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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:
[ ] 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
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:
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[SONOCO(R) LOGO]
SONOCO PRODUCTS COMPANY
POST OFFICE BOX 160
NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160 U.S.A.
March 14, 1997
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 16, 1997, 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 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 1996 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 record shareholder and later find you can be present or for any
reason desire to revoke your proxy, you can do so at any time before the voting.
Your vote is important and will be greatly appreciated.
/s/ Charles W. Coker
------------------------------------
Charles W. Coker
Chairman and Chief Executive Officer
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SONOCO PRODUCTS COMPANY
POST OFFICE BOX 160
NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME................................. 11:00 A.M. on Wednesday, April 16, 1997.
PLACE................................ The Center Theater, 212 North Fifth Street, Hartsville,
South Carolina.
PURPOSES............................. (1) To elect five members of the Board of Directors to serve
for the next three years.
(2) To elect independent auditors.
(3) 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 28, 1997, are entitled to notice of and to vote at
the meeting.
ANNUAL REPORT........................ The 1996 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.
By order of the Board of Directors,
Charles J. Hupfer
Secretary
March 14, 1997
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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 16, 1997.
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 14, 1997, to shareholders of
record at the close of business on February 28, 1997.
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, 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
record 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
persons named in this Proxy Statement as the Board of Directors' nominees for
election to the Board of Directors and FOR the election of Coopers & Lybrand
L.L.P. as the Company's independent auditors for the fiscal year ending December
31, 1997. As to any other matter of business that may be brought before the
Annual Meeting, a vote may be cast pursuant to the accompanying 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.
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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 90,021,489 shares are
outstanding, and 30,000,000 authorized shares of no par value Preferred Stock,
of which 2,394,125 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 February 28, 1997, will be entitled to vote at the Annual Meeting.
As of that date there were issued and outstanding 90,021,489 shares of Common
Stock. 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.
Election of Coopers & Lybrand L.L.P., 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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ELECTION OF DIRECTORS
At this Annual Meeting five directors are to be elected, who shall hold
office until 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 five persons
named herein (or if any of the persons nominated is unexpectedly unavailable to
serve, for such substitutions as the Board of Directors may designate), 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
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
- ------------------- *C. W. COKER (63). Mr. Coker is Chairman and Chief 1962
- ------------------- Executive Officer of the Company. He was President of the
- ------------------- Company from 1970 to 1990 and was reappointed President in
- -----[PHOTO]------- 1994, serving until 1996. He is a director of NationsBank
- ------------------- Corporation, Springs Industries, Inc., Sara Lee
- ------------------- Corporation and Carolina Power and Light Company.
- ------------------- A. T. DICKSON (65). Mr. Dickson is Chairman and Director 1981
- ------------------- of Ruddick Corporation (diversified holding company),
- ------------------- Charlotte, North Carolina, a position held since 1994. He
- -----[PHOTO]------- served as President of Ruddick Corporation from 1968 to
- ------------------- 1994. Mr. Dickson is a director of Lance, Inc.,
- ------------------- NationsBank Corporation and Bassett Furniture Industries,
- ------------------- Inc.
- -------------------
- ---------------
* 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.
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NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
- ------------------- R. E. ELBERSON (68). Mr. Elberson is a retired executive 1985
- ------------------- officer and director of Sara Lee Corporation (manufacturer
- ------------------- and marketer of consumer products), Chicago, Illinois. He
- ------[PHOTO]------ served as Vice Chairman of Sara Lee Corporation from 1986
- ------------------- to 1989 and as President and Chief Operating Officer from
- ------------------- 1983 to 1986. Mr. Elberson is a director of W. W.
- ------------------- Grainger, Inc.
- -------------------
- ------------------- J. C. FORT (70). Mr. Fort is President and Director of 1969
- ------------------- Trust Company of South Carolina, Inc. (insurance brokers),
- ------------------- Hartsville, South Carolina. Until his retirement from the
- ------[PHOTO]------ Company in 1987, Mr. Fort was Senior Vice President, a
- ------------------- position held since 1986. He served as Senior Vice
- ------------------- President -- International Group from 1983 to 1986.
- ------------------- DONA DAVIS YOUNG (43). Mrs. Young is Executive Vice 1995
- ------------------- President -- Individual Insurance, General Counsel and
- ------------------- Secretary of the Board of Directors of Phoenix Home Life
- ------------------- Mutual Insurance Company, Hartford, Connecticut, positions
- ------[PHOTO]------ held since 1995. 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.
