UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q


[ x ]  Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities 
       Exchange Act of 1934

For the Period Ended December 31, 1998

                                       OR

[   ]  Transition Report Pursuant to Section 13 or 15 (d) of the Securities 
       Exchange Act of 1934

For the Transition Period From_________________to___________________


                          Commission file number 1-652

                              UNIVERSAL CORPORATION
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


           VIRGINIA                                              54-0414210
- -------------------------------                               ---------------- 
(State or other jurisdiction of                               (I.R.S. Employer 
 incorporation or organization)                           Identification Number)


   1501 North Hamilton Street, Richmond, Virginia              23230
   ----------------------------------------------              -----
         (Address of principal executive offices)           (Zip code)


Registrant's telephone number, including area code - (804) 359-9311 


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
                                                     Yes     X     No  
                                                         ---------     ---------

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock as of the latest practicable date:


                 Common Stock, No par value - 33,233,334 shares
                       outstanding as of February 8, 1999


<PAGE>

<TABLE>

PART I.  FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three and Six Months Ended December 31, 1998 and 1997
(In thousands of dollars, except per share data)

<CAPTION>


                                                                      Three Months                          Six Months
                                                                 1998              1997              1998               1997
                                                             --------------------------------    ---------------------------------

<S>                                                             <C>               <C>               <C>                <C>       
Sales and other operating revenues                              $1,297,719        $1,265,157        $2,177,004         $2,288,313

Costs and expenses                                                                                                  
    Cost of goods sold                                           1,129,187         1,093,490         1,871,888          1,974,411
    Selling, general and administrative expenses                    85,670            87,142           163,984            165,579
                                                             ---------------------------------------------------------------------
Operating Income                                                    82,862            84,525           141,132            148,323

    Equity in pretax earnings of unconsolidated affiliates           1,212             1,512             1,782              5,257
    Interest expense                                                13,146            15,879            28,688             29,681
                                                             ---------------------------------------------------------------------

Income before income taxes and other items                          70,928            70,158           114,226            123,899
    Income taxes                                                    26,243            28,691            42,264             49,997
    Minority interests                                               3,261             3,382             3,481              3,044
                                                             ---------------------------------------------------------------------


                                                             ---------------------------------------------------------------------
Net Income                                                        $ 41,424          $ 38,085          $ 68,481           $ 70,858
- ----------------------------------------------------------------------------------------------------------------------------------


                                                             ---------------------------------------------------------------------
Earnings per share                                                $   1.23          $   1.08          $   2.02           $   2.02
- ----------------------------------------------------------------------------------------------------------------------------------


                                                             ---------------------------------------------------------------------
Diluted earnings per share                                        $   1.23          $   1.08          $   2.01           $   2.00
- ----------------------------------------------------------------------------------------------------------------------------------


Retained earnings - Beginning of period                                                               $508,137           $424,298
Net income                                                                                              68,481             70,858
Cash dividends declared ($.58 - 1998; $.545 - 1997)                                                    (19,415)           (19,191)
Purchase of common stock                                                                               (54,004)      
                                                             ---------------------------------------------------------------------
Retained earnings - End of period                                                                     $503,199           $475,965
- ----------------------------------------------------------------------------------------------------------------------------------



<PAGE>

Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
                                                                            December 31,                  June 30,
                                                                                1998                        1998
                                                                         --------------------       ----------------------

ASSETS

Current
    Cash and cash equivalents                                                       $ 80,479                     $ 79,835
    Accounts receivable                                                              375,783                      392,821
    Advances to suppliers                                                            107,183                      104,439
    Accounts receivable - unconsolidated affiliates                                   14,323                       49,343
    Inventories - at lower of cost or market:
        Tobacco                                                                      687,424                      541,822
        Lumber and building products                                                  92,089                       97,071
        Agri-products                                                                 67,910                       89,990
        Other                                                                         23,705                       33,162
    Prepaid income taxes                                                               8,139                       18,347
    Deferred income taxes                                                              4,152                        3,794
    Other current assets                                                              18,882                       19,665
                                                                         -------------------------------------------------
        Total current assets                                                       1,480,069                    1,430,289


Property, plant and equipment - at cost
    Land                                                                              31,570                       29,951
    Buildings                                                                        236,871                      219,594
    Machinery and equipment                                                          498,746                      466,177
                                                                         -------------------------------------------------
                                                                                     767,187                      715,722
        Less accumulated depreciation                                                407,905                      385,967
                                                                         -------------------------------------------------
                                                                                     359,282                      329,755
Other assets
    Goodwill                                                                         120,542                      120,889
    Other intangibles                                                                 19,683                       18,586
    Investments in unconsolidated affiliates                                          87,898                       87,052
    Other noncurrent assets                                                           80,344                       70,134
                                                                         -------------------------------------------------
                                                                                     308,467                      296,661
                                                                         -------------------------------------------------
                                                                                  $2,147,818                   $2,056,705
- --------------------------------------------------------------------------------------------------------------------------

See accompanying notes.




<PAGE>

Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
                                                                             December 31,                  June 30,
                                                                                1998                        1998
                                                                         --------------------       ----------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current
    Notes payable and overdrafts                                                 $   525,730                 $    586,450

    Accounts payable                                                                 289,599                      285,994
    Accounts payable - unconsolidated affiliates                                      12,601                       17,116
    Customer advances and deposits                                                   294,898                      125,311
    Accrued compensation                                                              18,786                       24,706
    Income taxes payable                                                              25,459                       27,693
    Current portion of long-term obligations                                          30,841                       34,251
                                                                         -------------------------------------------------
        Total current liabilities                                                  1,197,914                    1,101,521

Long-term obligations                                                                240,881                      263,140

Postretirement benefits other than pensions                                           43,947                       44,535

Other long-term liabilities                                                           49,002                       40,909

Deferred income taxes                                                                 29,248                       27,065

Minority interests                                                                    35,687                       31,668

Shareholders' equity
  Preferred stock, no par value, authorized 5,000,000
     shares none issued or outstanding
  Common stock, no par value, authorized 50,000,000
     shares, issued and outstanding 33,358,984 shares
     (34,866,406 at June 30, 1998)                                                    78,673                       80,122
   Retained earnings                                                                 503,199                      508,137
   Accumulated other comprehensive income                                            (30,733)                     (40,392)
                                                                         -------------------------------------------------
         Total shareholders' equity                                                  551,139                      547,867
                                                                         -------------------------------------------------
                                                                                $  2,147,818                $   2,056,705
- --------------------------------------------------------------------------------------------------------------------------

See accompanying notes.



<PAGE>



Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1998 and 1997
(In thousands of dollars)
<CAPTION>
                                                                          December 31,             December 31,
                                                                             1998                      1997
                                                                     --------------------      --------------------


CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                 $   68,481                $   70,858
   Adjustments to reconcile net income to net                         
     cash provided by operating activities                                        29,000                    30,700
   Changes in operating assets and liabilities net of                                           
    effects from purchase of businesses                                          100,363                   (54,842)
                                                                     ----------------------------------------------
     Net cash provided by operating activities                                   197,844                    46,716

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property, plant and equipment                                    (38,700)                  (51,700)
                                                                     ----------------------------------------------
      Net cash used in investing activities                                      (38,700)                  (51,700)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuance (repayment) of short-term debt, net                                 (60,700)                   52,000
    Repayment of long-term debt                                                  (23,000)                  (20,000)
    Purchases of common stock                                                    (57,700)
    Issuance of common stock                                                       2,300                     5,300
    Dividends paid                                                               (19,400)                  (19,200)
                                                                     ----------------------------------------------
      Net cash provided (used) in financing activities                          (158,500)                   18,100
                                                                     ----------------------------------------------

Net increase in cash and cash equivalents                                            644                    13,116
Cash and cash equivalents at beginning of year                                    79,835                   109,070
                                                                     ----------------------------------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                    $   80,479               $   122,186
- -------------------------------------------------------------------------------------------------------------------
</TABLE>





<PAGE>

Universal Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998


All figures contained herein are unaudited.

1) Universal Corporation, together with its subsidiaries and affiliates, is also
referred to as the Company or Universal.  The operations of domestic and foreign
tobacco,  lumber and building products, and agri-products segments are seasonal.
Therefore, the results of operations for the six-month period ended December 31,
1998,  are not  necessarily  indicative  of results to be expected  for the year
ending June 30, 1999. All adjustments  necessary to state fairly the results for
such period have been included and were of a normal recurring nature.

