Document:

EX-10.4

Exhibit 10.4

 

 

 

SONOCO PRODUCTS COMPANY

AMENDED AND RESTATED TRUST AGREEMENT

FOR EXECUTIVES

As of

October 15, 2008

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE I	 	 	2	 
	 	 	 	 	 
	 	 	 	 
	 	1.1	 	 	Trust Fund
	 	 	2	 
	 	1.2	 	 	Irrevocability
	 	 	2	 
	 	1.3	 	 	Grantor Trust
	 	 	2	 
	 	1.4	 	 	Separate and Apart
	 	 	2	 
	 	1.5	 	 	Benefits Not Transferable
	 	 	2	 
	 	1.6	 	 	Acceptance of Trust
	 	 	3	 
	 	1.7	 	 	Additional Obligations
	 	 	3	 
	 	1.8	 	 	Definitions
	 	 	3	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II	 	 	4	 
	 	 	 	 	 
	 	 	 	 
	 	2.1	 	 	Initial Contributions
	 	 	4	 
	 	2.2	 	 	Additional Contributions
	 	 	4	 
	 	2.3	 	 	Credit Contributions
	 	 	5	 
	 	2.4	 	 	Substitution of Assets
	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	 	3.1	 	 	Benefit Entitlement
	 	 	5	 
	 	3.2	 	 	Participant Information
	 	 	5	 
	 	3.3	 	 	Company Responsibility
	 	 	6	 
	 	3.4	 	 	Payment Due To Taxable Income
	 	 	6	 
	 	3.5	 	 	Separate Accounting
	 	 	6	 
	 	3.6	 	 	Company Reimbursement
	 	 	6	 
	 	3.7	 	 	Initiation of Payment
	 	 	7	 
	 	3.8	 	 	Following a Change of Control
	 	 	7	 
	 	3.9	 	 	Return of Assets
	 	 	8	 
	 	3.10	 	 	Excess Asset Determination
	 	 	9	 
	 	3.11	 	 	Letter of Credit Funding on a Change of Control or Threatened Change of Control
	 	 	9	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	 	4.1	 	 	Powers
	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	 	5.1	 	 	Purchase of Contracts
	 	 	11	 
	 	5.2	 	 	Trustee Powers and Duties Over Contracts
	 	 	12	 
	 	5.3	 	 	Proceeds
	 	 	12	 
	 	5.4	 	 	Payments of Premiums, Assessments and Dues
	 	 	12	 
	 	5.5	 	 	Insurance Company Not Party
	 	 	12	 
	 	5.6	 	 	Contracts
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	6.1	 	 	Trustee Records
	 	 	13	 
	 	6.2	 	 	Taxes
	 	 	13	 
	 	6.3	 	 	Compensation and Expenses
	 	 	14	 
	 	6.4	 	 	Judicial Settlement
	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	 	7.1	 	 	Reliance
	 	 	14	 
	 	7.2	 	 	Advice of Counsel
	 	 	15	 

     i     

 

 

	 	 	 	 	 	 	 	 	 
	ARTICLE VIII	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	 	8.1	 	 	Resignation
	 	 	15	 
	 	8.2	 	 	Removal
	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	 	9.1	 	 	Insolvency
	 	 	16	 
	 	9.2	 	 	Determination of Insolvency
	 	 	16	 
	 	9.3	 	 	Company Obligations
	 	 	17	 
	 	9.4	 	 	Certain Transactions
	 	 	17	 
	 	9.5	 	 	Amendment
	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	 	10.1	 	 	Governing Law
	 	 	18	 
	 	10.2	 	 	Titles and Headings
	 	 	18	 
	 	10.3	 	 	Affiliates
	 	 	18	 
	 	10.4	 	 	Assignment
	 	 	18	 
	 	10.5	 	 	Entire Agreement
	 	 	18	 
	 	10.6	 	 	Severability
	 	 	18	 

     ii     

 

 

SONOCO PRODUCTS COMPANY

AMENDED AND RESTATED

TRUST AGREEMENT FOR EXECUTIVES

     AMENDED AND RESTATED AGREEMENT made as of October 15, 2008, by and between SONOCO PRODUCTS
COMPANY, a South Carolina corporation with an office in Hartsville, South Carolina, or any
successor corporation (hereinafter referred to as the “Company”) and WACHOVIA BANK, National
Association, a national banking association having an office at One West Fourth Street, NC 6251,
5th Floor, Winston-Salem, North Carolina 27101 (hereinafter referred to as the
“Trustee”).

W I T N E S S E T H:

     WHEREAS, the Company has adopted various plans outlined in Appendix I, and may in the future
adopt additional plans that provide for benefits to current and former executives or other “Highly
Compensated Employees” as that term is defined in the Internal Revenue Code of 1986 (the “Code”)
(“Executives”) employed by the Company (collectively the “Plan”); and

     WHEREAS, the Company has incurred or expects to incur liability under the terms of the Plan to
or with respect to the individuals participating in the Plan or to the beneficiaries of the
participating individuals (hereinafter referred to as the “Participants” and “Beneficiaries”); and

     WHEREAS, the Plan contemplates that the Company will pay the entire cost of benefits from its
general assets and the obligations of the Company under the Plan, such benefits are not funded or
otherwise secured, and the Company desires to assure payment under the Plan; and

     WHEREAS, by trust agreement dated as of July 26, 1988, and amended as of July 26, 1988 and
February 7, 2001, the Company established a trust arrangement (hereinafter referred to as the
“Trust”), which was intended to be a grantor trust as generally defined within the Code for the
purpose of accumulating assets to assist the Company in fulfilling its obligations under the Plan;
to which Trust the Company has made or shall in the future make contributions in the amounts
determined by the Company’s Board of Directors in accordance with the terms of the Trust; with the
corpus and income of the Trust treated as assets and income of the Company for federal income tax
purposes; and

     WHEREAS, the Company desires to further amend and restate in its entirety such original trust
agreement, as amended; and

     WHEREAS, the Company desires that the Trustee hold and administer all funds contributed by
the Company, and the Trustee is willing to hold and administer such funds pursuant to the terms of
this Agreement; and

     WHEREAS, records of separate accounts (hereinafter referred to as “Accounts”) may be created
and maintained for each Participant in the Plan to provide a source of payments of the

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	 

 

 

Company’s obligations to Participants under the Plan; and

     WHEREAS, the Plan is administered by the Board of Directors of the Company or its designee
(hereinafter referred to as the “Committee”); and

     WHEREAS, the Company intends that the assets of the Trust shall at all times be subject to the
claims of creditors of the Company, as provided below, and that the existence of the Trust shall
not cause the Plan to become a funded employee benefit plan for purposes of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) and shall not be construed to provide taxable
income to any participant of the Plan prior to actual payment of benefits thereunder.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the Company and the Trustee do hereby covenant and agree as follows:

ARTICLE I

ESTABLISHMENT OF TRUST

     1.1 Trust Fund. The Trustee hereby accepts the assets constituting the initial trust
corpus contributed by the Company. The Trustee shall receive any contributions paid in cash or in
other acceptable property which shall be transferred to the Trustee by the Company. All such money
and other property, all investments and reinvestments made therewith or proceeds thereof and all
earnings and profits thereon, less all payments and charges shall constitute the Trust Fund. The
Trust Fund shall be held, managed and administered by the Trustee pursuant to the terms of this
Agreement. The Trustee shall not have a duty or responsibility with respect to the determination
of the amount of contributions to this Trust. The Trustee may maintain one or more separate
investment funds in the Trust.

     1.2 Irrevocability. The Company and the Trustee agree that the Trust created herein
shall be irrevocable after December 31, 1992.

     1.3 Grantor Trust. This Trust is intended to be a grantor trust under Section 671 of
the Code and shall be construed accordingly. All interest and other income earned on the
investment of this Trust shall for such purposes be the property of, and taxable to, the Company.
All taxes on or with respect to the Trust shall be payable by the Company from its separate funds
and shall not be a charge against the Trust.

     1.4 Separate and Apart. The Trust shall be held separate and apart from other funds
of the Company and shall be used exclusively for the uses and purposes herein set forth. Neither
the Plan nor any Participant or Beneficiary shall have any preferred claim on, or any beneficial
ownership interest in, any assets of the Trust prior to the time such assets are payable to the
Participant or Beneficiary.

     1.5 Benefits Not Transferable. No right or interest to receive a benefit from the
Trust may be assigned, sold, anticipated, alienated or otherwise transferred by a Participant or Beneficiary.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 2          

 

 

Any rights created under the Plan and this Trust shall be mere unsecured
contractual rights of Participants and Beneficiaries against the Company. Any assets held by the
Trust will be subject to the claims of the Company’s general creditors under federal and state law
in the event of Insolvency.

