SONOCO PRODUCTS CO, DEF 14A, 1999-03-19

SONOCO PRODUCTS CO
DEF 14A, 1999-03-19
PAPERBOARD MILLS

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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 Rule 14a-11(c) or Rule 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] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
<PAGE> 2

(SONOCO LOGO)

SONOCO PRODUCTS COMPANY

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

March 19, 1999

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, on Wednesday, April 21, 1999, at
11:00 A.M.

The accompanying Notice of Annual Meeting of Shareholders and Proxy
Statement cover the details of matters to be presented at the meeting which
consist of the election of directors, approval of an amendment to the Company's
Restated Articles of Incorporation and approval of the selection 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 1998 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 are a shareholder of record and later find you can be present or if for
any reason you 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)
Charles W. Coker
Chairman
<PAGE> 3

SONOCO PRODUCTS COMPANY

POST OFFICE BOX 160
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 21, 1999.

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

PURPOSES............................. (1) To elect six members of the Board of Directors, five to
serve for the next three years and one to serve for the next
year.
(2) To approve an amendment to the Company's Restated
Articles of Incorporation that would increase the number of
shares of Common Stock the Company is authorized to
issue from 150,000,000 to 300,000,000.
(3) To approve the selection of independent auditors.
(4) 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
February 26, 1999, are entitled to notice of and to vote at
the meeting.

ANNUAL REPORT........................ The 1998 Annual Report of the Company is enclosed unless you
have signed a statement indicating that you have access to
another copy at your address.

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,

Charles J. Hupfer
Secretary

March 19, 1999

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SONOCO PRODUCTS COMPANY

POST OFFICE BOX 160
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 21, 1999.

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, e-mail, or by personal calls to obtain proxies.

The proxy materials are being mailed on March 19, 1999, to shareholders of
record at the close of business on February 26, 1999.

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 a shareholder of
record by giving notice of revocation at the Annual Meeting, 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 of record 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
persons named in this Proxy Statement as the Board of Directors' nominees for
election to the Board of Directors, FOR approval of the amendment to the
Company's Restated Articles of Incorporation and FOR approval of selection of
PricewaterhouseCoopers LLP as the Company's independent auditors for the fiscal
year ending December 31, 1999. As to any other matter of business that may be
brought before the Annual Meeting, a vote may be cast pursuant to the
accompanying

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proxy in accordance with the best judgment of the persons holding the proxy, but
the Board of Directors presently does not know of any other such business.

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 101,845,073 shares were
outstanding at February 26, 1999, and 30,000,000 authorized shares of no par
value Preferred Stock, none of which is outstanding. An amendment to the
Company's Restated Articles of Incorporation to increase the number of
authorized shares of Common Stock from 150,000,000 to 300,000,000 will be voted
on at the Annual Meeting.

VOTING SECURITIES

Only shareholders of record of the Company's Common Stock at the close of
business on February 26, 1999, will be entitled to vote at the Annual Meeting.
Each share outstanding 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 by 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 amendment to the Restated Articles of Incorporation
requires the affirmative vote of two-thirds of the outstanding shares of Common
Stock. Votes that are withheld or that are not voted and abstentions will have
the effect of votes against the amendment.

Approval of selection of PricewaterhouseCoopers LLP as independent auditors
and approval of any other matter that may be brought before the meeting require
that the votes cast in favor of the matter exceed the votes cast against the
matter. Votes that are withheld or shares that are not voted will have no effect
on the outcome of such matters.

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> 6

ELECTION OF DIRECTORS

At this Annual Meeting six directors are to be elected, five of whom shall
hold office for the next three years, their terms expiring at the Annual
Shareholders' Meeting in 2002, and one of whom shall hold office for the next
year, his term expiring at the Annual Shareholders' Meeting in 2000, or until
their successors are duly elected and qualified. It is the intention of the
persons named on the enclosed form of proxy to vote such proxy FOR the election
of the six persons named herein unless authority to vote 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

- ------------------- R. J. BROWN (64). Mr. Brown is Founder, Chairman and Chief 1993
- ------------------- Executive Officer of B&C Associates, Inc. (management
- ------------------- consulting, marketing research and public relations firm),
- -----[PHOTO]------- High Point, North Carolina, a position held since 1973. He
- ------------------- is a director of First Union Corporation, Duke Energy
- ------------------- Corporation and Republic Industries, Inc.
- -------------------
- -------------------

- ------------------- *J. L. COKER (58). Mr. Coker is President of JLC 1969
- ------------------- Enterprises (private investments), Stonington,
- ------------------- Connecticut, a position held since 1979. He was Secretary
- -----[PHOTO]------- of the Company from 1969 to 1995 and was President of
- ------------------- Sonoco Limited, Canada, from 1972 to 1979.
- -------------------
- -------------------
- -------------------
</TABLE>

---------------
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of
J. L. Coker.

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<PAGE> 7

<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 (64). Mr. Fulton is Chief Executive Officer, a 1989
- ------------------- position held since 1997, and Director of Bassett
- ------------------- Furniture Industries, Inc., Bassett, Virginia. He served
- ----[PHOTO]-------- as Dean of The Kenan-Flagler Business School, The
- ------------------- University of North Carolina, Chapel Hill, North Carolina,
- ------------------- from 1994 until 1997. He was President of Sara Lee
- ------------------- Corporation (manufacturer and marketer of consumer
- ------------------- products), Chicago, Illinois, from 1988 through 1993. He
served as Executive Vice President from 1987 to 1988 and
as Senior Vice President of Sara Lee Corporation and
President of the Hanes Group of Sara Lee Corporation from
1981 to 1986. Mr. Fulton is a director of Bank of America
Corporation, Cato Corporation, Hudson Bay Corporation, and
Lowe's Companies, Inc.