2).  Contingent  liabilities:   At  December  31,  1998,  total  exposure  under
guarantees  issued for  banking  facilities  of  unconsolidated  affiliates  was
approximately $11 million. Other contingent liabilities  approximate $40 million
and relate  principally to performance bonds and Common Market  Guarantees.  The
Company's  Brazilian  subsidiaries  have been notified by the tax authorities of
proposed  adjustments to the income tax returns filed in prior years.  The total
proposed adjustments, including penalties and interest, approximate $40 million;
however,  recent currency  fluctuations and possible interest rate changes could
affect that amount. The Company believes the Brazilian tax returns filed were in
compliance with the applicable tax code. The numerous proposed  adjustments vary
in  complexity  and  amounts.  While it is not  feasible  to predict the precise
amount or timing of each  proposed  adjustment,  the Company  believes  that the
ultimate  disposition  will not have a material  adverse effect on the Company's
consolidated financial position or results of operations.  At December 31, 1998,
the Company had outstanding  short-term loans of $29 million and long-term loans
of $17.2 million to a farmer cooperative in Argentina.  The loans are secured by
tobacco and liens on real property, processing machinery and equipment and other
assets of the cooperative.  Upon export of the tobacco, which is usually in less
than twelve  months,  the  short-term  loans should be recovered.  The long-term
loans are scheduled for repayment over the next nine years.  Ultimate collection
of the  loans  is  contingent  upon  the  ability  of  the  farmers  to  produce
competitively  priced tobacco suitable for export,  the financial  management of
the cooperative and the value of the assets pledged as security for the loans.

3) As of July 1, 1998,  the Company  adopted  Statement of Financial  Accounting
Standards No.  130,"Reporting  Comprehensive Income" (SFAS 130). The adoption of
this  statement  had no  impact on the  Company's  net  income or  shareholders'
equity.  SFAS 130  establishes  new  rules  for the  reporting  and  display  of
comprehensive  income and its  components.  SFAS 130 requires  foreign  currency
translation adjustments to be included in other comprehensive income. Amounts in
prior year financial statements have been reclassified to conform to SFAS 130.

<TABLE>
<CAPTION>
                                                           Three Months                                 Six Months
Periods ended December 31,                         1998                   1997                   1998                   1997
                                             -----------------      -----------------      -----------------      -----------------
(in millions of dollars)

<S>                                                       <C>                    <C>                    <C>                    <C>
Net income                                                $41                    $38                    $68                    $71

Foreign currency translation adjustment                     8                      2                     10                     (5)
                                             -----------------      -----------------      -----------------      -----------------
Comprehensive income                                      $49                    $40                    $78                    $66
                                             =================      =================      =================      =================


4) The  following  table sets forth the  computation  of earnings  per share and
diluted earnings per share.

                                                            Three Months                                   Six Months
Periods ended December 31,                           1998                  1997                   1998                  1997
                                               -----------------     -----------------      -----------------     -----------------

Net income (in thousands of dollars)                    $41,424               $38,085                $68,481               $70,858

Denominator for earnings per share:
         Weighted average shares                     33,571,791            35,172,358             33,981,541            35,155,747

Effect of dilutive securities:                  
          Employee stock options                         42,832               217,767                 67,693               204,113
                                               -----------------     -----------------      -----------------     -----------------
Denominator for diluted earnings per share           33,614,623            35,390,125             34,049,234            35,359,860

Earnings per share                                        $1.23                 $1.08                  $2.02                 $2.02
                                               =================     =================      =================     =================

Diluted earnings per share                                $1.23                 $1.08                  $2.01                 $2.00
                                               =================     =================      =================     =================
</TABLE>



5)   The lower  estimated  effective  tax rate in fiscal year 1999 is due to the
     anticipated mix of foreign and domestic  earnings and management's  current
     assessment of pending and contested tax issues.

6)   Amounts  in the three- and  six-month  periods  for the last year have been
     reclassified  to be reported on a consistent  basis with the current year's
     presentation.




<PAGE>


I
TEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Liquidity and Capital Resources

         Working  capital  declined  from $329  million at June 30, 1998 to $282
million at December  31,  1998.  Although  the net change in current  assets and
current liabilities was $50 million and $96 million respectively, the components
of working capital on a comparative basis fluctuated to varying degrees compared
to June  30th  primarily  due to the  seasonality  of  tobacco  operations.  The
majority of the increase in current  assets was  reflected in tobacco  inventory
which in turn was supported by an increase in customer  advances.  The increases
primarily  represent  purchases  of crops  that have not been  processed  and/or
shipped due to customer requirements.  In the United States, December 31 tobacco
working capital needs represent a combination of unshipped processed  flue-cured
tobacco  plus  burley  tobacco  purchases  from   mid-November.   A  significant
percentage  of the  Company's  U. S. burley  volume is  purchased  in the second
quarter of the fiscal year.  Processing  begins  shortly  after  purchase of the
tobacco and  continues  through the beginning of the fourth  quarter.  June 30th
usually  represents the low point of U.S.  tobacco working capital needs as most
of the current crop has been shipped. Variations may occur quarter to quarter in
the proportion of notes payable and customer advances that support  inventories,
depending on the Company's and its customers' borrowing  capabilities,  interest
rates and exchange rates.

         Although  working capital changes  reflected a seasonal  increase as is
the  pattern  in the  industry,  the amount of that  increase  in  inventory  is
significantly  lower than that of last year.  The lower  seasonal  investment is
primarily  due to the lower prices of green  tobacco  worldwide  and the smaller
tobacco crop in Brazil.  This lower  inventory  investment is also  reflected in
lower financing requirements.

         The  Company  generally  does not  purchase  tobacco  in the U.S.  on a
speculative  basis.  In a number of foreign  operating  regions  the Company may
advance  funds for the  purchase  of tobacco or in some  cases  advance  farmers
agricultural  materials,  such  as  seed  and  fertilizer.  These  advances  are
recovered from the delivery of tobacco by the respective creditor. See note 2 of
the  Company's  notes to the financial  statements  for  additional  information
regarding advances in Argentina.

         Generally,  the  Company's  international  tobacco  operations  conduct
business  in U.S.  dollars,  thereby  limiting  foreign  exchange  risk to local
production and overhead costs.  Agri-product  and lumber  operations  enter into
foreign  exchange  contracts to hedge firm  purchase and sales  commitments  for
terms of less than six months.  Contracts used to manage foreign  currency risks
are not material. Interest rate risk is limited because customers in the tobacco
business  usually  pre-finance  purchases  or pay market  rates of interest  for
inventory purchased for their accounts.

         The Company  continues to purchase its common stock  pursuant to a $100
million repurchase plan announced in May 1998. In addition, on February 4, 1999,
the Company's Board of Directors  authorized an additional $100 million purchase
through June 30, 2000. As of December 31, 1998,  cumulative share purchases were
2.2 million shares for  approximately  $77.5 million.  The repurchase plans have
been and are expected to continue to be funded from  operating  cash flows.  The
liquidity  and capital  resources of the Company at December  31,  1998,  remain
adequate to support the Company's foreseeable operating needs.

Results of Operations
         'Sales and Other  Operating  Revenues' for the second quarter of fiscal
year 1999 were up slightly and  declined 5% for the six months  compared to last
year. The six-month  decline reflects the impact of shipment timing in the first
quarter primarily due to African and dark tobacco operations.  In addition,  the
Company  contributed  its Turkish  subsidiary  into a joint  venture in oriental
tobaccos  during the fourth quarter last year.  Revenues for lumber and building
products and agri-products were comparable for the six-month periods. `Operating
Income'  for the quarter and the  six-month  period  ended  December  31,  1998,
declined 2% and 5%  respectively  compared to the same periods last year. In the
quarter, Brazilian results were off slightly due to lower volumes handled out of
the smaller crop and similarly, a smaller U.S. flue-cured crop resulted in lower
volumes processed during the quarter.  In addition,  there were quality problems
with crops in Argentina and Kyrgystan,  while shipments of some Oriental tobacco
by the  Company's  joint  venture have been delayed until the second half of the
year. The negative impact of these developments was partially offset by improved
results in Africa and the Far East. For the six months,  these factors  combined
with shipment  timing issues in the first quarter held tobacco  earnings for the
period  below last year's  record pace.  Dark  results in the quarter  improved,
reflecting  the  continued  tight world  market for wrapper  leaf,  and old crop
shipments.  For the six months,  dark tobacco  results were  comparable  to last
year.  Lumber and  building  products  results  were  adversely  affected in the
quarter by excessive rains in Holland that disrupted  construction  activity and
impacted the regional  sales  outlets.  Wholesale  results also  declined due to
margin  pressures.  However,  industrial timber earnings were up due to improved
margins.  Agri-product  results were comparable to last year for the quarter and
six-month period.