All nominees previously have been elected to the Board of Directors by the
Common Shareholders.
Mr. R.C. King, Jr., who would have been a nominee at this Annual Meeting,
did not offer for re-election due to other commitments. Mr. Leo Benatar, whose
term would have expired in 1998, resigned from the Board on September 16, 1996,
to pursue other interests. As a result, at its meeting on February 5, 1997, the
Board of Directors, 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, fixed the number of directors of the Company at sixteen.
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
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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.
Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 1998 are:
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
- ------------------- P. C. BROWNING (55). Mr. Browning is President and Chief 1995
- ------------------- Operating Officer of the Company, a position held since
- ------------------- 1996. He was Executive Vice President of the Company from
- ------[PHOTO]------ 1993 to 1996. He served as 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 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 and First Union National Bank of
South Carolina.
- ------------------- *F. L. H. COKER (61). 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. Until his retirement from the Company
- ------------------- in 1979, Mr. Coker was Senior Vice President, a position
- ------------------- held since 1976.
- ---------------
* 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.
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NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
- ------------------- T. C. COXE III (66). Mr. Coxe is retired. He was Senior 1982
- ------------------- Executive Vice President of the Company from 1993 to 1996
- -----[PHOTO]------- and was Executive Vice President from 1985 to 1993. He is
- ------------------- a director emeritus of Wachovia Bank of South Carolina,
- ------------------- N.A.
- -------------------
- ------------------- B. L. M. KASRIEL (50). 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, Charlotte, North Carolina, 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. (67). Mr. Lawton is President and 1968
- ------------------- Director of Hartsville Oil Mill (vegetable oils
- -----[PHOTO]------- processor), Darlington, South Carolina, a position held
- ------------------- since 1962. He is a director of NationsBank, N.A.
- ------------------- E. C. WALL, JR. (59). Mr. Wall was Chairman and Chief 1976
- ------------------- Executive Officer, a position held since 1996, and
- ------------------- Director of Canal Industries (forest products), Conway,
- -----[PHOTO]------- South Carolina. He served as President and Chief Executive
- ------------------- Officer of Canal Industries from 1969 to 1996. Mr. Wall
- ------------------- was a director of Ruddick Corporation, SCANA Corporation,
- ------------------- NationsBank Corporation and Blue Cross-Blue Shield of
- ------------------- South Carolina.
Mr. Wall died unexpectedly on March 5, 1997. Since the
Restated Articles of Incorporation of the Company require
that nominations for election of directors be made not
less than sixty days prior to an Annual Meeting, Mr.
Wall's position will remain vacant at the April 16, 1997,
meeting.
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Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 1999 are:
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
- ------------------- C. J. BRADSHAW (60). 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 (62). 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 and Duke Power
- ------------------- Company.
- ------------------- *J. L. COKER (56). Mr. Coker is President of JLC 1969
- ------------------- Enterprises (private investments), Stonington,
- ------------------- Connecticut, a position held since 1979. He was Secretary
- ------------------- of the Company from 1969 to 1995 and was President of
- ------------------- Sonoco Limited, Canada, from 1972 to 1979.
- -------------------
- ---------------
* 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.
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NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------- --------------
- ------------------- PAUL FULTON (62). 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, Winston Hotels, Inc. and Lowes
Companies, Inc.
- ------------------- H. L. MCCOLL, JR. (61). Mr. McColl is Chief Executive 1972
- ------------------- Officer and Director of NationsBank Corporation,
- ------------------- Charlotte, North Carolina, and Chief Executive Officer of
- -----[PHOTO]------- each of its subsidiary banks. He has served as Chief
- ------------------- Executive Officer of NationsBank Corporation since 1983.
- ------------------- He is a director of CSX Corporation, Ruddick Corporation,
- ------------------- Jefferson-Pilot Corporation and Jefferson- Pilot Life
- ------------------- Insurance Company.
