and prevent violations of the FCPA.

Within sixty (60) calendar days of initiating each follow-up review, the Monitor shall: (A) complete the review; (B) certify whether the anti-bribery compliance program of the

9

Defendant, including the policies and procedures, is appropriately designed and implemented to ensure compliance with the FCPA; and (C) report on the Monitor’s findings in the same fashion as with respect to the initial review.

The first follow-up review and report shall be completed by one (1) year after the initial review.  The second follow-up review and report shall be completed by one (1) year after the completion of the first follow-up review.  

The Monitor may extend the time period for submission of the follow-up reports with prior written approval of the SEC.

The Defendant shall adopt the recommendations set forth in the follow-up reports not inconsistent with the terms of the Final Judgment and no later than sixty (60) days from the receipt of the follow-up reports.

In undertaking the assessments and reviews described above, the Monitor shall formulate conclusions based on, among other things:  (a) inspection of relevant documents, including the policies and procedures relating to Defendant’s FCPA and anti-corruption compliance program;  (b) onsite observations of Defendant’s systems and procedures, including Defendant’s policies, record-keeping and internal audit procedures, and internal controls; (c) meetings with, and interviews of, relevant employees, officers, directors, and other persons at mutually convenient times and places; and (d) analyses, studies, and testing of Defendant’s FCPA and anti-corruption compliance program.

Should the Monitor, during the course of the Monitor’s engagement, discover credible evidence that questionable or corrupt payments or questionable or corrupt transfers of property or other interests may have been offered, promised, paid, or authorized by any company, entity,

10

person, or Defendant, or any entity or person working directly or indirectly for Defendant, or that any books, records, or accounts have been falsified, or that Defendant has failed to devise and maintain a system of internal accounting controls, the Monitor shall promptly report such conduct to Defendant’s General Counsel, to Defendant’s Audit Committee, to Defendant’s Compliance Committee and to Defendant’s outside counsel, and to the SEC, unless the Monitor believes, in the exercise of the Monitor’s discretion, that such disclosure should only be made directly to the SEC.  The Monitor shall report any other violations of the federal securities laws discovered in the course of performing the Monitor’s duties in the same manner as described above.

IV.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $3,125,905, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $1,455,371.51.  Defendant shall satisfy this obligation by paying $4,581,276.51 within 14 days after entry of this Final Judgment by wire transfer, certified check, bank cashier’s check, or United States postal money order payable to the Securities and Exchange Commission.  Payment by certified check, bank cashier’s check, or United States postal money order shall be delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, a nd shall be accompanied by a letter identifying Universal Corporation as a defendant in this action; setting forth the title and civil action number of this action and the name of this Court; and specifying that payment is made pursuant to this Final Judgment.  Defendant shall simultaneously transmit evidence of

11

payment to the Commission’s counsel in this action, Erica Y. Williams, Assistant Chief Litigation Counsel, Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549. Defendant shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC § 1961.  The Commission shall remit the funds paid pursuant to this paragraph to the United States Treasury.

V.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein with the same force and effect as if fully set forth herein, and that Defendant shall comply with all of the undertakings and agreements set forth therein.

VI.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.

Dated:  _______, 2010
	UNITED STATES DISTRICT JUDGE

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EX-99.1 5 ex99-1.htm PRESS RELEASE BY THE COMPANY

Exhibit 99.1

P.O. Box 25099 Ÿ Richmond, VA 23260 Ÿ Phone: (804) 359-9311 Ÿ Fax: (804) 254-3584

PRESS RELEASE

CONTACT:	Karen M. L. Whelan		RELEASE:	Immediately
	Phone:	(804) 359-9311
	Fax:	(804) 254-3584
	Email:	investor@universalleaf.com

Universal Corporation Settles FCPA Matter

Richmond, VA, August 6, 2010 / PRNEWSWIRE

Universal Corporation (NYSE:UVV) announced today that it has finalized agreements with the United States Department of Justice and the U.S. Securities and Exchange Commission resolving the investigations that commenced with the self-reporting by the Company of certain payments to foreign government officials and other individuals in connection with business activities in several countries.  The resolution includes aggregate payments to the Department of Justice and the Securities and Exchange Commission of $8.98 million.  As previously reported, the Company has already accrued amounts from time to time since the matter arose that are adequate to cover these obligations, so the resolution will not require any charge to fiscal year 2011 financial results.