         Interest  expense  was  down  from the  comparable  periods  last  year
principally  reflecting  lower  borrowing  levels by the  Company due in part to
lower tobacco leaf prices. The estimated  effective tax rate for fiscal 1999 was
37% compared to 40% in the previous year primarily due to the anticipated mix of
foreign and domestic earnings and management's current assessment of pending and
contested tax issues.

         It should be noted that  although  recent  news from  Brazil has caused
concern  in  world  financial  circles,  the  currency  devaluation  may well be
favorable for the future export of Brazilian tobacco. However, the leaf industry
will  continue to face  uncertainties  in the months  ahead  resulting  from the
aftermath of the tobacco  settlement in the U.S.,  from  continued  economic and
financial  turmoil in a number of Southeast  Asian areas,  Latin America and the
former Soviet Union and from uncommitted inventories held in the trade.

         These factors, which affect the overall industry environment, have thus
far not had a  significant  effect on  Universal's  operations  and  should  not
materially affect earnings for the year.  Management remains confident about the
Company's  strategic  direction.  The Company has  continued to minimize  unsold
inventories.  Therefore,  despite the effect of adverse weather in some areas on
tobacco  production  and on  construction  activity and lumber sales in Holland,
management  still  expects  to  achieve  earnings  for the year form  continuing
operations in line with its previous projections.

         The Company  cautions  readers  that the  statements  contained  herein
regarding   expected   earnings  are   forward-looking   statements  based  upon
management's  current knowledge and assumptions  about future events,  including
anticipated  levels of demand for the  Company's  products and  services,  costs
incurred in providing  these  products and services,  and timing of shipments to
customers.  Lumber  earnings  could  also be  affected  by a number of  factors,
including  currency   translations,   and  unusual  weather  conditions  in  the
Netherlands.  Actual results, therefore could vary from those expected. For more
details on factors  that could affect  expectations,  see the  Company's  Annual
Report  on Form  10-K  for the  year  ended  June 30,  1998,  as filed  with the
Securities and Exchange Commission.

         As reported in the Company's  1998 Annual Report on Form 10-K (refer to
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations, Year 2000), the Company has developed a plan to mitigate the effects
of the year 2000 problem on its  operations.  At the time of the report,  it was
expected  that by December 31, 1998,  all of the  Company's  business  locations
would  complete the  assessment and  remediation  phases of the plan's  internal
aspects.  Currently several business  locations are not expected to complete the
remediation  phase until June 30,  1999.  However,  this delay should not have a
material  adverse effect on the Company's plan. In conjunction  with contingency
planning for the year 2000,  the  Company's  operating  regions  have  submitted
drafts of their contingency plans,  which have identified  potential risk areas,
and the  possibility  of a  disruption  to related  business  operations.  These
contingency plans are currently being reviewed by the Company.

         The Company has revised its total  estimated  costs of  addressing  the
year 2000 problem from $5.7 million to $7.5 million primarily to reflect certain
internal costs that had previously been omitted.  Approximately $6.7 million was
spent through  December 31, 1998.  The Company does not expect the total cost of
preparing  its  internal  technology  for the year  2000 to be  material  to its
consolidated financial condition or results of operations.

         Reference  is made to Items 1 and 7 and the  Notes to the  Consolidated
Financial  Statements in Item 8 of the Company's  Annual Report on Form 10-K for
the fiscal year ended June 30, 1998, and  "Management's  Discussion and Analysis
of Financial Conditions and Results of Operations - Other Information  Regarding
Trends and Management's Actions - Factors That May Affect Future Results" in the
Annual Report  regarding  important  factors that would cause actual  results to
differ materially from those contained in any forward-looking  statement made by
or on behalf of the Company,  including forward-looking  statements contained in
I
tem 2 of this Form 10-Q.








<PAGE>


PART II.          OTHER INFORMATION




Item 6.  Exhibits and Reports on Form 8-K

a.             Exhibits
               --------

4              Form of Common Stock Certificate, effective February 13, 1999.*

10.1           Universal Corporation Amended and Restated 1994 Stock Option Plan
               for Non-Employee Directors. *


10.2           Form of Amendment to Non-Employee  Director  Non-Qualified  Stock
               Option Agreement(s).*

10.3           First   Amendment  to  the   Universal   Leaf  Tobacco   Company,
               Incorporated  Benefit  Restoration Trust, dated January 12, 1999,
               between Universal Leaf Tobacco Company, Incorporated and Wachovia
               Bank, N. A., as trustee. *

10.4           Form of Non-Employee Director Restricted Stock Agreement. *

27             Financial Data Schedule.*

b.             Reports on Form 8-K


*  Filed Herewith




<PAGE>


                                   SIGNATURES


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





Date: February 11, 1999                         UNIVERSAL CORPORATION
                                      ------------------------------------------
                                                     (Registrant)



                                          /s/   Hartwell H. Roper
                                      ------------------------------------------
                                           Hartwell H. Roper, Vice President and
                                                  Chief Financial Officer



                                          /s/   William J. Coronado
                                      ------------------------------------------
                                          William J. Coronado, Vice President
                                                     and Controller
                                             (Principal Accounting Officer)







                                                                       Exhibit 4
                          [FRONT OF STOCK CERTIFICATE]
         COMMON                                               COMMON


                                                THIS CERTIFICATE IS TRANSFERABLE
                                                 IN NEW YORK, NY, BOSTON, MA OR
                                                        WINSTON-SALEM, NC
                INCORPORATED UNDER THE LAWS
              OF THE COMMONWEALTH OF VIRGINIA
                                                   CUSIP 913456 10 9
                                        SEE REVERSE SIDE FOR CERTAIN DEFINITIONS


                              UNIVERSAL CORPORATION

This certifies that

is the owner of

       FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON CAPITAL STOCK OF

Universal  Corporation  (hereinafter  called "the Company")  transferable on the
books of the Corporation in person or by duly authorized attorney upon surrender
of  this  certificate  properly  endorsed.   This  certificate  and  the  shares
represented hereby are subject to all of the terms, conditions,  and limitations
of the Articles of Incorporation of the Company and all amendments thereto. This
certificate  is  not  valid  until  countersigned  by  the  Transfer  Agent  and
registered by the Registrar.
         In Witness  Whereof,  the  Company has caused  this  certificate  to be
sealed  with a  facsimile  of its  corporate  seal and to be  signed by its duly
authorized officers.

Dated:

COUNTERSIGNED AND REGISTERED:                        /S/ Henry H. Harrell
     WACHOVIA BANK, N.A.                                 CHAIRMAN AND
         WINSTON SALEM, NC                               CHIEF EXECUTIVE OFFICER
                                 TRANSFER AGENT
                                  AND REGISTRAR
BY                                                  /S/ J. M. White, III
                         AUTHORIZED
 SIGNATURE            SECRETARY

                                                         [SEAL]




<PAGE>
                           [BACK OF STOCK CERTIFICATE]

                              UNIVERSAL CORPORATION

         THE COMPANY WILL FURNISH TO ANY SHAREHOLDER  UPON REQUEST,  AND WITHOUT
CHARGE,  A FULL STATEMENT OF THE  DESIGNATIONS,  PREFERENCES,  LIMITATIONS,  AND
RELATIVE RIGHTS OF EACH CLASS OF STOCK WHICH THE COMPANY IS AUTHORIZED TO ISSUE.
REQUESTS MAY BE DIRECTED TO UNIVERSAL  CORPORATION,  1501 NORTH HAMILTON STREET,
RICHMOND, VIRGINIA 23230.
         The following  abbreviations,  when used in the inscription on the face
of this certificate,  shall be construed as though they were written out in full
according to applicable laws or regulations:

   TEN COM  - as tenants in common         UNIF GIFT MIN ACT -   Custodian 
                                                            (Cust)       (Minor)
   TEN ENT  - as tenants by the entireties         under Uniform Gifts to Minors

   JT TEN            - as joint tenants with right of
                     survivorship and not as tenants      Act  . . . . . . . . .
                     in common                                    (State)

     Additional abbreviations may also be used though not in the above list.


