SONOCO PRODUCTS CO, DEF 14A, 1995-03-16

SONOCO PRODUCTS CO
DEF 14A, 1995-03-16
PAPERBOARD MILLS

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<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:

<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>

SONOCO PRODUCTS COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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

/ / Fee paid previously with preliminary materials.

/ / 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:

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<PAGE> 2

[logo]

SONOCO PRODUCTS COMPANY

POST OFFICE BOX 160
ONE NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160 U.S.A.

March 17, 1995

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 19,
1995, 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 approve amendments to the 1991 Key Employee Stock Plan,
a proposal to approve the Annual Incentive Compensation Terms for Executive
Officers, and the election of independent auditors.

In addition to action to be taken on the matters listed in the Notice of
Annual Meeting of Shareholders, the Company's progress will be discussed, and
attendees will be given an opportunity to ask questions of general interest to
all shareholders.

A copy of the 1994 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.

Charles W. Coker
Chairman, President 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 19, 1995.

PLACE......................... The Center Theater, 212 North Fifth Street, Hartsville, South
Carolina, 29550.

PURPOSES...................... (1) To elect seven members of the Board of Directors to serve
for the next three years.
(2) To act upon a proposal to amend the 1991 Key Employee
Stock Plan.
(3) To act upon a proposal to approve the Annual Incentive
Compensation Terms for Executive Officers.
(4) To elect independent auditors.
(5) To transact such other business as may properly come
before the meeting or any adjournment thereof.

RECORD DATE................... Holders of Common Stock of record at the close of business
March 3, 1995, are entitled to notice of and to vote at the
meeting.

ANNUAL REPORT................. The Annual Report of the Company for the year 1994 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>

By order of the Board of Directors,

James L. Coker, Secretary

March 17, 1995

2
<PAGE> 5

SONOCO PRODUCTS COMPANY

POST OFFICE BOX 160
ONE NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160

PROXY STATEMENT

GENERAL INFORMATION

INFORMATION CONCERNING THE SOLICITATION

This statement is furnished in connection with the solicitation of proxies
to be used at the Annual Meeting of Shareholders (Annual Meeting) of Sonoco
Products Company (the "Company"), a South Carolina corporation, to be held on
April 19, 1995.

The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of the Company.

The cost of preparing, assembling and mailing the proxy material and of
reimbursing brokers, nominees and fiduciaries for the out-of-pocket and clerical
expense of transmitting copies of the proxy material to the beneficial owners of
shares held of record by such persons will be borne by the Company. The Company
does not intend to solicit proxies otherwise than by use of the mail; however,
certain officers and regular employees of the Company or its subsidiaries,
without additional compensation, may use their personal efforts by telephone,
telefacsimile or by personal calls to obtain proxies.

The proxy materials are being mailed on March 17, 1995, to shareholders of
record at the close of business on March 3, 1995.

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, 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.

Shares represented by all properly executed proxies delivered pursuant to
this solicitation will be voted at the Annual Meeting or any adjournment
thereof. With respect to the election of directors and to any of the proposals
for which a choice is provided, the proxy will be voted in the manner directed
by the shareholder. If no direction is made, the proxy will be voted FOR the
election of directors and FOR the proposals.

OUTSTANDING SECURITIES

The Company has authorized two classes of stock consisting of 150,000,000
authorized shares of no par value Common Stock, of which 86,766,503 shares are
outstanding and 30,000,000 authorized shares of no par

3
<PAGE> 6

value Preferred Stock of which 3,450,000 shares of $2.25 Series A Cumulative
Convertible Preferred Stock are outstanding. Each share of the Company's Common
Stock is entitled to one vote. The shareholders of the Company's $2.25 Series A
Cumulative Convertible Preferred Stock will not be entitled to vote at the
Annual Meeting.

VOTING SECURITIES

Only shareholders of record of the Company's Common Stock at the close of
business on March 3, 1995, will be entitled to vote at the Annual Meeting. As of
that date there were issued and outstanding 86,766,503 shares. Each share will
be entitled to one vote on each matter submitted 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 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 Annual Meeting, directors will be elected by
a plurality of the votes cast by shares present and entitled to vote at the
Annual 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 proposals to amend the 1991 Key Employee Stock Plan and to
adopt the Annual Incentive Compensation Terms for Executive Officers requires
the affirmative vote of a simple majority of the total shares present and
entitled to vote at the Annual Meeting.

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.

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<PAGE> 7

ELECTION OF DIRECTORS

At this Annual Meeting seven directors are to be elected and shall hold
office for the next three years, their terms expiring at the Annual
Shareholders' Meeting in 1998, 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 seven 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

<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 (65). 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
[PHOTO] 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 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, Aaron Rents,
Inc., Mohawk Industries, Inc. and Riverwood International
Corporation, and is Chairman of the Federal Reserve Bank
of Atlanta.

- ----------------- PETER C. BROWNING (53). Mr. Browning is Executive Vice
- ----------------- President of the Company, a position held since 1993. He
- ----------------- served as President, Chairman and Chief Executive Officer
[PHOTO] of National Gypsum Company (manufacturer and supplier of
- ----------------- products and services used in building and construction),
- ----------------- Charlotte, North Carolina, from 1990 to 1993 and as
- ----------------- President-Gold Bond Division, National Gypsum Company,
- ----------------- from 1989 to 1990. Prior to 1989 he spent twenty-four
years with Continental Can Company, serving as President
of Continental's Bondware and White Cap Divisions and
later as the company's Executive Vice President. Mr.
Browning is a director of Phoenix Home Life Mutual
Insurance Company, Loctite Corporation and First Union
National Bank of South Carolina.
</TABLE>

5
<PAGE> 8

- ----------------- T. C. COXE, III (64). 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
[PHOTO] director of Wachovia Bank of South Carolina, N.A.
- -----------------
- -----------------
- -----------------
- -----------------

- ----------------- BERNARD L. M. KASRIEL (48). Mr. Kasriel is Vice Chairman
- ----------------- and Chief Operating Officer of Lafarge Coppee (a
- ----------------- construction materials group), Paris, France, a position
[PHOTO] held since January 1995. He served as Managing Director of
- ----------------- Lafarge Coppee from 1989 to 1994 and as Senior Executive
- ----------------- Vice President from 1987 to 1989. Mr. Kasriel temporarily
- ----------------- was detached to National Gypsum Company, Charlotte, North
- ----------------- Carolina, as President and Chief Operating Officer from
1987 to 1989. He served as Executive Vice President of
Lafarge Coppee from 1984 to 1987. Mr. Kasriel is a
director of Lafarge Coppee, Lafarge Corporation and
National Gypsum Company.
</TABLE>

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

<TABLE>
<C> <S> <C>
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L. Coker and of P.C.
Coggeshall, Jr., an executive officer of the Company.
</TABLE>

6
<PAGE> 9

- ----------------- E. C. WALL, JR. (57). 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
[PHOTO] Ruddick Corporation, SCANA Corporation and Blue Cross-Blue
- ----------------- Shield of South Carolina.
- -----------------
- -----------------
- -----------------
</TABLE>

All nominees previously have been elected to the Board of Directors by the
Common Shareholders except Mr. Browning and Mr. Kasriel.

At its meeting on February 1, 1995, the Board of Directors decided it was
in the best interest of the Company to increase the size of the Board of
Directors from fifteen to seventeen, and pursuant to Article III, Section 1, of
the By-Laws of the Company, amendment of which was approved by the shareholders
at their Annual Meeting in 1994, the Board fixed the number of directors of the
corporation at seventeen.

Mr. Browning and Mr. Kasriel were nominated by the Board of Directors at
their February 1, 1995, meeting, for election by the shareholders at this Annual
Meeting, to serve three-year terms which will expire at the Annual Shareholders'
Meeting in 1998. The Nominating Committee of the Board of Directors recommends
Mr. Browning and Mr. Kasriel for election by the Common Shareholders.

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. The Company's Restated Articles of Incorporation require that nominations
for any person who is not then a director of the Company, whether made by the
Nominating Committee or any shareholder, be submitted to the Secretary not less
than sixty days prior to the Annual Meeting for which such nominations are made.

7
<PAGE> 10

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 (58). Mr. Bradshaw is President and 1986
- ----------------- Director of Bradshaw Investments, Inc. (private
- ----------------- investments), Georgetown, South Carolina, a position held
[PHOTO] 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 Wachovia Bank of South Carolina,
N.A.