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BOARD COMMITTEES
During 1996 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:
COMMITTEE CURRENT NUMBER OF
NAME PURPOSE MEMBERS* 1996 MEETINGS
- ----------------- --------------------------------------- -------------------- -------------
Audit Committee Responsible for the scope of both E. C. Wall, Jr. -- 3
internal and external audit programs Chairman
in order to fully protect assets of R. J. Brown
the Company. A. T. Dickson
J. C. Fort
B. L. M. Kasriel
R. C. King, Jr.
D. D. Young
Executive Responsible for establishing and A. T. Dickson -- 4
Compensation maintaining officer-level salaries Chairman
Committee and administering executive C. J. Bradshaw
compensation plans. R. E. Elberson
Paul Fulton
B. L. M. Kasriel
E. H. Lawton, Jr.
D. D. Young
Nominating Responsible for recommending to the F. L. H. Coker -- 1
Committee directors qualified candidates to fill Chairman
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. -- 0
Company's financial status, advising Chairman
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
Paul Fulton
R. C. King, Jr.
E. C. Wall, Jr.
Executive Empowered to exercise all of the P. C. Browning 0
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.
During 1996 all directors attended 75% or more of the aggregate number of
meetings of the Board and committees except Mr. R. J. Brown who attended 63%.
- ---------------
* Mr. E. C. Wall, Jr., who served during 1996 and 1997, died unexpectedly on
March 5, 1997.
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SECURITY OWNERSHIP OF MANAGEMENT AS OF DECEMBER 31, 1996
COMMON STOCK
BENEFICIALLY OWNED
-------------------------
NAME POSITION NUMBER(1) PERCENTAGE(2)
- ------------------------ ----------------------------------------------- --------- -------------
C. J. Bradshaw Director 24,935
R. J. Brown Director 3,950
F. L. H. Coker Director 1,205,299 1.3
J. L. Coker Director 269,731
T. C. Coxe III Director 358,098
A. T. Dickson Director 65,326
R. E. Elberson Director 32,150
J. C. Fort Director 1,156,136 1.3
Paul Fulton Director 12,021(3)
B. L. M. Kasriel Director 2,105
R. C. King, Jr. Director 157,141
E. H. Lawton, Jr. Director 715,772(4)
H. L. McColl, Jr. Director 21,778(5)
E. C. Wall, Jr. Director 88,866
D. D. Young Director 3,779
C. W. Coker Chairman, Chief Executive Officer and Director 1,516,010 1.7
P. C. Browning President, Chief Operating Officer and Director 265,750
H. E. DeLoach, Jr. Executive Vice President 377,582(6)
H. J. Moran Executive Vice President 202,523
F. T. Hill, Jr. Vice President and Chief Financial Officer 154,070
All Executive Officers and Directors (32 persons) 7,719,246(7) 8.6
- ---------------
(1) Shareholdings represent the number of shares beneficially owned, directly or
indirectly, by each director and named executive officer as of December 31,
1996. The number includes shares subject to currently exercisable options,
granted by the Company under the 1983 Key Employee Stock Option Plan (the
"1983 Plan"), the 1991 Key Employee Stock Plan (the "1991 Plan") and the
1996 Non-Employee Directors' Stock Plan (the "1996 Plan"), for the
following directors and named executive officers: C. W. Coker -- 473,477;
P. C. Browning -- 260,546; H. E. DeLoach, Jr. -- 80,786; H. J.
Moran -- 146,621; F. T. Hill, Jr. -- 105,465; T. C. Coxe III -- 75,755; R.
C. King, Jr. -- 92,930 and each other listed director -- 2,000 shares each.
Shareholdings do not include Restricted Stock Rights, which begin to vest
in 1997, granted under the 1991 Plan for the following named executive
officers: C. W. Coker -- 88,558; P. C. Browning -- 66,419; H. E. DeLoach,
Jr. -- 44,279; H. J. Moran -- 44,279 and F. T. Hill, Jr. -- 11,070.
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Also included are shares held, directly or indirectly, in the following
Company plans:
DEFERRED COMPENSATION
AND RESTORATION EMPLOYEE SAVINGS DIVIDEND
(SHARE EQUIVALENTS) AND STOCK OWNERSHIP REINVESTMENT
- ----------------------------- --------------------------- --------------------------
C. J. Bradshaw....... 3,344 T. C. Coxe III..... 1,413 F. L. H. Coker..... 235
R. J. Brown.......... 1,530 C. W. Coker........ 3,008 J. L. Coker........ 1,613
T. C. Coxe III....... 7,295 P. C. Browning..... 351 All Officers and
A. T. Dickson........ 730 H. E. DeLoach, Jr.. 2,209 Directors........ 1,978
J. C. Fort........... 6,480 H. J. Moran........ 1,937
E. H. Lawton, Jr. ... 5,197 F. T. Hill, Jr. ... 2,330
H. L. McColl, Jr. ... 5,474 All Officers and
E. C. Wall, Jr. ..... 1,816 Directors..........37,478
D. D. Young.......... 1,479
C. W. Coker.......... 5,423
P. C. Browning....... 1,119
H. E. DeLoach, Jr.... 2,493
H. J. Moran.......... 1,842
F. T. Hill, Jr. ..... 932
All Officers and
Directors.......... 50,468
(2) Percentages not shown are less than 1%.