For value received, __________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
     IDENTIFYING NUMBER OF ASSIGNEE

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------Shares

of the  Capital  Stock  represented  by the  within  Certificate,  and do hereby
irrevocably constitute and appoint

- --------------------------------------------------------------------------------

Attorney to  transfer  the said stock on the books of the within  named  Company
with full power of substitution in the premises.

Dated 
     ---------------------
                                       ----------------------------------------


In Presence of


Signature(s) Guaranteed:



- ----------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR  INSTITUTION.  AS
DEFINED IN RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


         This  certificate  also  evidences  and entitles  the holder  hereof to
certain rights as set forth in an Agreement  between  Universal  Corporation and
Wachovia  Bank,  N.A.,  dated as of December 3, 1998,  as it may be amended from
time to time  (the  "Agreement"),  the terms of which  are  hereby  incorporated
herein by reference  and a copy of which is on file at the  principal  executive
offices of Universal Corporation.  Under certain circumstances,  as set forth in
the Agreement,  such Rights (as defined in the  Agreement)  will be evidenced by
separate  certificates  and will no longer  be  evidenced  by this  certificate.
Universal  Corporation will mail to the holder of this certificate a copy of the
Agreement  without charge after receipt of a written  request  therefor.  As set
forth in the Agreement,  Rights  beneficially owned by any Person (as defined in
the  Agreement)  who becomes an Acquiring  Person (as defined in the  Agreement)
become null and void.


KEEP THIS  CERTIFICATE  IN A SAFE PLACE.  IF IT IS LOST,  STOLEN,  MUTILATED  OR
DESTROYED,  THE  CORPORATION  WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT CERTIFICATE.



                                                                    Exhibit 10.1

                              UNIVERSAL CORPORATION
                              AMENDED AND RESTATED
                1994 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

                                    Article I

                                   DEFINITIONS

         1.01 Affiliate means any "subsidiary" or "parent  corporation"  (within
the meaning of Section 424 of the Code) of the Company.

         1.02 Agreement  means a written  agreement  (including any amendment or
supplement  thereto) between the Company and a Participant  specifying the terms
and conditions of a Grant issued to such Participant.

         1.03 Board means the Board of Directors of the Company.

         1.04 Code means the Internal  Revenue Code of 1986,  and any amendments
thereto.

         1.05  Commission  means the Securities  and Exchange  Commission or any
successor agency.

         1.06 Committee means the Executive Compensation Committee of the Board.

         1.07 Common Stock means the Common Stock of the Company.

         1.08 Company means Universal Corporation.

         1.09 Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

         1.10 Fair Market Value means, on any given date, the closing price of a
share of Common Stock as reported on the New York Stock Exchange  composite tape
on such day or,  if the  Common  Stock  was not  traded  on the New  York  Stock
Exchange on such day,  then on the next  preceding
 day that the Common Stock was
traded on such  exchange,  all as reported by such source as the  Committee  may
select.  If there is no regular public trading market for the Common Stock,  the
Fair Market Value shall be determined by the Committee in good faith.

         1.11     Grant means the grant of an Option.

         1.12  Non-Employee  Director  means a member of the Board who is not an
employee of the  Company or an  Affiliate  and was not such an  employee  within
three years prior to his or her first election to the Board.

         1.13 Option means a stock  option that  entitles the holder to purchase
from the  Company  under the  terms of this Plan the  number of shares of Common
Stock set forth in Article IV at the Option Price.

         1.14 Option Price means the price per share for Common Stock  purchased
on the exercise of an Option as provided in Article IV.

         1.15  Participant  means a  Non-Employee  Director  who is  eligible to
receive a Grant under this Plan.

         1.16 Rule 16b-3 means Rule 16b-3,  as  promulgated by the Commission in
Release No.  34-28869 under Section 16(b) of the Exchange Act,  effective May 1,
1991, or any successor rule as amended from time to time.

         1.17  Securities   Broker  means  the  registered   securities   broker
acceptable  to the  Company  who agrees to effect the  cashless  exercise  of an
Option pursuant to Section 7.03 hereof.

         1.18 Subsidiary  means any  corporation  (other than the Company) in an
unbroken  chain  of  corporations  beginning  with  the  Company  if each of the
corporations  in  the  chain  (other  than  the  last  corporation)  owns  stock
possessing at least 50 percent of the total combined voting power of all classes
of stock in one of the other corporations in such chain.


                                   Article II

                                     PURPOSE

         This Plan is intended to associate  the  interests of the  Non-Employee
Directors  with those of the  Company  and its  shareholders  through  increased
equity ownership,  to assist the Company in recruiting and retaining individuals
of ability and  experience  who are not  employed by the Company to serve on the
Board and its  committees  and to  provide  incentive  to those  individuals  by
enabling them to participate in the future success of the Company.


                                   Article III

                                 ADMINISTRATION

         The Plan shall be  administered  by the Committee.  The Committee shall
have all the  powers  vested  in it by the  terms of the  Plan,  such  powers to
include the authority (within the limitations described herein) to prescribe the
form of the  Agreements  evidencing  Grants  under the terms of this  Plan.  The
Committee  shall,  subject  to the  provisions  of the  Plan,  have the power to
construe the Plan, to determine all questions  arising  thereunder  and to adopt
and amend such rules and  regulations for the  administration  of the Plan as it
may deem desirable,  consistent with the provisions of the Plan. Any decision of
the Committee in the  administration of the Plan, as described herein,  shall be
final and conclusive. The Committee may act only by a majority of its members in
office,  except that the members  thereof may authorize any one or more of their
number or the  Secretary  or any other  officer of the  Company  to execute  and
deliver  documents on behalf of the Committee.  No member of the Committee shall
be liable for anything done or omitted to be done by such member or by any other
member of the Committee in  connection  with the Plan,  except in  circumstances
involving  actual bad faith.  All costs and expenses of  administering  the Plan
shall be borne by the Company.


                                   Article IV

                                GRANTS OF OPTIONS

         Every Non-Employee  Director who serves on the Board during the term of
the Plan is eligible to receive Grants.  Each  Non-Employee  Director serving on
the Board as of the  effective  date of this Plan  shall be granted an Option on
such date. Every  Non-Employee  Director who continues to serve in such capacity
on the date which is the first  business day  following  each Annual  Meeting of
Shareholders  during  the term of this Plan  shall be  granted an Option on each
such date.  Each Option  shall be for the purchase by the  Participant  of 1,000
shares of Common  Stock at a price per share equal to the Fair Market Value of a
share of the  Common  Stock  on the  date of the  Grant.  Each  Option  shall be
evidenced by an Agreement  issued by the Committee in the form prescribed by the
Committee and consistent with the terms of this Plan.


                                    Article V

                                 AMOUNT OF STOCK

         The total number of shares of Common Stock  reserved and  available for
issuance  upon  exercise  of  Options  granted  under the Plan  shall be 100,000
shares,  subject to  adjustment  as provided in Article  VIII below.  The Common
Stock to be issued may be either  authorized and unissued shares,  issued shares
acquired by the Company or its Subsidiaries or any combination  thereof.  In the
event that an Option is  terminated,  in whole or in part,  for any reason other
than its exercise, the number of shares of Common Stock allocated to such Option
or terminated  portion thereof may be reallocated to other Options to be granted
under  this  Plan.  In the event  that the  number  of  shares  of Common  Stock
available for future Grants under the Plan is insufficient to make all automatic
Grants required to be made on such date, then all  Non-Employee  Directors shall
share ratably in the number of Options available for Grants under the Plan.


                                   Article VI

                               EXERCISE OF OPTIONS

         6.01 Exercisability. Each Option shall be first exercisable on the date
which is six months from the date of the grant of the Option and shall  continue
to be exercisable for a term of ten years thereafter;  provided  however,  that:
(i) subject to the six month  exercisability  requirement  set forth  above,  an
Option  shall be  exercisable,  in the event of a  Participant's  death prior to
exercising  the  Option,  by his  estate,  or the  person or persons to whom his
rights  under  the  Option  shall  pass  by  will or the  laws  of  descent  and
distribution  but  only  for a  period  of  two  years  from  the  date  of  the
Participant's  death  or  during  the  remainder  of the  period  preceding  the
expiration  of the Option,  whichever is shorter;  (ii) subject to the six month
exercisability requirement set forth above, an Option shall be exercisable, if a
Participant  becomes  permanently  and totally  disabled  (within the meaning of
Section  105(d)(4) of the Code) while  serving on the Board prior to  exercising
the Option,  but only for a period of two years from the date on which he ceases
serving  on the Board due to such  disability  or during  the  remainder  of the
period preceding the expiration of the Option,  whichever is shorter;  and (iii)
subject to the six month  exercisability  requirement  set forth  above,  in the
event that a Participant resigns from or is not re-elected or does not stand for
re-election to the Board or in any other  circumstance  approved by the Board in
its sole discretion, an Option shall be exercisable but only for a period of two
years  following  the date of his  resignation  or  cessation  of service on the
Board, or in the period prescribed by the Board in an approved circumstance,  or
during the  remainder  of the period  preceding  the  expiration  of the Option,
whichever is shorter.