- ----------------- R. J. BROWN (60). 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, Duke Power
[PHOTO] Company and Pacific National Financial Group.
- -----------------
- -----------------

- ----------------- *J. L. COKER (54). Mr. Coker is Secretary of the Company, 1969
- ----------------- a position held since 1969. He is President of JLC
- ----------------- Enterprises (private investments), Stonington,
[PHOTO] Connecticut, a position held since 1979. He was President
- ----------------- of Sonoco Limited, Canada, from 1972 to 1979.
- -----------------
- -----------------
- -----------------
</TABLE>

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

<TABLE>
<C> <S> <C>
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L. Coker and of P.C.
Coggeshall, Jr., an executive officer of the Company.
</TABLE>

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>
- ----------------- PAUL FULTON (60). Mr. Fulton is Dean of The Kenan-Flagler 1989
- ----------------- Business School, The University of North Carolina, Chapel
- ----------------- Hill, North Carolina, a position held since 1994. He was
[PHOTO] 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, Bassett Furniture Industries,
Inc., Cato Corporation and Winston Hotels, Inc.

- ----------------- H. L. MCCOLL, JR. (59). 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.
[PHOTO] 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 and Jefferson-Pilot Corporation.
</TABLE>

Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 1997 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. W. COKER (61). Mr. Coker is Chairman, President and 1962
- ----------------- Chief Executive Officer of the Company. He was President
- ----------------- of the Company from 1970 to 1990 and was reappointed
[PHOTO] President upon the early retirement of R. C. King, Jr. on
- ----------------- May 31, 1994. He is a director of NationsBank Corporation,
- ----------------- Springs Industries, Inc., Sara Lee Corporation and
- ----------------- Carolina Power and Light Company.
- -----------------
</TABLE>

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

* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker and of P.C. Coggeshall, Jr., an executive officer of the Company.

9
<PAGE> 12

- ----------------- R. E. ELBERSON (66). 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
[PHOTO] 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 (68). 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,
[PHOTO] a position held since 1986. He served as Senior Vice
- ----------------- President -- International Group from 1983 to 1986.
- -----------------
- -----------------

- ----------------- R. C. KING, JR. (60). Mr. King is retired. He was 1991
- ----------------- President and Chief Operating Officer of the Company from
- ----------------- 1990 to 1994 and Senior Vice President from 1987 to 1990.
[PHOTO] He is a director of United Dominion Industries.
- -----------------
- -----------------
- -----------------
- -----------------
</TABLE>

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<PAGE> 13

BOARD COMMITTEES

During 1994 the Board of Directors held four regularly scheduled meetings
and one special meeting 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>
NUMBER OF
COMMITTEE CURRENT 1994
NAME PURPOSE MEMBERS MEETINGS
- ----------------- --------------------------------------- -------------------- ----------
<S> <C> <C> <C>
Audit Committee Responsible for the scope of both E. C. Wall, Jr. -- 3
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
R. C. King, Jr.
Executive Responsible for establishing and A. T. Dickson -- 5
Compensation maintaining officer-level salaries and Chairman
Committee administering executive compensation C. J. Bradshaw
plans. R. E. Elberson
Paul Fulton
E. H. Lawton, Jr.

Nominating Responsible for recommending to the F. L. H. Coker -- 3
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
R. C. King, Jr.
E. H. Lawton, Jr.
</TABLE>

During 1994 all directors attended 75% or more of the aggregate number of
meetings of the Board and committees.

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<PAGE> 14

SECURITY OWNERSHIP OF MANAGEMENT AS OF DECEMBER 31, 1994

<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
--------------------------
NAME POSITION NUMBER(1) PERCENTAGE(2)
- ----------------------- ---------------------------------------------- --------- -------------
<S> <C> <C> <C>
C. J. Bradshaw Director 21,262
R. J. Brown Director 832
F. L. H. Coker Director 1,148,633 1.3
J. L. Coker Secretary and Director 144,087
A. T. Dickson Director 59,616
R. E. Elberson Director 21,000
J. C. Fort Director 1,136,666 1.3
Paul Fulton Director 5,700
R. C. King, Jr. Director 280,802
E. H. Lawton, Jr. Director 710,962
H. L. McColl, Jr. Director 17,257
E. C. Wall, Jr. Director 80,651
C. W. Coker Chairman, President, Chief Executive Officer 1,483,158 1.7
and Director
P. C. Browning Executive Vice President 235,300
T. C. Coxe, III Senior Executive Vice President and Director 343,471
Leo Benatar Senior Vice President and Director 176,684
H. E. DeLoach, Jr. Group Vice President 1,023,520(3) 1.2
All Executive Officers and Directors (26 persons) 7,940,410(4) 9.1
</TABLE>

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

(1) Shareholdings represent the number of shares beneficially owned directly or
indirectly by each named director and executive officer as of December 31,
1994. 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, and Restricted Stock Awards, granted
under the 1991 Key Employee Stock Plan, respectively, for the following
directors and named executive officers: C. W. Coker -- 391,200 and 80,000;
P. C. Browning -- 175,000 and 60,000; T. C. Coxe, III -- 98,500 and 20,000;
Leo Benatar -- 126,752 and 20,000; H. E. DeLoach, Jr. -- 91,600 and 40,000;
and R. C. King, Jr. -- 206,200 and -0-.

Also included are shares held in the Company's Dividend Reinvestment Plan
(8,949), the Employee Savings and Stock Ownership Plan (46,509), and share
equivalents in deferred compensation plans (24,565).

(2) Percentages not shown are less than 1%.

(3) Includes 773,670 shares of Common Stock owned by an estate of which Mr.
DeLoach is executor. Mr. DeLoach disclaims beneficial ownership of such
shares.

(4) Includes 1,623,702 shares of Common Stock which the executive officers have
a right to acquire pursuant to options granted by the Company under the
1983 and the 1991 Plans and 320,000 shares which they have a right to
acquire pursuant to Restricted Stock Awards granted under the 1991 Plan.

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<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. Additionally, the
Committee reviews and plans for top management succession and reviews executive
job performance. 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 five times during 1994, and had met twice in 1995 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 its 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 and reflect adjustments based upon company revenues. The Dow
Jones Containers and Packaging Group Index, which includes the Company, was used
in the five year shareholder return performance graph that appears on Page 16.
The companies in this Index also are included, as available, among the companies
whose survey data is used in the Company's compensation studies.

The total compensation package for executives is generally structured to be
competitive with the median total pay practices for executives of other large
corporations. The base salary midpoints 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 at the median of
surveyed market compensation for expected Company performance, and provides
opportunities 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 a benefit that is somewhat
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 1994 compensation. Also included is a specific
discussion of the decisions regarding Mr. Coker's compensation for performing
the duties of Chairman, President 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. The Company reviews
the base salaries of all salaried employees on an annual basis.

Merit salary increases are based on a table which considers each
individual's performance rating and position in his or her salary range.
Promotional salary increases are awarded to recognize increased responsibilities
and accountabilities. The Committee used this table to determine salary
adjustments for each of the executive officers, including Mr. Coker, whose most
recent increase was effective June 1, 1994.

ANNUAL BONUS AWARDS

The Company has a bonus plan which for 1994 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 is to link a significant
portion of executive pay to both the Company's operating performance for the
year and to critical issues affecting the long-term health of the Company.

Financial performance goals were weighted from 80% to 86% of total bonus
opportunity. For executives with only 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.

The key strategic and operational objectives for 1994, which were weighted
from 14% to 20% of 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 1, 1995, the Committee reviewed and approved the 1994 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 the Company's record
performance, based on earnings per share from ongoing operations, the
Committee's assessment of how well he met his key strategic and operational
objectives for the year, and the Committee's assessment of Mr. Coker's
individual performance and contributions during the year, and is included among
the values listed under the "Bonus" caption in the Summary Compensation Table on
Page 17.

STOCK OPTIONS

In 1994 Mr. Coker, the executive officers, and other key management
employees were granted options to purchase shares of Common Stock by the
Committee 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

14
<PAGE> 17

options were awarded. Accordingly, these options will be valuable to the
recipients only if the market price of Company stock increases. Stock option
awards and annual cash bonus opportunities are the Company's performance-based
compensation elements. The level of the combined award opportunities, including
Mr. Coker's, reflects median competitive total annual incentive compensation
opportunities as reported by the independent consulting firms. Stock option
awards for Mr. Coker and the other four named officers are included in the
Summary Compensation Table on Page 17 under the caption "Number of Securities
Underlying Options" and on the Option Grants Table on Page 19.

OTHER

On October 20, 1994, the Committee granted one-time awards of contingent
shares to thirteen executives, including Mr. Coker and the four other executive
officers named in the Summary Compensation Table. These awards, consisting of
share units equal in value to an equivalent number of shares of Common Stock,
were granted to reward the members of the current management team for the
contribution each has made in strategically positioning the Company as the
recognized leader and top financially performing company in the majority of the
industries in which it competes. The number of share units granted was based on
the Committee's judgment as to the appropriate size of an award, given its
intent, and the individual's current salary level. The shares disbursed as a
part of this program will be funded from shares allocated in the 1991 Key
Employee Stock Plan and, in order to minimize dilution, will consist entirely of
previously-issued shares that are reacquired by the Company.