- ------------------- H. L. MCCOLL, JR. (63). Mr. McColl is Chairman and Chief 1972
- ------------------- Executive Officer and Director of Bank of America
- ----[PHOTO]------- Corporation, NB Holdings Corporation, NationsBank, N.A.
- ------------------- and Bank of America, NT & SA, Charlotte, North Carolina.
- ------------------- He served as Chief Executive Officer of the former
- ------------------- NationsBank Corporation from 1983 to 1998. Mr. McColl is a
- ------------------- director of Ruddick Corporation.
- -------------------

- ------------------- C. D. SPANGLER, JR. (66). Mr. Spangler is Chairman of the 1999
- ------------------- Board of Golden Eagle Industries, Inc. (investment
- ------------------- company), Charlotte, North Carolina, a position held since
- ----[PHOTO]-------- 1986. He also is Chairman of the Board of National Gypsum
- ------------------- Company (manufacturer and supplier of products and
- ------------------- services used in building and construction), Charlotte,
- ------------------- North Carolina, a position held since 1995. Mr. Spangler
- ------------------- served as President of The University of North Carolina
from 1986 to 1997. He is a director of BellSouth
Corporation.
</TABLE>

All nominees previously have been elected to the Board of Directors by the
Common Shareholders except Mr. C. D. Spangler, Jr.

Mr. J. C. Fort, whose term would have expired in 2000, retired from the
Board in February 1999 upon reaching mandatory retirement age. Mr. Spangler was
elected by the Board to fill the vacancy created by the retirement of Mr. Fort
until the Annual Meeting.

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<PAGE> 8

Mr. Spangler has been nominated for election by the shareholders at this
Annual Meeting to serve a one-year term which will expire at the Annual
Shareholders' Meeting in 2000. His proposed term is for one year to cause the
distribution of directors among the three classes to be as nearly equal as
possible in future years as required by South Carolina law and the Company's
By-Laws. Pursuant to the Company's By-Laws, at its meeting on February 3, 1999,
the Board of Directors fixed the number of directors of the Company at 15.

The Corporate Governance 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 Corporate Governance 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 Corporate Governance Committee or by any
shareholder, be submitted to the Secretary not less than 60 days prior to the
Annual Meeting for which such nominations are made.

Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 2000 are:

- ------------------- H. E. DELOACH, JR. (54). Mr. DeLoach is Executive Vice 1998
- ------------------- President of the Company, a position held since 1996. He
- ------------------- served as Group Vice President from 1993 to 1996, Vice
- ----[PHOTO]-------- President -- Film, Plastics and Special Products from
- ------------------- February 1993 to October 1993, Vice President -- High
- ------------------- Density Film Products Division from 1990 to 1993, and Vice
- ------------------- President -- Administration and General Counsel from 1986
- ------------------- to 1990.
</TABLE>

- ---------------
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker.

6
<PAGE> 9

- ------------------- DONA DAVIS YOUNG (45). Mrs. Young is Executive Vice 1995
- ------------------- President -- Individual Insurance, General Counsel (since
- ------------------- 1995) and a member of the Board of Directors since 1998 of
- ----[PHOTO]-------- Phoenix Home Life Mutual Insurance Company, Hartford,
- ------------------- Connecticut. She served as Executive Vice
- ------------------- President -- Individual Sales and Marketing and General
- ------------------- Counsel from 1994 to 1995, Senior Vice President and
- ------------------- General Counsel from 1989 to 1994, Vice President and
Assistant General Counsel from 1987 to 1989, and Second
Vice President and Insurance Counsel from 1985 to 1987.
She also was Secretary of the Board of Directors of
Phoenix Home Life Mutual Insurance Company from 1989 to
1998.
</TABLE>

Mr. R. E. Elberson, whose term would have expired in 2000, resigned from
the Board on December 31, 1998, to pursue other interests.

7
<PAGE> 10

Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 2001 are:

<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
<C> <S> <C>
- ------------------- P. C. BROWNING (57). Mr. Browning is President, a position 1995
- ------------------- held since 1996, and Chief Executive Officer, a position
- ------------------- held since 1998, of the Company. He served as Chief
- ------[PHOTO]------ Operating Officer from 1996 to 1998 and as Executive Vice
- ------------------- President of the Company from 1993 to 1996. Mr. Browning
- ------------------- was President, Chairman and Chief Executive Officer of
- ------------------- National Gypsum Company (manufacturer and supplier of
- ------------------- products and services used in building and construction),
Charlotte, North Carolina, from 1990 to 1993 and
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, Wachovia Corporation and Lowe's
Companies, Inc.

- ------------------- *F. L. H. COKER (63). Mr. Coker is retired. He was 1964
- ------------------- President and Director of Sea Corporation of Myrtle Beach,
- ------------------- Inc. (private investments), Myrtle Beach, South Carolina,
- -----[PHOTO]------- from 1983 to 1989. At the time of his retirement from the
- ------------------- Company in 1979, Mr. Coker was Senior Vice President, a
- ------------------- position held since 1976.
- -------------------
- -------------------

- ------------------- T. C. COXE III (68). Mr. Coxe is retired. He was Senior 1982
- ------------------- Executive Vice President of the Company from 1993 to 1996
- ------------------- and was Executive Vice President from 1985 to 1993. Mr.
- -----[PHOTO]------- Coxe is a director emeritus of Wachovia Bank of South
- ------------------- Carolina, N.A.
- -------------------
- -------------------
- -------------------
</TABLE>

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

<TABLE>
<C> <S> <C>
* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L. Coker.
</TABLE>

8
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<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
<C> <S> <C>
- ------------------- B. L. M. KASRIEL (52). Mr. Kasriel is Vice Chairman and 1995
- ------------------- Chief Operating Officer of Lafarge (construction materials
- ------------------- group), Paris, France, a position held since 1995. He
- ----(PHOTO)-------- 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, Dallas, Texas, as President and Chief
- ------------------- Operating Officer from 1987 to 1989. He served as
Executive Vice President of Lafarge Coppee from 1982 to
1987. Mr. Kasriel is a director of Lafarge and Lafarge
Corporation.

