<PAGE>

                                                                   Exhibit 10.25

                             UNIVERSAL CORPORATION

              1999 STOCK OPTION AND EQUITY ACCUMULATION AGREEMENT

          THIS AGREEMENT, dated this 2nd day of December 1999, between Universal
Corporation, a Virginia corporation (the "Company") and ____________ (the
"Optionee"), 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.   Grant of Long Term Option and Reload Options. Pursuant to the
               --------------------------------------------
Plans, and upon action taken on December 2, 1999, by the Executive Compensation
Committee (the "Committee") of the Board of Directors of the Company effective
as of December 2, 1999, the Company grants to the Optionee, subject to the terms
and conditions of the Plan and subject further to the terms and conditions set
forth herein, the right and option to purchase __________ shares of Common Stock
(the "Long Term Option") and the Reload Options as described in subparagraph 5E.
The Long Term Option and Reload Options are non-qualified stock options. The
option price of the Long Term Option shall be the Fair Market Value of Common
Stock at the close of business on December 2, 1999, or $24.69 per share.

          2.   Expiration Date. The expiration date of the Long Term Option and
               ---------------
any Reload Options granted hereunder shall be December 2, 2009 (the "Expiration
Date").

          3.   Date Options Become Exercisable. Any Option granted hereunder may
               -------------------------------
not be exercised until at least six months after the date of grant thereof.
<PAGE>

          4.  Eligibility to Participate. In order to participate and receive
              --------------------------
the Options granted under this Agreement, the Optionee must sign and return a
copy of this Agreement by January 31, 2000.

          5.  Automatic Exercise Program.
              --------------------------

              A.  Method of Automatic Exercise. Until the Automatic Exercise
                  ----------------------------
Program terminates as provided in subparagraph 5G, the Optionee authorizes the
Company on any Automatic Exercise Date (as hereinafter defined), including the
Initial Exercise Date (as hereinafter defined), automatically to exercise the
lowest price Long Term or Reload Options granted the Optionee under this Program
only by means of a stock-for-stock swap using shares of Common Stock then
credited to the Optionee's Account. On the Initial Exercise Date, such Options
shall be automatically exercised to purchase the number of shares of Common
Stock which can be purchased from shares of Common Stock credited to the
Optionee's Account. With respect to subsequent Automatic Exercise Dates, the
Optionee authorizes the Company to automatically exercise such Options for the
amount of shares of Common Stock which can be purchased from shares of Common
Stock held in the Optionee's Account received on previous Automatic Exercise
Dates and shares of Common Stock, if any, contributed to the Optionee's Account
pursuant to subparagraph 5D, less the number of shares, if any, sold for payment
of principal and interest on the Loan as provided in paragraph 2 of the
Universal Corporation 1997 Restricted Stock Agreement (the "1997 Restricted
Stock Agreement") and withheld from the exercise or sold for payment of taxes
under subparagraph 5F of this Agreement. The automatic exercise shall only occur
if the Fair Market Value on the Automatic Exercise Date exceeds by one percent
(1%) or more the exercise price of the lowest priced Option held by the Optionee
under this Program (the "Automatic Exercise Criterion"). The Optionee grants the
Company or any of its officers the power of attorney
<PAGE>

to endorse and transfer the share certificates credited to the Optionee's
Account in accordance with the Automatic Exercise Program. The power of attorney
shall cease upon the termination of the Optionee's participation in the
Automatic Exercise Program.

          B.   Other Options Granted by Universal to the Optionee. Options
               --------------------------------------------------
granted to the Optionee under agreements other than this Agreement, the
Universal Corporation 1997 Stock Option and Equity Accumulation Agreement (the
"1997 Agreement"), the Universal Corporation 1994 Stock Option and Equity
Accumulation Agreement, as amended (the "1994 Agreement") or the Universal
Corporation 1991 Stock Option and Equity Accumulation Agreement, as amended (the
"1991 Agreement") are not eligible to be included in the Automatic Exercise
Program under this Agreement, the 1997 Agreement, the 1994 Agreement and the
1991 Agreement.