Under the Company’s agreements with the Department of Justice:

·   The Company’s Brazilian subsidiary pled guilty to Foreign Corrupt Practices Act anti-bribery provisions and conspiracy ending in 2005 and will pay a fine of $4.40 million.

·   The Company will retain an independent corporate monitor to review its compliance, bookkeeping, and internal control standards and procedures and will adopt new or modify existing policies where appropriate.

·   The Department of Justice will not prosecute the Company if, for a period of three years, the Company meets its obligations set forth in a non-prosecution agreement between the Company and the Department of Justice.

Pursuant to the Company’s agreements with the Securities and Exchange Commission, the Company consented to the entry of a final judgment with respect to the Securities and

-M  O  R  E-

Universal Corporation

Page 2 

Exchange Commission’s investigation. Under the final judgment, the Company is permanently enjoined from violating the anti-bribery, internal controls, and books and records provisions of the Foreign Corrupt Practices Act, and is required to disgorge $4.58 million in profits and prejudgment interest. That amount is included in the $8.98 million in aggregate payments mentioned earlier. In addition, Universal has agreed with the SEC to retain the independent corporate monitor under terms similar to the Company's agreement with the Department of Justice.

The agreements with the Department of Justice and the Securities and Exchange Commission have been approved by the Boards of Directors of the Company and its Brazilian subsidiary. The agreements conclude the independent investigation by Universal Corporation’s Audit Committee and the outside law firm that was retained by the Audit Committee to assist in the investigation of these matters.

George C. Freeman, III, Universal’s Chairman, President, and Chief Executive Officer, said, “Universal prides itself on conducting business with honesty and integrity. These past payments were - and are - contrary to the policies and standards of Universal and its subsidiaries. We have absolutely no tolerance for this type of activity. Our Audit Committee conducted a rigorous and thorough investigation, we voluntarily reported this matter to federal authorities, and we have fully cooperated with federal authorities at each step of the investigation.  We have since taken steps to strengthen our culture of ethical and legal compliance, and our efforts are supported by our operations around the world. Our regional management is fully committed to our culture.”

Since its discovery of the conduct at issue, Universal has instituted remedial efforts, including updating and improving its internal controls and compliance resources, policies, and procedures. The Company has named a Chief Compliance Officer, and its compliance program includes enhanced training of the Company’s employees, the expansion of existing programs, and formal due diligence programs. “Our aim,” said Mr. Freeman, “is to continue to build on these improvements to our compliance program, and to maintain the high ethical standards and culture that our shareholders, our customers, and our employees expect. Conducting our business with integrity is essential to maintaining our status as the leader in our industry.”

Headquartered in Richmond, Virginia, Universal Corporation is the world’s leading tobacco merchant and processor and conducts business in more than 30 countries. Its revenues from continuing operations for the fiscal year ended March 31, 2010, were $2.5 billion. For more information on Universal Corporation, visit its web site at www.universalcorp.com.

# # #

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EX-10.3

Exhibit 10.3

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

SECURITIES AND EXCHANGE COMMISSION
		Plaintiff,
	v.
UNIVERSAL CORPORATION
		Defendant.

CONSENT OF DEFENDANT UNIVERSAL CORPORATION

1.           Defendant Universal Corporation (“Defendant”) waives service of a summons and the complaint in this action, enters a general appearance, and admits the Court’s jurisdiction over Defendant and over the subject matter of this action.