- ------------------- E. H. LAWTON, JR. (69). Mr. Lawton is President and 1968
- ------------------- Director of Hartsville Oil Mill (vegetable oils
- ------------------- processor), Darlington, South Carolina, a position held
- ----(PHOTO)-------- since 1962.
- -------------------
- -------------------
- -------------------
- -------------------
</TABLE>

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BOARD COMMITTEES

During 1998 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 five committees:

<TABLE>
<CAPTION>
COMMITTEE CURRENT NUMBER OF
NAME PURPOSE MEMBERS 1998 MEETINGS
- ----------------- --------------------------------------- -------------------- -------------
<S> <C> <C> <C>
Audit Committee Responsible for the scope of both B. L. M. Kasriel -- 3
internal and external audit programs Chairperson
in order to fully protect assets of C. J. Bradshaw
the Company. R. J. Brown
F. L. H. Coker
J. L. Coker

Executive Responsible for establishing and A. T. Dickson -- 4
Compensation maintaining officer-level salaries and Chairperson
Committee administering executive compensation C. J. Bradshaw
plans. Paul Fulton
B. L. M. Kasriel
E. H. Lawton, Jr.
D. D. Young

Executive Empowered to exercise all of the P. C. Browning 1
Committee authority of the Board of Directors C. W. Coker
between regularly scheduled meetings, A. T. Dickson
except as limited by South Carolina E. H. Lawton, Jr.
law. H. L. McColl, Jr.

Employee Responsible for reviewing and D. D. Young -- 3
and Public evaluating the Company's effectiveness Chairperson
Responsibility in dealing with issues such as R. J. Brown
Committee diversity, safety, morale, F. L. H. Coker
charitable contributions, and legal J. L. Coker
matters. T. C. Coxe III
</TABLE>

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<PAGE> 13

<TABLE>
<CAPTION>
COMMITTEE CURRENT NUMBER OF
NAME PURPOSE MEMBERS 1998 MEETINGS
- ----------------- --------------------------------------- -------------------- -------------
<S> <C> <C> <C>
Corporate Responsible for evaluating issues and Paul Fulton -- 2
Governance making recommendations with respect to Chairperson
Committee the governance of the Company and the T. C. Coxe III
functioning of the Board. A. T. Dickson
B. L. M. Kasriel
E. H. Lawton, Jr.
D. D. Young
</TABLE>

During a portion of 1998 the Board of Directors also had a Finance
Committee and a Nominating Committee, both of which were incorporated in other
committees in October 1998, as follows:

<TABLE>
<CAPTION>
COMMITTEE NUMBER OF
NAME PURPOSE MEMBERS 1998 MEETINGS
- ----------------- --------------------------------------- -------------------- -------------
<S> <C> <C> <C>
Nominating Responsible for recommending to the F. L. H. Coker -- 1
Committee directors qualified candidates to fill Chairperson
vacancies on the Board. J. L. Coker
R. E. Elberson
J. C. Fort
E. H. Lawton, Jr.
H. L. McColl, Jr.

Finance Committee Responsible for evaluating the H. L. McColl, Jr. -- 1
Company's financial status, advising Chairperson
corporate management and the full R. J. Brown
Board on financial matters and F. L. H. Coker
reviewing the Company's long-term J. L. Coker
financial requirements and plans. T. C. Coxe III
A. T. Dickson

</TABLE>

During 1998 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

<TABLE>
<CAPTION>
DEFERRED
SHARES OF OPTIONS COMPENSATION
COMMON STOCK EXERCISABLE SONOCO TOTAL NUMBER PERCENT AND
BENEFICIALLY WITHIN SAVINGS OF SHARES OF RESTRICTED RESTORATION
NAME AND POSITION OWNED 60 DAYS PLAN OWNED(1) CLASS(2) STOCK(7) UNITS(8)
- ------------------------------- ------------ ----------- -------- ------------ -------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
C. J. Bradshaw 26,030 6,600 - 32,630 - - 3,854
Director
R. J. Brown 462 9,586 - 10,048 - - 2,164
Director
F. L. H. Coker 1,295,670 6,600 - 1,302,270 1.25 - -
Director
J. L. Coker 275,273 6,600 - 281,873 - - -
Director
T. C. Coxe III 303,729 76,758 1,635 382,122 - - -
Director
A. T. Dickson 68,855 6,600 - 75,455 - - 2,487
Director
Paul Fulton 11,530 6,600 - 18,130(3) - - -
Director
B. L. M. Kasriel 115 10,311 - 10,426 - - -
Director
E. H. Lawton, Jr. 777,111 6,600 - 783,711(4) - - 6,052
Director
H. L. McColl, Jr. 27,871 6,600 - 34,471(5) - - 8,156
Director
C. D. Spangler, Jr. 4,651,700 - - 4,651,700 4.46 - -
Director
D. D. Young 4,730 2,200 - 6,930 - - 4,968
Director
C. W. Coker 1,081,098 698,896 3,993 1,783,987 1.71 102,032 9,400
Chairman and Director
P. C. Browning 3,886 433,361 5,335 442,582 - 74,129 3,548
President, Chief Executive
Officer and Director
H. E. DeLoach, Jr. 269,756 115,500 3,249 388,505(6) - 51,016 4,184
Executive Vice President
and Director
</TABLE>

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<PAGE> 15

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

(1) Shareholdings represent the number of shares beneficially owned as of
February 26, 1999, directly or indirectly, by each director and named
executive officer. The directors and the named executive officers have sole
voting and investment power over the shares unless otherwise indicated in
the footnotes. The number includes shares subject to currently exercisable
options, granted by the Company under the 1983 Key Employee Stock Option
Plan, the 1991 Key Employee Stock Plan (the "1991 Plan") and the 1996
Non-Employee Directors' Stock Plan, shares in dividend reinvestment and
shares in the Sonoco Savings Plan.

Shareholdings do not include Restricted Stock Rights, which have been
deferred until retirement, granted under the 1991 Plan or Deferred
Compensation and Restoration Units.

Shareholdings do not include the awards listed in the Long-Term Incentive
Plans -- Awards in Last Fiscal Year table shown on Page 19.

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

(3) Includes 507 shares of Common Stock owned by Mrs. Fulton. Mr. Fulton
disclaims beneficial ownership of these shares.

(4) Includes 672,459 shares of Common Stock owned by trusts for which Mr. Lawton
is trustee. Mr. Lawton has no pecuniary interest in these trusts and
disclaims beneficial ownership of these shares.

