<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
SONOCO PRODUCTS COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
LANA ROPER, Assistant Treasurer and Assistant Secretary
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
SONOCO PRODUCTS COMPANY
POST OFFICE BOX 160
ONE NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160 U.S.A.
March 18, 1994
TO OUR SHAREHOLDERS:
As a shareholder of Sonoco Products Company, you are cordially invited to
attend the Annual Shareholders' Meeting to be held at the Center Theater, 212
North Fifth Street, Hartsville, South Carolina, 29550, on Wednesday, April 20,
1994, at 11:00 A.M.
The accompanying Notice of Meeting and Proxy Statement cover the details of
matters to be presented at the meeting which consists of the election of
directors, a proposal to amend the Restated Articles of Incorporation (including
related amendments to the By-Laws) and the election of independent auditors.
A copy of the 1993 Annual Report, which reviews the Company's past year's
events, is enclosed unless you have signed a statement indicating that you have
access to another copy at your address.
Whether or not you plan to attend the meeting, you are urged to participate
by completing and returning your proxy in the enclosed business reply envelope.
If you later find you can be present or for any reason desire to revoke your
proxy, you can do so at any time before the voting. Your vote is important and
will be greatly appreciated.
/s/ Charles W. Coker
Charles W. Coker
Chairman and
Chief Executive Officer
<PAGE> 3
SONOCO PRODUCTS COMPANY
POST OFFICE BOX 160
ONE NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
<TABLE>
<S> <C>
TIME.......................... 11:00 A.M. on Wednesday, April 20, 1994.
PLACE......................... The Center Theater, 212 North Fifth Street, Hartsville, South
Carolina, 29550.
PURPOSES...................... (1) To elect six members of the Board of Directors, five for
the next three years and one for the next year to complete an
unexpired term.
(2) To act upon a proposal to amend the Restated Articles of
Incorporation and the By-Laws to (a) delete the present
fifteen person maximum number of directors the Company
can have, (b) give directors the ability to set the size
of the Board of Directors, as well as to create and fill
vacancies on the Board of Directors, (c) require that
nominations for directors to be elected at any Annual
Meeting of Shareholders, other than incumbent directors,
be made in writing at least sixty days prior to the
Annual Meeting, and (d) recognize that the holders of the
Company's $2.25 Cumulative Convertible Preferred Stock
have been given the right to elect two directors during
any period in which payment of dividends on the Preferred
Stock is in arrears, and make it clear that any such
directors are in addition to the directors elected by the
Common Shareholders.
(3) To elect independent auditors.
(4) To transact such other business as may properly come
before the meeting or any adjournments thereof.
RECORD DATE................... Holders of Common Stock of record at the close of business
March 4, 1994, are entitled to vote at the meeting.
ANNUAL REPORT................. The Annual Report of the Company for the year 1993 is
enclosed unless you have signed a statement indicating that
you have access to another copy at your address.
</TABLE>
1
<PAGE> 4
<TABLE>
<S> <C>
PROXY VOTING.................. It is important that your shares be represented and voted at
the meeting. Please MARK, SIGN, DATE, and RETURN PROMPTLY the
enclosed proxy card in the envelope furnished. Any proxy so
given can be revoked in the manner described in the
accompanying Proxy Statement at any time prior to its
exercise at the meeting.
</TABLE>
James L. Coker, Secretary
March 18, 1994
2
<PAGE> 5
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
SONOCO PRODUCTS COMPANY
APRIL 20, 1994
GENERAL INFORMATION
The solicitation of the enclosed proxy is made by the Board of Directors of
Sonoco Products Company, whose principal address is Post Office Box 160, One
North Second Street, Hartsville, South Carolina, 29551-0160, for use at the
Annual Meeting of Shareholders, to be held at 11:00 A.M. on Wednesday, April 20,
1994, and at any adjournments thereof.
Any shareholder who executes and delivers a proxy has the right to revoke
it at any time before it is voted. The proxy can be revoked by giving notice of
revocation at the Annual Meeting, or by delivery to the Secretary of the
Company, Post Office Box 160, One North Second Street, Hartsville, South
Carolina, 29551-0160, of an instrument which by its terms revokes the proxy, or
by delivery to the Secretary of a duly executed proxy bearing a later date. Any
shareholder who desires to do so can attend the meeting and vote in person in
which case the proxy will not be used.
The Annual Report to shareholders, including financial statements for the
year ended December 31, 1993, is enclosed unless you have signed a statement
indicating that you have access to another copy at your address. The Annual
Report, Proxy Statement and Proxy were first mailed to shareholders on or about
March 18, 1994.
The expense of the solicitation of proxies will be borne by the Company.
Solicitations will be made by the use of the mails and, if necessary, officers
and regular employees of the Company can make solicitations of proxies by
telephone or telefacsimile or by personal calls. It is contemplated that
brokerage houses, nominees and fiduciaries will forward the proxy soliciting
material to the beneficial owners of the stock held of record by such persons
and that the Company will reimburse them for their charges and expenses in
connection therewith.
The Company has authorized two classes of stock consisting of 150,000,000
authorized shares of no par value Common Stock, of which 86,861,963 shares are
outstanding and 30,000,000 authorized shares of no par value Preferred Stock of
which 3,450,000 shares of $2.25 Cumulative Convertible Preferred Stock are
outstanding. Each share of the Company's Common Stock will be entitled to one
vote on each matter submitted at the Annual Meeting. Only shareholders of record
of the Company's Common Stock at the close of business on March 4, 1994, will be
entitled to vote at the meeting. The shareholders of the Company's $2.25
Cumulative Convertible Preferred Stock, issued in November, 1993, will not be
entitled to vote at the Annual Meeting.
A majority of the shares entitled to be voted at the Annual Meeting
constitutes a quorum. If a share is represented for any purpose at the Annual
Meeting by the presence of the registered owner or a person holding a valid
proxy for the registered owner, it is deemed to be present for purposes of
establishing a quorum. Therefore, valid proxies which are marked "Abstain" or
"Withhold" and shares that are not voted, including
3
<PAGE> 6
proxies submitted by brokers that are the record owners of shares (so-called
"broker non-votes"), will be included in determining the number of votes present
or represented at the Annual Meeting.
If a quorum is present at the meeting, directors will be elected by a
plurality of the votes cast by shares present and entitled to vote at the
meeting. Votes that are withheld or that are not voted in the election of
directors will have no effect on the outcome of election of directors.