     1.6 Acceptance of Trust. The Trustee accepts the Trust established under this
Agreement on the terms and subject to the provisions set forth herein, and it agrees to discharge
and perform fully and faithfully all of the duties and obligations imposed upon it under this
Agreement.

     1.7 Additional Obligations. The Company has provided or will provide the Trustee with
true and correct copies of the Plans, and all amendments thereto, to be attached hereto, as
Appendix I. The Company may add plans to this Trust, by amending Appendix I and
notifying the Trustee in writing, provided such additional plans are subject to the terms of this
Agreement. Provided, however, that following a Change in Control or during a Threatened Change in
Control Period, the Company may not add plans to this Agreement, add participants to the Payment
Schedule, increase payments under the Payment Schedule, or amend any plan covered by this Trust
which would increase the accrued benefits payable under this Trust unless it makes a contribution
to the Trust sufficient to pay the benefits arising under such plans or changes, plus reasonably
anticipated Trustee’s fees relating to such plans. Such funding calculation shall be in the same
manner as set forth in Section 2.2(b) below. Benefits under any such plans or changes and
additional contributions related to such benefits shall be segregated from other liabilities and
assets of the Trust and payable only from such segregated additional assets provided in accordance
with this Section.

     1.8 Definitions.

          (a) “Affiliate” shall mean any corporation, partnership or other entity, the majority interest
in which is held by the Company directly or through one or more intermediaries.

          (b) The “Board” shall mean the Board of Directors of the Company.

          (c) “Company” shall have the meaning assigned to such term in the introductory paragraph.

          (d) “Participants” shall mean active and former directors and employees of the Company and/or
of its Affiliates eligible for a benefit under the Plan.

          (e) “Threatened Change in Control” shall occur when:

               (1) a corporation, person or group initiates a tender offer to acquire such number of shares
as would result in such corporation, person or group holding twenty-five percent (25%) or more of
the voting power of the Company’s outstanding common shares; or

               (2) the Board notifies the Trustee in writing that it has determined that a Change in Control
is imminent.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 3          

 

 

          (f) “Threatened Change in Control Period” shall mean the period beginning on the date a
Threatened Change in Control commences and ending on the earliest of:

               (1) The date when a corporation, person or group shall have abandoned the tender offer;

               (2) The date the Board shall have notified the Trustee in writing that a Change in Control is
no longer imminent when the Threatened Change in Control Period has commenced by reason of a
written notification by the Board; or

               (3) The date a Change in Control (as defined in Section 3.7) occurs.

ARTICLE II

CONTRIBUTIONS

     2.1 Initial Contributions. The Company shall promptly after the execution and delivery
of this Agreement, transfer to the Trustee assets to form the corpus of the Trust as determined by
the Company.

     2.2 Additional Contributions.

          (a) The Company, in its sole discretion, may at any time, or from time to time, make
additional contributions of cash or other property to the Trustee to augment the principal to be
held, administered and disposed of by the Trustee as provided in this Agreement. Neither the
Trustee nor any Participant or Beneficiary shall have the right to compel such discretionary
additional deposits.

          (b) Upon a Change in Control or Threatened Change in Control (the “Funding Trigger Date”), the
Company shall, as soon as possible, but in no event later than ten (10) days following the Change
in Control or, if sooner, thirty (30) days following the commencement of the Threatened Change in
Control Period, make a contribution to the Trust such that the total assets in the Trust equal 110%
of the present value of the benefit obligation for the Plans (as of the date of a Change in Control
or, if earlier, the beginning of the Threatened Change in Control Period), plus reasonably
anticipated Trustee’s fees. The benefit obligation for the Plans shall be measured in accordance
with generally accepted accounting principles, using the same assumptions and methodologies for
measuring this obligation as recorded in the Company’s most recent quarterly financial statements,
and shall reflect the Projected Benefit Obligation (the “PBO”) under SFAS 87 (as may be
subsequently amended) for Plan obligations that are treated as pensions, and shall reflect
participant account balances for Plan obligations that are not treated as pensions.

          (c) Following a Change in Control or during a Threatened Change in Control Period, if the
Trust assets are less than 105% of the present value of the benefit obligation for the Plans
reflected on the Company’s most recent annual financial statement at the time that the annual
financial statement is published, the Company shall notify the Trustee and contribute an additional

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 4          

 

 

amount to the Trust, if required, such that the total assets in the Trust equal 110% of a
modified benefit obligation, as described in this paragraph. The modified benefit obligation for
purposes of this paragraph (c), shall be measured based on actual benefits accrued as of the
Funding Trigger Date assuming the Participants terminated employment on the Funding Trigger Date,
whether or not vested, (adjusted, in the case of account-based obligations, for subsequent earnings
attributed to the accrued benefit, and further adjusted for any benefit payments actually made to
Participants following the Funding Trigger Date). The Company shall provide such notification and
make any required contribution within 10 days following the publication of the annual financial
statement of the Company.

     The Trustee shall invest such contributed funds in accordance with the investment guidelines
attached hereto.

     2.3 Credit Contributions. Company contributions to the Trust may be in the form of an
irrevocable letter of credit or irrevocable letters of credit (“Credit”). Such Credit shall be in a
form reasonably acceptable to the Trustee.

     2.4 Substitution of Assets. At any time prior to a Change in Control or Threatened
Change in Control, the Company shall have the right at any time and from time to time, in its sole
discretion, to substitute assets of equal fair market value for any asset held by the Trust. This
right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of
any person in a fiduciary capacity. Following a Change in Control or Threatened Change in Control,
substitution of assets must be acceptable to the Trustee and not detrimental to the interests of
the Participants and Beneficiaries.

ARTICLE III

PAYMENTS FROM THE TRUST FUND

     3.1 Benefit Entitlement. At the time a Participant or Beneficiary is entitled to
payment under the Plan, such Participant or Beneficiary shall be entitled to receive from the Trust
an amount in cash equal to (i) the amount to which he is entitled under the Plan at such time, less
(ii) any payments previously made to him by the Company with respect to such amount under the terms
of the Plan. Unless otherwise provided herein, the Trustee shall pay such amount to the
Participant or Beneficiary as directed by the Company or as the Participant or Beneficiary may
otherwise be eligible and application is made in conformity with this Article.

     3.2 Participant Information. The Company shall deliver to the Trustee a schedule of
benefits (the “Payment Schedule”), to include state and federal tax withholding guidelines, due
under the Plan on an annual basis. Immediately after a Change in Control, the Company shall
deliver to the Trustee an updated schedule of benefits due under the Plan. Upon payment to a
Participant or Beneficiary, the Trustee shall make payment of all withholding taxes to the
appropriate taxing authority and shall furnish each Participant or Beneficiary or person receiving
benefits with respect to the Participant or Beneficiary with the appropriate tax information form
evidencing such payment and the amount thereof.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 5          

 

 

     3.3 Company Responsibility. Notwithstanding the provisions of this Article III, the
Company shall remain obligated to pay benefits under the Plan or Plans. To the extent the amount
in a Participant’s or Beneficiary’s Account or Accounts is not sufficient to pay any and all
benefits under the applicable Plan when due, the Company shall pay such benefits directly. In the
event of such a funding shortfall, the Trustee shall make payments under the Plan as such payments
come due until the Participant’s Account or Beneficiary’s Account, if applicable, has been reduced
to zero.

     3.4 Payment Due To Taxable Income. In the event the Internal Revenue Service issues a
deficiency notice to any individual entitled to benefits under the terms of the Plan covered by
this Trust stating that such individual is subject to any tax by reason of any interest in the
Trust in a calendar year prior to the calendar year of his receipt of such benefits, then the
Trustee upon presentation of the deficiency notice and written direction from the Participant or
Beneficiary shall distribute to such individual the amount which has been determined to be taxable
income to the individual.

     3.5 Separate Accounting. The Payment Schedule may be maintained to reflect the
interest of each Participant or Beneficiary in the Trust. The Company may identify at the time any
contribution is made to the Trust how such contribution shall be credited to the Account of any
Participant or Beneficiary shown in the Payment Schedule. Prior to a Change in Control, the
Company (or its agents) may adjust such accounts to reflect investment experience, expenses,
distributions and subsequent contributions. Following a Change in Control, the Trustee may perform
the duties reflected in the preceding sentence. After all obligations with respect to a Participant
or Beneficiary have been fully satisfied, any remaining amounts allocated to his Account shall be
reallocated among other Participants and Beneficiaries Accounts in accordance with directions from
the Company.

