Ex-10-2



 



EXHIBIT 10.2



SONOCO PRODUCTS COMPANY

1996 Non-Employee Directors’ Stock Plan

As Amended October 14, 1996

As Amended February 4, 2004




	1.	 	Purpose. The Sonoco Products Company Non-Employee Directors Stock Plan
(the “Plan”) is intended to enhance the Company’s ability to attract and
retain talented individuals to serve as members of the Board and to
promote a greater alignment of interests between non-employee members of
the Board and the shareholders of the Company.
	 
	2.	 	Definitions. As used in the Plan, the following terms have the respective
meanings:




	 	a.	 	“Annual Stock Option” means the Stock Option granted to each
Eligible Director pursuant to Section 7.
	 
	 	b.	 	“Board” means the Company’s Board of Directors.
	 
	 	c.	 	“Common Stock” means the Company’s no par value Common Stock.
	 
	 	d.	 	“Company” means Sonoco Products Company, a corporation established
under the laws of the State of South Carolina.
	 
	 	e.	 	“Deferred Stock Unit” means a bookkeeping entry, equivalent in
value to a share of Common Stock, credited in accordance with an
election made by an Eligible Director pursuant to Section 8.
	 
	 	f.	 	“Election Date” means the date on which an Eligible Director files
an election with the Secretary of the Company pursuant to Section 8(a).
	 
	 	g.	 	“Eligible Director” means any director who is not an employee of
the Company or any subsidiary or affiliate of the Company on the
applicable Grant Date for purposes of Section 7 and on the applicable
Election Date for purposes of Section 8.
	 
	 	h.	 	“Exercise Price” shall mean (a) the Fair Market Value for a Stock
Option granted pursuant to Section 7 of the Plan.
	 
	 	i.	 	“Fair Market Value” means the closing price of a share of Common
Stock as reported on the composite tape for securities listed on the
New York Stock Exchange (the “Exchange”) for the specific Grant Date or
other date in question. If no sales of Common Stock were made on the
Exchange on that date, the closing price of a share of Common Stock as
reported on said composite tape for the preceding day on which sales of
Common Stock were made on the Exchange shall be used.
	 
	 	j.	 	“Grant Date” means the date specified in Section 7 and Section 8(b)
and (c) as shall be applicable.
	 
	 	k.	 	“Plan” means this Stock Plan for Non-Employee Directors.
	 
	 	l.	 	“Stock Option” means a right granted pursuant to either Sections 7
or 8(c) of the Plan to an Eligible Director to purchase Common Stock at
the applicable Exercise Price.
	 
	 	m.	 	“1934 Act” means the Securities Exchange Act of 1934.




	3.	 	Effective Date. Subject to the approval by the shareholders of the
Company prior to December 31, 1996, the Plan shall be effective as of
February 7, 1996.



 






 






	4.	 	Common Shares Available for Issuance. Subject to any adjustments
contemplated by Section 5, Beginning April 17, 1996, and ending April 17,
2006, for each calendar year the Plan is in effect 125,000 shares of
common stock shall be cumulatively available for Stock Options and the
settlement of Deferred Stock Units. Thus, any shares which are not issued
in the year they become available, shall be available in subsequent years
for the settlement of Stock Options and Deferred Stock Units. In
addition, any shares of Common Stock which may be exchanged, either
actually or by attestation, as full or partial payment to the Company upon
the exercise of a Stock Option, shall be available for future awards under
the Plan. If a Stock Option expires without being exercised, the shares
of Common Stock covered by such option shall remain available for issuance
under the Plan. If a Stock Option or Deferred Stock Unit is settled in
cash or in any form other than shares, then the shares covered by these
settlements shall not be deemed issued and shall remain available for
issuance under the Plan. The crediting of dividend equivalent in
conjunction with outstanding Deferred Stock Units or Stock Options shall
not be counted against the shares available for issuance. Any shares
issued under the Plan may be either authorized but unissued shares, or
previously-issued shares reacquired by the Company.
	 