(5) Includes 11,882 shares of Common Stock owned by Mrs. McColl. Mr. McColl
disclaims beneficial ownership of these shares.

(6) Includes 229,704 shares of Common Stock owned by trusts for which Mr.
DeLoach is trustee. Mr. DeLoach has no pecuniary interest in these trusts
and disclaims beneficial ownership of these shares.

(7) Issuance of these shares, two-thirds of which have vested, has been deferred
until retirement; thus, no voting rights are associated with them.

(8) These units represent deferred compensation and restoration connected with
the Sonoco Savings Plan. No voting rights are associated with these units.

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<PAGE> 16

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 four times during 1998 and had met once in 1999 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. The program currently consists of salary, annual cash bonus awards,
annual stock options, periodic contingent share 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.
In these surveys executive compensation levels are developed by looking at large
numbers of similar positions across American industry and reflect adjustments
based on company revenues. The Dow Jones Containers & Packaging Group Index
("Index"), which includes the Company, was used in the five-year shareholder
return performance graph that appears on Page 17. The companies in this Index
also are included, as available, among the companies whose survey data is used
in the Company's compensation studies. From time to time the Company contracts
with independent consulting firms to perform customized compensation studies of
companies in its industry group and/or of companies having similar long-term
financial performance results.

The total compensation package for executives for 1998 was generally
structured to be competitive with the third quartile total pay practices for
executives of other large corporations if challenging annual financial targets
and corresponding longer-term increases in shareholder value were achieved. The
base salary midpoints were targeted to be at the median of surveyed market
rates. Incentive compensation, consisting of annual cash bonuses, annual stock
options awards and periodic contingent share awards, is the Company's
performance-based compensation element. The levels of the combined award
opportunities reflected third quartile competitive total annual incentive
compensation opportunities for similar positions as reflected by the independent
consulting firms. These awards provided opportunities to motivate and reward
executives for exceptional performance. Executive perquisites were limited and
provided a lower benefit than the market median. The benefits program for
executives provided a benefit that was somewhat higher than the market median.
This benefits program, in particular the retirement and life insurance plans,
was designed to enhance retention of executives until normal retirement age.

The Committee has taken, and it intends to continue to take, steps
necessary to assure the federal tax deductibility of compensation realized by
senior executives. However, to the extent that such steps would not

14
<PAGE> 17

be practical or would not be consistent with the Committee's compensation
objectives, there is the possibility that future compensation, in some
circumstances, may not meet tax deductibility requirements.

Following is a discussion of elements of the executive compensation
program, along with a description of the decisions and actions taken by the
Committee with regard to 1998 compensation. Also included is a specific
discussion of the decisions regarding the compensation of Messrs. Coker and
Browning. On April 15, 1998, Mr. Browning succeeded Mr. Coker as Chief Executive
Officer (CEO). Mr. Coker remained an active employee of the Company as Chairman
of the Board, and Mr. Browning became President and CEO of the Company. The
tables and accompanying narrative and footnotes which follow this report reflect
the decisions covered by the following discussions.

SALARY

The Company's salary ranges and resulting salaries are based on a relative
valuing of the duties and responsibilities of each position. The Committee
reviews the base salaries of all senior executives on an annual basis.

Merit salary increases are based on consideration of each executive's
performance and position in his or her salary range. Promotional salary
increases are awarded to recognize increased responsibilities and
accountabilities. The Committee used these criteria to determine salary
adjustments for each of the executive officers. Mr. Browning's base salary was
increased, effective April 1, 1998, based on his additional responsibilities as
the President and CEO of the Company, as well as external pay practices and the
Committee's subjective assessment of his overall performance during the
preceding year.

ANNUAL BONUS AWARDS

The Company has an annual bonus plan which provided for cash incentive
opportunities based upon achievement of pre-determined 1998 financial
performance goals, as well as attainment of key 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 73% to 100% of total bonus
opportunity. For senior executives with corporate responsibility, the plan's
financial goals were based on corporate earnings per share from ongoing
operations. For executives with business unit responsibility, one-fourth of the
bonus opportunity available for financial performance was based on corporate
earnings per share, and the remainder was based on business unit earnings before
interest and taxes.

The Vision 2000 objectives for 1998 were weighted from 0% to 27% of total
bonus opportunity and were comprised of employee safety, unit sales growth,
productivity improvement, and effective use of capital.

On February 2, 1999, the Committee reviewed and approved the 1998 annual
bonus payments for executive officers. Initial bonus amounts were assigned to
each executive officer (except Messrs. Coker, Browning, DeLoach, and Moran)
based on the scoring of financial goal attainment and subjective evaluations of
how well the Vision 2000 objectives were met. In some cases the Committee used
additional discretion

15
<PAGE> 18

based on its assessment of individual performance and internal equity in the
determination of final bonus amounts. Mr. Browning's bonus, which reflects the
Committee's assessment of his contribution and efforts in 1998, is shown under
the "Bonus" caption in the Summary Compensation Table on Page 18. In setting the
amount the Committee considered, in addition to the record level of earnings per
share, his role in establishing strategic objectives and implementing
initiatives for growth. Mr. Coker's bonus reflects his positioning of the
Company for future growth, the Committee's subjective assessment of his
individual performance and his continuing, critical role in making a seamless
transition of CEO responsibilities. The bonus amounts for Messrs. Coker and
Browning were less than the maximum that could have been paid under the earnings
per share schedule adopted for each of them by the Committee in early 1998. The
bonus awards for Messrs. DeLoach and Moran were determined in the same manner as
the bonus awards for Messrs. Coker and Browning.

STOCK OPTIONS

In 1998 Mr. Browning, 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 options were awarded. Accordingly, these options will be
valuable to the recipients only if the market price of Company stock increases.
Stock option awards for Mr. Browning, Mr. Coker and the other named officers are
included in the Summary Compensation Table on Page 18 under the caption "Number
of Securities Underlying Options Granted" and in the Option Grants in Last
Fiscal Year table on Page 21.