     The Company shall indemnify and hold harmless the Trustee for any liability or expenses,
including without limitation reasonable attorney’s fees, incurred by the Trustee with respect to
maintaining the subaccounts for Participants’ and Beneficiaries’ Accounts, any reporting thereon to
Participants or Beneficiaries, certifying benefit or payment information, determining the status of
Accounts and benefits hereunder and otherwise carrying out its obligations in maintaining the
subaccounts under this Agreement, other than those resulting from the Trustee’s gross negligence
or willful misconduct.

     3.6 Company Reimbursement. The Company may make payment of benefits directly to a
Participant or Beneficiary as they become due under the terms of the Plan. The Company shall notify
the Trustee of its decision to make payment of benefits directly prior to the time amounts are
payable to a Participant or Beneficiary. Before a Threatened Change in Control or Change in
Control, the Company may direct the Trustee in writing to reimburse the Company from the Trust
assets, and debit the account of each Participant or Beneficiary, for amounts paid directly to the
Participant or Beneficiaries by the Company. The Trustee shall reimburse the Company for such
payments promptly after receipt by the Trustee of satisfactory evidence that the Company has made
the direct payments. No such reimbursement shall be allowed upon or during a Threatened Change in
Control or after a Change in Control that would result in Trust
assets equaling less than the funding levels outlined in Section 2.2 (b) and (c).

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 6          

 

 

     3.7 Initiation of Payment. Prior to a Change in Control, the Trustee shall commence
or continue payments from the Plan to a Participant or Beneficiary upon the occurrence of one or
more of the following events:

          (i) an instruction from the Company in a form or manner reasonably acceptable to the Trustee;
or

          (ii) other evidence presented by a Participant or Beneficiary of eligibility to commence or
continue receiving benefits in accordance with the Plan, in a form or manner reasonably acceptable
to the Trustee, and with such evidence as the Trustee deems necessary to prove eligibility for
benefits.

Upon a demand of the Participant or Beneficiary, the Trustee shall immediately notify the Company
of the demand and the intended action of the Trustee as to payment. The Company shall have a
period of fifteen business days from such notification to object to such intended action. Barring
objection, the Trustee shall take its intended action at the close of this 15 day period. If the
Company files an objection, the Trustee shall resolve the issue using such means as are
appropriate, including, but not limited to requiring additional evidence from either or both the
Company and the Participant or Beneficiary and hiring any outside advisors it deems necessary. If
the Company files an objection to a demand for payment, payment will be made if the Trustee is
satisfied with the Participant’s or Beneficiary’s eligibility for benefits. The cost of this
process shall be borne by the Company. However, in the event the Company refuses to pay to the
Trustee the cost of the process, the Trustee may charge the Trust and demand reimbursement from the
Company. If such demand is not met, the Trustee may proceed with a collection action against the
Company.

     3.8 Following a Change in Control.

          (a) A “Change in Control” shall be deemed to have occurred if (i) any person or group of
persons within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 is or becomes
the beneficial owner, directly or indirectly, of 25% or more of the common stock of the Company,
(ii) during any period of 24 consecutive months, individuals who at the beginning of such period
constituted the Board of Directors of the Company, cease for any reason to constitute at least a
majority of the Board of Directors of the Company, or (iii) the stockholders of the Company, shall
approve a merger, consolidation or dissolution of the Company or a sale, lease, or exchange of all
or substantially all its assets.

          (b) Following a Change in Control, the Trustee shall, without direction from the Company, to
the extent designated funds are available from the Accounts of Participants or Beneficiaries, make
payments to Participants and Beneficiaries in such manner and in such amounts as the Trustee shall
determine they are entitled to be paid under the Plans based on the most recent Payment Schedule
and the terms of the appropriate Plan, provided that such payment obligations shall be fixed as of
the date of the Change in Control and shall not include any obligations or liabilities that are not
listed on the most recent Payment Schedule or that accrue after the Change in

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 7          

 

 

Control, except as provided in Section 1.7 herein. A Participant or Beneficiary who believes
he is eligible or entitled to benefits under the Plan may apply directly to the Trustee for payment
of such benefits. Such application shall advise the Trustee of the information and circumstances
which entitles such Participant or Beneficiary to payments of such benefit.

     The Trustee shall make its own independent determination as to the Participant’s or
Beneficiary’s entitlement to benefits, even though the Trustee may be informed from another source
(including the Company) that payments are not due under the Plan or that a distribution called for
by the Payment Schedule and Plan should not be made. If the Trustee so desires, it may, in its
sole discretion, make such additional inquiries and take such additional measures as it deems
necessary in order to enable it to determine whether benefits are due and payable, including, but
not limited to, interviewing appropriate persons, requesting affidavits, soliciting oral or written
testimony under oath, or holding a hearing or other proceeding. The Trustee shall make its
determination whether benefits are payable as promptly as possible.

     The Trustee may engage its own counsel or other experts to assist it in making its
determination. The cost of such counsel or other expert assistance, and any other costs reasonably
incurred by the Trustee in making its determination, shall be borne by the Company. Trustee
expenses in making such determination shall be extraordinary expenses for which compensation in
addition to normal fees shall be due and payable. If the Company fails to pay any such fees and
expense when due, the Trustee may use the assets of the Trust to pay the fees and expense and
demand reimbursement from the Company. If such demand is not met the Trustee may proceed with a
collection action on behalf of the Trust against the Company.

     Following a Change in Control and during a Threatened Change in Control, the Trustee shall owe
its fiduciary duties to the Participants and Beneficiaries and shall exercise its powers hereunder
for the sole benefit of such Participants and Beneficiaries.

     Within thirty (30) days after a Change in Control, the Trustee shall notify all Participants
and Beneficiaries who are entitled to receive benefits under the Plans, in writing, of the
Trustee’s availability to aid them in pursuing any claims they may have for benefits under the
terms of those Plans under which they are covered. The Trustee shall provide such notice by using
such method or methods of delivery likely to result in full distribution. Materials sent through
the mail shall be sent by first class mail to the address of the Participant or Beneficiary listed
on the Payment Schedule. In addition, the Trustee may, at its option, provide such notification by
placing an advertisement in one newspaper of general circulation in each of the ten locations in
which the largest number of employees of the Company and its Affiliates are located as communicated
by the Company to the Trustee prior to a Change in Control.

     3.9 Return of Assets.

          (a) Prior to termination of the Trust, except (i) following a Change in Control or (ii) during
a Threatened Change in Control Period, the Trustee shall, upon the Company’s written request,
deliver all or any portion of the trust assets to the Company, and allow the cancellation of any
Credits previously contributed to the Trust, leaving a minimum corpus of $100.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 8          

 

 

          (b) Following a Change in Control, if the assets of the Trust Fund exceed 120% of the present
value (as determined under generally accepted accounting principles) of the amount which would be
payable to all Participants and Beneficiaries in the Plan if all such persons were to become
immediately entitled to receive all benefits reflected on the Payment Schedule (the amount of such
excess being referred to as the “Excess Assets”), the Trustee shall, upon the Company’s written
request, deliver all or any portion of such Excess Assets to the Company.

     3.10 Excess Asset Determination. The Trustee shall determine in its sole discretion
the amount of any Excess Assets and whether any Excess Assets shall be delivered to the Company in
accordance with Section 3.8(b) above. The Company shall provide to the Trustee such information as
the Trustee shall reasonably request, and the Trustee shall be fully protected in acting on such
information.

     3.11 Letter of Credit Funding on a Change in Control or Threatened Change in Control.

          (a) In the event of a Change in Control or Threatened Change in Control, the Company may fund
part or all of its obligation under Section 2.2 through contribution of Credits and the
Trustee may draw on a Credit as it shall determine in its sole discretion.

          (b) If after a Change in Control or Threatened Change in Control, the Trustee receives written
notice from the Bank which issued a Credit, referencing the Credit by number, signed by an officer
of such Bank, and stating that such Credit is due to expire and has not been extended, then the
Trustee shall draw on such Credit to the full extent thereof at any time during the ten business
days prior to the expiration of such Credit unless: (1) prior to taking such action, the Trustee
has received a copy of a replacement letter of credit executed by the bank issuing a replacement
letter of credit in at least the amount of the Credit which is due to expire, or (2) the Trustee
has received a contribution from Company equal to the amount of the Credit which is due to expire.

          (c) Any direction to Wachovia pursuant to this Section shall be addressed as follows:

			
	                    	 	Wachovia Bank, National Association

Attn: Executive Benefits Group/Sonoco Products Company NC6251

One West Fourth Street

Winston-Salem, NC 27101

     All directions shall plainly reference the Plan and the Trust and provide all necessary
information for the Trustee to act.