          C.   Automatic Exercise Dates; Amendment of 1997 Agreement, 1994
               -----------------------------------------------------------
Agreement and 1991 Agreement. The initial automatic exercise date under the
----------------------------
Automatic Exercise Program for Options granted under this Agreement shall be
June 2, 2000, or the first business day thereafter on which the Automatic
Exercise Criterion is met (the "Initial Exercise Date"), and subsequent
automatic exercise dates for such Options shall occur upon the first business
day on which the New York Stock Exchange trades stock which occurs after a six
month interval has elapsed since the last automatic exercise date, or the first
business day thereafter on which the Automatic Exercise Criterion is met (the
"Automatic Exercise Date(s)"); provided, however, that any Automatic Exercise
Date for Options granted under this Agreement, the 1997 Agreement, the 1994
Agreement or the 1991 Agreement shall be at least six months after the last
Automatic Exercise Date for any such Options. Subparagraph 5C of the 1997
Agreement is amended to read as follows:
<PAGE>

          C.   The initial automatic exercise date under the Automatic Exercise
     Program for Options granted under this Agreement shall be June 15, 1998, or
     the first business day thereafter on which the Automatic Exercise Criterion
     is met (the "Initial Exercise Date"), and subsequent automatic exercise
     dates for such Options shall occur upon the first business day on which the
     New York Stock Exchange trades stock which occurs after a six month
     interval has elapsed since the last such automatic exercise date, or the
     first business day thereafter on which the Automatic Exercise Criterion is
     met (the "Automatic Exercise Date(s)"); provided, however, that any
     Automatic Exercise Date for Options granted under this Agreement, the
     Universal Corporation 1999 Stock Option and Equity Accumulation Agreement,
     the Universal Corporation 1994 Stock Option and Equity Accumulation
     Agreement, or the Universal Corporation 1991 Stock Option and Equity
     Accumulation Agreement shall be at least six months after the last
     Automatic Exercise Date for any such Options.

Subparagraph 5C of the 1994 Agreement is amended to read as follows:

          C.   The initial automatic exercise date under the Automatic Exercise
     Program for Options granted under this Agreement shall be June 1, 1995, or
     the first business day thereafter on which the Automatic Exercise Criterion
     is met (the "Initial Exercise Date"), and subsequent automatic exercise
     dates for such Options shall occur upon the first business day on which the
     New York Stock Exchange trades stock which occurs after a six month
     interval has elapsed since the last such automatic exercise date, or the
     first business day thereafter on which the Automatic Exercise Criterion is
     met (the "Automatic Exercise Date(s)"); provided, however, that any
     Automatic Exercise Date for Options granted under this Agreement, the
     Universal Corporation 1999 Stock Option and Equity Accumulation Agreement,
     the Universal Corporation 1997 Stock Option and Equity Accumulation
     Agreement, or the Universal Corporation 1991 Stock Option and Equity
     Accumulation Agreement shall be at least six months after the last
     Automatic Exercise Date for any such Options.

Subparagraph 5C of the 1991 Agreement is amended to read as follows:

          C.   The initial automatic exercise date under the Automatic Exercise
     Program shall be November 1, 1992, or the first business day thereafter on
     which the Automatic Exercise Criterion is met (the "Initial Exercise
     Date"), and subsequent automatic exercise dates shall occur upon the first
     business day on which the New York Stock Exchange trades stock which occurs
     after a six month interval has elapsed since the last automatic exercise
     date, or the first business day thereafter on which the Automatic Exercise
     Criterion is met (the "Automatic Exercise Date(s)"); provided, however,
     that any Automatic Exercise Date for Options granted under this Agreement,
     the Universal Corporation 1999 Stock Option and Equity Accumulation
     Agreement, the Universal Corporation 1997 Stock Option and Equity
     Accumulation Agreement, or the Universal Corporation 1994
<PAGE>

     Stock Option and Equity Accumulation Agreement shall be at least six months
     after the last Automatic Exercise Date for any such Options.