2.           Without admitting or denying the allegations of the complaint (except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other things:

(a)           Permanently restrains and enjoins Defendant from violation of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B)];

(b)           Orders Defendant to pay disgorgement in the amount of $3,125,905, plus prejudgment interest thereon in the amount of $1,455,371.51; and

(c)           Orders Defendant, within 60 calendar days of the entry of the Final

Judgment, to engage an independent compliance monitor (the “Monitor”) not unacceptable to the staff of the Securities and Exchange Commission for a period of three (3) years from the date of engagement to review and evaluate Defendant’s internal controls, recordkeeping, and financial

reporting policies as they relate to Defendant’s current and ongoing compliance with Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B)] and to adopt the Monitor’s recommendations.

3. Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

4. Defendant waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

5. Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendant to enter into this Consent.

6. Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set forth therein.

7. Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

8. Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms and conditions.  Defendant further agrees to provide counsel for the Commission,

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within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment.

9.           Consistent with 17 C.F.R. § 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding.  Defendant acknowledges that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability.Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein.  Defendant further acknowledges that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations.  Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization.  This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding.  In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that it shall not be permitted to contest the factual allegations of the complaint in this action.

10.           Defendant understands and agrees to comply with the Commission's policy “not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegation in the complaint or order for proceedings.”  17 C.F.R. §202.5.  In compliance with this policy, Defendant agrees: (i) not to take any action or to make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or

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creating the impression that the complaint is without factual basis; and (ii) that upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the complaint.  If Defendant breaches this agreement, the Commission may petition the Court to vacate the Final Judgment and restore this action to its active docket.  Nothing in this paragraph affects Defendant’s: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings in which the Commission is not a party.

11.           Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States acting in his or her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees, expenses, or costs expended by Defendant to defend against this action.  For these purposes, Defendant agrees that Defendant is not the prevailing party in this action since the parties have reached a good faith settlement.

12.           Defendant agrees that the Commission may present the Final Judgment to the Court for signature and entry without further notice.

13.           Defendant agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.

	Universal Corporation
Dated: July 19, 2010	By:	/s/ Preston D. Wigner
		Preston D. Wigner, Vice President,
		General Counsel, Secretary & Chief Compliance Officer
		9201 Forest Hill Avenue
		Richmond, VA 23235

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On July 19, 2010, Preston D. Wigner, a person known to me, personally appeared before me and acknowledged executing the foregoing Consent with full authority to do so on behalf of Universal Corporation as its General Counsel.

  /s/ Terry L. Marks

Notary Public

Commission expires:  October 31, 2011

 [Notary Seal]

Approved as to form:

/s/ Patrick R. Hanes

Patrick R. Hanes, Esq.

Williams Mullen

200 South 10th Street, Suite 1600

Richmond, Virginia 23219

Counsel for Defendant

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

SECURITIES AND EXCHANGE COMMISSION
		Plaintiff,
	v.
UNIVERSAL CORPORATION
		Defendant.

FINAL JUDGMENT AS TO DEFENDANT UNIVERSAL CORPORATION

The Securities and Exchange Commission having filed a Complaint and Defendant Universal Corporation having entered a general appearance; consented to the Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:

I.

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section 30A of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78dd-1], by acting on behalf of any issuer which has a class of securities registered pursuant to Section 12 of the Exchange Act or which is required to file reports under Section 15(d) of the Exchange Act and

making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to:

(1)           any foreign official for purposes of:

(A)(i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or  instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person;

(2)           any foreign political party or official thereof or any candidate for foreign political office for purpose of:

(A)(i) influencing any act or decision of such party, official, or candidate in its or in his official capacity, (ii) inducing such party, official, or candidate to do or omit to do any act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist any issuer in obtaining or retaining business for or with, or directing business to, any person; or

(3)           any person, while knowing that all or a portion of such money or thing of

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value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office for purposes of:

(A)(i) influencing any act or decision of such foreign official, political party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candidate to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist any issuer in obtaining or retaining business for or with, or directing business to, any person.