Cumulative voting is not permitted.
Approval of the amendments to Article 9(a) of the Restated Articles of
Incorporation and to Article III, Sections 1 and 2 of the By-Laws requires the
affirmative vote of two-thirds of the outstanding shares. Accordingly, proxies
marked "Abstain" and shares that are not voted will have the same effect as
votes against the amendments.
Approval of the amendment to Article III, Section 5 of the By-Laws requires
the affirmative vote of a majority of the outstanding shares. Accordingly,
proxies marked "Abstain" and shares that are not voted will have the same effect
as a vote against the amendment.
Shares represented by all properly executed proxies, delivered pursuant to
this solicitation, will be voted at the Annual Meeting or any adjournments
thereof. Where the proxy card specifies a choice with respect to any matters to
be voted upon, the shares will be voted in accordance with the specifications so
made. Where the proxy card does not specify a choice with respect to an item,
the proxy will be voted FOR such item.
There is no person known by the management of the Company to own of record
or beneficially more than 5% of the outstanding voting shares of the Company.
4
<PAGE> 7
ELECTION OF DIRECTORS
At this Annual Meeting six directors are to be elected. Five shall hold
office for the next three years, their terms expiring at the Annual
Shareholders' Meeting in 1997, and one shall hold office for the next year, his
term expiring at the Annual Shareholders' Meeting in 1995, or until their
successors are duly elected and qualified. It is the intention that the persons
named on the enclosed form of proxy will vote such proxy FOR the election of the
six persons named herein (or if any of the persons nominated is unexpectedly
unavailable, for such substitutions as the Board of Directors may designate)
unless authority is withheld for all or any of the nominees. Proxies will not be
voted for a greater number of persons than the number of nominees named. Each
nominee has been recommended for election by the Board of Directors.
INFORMATION CONCERNING NOMINEES
NOMINEES TO BE ELECTED FOR THREE-YEAR TERMS:
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- *C. W. COKER (60). Mr. Coker is Chairman and Chief 1962
- ----------------- Executive Officer of the Company, a position held since
- ----------------- 1990. He was President of the Company from 1970 to 1990.
- ----------------- He is a director of NationsBank Corporation, Springs
- ----------------- Industries, Inc., Sara Lee Corporation and Carolina Power
- ----------------- and Light Company.
- -----------------
- -----------------
- ----------------- A. T. DICKSON (62). Mr. Dickson is President and Director 1981
- ----------------- of Ruddick Corporation (a diversified holding company),
- ----------------- Charlotte, North Carolina, a position held since 1968. He
- ----------------- is a director of Lance, Inc., NationsBank Corporation,
- ----------------- Royal Group, Inc. and Bassett Furniture Industries, Inc.
- -----------------
- -----------------
- -----------------
</TABLE>
- ---------------
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker.
5
<PAGE> 8
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- R. E. ELBERSON (65). Mr. Elberson is a retired executive 1985
- ----------------- and director of Sara Lee Corporation (manufacturer and
- ----------------- marketer of consumer products), Chicago, Illinois. He
- ----------------- served as Vice Chairman of Sara Lee Corporation from 1986
- ----------------- to 1989 and as President and Chief Operating Officer from
- ----------------- 1983 to 1986. Mr. Elberson is a director of W. W.
- ----------------- Grainger, Inc.
- -----------------
- ----------------- J. C. FORT (67). Mr. Fort is President and Director of 1969
- ----------------- Trust Company of South Carolina, Inc. (insurance brokers),
- ----------------- Hartsville, South Carolina. Until his retirement from the
- ----------------- Company in 1987, Mr. Fort served as Senior Vice President,
- ----------------- a position held since 1986. He served as Senior Vice
- ----------------- President -- International Group from 1983 to 1986.
- -----------------
- -----------------
- ----------------- R. C. KING, JR. (59). Mr. King is President and Chief 1991
- ----------------- Operating Officer of the Company, a position held since
- ----------------- 1990. He was Senior Vice President from 1987 to 1990. Mr.
- ----------------- King is a director of United Dominion Industries.
- -----------------
- -----------------
- -----------------
- -----------------
</TABLE>
6
<PAGE> 9
NOMINEE TO BE ELECTED FOR ONE-YEAR TERM:
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- LEO BENATAR (63). Mr. Benatar is Senior Vice President of 1993
- ----------------- the Company, a position held since 1993, and Chairman and
- ----------------- Chief Executive Officer of Engraph, Inc. (printer and
- ----------------- fabricator of roll labels, decals, specialty paperboard
- ----------------- items and flexible packaging), Atlanta, Georgia, a
- ----------------- position held since 1981. Engraph, Inc. became a wholly
- ----------------- owned subsidiary of the Company as a result of a merger of
- ----------------- the two companies on October 21, 1993. He was President of
Mead Packaging, a division of the Mead Corporation, from
1972 to 1981. Mr. Benatar is a director of Interstate
Bakeries Corporation, Mohawk Industries, Inc. and
Riverwood International Corporation, and is Deputy
Chairman of the Federal Reserve Bank of Atlanta.
</TABLE>
All nominees previously have been elected to the Board of Directors by the
Common Shareholders, except Mr. Benatar, who was elected by the Board of
Directors at their October 20, 1993, meeting to fill the vacancy on the Board
created by the resignation on February 3, 1993, of Mr. P. J. Rizzo. Mr. Benatar
is recommended by the Nominating Committee of the Board of Directors for
election by the Common Shareholders to fill the unexpired term of Mr. Rizzo,
which will expire at the Annual Meeting of Shareholders in 1995.
The Nominating Committee recommends to the Board of Directors nominees to
fill vacancies on the Board as they occur and recommends candidates for election
as directors at Annual Meetings of Shareholders. The committee will consider
persons recommended to be nominees by shareholders upon submission in writing to
the Nominating Committee of the Company of the names of such persons, together
with their qualifications for service and evidence of their willingness to
serve. If the amendment to Article 9(a) of the Company's Restated Articles of
Incorporation is adopted at the Annual Meeting, nominations for any person who
is not then a director of the Company, whether made by the Nominating Committee
or any shareholder, will be required to be submitted to the Secretary not less
than sixty days prior to the Annual Meeting for which such nominations are made.