The award to Mr. Coker reflects the Committee's recognition of his
excellent contributions and outstanding leadership in the development of
strategic direction and succession plans for the Company. The awards to other
officers also are intended to enhance management succession and ongoing
management stability by helping to ensure that each recipient remains with the
Company over the respective vesting period. Awards will generally vest in
one-third annual installments commencing on October 20, 1997. A termination of
employment by a recipient may not result in forfeiture of an award if the
Committee determines that such early termination is in the interest of the
Company and the recipient does not provide services to a competitor during the
remaining vesting period. Unless otherwise determined by the Committee, the
future payment of awards or portions of awards will be deferred until such time
that the payment is tax deductible to the Company.

As a result of recent changes to tax law, companies cannot deduct certain
types of compensation paid to the CEO or to the other executive officers named
in the Summary Compensation Table for individual amounts in excess of one
million dollars unless such compensation is approved by the shareholders and
meets certain other requirements. The Committee deferred payment of the
applicable portion of the 1994 bonus award to Mr. Coker until tax year 1995.
Under current regulations this amount will be a tax deductible expense. The
Committee and the Board of Directors present and recommend shareholder approval
of the annual incentive compensation terms for executive officers and
ratification of amendments to the Company's 1991 Key Employee Stock Plan that,
under current regulations, are intended to ensure tax deductibility in the
future.

A. T. Dickson (Chairman) C. J. Bradshaw R. E. Elberson
P. Fulton E. H. Lawton, Jr. E. C. Wall, Jr.

15
<PAGE> 18

COMPARATIVE COMPANY PERFORMANCE

The following line graph compares cumulative total shareholder return for
the Company with the cumulative total return of the S&P 500 Stock Index and a
nationally recognized industry index, the Dow Jones Containers and Packaging
Group (which includes the Company), from December 31, 1989, through December 31,
1994.

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 PRODUCTS
(FISCAL YEAR COVERED) INDEX GROUP COMPANY
<S> <C> <C> <C>
1989 $100 $100 $100
1990 $ 97 $ 86 $ 90
1991 $126 $135 $ 98
1992 $136 $147 $139
1993 $150 $141 $132
1994 $152 $140 $134
</TABLE>

ASSUMES $100 INVESTED ON DECEMBER 31, 1989, IN EACH OF 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

16
<PAGE> 19

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS
-----------------------
ANNUAL NUMBER OF PAYOUTS
COMPENSATION(2) RESTRICTED SECURITIES ----------
NAME AND PRINCIPAL ------------------- STOCK UNDERLYING LTIP ALL OTHER
POSITION YEAR SALARY BONUS AWARDS(3) OPTIONS PAYOUTS(4) COMPENSATION(5)
- ---------------------- ---- -------- -------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
C. W. Coker 1994 $602,835 $691,416 $1,820,000 63,200 $ -0- $ 205,936
Chairman, President 1993 575,834 451,567 -0- 62,000 -0- 184,233
and Chief Executive 1992 541,831 460,556 -0- 80,000 -0- 178,813
Officer
P. C. Browning 1994 449,759 360,241 1,365,000 25,000 -0- 56,228
Executive 1993 73,666 221,000 -0- 150,000 -0- 55,366
Vice President
T. C. Coxe, III 1994 340,891 324,109 455,000 29,000 -0- 62,813
Senior Executive 1993 316,668 200,999 -0- 26,600 -0- 48,975
Vice President 1992 297,759 211,409 -0- 36,000 -0- 47,059
L. Benatar(1) 1994 368,579 230,000 455,000 20,000 -0- 87,078
Senior Vice 1993 360,813 169,106 -0- -0- 55,427 13,832
President 1992 344,166 435,875 -0- 21,809 -0- 13,148
H. E. DeLoach, Jr. 1994 259,586 230,512 910,000 20,000 -0- 41,422
Group Vice President 1993 220,351 172,690 -0- 12,600 -0- 25,398
1992 206,460 110,487 -0- 16,000 -0- 22,010
</TABLE>

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

(1) Includes amounts paid by Engraph, Inc. for services as Chairman and CEO for
the period from January 1, 1992, through October 21, 1993, the date that
Engraph, Inc. merged with the Company.

(2) 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.

(3) Dollar amounts shown equal the number of units of restricted stock rights
granted multiplied by the $22.75 per share stock price on October 20, 1994,
the date of grant. The number and dollar value of restricted stock rights,
including dividend equivalents, held, based on the closing stock price on
December 31, 1994, of $21.875 per share, were: C. W. Coker -- 80,546 shares
($1,761,951); P. C. Browning -- 60,410 shares ($1,321,463); T. C. Coxe,
III -- 20,137 shares ($440,488); L. Benatar -- 20,137 shares ($440,488); and
H. E. DeLoach, Jr. -- 40,273 shares ($880,976). Restrictions lapse over a
five year vesting period for Messrs. Coker, Browning, and DeLoach with
one-third of the shares vesting on each of the third, fourth, and fifth
anniversary dates of the grant. The restrictions lapse and all shares vest
for Messrs. Coxe and Benatar on October 20, 1996.

(4) This award was pursuant to the Engraph Long Range Incentive Plan for the
1991-1993 performance period. There are no other potential payment
obligations under this plan.

17
<PAGE> 20

(5) All other compensation for 1994 consisted of the following components:

<TABLE>
<CAPTION>
COMPANY CONTRIBUTIONS AND
SPLIT-DOLLAR ABOVE-MARKET DEFERRED ACCRUALS TO DEFINED CONTRIBUTION
NAME LIFE INSURANCE COMPENSATION ACCRUALS(2) RETIREMENT PLANS
- ------------------- -------------- ------------------------ --------------------------------
<S> <C> <C> <C>
C. W. Coker $135,779(1) $ 38,525 $ 31,632(3)
P. C. Browning 56,228 -0- -0-
T. C. Coxe, III 18,168 28,388 16,257(3)
L. Benatar 77,208 -0- 9,870(4)
H. E. DeLoach, Jr. 18,139 10,315 12,968(3)
</TABLE>

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

(1) Includes additional insurance which was purchased for Mr. Coker during
December 1992 in exchange for cancellation of stock options that, at
the time of the transaction, had a market price gain of $497,875.

(2) Represents the above-market portion of interest credits on
previously-earned compensation for which payment has been deferred.

(3) 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, in order to keep
employees whole with respect to Company contribution amounts that were
limited by tax law.

(4) Comprised of contributions to the Engraph, Inc. Retirement Plus Plan.

OPTION EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION EXERCISES IN 1994 AND 1994 YEAR-END VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AS OF IN-THE-MONEY OPTIONS
ACQUIRED DECEMBER 31, 1994 AS OF DECEMBER 31, 1994(2)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker 17,500 $ 193,625 328,000 63,200 $ 1,187,688 $ -0-
P. C. Browning -0- -0- 150,000 25,000 168,750 -0-
T. C. Coxe, III 4,440 85,401 69,500 29,000 571,331 -0-
L. Benatar 4,480 89,690 106,752 20,000 1,143,172 -0-
H. E. DeLoach, Jr. -0- -0- 71,600 20,000 251,500 -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) Based on $21.875 per share, the December 31, 1994, closing price.

18
<PAGE> 21

OPTION GRANTS TABLE
1994 STOCK OPTION GRANTS

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AND
INDIVIDUAL GRANTS RESULTING COMPANY STOCK PRICE AT
- --------------------------------------------------------------------------------- ASSUMED ANNUAL RATES OF STOCK
NUMBER OF % OF TOTAL PRICE
SECURITIES OPTIONS APPRECIATION FOR 10 YEAR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES PRICE (PER EXPIRATION ---------------------------------
NAME GRANTED(1) IN 1994 SHARE) DATE 5% ($40.926) 10% ($66.168)
- -------------------- ---------- ----------- ----------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker 63,200 7.1 $25.125 2/2/2004 $ 998,623 $ 2,530,718
P. C. Browning 25,000 2.8 25.125 2/2/2004 395,025 1,001,075
T. C. Coxe, III 29,000 3.3 25.125 2/2/2004 458,229 1,161,247
L. Benatar 20,000 2.2 25.125 2/2/2004 316,020 800,860
H. E. DeLoach, Jr. 20,000 2.2 25.125 2/2/2004 316,020 800,860
Comparable gain in shareholder value for the 87,547,334 shares outstanding as of
February 2, 1994, the grant date. 1,383,335,425 3,505,657,895
</TABLE>

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

(1) These options were granted on February 2, 1994, at the closing market price,
became exercisable on February 2, 1995, and were granted for a period of
ten years, subject to earlier expiration in certain events related to
termination of employment. The exercise price 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 Company's stock price.