          D.   Method of Payment Under Automatic Exercise Program; Amendment of
               ----------------------------------------------------------------
1997 Agreement, 1994 Agreement and 1991 Agreement. Other than the payment on
-------------------------------------------------
the Initial Exercise Date from shares of Common Stock then credited to the
Optionee's Account pursuant to the 1997 Agreement, the 1994 Agreement, the 1991
Agreement and the 1997 Restricted Stock Agreement, payment by the Optionee under
the Automatic Exercise Program shall be only from shares of Common Stock
received from the previous exercise under the Program and from additional shares
of Common Stock delivered to the Optionee's Account as provided in this
subparagraph 5D.

     Prior to termination of the Automatic Exercise Program as provided in
subparagraph 5G, the Committee may permit the Optionee to deliver additional
shares of Common Stock to the Company for credit to the Optionee's Account for
inclusion in the Program. The Committee may limit the total number of such
additional shares which may be contributed by the Optionee. Such additional
shares may be delivered from time-to-time during the term of the Program.
However, for purposes of the Program, the delivery of shares shall be made at
least six (6) months prior to the Automatic Exercise Date on which such shares
shall be used for a stock swap pursuant to the Program.

          E.   Reload Options. Only participants in the Automatic Exercise
               --------------
Program will be eligible to receive Reload Options. A Reload Option is an
automatic grant of a new Option each time the Company executes an automatic
stock-for-stock swap exercise. The number of shares granted in the Reload Option
shall equal the number of shares exchanged in payment of the exercise price on
an Automatic Exercise Date. The Reload Options will be fully vested six (6)
<PAGE>

months from the date of grant and will have a term which expires on the same
date as the automatically exercised Option. The exercise price for a Reload
Option shall be the Fair Market Value on the date of the Reload Option grant.

     The grant of a Reload Option shall be subject to there being sufficient
shares available for such grants under the Plan and the Company's 1989 Executive
Stock Plan, as amended. If there are not sufficient shares available to fully
meet the obligation of the Automatic Exercise Program as described above, then
the Committee will, in its sole discretion, allocate the available shares to
participants. In addition, should the Committee, in its sole discretion,
determine that continuing to grant Reload Options is no longer in the best
interest of the Company, it may, by means of written notice to participants,
cause the discontinuance of the granting of Reload Options.

          F.   Payment of Taxes Under the Automatic Exercise Program. Unless at
               -----------------------------------------------------
least six (6) months prior to an Automatic Exercise Date the Optionee gives
written notice to the Company, directed to the attention of its Secretary, that
he or she will pay the Company, on a timely basis, cash for the payment of
withholding taxes on the gain realized from the exercise of an Option under the
Automatic Exercise Program, the Company shall (i) reduce the number of shares of
Common Stock issuable upon such exercise by the number of whole shares of Common
Stock which on such exercise date best approximates but does not exceed the
minimum amount of taxes required to be withheld by the Company and (ii) on the
date seven (7) days after such Automatic Exercise Date, the Company shall
deliver from the Optionee's Account to the broker hereinafter designated by the
Optionee, free of all restrictions, the number of whole shares of Common Stock
which best approximates the amount of such taxes in excess of the minimum amount
required to be withheld by the Company. For purposes of the preceding sentence,
the Optionee designates Legg Mason Wood Walker, Inc., Riverfront Plaza, Suite
810, 951 East Byrd Street, Richmond, Virginia
<PAGE>

23219-4027, Account No. ____________, as his or her broker and authorizes and
directs the Company to deliver such shares to said broker and the broker to sell
the shares and remit the proceeds to the Company for the payment of withholding
taxes.