7
<PAGE> 10
INFORMATION CONCERNING DIRECTORS WHOSE TERMS WILL CONTINUE:
Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 1995 are:
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- *F. L. H. COKER (58). Mr. Coker is retired. He was 1964
- ----------------- President and Director of Sea Corporation of Myrtle Beach,
- ----------------- Inc. (private investments), Myrtle Beach, South Carolina,
- ----------------- from 1983 to 1989. Until his retirement from the Company
- ----------------- in 1979, Mr. Coker was Senior Vice President, a position
- ----------------- held since 1976.
- -----------------
- -----------------
- ----------------- T. C. COXE, III (63). Mr. Coxe is Senior Executive Vice 1982
- ----------------- President of the Company, a position held since 1993. He
- ----------------- was Executive Vice President from 1985 to 1993. He is a
- ----------------- director of South Carolina National Corporation and The
- ----------------- South Carolina National Bank.
- -----------------
- -----------------
- -----------------
- ----------------- E. H. LAWTON, JR. (64). Mr. Lawton is President and 1968
- ----------------- Director of Hartsville Oil Mill (vegetable oils
- ----------------- processor), Darlington, South Carolina, a position held
- ----------------- since 1962. He is a director of NationsBank of South
- ----------------- Carolina, N.A.
- -----------------
- -----------------
- -----------------
</TABLE>
- ---------------
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker.
8
<PAGE> 11
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- E. C. WALL, JR. (56). Mr. Wall is President and Director 1976
- ----------------- of Canal Industries (forest products), Conway, South
- ----------------- Carolina, a position held since 1969. He is a director of
- ----------------- Ruddick Corporation, SCANA Corporation and Blue Cross-Blue
- ----------------- Shield of South Carolina.
- -----------------
- -----------------
- -----------------
</TABLE>
Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 1996 are:
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- C. J. BRADSHAW (57). Mr. Bradshaw is President and 1986
- ----------------- Director of Bradshaw Investments, Inc. (private
- ----------------- investments), Georgetown, South Carolina, a position held
- ----------------- since 1986. He served as President and Chief Operating
- ----------------- Officer of Transworld Corporation, New York, New York,
- ----------------- from 1984 to 1986 and Chairman of the Board and Chief
- ----------------- Executive Officer of Spartan Food Systems, Inc.,
- ----------------- Spartanburg, South Carolina, from 1961 to 1986. Mr.
Bradshaw is a director of South Carolina National
Corporation and The South Carolina National Bank.
- ----------------- R. J. BROWN (59). Mr. Brown is Founder, Chairman and Chief 1993
- ----------------- Executive Officer of B&C Associates, Inc. (a management
- ----------------- consulting, marketing research and public relations firm),
- ----------------- High Point, North Carolina, a position held since 1973. He
- ----------------- is a director of First Union Corporation and Pacific
- ----------------- Financial Group.
- -----------------
- -----------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<S> <C> <C>
- ----------------- *J. L. COKER (53). Mr. Coker is Secretary of the Company, 1969
- ----------------- a position held since 1969. He is President of JLC
- ----------------- Enterprises (private investments), Stonington,
- ----------------- Connecticut, a position held since 1979. He was President
- ----------------- of Sonoco Limited, Canada, from 1972 to 1979.
- -----------------
- -----------------
- -----------------
- ----------------- PAUL FULTON (59). Mr. Fulton is Dean of The Kenan-Flagler 1989
- ----------------- Business School, The University of North Carolina, Chapel
- ----------------- Hill, North Carolina, a position he assumed on January 1,
- ----------------- 1994. He was President of Sara Lee Corporation
- ----------------- (manufacturer and marketer of consumer products), Chicago,
- ----------------- Illinois, from 1988 through 1993. He served as Executive
- ----------------- Vice President from 1987 to 1988 and as Senior Vice
- ----------------- President of Sara Lee Corporation and President of the
Hanes Group of Sara Lee Corporation from 1981 to 1986. Mr.
Fulton is a director of NationsBank Corporation and
Bassett Furniture Industries Inc.
- ----------------- H. L. MCCOLL, JR. (58). Mr. McColl is Chairman of the 1972
- ----------------- Board and Chief Executive Officer and Director of
- ----------------- NationsBank Corporation, Charlotte, North Carolina, and
- ----------------- Chief Executive Officer of each of its subsidiary banks.
- ----------------- He served as Chairman of the Board of NationsBank
- ----------------- Corporation (formerly NCNB Corporation) from 1983 until
- ----------------- December 31, 1991, and was reappointed Chairman on
- ----------------- December 31, 1992. He is a director of CSX Corporation,
Ruddick Corporation, Jefferson-Pilot Corporation and
Jefferson-Pilot Life Insurance Company.
</TABLE>
- ---------------
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker.
10
<PAGE> 13
BOARD COMMITTEES
During 1993 the Board of Directors held four regularly scheduled meetings
and three special meetings to review significant developments affecting the
Company and to act on matters requiring Board approval. To assist it in the
discharge of its responsibilities, the Board has established four committees:
<TABLE>
<CAPTION>
COMMITTEE CURRENT NUMBER OF
NAME PURPOSE MEMBERS 1993 MEETINGS
- ----------------- --------------------------------------- ----------------- --------------
<S> <C> <C> <C>
Audit Committee Responsible for the scope of both E. C. Wall, Jr. -- 2
internal and external audit programs in Chairman
order to fully protect assets of the R. J. Brown
Company. F. L. H. Coker
J. L. Coker
A. T. Dickson
J. C. Fort
Executive Responsible for establishing and A. T. Dickson -- 4
Compensation maintaining officer-level salaries and Chairman
Committee administering executive compensation C. J. Bradshaw
plans. R. E. Elberson
Paul Fulton
E. C. Wall, Jr.
Nominating Responsible for recommending to the F. L. H. Coker -- 2
Committee directors qualified candidates to fill Chairman
vacancies on the Board. R. E. Elberson
J. C. Fort
E. H. Lawton, Jr.
H. L. McColl, Jr.
Finance Responsible for evaluating the H. L. McColl, Jr. -- 3
Committee Company's financial status, advising Chairman
corporate management and the full Board C. J. Bradshaw
on financial matters, and reviewing the R. J. Brown
Company's long-term financial J. L. Coker
requirements and plans. Paul Fulton
E. H. Lawton, Jr.
</TABLE>
All directors attended 75% or more of the aggregate number of meetings of
the Board and committees.