II.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and Defendant’s agents, servants, employees, attorneys, and all those persons in active concert and participation with them who receive actual notice of this Judgment by personal service or otherwise, and each of them, be and they hereby are permanently restrained and enjoined from violating Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)] by:

(1) failing to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflect the transactions and

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dispositions of the assets of the issuer; or

(2) failing to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recorded as necessary (a) to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements and (b) to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

III.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREEDthat Defendant engage an independent compliance monitor (“Monitor”) not unacceptable to the staff of the Securities and Exchange Commission (“SEC”) within sixty (60) calendar days of the entry of the Final Judgment.  Defendant shall engage the Monitor for a period of three (3) years from the date of engagement.  Defendant agrees that, in the event that the SEC determines, in its sole discretion, that Defendant has knowingly violated any provision of the Consent attached hereto and incorporated by reference herein (the “Consent”) or the Final Judgment, an extension or extensions of the Monitor’s term may be imposed by the SEC, in its sole discretion, f or up to a total additional time period of one (1) year.  The Monitor shall review and evaluate, in the

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manner set forth in the paragraphs below, Defendant’s internal controls, recordkeeping, and financial reporting policies as they relate to Defendant’s current and ongoing compliance with the books and records, internal accounting controls, and anti-bribery provisions of the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§78dd-1, et seq. (the “FCPA”), codified at Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78dd-1, 78m(b)(2)(A), and 78m(b)(2)(B) and to make recommendations.  This review and evaluation shall include an assessment of the policies and procedures as actually implemented.  Defendant shall exclusively bear all costs, including compensation and expenses, associated with the retention of the Monitor.   Within thirty (30) calendar days after entry of the Final Judgment, and after consultation with the SEC, Defendant shall recommend to the SEC three qualified candidates to serve as the Monitor.

The Monitor candidates shall have, at a minimum, the following qualifications:  demonstrated expertise with respect to the FCPA, including experience counseling on FCPA issues; experience designing and/or reviewing corporate compliance policies, procedures, and internal controls, including FCPA-specific policies, procedures and internal controls; ability to access and deploy resources as necessary to discharge the Monitor’s duties as described herein; and independence from Defendant to ensure effective and impartial performance of the Monitor’s duties as described herein.

Defendant shall require the Monitor to enter into an agreement with Defendant providing that, for the period of the three (3) year engagement and for a period of two (2) years from completion of the engagement, the Monitor shall not enter into any additional employment, consultant, attorney-client, auditing, or other professional relationship with Defendant or any of

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its affiliates, directors, officers, employees, or agents acting in their capacity as such.  The agreement shall also provide that the Monitor will require any firm with which the Monitor is affiliated or of which the Monitor is a member, and any person the Monitor engages to assist in the performance of the Monitor’s duties under the Consent and Final Judgment shall not, without prior written consent of the SEC, enter into any employment, consultant, agency, attorney-client, auditing, or other professional relationship with Defendant or any of Defendant’s affiliates, directors, officers, or employees, or agents acting in their capacity as such for the period of the engagement and for a period of two (2) years after the engagement.  To ensure the independence of the Monitor, Defendant shall not have the authority to terminate the Monitor without the prior written approval of the SEC.

The retention agreement between Defendant and the Monitor shall reference the Final Judgment and include the Final Judgment as an attachment so the Monitor is fully apprised of the Monitor’s duties and/or responsibilities.