          (d) The Trustee shall draw on any Credit only if and to the extent specifically directed or
provided for in the foregoing provisions of this Agreement. In the event that the Trustee shall
resign or be removed, and a successor trustee shall be appointed hereunder, the rights and
obligations of the Trustee under each Credit shall automatically become the rights and obligations
of the successor trustee, and the Trustee shall have no further rights, duties, obligations or
liabilities with respect to any Credit.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 9          

 

 

ARTICLE IV

TRUSTEE POWERS AND AUTHORITY

     4.1 Powers. Subject to investment guidelines agreed to in writing from time to time
by the Company and the Trustee, attached hereto as Appendix II, the Trustee shall have the
following powers and authority in the administration of the Trust:

          (a) To purchase or subscribe for any securities, including but not limited to securities of
the Company, or other property and to retain in trust such securities or other property.

          (b) To sell for cash or on credit at public or private sale, exchange, convey, transfer or
dispose of, to grant options, convert, securities or other property held at any time and to collect
and receive any and all money and other property due the Trust and to give a full discharge
therefor.

          (c) To settle, compromise or submit to arbitration, any claims, debts or damages, due or owing
to or from the Trust, to commence or defend suits or legal proceedings and to represent the Trust
in all suits or legal proceedings.

          (d) To exercise any conversion privilege and/or subscription right available in connection
with any securities or other property at any time held; to oppose or to consent to the
reorganization, consolidation, merger, or readjustment of the finances of any corporation, company
or association or to the sale, mortgage, pledge or lease of the property of any corporation,
company or association any of the securities of which may at any time be held and to do any act
with reference thereto, including the exercise of options, the making of agreements or
subscriptions, which may be deemed necessary or advisable in connection therewith, and to hold and
retain any securities or other property so acquired.

          (e) To exercise, personally or by general or by limited power of attorney, any right,
including the right to vote, appurtenant to any securities or other property held at any time.

          (f) To borrow money from any lender in such amounts and upon such terms and conditions as
shall be deemed advisable or proper to carry out the purposes of the Trust and to pledge any
securities or other property for the repayment of any such loan.

          (g) To hold part or all of the Trust uninvested.

          (h) To form corporations and to create trusts and appoint ancillary trustees to hold title to
any securities or other property, all upon such terms and conditions as may be deemed advisable.

          (i) To employ suitable agents and counsel and to pay their reasonable expenses
and compensation.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 10          

 

 

          (j) To register any securities held hereunder in the name of the Trustee or in the name of a
nominee with or without the addition of words indicating that such securities are held in a
fiduciary capacity.

          (k) To make, execute and deliver, as Trustee, any and all conveyances, contracts, waivers,
releases or other instruments in writing necessary or proper for the accomplishment of any of the
foregoing powers.

          (l) To invest and reinvest all or any specified portion of the Trust through the medium of a
mutual fund which has been or may hereafter be established and maintained by the Trustee.

          (m) To determine how all receipts and disbursements shall be credited, charged or apportioned
as between income and principal, and the decision of the Trustee shall be final and not subject to
question by the Company or any Participant or Beneficiary.

          (n) To take any and all actions necessary to collect funds under a Letter of Credit as more
fully described within this Agreement.

          (o) Following a Change in Control, to have the sole and absolute discretion in the management
of the Trust assets including the powers set forth in this Section 4.1. In investing the Trust
assets, the Trustee shall consider:

               (1) the needs of the Plan;

               (2) the need for matching of the Trust assets with the liabilities of the Plan; and

               (3) the duty of the Trustee to act solely in the best interests of the Participants and their
Beneficiaries.

          (p) To do all acts, whether or not expressly authorized, which the Trustee may deem necessary
or desirable for the protection of the Trust.

ARTICLE V

INSURANCE AND ANNUITY CONTRACTS

     5.1 Purchase of Contracts. The Trustee, upon written direction of the Company prior
to a Change in Control, shall pay from the Trust such sums to such insurance company or companies
as the Company may direct for the purpose of procuring participating or nonparticipating insurance
and/or annuity contracts for the Plans (hereinafter referred to as “Contracts”). The Company shall
prepare, or cause to be prepared in such form as it shall prescribe, the application for any
Contract. The Trustee shall receive and hold in the Trust all Contracts so obtained.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 11          

 

 

     5.2 Trustee Powers and Duties Over Contracts. The Trustee shall be the complete and
absolute owner of Contracts held in the Trust and, upon written direction of the Company prior to a
Change in Control, shall have power, without the consent of any other person, to exercise any and
all of the rights, options or privileges that belong to the absolute owner of any Contract held in
the Trust or that are granted by the terms of any such Contract or by the terms of this Agreement.
Prior to a Change in Control, the Trustee shall have no discretion with respect to the exercise of
any of the foregoing powers or to take any other action permitted by any Contract held in the
Trust, but shall exercise such powers or take such action only upon the written direction of the
Company and the Trustee shall have no duty to exercise any of such powers or to take any such
action unless and until it shall have received such direction. After a Change in Control, the
Trustee shall exercise, without directions from the Company, any and all of the rights, options or
privileges that belong to the absolute owner of any Contract held in the Trust or that are granted
by the terms of any such Contract or by the terms of this Agreement. The Trustee, upon the written
direction of the Company prior to a Change in Control, shall deliver any Contract held in the Trust
to such person or persons as may be specified in the direction.

     5.3 Proceeds. The Trustee shall hold in the Trust the proceeds of any sale,
assignment or surrender of any Contract held in the Trust and any and all dividends and other
payments of any kind received in respect of any Contract held in the Trust.

     5.4 Payments of Premiums, Assessments and Dues. Upon the written direction of the
Company prior to a Change in Control, the Trustee shall pay from the proper Account premiums,
assessments, dues, charges and interest, if any, upon any Contract held in the Trust. The Trustee
shall have no duty to make any such payment unless and until it shall have received such direction.
After a Change in Control, the Trustee shall, in its discretion, pay from the proper Account
premiums, assessments, dues, charges and interest, if any, upon any Contract held in the Trust,
without direction from the Company.

     5.5 Insurance Company Not Party. Any insurance company that may issue any Contract or
Contracts held in the Trust shall not be deemed to be a party to this Agreement for any purpose, or
to be responsible in any way for the validity of this Agreement or to have any liability under this
Agreement other than as stated in each Contract that it may issue. Any insurance company may deal
with the Trustee as sole owner of any Contract issued by it and held in the Trust, without inquiry
as to the authority of the Trustee to act, and may accept and rely upon any written notice,
instruction, direction, certificate or other communication from the Trustee believed by the
insurance company to be genuine and to be signed by an officer of the Trustee and shall incur no
liability or responsibility for so doing. Any sums paid out by any insurance company under any of
the terms of a Contract issued by the insurance company and held in the Trust either to the
Trustee, or, in accordance with the direction of the Trustee, to any other person or persons
designated as payees in such Contract shall be a full and complete discharge of the liability to
pay such sums, and the insurance company shall have no obligation to look to the disposition of any
sums so paid. No insurance company shall be required to look into the terms of this Agreement, to
question any action of the Trustee or to see that any action of the Trustee is authorized by the
terms of this Agreement.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 12          

 

 

     5.6 Contracts. Anything contained herein to the contrary notwithstanding, neither the
Company nor the Trustee shall be liable for the refusal of any insurance company to issue or change
any Contract or Contracts or to take any other action requested by the Trustee; nor for the form,
genuineness, validity, sufficiency or effect of any Contract or Contracts held in the Trust; nor
for the act of any person or persons that may render any such Contract or Contracts null and void;
nor for the failure of any insurance company to pay the proceeds and avails of any such Contract or
Contracts as and when the same shall become due and payable; nor for any delay in payment resulting
from any provision contained in any such Contract or Contracts; nor for the fact that for any
reason whatsoever (other than their own negligence or willful misconduct) any Contract or Contracts
shall lapse or otherwise become uncollectible.

ARTICLE VI

TRUSTEE RECORDS, COMPENSATION AND EXPENSES OF TRUSTEE

     6.1 Trustee Records. The Trustee shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder, and all accounts, books and
records relating thereto shall be open to inspection and audit at all reasonable times by any
person designated by the Company. Within 90 days after the close of each fiscal year (or such
other date as may be agreed upon in writing between the Company and the Trustee), and within 120
days after the effective date of the resignation of the Trustee, the Trustee shall file with the
Company a written account setting forth all investments, receipts, disbursements and other
transactions effected by the Trustee during the year ending on such date (but not including any
part of such year for which such an account has previously been filed) and certified as to the
accuracy of the information set forth therein. Such account may incorporate by reference any and
all schedules and other statements setting forth investments, receipts, disbursements and other
transactions effected during the period for which such account is rendered which the Trustee has
furnished to the Company prior to the filing of such account. Each account so filed (and copies of
any schedules and statements incorporated therein by reference as aforesaid) shall be open to
inspection during business hours by any Participant or Beneficiary and any person designated by
such Participant or Beneficiary for a period of 60 days immediately following the date on which the
account is filed with the Company. The Company may approve such accounts by an instrument in
writing delivered to the Trustee. In the absence of the filing in writing with the Trustee by the
Company of exceptions or objections to any such account within 90 days, the Company shall be deemed
to have approved such account; and in such case, or upon the written approval of the Company of any
such account, the Trustee shall be released, relieved and discharged with respect to all matters
and things set forth in such account as though such account had been settled by the decree of a
court of competent jurisdiction.