OTHER

In 1997 the Committee approved a performance-based restricted stock plan
and granted one-time awards of contingent share units to twenty-five executives,
including Mr. Browning, Mr. Coker and the other executive officers named in the
Summary Compensation Table. These awards, consisting of performance-based
restricted shares of Common Stock, were granted to provide corporate and
business unit managers with an additional compensation opportunity which can be
realized only if targeted creation of shareholder value also is achieved. The
number of restricted shares 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 plan provides that participants who change responsibility or position
may be eligible for additional share units. On April 14, 1998, the Committee
granted additional contingent share units to Messrs. Browning and DeLoach in
recognition of Mr. Browning's promotion to President and CEO and a significant
expansion of Mr. DeLoach's responsibilities as Executive Vice President.

The awards are intended to reward achievement of above-average shareholder
returns. As described in more detail on Page 19, awards will vest depending on
stock price performance during the last 24 months of the four-year performance
period. Except for death, disability or retirement other than for cause,
termination of a participant's employment prior to the end of the performance
period will result in forfeiture of an award.

A. T. Dickson (Chairman) C. J. Bradshaw R. E. Elberson
Paul Fulton B. L. M. Kasriel E. H. Lawton, Jr. D. D. Young
16
<PAGE> 19

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 & Packaging Group
(which includes the Company), from December 31, 1993, through December 31, 1998.

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 & SONOCO
MEASUREMENT PERIOD S&P 500 PACKAGING PRODUCTS
(FISCAL YEAR COVERED) STOCK INDEX GROUP COMPANY
<S> <C> <C> <C>
1993 100 100 100
1994 101 99 102
1995 139 108 132
1996 171 136 133
1997 229 157 182
1998 294 137 175
</TABLE>

ASSUMES $100 INVESTED ON DECEMBER 31, 1993, IN SONOCO PRODUCTS COMPANY COMMON
STOCK, THE S&P 500 STOCK INDEX AND THE DOW JONES CONTAINERS & PACKAGING GROUP.

* TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
** FISCAL YEAR ENDING DECEMBER 31

17
<PAGE> 20

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS(2)
------------
ANNUAL COMPENSATION NUMBER OF
------------------------------------- SECURITIES
OTHER UNDERLYING
ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) GRANTED(3) COMPENSATION(4)
- --------------------------- ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker 1998 $740,004 $613,463 $69,816 110,000 $344,629
Chairman 1997 723,334 870,000 60,165 110,000 220,353
1996 679,173 870,827 51,852 82,500 206,934

P. C. Browning 1998 684,999 576,864 -0- 110,000 116,259
President and 1997 567,496 600,000 -0- 110,000 102,600
Chief Executive Officer 1996 535,414 540,000 -0- 110,000 104,598

H. E. DeLoach, Jr. 1998 412,002 296,229 18,223 55,000 48,388
Executive Vice President 1997 373,666 400,000 15,799 33,000 43,921
1996 354,087 325,000 13,700 27,500 43,821

H. J. Moran 1998 390,165 280,529 -0- 33,000 73,013
Executive Vice President 1997 373,666 375,000 -0- 33,000 75,477
1996 353,837 325,000 -0- 27,500 73,156

F. T. Hill, Jr. 1998 293,169 178,540 770 27,500 24,598
Vice President and 1997 278,750 240,000 696 27,500 22,831
Chief Financial Officer 1996 259,999 210,000 630 16,500 21,789
</TABLE>

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

(1) None of the executive officers received perquisites or personal benefits
which totaled the lesser of $50,000 or 10% of their respective salary plus
bonus payments. Amounts in this column represent the above-market portion of
interest credits on previously-earned compensation for which payment has
been deferred.

(2) The number and dollar value of restricted stock rights held, including
target contingent share units, and dividend equivalents, based on the
closing stock price on December 31, 1998, of $29.6250 per share were: C. W.
Coker -- 104,755 shares ($3,103,376); P. C. Browning -- 96,115 shares
($2,847,416); H. E. DeLoach, Jr. -- 62,063 shares ($1,838,605); H. J.
Moran -- 39,644 shares ($1,174,448); and F. T. Hill, Jr. -- 21,239 shares
($629,196).

(3) Number of securities covered by 1996, 1997 and 1998 grants adjusted to
reflect the 10% stock dividend paid June 10, 1998.

18
<PAGE> 21

(4) All other compensation for 1998 consisted of the following components:

<TABLE>
<CAPTION>
COMPANY CONTRIBUTIONS AND
SPLIT-DOLLAR ACCRUALS TO DEFINED CONTRIBUTION
NAME LIFE INSURANCE RETIREMENT PLANS(1)
- ------------------ -------------- --------------------------------
<S> <C> <C>
C. W. Coker $296,328 $48,301
P. C. Browning 77,709 38,550
H. E. DeLoach, Jr. 24,028 24,360
H. J. Moran 50,057 22,956
F. T. Hill, Jr. 8,603 15,995
</TABLE>

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

(1) Comprised of contributions to the Sonoco Savings Plan and accruals to
individual accounts in the Company's Omnibus Benefit Restoration Plan
in order to keep employees whole with respect to Company contribution
amounts that were limited by tax law.

LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
MAXIMUM PERFORMANCE PERIOD ESTIMATED FUTURE PAYOUTS
NUMBER OF UNTIL MATURATION -------------------------------------
NAME SHARE UNITS OR PAYOUT THRESHOLD(#) TARGET(#) MAXIMUM(#)
- ------------------ ----------- ------------------ ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
C. W. Coker -0- -- -0- -0- -0-
P. C. Browning 27,500 9/2/97-9/1/01 6,875 13,750 27,500
H. E. DeLoach, Jr. 44,000 9/2/97-9/1/01 11,000 22,000 44,000
H. J. Moran -0- -- -0- -0- -0-
F. T. Hill, Jr. -0- -- -0- -0- -0-
</TABLE>

Awards are made in the form of contingent Company share units. The vesting
of awards is tied to growth in share price over a four-year period as described
in the Compensation Committee's Report on Page 16. Threshold vesting is earned
if the share price is $43.0911; target vesting is earned if the share price is
$47.1441, and maximum vesting is earned if the share price is $51.4764. All
share units and share prices have been adjusted for the 10% stock dividend,
effective June 10, 1998. None of the stock units will vest if the minimum share
price growth objective (threshold) is not achieved. Dividend equivalents with
respect to such shares are automatically reinvested in additional stock units,
subject to vesting conditions previously described.