         6.02   Transferability.   Any   Option   granted   hereunder   will  be
nontransferable and, accordingly, shall not be assignable, alienable, salable or
otherwise transferable by any Participant,  unless the Participant's  Agreement,
as determined in the discretion of the Committee,  expressly authorizes all or a
portion of the Options to be granted to the  Participant  on terms which  permit
transfer by such Participant to (i) the spouse, children or grandchildren of the
Participant  ("Immediately  Family  Members"),  (ii) a trust or  trusts  for the
exclusive benefit of such Immediately Family Members,  or (iii) a partnership in
which such Immediate  Family  Members are the only  partners,  provided that (x)
there may be no consideration for any such transfer,  (y) the Agreement pursuant
to  which  Options  are  granted  must be  approved  by the  Committee  and must
expressly provide for  transferability in a manner consistent with this Article,
and (z) subsequent  transfers of transferred  Options shall be prohibited except
those  transferred  by will or the laws of descent and  distribution.  Following
transfer,  any such Options  shall  continue to be subject to the same terms and
conditions as were applicable  immediately prior to transfer,  provided that for
purposes of this  Article VI, the term  Participant  shall be deemed to refer to
the transferee.  The events of resignation from or cessation of Board service of
this  Article  shall  continue  to be  applied  with  respect  to  the  original
Participant to whom the Option was granted,  following which the Option shall be
exercisable by the transferee only to the extent,  and for the period  specified
in this Article VI.


                                   Article VII

                               MANNER OF EXERCISE

         7.01  Exercise.  Subject to the provisions of Article VI, an Option may
be  exercised  in whole  at any time or in part  from  time to time.  An  Option
granted  under this Plan may be  exercised  with  respect to any number of whole
shares less than the full number for which the Option could be  exercised.  Such
partial  exercise of an Option shall not affect the right to exercise the Option
from time to time in accordance with this Plan with respect to remaining  shares
subject to the Option.

         7.02  Payment.  Payment of the  Option  Price may be made in cash or by
surrendering  previously-owned  shares of Common Stock to the Company,  provided
the  shares  surrendered  have a Fair  Market  Value  (determined  as of the day
preceding the date of exercise)  that is not less than such Option Price or part
thereof.

         7.03 Cashless  Exercise.  To the extent permitted under applicable laws
and regulations,  at the request of the Participant,  the Company will cooperate
in a "cashless  exercise" of an Option.  The cashless exercise shall be effected
by the Participant  delivering to the Securities Broker instructions to exercise
all or part of the Option, including instructions to sell a sufficient number of
shares of Common Stock to cover the costs and expenses associated therewith.

         7.04  Shareholder  Rights.  No  Participant  shall have any rights as a
shareholder  with  respect  to shares  subject  to an  Option  until the date he
exercises such Option.

                                  Article VIII

                     ADJUSTMENT UPON CHANGE IN COMMON STOCK

         Should  the  Company  effect  one or more (x)  stock  dividends,  stock
split-ups,  subdivisions or consolidations of shares or other similar changes in
capitalization;  (y) spin-offs, spin-outs, split-ups,  split-offs, or other such
distribution of assets to  shareholders;  or (z) direct or indirect  assumptions
and/or conversions of outstanding  options due to an acquisition of the Company,
then the maximum  number of shares as to which  Grants may be issued  under this
Plan and the number and price of shares of Common Stock  subject to Grants shall
be proportionately  adjusted, and the terms of Options shall be adjusted, as the
Committee  shall   determine  to  be  equitably   required  to  retain  for  the
Participants  the  equivalent   economic   benefit  of  their   Option(s).   Any
determination  made under this Article VIII by the Committee  shall be final and
conclusive.

         The  issuance  by the Company of shares of Common  Stock or  securities
convertible  into shares of Common  Stock,  for cash or property or for labor or
services,  either upon direct sale or upon the exercise of rights or warrants to
subscribe  therefor,  or upon conversion of shares or obligations of the Company
convertible  into such  shares or other  securities,  shall not  affect,  and no
adjustment by reason thereof shall be made with respect to any Grant.


                                   Article IX

              COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

         No Option shall be  exercisable,  no Common  Stock shall be issued,  no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in  compliance  with all  applicable  federal and
state laws and  regulations  (including,  without  limitation,  withholding  tax
requirements, if any) and the rules of all domestic stock exchanges on which the
Company's  shares  may be  listed.  The  Company  may rely on an  opinion of its
counsel as to such compliance.  Any share certificate  issued to evidence Common
Stock for which an Option is exercised  may bear such legends and  statements as
the Committee  may deem  advisable to assure  compliance  with federal and state
laws and  regulations.  No Grant shall be exercisable,  no Common Stock shall be
issued,  and no certificate  for shares shall be delivered until the Company has
obtained  such  consent or approval as the  Committee  may deem  advisable  from
regulatory bodies having jurisdiction over such matters.


                                    Article X

                               GENERAL PROVISIONS

         10.01 Rules of  Construction.  Headings  are given to the  articles and
sections  of this Plan for ease of  reference.  The  reference  to any  statute,
regulation,  or  other  provision  of law  shall  be  construed  to refer to any
amendment to or successor of such provision of law.

         10.02  Amendment.  The Board may amend or terminate this Plan from time
to time;  provided,  however,  that the Board may amend no more  often than once
every six  months  and no  amendment  may  become  effective  until  shareholder
approval is obtained if the amendment  would  increase the number of shares that
may  be  issued  hereunder  pursuant  to  Options,   increase  the  benefits  to
Participants  under the Plan, or change the  requirements  as to eligibility for
participation in the Plan. No amendment shall, without a Participant's  consent,
adversely affect any rights of such Participant  under any Grant  outstanding at
the time such amendment is made except if such an amendment is made to cause the
Plan or a Grant to qualify for the Rule 16b-3  exemption.  No amendment shall be
made if it would disqualify the Plan from the exemption provided by Rule 16b-3.

         10.03 No Right.  Neither the Plan nor any action taken  hereunder shall
be construed as giving any Non-Employee Director any right to be retained in the
service of the Company.

         10.04 Unfunded Plan. The Plan shall be unfunded.  The Company shall not
be required  to  establish  any  special or  separate  fund or to make any other
segregation  of assets to assure the  issuance  of shares  upon  exercise of any
Option under the Plan and issuance of shares upon  exercise of Options  shall be
subordinated to the claims of the Company's general creditors.

         10.05  Acceptance.  By accepting  any Option or other benefit under the
Plan,  each  Participant  and each person  claiming under or through such person
shall be conclusively  deemed to have indicated his acceptance and  ratification
of, and consent to, any action taken under the Plan by the Company or the Board.

         10.06 Rule 16b-3  Compliance.  It is the  intention of the Company that
the Plan  comply  in all  respects  with Rule  16b-3,  that any  ambiguities  or
inconsistencies  in  construction  of the Plan be  interpreted to give effect to
such  intention  and that if any  provision  of the  Plan is found  not to be in
compliance with Rule 16b-3,  such provision shall be deemed null and void to the
extent  required  to permit the Plan to comply  with Rule  16b-3.  The Board may
adopt rules and  regulations  under,  and amend,  the Plan in furtherance of the
intent of the foregoing.

         10.07 Term of Plan.  No Grant may be issued  under this Plan before the
effective  date of the Plan or after the first  business day  following the 2004
Annual Meeting of Shareholders  (the  "Termination  Date").  Grants issued on or
before the Termination Date shall remain valid in accordance with their terms.

         10.08  Effective Date. This Amended and Restated Plan has been approved
by the Board of Directors of the Company, effective as of December 3, 1998.