(3) Includes 461 shares of Common Stock owned by Mrs. Fulton. Mr. Fulton
disclaims beneficial ownership of these shares.
(4) Includes 611,327 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 10,802 shares of Common Stock owned by Mrs. McColl. Mr. McColl
disclaims beneficial ownership of these shares.
(6) Includes 252,975 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) Includes 2,102,399 shares of Common Stock which the executive officers and
the non-employee directors have a right to acquire pursuant to options
granted by the Company under the 1983, the 1991 and the 1996 Plans.
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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 1996 and had met once in 1997 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 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 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. 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 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 annual cash bonuses
and annual stock options awards, is targeted at the median of surveyed market
compensation for expected Company performance. These awards provide
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.
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, because of unforeseen future events, there is the
possibility that future compensation, in some circumstances, may not meet tax
deductibility requirements.
13
16
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 1996 compensation. Also included is a specific
discussion of the decisions regarding Mr. Coker's compensation for performing
the duties of Chairman and Chief Executive Officer. The tables and accompanying
narrative and footnotes which follow this report reflect the decisions covered
by the discussions below.
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, including Mr. Coker, whose most
recent increase was effective June 1, 1996.
ANNUAL BONUS AWARDS
The Company has a bonus plan which for 1996 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 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 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 1996, which were weighted
from 0% to 27% of total bonus opportunity, varied by individual and included
employee safety, Vision 2000 goals, customer satisfaction, business development,
strategic acquisitions, technology innovation, management succession and
employee development, process improvement, total quality management and
environmental protection.
On February 4, 1997, the Committee reviewed and approved the 1996 annual
bonus awards for executive officers. Initial bonus amounts were assigned to each
executive officer (except Messrs. Coker and Browning) 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 bonus, which reflects
the Committee's assessment of his contribution and efforts in 1996, is shown
under the "Bonus" caption in the Summary Compensation Table on Page 17. In
setting the amount the Committee considered, in addition to the record level of
earnings per share, his performance in leading the Company and his role in
establishing strategic initiatives and implementing operational plans. The
amount of Mr. Coker's bonus was
14
17
less than the maximum that could have been paid under the earnings per share
schedule adopted for him by the Committee in early 1996. Mr. Browning's bonus
award also was determined in the same manner as Mr. Coker's bonus award.
STOCK OPTIONS
In 1996 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 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 the annual competitive median
incentive opportunity 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 Granted" and on the Option Grants Table on Page
19.
A. T. Dickson (Chairman) C. J. Bradshaw R. E. Elberson
Paul Fulton B. L. M. Kasriel E. H. Lawton, Jr. D. D. Young
15
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 & Packaging Group
(which includes the Company), from December 31, 1991, through December 31, 1996.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG SONOCO PRODUCTS COMPANY, THE S&P 500 STOCK INDEX
AND THE DOW JONES CONTAINERS & PACKAGING GROUP**
DOW JONES
CONTAINERS & SONOCO
MEASUREMENT PERIOD S&P 500 PACKAGING PRODUCTS
(FISCAL YEAR COVERED) STOCK INDEX GROUP COMPANY
1991 100 100 100
1992 108 110 142
1993 118 105 134
1994 120 104 136
1995 165 113 176
1996 203 142 177
ASSUMES $100 INVESTED ON DECEMBER 31, 1991, 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
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SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
-----------------------
NUMBER OF
SECURITIES
ANNUAL COMPENSATION(1) RESTRICTED UNDERLYING
----------------------- STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS RIGHTS(2) GRANTED(3) COMPENSATION(4)
- --------------------------- ---- --------- ----------- ---------- ---------- ---------------
C. W. Coker 1996 $679,173 $ 870,827 $ -0- 75,000 $351,478
Chairman and 1995 634,169 1,000,000 -0- 79,275 229,571
Chief Executive Officer 1994 602,835 691,416 1,820,000 66,360 205,936
P. C. Browning 1996 535,414 540,000 -0- 100,000 187,150
President and 1995 466,791 600,000 -0- 40,215 72,792
Chief Operating Officer 1994 449,759 360,241 1,365,000 26,250 56,228
H. E. DeLoach, Jr. 1996 354,087 325,000 -0- 25,000 72,475
Executive Vice President 1995 309,585 340,415 -0- 23,835 56,647
1994 259,586 230,512 910,000 21,000 41,422
H. J. Moran 1996 353,837 325,000 -0- 25,000 103,452
Executive Vice President 1995 307,000 338,000 -0- 23,835 63,473
1994 252,003 217,997 910,000 21,000 45,283
F. T. Hill, Jr. 1996 259,999 210,000 -0- 15,000 34,508
Vice President and 1995 218,997 225,008 -0- 16,170 18,498
Chief Financial Officer 1994 191,720 148,775 227,500 13,335 15,440
- ---------------
(1) None of the executive officers received perquisites or personal benefits
which totaled the lesser of $50,000 or 10% of their respective salary plus
bonus payments.