19
<PAGE> 22

OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
AGGREGATED OPTION EXERCISES IN 1998 AND 1998 YEAR-END VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AS OF 12/31/98 AS OF 12/31/98(2)
ACQUIRED ON VALUE --------------------------- ---------------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE(3) UNEXERCISABLE(4)
- ------------------ ----------- ----------- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker 46,942 $ 890,715 588,896 110,000 $5,509,767 -0-
P. C. Browning 33,000 504,016 323,362 110,000 2,258,488 -0-
H. E. DeLoach, Jr. 37,653 462,173 60,500 55,000 322,312 -0-
H. J. Moran 15,200 245,052 181,590 33,000 1,767,070 -0-
F. T. Hill, Jr. 70,917 1,279,493 73,222 27,500 478,622 -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 $29.6250 per share, the December 31, 1998, closing price.

(3) Based on exercise prices ranging from $13.2035 to $24.5455 per share.

(4) Based on an exercise price of $33.6932 per share.

20
<PAGE> 23

OPTION GRANTS IN LAST FISCAL YEAR
1998 STOCK OPTION GRANTS

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO PRICE GRANT DATE
OPTIONS EMPLOYEES (PER SHARE) EXPIRATION PRESENT
NAME GRANTED(1)(2) IN 1998 (2) DATE VALUE(3)
- ------------------ ------------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
C. W. Coker 110,000 8.2 $33.6932 2/4/2008 $809,600
P. C. Browning 110,000 8.2 33.6932 2/4/2008 809,600
H. E. DeLoach, Jr. 55,000 4.1 33.6932 2/4/2008 404,800
H. J. Moran 33,000 2.5 33.6932 2/4/2008 242,880
F. T. Hill, Jr. 27,500 2.1 33.6932 2/4/2008 202,400
</TABLE>

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

(1) These options were granted on February 4, 1998, at the closing market price,
became exercisable on February 4, 1999, 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 by the
delivery of previously-owned shares. Tax obligations also can be paid by an
offset of the underlying shares.

(2) The number of shares and the exercise price have been adjusted for the 10%
stock dividend paid June 10, 1998.

(3) The grant date present values per option share were derived using the
Black-Scholes option pricing model in accordance with the rules and
regulations of the Securities and Exchange Commission and are not intended
to forecast appreciation of the Company's stock price. The options had a
grant date present value of $7.36 per option share. The Black-Scholes model
was used with the following assumptions: stock price volatility of 20.0%,
dividend yield of 2.3%, risk-free investment rate of 5.44%, and a five-year
option life.

21
<PAGE> 24

PENSION TABLE

Named executive officers participate in a non-contributory defined benefit
program which provides for a maximum annual lifetime retirement benefit equal to
60% of final average compensation, computed as a straight life annuity, based on
the highest three of the last seven calendar years. In order to receive the full
benefit the executive must have at least 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 and the executive's benefits from
Sonoco's qualified pension plan.

<TABLE>
<CAPTION>
AGE 65 RETIREMENT
YEARS OF SERVICE
FINAL ------------------------------
AVERAGE 15 OR
COMPENSATION(1) 5 10 MORE(2)
- --------------- -------- -------- --------
<S> <C> <C> <C>
$ 300,000 $ 60,000 $120,000 $180,000
400,000 80,000 160,000 240,000
500,000 100,000 200,000 300,000
600,000 120,000 240,000 360,000
700,000 140,000 280,000 420,000
800,000 160,000 320,000 480,000
900,000 180,000 360,000 540,000
1,000,000 200,000 400,000 600,000
1,100,000 220,000 440,000 660,000
1,200,000 240,000 480,000 720,000
1,300,000 260,000 520,000 780,000
1,400,000 280,000 560,000 840,000
1,500,000 300,000 600,000 900,000
1,600,000 320,000 640,000 960,000
</TABLE>

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

(1) Final average compensation includes salary and bonus. Age, years of service
and final average compensation as of December 31, 1998, for the named
officers are as follows:

<TABLE>
<CAPTION>
YEARS OF FINAL AVERAGE
NAME AGE SERVICE COMPENSATION
- ------------------ --- -------- -------------
<S> <C> <C> <C>
C. W. Coker 65 41 $1,592,501
P. C. Browning 57 5 1,165,258
H. E. DeLoach, Jr. 54 13 720,328
H. J. Moran 66 38 699,399
F. T. Hill, Jr. 46 19 486,819
</TABLE>

(2) Years of service beyond 15 do not provide for any additional benefit.

22
<PAGE> 25

DIRECTORS' COMPENSATION

Employee directors receive no additional compensation for their services as
members of the Board of Directors. Effective April 1, 1997, non-employee
directors were paid a $10,500 quarterly retainer fee and a $1,000 attendance fee
for special meetings.

On an annual basis directors are able to elect to defer part or all of
their retainer and special meeting fees. Directors can choose to have their
deferrals earn interest credits at a market rate or be treated as if invested in
equivalent units of Common Stock (which are credited with reinvested dividend
equivalents). Alternatively, directors can elect to receive, in lieu of part or
all of their compensation, stock options under the 1996 Non-Employee Directors'
Stock Plan (the "Directors' Plan"). For each one dollar of foregone
compensation, the director will receive an at-the-money option covering four
dollars of Common Stock. During 1998 three directors received the following
number of stock options for foregone compensation: R. J. Brown -- 1,768 shares;
J. C. Fort -- 6,409 shares; and B. L. M. Kasriel -- 3,102 shares.