     6.2 Taxes. The Company shall pay all taxes of any and all kinds levied or assessed
under existing or future laws against the Trust. If requested by the Company, the Trustee shall,
at Company expense, contest the validity of such taxes in any manner deemed appropriate by the
Company or its counsel, after the Trustee receives an indemnity bond or other security satisfactory
to it to pay any expense of such contest.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 13          

 

 

     6.3 Compensation and Expenses. The Trustee shall be paid such reasonable compensation
by the Company in accordance with the Trustee’s regular schedule of fees for trust services as
shall from time to time be in effect unless otherwise agreed to by the Company and the Trustee.
The Trustee shall charge on the basis of hours for making the determination under Section 3.7 or
under Section 3.8. The Trustee shall be reimbursed by the Company for its reasonable expenses of
management and administration of the Trust, including reasonable compensation of fees of counsel
and any agent engaged by the Trustee to assist it in such management and administration. Such
compensation and all expenses and fees of administration of the Trust shall be withdrawn by the
Trustee out of the Trust unless promptly paid by the Company on demand. In the event the Trustee
must satisfy its obligations from the Trust, the Company shall immediately on demand from the
Trustee, deposit into the Trust a sum equal to the amount paid by the Trust for such fees and
expenses. In the event such demand is not met the Trustee may proceed with a collection action
against the Company.

     6.4 Judicial Settlement. Notwithstanding the foregoing the Trustee or the Company may
apply at any time for a judicial settlement of the Trustee’s Account.

ARTICLE VII

PROTECTION OF THE TRUSTEE

     7.1 Reliance. The Trustee shall be fully protected in relying upon a certification of
an authorized representative of the Company with respect to any instruction, direction or approval
of the Company, and protected also in relying upon the certification until a subsequent
certification is filed with the Trustee.

     The Trustee shall be fully protected in acting upon any instrument, certificate, or paper
believed by it to be genuine and to be signed or presented by the proper person or persons, and the
Trustee shall be under no duty to make any investigation or inquiry as to any statement contained
in any such writing but may accept the same as conclusive evidence of the truth and accuracy of the
statements therein contained.

     The Trustee shall not be liable for the proper application of any part of the Trust Fund if
distributions are made in accordance with the terms of the Plan or the information otherwise
furnished to the Trustee or the Company.

     The Trustee shall not be liable hereunder for any loss or diminution of the Trust Fund
resulting from any action taken or omitted.

     The Company hereby indemnifies the Trustee and holds it harmless from and against all losses,
damages, costs, expenses and liabilities (“Liabilities”), including reasonable attorneys fees and
other costs of litigation, to which the Trustee may become subject to, arising out of, occasioned
by, incurred in connection with or in any way associated with this Trust, except for any act or
omission due to its gross negligence or willful misconduct, including, without limiting the
generality of the foregoing, any claim or liability brought against the Trustee by the Company.

     If one or more Liabilities shall arise, or if the Company fails to indemnify the Trustee as
provided herein, or both, then the Trustee may engage counsel of the Trustee’s choice, but at
Company expense, either to conduct the defense against such Liabilities or to conduct such actions
as may be necessary to obtain the indemnity provided for herein, or to take both such actions.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 14          

 

 

     If the Trustee shall be entitled to indemnification by the Company pursuant to this Article
and this Trust and the Company shall not provide such indemnification on demand, the Trustee may
apply assets of the Trust in full satisfaction of the obligations for indemnity by the Company, and
any legal proceeding by the Trustee against the Company for such indemnification shall be on behalf
of the Trust.

     7.2 Advice of Counsel. The Trustee may consult with legal counsel, including counsel
to the Trustee and (except following a Change in Control) counsel to the Company with respect to
the construction of this Agreement, its duties hereunder, or any act it proposes to take or omit,
and shall not be liable for any action taken or omitted in good faith pursuant to such advice.
Expenses of such counsel shall be deemed to be expenses of management and administration of the
Trust and shall be paid by the Company and, if not promptly paid by the Company, charged to the
Trust.

ARTICLE VIII

RESIGNATION AND REMOVAL

     8.1 Resignation. The Trustee may resign on 60 days prior written notice to the
Company. Promptly after the resignation of the Trustee, the Company (or, if a Change in Control
shall previously have occurred, the Company with the approval of more than fifty percent (50%) of
the Participants) shall appoint a successor Trustee (the “Successor Trustee”), which shall be a
bank or trust company with a market capitalization of at least $10 billion. Such successor’s
appointment shall be effective as of the date of resignation of the Trustee. Any Successor Trustee
shall have the same powers and duties as those conferred upon the Trustee hereunder and the
appointment of the Successor Trustee shall be by a written instrument delivered to the Trustee
executed by the Company and the Successor Trustee.

     If the Trustee and the Participants are unable to agree on a successor thirty (30) days after
such notice, the Trustee shall be entitled, at the expense of the Company, to petition a United
States District Court or the court of a state having jurisdiction to appoint a successor.

     8.2 Removal. The Company (or if a Change in Control shall previously have occurred,
the Company with the approval of more than fifty percent (50%) of the Participants) may remove the
Trustee at any time by giving 90 days written notice to the Trustee. Upon removal the Company (or
if a Change in Control shall previously have occurred, the Company with the approval of more than
fifty percent (50%) of the Participants) shall appoint a Successor Trustee, which shall be a bank
or trust company with a market capitalization of at least $10 billion. Such removal shall be
effective as expressed in the notice. Such Successor Trustee shall have the same powers and duties
as those conferred upon the Trustee hereunder. The appointment of the Successor Trustee shall be
by a written instrument delivered to the Trustee executed by the Company and the Successor Trustee.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 15          

 

 

ARTICLE IX

CLAIMS OF COMPANY CREDITORS

CERTAIN TRANSACTIONS AND AMENDMENTS

     9.1 Insolvency. As used in this Article IX, the Company shall be deemed to be
“Insolvent” if (1) the Company is unable to pay its debts as they come due, or (2) the Company is
subject to a pending proceeding as a debtor under the United States Bankruptcy Code (or any
successor federal statute). In the event the Company shall be deemed Insolvent, the assets of the
Trust shall be subject to claims of general creditors of the Company (hereinafter referred to as
“Bankruptcy Creditors”), as hereinafter provided. Participants and Beneficiaries will be included
among the Bankruptcy Creditors to the extent their benefits are unpaid and to the extent provided
for by the United States Bankruptcy Code.

     9.2 Determination of Insolvency. If at any time a person claiming to be a creditor of
the Company or the Company alleges in writing to the Trustee that the Company has become Insolvent,
the Trustee shall independently determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payments of benefits under this Agreement, shall hold
the Trust Fund for the benefit of the Company’s Bankruptcy Creditors, and shall resume payments of
benefits under this Agreement in accordance with Article II hereof only after the Trustee has
determined that the Company is not Insolvent (or is no longer Insolvent, if the Trustee initially
determined the Company to be Insolvent) or upon receipt of an order of a court of competent
jurisdiction requiring such payments. The Chief Executive Officer of the Company shall be
obligated to give the Trustee prompt written notice in the event that the Company becomes Insolvent
with the same consequences as provided in the immediately preceding sentence. In determining
whether the Company is Insolvent, the Trustee may rely conclusively upon, and shall be protected in
relying upon, court records showing that the Company is Insolvent, a current report or statement
from a nationally recognized credit reporting agency showing that the Company is Insolvent or any
other evidence provided to the Trustee that provides the Trustee with a reasonable basis for making
a determination concerning the Company’s solvency. For purposes of this Agreement, knowledge and
information concerning the Company which is not in the possession of employees of the Trustee’s
Trust Department shall not be imputed to the Trustee (except to the extent that such information
can reasonably be imputed to the Trustee under normal bank procedures). The Trustee shall have no
duty or obligation to ascertain whether the Company is Insolvent unless and until it receives a
writing alleging that the Company is Insolvent as described in the first or second sentence of this
Section.