          G.   Termination of the Automatic Exercise Program. The Automatic
               ---------------------------------------------
Exercise Program shall terminate upon the earlier of (i) the date on which the
Optionee gives written notice to the Company that he or she irrevocably elects
to terminate participation in such Program, provided that such notice may not be
given before the second business day after the Initial Exercise Date; or (ii)
the date the Optionee's employment with the Company is terminated; or (iii) the
failure by the Company to be in a position to grant Reload Options on any
Automatic Exercise Date pursuant to subparagraph 5E in which case the Company
shall promptly notify the Optionee.

          H.   Restriction on Sales and Encumbrance of Shares. During the
               ----------------------------------------------
Optionee's participation in the Automatic Exercise Program, the Optionee agrees
that unless otherwise permitted by the Committee in its sole discretion, (i)
shares of Common Stock contributed to or received by and on behalf of the
Optionee pursuant to the Program and (ii) shares of Common Stock representing
the after-tax gain on each automatic exercise, rounded to the nearest whole
share, shall be held in the Optionee's Account and shall not be available for
sale, transfer, pledge, hypothecation or other disposition except for payment of
interest and principal on the Loan as provided in paragraph 2 of the 1997
Restricted Stock Agreement, payment of tax obligations as provided in
subparagraph 5F of this Agreement, and stock-for-stock Option exercises pursuant
to paragraph 5 of this Agreement. All shares of Common Stock held in the
Optionee's Account shall be owned by and registered in the name of the Optionee,
and the Optionee shall have all rights of ownership with respect thereto,
including voting rights and the right to receive dividends. Such shares shall be
held by the Company and a legend on the stock certificate(s) shall note the
<PAGE>

restrictions. The restrictions on the shares of Common Stock held in the
Optionee's Account shall lapse upon termination of the Automatic Exercise
Program as provided in subparagraph 5G.

          I.   Maintenance of Shares. The Company shall establish and maintain
               ---------------------
an individual account in the Optionee's name (the "Optionee's Account") to hold
shares of Common Stock registered in the Optionee's name contributed to or
obtained through the Automatic Exercise Program under this Agreement, the 1997
Agreement, the 1994 Agreement, the 1991 Agreement and the 1997 Restricted Stock
Agreement. The Company shall deliver a written report to the Optionee on the
status of the Optionee's Account following each Automatic Exercise Date. Upon
termination of the Automatic Exercise Program as provided in subparagraph 5G,
all shares of Common Stock held in the Optionee's Account, less any of such
shares sold pursuant to paragraph 2 of the 1997 Restricted Stock Agreement,
shall be delivered to the Optionee free of all restrictions.

     6.   Nonautomatic Exercises by the Optionee.
          --------------------------------------

          A.   Subject to Automatic Exercise Program Termination. Except for
               -------------------------------------------------
exercises under the Automatic Exercise Program as provided in paragraph 5, the
Optionee shall not be able to exercise the Long Term and Reload Options until
the earlier of (i) the date the Program terminates as provided in subparagraph
5G or (ii) the date one (1) year prior to the Expiration Date. On such date,
such Options that have vested pursuant to paragraph 3 and that have not been
previously exercised under the Automatic Exercise Program may be exercised in
the manner provided in this paragraph 6.

          B.   Nonautomatic Exercises. After termination of the Automatic
               ----------------------
Exercise Program in accordance with subparagraphs 5G(ii) or (iii), or on the
date one (1) year prior to the Expiration Date, all vested and unexercised Long
Term and Reload options shall continue to be exercisable by the Optionee until
the earlier of the termination of the Optionee's rights hereunder
<PAGE>

pursuant to subparagraphs 6E and 6F, or the Expiration Date. A partial exercise
of such Options pursuant to subparagraphs 6E or 6F shall not affect Optionee's
right to exercise such Options with respect to the remaining shares, subject to
the six month vesting period set forth in paragraph 3 and the conditions of the
Plan and this Agreement. If the Optionee terminates the Automatic Exercise
Program pursuant to subparagraph 5G(i), such Options may only be exercised in
the manner provided in subparagraph 6H.