	5.	 	Adjustments and Reorganizations. The Board may make such adjustments as
it deems appropriate to meet the intent of the Plan in the event of
changes that impact the Company’s share price or share status, provided
that any such actions are consistently and equitably applied to all
affected Eligible Directors (and are not inconsistent with adjustments
made to stock options and other stock-based awards held by employees of
the Company).
	 
	 	 	Accordingly, in the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation, spin-off or other distribution
(other than normal cash dividends) of Company assets to shareholders, or any
other change affecting shares, such proportionate adjustments, if any, as
the Board in its discretion may deem appropriate to reflect such change,
shall be made with respect to




	 	(i)	 	the aggregate number of shares that may be issued under the Plan;
	 
	 	(ii)	 	the number of shares covered by each outstanding award made under
the Plan;
	 
	 	(iii)	 	the Exercise Price for each outstanding Stock Option; and
	 
	 	(iv)	 	the limit on the number of shares that may be covered by each
annual stock option grant set forth in Section 7.




	 	 	In the event the Company is not the surviving company of a merger,
consolidation or amalgamation with another company or in the event of a
liquidation, reorganization or significant change of control of the Company,
and in the absence of any surviving corporation’s assumption of outstanding
awards made under the Plan, the Board may provide for appropriate
settlements of such awards either at the time of grant or at a subsequent
date.
	 
	6.	 	Plan Operation. The Plan is intended to permit Eligible Directors to
qualify as “disinterested” persons under Rule 16b-3 promulgated by the
Securities and Exchange Commission under the 1934 Act. Accordingly, in
many respects the Plan is self-governing and requires no discretionary
action by the Board except as contemplated by the language herein.
However, should any questions of interpretation arise, they shall be
resolved by the Board or such committee of the Board as may be designated
from time to time.
	 
	7.	 	Annual Stock Option Grants.




	 	a.	 	Grants to be Made at the First Regularly Scheduled Meeting of the
Board. Commencing with calendar year 1996, at the first regularly
scheduled Board meeting of each calendar year the Plan is in effect,
each Eligible Director will receive an Annual Stock Option to purchase
2,000 shares of Common Stock or such higher number as may be
established pursuant to Section 17. The



 






 






	 	 	 	Exercise Price of each such option shall be the Fair Market Value on the
Grant Date, and each such option shall have a ten-year term.
	 
	 	b.	 	Grants to be Made Subsequent to the First Regularly Scheduled
Meeting of the Board. A person who becomes an Eligible Director
subsequent to The Board’s initial regularly scheduled meeting of a
calendar year during which the Plan is in effect shall receive an
Annual Stock Option grant on the date such person becomes an Eligible
Director. The number of shares covered by the annual Stock Option
granted to such individual shall be the product of multiplying




	 	(i)	 	the number of shares to be covered by the annual Stock Option
grant received by each Eligible Director for such calendar year
pursuant to subsection (a) above by
	 
	 	(ii)	 	(A) 100% if the person becomes an Eligible Director during
the first calendar quarter, or

(B) 75% if the person becomes an Eligible Director during the second
calendar quarter, or

(C) 50% if the person becomes an Eligible Director during the third
calendar quarter, or

(D) 25% if the person becomes an Eligible Director during
the fourth calendar quarter. If such calculation results in a
      fractional share, the number of shares shall be increased to the
next whole number.




	8.	 	Deferred Stock Awards and Deferred Compensation Stock Options. Each
Eligible Director may elect to take a portion or all of his or her annual
retainer and committee and meeting fees in either the form of Deferred
Stock Units or in the form of Stock Options, provided that the Board has
determined to permit either or both such forms of deferred payment to be
available for such an election. However, in no event may the portion of
the Eligible Director’s annual compensation affected by such an election
be less than 25%.




	 	a.	 	Method of Electing. In order to elect either such form of deferred
payment, the Eligible Director must complete and deliver to the
Secretary of the Company a written election designating the portion of
his or her compensation that is to be deferred and the form of
deferral. Such an election shall be effective beginning with
compensation earned for the first calendar quarter to begin six months
after the applicable Election Date. Such election to defer, or an
election to revoke a previous deferral, shall be made annually prior to
the calendar year in which it is to be effective. A period of at least
six months must elapse between changes in election. Any such election
shall only be effective to the extent that there are sufficient shares
of Common Stock available under the Plan pursuant to Section 4.
	 