Under the Directors' Plan, at the first regularly scheduled meeting of the
Board of Directors during a calendar year, each non-employee director, who is
then currently serving as such, is granted a stock option covering 2,000 shares
of Common Stock having a per share exercise price equal to 100% of the fair
market value as of that date. Any person who subsequently becomes a non-employee
director also receives an at-the-money stock option with the number of shares
reduced 25% for each elapsed full quarter of the calendar year during which such
person has not served as a non-employee director. During 1998 each non-employee
director received an option covering 2,000 shares, adjusted to 2,200 shares for
the 10% stock dividend paid June 10, 1998.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. A. T. Dickson, C. J. Bradshaw, R. E. Elberson, Paul Fulton, B. L.
M. Kasriel, E. H. Lawton, Jr. and Mrs. D. D. Young served on the Company's
Executive Compensation Committee during the year ended December 31, 1998.

Mr. A. T. Dickson and Mr. Paul Fulton are directors of Bank of America
Corporation and Mr. C. J. Bradshaw is a director of Wachovia Bank, N.A. During
the third quarter of 1996 NationsBank, N.A., now Bank of America, served as
agent to provide a five-year committed revolving line of credit for $450,000,000
to support the Company's commercial paper program and for general corporate
purposes. Bank of America's commitment to this facility is $80,000,000. Wachovia
Bank, N.A.'s commitment to this facility is $37,000,000. Committed lines of
credit from both banks have been in place since 1987 and have been renewed,
amended and increased or decreased according to the Company's needs. Bank of
America and Wachovia Bank, N.A. have extended other lines of credit to the
Company as support for letters of credit, overdrafts and other corporate needs.
They also provide treasury management services to the Company. The Company pays
fees to both banks 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.

23
<PAGE> 26

Mr. A. T. Dickson, an executive officer of Ruddick Corporation, is a member
of the Company's Compensation Committee. Mr. H. L. McColl, Jr., an executive
officer of Bank of America Corporation and a director of the Company, is a
director of Ruddick Corporation.

Mr. P. C. Browning, President and Chief Executive Officer of the Company,
serves as a director of Phoenix Home Life Mutual Insurance Company. Mrs. D. D.
Young, an executive officer of Phoenix Home Life Mutual Insurance Company,
serves on the Company's Executive Compensation Committee.

TRANSACTIONS WITH MANAGEMENT

Mr. H. L. McColl, Jr. is Chairman and Chief Executive Officer and Director
of Bank of America Corporation. Messrs. C. W. Coker, A. T. Dickson and Paul
Fulton are directors of Bank of America Corporation. Mr. P. C. Browning is a
director of Wachovia Corporation. Mr. C. J. Bradshaw is a director of Wachovia
Bank, N.A. Mr. T. C. Coxe III is a director emeritus of Wachovia Bank of South
Carolina, N.A. See the Compensation Committee Interlocks and Insider
Participation section.

Mr. R. J. Brown is a director of First Union Corporation. First Union
National Bank of South Carolina provides a line of credit of $37,000,000 similar
to that of Wachovia Bank, N.A. and Bank of America to support the Company's
commercial paper program and for general corporate purposes. It also provides
trustee services. The Company pays fees to First Union National Bank of South
Carolina for the availability of the credit line and for the trustee services.

During 1998 the Company purchased timber from a trust of which Mr. T. C.
Coxe III, a director and former executive officer of the Company, is trustee and
more than a 10% beneficial owner. The aggregate purchase price of the timber was
approximately $531,000.

The Company also purchased wooden pallets during the year from a company of
which Mr. J. C. Fort, a recently retired director and former executive officer
of the Company, is more than a 10% beneficial owner. The aggregate purchase
price of the pallets was approximately $581,000. The Company, in turn, sold to
the same company approximately $925,000 in hardwood timbers.

During 1998 the Company paid approximately $675,000 to Phoenix Home Life
Mutual Insurance Company covering premiums for split-dollar insurance policies
covering certain of its officers and directors. Mrs. D. D. Young is an executive
officer and director of Phoenix Home Life Mutual Insurance Company.

It is anticipated that the Company will continue to engage in similar
business transactions with the foregoing entities in 1999.

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

24
<PAGE> 27

PROPOSAL TO AMEND THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION

The Board of Directors has unanimously proposed an amendment to the
Company's Restated Articles of Incorporation that would increase the number of
shares of Common Stock the Company is authorized to issue from 150,000,000
shares to 300,000,000 shares.

As of February 26, 1999, 101,845,073 shares of Common Stock were issued and
outstanding and an additional 14,262,202 shares of Common Stock were reserved
for issuance under stock option plans. The additional shares for which
authorization is sought would be part of the existing class of Common Stock and,
if and when issued, would have the same rights and privileges as the shares of
Common Stock presently outstanding.

The Board of Directors believes that it is desirable to have the additional
authorized shares of Common Stock available for possible future financing and
acquisition transactions, stock dividends and other general corporate purposes.
Having such additional authorized shares available for issuance without further
action by the shareholders, unless such action is required by applicable law or
the rules of any stock exchange on which the Company's securities may be listed
in the future, allows shares of Common Stock to be issued without the delay and
expense occasioned by the necessity of obtaining shareholder approval.

Some of the additional authorized Common Stock may be sold by the Company
to raise additional capital for use by the Company in reducing its debt and
financing capital improvements, acquisitions, research, and operations.
Additional authorized stock also may be issued in conjunction with one or more
series of the already-authorized Preferred Stock of the Company as part of an
issue of Preferred Stock convertible into Common Stock. The Company might be
able to obtain more favorable terms for the sale of convertible Preferred Stock
than for sale of either Common Stock or Preferred Stock alone.

Some of the additional authorized Common Stock may be used to make
acquisitions. Although most of the Company's recent acquisitions have been for
cash, some sellers prefer to receive Company stock in order to defer taxes
associated with a sale. Present levels of authorized but unissued Common Stock
limit the size and number of such transactions in which the Company could
engage.

Additional authorized Common Stock also may be used to pay stock dividends
to shareholders, as was done in 1998, and may be used in compensation programs.
The Company uses such compensation programs to encourage employees to be aware
of the effect of their efforts on the overall performance of the Company and to
give them a stake in the outcome that is parallel to that of the shareholders
generally. An example of such a program is the Centennial Shares Program
instituted in 1998.