          C.   Method of Exercising and Payment for Shares. An Option exercised
               -------------------------------------------
pursuant to this paragraph 6 shall be exercised by written notice of the
Optionee delivered to the attention to the Company's Secretary at the Company's
principal office in Richmond, Virginia. The written notice shall specify the
number of shares being acquired pursuant to the exercise of the Option when such
Option is being exercised in part pursuant to subparagraphs 6E or 6F. The
exercise date shall be the date such notice is received by the Company. Such
notice shall be accompanied by payment in full of the Option Price for each
share of Common Stock to be purchased.

          D.   Cashless Exercise. To the extent permitted under the applicable
               -----------------
laws and regulations, at the request of the Optionee, the Company agrees to
cooperate in a "cashless exercise" of a Long Term or Reload Option pursuant to
this paragraph 6.  The cashless exercise shall be effected by the Optionee
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.

          E.   Exercise During Employment. Subject to (i) the provisions of
               --------------------------
subparagraph 6F which shall apply to exercise in the event of retirement, death,
disability or Committee approval, and (ii) the provisions of subparagraph 6H
which shall apply to exercise in the event Optionee
<PAGE>

terminates his or her participation in the Automatic Exercise Program as
provided in subparagraph 5G(i), all vested and unexercised Long Term and Reload
Options may be exercised in whole or in part during Optionee's employment with
the Company or an Affiliate from the date such Options are exercisable pursuant
to subparagraph 6B until the earlier of the expiration of ninety (90) days from
the date the Optionee's employment with the Company or an Affiliate is
terminated or the Expiration Date; provided, however, that the Optionee's right
to exercise the Options shall terminate immediately in the event the Optionee's
employment with the Company or an Affiliate is terminated for cause as
hereinafter defined or the Optionee is in violation of the provisions of
paragraph 7 hereof. For purposes of the preceding sentence, the Optionee's
employment shall be deemed to have been terminated for cause if the Optionee's
employment is terminated as result of fraud, dishonesty or embezzlement from the
Company or an Affiliate.

          F.   Exercise in the Event of Retirement, Death, or Disability or
               ------------------------------------------------------------
Approval by the Committee. Subject to the provisions of subparagraph 6H which
-------------------------
shall apply to exercise in the event the Optionee terminates his or her
participation in the Automatic Exercise Program as provided in subparagraph
5G(i), all unexercised Long Term and Reload Options that have vested pursuant to
paragraph 3 shall be exercisable in whole or in part in the event that prior to
the Expiration Date (i) the Optionee retires (early, after age 55, normal, at
age 65, or delayed) or, (ii) the Optionee dies or becomes permanently and
totally disabled (as defined in the Disability Benefits Plan of Universal Leaf
Tobacco Company, Incorporated and Domestic Subsidiaries) while employed by the
Company or an Affiliate or (iii) for any reason approved by the Committee in its
absolute discretion. In the event of death, such Options may be exercised by the
Optionee's estate, or the person or persons to whom his or her rights under this
Agreement shall pass by will or the
<PAGE>

laws of descent and distribution. Options that become exercisable pursuant to
this subparagraph 6F will continue to be exercisable for the remainder of the
period preceding the Expiration Date.

          G.   Exercise in the Event of Liquidation or Reorganization. In the
               ------------------------------------------------------
event of a dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation, the
Optionee shall have the right immediately prior to such dissolution or
liquidation, or merger or consolidation, to exercise all unexercised Long Term
and Reload Options in full.

