EX-10.3






Exhibit 10.3




DEFERRED COMPENSATION PLAN




FOR




OUTSIDE DIRECTORS OF




SONOCO PRODUCTS COMPANY




Effective January 1, 1990




As amended October 15, 2008




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE I
	 	STATEMENT OF PURPOSE	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	DEFINITIONS	 	 	4 – 5	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	ELIGIBILTY AND PARTICIPATION	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	DEFERRED COMPENSATION ELECTIONS	 	 	7 – 8	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 	CREDITS TO DEFERRAL ACCOUNTS	 	 	9 – 10	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	ADMINISTRATIVE COMMITTEE & CLAIMS	 	 	11 – 12	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 	AMENDMENT AND TERMINATION	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	MISCELLANEOUS	 	 	14 – 15	 
	 
	 	 	 	 	 	 
	ARTICLE IX
	 	CONSTRUCTION	 	 	16	 








 









 






SONOCO PRODUCTS COMPANY


DEFERRED COMPENSATION PLAN

FOR OUTSIDE DIRECTORS




ARTICLE I




STATEMENT OF PURPOSE




     The purpose of this plan is to provide outside directors of Sonoco Products Company (the
“Company”) the opportunity to defer receipt of compensation earned as a director to a date
following separation from service with the Company. This deferral opportunity is designed to help
the Company to attract and retain outstanding individuals as Directors of the Company through
enhancement of the value of the fees paid to such individuals.



 









 





ARTICLE II




DEFINITIONS




               When used herein the following terms shall have the meanings indicated unless a different
meaning is clearly required by the context.




	 	1.	 	“Company”: Sonoco Products Company, a South Carolina Corporation, and its
corporate successors.
	 
	 	2.	 	“Committee”: The Administrative Committee appointed by the Board of
Directors of the Company to administer this plan.
	 
	 	3.	 	“Director”: Any person who is serving on the Board of Directors and is not
an employee of the Company or any of its subsidiaries.
	 
	 	4.	 	“Participant”: A Director or former Director who has deferred fees hereunder
and has a credit balance in his deferred compensation account.
	 
	 	5.	 	“Separation from Service”: The date of termination of a Director’s active
service with the Company as defined under code section 409A.
	 
	 	6.	 	“Plan”: The Deferred Compensation Plan for Outside Directors of Sonoco
Products Company as contained herein, and as may be amended from time to time hereafter,
together with any election forms that the Committee requires a Participant to complete.
	 
	 	7.	 	“Plan Year”: The period commencing January 1 and ending December 31.
	 
	 	8.	 	“Stock Equivalent Account”: The account described in Article V.
	 
	 	9.	 	“Interest Account”: The account described in Article V.
	 
	 	10.	 	“Director’s Fees”: Retainer fees and meeting fees.




 









 






	 	11.	 	“Fixed Payment Period”: The period of years over which annual payments are
made to a Participant following his Separation from Service or upon his death preceding
his Separation from Service.




 









 











ARTICLE III




ELIGIBILITY AND PARTICIPATION





	 	1.	 	Any Director of the Company who is not also an employee of the Company is eligible to
participate in the plan.
	 
	 	2.	 	The Director may elect to defer receipt of all or a specified part of the
compensation payable to the Director for serving on the Board of Directors or committees
of the Board of Directors of the Company.
	 
	 	3.	 	An eligible Director participates in the plan by irrevocably electing on an annual
basis, in the manner specified herein, to defer future Director’s Fees earned for which
the related services commence in the calendar year following the year in which the
election is made. Participation commences upon the execution and delivery of a Deferred
Compensation Agreement. Such Agreement must be executed (and must become irrevocable) in
all cases on or before December 31 preceding the calendar year in which the services
related to the Director’s Fees to be deferred commence.




 









 











ARTICLE IV




DEFERRED COMPENSATION ELECTIONS





	 	1.	 	A Director electing to defer payment of fees may elect deferral to be invested in the
Interest Account and/or the Stock Equivalent Account.
	 
	 	2.	 	Subject to such limitations as the Committee may impose, a Director electing to defer
hereunder shall also elect at the same time as his deferral election, a Fixed Payment
Period commencing six months following the Director’s Separation from Service over which
the amount deferred under such election shall be paid to him in annual installments and a
Fixed Payment Period (which may be a different period) over which the unpaid portion of
the amount deferred shall be paid to his beneficiary or estate in annual installments in
the event of his death before Separation from Service occurs. Finally, the Director may
elect to have the unpaid portion of the amount deferred paid in a lump sum to his
beneficiary or estate in the event of his death following a Separation of Service.
	 