19
<PAGE> 22

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 and based
on the highest three of the last seven calendar years. In order to receive the
full benefit, the executive must have at least 15 years of service and retire no
earlier than age 65. Eligible spouses (married one year or longer at the
executive's retirement date) 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
FINAL YEARS OF SERVICE
AVERAGE --------------------------------------------------------------------------------------
COMPENSATION(1) 5 10 15 20 25 30 35
- --------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $ 60,000 $120,000 $180,000 $180,000 $180,000 $180,000 $180,000
400,000 80,000 160,000 240,000 240,000 240,000 240,000 240,000
500,000 100,000 200,000 300,000 300,000 300,000 300,000 300,000
600,000 120,000 240,000 360,000 360,000 360,000 360,000 360,000
700,000 140,000 280,000 420,000 420,000 420,000 420,000 420,000
800,000 160,000 320,000 480,000 480,000 480,000 480,000 480,000
900,000 180,000 360,000 540,000 540,000 540,000 540,000 540,000
1,000,000 200,000 400,000 600,000 600,000 600,000 600,000 600,000
1,100,000 220,000 440,000 660,000 660,000 660,000 660,000 660,000
1,200,000 240,000 480,000 720,000 720,000 720,000 720,000 720,000
1,300,000 260,000 520,000 780,000 780,000 780,000 780,000 780,000
1,400,000 280,000 560,000 840,000 840,000 840,000 840,000 840,000
1,500,000 300,000 600,000 900,000 900,000 900,000 900,000 900,000
1,600,000 320,000 620,000 960,000 960,000 960,000 960,000 960,000
</TABLE>

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

(1) 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 as of December 31, 1994, for the named officers are as
follows:

<TABLE>
<CAPTION>
FINAL
YEARS OF AVERAGE
NAME AGE SERVICE COMPENSATION
- ------------------- --- -------- ------------
<S> <C> <C> <C>
C. W. Coker 61 37 $987,105
P. C. Browning 53 1 372,213
T. C. Coxe, III 64 42 520,395
L. Benatar 64 14 700,956
H. E. DeLoach, Jr. 50 9 325,531
</TABLE>

20
<PAGE> 23

EMPLOYMENT AGREEMENT

On September 12, 1993, in conjunction with the Company's tender offer for
Engraph, Inc. Common Stock, the Company entered into an employment agreement
with Mr. Leo Benatar, an executive officer and director of the Company. This
agreement, which superseded the employment agreement of May 7, 1992, between
Engraph, Inc. and Mr. Benatar, secured the continued service of Mr. Benatar
until March 31, 1995. The Company has extended the term of this agreement until
March 31, 1996. This agreement can be further extended by the Company, with the
consent of Mr. Benatar, until March 31, 1997. This agreement provides for a
minimum annual base salary of $362,500 (Mr. Benatar's then present salary as
Chairman and CEO of Engraph, Inc.), subject to annual review by the Board's
Executive Compensation Committee, and participation in the Company's executive
officer bonus plan, Engraph benefit plans, and the Company's executive benefit
and perquisite programs. Consistent with a provision in the prior agreement, on
March 31, 1995, Mr. Benatar will be credited with one additional year of service
for the purposes of credited service calculations in the Company's Supplemental
Executive Retirement Plan. The agreement stipulates that during the term of his
employment and for two years thereafter, Mr. Benatar will not compete with the
Company, will not solicit its customers or employees, and will not use or
disclose its trade secrets and proprietary information.

DIRECTORS' COMPENSATION

Employee directors receive no additional compensation for their services as
members of the Board of Directors. Effective July 1, 1993, non-employee
directors were paid a $9,000 quarterly retainer fee and a $1,000 attendance fee
for special meetings. On July 1, 1994, the quarterly retainer fee was increased
to $9,250.

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.

Mr. R. C. King, Jr. elected to take early retirement from the Company
effective May 31, 1994, following over 37 years of distinguished service. To
secure his advice and counsel, the Company entered into an agreement with Mr.
King under which he will provide consulting services to the Company on an
as-needed basis through December 31, 1996. As a part of this arrangement, Mr.
King agreed that he would not compete against the Company for the remainder of
the century and would not disclose any confidential Company information. Mr.
King received consulting fees of $193,263 during 1994 under this agreement. In
recognition of Mr. King's innumerable and invaluable contributions to the
Company in the past, the Company provided to him certain benefits under the
terms of a retirement agreement. Mr. King's annual retirement benefit, including
payments from Primary Social Security or equivalents, Sonoco's Retirement Plan,
and Sonoco's Supplemental Executive Retirement Plan, totals $390,434 or 49.5% of
his salary and bonus paid in 1993. Mr. King also received a payment of $184,839
in February 1995, representing a pro-rata annual bonus for his five months of
service in 1994, and payments totaling $9,266 for reimbursement of financial and
early retirement planning fees and expenses during 1994.

21
<PAGE> 24

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. A. T. Dickson, C. J. Bradshaw, R. E. Elberson, Paul Fulton, E. H.
Lawton, Jr. and E. C. Wall, Jr. served on the Company's Executive Compensation
Committee during the year ended December 31, 1994. Mr. E. C. Wall, Jr. resigned
from the Executive Compensation Committee on October 19, 1994, prior to the
meeting of the committee on that date due to other commitments. Mr. E. H.
Lawton, Jr. was appointed to the committee on September 9, 1994.

Mr. A. T. Dickson and Mr. Paul Fulton, directors of NationsBank
Corporation, Mr. E. H. Lawton, Jr., a director of NationsBank, N.A. (Carolinas),
and Mr. C. J. Bradshaw, a director of Wachovia Bank of South Carolina, N.A., 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, subsequently NationsBank of North Carolina, N.A., and now
NationsBank, N.A. (Carolinas), to exchange a floating interest rate payment for
a fixed rate payment. This agreement expired October 8, 1994. On October 1,
1993, NationsBank of North Carolina, N.A., now NationsBank, N.A. (Carolinas),
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. Wachovia Bank of South Carolina, N.A. has extended a similar line
for $65,000,000. These committed lines of credit from NationsBank, N.A.
(Carolinas) and Wachovia Bank of South Carolina, N.A. have been in place since
1987 and have been renewed and increased or decreased according to the Company's
needs. Additionally, NationsBank, N.A. (Carolinas) has extended other lines of
credit to the Company as support for letters of credit, overdrafts and other
corporate needs. NationsBank, N.A. (Carolinas) also provides treasury management
services to the Company and investment management services through its trust
department. The Company pays fees to NationsBank, N.A. (Carolinas) 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. E. C. Wall, Jr., a director of the Company and a member of the
Executive Compensation Committee during the year, is Chairman of the Board and
more than a 10% beneficial owner of a company from which the Company purchased
lumber for an aggregate purchase price of $846,521 during 1994.

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, President and Chief Executive
Officer of the Company, is a member of NationsBank Corporation's Compensation
Committee.

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 and Mr. E. H. Lawton, Jr. is a director
of NationsBank, N.A. (Carolinas). Mr. C. J. Bradshaw and Mr. T. C. Coxe, III are
directors of Wachovia Bank of South Carolina, N.A. See the "Compensation
Committee Interlocks and Insider Participation" section above.

22
<PAGE> 25

During 1994 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. Mr. T. C. Coxe, III, a director and executive officer of
the Company, also is a director of this company. The aggregate purchase price of
the lumber was $846,521.

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
$218,473.

The Company purchased wooden pallets from a company of which Mr. J. C.
Fort, a director of the Company, is more than a 10% beneficial owner. The
aggregate purchase price of the pallets was approximately $677,880. The Company,
in turn, sold to the same company approximately $1,066,000 in hardwood timbers.

Management of the Company believes the prices and terms were comparable to
those the Company could have obtained from unaffiliated third parties.

In accordance with the Company's relocation policy and practices, the
Company made secured relocation loans to Mr. Peter C. Browning, Executive Vice
President, under identical terms and conditions as loans made to other salaried
employees. These loans were settled in full on February 24, 1995.

AMENDMENTS TO THE 1991 KEY EMPLOYEE STOCK PLAN

On March 17, 1995, the Executive Compensation Committee of the Board of
Directors (the "Committee") amended the 1991 Key Employee Stock Plan (the
"Plan"), subject to the approval of shareholders at this Annual Meeting. The
full text of this Plan is appended to this Proxy Statement as Exhibit I. The
following information is qualified in its entirety by the Plan, as amended.