(2) Dollar amounts shown equal the number of units of restricted stock rights
granted multiplied by the $21.667 per share stock price on October 21, 1994,
the date of grant, adjusted for the 1995 stock dividend. The number and
dollar value of restricted stock rights held, including dividend
equivalents, adjusted for the 1995 stock dividend, based on the closing
stock price on December 31, 1996, of $25.875 per share were: C. W.
Coker -- 88,558 shares ($2,291,438); P. C. Browning -- 66,419 shares
($1,718,592); H. E. DeLoach, Jr. -- 44,279 shares ($1,145,719); H. J.
Moran -- 44,279 shares ($1,145,719) and F. T. Hill, Jr. -- 11,070 shares
($286,436). Restrictions lapse over a five-year vesting period with
one-third of the shares vesting on each of the third, fourth and fifth
anniversary dates of the grant.
(3) Number of securities has been adjusted to reflect the 5% stock dividend paid
June 9, 1995.
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20
(4) All other compensation for 1996 consisted of the following components:
COMPANY CONTRIBUTIONS AND
SPLIT-DOLLAR ABOVE-MARKET DEFERRED ACCRUALS TO DEFINED CONTRIBUTION
NAME LIFE INSURANCE COMPENSATION ACCRUALS(2) RETIREMENT PLANS(3)
- ------------------ -------------- ------------------------ --------------------------------
C. W. Coker $249,250(1) $51,852 $50,376
P. C. Browning 153,088 -0- 34,062
H. E. DeLoach, Jr. 37,940 13,700 20,835
H. J. Moran 82,696 -0- 20,756
F. T. Hill, Jr. 19,327 630 14,551
---------------
(1) Includes additional insurance purchased for Mr. Coker during 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.
OPTION EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION EXERCISES IN 1996 AND 1996 YEAR-END VALUES
NUMBER OF SHARES
NUMBER OF UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED AS OF 12/31/96 AS OF 12/31/96(2)
ON VALUE --------------------------- ------------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(3)
- ------------------- ---------- ----------- ----------- ------------- ----------- ----------------
C. W. Coker 57,000 $781,642 403,035 75,000 $2,476,324 -0-
P. C. Browning 60,000 469,911 163,965 100,000 888,169 -0-
H. E. DeLoach, Jr. 61,950 718,706 58,065 25,000 222,093 -0-
H. J. Moran -0- -0- 123,900 25,000 842,899 -0-
F. T. Hill, Jr. 32,445 410,054 91,035 15,000 582,243 -0-
- ---------------
(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 $25.875 per share, the December 31, 1996, closing price.
(3) Based on an exercise price of $27.00 per share.