	 	b.	 	Deferred Stock Units. If an Eligible Director elects to receive
compensation in the form of Deferred Stock Units, such individual will
have Deferred Stock Units credited to his or her account on the first
business day of each calendar quarter during which his or her election
is effective. The number of Deferred Stock Units covered by each such
crediting shall be determined by the following formula:




	 	 	 	 	 
	Number of	 	
=
	 	Amount of Compensation to be Deferred
	Deferred Stock Units	 	 	 	Fair Market Value




	 	 	 	Deferred Stock Units shall be credited with dividend equivalents when
dividends are paid on shares of Common Stock and such dividend
equivalents shall be converted into additional Deferred Stock Units based
on the Fair Market Value on the date credited.
	 
	 	c.	 	Deferred Compensation Stock Options. If an Eligible Director
elects to receive compensation in the form of Stock Options, such
individual shall be granted a Stock Option on the first business day of
each calendar quarter during which his or her election is effective.
The number of shares covered by each such Stock Option shall be
determined by the following formula:




	 	 	 	 	 
	Number of	 	
=
	 	Amount of Compensation to be Deferred
	Shares	 	 	 	25% of the Fair Market Value



 






 



	 	 	 	If this calculation results in a fractional share, the number of shares
covered by the resulting Stock Option shall be increased to the next
whole number.
	 
	 	 	 	Each such option shall expire on the tenth anniversary of the Date of the
Grant.




	9.	 	Option Exercisability and Restoration. A Stock Option shall not be
exercisable until the later of 12 months following its Grant Date, or 12
months following the date that the Plan is approved by the shareholders.
The following terms and conditions shall apply if applicable:




	 	a.	 	Participant’s Death. In the event of the optionee’s death during
the final year of the term of an outstanding Stock Option, such option
shall remain exercisable for one full year after the participant’s
death.
	 
	 	b.	 	Exercise Payment. A Stock Option, or portion thereof, may be
exercised by written notice of exercise delivered to the Secretary of
the Company, accompanied by payment of the aggregate Exercise Price.
Such payments may be made in cash, personal check or with Common Stock
(either actually or by attestation) already owned by the individual
valued at the Fair Market Value on the date of exercise, or a
combination of such payment methods. The Board, however, may deny the
exercise of Stock Options during a period of time that it deems
necessary to prevent any possible violation of federal securities or
any other laws. As soon as practicable after notice of exercise and
receipt of full payment for shares of Common Stock being acquired, the
Company shall deliver a certificate to the individual representing the
Common Stock purchased through the Stock Option.
	 
	 	c.	 	Restoration Option Right. Commencing in 1998, each Stock Option
granted pursuant to the Plan will contain a restoration right whereby,
if the optionee, who is an Eligible Director on the date of exercise,
exercises the option by tendering, either actually or by attestation,
previously acquired shares of Common Stock, such individual will
receive a Stock Option covering the number of shares tendered with the
term equal to the remaining term of the original Stock Option and with
a per share Exercise Price equal to the Fair Market Value as of the
date of exercise of the original Stock Option. Stock Options granted
pursuant to such restoration rights also will carry restoration Stock
Option rights.




	10.	 	Termination of Board Service. Upon termination of Board service by an
individual holding awards granted under the Plan, the following conditions
shall apply:




	 	a.	 	Stock Options. Each Stock Option shall continue to remain
outstanding for the duration of its term, subject to the extension of
such term in the event of an optionee’s death while holding the option
as provided in Section 9(a).
	 
	 	b.	 	Deferred Stock Units. Unless the Eligible Director has elected,
prior to termination of Board service, to receive payment in fifteen or
fewer annual installments commencing in the January following the
individual’s termination of Board service, he or she will receive a
lump sum payment equal to the aggregate Fair Market Value of the
Deferred Stock Units credited to his or her account as of such date.
This payment may be in the form of shares of Common Stock equal in
number to the amount of Deferred Stock Units credited to the Eligible
Director’s account. Installment payments may similarly be made in
shares of Common Stock. However, the Board may determine to settle a
portion of or all of an award payment in cash based on the Fair Market
Value at time of payment.