11
<PAGE> 14
SECURITY OWNERSHIP OF MANAGEMENT AS OF DECEMBER 31, 1993
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
---------------------------
NAME POSITION NUMBER(1) PERCENTAGE(2)
- ------------------ ------------------------------------------------ --------- -------------
<S> <C> <C> <C>
Leo Benatar Senior Vice President and Director 135,606
C. J. Bradshaw Director 20,846
R. J. Brown Director 400
F. L. H. Coker Director 1,148,565 1.3
J. L. Coker Secretary and Director 142,801
A. T. Dickson Director 59,616
R. E. Elberson Director 17,000
J. C. Fort Director 1,154,911 1.3
Paul Fulton Director 5,400
E. H. Lawton, Jr. Director 712,899
H. L. McColl, Jr. Director 15,432
E. C. Wall, Jr. Director 81,610
C. W. Coker Chairman & Chief Executive Officer and Director 1,375,504 1.6
R. C. King, Jr. President & Chief Operating Officer and Director 252,514
T. C. Coxe, III Senior Executive Vice President and Director 296,393
H. E. DeLoach, Jr. Group Vice President 1,753,956(3) 2.0
H. J. Moran Group Vice President 124,403
All Executive Officers and Directors (26 persons) 8,243,527(4) 9.4
</TABLE>
- ---------------
(1) Shareholdings represent the number of shares beneficially owned directly or
indirectly by each named director and executive officer as of December 31,
1993. The number includes shares subject to currently exercisable options
granted by the Company under the 1983 Key Employee Stock Option Plan and
the 1991 Key Employee Stock Plan for the following directors and named
executive officers: C. W. Coker -- 345,500, R. C. King, Jr. -- 184,550, T.
C. Coxe, III -- 78,940, H. E. DeLoach, Jr. -- 71,600, H. J.
Moran -- 106,800, and Leo Benatar -- 111,232.
Also included are shares held in the Company's Dividend Reinvestment Plan
(6,616), the Employee Savings and Stock Ownership Plan (42,533), and share
equivalents in deferred compensation plans (16,174).
(2) Percentages not shown are less than 1%.
(3) Includes 1,584,778 shares of Common Stock owned by an estate for which Mr.
DeLoach is executor. Mr. DeLoach disclaims beneficial ownership of such
shares.
(4) Includes 1,687,442 shares of Common Stock which the executive officers have
a right to acquire pursuant to options granted by the Company.
12
<PAGE> 15
EXECUTIVE COMPENSATION COMMITTEE'S REPORT TO SHAREHOLDERS
The Executive Compensation Committee of the Board of Directors (the
"Committee") is responsible for setting the remuneration levels for executives
of the Company. It also oversees the Company's various executive compensation
plans, as well as the overall management compensation program. The Committee
periodically evaluates the Company's executive compensation program in terms of
appropriateness, including competitive positioning relative to other companies'
practices. The Committee obtains independent and impartial advice from external
compensation consulting firms in order to maintain objectivity in executing its
responsibilities. The Committee met four times during 1993, and had met once in
1994 as of the printing of this report.
PHILOSOPHY
The executive compensation program has been designed to attract, motivate,
reward, and retain senior management by providing competitive total compensation
opportunities based on performance, teamwork, and the creation of shareholder
value. It is a basic program consisting of salary, annual cash bonus awards,
annual stock option awards, perquisites, and employee benefits.
In order to determine competitive compensation levels, the Company
participates in a number of surveys conducted by independent consulting firms,
and from time to time contracts with these firms to perform customized studies
of companies in our industry groups and/or with companies showing similar
long-term financial performance results. In these surveys executive compensation
levels are developed by looking at large numbers of similar positions across
American industry. The results reflect adjustments based upon Company revenues.
Companies in the Dow Jones Containers and Packaging Group also are included, as
available, among the companies whose survey data is used in our studies. This
group, which includes the Company, was used in the five year shareholder return
performance graph that appears on Page 20.
The total compensation package for executives is structured to be
competitive with the median total pay practices for executives of other large
corporations. The base salary ranges are targeted to be at the median of
surveyed market rates. Incentive compensation, consisting of the annual cash
bonus plan and the annual stock option awards, is targeted to provide median
market compensation for expected Company performance, and is leveraged upward to
motivate and reward executives for exceptional performance. Executive
perquisites are limited and provide a lower benefit than the market median. The
benefits program for executives provides an overall level that is slightly
higher than the market median. This benefits program, in particular the
retirement and life insurance plans, is designed to enhance retention of
executives until normal retirement age.
Following is a discussion of the elements of the executive compensation
program, along with a description of the decisions and actions taken by the
Committee with regard to 1993 compensation. Also included is a specific
discussion of the decisions regarding Mr. Coker's compensation for performing
the duties of Chairman and Chief Executive Officer ("CEO"). The tables and
accompanying narrative and footnotes which follow this report reflect the
decisions covered by the discussions below.
13
<PAGE> 16
SALARY
The Company's salary ranges and resulting salaries are based on a relative
valuing of the duties and responsibilities of each position, as well as the
annual revenues of the Company or applicable business unit. The Company reviews
the base salaries of all salaried employees on an annual basis. Merit salary
increases are awarded from a table which considers each individual's performance
rating and position in his or her salary range. The Committee used the identical
process and table to determine salary adjustments for each of the executive
officers, including Mr. Coker, whose most recent increase was effective June 1,
1993.
ANNUAL BONUS AWARDS
The Company has a bonus plan which for 1993 provided for cash incentive
opportunities based upon achievement of pre-determined annual financial
performance goals, as well as attainment of key individual strategic and
operational objectives. The purpose of this plan was to link a significant
portion of executive pay to both the Company's operating performance for the
year and critical issues affecting the long-term health of the Company.
Financial performance goals were weighted from 80% to 86% of the total
bonus opportunity. For executives with total corporate responsibility, the
plan's financial goals were based on corporate earnings per share from ongoing
operations. For executives with business unit responsibility, one half of the
bonus opportunity available for financial performance was based on corporate
earnings per share and the remainder was based on business unit profit before
interest and taxes. Consistent with prior years, unusual non-recurring items,
such as gains resulting from the sale of businesses and restructuring charges,
were excluded in determining operating performance.
The key strategic and operational objectives for 1993, which were weighted
from 14% to 20% of the total bonus opportunity, varied by individual and were in
areas such as employee safety, customer satisfaction, business development,
strategic acquisitions, technology innovation, management succession and
employee development, process improvement, total quality management, and
environmental protection.