It is the opinion of the Committee and the Board of Directors that the 1991
Key Employee Stock Plan advances the interests of the shareholders of the
Company by encouraging employees to acquire greater proprietary interests in the
Company. The Plan permits the Committee to grant long-term incentive
compensation opportunities that will provide meaningful incentive for recipients
to make significant contributions toward the Company's future success, while
enhancing the Company's competitive compensation position and the Company's
ability to attract and retain individuals of outstanding ability.

The Board of Directors recommends that you vote FOR ratification of the
amendments to the 1991 Key Employee Stock Plan.

The major amendments to the Plan are as follows:

Term. Under its present provisions, the Plan will terminate in 2001. Under
the proposed amendments, the Plan will remain in effect until terminated by the
Board of Directors. These amendments are intended to cause the Plan to have an
indefinite term.

The Common Shares Available for Issuance. In 1991 the Plan made available
for issuance 5,000,000 shares of Common Stock plus any shares of Common Stock
exchanged by optionees as full or partial payment to the Company upon exercise
of stock options granted under the 1983 Key Employee Stock Option Plan (the

23
<PAGE> 26

"Prior Plan"). The proposed amendments to the Plan increase the number of shares
available for issuance. In addition to the shares presently available for
issuance, the amendments to the Plan make available for issuance, beginning
January 1, 1995, and on each January 1 thereafter, a number of shares equal to
1.2% of the number of shares of Common Stock issued on such first day of
January. After April 19, 1995, the proposed amendments may increase the number
of shares available for issuance by the number of shares acquired by the Company
from open market purchases at market price or private transactions at fair
market value to the extent that the price paid for such shares does not exceed
the cumulative amount of money received by the Company from the exercise of
options granted under the Plan, as amended, or the Prior Plan. These amendments
will cause the number of shares available for issuance under the Plan to
increase annually without further shareholder approval.

Grant Limits. The proposed amendments to the Plan include a new section
(Section 9) that imposes certain limits on the number of shares that can be
granted after April 19, 1995, as stock options, stock appreciation rights or
stock grants. These amendments are intended to cause the Plan to comply with
changes to the Internal Revenue Code of 1986, as amended, (the "Code"), in order
to keep the Company from losing deductibility for federal income tax purposes of
certain benefits paid to Plan participants.

Transferability and Exercisability. The proposed amendments to the Plan
expand the circumstances under which a grant under the Plan may be transferable
to permit transfers pursuant to certain qualified domestic relations orders and
certain types of gifts. These amendments may allow Plan participants to take
advantage of certain estate planning mechanisms.

Other Changes. A number of other amendments to the Plan also are included
for the purpose of clarifying various aspects of the Plan and removing certain
restrictions.

The following is a summary description of the Plan as amended. The full
text of the Plan, as amended, is Exhibit 1 to this Proxy Statement.

While any employee of the Company is eligible to receive a grant under the
Plan, it is intended that participation be limited to officers, other executives
and employees as selected by the Committee administering the Plan. Currently,
the number of such employees is approximately 325.

The Plan is administered by the Committee which is presently made up of
five members of the Board of Directors, each of whom qualifies for plan
administration under Rule 16b-3 of the Securities Exchange Act of 1934 (the
"1934 Act"). In addition to selecting participants, the Committee has the power,
within certain limitations set forth in the Plan, to determine the number of
shares to be covered by grants, the terms (including form of settlement) for all
grants, and to interpret, make rules, regulations and determinations and,
otherwise, administer the Plan to carry out its intent. Within the Committee's
authority is the ability to delegate its responsibilities with regard to
participation by employees who are not persons subject to Section 16 of the 1934
Act. Also within the Committee's authority is the ability to provide, at its
discretion, for grants under the Plan to carry dividend or dividend equivalent
rights and to permit or require the deferral of settlement of grants under the
Plan on such terms and conditions as the Committee may determine.

Stock Options: The Committee may grant three types of stock options:
non-qualified stock options, incentive stock options (which qualify for
specified tax status under Section 422 of the Code), and non-

24
<PAGE> 27

qualified deferred compensation stock options. A stock option entitles the
recipient to purchase a specified number of shares of Common Stock at a fixed
price, subject to terms and conditions set by the Committee. The purchase price
of shares covered by a non-qualified or incentive stock option cannot be less
than 100% of the fair market value on the date the option is granted, except
that in a situation where a non-qualified option is granted in tandem with or as
substitution for another grant, the exercise price can be the same as the
exercise or designated price of the other grant. The maximum number of shares
that may be covered by stock options and stock appreciation rights that may be
granted to any individual in a calendar year is 200,000 plus the carry-forward
of available but unused shares for up to five years, commencing in 1995. The
aggregate fair market value of incentive stock option shares (determined at the
time the options are granted) for an individual cannot exceed $100,000 for all
shares covered by options which become exercisable for the first time in any
calendar year.

The Committee also may grant deferred compensation options under the Plan.
Such options are intended to serve as a deferred payment vehicle for
compensation earned by selected employees. The total purchase price of these
shares is 100% of the fair market value on the date the option is granted. This
total purchase price per share is equal to the compensation deferred, on a per
share basis, and the exercise price. The Committee determines the exercise
price, which shall be no lower than that permitted by Rule 16b-3 of the 1934
Act, and the Committee determines whether each such option shall carry dividend
equivalents rights. The number of shares covered by each deferred compensation
option is determined by the formula in the Plan.

Stock Appreciation Rights (SAR): A SAR permits its recipient, subject to
such terms and conditions as the Committee shall set for each grant, to receive
in shares, cash or a combination of both, an amount up to the positive aggregate
difference, if any, between the fair market value of the covered shares, based
on the closing bid price as of the exercise date and the designated price of a
specified number of shares. The designated price of the SARs may be no less than
the closing price of the Common Stock on the date of grant; except that if a SAR
is granted in tandem with or in substitution for another grant, the designated
price may be the same as the exercise or designated price of the other grant.
For all SARs granted under the Plan, the Committee determines whether each such
SAR shall carry dividend equivalent rights. The maximum number of shares that
may be covered by stock options and SARs that may be granted to any individual
in a calendar year is 200,000 plus the carry-forward of available but unused
shares for up to five years commencing in 1995.

Stock Grants: The Committee may award to selected participants shares of
Common Stock or share equivalents under such terms and conditions as it may
determine. These grants may require that the recipients remain in the Company's
employ for specified future periods of time for the shares or share equivalents
to vest. Additionally, the Committee may require that the grants vest only if
certain levels of financial or other measurable performance are met. The
performance criteria that may be used by the Committee in awarding contingent
stock grants may consist of total shareholders return, earnings and revenue
growth, and profitability as measured by return ratios. The Committee may select
one criterion or multiple criteria for measuring performance, and the
measurement may be based on absolute Company or business unit performance or
based on comparative performance with other companies. Stock grants also may be
used by the Committee as a form of payment to selected employees for salary
earned or for incentive compensation awarded under other Company plans. The
maximum number of shares that may be covered by stock grants that may be granted
to any individual in a calendar year is 100,000 plus the carry-forward of
available but unused shares for up to five

25
<PAGE> 28

years commencing in 1995. Beginning in 1995 the maximum aggregate number of
shares that may be covered by stock grants shall be 0.4% of shares outstanding
on the first day of each calendar year, plus any unused shares which were
available to be covered by stock grants in any prior year commencing in 1995.

General: Under limited circumstances the Committee may permit awards or
grants to be assigned under a qualified domestic relations order, or transferred
to the participant's spouse or other relative, or transferred to a trust or
estate in which the optionee or an optionee's spouse or other relative has a
substantial interest.

The Board of Directors may make appropriate adjustments and settlements to
outstanding grants and the share and cash authorizations under the Plan in the
event of changes in capitalization or other events that affect the number and/or
market value of shares of Common Stock or in the event of a reorganization,
merger or other transaction in which the Company is not the surviving
corporation.

Under the Code, the granting of a stock option does not produce income to
the optionee or a tax deduction for the Company unless the option itself has a
determinable market value and is not an incentive stock option. Upon exercise of
a non-qualified stock option, the excess of the fair market value of the shares
over the option exercise price is taxable to the optionee as ordinary income and
deductible as an expense by the Company. The cost basis of the shares acquired
is the fair market value at the time of exercise. Upon exercise of an incentive
stock option, the excess of the fair market value of the stock acquired over the
option price will be an item of tax preference to the optionee, which may be
subject to an alternative minimum tax for the year of exercise. If no
disposition of the stock is made within two years from the date of grant of the
incentive stock option nor within one year after the transfer of the stock to
the optionee, the optionee does not realize income as a result of exercising the
incentive stock option; the tax basis of the stock received is the option price;
any gain or loss realized on the ultimate sale of the stock is long-term capital
gain or loss, and the Company is not entitled to any tax deduction by reason of
the exercise. If the optionee disposes of the stock within the two-year or
one-year periods referred to above, the excess of the fair market value of the
stock at the time of exercise (or the proceeds of disposition, if less) over the
option price will at that time be taxable to the optionee as ordinary income and
deductible by the Company. For determining capital gain or loss on such a
disposition, the tax basis of the stock will be the fair market value at the
time of exercise.