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OPTION GRANTS TABLE
1996 STOCK OPTION GRANTS
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AND RESULTING COMPANY
- ----------------------------------------------------------------------- STOCK PRICE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR 10-YEAR OPTION TERM(2)
OPTIONS EMPLOYEES PRICE EXPIRATION -------------------------------
NAME GRANTED(1) IN 1996 (PER SHARE) DATE 5% ($43.980) 10% ($70.031)
- ------------------ ---------- ----------- ----------- ---------- -------------- --------------
C. W. Coker 75,000 6.8 $27.000 2/7/2006 $ 1,273,512 $ 3,227,328
P. C. Browning 100,000 9.0 27.000 2/7/2006 1,698,015 4,303,105
H. E. DeLoach, Jr. 25,000 2.3 27.000 2/7/2006 424,504 1,075,776
H. J. Moran 25,000 2.3 27.000 2/7/2006 424,504 1,075,776
F. T. Hill, Jr. 15,000 1.4 27.000 2/7/2006 254,702 645,466
Comparable gain in shareholder value for the 91,147,146 shares
outstanding as of February 7, 1996, the grant date. $1,547,696,768 $3,922,152,840
- ---------------
(1) These options were granted on February 7, 1996, at the closing market price,
became exercisable on February 7, 1997, 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 based on the
assumption that the market price of the Common Stock will appreciate in
value from the date of grant to the end of the ten-year option term at the
rates of 5% and 10% per year. The 5% and 10% annual appreciation
assumptions are required by the Securities and Exchange Commission; they
are not intended to forecast possible future appreciation, if any, of the
Company's stock price.
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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.
AGE 65 RETIREMENT
FINAL YEARS OF SERVICE
AVERAGE --------------------------------------------------------------------------
COMPENSATION(1) 5 10 15 20 25 30 35
- --------------- -------- -------- -------- -------- -------- -------- --------
$ 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
- ---------------
(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, 1996, for the named officers are as
follows:
YEARS OF FINAL AVERAGE
NAME AGE SERVICE COMPENSATION
- ------------------ --- -------- -------------
C. W. Coker 63 39 $1,343,330
P. C. Browning 55 3 877,736
H. E. DeLoach, Jr. 52 11 552,291
H. J. Moran 64 36 536,519
F. T. Hill, Jr. 44 17 379,204
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DIRECTORS' COMPENSATION
Employee directors receive no additional compensation for their services as
members of the Board of Directors. Each non-employee director received during
1996 a quarterly retainer fee of $10,000 for each full or partial quarter of
Board service. Non-employee directors also received $1,000 for each special
meeting attended.
Beginning with the second quarter of 1997, the quarterly retainer fee will
be increased to $10,500 to reflect current competitive levels.
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'
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. No compensation replacement stock options were granted pursuant to such
elections during 1996.
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 at 100% of the fair
market value covering 2,000 shares of Common Stock. 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
1996 each non-employee director received an option covering 2,000 shares, except
for Mr. Leo Benatar, whose option covered 1,500 shares, reflecting his
retirement as an employee in April 1996, thus becoming a non-employee director
at that time.
Mr. R. C. King, Jr. elected to take early retirement from the Company
effective May 31, 1994, following over thirty-seven years of distinguished
service. To secure his advice and counsel the Company entered into an agreement
with Mr. King under which he would provide consulting services to the Company on
an as-needed basis through December 31, 1996. Under this agreement Mr. King
received consulting fees of $331,308 during 1996. 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 retirement benefit, including payments from Primary Social Security or
equivalents, Sonoco's Retirement Plan and Sonoco's Supplemental Executive
Retirement Plan totals $32,536 per month.
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, 1996.
Mr. A. T. Dickson and Mr. Paul Fulton are directors of NationsBank
Corporation; Mr. E. H. Lawton, Jr. is a director of NationsBank, N.A. and Mr. C.
J. Bradshaw is a director of Wachovia Bank of South Carolina, N.A. During the
third quarter of 1996 NationsBank, N.A. served as agent to provide a five-year
committed
21
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revolving line of credit for $450,000,000 to support the Company's commercial
paper program and general corporate purposes. NationsBank, N.A.'s commitment to
this facility is $43,000,000. Wachovia Bank of South Carolina, 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 and increased or decreased
according to the Company's needs. Additionally, NationsBank, N.A. has extended
other lines of credit to the Company as support for letters of credit,
overdrafts and other corporate needs. NationsBank, N.A. also provides treasury
management services to the Company and investment management services through
its trust department. The Company pays fees to NationsBank, N.A. for these
services and for the availability of the lines of credit, as well as interest on
borrowed funds. All transactions were handled on a competitive basis. Management
is convinced that the rates and provisions were as favorable to the Company as
otherwise could have been obtained.
Mr. H. L. McColl, Jr., an executive officer of NationsBank Corporation, is
a member of the Company's Board but is not a member of the Company's Executive
Compensation Committee. Mr. C. W. Coker, Chairman and Chief Executive Officer of
the Company, is a member of NationsBank Corporation's Compensation Committee.