Defendant shall cooperate fully with the Monitor and the Monitor shall have the authority to take such reasonable steps as, in the Monitor’s view, may be necessary to be fully informed about Defendant’s compliance program within the scope of the Monitor’s duties and/or responsibilities under the Final Judgment.  To that end, the Defendant shall provide the Monitor with access to all information, documents, records, facilities, and/or employees, as requested by the Monitor, that fall within the scope of the duties and/or responsibilities of the Monitor under the Final Judgment.  In the event that Defendant, or any entity or person working directly or indirectly for Defendant, refuses to provide information necessary for the performance of the Monitor’s responsibilities, the Monitor shall promptly disclose that fact to the SEC.  Defendant

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shall not take any action to retaliate against the Monitor for any such disclosures or for any other reason.  In the event that Defendant seeks to withhold from the Monitor access to information, documents, records, facilities, and/or employees of Defendant on grounds that the information, documents, records, facilities and/or employees are protected by the attorney-client privilege or the attorney work product doctrine, Defendant shall work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If the matter cannot be resolved, the Defendant shall promptly provide written notice of the documents or information over which protection or pr ivilege is claimed to the Monitor and the SEC.  Such notice shall include a general description of the nature of the information, documents, records, facilities, and/or employees that are being withheld, as well as the basis for the claim.

Defendant and Monitor shall agree that the Monitor is an independent third-party and not an employee or agent of the Defendant.  In addition, Defendant and Monitor agree that no attorney-client relationship shall be formed between Defendant and the Monitor.

The Monitor shall assess whether Defendant’s existing policies, procedures, and internal controls are reasonably designed to detect and prevent violations of the FCPA; assess, monitor, and evaluate Defendant’s compliance with the terms of the Final Judgment; oversee Defendant’s implementation of, and adherence to, all existing, modified, or new policies, procedures, or internal controls relating to FCPA compliance; and ensure that the policies, procedures, or internal controls relating to FCPA compliance are appropriately designed to accomplish their goals.

During the three (3) year term, the Monitor shall conduct an initial review and prepare an initial report, followed by two (2) follow-up reviews and reports, as described below:

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With respect to each of the three (3) reviews, after consultation with Defendant and the SEC, the Monitor shall prepare a written work plan for each review that shall be submitted in advance to Defendant and the SEC for comment before commencing each review.  The Defendant’s comments shall be provided to the Monitor no more than thirty (30) calendar days after receipt of the written work plan.  In order to conduct an effective initial review and to understand fully any existing deficiencies in policies, procedures, and internal controls related to the FCPA, the Monitor’s initial work plan shall include such steps as are reasonably necessary to develop an understanding of the facts and circumstances surrounding any violations that may have occurred and to assess the effectiveness of De fendant’s existing policies, procedures, and internal controls that were designed to detect, deter, and prevent violations of the FCPA.  Any dispute between Defendant and the Monitor with respect to the work plan shall be decided by the SEC in its sole discretion.

In connection with the initial review, the Monitor shall issue a written report within one hundred twenty (120) calendar days of the engagement of the Monitor, setting forth the Monitor’s assessment and making recommendations reasonably designed to improve the policies and procedures of Defendant for ensuring compliance with the FCPA.  The Monitor shall provide the report to Defendant’s Board of Directors and contemporaneously transmit copies to Charles E. Cain, Assistant Director, Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549.  The Monitor may extend the time period for issuance of the report with prior written approval of the SEC.

Within one-hundred twenty (120) calendar days after receiving the Monitor’s report, Defendant shall adopt the recommendations set forth in the report; provided, however, that

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within sixty (60) calendar days after receiving the report, Defendant shall advise the Monitor and the SEC in writing of any recommendations that Defendant considers unduly burdensome, impractical, costly, or otherwise inadvisable.  With respect to any recommendation that Defendant considers unduly burdensome, impractical, costly, or otherwise inadvisable, Defendant shall propose in writing an alternative policy, procedure, or system designed to achieve the same objective or purpose.  Defendant shall explain why the objective or purpose of such recommendation is unduly burdensome, impractical, costly, or otherwise inadvisable.  As to any recommendation on which Defendant and the Monitor do not agree, such parties shall attempt in good faith to reach an agreement within forty-five (45) calendar days after Defendant serves the written proposal.  In the event the Defendant and the Monitor are unable to agree on an alternative proposal, the Defendant shall promptly consult with the SEC.  The SEC may make a determination as to whether Defendant shall adopt the Monitor’s recommendation or an alternative proposal, and Defendant shall abide by the SEC’s determination.  Pending such determination, Defendant shall not be required to implement any contested recommendation(s).  With respect to any recommendation that the Monitor determines cannot reasonably be implemented within one hundred and twenty (120) calendar days after receiving the report, the Monitor may extend the time period for implementation with prior written approval of the SEC.