The plan may be amended or terminated by the Committee except that any
amendment to the Plan, which (a) materially increases the number of securities
which may be granted under the Plan or to any individual participant, or (b)
reduces the minimum exercise or designated price for any stock options or SARs
granted under the Plan, will require shareholder approval.

On February 1, 1995, the Committee made available for grants 1,055,200
shares to selected officers, other executives and employees, of which 50,000
shares have not been allocated as of March 1, 1995. Those grants are not
contingent on the approval of the proposed amendments to the Plan.

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<PAGE> 29

Set forth below are the numbers of shares underlying the options which were
actually granted under the 1991 Key Employee Stock Plan on February 1, 1995, for
the 1995 plan year to the persons and groups identified. Any future options,
grants, or benefits under the Plan are not determinable, as they are at the
discretion of the Committee.

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING
NAME AND POSITION OPTIONS GRANTED
------------------------------------------------------------- ---------------------------
<S> <C>
C. W. Coker 75,500
Chairman, President & CEO
P. C. Browning 38,300
Executive Vice President
T. C. Coxe, III 34,800
Senior Executive Vice President
L. Benatar 22,700
Senior Vice President
H. E. DeLoach, Jr. 22,700
Group Vice President
All Current Executive Officers As A Group 343,800
(including the persons named above)
All Current Directors, Not Executive Officers, --0--
As A Group (not eligible)
All Employees, Not Executive Officers, As A Group 661,400

Shares Not Allocated 50,000
</TABLE>

All of the above options, excluding the 50,000 shares not allocated, are
non-qualified stock options, have an exercise price of $20.875 per share (the
fair market value of the Common Stock on February 1, 1995, the date of the
grant), become exercisable on February 1, 1996, and were granted for a period of
ten years, expiring February 1, 2005, 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. No person
other than the persons named in the above table received more than five percent
of the options granted under the Plan.

In order to be approved, the amendments to the Plan must receive the
affirmative vote of a majority of the outstanding shares of Common Stock
present, or represented, and eligible to vote at the Annual Meeting.

If the amendments to the Plan are not ratified by the shareholders, the
Plan will remain in effect without the amendments.

The Board of Directors recommends that you vote FOR ratification of the
amendments to the 1991 Key Employee Stock Plan.

27
<PAGE> 30

ANNUAL INCENTIVE COMPENSATION TERMS FOR EXECUTIVE OFFICERS

As noted in the Executive Compensation Committee's Report To Shareholders,
beginning on Page 13, on February 1, 1995, and on March 1, 1995, the Executive
Compensation Committee (the "Committee") of the Board of Directors took actions,
including adopting resolutions, that are intended to ensure that future annual
incentive compensation payments will be tax deductible by the Company.

The Board of Directors recommends that you vote FOR approval of the
Committee's actions.

Such approval is required under Section 162(m) of the Internal Revenue Code
of 1986 (the "Code"), so that certain compensation in excess of $1 million is
considered "performance-based" and, therefore, tax deductible by a company. This
Section of the Code applies to compensation paid to or received by a person
named in a company's Summary Compensation Table who is employed by that company
on the last day of the year.

The Committee has approved the following Annual Incentive Compensation
Terms (the "Terms") for fiscal year 1995 and all future years, contingent upon
this approval by the shareholders:

1. ELIGIBLE EMPLOYEES: All executive officers (17), as defined by Rule
16a-1(f) of the Securities Exchange Act of 1934 are eligible to be named by the
Committee as participants for any fiscal year.

2. PERFORMANCE CRITERION: Performance goals shall be based on the
Company's "Earnings Per Share from Ongoing Operations" (EPS).

EPS shall be calculated in accordance with generally accepted accounting
principles applied on a consistent basis and shall be audited by independent
certified public accountants. EPS shall be exclusive of the after-tax effects of
(a) unusual items, and (b) cumulative effects of changes in accounting
principles stated in the Consolidated Statement of Income and Notes to
Consolidated Financial Statements as published in the Company's Annual Report.
Shares used in the calculation shall be the "Average Common Shares Outstanding"
(calculated on a daily basis) as stated in the Consolidated Statement of Income.

3. MAXIMUM PAYMENT AMOUNT: The maximum payment amount to any one
individual shall be limited to 0.75% of income from operations before income
taxes and cumulative effect of changes in accounting principles, exclusive of
unusual items, for the applicable fiscal year, as stated in the Consolidated
Statement of Income published in the Company's Annual Report. If this provision
had been in effect for fiscal year 1994, the Maximum Payment Amount allowable
would have been $1,581,975.

These Terms will not be altered or replaced by any other criterion without
ratification by shareholders if failure to obtain such approval would otherwise
result in jeopardizing the tax deductibility of future annual incentive payments
to the eligible employees.

In order to comply with the remaining provisions of Section 162(m), the
Committee members who administer this plan will meet the qualifications for
being disinterested "outside directors" as defined in the Code. The Committee
will select participants each fiscal year from among the list of eligible
employees, establish performance payment schedules at a time when the outcomes
are substantially uncertain that set in place maximum individual incentive
payment limits for each level of performance, certify, in writing, the extent to
which the performance goals have been met, and set the final payment amounts.
Any individual who

28
<PAGE> 31

participates under these Terms will be ineligible to participate in any other
annual incentive plan for which the individual would have been otherwise
eligible.

In setting final payment amounts, the Committee has retained full authority
to award final payments that are less than the amount earned by an executive
pursuant to the performance payment schedule. In determining whether to use this
downward discretion and the extent to which it will be used, the Committee may
consider any or all of the following: the extent to which each participant
completed his personal performance goals for the year, the size of the bonus
awards earned by other executive officers, the general business conditions for
the Company and the world economy, and other factors that are deemed to be
significant at the time of the decision.

The Committee also has retained the full authority to suspend or amend
these Terms at any time, provided that such action does not require shareholder
approval in order to retain tax deductibility.

For 1995 the Committee has selected two individuals, Mr. Charles W. Coker
and Mr. Peter C. Browning, to be participants. The Committee has established a
performance payment schedule for each individual that provides for incremental
incentive award payments based on the degree of achievement of the Company's
budgeted consolidated EPS. The Committee believes that it would adversely affect
the Company to disclose the exact performance payment schedules that it has set
for the participants because confidential business information would be
compromised as a result. Accordingly, such information is not provided.

It should be noted that while the Committee's action and intent are to
ensure deductibility of annual incentive compensation payments, final
regulations and guidance for Section 162(m) have not been adopted by the
Internal Revenue Service. For this reason, and because of possible unforeseen
future events, it is impossible to be certain that all future annual incentive
compensation payments by the Company will be deductible. It is, however, the
Committee's intent to pursue actions that it deems to be reasonable in the
future to maintain the tax deductibility of incentive compensation payments.

In order to be approved, the Terms must receive the affirmative vote of a
majority of the outstanding shares of Common Stock present, or represented, and
eligible to vote at the Annual Shareholders' Meeting.

If the Terms are not approved, the Company will not make performance
payments for 1995 to participants in amounts that would not be deductible
expenses pursuant to Section 162(m) of the Code.

POTENTIAL PAYMENTS

The amount of annual incentive compensation to be paid in the future to any
of the Company's current or future executive officers subject to Section 162(m)
cannot be determined since such amounts will be totally dependent on actual
performance measured against the attainment of performance goals. Such amounts
will not, however, exceed the Maximum Payment Amount. If these Terms had been in
place for fiscal year 1994, the amounts paid to Mr. Coker and Mr. Browning would
be substantially identical to the amounts shown under the "Bonus" column in the
Summary Compensation Table on Page 17.

The Board of Directors urges you to vote FOR approval of the Executive
Compensation Committee's actions regarding the Annual Incentive Compensation
Terms for Executive Officers.

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<PAGE> 32

ELECTION OF INDEPENDENT AUDITORS

Independent auditors are to be elected by the shareholders for the calendar
year 1995. The firm of Coopers & Lybrand, LLP, 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, LLP 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, LLP 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. R. C. King,
Jr. Mr. King's wife sold a small number of Company shares in an IRA. Mr. King is
a director of the Company. This information should have been filed on September
1994's Form 4, due October 10, 1994, but was reported on March 10, 1995, on Form
4, amended.

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 3, 1995, in order to be included
in the Proxy Statement and Proxy.