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 NationsBank Corporation and a director of the Company, is a director
of Ruddick Corporation.
Mr. P. C. Browning, President and Chief Operating Officer of the Company,
serves as a director of Phoenix Home Life Mutual Insurance Company, as well as a
member of its Compensation Committee. 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 Chief Executive Officer and Director of
NationsBank Corporation. Messrs. C. W. Coker, A. T. Dickson and Paul Fulton are
directors of NationsBank Corporation, and Mr. E. C. Wall, Jr. was a director of
NationsBank Corporation. Mr. E. H. Lawton, Jr. is a director of NationsBank,
N.A. Mr. C. J. Bradshaw is a director of Wachovia Bank of South Carolina, 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 above.
During 1996 the Company purchased lumber from a company of which Mr. E. C.
Wall, Jr., who was a director of the Company, was Chairman of the Board and more
than a 10% beneficial owner. Mr. T. C. Coxe III, a director and former executive
officer of the Company, also is a director of this company. The aggregate
purchase price of the lumber was approximately $683,000. During the year the
Company purchased pulpwood from another company of which Mr. Wall was Chairman
and more than a 10% beneficial owner. The aggregate purchase price of the
pulpwood was approximately $276,000.
The Company also purchased timber during the year 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 $826,000.
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25
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 $520,000. The Company,
in turn, sold to the same company approximately $843,000 in hardwood timbers.
It is anticipated that the Company will continue to engage in similar
business transactions with the foregoing entities in 1997.
Management of the Company believes the prices and terms were comparable to
those the Company could have obtained from unaffiliated third parties.
ELECTION OF INDEPENDENT AUDITORS
Independent auditors are to be elected by the shareholders for the calendar
year 1997. The firm of Coopers & Lybrand L.L.P., 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 L.L.P. 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 L.L.P. as independent auditors for the Company for the current year.
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 inadvertently failed to file on a timely basis two reports on
Form 5, due February 14, 1995, and February 14, 1996, for the years ended
December 31, 1994, and December 31, 1995, respectively, for Messrs. C. W. Coker,
P. C. Browning, T. C. Coxe III and Leo Benatar, officers and directors of the
Company, and Messrs. H. E. DeLoach, Jr., H. J. Moran, R. E. Holley, C. W.
Claypool, J. R. Kelley, R. C. Eimers, F. T. Hill, Jr., E. P. Norman and P. C.
Coggeshall, Jr., officers of the Company, covering one accrual of dividend
equivalent rights on restricted stock rights issued pursuant to the 1991 Key
Employee Stock Plan for the year ended December 31, 1994, and four such accruals
for the year ended December 31, 1995, for each of the individuals named above
except for Mr. Eimers, who only had one accrual prior to his voluntary
termination in 1995. Two accruals also should have been reported for 1995 for
Mr. C. J. Hupfer and Mrs. C. A. Hartley, officers of the Company. These small
accruals have been reported on these individuals' most recent Form 5 filed on
February 14, 1997, or on an earlier Form 4.
The Company also inadvertently failed to file on a timely basis one report
on Form 3 due August 22, 1996, for a trust established on August 12, 1996, for
which Mr. P. C. Coggeshall, Jr. is trustee and has a pecuniary interest. Form 3
for this trust was filed on September 9, 1996.
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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 15, 1997, in
order to be included in the Company's 1998 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.
Charles J. Hupfer
Secretary
March 14, 1997
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27
APPENDIX A
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
------------------
SONOCO
PRODUCTS COMPANY
------------------
1. Election of Directors:
Nominees-
C.W. Coker, A.T. Dickson, R.E. Elberson, J.C. Fort, Dona Davis Young
[ ] 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 that nominee's name. Your
shares shall be voted for the remaining nominees.
2. Proposal to approve the election of Coopers & Lybrand L.L.P., Certified
Public Accountants, as the independent auditors of the corporation.
[ ] For [ ] Against [ ] Abstain
3. 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 AND 2
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 Peter C. Browning, President and Chief Operating
Officer, or Harris E. DeLoach, Jr., Executive Vice President, 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 28, 1997,
at the Annual Meeting of Shareholders to be held on April 16, 1997, 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 AND 2.
- --------------------------------------------------------------------------------
PLEASE MARK, DATE, SIGN ON REVERSE AND
RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
Please sign this proxy exactly as your name(s) appear(s) herein. 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 signs in partnership name by authorized
person.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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