	11.	 	No Fractional Shares. No fractional shares shall be issued under the
Plan and cash shall be paid based on the Fair Market Value at time of
payment in lieu of any fractional shares in settlement of Deferred Stock
Units granted under the Plan pursuant to Section 8.



 






 






	12.	 	Transferability of Awards. Stock Options and Deferred Stock Units shall
not be transferable or assignable other than




	 	a.	 	by will or the laws of descent and distribution;
	 
	 	b.	 	pursuant to a qualified domestic relation order; or
	 
	 	c.	 	to the extent permitted by Rule 16b-3 under the 1934 Act as then
applicable to the Company’s employee benefits plans, by gift or other
transfer to either





	 	(i)	 	any trust or estate in which the original award recipient or
such person’s spouse or other immediate relative has a substantial
beneficial interest or
	 
	 	(ii)	 	a spouse or other immediate relative, provided that such a
transfer would continue to require such awards to be disclosed
pursuant to Item 403 of Regulation S-K under the Securities Act of
1933, as amended from time to time.




	13.	 	Award Documentation. Each award granted under the Plan shall be
evidenced by written documentation which shall contain the terms and
conditions governing such award. Directors need not execute any
instrument or acknowledgment of notice of a grant under the Plan, in which
case acceptance of such an award by the respective participant will
constitute agreement to the terms of the award.
	 
	14.	 	No Right to Service. Neither participation in the Plan nor any action
under the Plan shall be construed to giving any Eligible Director a right
to be retained in the service of the Company.
	 
	15.	 	Unfunded Plan. Unless otherwise determined the Board, the Plan shall be
unfunded and shall not create (or be construed to create) a trust or a
separate fund or funds. The Plan shall not establish any fiduciary
relationship between the Company or any participant or other individual.
To the extent any individual holds any rights by virtue of a grant awarded
under the Plan, such right (unless otherwise determined by the Board)
shall be no greater than the right of an unsecured general creditor of the
Company.
	 
	16.	 	Successors and Assigns. The Plan shall be binding on all successors and
assigns of a participant, including without limitation, the estate of such
participant and the executor, administrator or trustee of such estate, or
any receiver or trustee in bankruptcy or representative of the
participant’s creditors.
	 
	17.	 	Plan Amendment. The Board may amend the Plan as it deems necessary or
appropriate to better achieve the purposes of the Plan, except that no
amendment without the approval of the Company’s shareholders shall be made
which would:




	 	(i)	 	Subject to adjustments contemplated by Section 5, increase
with the total number of shares available for issuance under Section
4 or the individual Annual Stock Option limit set forth in Section
7, except that such individual limit may be increased to up to
10,000 shares of Common Stock if the Board has determined that such
an amendment would not prevent Eligible Directors from being
“disinterested persons” for purposes of Rule 16b-3, if required by
such rule or any successor rule under the 1934 Act; or
	 
	 	(ii)	 	To the extent such amendment would be inconsistent with the
then-existing Rule 16b-3 or any successor rule under the 1934 Act ,
to materially increase the benefits accruing to participants under
the Plan or to materially modify the requirements as to eligibility
for participation in the Plan ; or
	 
	 	(iii)	 	Otherwise cause the Plan not to comply with Rule 16B-3 or
any successor rule under the 1934 Act.



 






 






	 	 	In addition, the Plan may not be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder.
	 
	18.	 	Plan Termination. The Board may terminate the Plan at any time.
However, if so terminated, prior awards shall remain outstanding and in
effect in accordance with their applicable terms and conditions.
	 
	19.	 	Governing Law. The validity, construction and effect of the Plan and any
actions taken or relating to the Plan shall be determined in accordance
with the laws of the State of South Carolina and applicable federal laws.