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 17, 1995

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<PAGE> 33

EXHIBIT I

SONOCO PRODUCTS COMPANY
1991 KEY EMPLOYEE STOCK PLAN
(AS AMENDED)

1. Purpose. The Sonoco Products Company 1991 Key Employee Stock Plan (the
"Plan") has been adopted by the Board of Directors (the "Board") to encourage
and create significant ownership of the Common Stock ("Common Stock" or
"Shares") of Sonoco Products Company (the "Company") by employees. Additional
purposes of the Plan include generating a meaningful incentive to participants
to make substantial contributions to the Company's future success, enhancing the
Company's ability to attract and retain persons who will make such
contributions, and ensuring that the Company can provide competitive
compensation opportunities for its key personnel. By meeting these objectives,
the Plan is intended to benefit the shareholders of the Company.

2. Term. The Plan shall be effective February 6, 1991. The amendments to
the Plan shall be effective when approved by shareholders and until terminated
pursuant to Section 14.7.

3. Common Shares Available for Issuance. Subject to adjustments
contemplated by Section 5, 5,000,000 shares of Common Stock of the Company
became available for issuance under the Plan on February 6, 1991. Beginning on
January 1, 1995, the number of shares available for issuance under the Plan
shall be increased on each January 1 by an amount equal to 1.2% of the number of
shares of Common Stock issued on such day. Furthermore, the Committee may
designate for issuance under the Plan any shares of Common Stock that are
repurchased by the Company after April 19, 1995, (the "Repurchased Shares") on
the open market or in private transactions in which the Company paid fair market
value, so long as the aggregate price paid for the Repurchased Shares does not
exceed the cumulative amount received in cash by the Company after April 19,
1995, for the exercise of options granted under the Plan or the 1983 Key
Employee Stock Option Plan (the "Prior Plan"). Shares available for issuance
under the Plan, which are not issued in a given year, will be carried forward
and continue to be available in the succeeding year. Any shares issued under the
Plan may be either authorized but unissued shares, or previously-issued shares
reacquired by the Company.

4. Share Usage. If grants made under the Plan expire or are canceled
without the issuance of shares, the shares of stock covered by such grants shall
remain available for issuance under the Plan. Further, any shares which are
exchanged by a participant as full or partial payment to the Company of the
purchase price of shares being acquired through the exercise of a stock option
granted under the Plan or the Prior Plan shall be added to the aggregate number
of shares available for issuance for grants other than incentive stock option
grants. In instances where a stock appreciation right (SAR) or a stock grant is
settled in cash or any form other than shares, then the shares covered by these
settlements shall not be deemed issued and shall remain available for issuance
under the Plan. The payment in shares of dividends in conjunction with
outstanding grants shall not be counted against the shares available for
issuance.

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<PAGE> 34

5. Adjustments and Reorganizations. The Board may make such adjustments
as it deems appropriate to meet the intent of the Plan in the event of changes
that impact the Company's share price or share status, provided that any such
actions are consistently and equitably applicable to all affected participants.

a. In the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation, spin-off or other distribution
(other than normal cash dividends) of Company assets to shareholders, or
any other change affecting shares, such proportionate adjustments, if any,
as the Board in its discretion may deem appropriate to reflect such change
shall be made with respect to (i) aggregate number of shares that may be
issued under the Plan; (ii) each outstanding grant made under the Plan;
(iii) the price per share for any outstanding stock options, SARs and other
rights granted under the Plan; and the limitations on share usage and
allocation set forth in Section 9. In addition, any shares issued or
settlement of grants by the Company through the assumption or substitution
of outstanding grants or grant commitments from an acquired company or
other entity shall not be counted against the limitations set forth in
Section 3 and Section 9.

b. In the event that the Company is not the surviving company of a
merger, consolidation or amalgamation with another company or in the event
of a liquidation or reorganization of the Company, and in the absence of
the surviving corporation's assumption of outstanding grants made under the
Plan, the Board may provide for appropriate adjustments and settlements of
such grants either at the time of grant or at a subsequent date.

6. Plan Administration.

6.1 The Committee. A Committee (the "Committee") appointed by the
Board shall be responsible for administering the Plan. The Committee shall
be comprised of three or more members of the Board who qualify to
administer the Plan as contemplated by Rule 16b-3 under the Securities
Exchange Act of 1934 (the "1934 Act"), or any successor rule.

6.2 Powers of the Committee. Subject only to the express
restrictions and limitations otherwise set forth in the Plan, the Committee
shall have sole, absolute and full authority and power to:

(a) Interpret the Plan and undertake such actions and make such
determinations and decisions as it deems necessary and appropriate to
carry out the Plan intent;

(b) Select individuals to receive grants;

(d) Decide the type grant or grants to be made to each participant
and the terms and conditions applicable to each such grant;

(e) Award grants to individuals who are foreign nationals or who
are employed outside the United States or both, on such terms and
conditions (which may be different than specified by the Plan) which it
deems are necessary to assure the viability of such grants in meeting
the purposes of the Plan;

32
<PAGE> 35

(f) Enter into grant agreements evidencing grants made under the
Plan and their respective terms and conditions;

(g) Establish, amend and repeal rules and regulations relating to
the Plan; and

(h) Amend the Plan to the extent permitted by Section 14.6.

6.3 Delegation of Authority. The Committee may designate persons
other than members of the Committee or the Board to carry out its
responsibilities subject to such limitations, restrictions and conditions
as it may prescribe, except that the Committee may not delegate its
authority with regard to the awarding of grants to persons subject to
Section 16 of the 1934 Act. Further, the Committee may not delegate its
authority if such delegation would cause the Plan not to comply with the
requirements of Rule 16b-3 or any successor rule under the 1934 Act.

6.4 Dividends and Dividend Equivalents. The Committee may provide
that grants awarded under the Plan earn dividends or dividend equivalents.
Such dividend equivalents may be paid currently or may be credited to a
participant's account. In addition, dividends paid on outstanding grants or
issued shares may be credited to a participant's account, including
additional shares or share equivalents, rather than paid currently. Any
crediting of dividends or dividend equivalents may be subject to such
restrictions and conditions as the Committee may establish, including
reinvestment in additional shares or share equivalents.

6.5 Deferrals and Settlements. The Committee may require or permit
participants to elect to defer the issuance of shares or the settlement of
grants in cash under such rules and procedures as it may establish under
the Plan. It also may provide that deferred settlements include the payment
or crediting of interest on the deferral amounts or the payment or
crediting of dividend equivalents on deferred settlements denominated in
shares. The Committee also may require or permit grants to be settled in
the form of other grant types.

6.6 Documentation of Grants. Grants under the Plan shall be
evidenced by written agreements or such other appropriate documentation as
the Committee shall prescribe. The Committee need not require the execution
of any instrument or acknowledgment of notice of a grant under the Plan, in
which case acceptance of such a grant by the respective participant will
constitute agreement to the terms of the grant.

7. Plan Eligibility. Any employee of the Company (including any entity
that is directly or indirectly controlled by the Company or any entity in which
the Company has a significant equity interest, as determined by the Committee)
shall be eligible to be designated a participant under the Plan.

8. Grant Types. Awards under the Plan may consist of single, combination,
tandem or replacement grants of the following types.

8.1 Stock Options. A stock option shall confer on a participant the
right to purchase a specified number of shares from the Company subject to
the terms and conditions of the stock option grant. A stock option may be
in the form of an incentive stock option or any other option type. Any
incentive stock option grant shall comply with the requirements of Section
422 of the Internal Revenue Code of 1986, as

33
<PAGE> 36

amended, (the "Code"), and, accordingly, the aggregate fair market value at
the time of grant of the shares covered by incentive stock option grants
exercisable by any one optionee in any calendar year shall not exceed
$100,000 (or such other limit as may be required by the Code). The
recipient of a stock option grant shall pay for the shares at the time of
exercise in cash or such other form as the Committee may approve, including
the transfer of shares (whether actual or constructive), valued at their
fair market value on the date of exercise, or in a combination of payment
forms.

8.2 Stock Appreciation Rights (SAR). A SAR grant shall confer on a
participant the right to receive in shares, cash or a combination of both,
up to the positive difference, if any, between the fair market value of a
designated number of shares on the date the SARs are exercised and the
designated price of the SARs contained in the terms and conditions of the
grant. Shares issued in settlement of the exercise of SARs shall be valued
at their fair market value on the date of the exercise of the SARs.

8.3 Stock Grants. A stock grant shall confer on a participant the
right to receive a specified number of shares, cash equal in value to a
designated number of shares or a combination of both, subject to the terms
and conditions of the grant, which may include forfeitability contingencies
based on continued employment with the Company or the meeting of
performance criteria or both. The performance criteria that may be used by
the Committee in awarding contingent stock grants will consist of total
shareholders' return, earnings growth, revenue growth, and/or profitability
measured by return ratios. The Committee may select one criterion or
multiple criteria for measuring performance, and the measurement may be
based on absolute Company or business unit performance or based on
comparative performance with other companies. A stock grant may be received
by a participant as part of or in lieu of the participant's normal
compensation or as part of or in lieu of a payment under another incentive
compensation or employee benefit plan of the Company, subject to such rules
and conditions as the Committee may establish for such grants.