                                                                    Exhibit 10.2

                              UNIVERSAL CORPORATION
                       AMENDMENT TO NON-EMPLOYEE DIRECTOR
                     NON-QUALIFIED STOCK OPTION AGREEMENT(S)


         THIS  AMENDMENT  dated  as  of  December  3,  1998,  between  UNIVERSAL
CORPORATION,   a  Virginia   corporation  (the   "Company"),   and  <<F1>>  (the
"Optionee"),  is made  pursuant and subject to the  provisions  of the Company's
Amended and Restated  1994 Stock  Option Plan for  Non-Employee  Directors  (the
"Plan").  All  terms  used  herein  that are  defined  in the Plan have the same
meanings given them in the Plan.

         1.  Grant  of  Option.   Company  and   Optionee   have   entered  into
Non-Qualified  Stock Option Agreements  providing for the grant of Options under
the Plan on the day following the Company's  annual meeting of  Shareholders  in
each of the following years: <<F2>> (collectively, the "Existing Agreements").

         2.  Amendment.  The parties desire to amend Section 2(e) of each of the
Existing  Agreements  by deleting it in its entirety  and  replacing it with the
following new Section 2(e):

                  (e) Limited Transferability. The Optionee shall have the right
                  to  transfer  this  option,  in whole  or in part,  to (i) the
                  spouse,    children   or   grandchildren   of   the   Optionee
                  ("Immediately Family Members"), (ii) a trust or trusts for the
                  exclusive benefit of such Immediately Family Members, or
 (iii)
                  a partnership in which such  Immediate  Family Members are the
                  only partners, provided that (y) there may be no consideration
                  for any such  transfer  and (z)  subsequent  transfers of this
                  option once transferred  shall be prohibited  except transfers
                  made by will or the laws of descent and distribution,  subject
                  to the terms  hereof.  Following  transfer,  this option shall
                  continue  to be subject to the same  terms and  conditions  as
                  were applicable  immediately prior to transfer,  provided that
                  for  purposes of this  Section 2, the term  Optionee  shall be
                  deemed to refer to the  transferee.  The events of resignation
                  from or cessation  of Board  service of this  Agreement  shall
                  continue to be applied with  respect to the original  Optionee
                  to whom this option was  granted,  following  which the option
                  shall be exercisable by the transferee only to the extent, and
                  for the period specified in this Section 2 (e).

         3. Unless  specifically  amended  herein,  all other  provisions of the
Existing Agreements shall remain unchanged and in full force and effect.

         4. This  Amendment  shall be construed,  in force and  administered  in
accordance with the laws of the Commonwealth of Virginia.

         IN WITNESS WHEREOF,  the Company has caused this Amendment to be signed
by a duly authorized officer,  and the Optionee has affixed his or her signature
hereto.

UNIVERSAL CORPORATION                       OPTIONEE


By:  __________________________             _____________________________




                                                                    Exhibit 10.3

                                 FIRST AMENDMENT
                                     TO THE
                  UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED
                         BENEFIT RESTORATION PLAN TRUST


         WHEREAS,  effective  June 25, 1997,  UNIVERSAL  LEAF  TOBACCO  COMPANY,
INCORPORATED,  a Virginia corporation (the "Company")  established the Universal
Leaf Tobacco Company,  Incorporated Benefit Restoration Plan Trust (the "Trust")
in  conjunction  with the agreement of WACHOVIA BANK,  N.A., a national  banking
association (the "Trustee"), to serve as the Trust's initial trustee;

         WHEREAS,  Section 13 of the Trust  provides  for the  amendment  of the
Trust by the Company and the Trustee;

         WHEREAS, the Company and the Trustee have agreed to modify the terms of
Section 6 of the Trust governing  investment  authority to provide,  among other
things,  that  prior to a Change of  Control,  as defined  under the Trust,  the
Company shall direct the investment of the assets of the Trust;

         NOW THEREFORE,  effective  January 12, 1999,  Section 6 of the Trust is
amended and restated in its entirety as follows:

Section 6.        Investment Authority

(a)      The Trustee shall not be liable in  discharging  its duties  hereunder,
         including  without  limitations  its duty to invest  and  reinvest  the
         assets of the Trust  (collectively,  the "Trust Fund"),  if it acts for
         the exclusive
 benefit of the participants and their  beneficiaries,  in
         good faith and as a prudent person would act in accomplishing a similar
         task and in accordance  with the terms of this Trust  Agreement and any
         applicable federal or state laws, rules or regulations.

(b)      Subject to investment guidelines agreed to in writing from time to time
         by the  Company  and the  Trustee  prior to a Change  of  Control,  the
         Trustee  shall have the power in investing  and  reinvesting  the Trust
         Fund in its sole discretion:

         (1)      To invest and  reinvest in any readily  marketable  common and
                  preferred  stocks,   bonds,   notes,   debentures   (including
                  convertible  stocks and securities but not including any stock
                  or security of the Trustee other than a de minimis amount held
                  in a collective  or mutual fund),  certificates  of deposit or
                  demand or time deposits  (including any such deposits with the
                  Trustee) and shares of investment  companies and mutual funds,
                  without  being limited to the classes or property in which the
                  Trustees  are  authorized  to invest by any law or any rule of
                  court of any state and without  regard to the  proportion  any
                  such property may bear to the entire amount of the Trust Fund;

         (2)      To invest and  reinvest  all or any  portion of the Trust Fund
                  collectively through the medium of any proprietary mutual fund
                  that may be established and maintained by the Trustee;

         (3)      To commingle for investment purposes all or any portion of the
                  Trust Fund with  assets of any other  similar  trust or trusts
                  established by the Company with the Trustee for the purpose of
                  safeguarding   deferred   compensation  or  retirement  income
                  benefits of its employees and/or directors;

         (4)      To retain any property at any time received by the Trustee;

         (5)      To sell or  exchange  any  property  held by it at  public  or
                  private  sale,  for cash or on credit,  to grant and  exercise
                  options for the purchase or exchange thereof,  to exercise all
                  conversion  or  subscription  rights  pertaining  to any  such
                  property  and to  enter  into any  covenant  or  agreement  to
                  purchase any property in the future;

         (6)      To participate in any plan of  reorganization,  consolidation,
                  merger,   combination,   liquidation  or  other  similar  plan
                  relating  to  property  held by it and to consent to or oppose
                  any  such  plan or any  actions  thereunder  or any  contract,
                  lease, mortgage, purchase, sale or other action by any person;

         (7)      To  deposit  any  property  held  by it with  any  protective,
                  reorganization or similar committee, to delegate discretionary
                  power   thereto,   and  to  pay  part  of  the   expenses  and
                  compensation  thereof any  assessments  levied with respect to
                  any such property to deposited;

         (8)      To extend the time of payment of any obligation held by it;

         (9)      To  hold   uninvested  any  moneys  received  by  it,  without
                  liability for interest  thereon,  but only in  anticipation of
                  payments  due  for  investments,  reinvestments,  expenses  or
                  disbursements;

         (10)     To exercise  all voting or other  rights  with  respect to any
                  property  held by it and to grant  proxies,  discretionary  or
                  otherwise;

         (11)     For the purposes of the Trust, to borrow money from others, to
                  issue its promissory note or notes therefor, and to secure the
                  repayment thereof by pledging any property held by it;

         (12)     To employ suitable contractors and counsel, who may be counsel
                  to the Company or to the Trustee,  and to pay their reasonable
                  expenses  and  compensation  from the Trust Fund to the extent
                  not paid by the Company;

         (13)     To  register  investment  in its own  name or in the name of a
                  nominee; to hold any investment in bearer form; and to combine
                  certificates  representing securities with certificates of the
                  same  issue  held by it in other  fiduciary  capacities  or to
                  deposit or to arrange for the deposit of such  securities with
                  any  depository,   even  though,   when  so  deposited,   such
                  securities  may be held in the  name  of the  nominee  of such
                  depository with other securities  deposited therewith by other
                  persons,  or to deposit or to arrange  for the  deposit of any
                  securities   issued  or   guaranteed   by  the  United  States
                  government,   or  any  agency  or   instrumentality   thereof,
                  including  securities evidenced by book entries rather than by
                  certificates,   with  the  United  States  Department  of  the
                  Treasury  or a Federal  Reserve  Bank,  even  though,  when so
                  deposited,  such  securities  may  not be held  separate  from
                  securities  deposited  therein  by  other  persons;  provided,
                  however,  that no  securities  held in the Trust Fund shall be
                  deposited with the United States Department of the Treasury or
                  a Federal Reserve Bank or other depository in the same account
                  as any  individual  property  of the  Trustee,  and  provided,
                  further,  that the books and records of the  Trustee  shall at
                  all times show that all such  securities are part of the Trust
                  Fund;