On February 2, 1994, the Committee reviewed and approved the 1993 annual
bonus awards for executive officers. Initial bonus amounts were assigned to each
executive officer based on the scoring of financial goal attainment and
subjective evaluations of how well the personalized objectives were met. In some
cases the Committee used additional discretion based on its assessment of
individual performance and internal equity in the determination of final bonus
amounts. Mr. Coker's earned award under the plan reflected both the Company's
financial performance, based on earnings per share from ongoing operations in
accordance with the predetermined bonus plan formula, and the Committee's
assessment of how well he met his key strategic and operational objectives for
the year.
STOCK OPTIONS
In 1993 Mr. Coker, the executive officers, and other key management
employees received options to purchase shares of Common Stock under a plan which
previously had been approved by the Company's shareholders. The price of these
options was set at the prevailing market price on the date the options were
awarded. Accordingly, these options will be valuable to the recipients only if
the market price of the
14
<PAGE> 17
Company's stock increases. The size of each option award, including Mr. Coker's,
in conjunction with annual cash bonus opportunity, reflects median competitive
incentive compensation opportunities as reported by independent consulting
firms.
OTHER
On October 21, 1993, Engraph, Inc., a publicly traded company, merged with
the Company. In conjunction with this merger, the Company assumed all
outstanding Engraph, Inc. stock options for sixty-five additional individuals,
one of whom became an executive officer of the Company. As a part of this
assumption, these option holders were awarded rights that would preserve their
gains in Engraph, Inc. options on the merger date.
Beginning in 1994, tax law changes restrict a publicly traded company's
right to deduct certain types of compensation payments to the CEO or to any of
the four other named executives for amounts in excess of one million dollars.
The Company previously adopted a deferred compensation plan and shareholders
have approved a stock option program which, under present tax laws and
regulations, affords the Company sufficient opportunity to ensure complete tax
deductability of all applicable compensation payments.
Tax law changes further limit the amounts that the Company can award to
employees participating in the Employee Savings and Stock Ownership Plan, and
reduce the amount of retirement income that executives can receive from
tax-qualified retirement plans. As a result of that legislation, the Company
adopted a non-qualified benefits restoration plan to keep employees whole with
respect to benefits now limited by tax law under the Company's qualified
employee benefit plans.
A. T. Dickson, Chairman C. J. Bradshaw R. E. Elberson J. C. Fort
P. Fulton E. C. Wall, Jr.
15
<PAGE> 18
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL AWARDS
COMPENSATION(1) ------------
------------------- NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION(3)
- ----------------------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
C. W. Coker 1993 $575,834 $451,567 62,000 $ 184,233
Chairman and Chief 1992 541,831 460,556 80,000 178,813
Executive Officer 1991 506,250 170,000 62,500 145,160
R. C. King, Jr. 1993 431,157 298,696 40,600 76,592
President and Chief 1992 401,581 356,848 60,000 86,856
Operating Officer 1991 374,232 125,773 25,000 84,919
T. C. Coxe, III 1993 316,668 200,999 26,600 48,975
Senior Executive 1992 297,759 211,409 36,000 47,059
Vice President and 1991 281,246 83,124 28,100 104,418
Executive Vice President
H. E. DeLoach, Jr. 1993 220,351 172,690 12,600 25,398
Group Vice President and 1992 206,460 110,487 16,000 22,010
Vice President - 1991 196,429 49,285 13,000 22,142
Film, Plastics and
Special Products
H. J. Moran 1993 209,411 140,724 12,600 27,731
Group Vice President and 1992 192,304 125,000 16,000 25,812
Vice President - 1991 180,166 90,444 13,000 49,838
Consumer Products
</TABLE>
- ---------------
(1) None of the executive officers received perquisites or personal benefits
which totaled the lesser of $50,000 or 10% of their respective salary plus
bonus payments.
(2) All amounts reflect a two-for-one stock split effective June 10, 1993.
16
<PAGE> 19
(3) All other compensation for 1993 consisted of the following:
<TABLE>
<CAPTION>
COMPANY CONTRIBUTIONS AND
SPLIT-DOLLAR ABOVE MARKET DEFERRED ACCRUALS TO DEFINED CONTRIBUTION
NAME LIFE INSURANCE COMPENSATION ACCRUALS RETIREMENT PLANS(2)
- ------------------- -------------- --------------------- --------------------------------
<S> <C> <C> <C>
C. W. Coker $141,020(1) $33,213 $ 10,000
R. C. King, Jr. 46,696 19,896 10,000
T. C. Coxe, III 14,506 24,469 10,000
H. E. DeLoach, Jr. 6,518 8,955 9,925
H. J. Moran 17,731 -0- 10,000
</TABLE>
- ----------
(1) Includes additional insurance which was purchased for Mr. Coker in
exchange for cancellation of previously-granted stock options that had a
market price gain of $497,875 at the time of the transaction.
(2) Comprised of contributions to the Company's Employee Savings and Stock
Ownership Plan (ESSOP) and accruals to individual accounts in the
Company's non-qualified benefits restoration plan, as described on Page
15, in order to keep employees whole with respect to certain ESSOP
benefits that were limited by tax law.
OPTION EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION EXERCISES IN 1993 AND 1993 YEAR END VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SECURITIES AS OF IN-THE-MONEY OPTIONS
UNDERLYING DECEMBER 31, 1993(2) AS OF DECEMBER 31, 1993(3)
OPTIONS VALUE --------------------------- ---------------------------
NAME EXERCISED REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- --------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker -0- $ -0- 283,500 62,000 $ 1,410,188 $ -0-
R. C. King, Jr. -0- -0- 143,950 40,600 775,516 -0-
T. C. Coxe, III 36,000 108,000 52,340 26,600 735,386 -0-
H. E. DeLoach, Jr. 11,000 88,000 59,000 12,600 258,875 -0-
H. J. Moran 16,000 280,750 94,200 12,600 720,600 -0-
</TABLE>
- ---------------
(1) The difference between the exercise price paid and the value of the acquired
shares based on the closing price of the Company's stock on the exercise
date.
(2) Reflects a two-for-one stock split effective June 10, 1993.
(3) Based on $22.00 per share, the December 31, 1993, closing price.