The Monitor shall undertake two (2) follow-up reviews to further monitor and assess whether the policies and procedures of Defendant are reasonably designed to detect, deter, and prevent violations of the FCPA.

Within sixty (60) calendar days of initiating each follow-up review, the Monitor shall: (A) complete the review; (B) certify whether the anti-bribery compliance program of the

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Defendant, including the policies and procedures, is appropriately designed and implemented to ensure compliance with the FCPA; and (C) report on the Monitor’s findings in the same fashion as with respect to the initial review.

The first follow-up review and report shall be completed by one (1) year after the initial review.  The second follow-up review and report shall be completed by one (1) year after the completion of the first follow-up review.  

The Monitor may extend the time period for submission of the follow-up reports with prior written approval of the SEC.

The Defendant shall adopt the recommendations set forth in the follow-up reports not inconsistent with the terms of the Final Judgment and no later than sixty (60) days from the receipt of the follow-up reports.

In undertaking the assessments and reviews described above, the Monitor shall formulate conclusions based on, among other things:  (a) inspection of relevant documents, including the policies and procedures relating to Defendant’s FCPA and anti-corruption compliance program;  (b) onsite observations of Defendant’s systems and procedures, including Defendant’s policies, record-keeping and internal audit procedures, and internal controls; (c) meetings with, and interviews of, relevant employees, officers, directors, and other persons at mutually convenient times and places; and (d) analyses, studies, and testing of Defendant’s FCPA and anti-corruption compliance program.

Should the Monitor, during the course of the Monitor’s engagement, discover credible evidence that questionable or corrupt payments or questionable or corrupt transfers of property or other interests may have been offered, promised, paid, or authorized by any company, entity,

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person, or Defendant, or any entity or person working directly or indirectly for Defendant, or that any books, records, or accounts have been falsified, or that Defendant has failed to devise and maintain a system of internal accounting controls, the Monitor shall promptly report such conduct to Defendant’s General Counsel, to Defendant’s Audit Committee, to Defendant’s Compliance Committee and to Defendant’s outside counsel, and to the SEC, unless the Monitor believes, in the exercise of the Monitor’s discretion, that such disclosure should only be made directly to the SEC.  The Monitor shall report any other violations of the federal securities laws discovered in the course of performing the Monitor’s duties in the same manner as described above.

IV.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $3,125,905, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $1,455,371.51.  Defendant shall satisfy this obligation by paying $4,581,276.51 within 14 days after entry of this Final Judgment by wire transfer, certified check, bank cashier’s check, or United States postal money order payable to the Securities and Exchange Commission.  Payment by certified check, bank cashier’s check, or United States postal money order shall be delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, a nd shall be accompanied by a letter identifying Universal Corporation as a defendant in this action; setting forth the title and civil action number of this action and the name of this Court; and specifying that payment is made pursuant to this Final Judgment.  Defendant shall simultaneously transmit evidence of

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payment to the Commission’s counsel in this action, Erica Y. Williams, Assistant Chief Litigation Counsel, Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549. Defendant shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC § 1961.  The Commission shall remit the funds paid pursuant to this paragraph to the United States Treasury.

V.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein with the same force and effect as if fully set forth herein, and that Defendant shall comply with all of the undertakings and agreements set forth therein.

VI.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.