          H.   Exercise in the Event the Optionee Terminates Automatic Exercise
               ----------------------------------------------------------------
Program. In the event the Optionee irrevocably elects to terminate his or her
-------
participation in the Automatic Exercise Program as provided in subparagraph
5G(i), the Optionee may (i) exercise all, but not a part, of all unexercised
Long Term and Reload Options which have vested pursuant to paragraph 3 for a
period of thirty (30) days from the date the Optionee gives written notice as
provided in subparagraph 5G(i), (ii) exercise unexercised Reload Options which
have not vested pursuant to paragraph 3 for a period of thirty (30) days from
the date each such Option vests, (iii) exercise all vested and unexercised Long
Term and Reload Options in whole or in part during the one (1) year period prior
to the Expiration Date, and (iv) exercise all vested and unexercised Long Term
and Reload Options in whole or in part pursuant to subparagraph 6F. An exercise
pursuant to subparagraph 6H(iii) may only be made during the Optionee's
employment with the Company or an Affiliate.

          I.   Payment of Withholding Taxes. Within seven (7) days following the
               ----------------------------
date of exercise pursuant to this paragraph 6, the Optionee shall pay to the
Company in cash (or provide for the payment of) the withholding taxes on the
gain realized from the exercise of the Option.
<PAGE>

          7.  Optionee Covenants.  The Optionee recognizes that over a period of
              ------------------
many years the Company and its Affiliates (including any predecessors or
entities from which it might have acquired goodwill) have developed, at
considerable expense, relationships with customers and prospective customers
which constitute a major part of the value of the goodwill of the Company and
the Affiliates.  During the course of his or her employment by the Company, the
Optionee will have substantial contact with these customers and prospective
customers.  In order to protect the goodwill of the Company's and the
Affiliates' businesses, the Optionee covenants and agrees that, in the event of
the termination of his or her employment, whether voluntary or involuntary, he
or she shall forfeit the Options granted under this Agreement if he or she
directly or indirectly as an owner, shareholder, director, employee, partner,
agent, broker, consultant or other participant, for the period during which such
Options are exercisable:

               (a) calls upon or causes to be called upon, or solicits or
               assists in the solicitation of any person, firm, association, or
               corporation, listed as a customer of the Company or any Affiliate
               on the date of termination of the Optionee's employment, for the
               purpose of selling, renting or supplying any product or service
               competitive with the products or services of the Company or any
               Affiliate; or

               (b) performs or contracts to perform for a competitor of the
               Company or any Affiliate the same or similar services he or she
               performed for the Company or such Affiliate.

          Subparagraphs (a) and (b) of this paragraph 7 are separate and
divisible covenants; if for any reason any one covenant is held to be invalid or
unenforceable, in whole or in part, the same shall not be held to affect the
validity or enforceability of the others, or of any other provision of this
<PAGE>

Agreement.  The period and scope of the restrictions set forth in this paragraph
7 shall be reduced to the maximum permitted by the law actually applied to
determine the validity of each subparagraph.

          8.  Fractional Shares.  Fractional shares shall not be issuable
              -----------------
hereunder, and when any provision hereof may entitle the Optionee to a
fractional share such fraction shall be disregarded.

          9.  No Right to Continued Employment.  This Agreement does not confer
              --------------------------------
upon the Optionee any right with respect to continuance of employment by the
Company or an Affiliate, nor shall it interfere in any way with the right of the
Company or an Affiliate to terminate his or her employment at any time.

          10.  Investment Representation.  The Optionee agrees that unless such
               -------------------------
shares previously have been registered under the Securities Act of 1933 (i) any
shares of Common Stock purchased by him or her hereunder will be purchased 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.

          11.  Administration and Interpretation.  The Plan Administrator shall
               ---------------------------------
be the Company; however, this Agreement shall be operated under the supervision
and authority of the Committee.  The Committee shall have the authority to
terminate the Automatic Exercise Program and the issuance of any Reload Options.
Also, the Committee may issue additional Reload Options and Long Term Options
under this Agreement if authorized by the Plans or any amendment thereto, or any
successor plan.  Any interpretation of this Agreement shall be made by the
Committee.  Any amendment to this Agreement must be authorized by the Committee.