17
<PAGE> 20
OPTION GRANTS TABLE
1993 STOCK OPTION GRANTS
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AND
- --------------------------------------------------------------------------------- RESULTING COMPANY STOCK PRICE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR 10 YEAR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES PRICE (PER EXPIRATION ---------------------------------
NAME GRANTED(1) IN 1993 SHARE) DATE 5% ($39.297) 10% ($62.574)
- -------------------- ---------- ----------- ----------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker 62,000 6.5 $24.125 2/3/2003 $ 940,664 $ 2,383,838
R. C. King, Jr. 40,600 4.2 24.125 2/3/2003 615,983 1,561,029
T. C. Coxe, III 26,600 2.8 24.125 2/3/2003 403,575 1,022,743
H. E. DeLoach, Jr. 12,600 1.3 24.125 2/3/2003 191,167 484,457
H. J. Moran 12,600 1.3 24.125 2/3/2003 191,167 484,457
Comparable gain in shareholder value for the 87,167,880 shares outstanding as of
February 3, 1993, the grant date. 1,322,511,075 3,351,517,818
</TABLE>
- ---------------
(1) These options were granted on February 3, 1993, at the closing market price,
became exercisable on February 3, 1994, and were granted for a period of
ten years, subject to earlier expiration in certain events related to
termination of employment. The exercise price and tax obligations can be
paid by cash or the delivery of previously-owned shares. Tax obligations
also can be paid by an offset of the underlying shares.
(2) The amounts in these columns are the result of calculations set by the
Securities and Exchange Commission and are based on hypothetical 5% and 10%
stock price appreciation over ten years. They are not intended to forecast
possible future appreciation, if any, of the price of the Company's stock.
All amounts have been adjusted to reflect a two-for-one stock split effective
June 10, 1993.
18
<PAGE> 21
PENSION TABLE
Executive officers participate in a non-contributory defined benefit
program which provides for a maximum annual lifetime retirement benefit equal to
60% of final average compensation computed as a straight life annuity based on
the highest three of the last seven calendar years. In order to receive the full
benefit, the executive must have at least fifteen years of applicable service
and retire no earlier than age sixty-five. Qualified spouses receive survivor
benefits at a rate of 75% of the benefit paid to the executives. The total
benefit provided by the Company is offset by 100% of primary U.S. Social
Security.
<TABLE>
<CAPTION>
AGE 65 RETIREMENT
YEARS OF SERVICE
FINAL AVERAGE -------------------------------------------------------------------------
COMPENSATION(1) 10 15 20 25 30 35+
- --------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 300,000 $120,000 $180,000 $180,000 $180,000 $180,000 $180,000
400,000 160,000 240,000 240,000 240,000 240,000 240,000
500,000 200,000 300,000 300,000 300,000 300,000 300,000
600,000 240,000 360,000 360,000 360,000 360,000 360,000
700,000 280,000 420,000 420,000 420,000 420,000 420,000
800,000 320,000 480,000 480,000 480,000 480,000 480,000
900,000 360,000 540,000 540,000 540,000 540,000 540,000
1,000,000 400,000 600,000 600,000 600,000 600,000 600,000
1,100,000 440,000 660,000 660,000 660,000 660,000 660,000
1,200,000 480,000 720,000 720,000 720,000 720,000 720,000
1,300,000 520,000 780,000 780,000 780,000 780,000 780,000
</TABLE>
- ---------------
(1) Covered final average compensation includes salary, bonus, and cash awards
from the Company's former long-term incentive plan. Age, years of service,
and final average compensation, if computed as of December 31, 1993, for
the named officers are as follows:
<TABLE>
<CAPTION>
FINAL
YEARS OF AVERAGE
NAME AGE SERVICE COMPENSATION
- ------------------- --- -------- ------------
<S> <C> <C> <C>
C. W. Coker 60 36 $919,612
R. C. King, Jr. 59 37 632,365
T. C. Coxe, III 63 41 498,580
H. E. DeLoach, Jr. 49 8 325,531
H. J. Moran 61 11 296,436
</TABLE>
19
<PAGE> 22
COMPARATIVE COMPANY PERFORMANCE
The following line graph compares cumulative total shareholder return for
the Company with the S&P 500 Stock Index, and a recognized industry index, the
Dow Jones Containers and Packaging Group (which includes the Company), from
December 31, 1988, through December 31, 1993.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (*)
AMONG SONOCO PRODUCTS COMPANY, THE S&P 500 STOCK INDEX,
AND THE DOW JONES CONTAINERS & PACKAGING GROUP (**)
<TABLE>
<CAPTION>
DOW JONES
CONTAINERS &
MEASUREMENT PERIOD S&P 500 STOCK PACKAGING SONOCO PROD-
(FISCAL YEAR COVERED) INDEX GROUP UCTS COMPANY
<S> <C> <C> <C>
1988 100 100 100
1989 132 108 111
1990 127 93 100
1991 166 146 109
1992 179 160 154
1993 197 153 145
</TABLE>
ASSUMES $100 INVESTED ON DECEMBER 31, 1988, IN SONOCO PRODUCTS COMPANY COMMON
STOCK, THE S&P 500 STOCK INDEX, AND THE DOW JONES CONTAINERS & PACKAGING GROUP.
* TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
** FISCAL YEAR ENDING DECEMBER 31
20
<PAGE> 23
DIRECTOR'S COMPENSATION
Employee directors receive no additional compensation for their services as
members of the Board of Directors. Effective July 1, 1992, non-employee
directors were paid an $8,500 quarterly retainer fee and a $1,000 attendance fee
for special meetings. On July 1, 1993, the quarterly retainer fee was increased
to $9,000.
Directors are able to defer part or all of their fees. Directors can choose
to earn market rate interest credits on their deferrals or have their deferrals
treated as if invested in equivalent units of Sonoco Products Company Common
Stock. In the latter account they earn dividend equivalent credits which are
reinvested in stock equivalent units. The directors can choose a fixed period,
commencing the January following termination from the Board of Directors, over
which the account balances will be paid in annual installments.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. A. T. Dickson, C. J. Bradshaw, R. E. Elberson, and E. C. Wall, Jr.
served on the Company's Executive Compensation Committee during the year ended
December 31, 1993. Mr. J. C. Fort, a former employee of the Company, who served
as Senior Vice President -- International Group from 1983 to 1986, and Senior
Vice President from 1986 until his retirement in 1987, resigned from the
Executive Compensation Committee on October 20, 1993, prior to the meeting of
the committee on that date. Mr. Paul Fulton was appointed to the committee on
January 1, 1994.