         (14)     To settle,  compromise  or submit to  arbitration  any claims,
                  debts  or  damages   due  or  owing  to  or  from  the  Trust,
                  respectively, to commence or defend suits or legal proceedings
                  to protect any  interest of the Trust,  and to  represent  the
                  Trust in all suits or legal proceedings in any court or before
                  any  other  body or  tribunal;  provided,  however,  that  the
                  Trustee  shall not be required to take any such action  unless
                  it  shall  have  been   indemnified  by  the  Company  to  its
                  reasonable satisfaction against liability or expenses it might
                  incur therefrom;

         (15)     To  hold  and  retain  policies  of  life  insurance,  annuity
                  contracts,  and other  property of any kind which policies are
                  contributed  to the Trust by the Company or any  subsidiary of
                  the Company or are purchased by the Trustee provided, however,
                  that the exercise by the Trustee of any incidents of ownership
                  under any  contract  shall,  prior to a Change of Control,  be
                  subject to the  direction  of the  Company.  After a Change of
                  Control, the Trustee shall have all such rights;

         (16)     To hold any other class of assets which may be  contributed by
                  the  Company  and that is deemed  reasonable  by the  Trustee,
                  unless expressly prohibited herein;

         (17)     To loan any  securities  at any time held by it to  brokers or
                  dealers  upon such  security as may be deemed  advisable,  and
                  during  the  terms  of any  such  loan to  permit  the  loaned
                  securities to be transferred into the name of and voted by the
                  borrower or others; and

         (18)     Generally,   to  do  all  acts,   whether  or  not   expressly
                  authorized,  that the Trustee may deem  necessary or desirable
                  for the protection of the Trust.

(c)      Prior to a Change of Control, the Company shall have the right, subject
         to this Section to direct the Trustee with respect to investments.

         (1)      The Company  may at any time  direct the Trustee to  segregate
                  all or a portion of the Trust  Fund in a  separate  investment
                  account or accounts  and may  appoint  one or more  investment
                  managers  and/or an investment  committee  established  by the
                  Company to direct the investment and reinvestment of each such
                  investment  account or  accounts.  In such event,  the Company
                  shall  notify  the  Trustee  of the  appointment  of each such
                  investment  manager  and/or  investment  committee.   No  such
                  investment  manager shall be related,  directly or indirectly,
                  to the Company. No members of the investment  committee may be
                  employees of the Company.

         (2)      Thereafter,  the Trustee  shall make every sale or  investment
                  with respect to such investment account as directed in writing
                  by the investment manager or investment committee. It shall be
                  the duty of the  Trustee to act  strictly in  accordance  with
                  each direction. The Trustee shall be under no duty to question
                  any such  direction of the  investment  manager or  investment
                  committee,  to review any securities or other property held in
                  such investment account or accounts acquired by it pursuant to
                  such  directions  or  to  make  any   recommendations  to  the
                  investment  managers or investment  committee  with respect to
                  such securities or other property.

         (3)      Notwithstanding the foregoing,  the Trustee, without obtaining
                  prior  approval or  direction  from an  investment  manager or
                  investment  committee,  shall invest cash  balances held by it
                  from time to time in short  term cash  equivalents  including,
                  but not  limited  to,  through  the  medium of any short  term
                  common,  collective or commingled  trust fund  established and
                  maintained   by  the   Trustee   subject  to  the   instrument
                  establishing such trust fund, U.S. Treasury Bills,  commercial
                  paper  (including  such  forms of  commercial  paper as may be
                  available    through   the   Trustee's   Trust    Department),
                  certificates of deposit (including  certificates issued by the
                  Trustee in its separate corporate capacity),  and similar type
                  securities,  with a  maturity  not to  exceed  one  year;  and
                  furthermore,  sell  such  short  term  investments  as  may be
                  necessary  to  carry  out the  instructions  of an  investment
                  manager or investment  committee regarding more permanent type
                  investment and directed distributions.

         (4)      The Trustee  shall neither be liable nor  responsible  for any
                  loss  resulting  to the  Trust  Fund by  reason of any sale or
                  purchase of an investment directed by an investment manager or
                  investment  committee nor by reason of the failure to take any
                  action  with  respect  to any  investment  which was  acquired
                  pursuant  to any such  direction  in the  absence  of  further
                  directions of such investment manager or investment committee.

         (5)      Notwithstanding  anything in this  Agreement to the  contrary,
                  the Trustee  shall be  indemnified  and saved  harmless by the
                  Company  from and against any and all  personal  liability  to
                  which  the  Trustee  may be  subjected  by  carrying  out  any
                  directions  of an investment  manager or investment  committee
                  issued pursuant hereto or for failure to act in the absence of
                  directions of the investment  manager or investment  committee
                  including all expenses  reasonably  incurred in its defense in
                  the event the Company fails to provide such defense; provided,
                  however,  the  Trustee  shall  not  be  so  indemnified  if it
                  participants knowingly in, or knowingly undertakes to conceal,
                  an act or  omission  of an  investment  manager or  investment
                  committee,  having actual  knowledge that such act or omission
                  is a breach of a fiduciary duty;  provided  further,  however,
                  that  the  Trustee  shall  not be  deemed  to  have  knowingly
                  participated  in or knowingly  undertaken to conceal an act or
                  omission of an investment manager or investment committee with
                  knowledge  that such act or omission was a breach of fiduciary
                  duty by merely  complying  with  directions  of an  investment
                  manager or  investment  committee or for failure to act in the
                  absence of directions  of an investment  manager or investment
                  committee.  The Trustee may rely upon any order,  certificate,
                  notice, direction or other documentary confirmation purporting
                  to have been issued by the  investment  manager or  investment
                  committee which the Trustee believes to be genuine and to have
                  been issued by the investment manager or investment committee.
                  The  Trustee  shall  not  be  charged  with  knowledge  of the
                  termination of the  appointment  of any investment  manager or
                  investment  committee until it received written notice thereon
                  from the Company.

(d)      Following  a Change of  Control,  the  Trustee  shall have the sole and
         absolute  discretion  in the  management  of the Trust assets and shall
         have all the powers set forth under  Section  6(b).  In  investing  the
         Trust assets, the Trustee shall consider:

         (1)      the needs of the Plan;

         (2)      the need for matching of the Trust assets with the liabilities
                  of the Plan; and

         (3) the duty of the Trustee to act solely in the best  interests of the
         participants and their beneficiaries.

(e)      The Trustee shall have the right, in its sole  discretion,  to delegate
         its investment  responsibility  to an investment  manager who may be an
         affiliate of the Trustee.  In the event the Trustee shall exercise this
         right, the Trustee shall remain,  at all times responsible for the acts
         of an investment manager.  The Trustee shall have the right to purchase
         an  insurance  policy  or an  annuity  to  fund  the  benefits  of  the
         Arrangements.

(f)      The Company shall have the right at any time,  and from time to time in
         its sole  discretion,  to substitute  assets of equal fair market value
         for any asset held by the Trust Fund.  This right is exercisable by the
         Company in a nonfiduciary  capacity  without the approval or consent of
         any person in a fiduciary capacity.

         The  remaining  provisions of the Trust are ratified and remain in full
force and effect.


                                            UNIVERSAL LEAF TOBACCO COMPANY,
                                            INCORPORATED



                                            By:     ___________________________

                                            Title: ____________________________

                                            Date: _____________________________




                                            WACHOVIA BANK, N.A.



                                            By:     ___________________________

                                            Title: ____________________________

                                            Date: _____________________________





                                                                    Exhibit 10.4

                              UNIVERSAL CORPORATION

                NON-EMPLOYEE DIRECTOR RESTRICTED STOCK AGREEMENT


         THIS  AGREEMENT,  dated  this  __th  day  of  ________,  ____,  between
Universal   Corporation,    a   Virginia   corporation   (the   "Company")   and
____________________  (the  "Director"),  is made  pursuant  and  subject to the
provisions of the Company's 1997  Executive  Stock Plan,  which is  incorporated
herein by reference,  and any future amendments thereto (the "Plan").  All terms
used herein that are defined in the Plan shall have the same meanings given them
in the Plan.