The Board of Directors is required to make any determination to issue
shares of Common Stock based on its judgment as to the best interests of the
Company and its shareholders. The authorized but unissued shares of Common Stock
and/or the already-authorized but unissued Preferred Stock could be used by the
Board of Directors to make it more difficult to effect a change in control of
the Company. Under certain circumstances such shares could be used to create
voting or other impediments or to frustrate persons seeking to gain control of
the Company by means of a merger, tender offer, proxy contest or other means.
Such shares could be privately placed with purchasers who might cooperate with
the Board in opposing such an attempt by a third

25
<PAGE> 28

party to gain control of the Company. The issuance of new shares could be used
to dilute the stock ownership of a person or entity seeking to obtain control of
the Company. The Board of Directors is not aware of any present or threatened
effort by any person to obtain control of the Company by accumulation of the
Company's securities or otherwise. However, adoption of the proposed amendment
would constitute approval by the shareholders of any one or more of the
foregoing uses of the Common Stock by the Board of Directors in accordance with
applicable law and stock exchange rules without further shareholder approval.

Furthermore, shares of authorized but unissued Common Stock, as well as the
already-authorized but unissued Preferred Stock, could (within the limits
imposed by applicable law and the rules of any stock exchange on which the
Company's securities may be listed in the future), be issued to a holder that
would thereby have sufficient voting power to assure that any proposal to remove
directors, to replace incumbent directors, or to accomplish certain business
combinations opposed by the incumbent Board, or any alteration, amendment or
repeal of provisions of the Restated Articles of Incorporation and By-Laws,
would not receive the two-thirds shareholder vote required therefor. For
information with respect to the ownership of shares (including shares issuable
upon exercise of stock options) of the Company's voting stock by directors and
officers, see the Security Ownership of Management section.

Although the Company has considered such actions in the past and will
probably do so in the future, at the date of this Proxy Statement, the Company
has no agreements, commitments or specific plans to sell or issue the additional
shares of Common Stock.

The affirmative vote of two-thirds of the outstanding shares of Common
Stock entitled to vote thereon is required to approve the proposed amendment.
The Board of Directors believes that the proposed amendment is advisable and in
the best interests of the Company and its shareholders and recommends that
shareholders vote FOR the proposed amendment.

APPROVAL OF INDEPENDENT AUDITORS

Selection of the Company's independent auditors is to be approved by the
shareholders. The firm of PricewaterhouseCoopers LLP, Certified Public
Accountants, or their predecessors, 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
PricewaterhouseCoopers 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 approval of the
selection of PricewaterhouseCoopers LLP as independent auditors for the Company
for the current year.

26
<PAGE> 29

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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 New York
Stock Exchange.

The Company failed to file on a timely basis one report on Form 4, due
September 10, 1998, for Mr. James L. Coker, former executive officer and a
current director of the Company, covering a purchase of shares on August 3,
1998. This purchase was reported for Mr. Coker on his Form 4 filed October 9,
1998.

The Company failed to file on a timely basis one report on Form 4, due
August 10, 1998, for Mr. Charles F. Paterno, Jr., an executive officer of the
Company, covering a purchase of shares on July 21, 1998. This purchase for Mr.
Paterno was reported on his Form 4 filed September 9, 1998.

SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING

A shareholder proposal to be presented at the next Annual Meeting must be
received by the Secretary of the Company not later than November 12, 1999, in
order to be included in the Company's 2000 Proxy Statement and Proxy. All
shareholder proposals must comply with the requirements of the Company's By-
Laws. To be voted on at the Annual Meeting in 2000, shareholder proposals other
than proposals made by the Board of Directors must be submitted to the Company
in writing not later than February 3, 2000. With respect to any shareholder
proposal not received by the Company prior to January 29, 2000, proxies
solicited by management of the Company will be voted on the proposal in the
discretion of the designated proxy agents.

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.

Charles J. Hupfer
Secretary

March 19, 1999

27
<PAGE> 30
APPENDIX A

[X] PLEASE MARK VOTES AS IN THIS EXAMPLE

------------------
SONOCO
PRODUCTS COMPANY
------------------

1. Election of Directors:

Nominees - Three-Year Terms:
C.J. Bradshaw, R.J. Brown, J.L. Coker, Paul Fulton, H.L. McColl, Jr.

Nominee - One-Year Term:
C.D. Spangler, Jr.

[ ] For All Nominees [ ] Withhold On All Nominees [ ] For All Except

NOTE: If you do not wish your shares voted "FOR" a particular nominee,mark
the "FOR ALL EXCEPT" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).

2. Proposal to approve an amendment to the Restated Articles of Incorporation
to increase authorized shares of Common Stock.

[ ] For [ ] Against [ ] Abstain

3. Proposal to approve the selection of PricewaterhouseCoopers LLP, Certified
Public Accountants, as the independent auditors of the corporation.

[ ] For [ ] Against [ ] Abstain

4. In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

DIRECTORS RECOMMEND VOTING FOR 1, 2 AND 3

Please be sure to sign and date this Proxy. Date
---------------------

- ---------------------------------- -----------------------------------
Shareholder Sign Here Co-Owner Sign Here

Mark box at right if an address change or comment
has been noted on the reverse side of this card. [ ]

DETACH CARD DETACH CARD

MAKE YOUR VOTE COUNT!

Please mark this proxy card to indicate how your
shares should be voted. Please sign, detach, and
return the card in the enclosed postage-paid envelope.

SONOCO PRODUCTS COMPANY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

SONOCO PRODUCTS COMPANY

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

The undersigned hereby appoints Charles W. Coker, Chairman, or F. Trent Hill,
Jr., Vice President and Chief Financial Officer, as Proxies, each with the power
to appoint 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 February 26, 1999, at the Annual Meeting of
Shareholders to be held on April 21, 1999, or at any adjournment thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.

- --------------------------------------------------------------------------------
PLEASE VOTE, DATE, SIGN ON REVERSE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) hereon. When shares are held by
joint tenants, both should sign. When signing as an 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 an authorized
person.
- --------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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