If the Trustee determines that the Company is Insolvent as provided above or has knowledge
that the Company is Insolvent, the Trustee shall discontinue payments to Participants and
Beneficiaries and shall hold the Trust Fund for the benefit of the Company’s Bankruptcy Creditors
and disburse the Trust Fund to satisfy such claims as a court of competent jurisdiction shall
direct. The Trustee shall as soon as practicable after making the determination of the Company’s
Insolvency invest all of the assets of the Trust Fund, with the exception of any insurance policies
that may be held in force, in short-term federal government securities or in a mutual fund invested
in such securities.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 16          

 

 

     Provided that there are sufficient assets, if the Trustee discontinues payment of benefits
pursuant to the first paragraph of this Section and subsequently resumes such payments, the payment
to a Participant or Beneficiary following such discontinuance shall include an aggregate amount
equal to the difference between the payments which would have been made to such Participant or
Beneficiary under this Agreement but for this Section and the aggregate payments actually made to
such Participant or Beneficiary by the Company during any such period of discontinuance.

     9.3 Company Obligations. If at any time an amount is paid from the Trust Fund to
Bankruptcy Creditors of the Company, the Company shall upon demand by the Trustee deposit into the
Trust Fund a sum equal to the amount paid by the Trust Fund to such Bankruptcy Creditors, to the
extent such amount has not been paid by the Company directly to Participants and Beneficiaries.

     9.4 Certain Transactions. The Company shall not engage in any transaction (or series
of transactions) with a Related Person (as defined below) or any affiliate or associate (as such
terms are defined in Rule 12b-2 under the Securities Exchange Act of 1934) of such Related Person
unless prior to such transaction, the Related Person (or, if there is more than one Related Person,
the Related Person which is the ultimate parent of the Related Persons, as determined by the
Trustee) either (i) guarantees the obligations of the Company pursuant to this Agreement, or (ii)
demonstrates to the satisfaction of the Trustee that the proposed transaction will not result
immediately after the transaction in a diminution of the Company’s net worth. If there shall be a
transaction with a Related Person or an affiliate or associate of such Related Person, the Company
shall notify the Trustee in writing within ten days following such transaction. The Trustee shall
thereupon determine if such transaction violates this Section. If the Trustee determines that the
transaction does violate this Section, the Trustee shall demand rescission. If rescission is not
made within 20 days following such demand, the Trustee shall take such action as it deems prudent
or advisable to recover payment. For purposes of this Section a Related Person shall mean any
person other than any employee benefit plan of the Company or its affiliates who directly or
indirectly (i) is or becomes the beneficial owner as defined in Rule 13d-3 and 13d-5 under the
Securities Exchange Act of 1934 of 10% or more of the total voting power represented by the
Company’s then outstanding voting securities, or (ii) engaged in a proxy contest as a result of
which one or more of such person’s nominees were elected to the Board of Directors of the Company.
Voting securities shall mean any securities of the Company having the right under ordinary
circumstances to vote at an election of the Board of Directors.

     9.5 Amendment. This Agreement may be amended any time and to any extent by a written
instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan, make the Trust revocable after it has become
irrevocable or retroactively change or deprive Participants or Beneficiaries of rights already
accrued under the Plan.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 17          

 

 

ARTICLE X

MISCELLANEOUS

     10.1 Governing Law. This Agreement and the Trust hereby created shall be construed
under and regulated by the laws of the State of North Carolina.

     10.2 Titles and Headings. The titles to Articles and the Section headings in this
Agreement are placed herein for convenience of reference only and in case of any conflict the text
of this Agreement, rather than such titles and headings, shall control.

     10.3 Affiliates. As used in this Agreement, the term “affiliate” as applied to the
Company or to the Trustee means any person or entity that directly, or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control with, the Company or
the Trustee, as the case may be.

     10.4 Assignment. This Agreement may not be assigned by either party without the prior
written consent of the other, and any purported assignment without such prior written consent shall
be null and void. This Agreement shall be binding upon the successors and permitted assigns of
each party hereto.

     10.5 Entire Agreement. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof and supersedes any and all prior agreements,
arrangements and understandings. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and legal representatives.

     10.6 Severability. In the event any provision of this Agreement shall be determined
by a court to be invalid or unenforceable the remainder of this Agreement shall not be affected
thereby.

[signature page follows]

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 18          

 

 

     IN WITNESS WHEREOF, the Company and Trustee have caused this Agreement to be executed by their
duly authorized officers and their respective seals to be hereunto affixed as of the date set forth
above.

	 	 	 	 	 
	Attest: 

 	 
	/s/ Sandy L. Jones
 	 
	 	 
	 	 
	 
	Attest: 

 	 
	/s/ Tracy C. Hartsell
 	 
	 	 
	 	 
	 

	 	 	 	 	 
	SONOCO PRODUCTS COMPANY

 	 
	By:  	/s/ Ritchie L. Bond                    [Seal]
 	 
	 	 	 
	 	 	 
	 
	WACHOVIA BANK, National Association

 	 
	By:  	/s/ D. Michael Hill                    [Seal]
 	 
	 	 	 
	 	 	 
	 

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 19          

 

 

APPENDIX I

     The following plans constitute the Plan as defined in this Trust and are covered under this
Agreement:

	1.	 	Omnibus Benefit Restoration Plan of Sonoco Products Company
	 
	2.	 	Deferred Compensation Plan for Key Employees of Sonoco Products Company
	 
	3.	 	Sonoco Products Company 2008 Long-Term Incentive Plan

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 20          

 

 

APPENDIX II

INVESTMENT GUIDELINES

	1.	 	During a Threatened Change in Control Period the Trustee shall invest the funds contributed in
accordance with Section 2.2 (b) in any of the following:

	 	a)	 	Direct obligations of the United States of America, or any agency thereof, or obligations
guaranteed by the United States of America, provided that such obligations mature within 90
days from the date of acquisition thereof;
	 
	 	b)	 	Acquisitions of certificates of deposit maturing within 90 days from the date of acquisition,
bankers’ acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case
issued by, created by, or with a bank or trust company organized under the laws of the United
States of America or any state thereof having capital and surplus aggregating at least
$100,000,000;
	 
	 	c)	 	Acquisitions of commercial paper given a rating of “A2” or better by Standard & Poor’s
Corporation or “P2” or better by Moody’s Investors Service, Inc. and maturing not more than 90
days from the date of creation thereof; or
	 
	 	d)	 	Investments in money market investment programs registered under the Investment Company Act
of 1940, as amended, which are administered by financial institutions having capital of at
least $500,000,000 and the portfolios of which are limited to Investments of the character
described in the foregoing clauses (a) through (c).

	2.	 	Subsequent to a Change in Control, the Trustee shall have discretion to invest the funds in a
manner that best satisfies its fiduciary duty to the Participants and Beneficiaries.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Trust Agreement for Executives
	 	Page 21EX-10.5

Exhibit 10.5

 

 

 

SONOCO PRODUCTS COMPANY

AMENDED AND RESTATED DIRECTORS DEFERRAL
TRUST AGREEMENT

As of

October 15, 2008

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE I	 	 	2	 
	 	1.1	 	 	Trust Fund
	 	 	 2	 
	 	1.2	 	 	Irrevocability
	 	 	 2	 
	 	1.3	 	 	Grantor Trust
	 	 	 2	 
	 	1.4	 	 	Separate and Apart
	 	 	 2	 
	 	1.5	 	 	Benefits Not Transferable
	 	 	 2	 
	 	1.6	 	 	Acceptance of Trust
	 	 	 3	 
	 	1.7	 	 	Additional Obligations
	 	 	 3	 
	 	1.8	 	 	Definitions
	 	 	 3	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II	 	 	4	 
	 	 	 	 	 
	 	 	 	 
	 	2.1	 	 	Initial Contributions
	 	 	 4	 
	 	2.2	 	 	Additional Contributions
	 	 	 4	 
	 	2.3	 	 	Credit Contributions
	 	 	 4	 
	 	2.4	 	 	Substitution of Assets
	 	 	 5	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	 	3.1	 	 	Benefit Entitlement
	 	 	 5	 
	 	3.2	 	 	Participant Information
	 	 	 5	 
	 	3.3	 	 	Company Responsibility
	 	 	 5	 
	 	3.4	 	 	Payment Due To Taxable Income
	 	 	 5	 
	 	3.5	 	 	Separate Accounting
	 	 	 6	 
	 	3.6	 	 	Company Reimbursement
	 	 	 6	 
	 	3.7	 	 	Initiation of Payment
	 	 	 6	 
	 	3.8	 	 	Following a Change of Control
	 	 	 7	 
	 	3.9	 	 	Return of Assets
	 	 	 8	 
	 	3.10	 	 	Excess Asset Determination
	 	 	 8	 
	 	3.11	 	 	Letter of Credit Funding on a Change of Control or Threatened Change of Control
	 	 	 9	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV	 	 	9	 
	 	 	 	 	 