          12.  Change in Capital Structure.  Subject to any required action by
               ---------------------------
the shareholders of the Company, the number of shares of Common Stock covered by
the Long Term and Reload
<PAGE>

Options, and the price per share thereof, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock of the
Company resulting from a subdivision or consolidation of shares or the payment
of a stock dividend (but only on the Common Stock), a stock split-up or any
other increase or decrease in the number of such shares effected without receipt
of cash or property or labor or services by the Company.

          Subject to any required action by the shareholders of the Company, if
the Company shall be the surviving corporation in any merger or consolidation,
the Long-Term and Reload Options shall pertain to and apply to the securities to
which a holder of the number of shares of Common Stock subject to such Options
would have been entitled.  A dissolution or liquidation of the Company or a
merger or consolidation in which the Company is not the surviving corporation,
shall cause such Options to terminate, provided that the Optionee shall, in such
event, have the right immediately prior to such dissolution or liquidation, or
merger or consolidation in which the Company is not the surviving corporation,
to exercise such Options.

          In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its authorized
shares without par value into the same number of shares with a different par
value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.

          To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive.

          Except as hereinbefore expressly provided in this paragraph 12, the
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class
<PAGE>

or by reason of any dissolution, liquidation, merger, or consolidation or spin-
off of assets or stock of another corporation, and any issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to the
Options granted under this Agreement.

          The grant of the Long Term and Reload Options pursuant to this
Agreement shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.

          13.  Governing Law.  This Agreement shall be governed by and construed
               -------------
and enforced in accordance with the laws of the Commonwealth of Virginia, except
to the extent that federal law shall be deemed to apply.

          14.  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.

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

          16.  Binding Effect.  Subject to the limitations stated herein and in
               --------------
the Plan, this Agreement shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of the Optionee and the
successors of the Company.

          17.  Nontransferability.  The Long Term Option and Reload Options
               ------------------
granted under this Agreement shall be nontransferable except by will or by the
laws of descent and distribution; provided, however, that the Optionee shall be
entitled, in the manner provided in paragraph 18
<PAGE>

hereof, to designate a beneficiary to exercise his or her rights, and to receive
any shares of Common Stock issuable, with respect to such Options upon the death
of the Optionee. The Long Term Option and Reload Options may be exercised during
the lifetime of the Optionee only by the Optionee or, if permitted by applicable
law, the Optionee's guardian or legal representative.

          18.  Designation of Beneficiary.  The Optionee may designate a
               --------------------------
beneficiary by completing a beneficiary designation form approved by the
Committee and delivering the completed designation form to the Human Resources
Department of the Company.  The person who is the Optionee's named beneficiary
at the time of his or her death (herein referred to as the "Beneficiary") shall
be entitled to exercise the Option, to the extent it is exercisable, after the
death of the Optionee.  The Optionee may from time to time revoke or change his
or her Beneficiary without the consent of any prior Beneficiary by filing a new
designation with the Human Resources Department of the Company.  The last such
designation received by the Company shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Company prior to the Optionee's death, and in no event shall any
designation be effective as of a date prior to such receipt.  If the Committee
is in doubt as to the right of any person to exercise the Long Term Option and
Reload Options, the Company may refuse to recognize such exercise, without
liability for any interest or dividends thereon, until the Committee determines
the person entitled to exercise such Options, which determination shall be final
and conclusive.
<PAGE>

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

UNIVERSAL CORPORATION                        OPTIONEE


By: _________________________                _________________________
Title: ______________________                [Name]
<PAGE>

                             UNIVERSAL CORPORATION

                   Schedule of Grants to Executive Officers


       Optionees                                          Options Awarded
       ---------                                          ---------------

       H. H. Harrell                                      150,000

       A. B. King                                         115,000

       W. L. Taylor                                       70,000

       H. H. Roper                                        65,000

       J. M. White, III                                   22,500