Dated:  _______, 2010
	UNITED STATES DISTRICT JUDGE

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EX-99.1

Exhibit 99.1

P.O. Box 25099 Ÿ Richmond, VA 23260 Ÿ Phone: (804) 359-9311 Ÿ Fax: (804) 254-3584

PRESS RELEASE

CONTACT:	Karen M. L. Whelan		RELEASE:	Immediately
	Phone:	(804) 359-9311
	Fax:	(804) 254-3584
	Email:	investor@universalleaf.com

Universal Corporation Settles FCPA Matter

Richmond, VA, August 6, 2010 / PRNEWSWIRE

Universal Corporation (NYSE:UVV) announced today that it has finalized agreements with the United States Department of Justice and the U.S. Securities and Exchange Commission resolving the investigations that commenced with the self-reporting by the Company of certain payments to foreign government officials and other individuals in connection with business activities in several countries.  The resolution includes aggregate payments to the Department of Justice and the Securities and Exchange Commission of $8.98 million.  As previously reported, the Company has already accrued amounts from time to time since the matter arose that are adequate to cover these obligations, so the resolution will not require any charge to fiscal year 2011 financial results.

Under the Company’s agreements with the Department of Justice:

·   The Company’s Brazilian subsidiary pled guilty to Foreign Corrupt Practices Act anti-bribery provisions and conspiracy ending in 2005 and will pay a fine of $4.40 million.

·   The Company will retain an independent corporate monitor to review its compliance, bookkeeping, and internal control standards and procedures and will adopt new or modify existing policies where appropriate.

·   The Department of Justice will not prosecute the Company if, for a period of three years, the Company meets its obligations set forth in a non-prosecution agreement between the Company and the Department of Justice.

Pursuant to the Company’s agreements with the Securities and Exchange Commission, the Company consented to the entry of a final judgment with respect to the Securities and

-M  O  R  E-

Universal Corporation

Page 2 

Exchange Commission’s investigation. Under the final judgment, the Company is permanently enjoined from violating the anti-bribery, internal controls, and books and records provisions of the Foreign Corrupt Practices Act, and is required to disgorge $4.58 million in profits and prejudgment interest. That amount is included in the $8.98 million in aggregate payments mentioned earlier. In addition, Universal has agreed with the SEC to retain the independent corporate monitor under terms similar to the Company's agreement with the Department of Justice.

The agreements with the Department of Justice and the Securities and Exchange Commission have been approved by the Boards of Directors of the Company and its Brazilian subsidiary. The agreements conclude the independent investigation by Universal Corporation’s Audit Committee and the outside law firm that was retained by the Audit Committee to assist in the investigation of these matters.

George C. Freeman, III, Universal’s Chairman, President, and Chief Executive Officer, said, “Universal prides itself on conducting business with honesty and integrity. These past payments were - and are - contrary to the policies and standards of Universal and its subsidiaries. We have absolutely no tolerance for this type of activity. Our Audit Committee conducted a rigorous and thorough investigation, we voluntarily reported this matter to federal authorities, and we have fully cooperated with federal authorities at each step of the investigation.  We have since taken steps to strengthen our culture of ethical and legal compliance, and our efforts are supported by our operations around the world. Our regional management is fully committed to our culture.”

Since its discovery of the conduct at issue, Universal has instituted remedial efforts, including updating and improving its internal controls and compliance resources, policies, and procedures. The Company has named a Chief Compliance Officer, and its compliance program includes enhanced training of the Company’s employees, the expansion of existing programs, and formal due diligence programs. “Our aim,” said Mr. Freeman, “is to continue to build on these improvements to our compliance program, and to maintain the high ethical standards and culture that our shareholders, our customers, and our employees expect. Conducting our business with integrity is essential to maintaining our status as the leader in our industry.”

Headquartered in Richmond, Virginia, Universal Corporation is the world’s leading tobacco merchant and processor and conducts business in more than 30 countries. Its revenues from continuing operations for the fiscal year ended March 31, 2010, were $2.5 billion. For more information on Universal Corporation, visit its web site at www.universalcorp.com.

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