Mr. A. T. Dickson and Mr. Paul Fulton, directors of NationsBank
Corporation, and Mr. C. J. Bradshaw, a director of The South Carolina National
Bank and South Carolina National Corporation, are members of the Executive
Compensation Committee. On October 8, 1987, the Company entered into a
seven-year $50,000,000 interest rate swap agreement with NCNB National Bank, now
NationsBank of North Carolina, N.A., to exchange a floating interest rate
payment for a fixed rate payment. On October 1, 1993, NationsBank of North
Carolina, N.A., also extended to the Company, as a backstop facility for its
commercial paper program and general corporate purposes, a five-year committed
line of credit for $75,000,000. The South Carolina National Bank has extended a
similar line for $65,000,000. These committed lines of credit from NationsBank
of North Carolina, N.A., and The South Carolina National Bank have been in place
since 1987 and have been renewed and increased or decreased according to the
Company's needs. Additionally, NationsBank of North Carolina, N.A., has extended
other lines of credit to the Company as support for letters of credit,
overdrafts and other corporate needs. NationsBank of North Carolina, N.A., also
provides treasury management services to the Company and investment management
services through its trust department. The Company pays fees to NationsBank of
North Carolina, N.A., for these services and for the availability of the lines
of credit, as well as interest on borrowed funds. All transactions were handled
on a competitive basis. Management is convinced that the rates and provisions
were as favorable to the Company as otherwise could have been obtained.
Mr. H. L. McColl, Jr., an executive officer of NationsBank Corporation, is
a member of the Company's Board but is not a member of the Company's Executive
Compensation Committee. Mr. C. W. Coker, Chairman and Chief Executive Officer of
the Company, is a member of NationsBank Corporation's Compensation Committee.
21
<PAGE> 24
TRANSACTIONS WITH MANAGEMENT
Mr. H. L. McColl, Jr. is Chairman, Chief Executive Officer and Director of
NationsBank Corporation. Mr. C. W. Coker, Mr. A. T. Dickson and Mr. Paul Fulton
are directors of NationsBank Corporation. Mr. C.J. Bradshaw and Mr. T. C. Coxe,
III are directors of The South Carolina National Bank and South Carolina
National Corporation. See the "Compensation Committee Interlocks and Insider
Participation" section above.
During 1993 the Company purchased lumber from a company of which Mr. E. C.
Wall, Jr., a director of the Company, is Chairman of the Board and more than a
10% beneficial owner. The aggregate purchase price of the lumber was $837,293.
The Company also purchased timber during the year from a trust of which Mr. T.
C. Coxe, III, a director and executive officer of the Company, is trustee and
more than a 10% beneficial owner. The aggregate purchase price of the timber was
approximately $282,000. Management of the Company believes the prices and terms
were comparable to those the Company could have obtained from unaffiliated third
parties.
AMENDMENTS TO THE RESTATED ARTICLES OF INCORPORATION AND THE BY-LAWS
The Board of Directors recommends to the shareholders of the Company the
approval of certain amendments to the Company's Restated Articles of
Incorporation and the By-Laws. The amendments would delete the present fifteen
person maximum number of directors the Company can have, would give the
directors the ability to set the size of the Board of Directors, as well as to
create and fill vacancies on the Board of Directors, and would require that
nominations for directors to be elected at any Annual Meeting of Shareholders,
other than incumbent directors, be made in writing at least sixty days prior to
the Annual Meeting.
The proposed amendments also recognize that the holders of the Company's
$2.25 Cumulative Convertible Preferred Stock have been given the right to elect
two directors during any period in which payment of dividends on the Preferred
Stock is in arrears and make it clear that any such directors are in addition to
the directors elected by the Common Shareholders.
Although the proposed amendments would give the Board of Directors the
ability to change the size of the Board, under South Carolina corporate law, the
directors are prohibited from increasing or decreasing by more than 30% the
number of directors last approved by the shareholders; only the shareholders can
approve a greater increase or decrease. Furthermore, any persons elected by the
Board to fill vacancies on the Board of Directors, whether such vacancies arise
by reason of resignation, death, increase in number of directors, or otherwise,
can serve only until the next Annual Meeting of Shareholders.
The proposed amendments relating to size of the Board of Directors and
giving directors the ability to fill vacancies between Annual Meetings are
intended to give the Board greater flexibility in controlling its size. For
example, it is often an important negotiating point in an acquisition to be able
to offer associates of the target company one or more Board seats. The
additional flexibility also would give the directors the ability to add persons
who offer special talents to the Board or who are able to add other dimensions
to the Board. To be able to offer seats, however, the seats must be available.
The current Restated Articles of Incorporation and
22
<PAGE> 25
the By-Laws fix the maximum number of directors at fifteen and do not give the
Board the ability to increase the number of directors by creating and filling a
vacancy. Similarly, vacancies can occur from time to time which do not need to
be filled. The proposed amendments would allow the Board to reduce its size
rather than fill a vacancy.
The proposed amendment relating to advance notice of nominations to the
Board is intended to provide for an orderly nomination process and to give the
Board time to determine the credentials of nominees and to take a position with
respect thereto.
The proposed amendments may have the impact of making a change in control
of the Company somewhat more difficult to effect, but the increased difficulty
is most likely to relate primarily to timing and not to the ultimate ability to
effect a change in the composition of the Board.
The full text of the proposed amendments to the Restated Articles of
Incorporation and the By-Laws is set forth below.
The Restated Articles of Incorporation of Sonoco Products Company are to be
amended by replacing Article 9(a) thereof with the following language:
(a) Board of Directors. Notwithstanding anything in Item 7 of the
Restated Articles of Incorporation, the number of directors of the
corporation shall be (i) the number fixed from time to time by the Board of
Directors, which shall not be less than nine, plus (ii) any directors
elected exclusively by the holders of Preferred Stock as provided in these
articles. Except for any director elected exclusively by the holders of
Preferred Stock, the directors shall continue to be divided into three
classes of as nearly equal size as possible. Each class shall be elected to
serve a term of three years. At each Annual Meeting of Shareholders,
directors shall be elected to fill any vacancies in any class of the Board
of Directors. Directors so elected shall serve until the Annual Meeting of
Shareholders in the year in which their terms expire. No person who is not
then already a director of the corporation shall be eligible to be elected
as a director at the Annual Meeting of Shareholders unless such person
shall have been nominated in writing, with such notice delivered to the
Secretary of the corporation, not less than sixty days prior to such Annual
Meeting.