	 	 	 	 
	 	4.1	 	 	Powers
	 	 	 9	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	 	5.1	 	 	Purchase of Contracts
	 	 	11	 
	 	5.2	 	 	Trustee Powers and Duties Over Contracts
	 	 	11	 
	 	5.3	 	 	Proceeds
	 	 	12	 
	 	5.4	 	 	Payments of Premiums, Assessments and Dues
	 	 	12	 
	 	5.5	 	 	Insurance Company Not Party
	 	 	12	 
	 	5.6	 	 	Contracts
	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	6.1	 	 	Trustee Records
	 	 	13	 
	 	6.2	 	 	Taxes
	 	 	13	 
	 	6.3	 	 	Compensation and Expenses
	 	 	13	 
	 	6.4	 	 	Judicial Settlement
	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	 	7.1	 	 	Reliance
	 	 	14	 
	 	7.2	 	 	Advice of Counsel
	 	 	15	 

     i     

 

 

	 	 	 	 	 	 	 	 	 
	ARTICLE VIII	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	 	8.1	 	 	Resignation
	 	 	15	 
	 	8.2	 	 	Removal
	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	 	9.1	 	 	Insolvency
	 	 	15	 
	 	9.2	 	 	Determination of Insolvency
	 	 	16	 
	 	9.3	 	 	Company Obligations
	 	 	17	 
	 	9.4	 	 	Certain Transactions
	 	 	17	 
	 	9.5	 	 	Amendment
	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	 	10.1	 	 	Governing Law
	 	 	17	 
	 	10.2	 	 	Titles and Headings
	 	 	17	 
	 	10.3	 	 	Affiliates
	 	 	17	 
	 	10.4	 	 	Assignment
	 	 	18	 
	 	10.5	 	 	Entire Agreement
	 	 	18	 
	 	10.6	 	 	Severability
	 	 	18	 

     ii     

 

 

SONOCO PRODUCTS COMPANY

AMENDED AND RESTATED

TRUST AGREEMENT

FOR EXECUTIVES

     AMENDED AND RESTATED AGREEMENT made as of October 15, 2008, by and between SONOCO PRODUCTS
COMPANY, a South Carolina corporation with an office in Hartsville, South Carolina, or any
successor corporation (hereinafter referred to as the “Company”) and WACHOVIA BANK, National
Association, a national banking association having an office at One West Fourth Street, NC 6251,
5th Floor, Winston-Salem, North Carolina 27101 (hereinafter referred to as the
“Trustee”).

W I T N E S S E T H:

     WHEREAS, the Company has adopted various plans outlined in Appendix I, and may in the future
adopt additional plans that provide for the deferral of directors’ fees or other benefits to past
and current members of the Board of Directors of the Company (collectively the “Plan”); and

     WHEREAS, the Company has incurred or expects to incur liability under the terms of the Plan to
or with respect to the individuals participating in the Plan or to the beneficiaries of the
participating individuals (hereinafter referred to as the “Participants” and “Beneficiaries”); and

     WHEREAS, the Plan contemplates that the Company will pay the entire cost of benefits from its
general assets and the obligations of the Company under the Plan, such benefits are not funded or
otherwise secured, and the Company desires to assure payment under the Plan; and

     WHEREAS, by trust agreement dated as of October 31, 1988, and amended as of February 7, 2001,
the Company established a trust arrangement (hereinafter referred to as the “Trust”), which was
intended to be a grantor trust as generally defined within the Internal Revenue Code of 1986 (the
“Code”) for the purpose of accumulating assets to assist the Company in fulfilling its obligations
under the Plan; to which Trust the Company has made or shall in the future make contributions in
the amounts determined by the Company’s Board of Directors in accordance with the terms of the
Trust; with the corpus and income of the Trust treated as assets and income of the Company for
federal income tax purposes; and

     WHEREAS, the Company desires to further amend and restate in its entirety such original trust
agreement, as amended; and

     WHEREAS, the Company desires that the Trustee hold and administer all funds contributed by the
Company, and the Trustee is willing to hold and administer such funds pursuant to the terms of this
Agreement; and

     WHEREAS, records of separate accounts (hereinafter referred to as “Accounts”) may be created
and maintained for each Participant in the Plan to provide a source of payments of the Company’s
obligations to Participants under the Plan; and

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	          

 

 

     WHEREAS, the Plan is administered by the Board of Directors of the Company or its designee
(hereinafter referred to as the “Committee”); and

     WHEREAS, the Company intends that the assets of the Trust shall at all times be subject to the
claims of creditors of the Company, as provided below, and that the existence of the Trust shall
not cause the Plan to become a funded employee benefit plan for purposes of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) and shall not be construed to provide taxable
income to any participant of the Plan prior to actual payment of benefits thereunder.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the Company and the Trustee do hereby covenant and agree as follows:

ARTICLE I

ESTABLISHMENT OF TRUST

     1.1 Trust Fund. The Trustee hereby accepts the assets constituting the initial trust
corpus contributed by the Company. The Trustee shall receive any contributions paid in cash or in
other acceptable property which shall be transferred to the Trustee by the Company. All such money
and other property, all investments and reinvestments made therewith or proceeds thereof and all
earnings and profits thereon, less all payments and charges shall constitute the Trust Fund. The
Trust Fund shall be held, managed and administered by the Trustee pursuant to the terms of this
Agreement. The Trustee shall not have a duty or responsibility with respect to the determination
of the amount of contributions to this Trust. The Trustee may maintain one or more separate
investment funds in the Trust.

     1.2 Irrevocability. The Company and the Trustee agree that the Trust created herein
shall be irrevocable after December 31, 1992.

     1.3 Grantor Trust. This Trust is intended to be a grantor trust under Section 671 of
the Code and shall be construed accordingly. All interest and other income earned on the
investment of this Trust shall for such purposes be the property of, and taxable to, the Company.
All taxes on or with respect to the Trust shall be payable by the Company from its separate funds
and shall not be a charge against the Trust.

     1.4 Separate and Apart. The Trust shall be held separate and apart from
other funds of the Company and shall be used exclusively for the uses and purposes herein set
forth. Neither the Plan nor any Participant or Beneficiary shall have any preferred claim on, or
any beneficial ownership interest in, any assets of the Trust prior to the time such assets are
payable to the Participant or Beneficiary.

     1.5 Benefits Not Transferable. No right or interest to receive a benefit from the
Trust may be assigned, sold, anticipated, alienated or otherwise transferred by a Participant or
Beneficiary. Any rights created under the Plan and this Trust shall be mere unsecured contractual
rights of Participants and Beneficiaries against the Company. Any assets held by the Trust will
be subject to the claims of the Company’s general creditors under federal and state law in the
event of Insolvency.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 2          

 

 

     1.6 Acceptance of Trust. The Trustee accepts the Trust established under this
Agreement on the terms and subject to the provisions set forth herein, and it agrees to discharge
and perform fully and faithfully all of the duties and obligations imposed upon it under this
Agreement.

     1.7 Additional Obligations. The Company has provided or will provide the Trustee with
true and correct copies of the Plans, and all amendments thereto, to be attached hereto, as
Appendix I. The Company may add plans to this Trust, by amending Appendix I and
notifying the Trustee in writing, provided such additional plans are subject to the terms of this
Agreement. Provided, however, that following a Change in Control or during a Threatened Change in
Control Period, the Company may not add plans to this Agreement, add participants to the Payment
Schedule, increase payments under the Payment Schedule, or amend any plan covered by this Trust
which would increase the accrued benefits payable under this Trust unless it makes a contribution
to the Trust sufficient to pay the benefits arising under such plans or changes, plus reasonably
anticipated Trustee’s fees relating to such plans. Such funding calculation shall be in the same
manner as set forth in Section 2.2(b) below. Benefits under any such plans or changes and
additional contributions related to such benefits shall be segregated from other liabilities and
assets of the Trust and payable only from such segregated additional assets provided in accordance
with this Section.

     1.8 Definitions.

          (a) “Affiliate” shall mean any corporation, partnership or other entity, the majority interest
in which is held by the Company directly or through one or more intermediaries.

          (b) The “Board” shall mean the Board of Directors of the Company.

          (c) “Company” shall have the meaning assigned to such term in the introductory paragraph.

          (d) “Participants” shall mean active and former directors and employees of the Company and/or
of its Affiliates eligible for a benefit under the Plan.