8.4 Deferred Compensation Stock Options. The Committee may, at its
sole discretion, require or permit that designated grants under the Plan be
settled in the form of deferred compensation stock options. The Committee
also, at its sole discretion, may require or permit eligible employees to
receive deferred compensation stock options in lieu of a payment of normal
compensation or a payment under another incentive compensation or employee
benefit plan of the Company. The number of shares to be subject to such a
grant shall be the quotient (rounded down to the nearest whole number)
resulting from the following formula:

<TABLE>
<C> <S> <C>
Amount of Compensation to be Deferred
------------------------------------------------------------ = Number of Shares
Fair Market Value at Time of Grant -- Option Price
</TABLE>

9. Grant Limits. Subject to adjustments contemplated by Section 5, the
following limitations on the usage of shares of Common Stock shall be effective
for grants made after April 19, 1995:

9.1 Stock Options and SARs. Commencing with 1995, no individual may
receive a stock option or SAR, or combination of both, in any one calendar
year that covers more than 200,000 shares plus unused shares carried
forward for up to five years commencing in 1995. The aggregate number of
shares that may be covered by incentive stock options granted under the
Plan cannot exceed 5,000,000 shares.

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<PAGE> 37

9.2 Stock Grants. Commencing with 1995, no individual may receive a
stock grant in any one calendar year that covers more than 100,000 shares
plus unused shares carried forward for up to five years commencing in 1995.
The aggregate number of shares that may be covered by stock grants made in
any one calendar year shall not exceed 0.4% of the number of issued shares
of Common Stock as of the first day of such calendar year commencing in
1995, plus any unused shares which were available for stock grants in any
prior years commencing in 1995.

10. Transferability and Exercisability

10.1 Transferability. Any grant under the Plan will be
non-transferable and, accordingly, shall not be assignable, alienable,
salable or otherwise transferable by the participant other than as provided
in Section 10.2 or:

(a) By will or the laws of descent and distribution;

(b) Pursuant to a qualified domestic relations order, to the extent
permitted by the Committee, either at the time of grant or subsequently;
and

(c) By gift or other transfer to, either (i) a trust or estate in
which the participant or such person's spouse, or other relative has a
substantial interest, or (ii) the participant's spouse or other
relative, to the extent permitted by the Committee, either at time of
grant or subsequently, provided further that for any such transfer by a
person subject to Section 16 of the 1934 Act, the Committee may require
the shares covered by such grant to continue to be deemed beneficially
owned.

10.2 Third Party Exercises. In the event that a participant
terminates employment with the Company to assume a position with a
governmental, charitable, educational or similar non-profit institution,
the Committee may subsequently authorize a third party, including but not
limited to a "blind" trust, to act on behalf of and for the benefit of the
respective participant with respect to any outstanding grants held by the
participant subsequent to such termination of employment. If permitted by
the Committee, a participant may designate a beneficiary or beneficiaries
to exercise the rights of the participant and receive any distributions
under the Plan upon the death of the participant.

11. Grant Terms and Conditions. The Committee shall determine the
provisions and duration of grants made under the Plan, including the purchase
prices for all stock options, the established prices for all SARs, the
consideration, if any, to be required from participants for all other grants and
the conditions under which a participant will retain rights in the event of the
participant's termination of employment while holding outstanding grants made
under the Plan. However, any stock option (other than a deferred compensation
grant made pursuant to Section 8.4) or SAR may not have an exercise or
designated price of less than 100% of the fair market value of the covered
shares on the date of grant, except that, in the case of a stock option or SAR
granted retroactively in tandem with or as a substitution for another grant, the
exercise or designated price may be the same as the exercise or designated price
of such other grant.

12. Tax Withholding. The Company shall have the right to deduct from any
settlement of a grant made under the Plan, including the delivery or vesting of
shares, a sufficient amount to cover withholding of any federal, state or local
taxes required by law or to take such other action as may be necessary to
satisfy any

35
<PAGE> 38

such withholding obligations. The Committee may permit shares to be used to
satisfy required tax withholding and such shares shall be valued at their fair
market value as of the settlement date of the applicable grant.

13. Other Company Benefit and Compensation Programs. Unless otherwise
determined by the Committee, settlements of grants received by participants
under the Plan shall not be deemed a part of a participant's regular, recurring
compensation for purposes of calculating payments or benefits from any Company
benefit or severance program (or severance pay law of any country). The above
notwithstanding, the Company may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary.

14. General. The following provisions are applicable to the Plan
generally:

14.1 Future Rights. No person shall have any claim or rights to be
awarded a grant under the Plan, and no participant shall have any rights
under the Plan to be retained in the employ of the Company.

14.2 Fair Market Value. The term "fair market value" as used in the
Plan means the closing price of a share of Common Stock on the date of the
applicable transaction or such other appropriate valuation method as the
Committee may determine.

14.3 No Fractional Shares. No fractional shares shall be issued
under the Plan and cash shall be paid in lieu of any fractional shares in
settlement of grants awarded under the Plan.

14.4 Unfunded Plan. Unless otherwise determined by the Committee,
the Plan shall be unfunded and shall not create (or be construed to create)
a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any participant or other
person. To the extent any person holds any rights by virtue of a grant
awarded under the Plan, such right (unless otherwise determined by the
Committee) shall be no greater than the right of an unsecured general
creditor of the Company.

14.5 Successors and Assigns. The Plan shall be binding on all
successors and assigns of a participant, including, without limitation, the
estate of such participant and the executor, administrator or trustee of
such estate, or any receiver or trustee in bankruptcy or representative of
the participant's creditors.

14.6 Plan Amendment. The Committee may amend the Plan as it deems
necessary or appropriate to better achieve the purposes of the Plan, except
that no amendment without the approval of the Company's shareholders shall
be made which would:

(a) Subject to adjustments contemplated by Section 5, increase the
total number of shares available for issuance under Section 3 or the
share limits set forth in Section 9; and

(b) Reduce the minimum exercise or designated price for any stock
options or SARs granted under the Plan.

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<PAGE> 39

14.7 Plan Termination. The Board may terminate the Plan at any time.
However, if so terminated, then-existing previously-awarded grants shall
remain outstanding and in effect in accordance with their applicable terms
and conditions.

14.8 Governing Law. The validity, construction and effect of the
Plan and any actions taken or relating to the Plan shall be determined in
accordance with the laws of the State of South Carolina and applicable
federal law.

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<PAGE> 40
EXHIBIT II
<TABLE>
<CAPTION>

<S> <C>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SONOCO PRODUCTS COMPANY
P POST OFFICE BOX 160 - ONE NORTH SECOND STREET - HARTSVILLE, SOUTH CAROLINA
29551-0160
R The undersigned hereby appoints Charles W. Coker, Chairman, President and Chief Executive Officer,
or Thomas C. Coxe, III, Senior Executive Vice President, as Proxies, each with the power to appoint
O his substitute, and hereby authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of Sonoco Products Company held of record by the undersigned on March 3,
X 1995, at the Annual Meeting of Shareholders to be held on April 19, 1995, or any adjournment thereof.

Y (1) ELECTION OF DIRECTORS
/ / FOR All Nominees / / WITHHOLD on All Nominees
/ / Withhold On The Following Nominees Only
-------------------------------------------------------------
DIRECTORS Nominees -- Leo Benatar, P.C. Browning, F.L.H. Coker, T.C. Coxe, III, B.L.M. Kasriel, E.H. Lawton, Jr.,
RECOMMEND E.C. Wall, Jr.
VOTING
FOR 1, (2) PROPOSAL TO AMEND THE 1991 KEY EMPLOYEE STOCK PLAN.
2, 3 AND 4
/ / FOR / / AGAINST / / ABSTAIN

(3) PROPOSAL TO APPROVE THE ANNUAL INCENTIVE COMPENSATION TERMS FOR EXECUTIVE
OFFICERS.

/ / FOR / / AGAINST / / ABSTAIN

(4) PROPOSAL TO APPROVE THE ELECTION OF COOPERS & LYBRAND, LLP, CERTIFIED PUBLIC
ACCOUNTANTS, AS THE INDEPENDENT AUDITORS OF THE CORPORATION.

/ / FOR / / AGAINST / / ABSTAIN

(Continued and to be signed and dated on the reverse side)

(Continued from other side)

(5) 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, 3 AND 4.

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.

!!!! -------- EDGAR ONLY -------- !!!!

</TABLE>