	 	3.	 	Any Fixed Payment Period Election to defer compensation shall be irrevocable and may
not be changed or modified thereafter by a Participant or the Company.
	 
	 	4.	 	The fact that a Director has made a particular election with respect to a deferral
shall not preclude such Director from making different elections with respect to new
elections to defer fees covering future period of service.
	 
	 	5.	 	In the event of a Fixed Payment Period commencing due to a Separation from Service,
the initial amount due shall be paid six months following Separation from Service. In the
event of a Fixed Payment Period commencing due to a Participant’s death prior to a
Separation from Service, the initial payment amount due shall be paid upon death (or on
such later date permitted under the regulations to Code




 









 






	 	 	 	Section 409A). The amount of any payment during a Fixed Payment Period shall equal the
unpaid balance of the amount deferred (including any earnings thereon) immediately
preceding the payment date divided by the number of annual payments remaining in the Fixed
Payment Period (including the payment that is about to be made).
	 
	 	6.	 	Upon consummation of a Change in Control that qualifies under 409A, all amounts
credited to the Stock Equivalent Account and/or Interest Account (along with any amounts
deferred but not yet credited to these accounts up to the date of payment), shall be paid
in a lump sum payment to the Participant within 30 days following the Change in Control.




 









 











ARTICLE V




CREDITS TO DEFERRAL ACCOUNTS





	 	1.	 	Deferred compensation shall be credited to the Stock Equivalent Account or the
Interest Account of a Participant or a combination of these accounts, as the Participant
may have elected, as follows:






	 	a)	 	One fourth of the annual retainer fee shall be credited on the
closing date for each of the Company’s fiscal quarters.
	 
	 	b)	 	The committee meeting fee shall be credited on the closing date for
the Company’s fiscal quarter in which the Director attends the committee meeting.






	 	2.	 	The fees credited to a Stock Equivalent Account shall be converted on the closing
date for each of the Company’s fiscal quarters into “Stock Equivalents” as though such
fees were applied to the purchase of common stock of the Company as follows:






	 	 	 	The Director’s Account shall be assigned Stock Equivalents which shall be the
number of full and fractional (rounded to the nearest tenth) shares of the
Company’s common stock that could be purchased, with the fees credited to the
Director’s Account, at the closing price of such common stock as of the end of the
fiscal quarter as quoted by the New York Stock Exchange.






	 	3.	 	As of the payment date for each dividend declared on the Company’s common stock, each
Director’s dividend shall be determined by multiplying the cash dividend per share by the
number of full and fractional Stock Equivalents in the Director’s Stock Equivalent Account
on the dividend payment date, with the resulting dividend amount converted into stock
equivalents as though such dividend amounts were applied to the purchase of common stock
of the Company.




 









 












	 	4.	 	Six months following a Participant’s Separation from Service, the Participant will
begin to receive payment(s) from the Stock Equivalent Account and/or Interest Account in
accordance with the Participant’s elections. Subsequent installments, if any, shall be
paid each January until the accounts have been paid in full. Payment(s) from the Stock
Equivalent Account will be in the form of shares of common stock equal in number to the
amount of Stock Equivalents credited to the eligible Director’s Stock Equivalent Account
as of the date of payment divided by the number of installment payments remaining to be
paid immediately before the payment date. Any remaining fractional share at the end of
the payment cycle, will be rounded up and issued as a whole share.
	 
	 	5.	 	Each month, the balance in the Interest Account will be credited with interest from
the date the deferral is credited to the account until payment is complete, at a rate
equal to the Merrill Lynch ten year high quality bond index for December 15 of each
preceding year.




 









 











ARTICLE VI




ADMINISTRATIVE COMMITTEE & CLAIMS





	 	1.	 	This plan shall be administered by the Governance Committee of the Board of
Directors.
	 
	 	2.	 	The construction and interpretation by the Committee of any provision of this plan
shall be final and conclusive.
	 
	 	3.	 	The administration of this plan is delegated to the Senior Vice President — Human
Resources who is responsible for executive compensation and benefits, or at his election,
to the Director, Compensation.
	 
	 	4.	 	No member of the Committee shall be personally liable for any actions taken by the
Committee unless the member’s action involves willful misconduct.
	 
	 	5.	 	If any claim for benefits under the Plan is wholly or partially denied, the claimant
shall be given notice in writing of such denial within a reasonable period of time (not to
exceed 90 days after receipt of the claim or, if special circumstances require an
extension of time, written notice of the extension shall be furnished to the claimant and
an additional 90 days will be considered reasonable) setting forth the following
information: (a) the specific reason or reasons for the denial; (b) specific reference to
pertinent Plan provisions on which denial is based; (c) a description of any additional
material or information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary; and (d) an explanation that a full and
fair review by the Committee of the decision denying the claim may be requested by the
claimant or his authorized representative by filing with the Committee, within 60 days
after such notice has been received, a written request for such review.