         1. Award of Restricted Stock. Pursuant to the Plan, the Company on this
date awards to the Director, subject to the terms and conditions of the Plan and
subject  further to the terms and  conditions  set forth  herein,  700 shares of
Restricted   Stock.   Such  number  of  shares  of  Restricted  Stock  shall  be
proportionately  adjusted  for any  increase or decrease in the total  number of
shares of Common Stock outstanding resulting from a subdivision or consolidation
of shares or the  payment of a dividend  entirely in shares of Common  Stock,  a
stock  split-up  or any other  increase  or  decrease in the number of shares of
Common Stock outstanding  without the receipt by the Company of cash,  property,
or labor or services.

         2. Terms and Conditions.
  This award of Restricted  Stock is subject to
the following terms and conditions:

             A.  Restricted  Period.  This award of  Restricted  Stock  shall be
subject  to the  restrictions  set forth  herein for a period  (the  "Restricted
Period")  commencing on the date of this  Agreement and ending with the earliest
of the following events:

                        (1)     the   Director   retires   from  the   Board  in
                                compliance with the Board's retirement policy as
                                then in effect;

                        (2)     the Director's  service on the Board  terminates
                                as  a  result   of  not  being   nominated   for
                                reelection  by  the  Board  (other  than  at the
                                Director's request);

                        (3)     the Director's  service on the Board  terminates
                                because the  Director,  although  nominated  for
                                reelection by the Board, is not reelected by the
                                Company's shareholders;

                        (4)     the  Director   becomes   Disabled  (as  defined
                                below);

                        (5)     the Director dies; or

                        (6)     the occurrence of a Change of Control.

                        A Director shall be deemed "Disabled" if the Director is
unable to perform his or her  customary  duties on the Board for a period of six
months or longer due to bodily injury or disease.

             B. Forfeiture of Restricted Stock. If the date ("Termination Date")
a Director's service on the Board terminates is before the end of the Restricted
Period,  the  Director  shall  forfeit  and return to the  Company the shares of
Restricted Stock awarded hereunder.

             C.  Restrictions.  The shares of Restricted Stock awarded hereunder
and any stock  distributions  with  respect to such  Restricted  Stock  shall be
subject to the following restrictions during the Restricted Period:

                        (1)     the   Restricted   Stock  shall  be  subject  to
                                forfeiture as provided herein;

                        (2)     the Restricted Stock may not be sold,  assigned,
                                transferred,  pledged, hypothecated or otherwise
                                disposed  of, and  neither  the right to receive
                                the Restricted Stock nor any interest  hereunder
                                may  be  assigned  by  the  Director,   and  any
                                attempted assignment shall be void;

                        (3)     A   certificate   representing   the  shares  of
                                Restricted Stock awarded hereunder shall be held
                                in  escrow  by the  Company  and  shall,  in the
                                Company's sole  discretion,  bear an appropriate
                                restrictive legend and be subject to appropriate
                                "stop transfer" orders. To facilitate the escrow
                                of  the  shares  of  Restricted   Stock  awarded
                                hereunder  with the Company,  the Director shall
                                deliver herewith the Stock Power attached hereto
                                as Exhibit I executed  in blank by the  Director
                                and dated as of the date hereof;

                        (4)     Any  additional  stock  or other  securities  or
                                property that may be issued or distributed  with
                                respect   to  the   Restricted   Stock   awarded
                                hereunder  as a result  of any  stock  dividend,
                                stock split, business combination or other event
                                shall be subject to the  restrictions  and other
                                terms   and   conditions   set   forth  in  this
                                Agreement; and

                        (5)     The  Director  shall not be  entitled to receive
                                any  shares  of  the  Restricted  Stock  awarded
                                hereunder   prior  to  the   completion  of  any
                                registration or  qualification of the Restricted
                                Stock  under any  federal or state  law,  or the
                                receipt   thereof   may  be   subject   to  such
                                restrictions to insure  compliance with the same
                                as  the   Company,   in  its  sole   discretion,
                                determines to be necessary or advisable.

             D. Receipt of Common Stock. If the Director's  Termination  Date is
at or after the end of the  Restricted  Period,  the Director  shall receive the
number of shares of restricted Common Stock awarded hereunder, free and clear of
the  restrictions  set  forth in this  Agreement,  except  for any  restrictions
necessary  to comply  with  federal  and  state  securities  laws.  Certificates
representing  such  shares  shall be  released  to the  Director  as promptly as
practical following the Director's becoming entitled to receive such shares.

             E. Shareholder Rights. Upon issuance of a certificate  representing
the shares of Restricted Stock awarded hereunder, the Director shall, subject to
the restrictions set forth herein, have all rights of a shareholder with respect
to such shares of Restricted Stock,  including the right to vote such shares and
the right to receive cash dividends and other distributions thereon.

             F. Tax  Withholding.  The Director shall pay to the Company in cash
(or provide for the payment of) the full amount of all federal and state  income
and  employment  taxes  required to be withheld by the Company in respect to the
inclusion  in the taxable  income of the  Director of any amount with respect to
the shares of Restricted Stock awarded hereunder.

         3. No Right to  Renomination.  Nothing in this  Agreement  shall confer
upon the Director any right to be renominated to the Board.

         4. Governing Law. This Agreement  shall be governed by and construed in
accordance with the domestic  substantive  law of the  Commonwealth of Virginia,
without  giving  effect to any choice or conflict of law  provision or rule that
would cause the application of the law of any other jurisdiction.

         5.  Investment  Representation.  The  Director  agrees that unless such
shares previously have been registered under the Securities Act of 1933, (i) any
shares of Restricted Stock awarded hereunder will be acquired for investment and
not with a view to  distribution  or resale and (ii)  until  such  registration,
certificates  representing such shares may bear an appropriate  legend to assure
compliance  with such Act. This investment  representation  shall terminate when
such  shares  have  been  registered  under  the  Securities  Act of 1933 or the
requirements of such Act have otherwise been satisfied.

         6. Director Bound by Plan. The Director hereby acknowledges  receipt of
a copy of the  Plan and  agrees  to be bound  by all the  terms  and  provisions
thereof.

         7.  Conflicts.  In the event of any conflict  between the provisions of
the Plan as in effect on the date hereof and the  provisions of this  Agreement,
the provisions of the Plan shall govern. All references herein to the Plan shall
mean the Plan as in effect on the date hereof.

         8. Binding  Effect.  This Agreement  shall be binding upon and inure to
the benefit of the legatees,  distributees,  and personal representatives of the
Director and the successors of the Company.


         IN WITNESS WHEREOF,  the Company has caused this Agreement to be signed
by a duly authorized officer,  and the Director has affixed his or her signature
hereto.


UNIVERSAL CORPORATION                                DIRECTOR



By:      _________________________                   __________________________
Title:   _________________________



0380093.03


<PAGE>
                                                                       EXHIBIT I


                                   STOCK POWER


         FOR VALUE RECEIVED,  pursuant to a certain  Restricted  Stock Agreement
between Universal Corporation and the undersigned dated  ___________________ __,
19__, I hereby sell,  assign and transfer unto Universal  Corporation all shares
of the restricted  Common Stock of Universal  Corporation  awarded to me on this
date and in the future under said Agreement and do hereby irrevocably constitute
and  appoint  _____________________________________  as my  attorney-in-fact  to
transfer  the said shares of stock on the books of  Universal  Corporation  with
full power of substitution in the premises.



         Dated ______________ __, 19__.



                                           ------------------------------------
                                           Director





<TABLE> <S> <C>

<ARTICLE> 5
<CIK> 0000102037
<NAME> UNIVERSAL CORPORATION
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                  6-MOS

<FISCAL-YEAR-END>                         JUN-30-1999
<PERIOD-END>                               DEC-31-1998
<CASH>                                          80,479
<SECURITIES>                                         0
<RECEIVABLES>                                  375,783
<ALLOWANCES>                                         0
<INVENTORY>                                    871,128
<CURRENT-ASSETS>                             1,480,069
<PP&E>                                         767,187    
<DEPRECIATION>                                 407,905
<TOTAL-ASSETS>                               2,147,818
<CURRENT-LIABILITIES>                        1,197,914
<BONDS>                                        240,881
<COMMON>                                        78,673
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                     472,466
<TOTAL-LIABILITY-AND-EQUITY>                 2,147,818
<SALES>                                      2,177,004
<TOTAL-REVENUES>                             2,177,004
<CGS>                                        1,871,888
<TOTAL-COSTS>                                1,871,888
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              28,688
<INCOME-PRETAX>                                114,226
<INCOME-TAX>                                    42,264
<INCOME-CONTINUING>                             68,481
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    68,481
<EPS-PRIMARY>                                     2.02
<EPS-DILUTED>                                     2.01
        

</TABLE>