Article III, Section 1 of the By-Laws is to be amended to read as follows:
1. THE MANAGEMENT of all the affairs, property and the business of the
corporation shall be vested in a Board of Directors. The number of
directors of the corporation shall be (i) the number fixed from time to
time by the Board of Directors, which number shall not be less than nine,
plus (ii) any directors elected exclusively by the holders of Preferred
Stock as provided in the corporation's Restated Articles of Incorporation.
Directors shall be shareholders, each owning not less than one hundred
(100) shares of the voting stock of the corporation. The directors need not
be residents of the State of South Carolina.
Article III, Section 2 of the By-Laws is to be amended to read as follows:
2. THE BOARD OF DIRECTORS shall be divided into three classes of as
nearly equal size as possible in accordance with the provisions of the
Restated Articles of Incorporation, as amended.
23
<PAGE> 26
Article III, Section 5 of the By-Laws is to be amended to provide that any
increase in the number of directors can be filled by the Board of Directors, and
thereby to read as follows:
5. ALL VACANCIES OCCURRING IN THE BOARD OF DIRECTORS whether caused by
resignation, death, increase in number of directors, or otherwise, can be
filled by a majority vote of the remaining directors attending a regular or
special meeting.
The Board of Directors urges you to vote FOR the amendments.
ELECTION OF INDEPENDENT AUDITORS
Independent auditors are to be elected by the shareholders for the calendar
year 1994. The firm of Coopers & Lybrand, Certified Public Accountants, has
audited the books and records of the Company for many years, and the Audit
Committee of the Board of Directors recommends continuing the services of this
firm. Representatives of Coopers & Lybrand will be present and available to
answer any questions that may arise at the Annual Meeting and may make a
statement if they so desire.
The Board of Directors recommends that you vote FOR the election of Coopers
& Lybrand as independent auditors for the Company for the current year.
COMPLIANCE WITH THE SECURITIES EXCHANGE ACT OF 1934
As required by Section 16(a) of the Securities Exchange Act of 1934, the
Company's directors, its executive officers and certain individuals are required
to report periodically their ownership of the Company's Common Stock and any
changes in ownership to the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc.
The Company failed to file on a timely basis one report for Mr. Leo
Benatar's shares in Engraph, Inc.'s Retirement Plus Plan 401(k). Mr. Benatar is
Senior Vice President and a director of the Company. This information should
have been filed on 1993's year-end Form 5, due February 14, 1994, but was
reported on February 28, 1994, on Form 5.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
A shareholder proposal to be presented at the next Annual Meeting must be
received by the Company not later than November 4, 1994, in order to be included
in the Proxy Statement and Proxy.
24
<PAGE> 27
OTHER MATTERS
As of the date of this statement management knows of no business which will
be presented for consideration at the meeting other than that stated in the
notice of the meeting. As to other business, if any, that may properly come
before the meeting, it is intended that proxies in the accompanying form will be
voted in respect thereof in accordance with the best judgment of the person or
persons voting the proxies.
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE MARK, SIGN, DATE, AND
RETURN YOUR PROXY AS PROMPTLY AS POSSIBLE. PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS ON THE ACCOMPANYING PROXY.
James L. Coker, Secretary
March 18, 1994
25
<PAGE> 28
<TABLE>
<S> <C>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
SONOCO PRODUCTS COMPANY
POST OFFICE BOX 160 - ONE NORTH SECOND STREET - HARTSVILLE, SOUTH CAROLINA 29551-0160
P The undersigned hereby appoints Charles W. Coker, Chairman and Chief Executive Officer, or Russell C. King,
R Jr., President and Chief Operating Officer, as Proxies, each with the power to appoint his substitute, and
O hereby authorizes them to represent and to vote, as designated below, all the shares of Common Stock of
X Sonoco Products Company held of record by the undersigned on March 4, 1994, at the Annual Meeting of
Y Shareholders to be held on April 20, 1994, or any adjournment thereof.
DIRECTORS (1) ELECTION OF DIRECTORS:
RECOMMEND / / FOR All Nominees / / WITHHOLD on All Nominees
VOTING / / Withhold On The Following Nominees Only __________________________________________________________
FOR 1, Nominees -- Three-year Terms: C. W. Coker, A. T. Dickson, R. E. Elberson, J. C. Fort,
2 AND 3 R. C. King, Jr.
Nominee -- One-year Term: Leo Benatar
(2) PROPOSAL TO APPROVE AMENDMENTS TO THE RESTATED ARTICLES OF INCORPORATION AND THE BY-LAWS TO:
(a) Delete the present fifteen person maximum number of directors the Company can have,
(b) Give the directors the ability to set the size of the Board of Directors, as well as to create and
fill vacancies on the Board of Directors,
(c) Require that nominations for directors to be elected at any Annual Meeting of Shareholders, other
than incumbent directors, be made in writing at least sixty days prior to the Annual Meeting, and
(d) Recognize that the holders of the Company's $2.25 Cumulative Convertible Preferred Stock have been
given the right to elect two directors during any period in which payment of dividends on the
Preferred Stock is in arrears, and make it clear that any such directors are in addition to the
directors elected by the Common Shareholders.
/ / FOR / / AGAINST / / ABSTAIN
(Continued and to be signed and dated on the reverse side)
(Continued from other side)
(3) PROPOSAL TO APPROVE THE ELECTION OF COOPERS & LYBRAND, CERTIFIED PUBLIC ACCOUNTANTS, AS THE INDEPENDENT
AUDITORS OF THE CORPORATION.
/ / FOR / / AGAINST / / ABSTAIN
(4) In their discretion the Proxies are authorized to vote upon such other business as may properly come
before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
DATE__________________________ 19 ______
________________________________________
________________________________________
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME
APPEARS HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH. IF A CORPORATION,
PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AUTHORIZED PERSON. PLEASE MARK,
SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
<PAGE> 29
SONOCO PRODUCTS COMPANY
INTER-OFFICE CORRESPONDENCE
March 18, 1994
To: The Securities and Exchange Commission
Ref: File #0-516 - CIK #0000091767
Sonoco Products Company
1994 Proxy Statement and Proxy
LETTER OF VARIANCE
------------------
Pictures and the numbers on each page will appear as follows:
Page 5 2 Pictures
Page 6 3 Pictures
Page 7 1 Picture
Page 8 3 Pictures
Page 9 3 Pictures
Page 10 3 Pictures
Lana O. Roper
Assistant Treasurer
and Assistant Secretary
803-383-7277