 









 






	 	 	 	In the event that a claimant does choose to appeal, as described under (d) above, the
claimant or his authorized representative may review pertinent documents and submit issues
and comments in writing within the same 60-day period specified in subsection (d) above.
Upon request (and free of charge), the Member/claimant shall be provided reasonable access
to and copies of all documents, records, and other information relevant to his claim for
benefits (as further described in DOL regulations, and as determined by the Committee, in
its sole discretion), and shall also be informed of his right to bring suit under ERISA.
	 
	 	 	 	The decision of the Committee shall be made promptly, and not later than 60 days after the
Committee’s receipt of the request for review, unless special circumstances require an
extension of time for processing, in which case the claimant shall be so notified and a
decision shall be rendered as soon as possible, but not later than 120 days after the
receipt of the request for review. The claimant shall be given a copy of the decision
promptly. The decision shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, and specific
references to the pertinent Plan provisions on which the decision is based.




 









 











ARTICLE VII




AMENDMENT AND TERMINATION




     The Company reserves the right, at any time or from time to time, by action of its Board of
Directors, to modify or amend in whole or in part any or all provisions of the Plan, or terminate
and liquidate the Plan provided, however, any such modification, amendment or termination and
liquidation shall not substantially and adversely affect the benefits then in effect. In the event
of Plan termination and liquidation by the Company, the Company will pay any benefits otherwise due
under the Plan during the first 12 months following a resolution to terminate and liquidate the
Plan and shall pay out any remaining amounts deferred under the Plan during the second 12 months
following such resolution to terminate and liquidate the Plan. Notwithstanding the above, the Plan
shall not be terminated and liquidated unless all other plans required to be aggregated with the
Plan under Section 409A of the Code are terminated and liquidated at the same time.



 









 





ARTICLE VIII




MISCELLANEOUS





	 	1.	 	NON-ALIENATION OF BENEFITS. No right or benefit under the Plan shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any right or
benefit under this Deferral shall be void. No right or benefit hereunder shall in any
manner be liable for or subject to the debts, contracts, liabilities, or torts of the
person entitled to such benefits. If the Participant or any beneficiary hereunder shall
become bankrupt, or attempt to anticipate, alienate, sell, assign, pledge, encumber, or
charge any right hereunder, then such right or benefit shall, in the discretion of the
Committee, cease and terminate, and in such event, the Committee may hold or apply the
same or any part thereof for the benefit of the Participant or his beneficiary, spouse,
children, or other dependents, or any of them in such manner and in such amounts and
proportions as the Committee may deem proper.
	 
	 	2.	 	NO TRUST CREATED. The obligations of the Company to make payments hereunder shall
constitute a liability of the Company to a Participant. Such payments shall be made from
the general funds of the Company, and the Company shall not be required to establish or
maintain any special or separate fund, or purchase or acquire life insurance on a
Participant’s life, or otherwise segregate assets to assure that payment shall be made,
and neither a Participant, his estate nor Beneficiary shall have any interest in any
particular asset of the Company by reason of its obligations hereunder. The Participant’s
rights to deferred amounts will be the same as an unsecured general creditor of the
Company, and all property and rights to property, including rights as a beneficiary of a
life insurance contract purchased with deferred




 









 






	 	 	 	amounts, and all income attributable to the deferred amounts and property will remain
solely the property of the Company and will be subject to claims of general creditors of
the company. Nothing contained in the Plan shall create or be construed as creating a
trust of any kind or any other fiduciary relationship between the Company and a Participant
or any other person.
	 
	 	3.	 	The effective date of this plan is January 1, 1990.
	 
	 	4.	 	The plan has been amended effective October 15, 2008, to comply with Section 409A of
the Code and the regulations thereunder.




 









 











ARTICLE IX




CONSTRUCTION





	 	1.	 	GOVERNING LAW. This Plan shall be construed and governed in accordance with the laws
of the State of South Carolina.
	 
	 	2.	 	GENDER. The masculine gender, where appearing in the plan, shall be deemed to
include the feminine gender, and the singular may include the plural, unless the context
clearly indicates to the contrary.
	 
	 	3.	 	HEADINGS, ETC. The cover page of this plan, the Table of Contents and all headings
used in this plan are for the convenience of reference only and are not part of the
substance of this plan.