          (e) “Threatened Change in Control” shall occur when:

               (1) a corporation, person or group initiates a tender offer to acquire such number of shares
as would result in such corporation, person or group holding twenty-five percent (25%) or more of
the voting power of the Company’s outstanding common shares; or

               (2) the Board notifies the Trustee in writing that it has determined that a Change in Control
is imminent.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 3          

 

 

          (f) “Threatened Change in Control Period” shall mean the period beginning on the date a
Threatened Change in Control commences and ending on the earliest of:

               (1) The date when a corporation, person or group shall have abandoned the tender offer;

               (2) The date the Board shall have notified the Trustee in writing that a Change in Control is
no longer imminent when the Threatened Change in Control Period has commenced by reason of a
written notification by the Board; or

               (3) The date a Change in Control (as defined in Section 3.7) occurs.

ARTICLE II

CONTRIBUTIONS

     2.1 Initial Contributions. The Company shall promptly after the execution
and delivery of this Agreement, transfer to the Trustee assets to form the corpus of the Trust as
determined by the Company.

     2.2 Additional Contributions.

          (a) The Company, in its sole discretion, may at any time, or from time to time, make
additional contributions of cash or other property to the Trustee to augment the principal to be
held, administered and disposed of by the Trustee as provided in this Agreement. Neither the
Trustee nor any Participant or Beneficiary shall have the right to compel such discretionary
additional deposits.

          (b) Upon a Change in Control or Threatened Change in Control (the “Funding Trigger Date”), the
Company shall, as soon as possible, but in no event later than ten (10) days following the Change
in Control or, if sooner, thirty (30) days following the commencement of the Threatened Change in
Control Period, make a contribution to the Trust such that the total assets in the Trust equal 100%
of the benefit obligation for the Plans (as of the date of a Change in Control or, if earlier, the
beginning of the Threatened Change in Control Period), plus reasonably anticipated Trustee’s fees.

The Trustee shall invest such contributed funds in accordance with the investment guidelines
attached hereto.

     2.3 Credit Contributions. Company contributions to the Trust may be in the form of an
irrevocable letter of credit or irrevocable letters of credit (“Credit”). Such Credit shall be in a
form reasonably acceptable to the Trustee.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 4          

 

 

     2.4 Substitution of Assets. At any time prior to a Change in Control or Threatened
Change in Control, the Company shall have the right at any time and from time to time, in its sole
discretion, to substitute assets of equal fair market value for any asset held by the Trust. This
right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of
any person in a fiduciary capacity. Following a Change in Control or Threatened Change in Control,
substitution of assets must be acceptable to the Trustee and not detrimental to the interests of
the Participants and Beneficiaries.

ARTICLE III

PAYMENTS FROM THE TRUST FUND

     3.1 Benefit Entitlement. At the time a Participant or Beneficiary is entitled to
payment under the Plan, such Participant or Beneficiary shall be entitled to receive from the Trust
an amount in cash equal to (i) the amount to which he is entitled under the Plan at such time, less
(ii) any payments previously made to him by the Company with respect to such amount under the terms
of the Plan. Unless otherwise provided herein, the Trustee shall pay such amount to the
Participant or Beneficiary as directed by the Company or as the Participant or Beneficiary may
otherwise be eligible and application is made in conformity with this Article.

     3.2 Participant Information. The Company shall deliver to the Trustee a schedule of
benefits (the “Payment Schedule”), to include state and federal tax withholding guidelines, due
under the Plan on an annual basis. Immediately after a Change in Control, the Company shall
deliver to the Trustee an updated schedule of benefits due under the Plan. Upon payment to a
Participant or Beneficiary, the Trustee shall make payment of all withholding taxes to the
appropriate taxing authority and shall furnish each Participant or Beneficiary or person receiving
benefits with respect to the Participant or Beneficiary with the appropriate tax information form
evidencing such payment and the amount thereof.

     3.3 Company Responsibility. Notwithstanding the provisions of this Article III, the
Company shall remain obligated to pay benefits under the Plan or Plans. To the extent the amount
in a Participant’s or Beneficiary’s Account or Accounts is not sufficient to pay any and all
benefits under the applicable Plan when due, the Company shall pay such benefits directly. In the
event of such a funding shortfall, the Trustee shall make payments under the Plan as such payments
come due until the Participant’s Account or Beneficiary’s Account, if applicable, has been reduced
to zero.

     3.4 Payment Due To Taxable Income. In the event the Internal Revenue Service issues a
deficiency notice to any individual entitled to benefits under the terms of the Plan covered by
this Trust stating that such individual is subject to any tax by reason of any interest in the
Trust in a calendar year prior to the calendar year of his receipt of such benefits, then the
Trustee upon presentation of the deficiency notice and written direction from the Participant or
Beneficiary shall distribute to such individual the amount which has been determined to be taxable
income to the individual.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 5          

 

 

     3.5 Separate Accounting. The Payment Schedule may be maintained to reflect the
interest of each Participant or Beneficiary in the Trust. The Company may identify at the time any
contribution is made to the Trust how such contribution shall be credited to the Account of any
Participant or Beneficiary shown in the Payment Schedule. Prior to a Change in Control, the
Company (or its agents) may adjust such accounts to reflect investment experience, expenses,
distributions and subsequent contributions. Following a Change in Control, the Trustee may perform
the duties reflected in the preceding sentence. After all obligations with respect to a Participant
or Beneficiary have been fully satisfied, any remaining amounts allocated to his Account shall be
reallocated among other Participants and Beneficiaries Accounts in accordance with directions from
the Company.

     The Company shall indemnify and hold harmless the Trustee for any liability or expenses,
including without limitation reasonable attorney’s fees, incurred by the Trustee with respect to
maintaining the subaccounts for Participants’ and Beneficiaries’ Accounts, any reporting thereon to
Participants or Beneficiaries, certifying benefit or payment information, determining the status of
Accounts and benefits hereunder and otherwise carrying out its obligations in maintaining the
subaccounts under this Agreement, other than those resulting from the Trustee’s gross negligence
or willful misconduct.

     3.6 Company Reimbursement. The Company may make payment of benefits directly to a
Participant or Beneficiary as they become due under the terms of the Plan. The Company shall notify
the Trustee of its decision to make payment of benefits directly prior to the time amounts are
payable to a Participant or Beneficiary. Before a Threatened Change in Control or Change in
Control, the Company may direct the Trustee in writing to reimburse the Company from the Trust
assets, and debit the account of each Participant or Beneficiary, for amounts paid directly to the
Participant or Beneficiaries by the Company. The Trustee shall reimburse the Company for such
payments promptly after receipt by the Trustee of satisfactory evidence that the Company has made
the direct payments. No such reimbursement shall be allowed upon or during a Threatened Change in
Control or after a Change in Control that would result in Trust assets equaling less than the
funding levels outlined in Section 2.2 (b).

     3.7 Initiation of Payment. Prior to a Change in Control, the Trustee shall commence
or continue payments from the Plan to a Participant or Beneficiary upon the occurrence of one or
more of the following events:

          (i) an instruction from the Company in a form or manner reasonably acceptable to the Trustee;
or

          (ii) other evidence presented by a Participant or Beneficiary of eligibility to commence or
continue receiving benefits in accordance with the Plan, in a form or manner reasonably acceptable
to the Trustee, and with such evidence as the Trustee deems necessary to prove eligibility for
benefits.

Upon a demand of the Participant or Beneficiary, the Trustee shall immediately notify the Company
of the demand and the intended action of the Trustee as to payment. The Company shall have a
period of fifteen business days from such notification to object to such intended action. Barring

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 6          

 

 

objection, the Trustee shall take its intended action at the close of this 15 day period. If the
Company files an objection, the Trustee shall resolve the issue using such means as are
appropriate, including, but not limited to requiring additional evidence from either or both the
Company and the Participant or Beneficiary and hiring any outside advisors it deems necessary. If
the Company files an objection to a demand for payment, payment will be made if the Trustee is
satisfied with the Participant’s or Beneficiary’s eligibility for benefits. The cost of this
process shall be borne by the Company. However, in the event the Company refuses to pay to the
Trustee the cost of the process, the Trustee may charge the Trust and demand reimbursement from the
Company. If such demand is not met, the Trustee may proceed with a collection action against the
Company.

     3.8 Following a Change in Control.

          (a) A “Change in Control” shall be deemed to have occurred if (i) any person or group of
persons within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 is or becomes
the beneficial owner, directly or indirectly, of 25% or more of the common stock of the Company,
(ii) during any period of 24 consecutive months, individuals who at the beginning of such period
constituted the Board of Directors of the Company, cease for any reason to constitute at least a
majority of the Board of Directors of the Company, or (iii) the stockholders of the Company, shall
approve a merger, consolidation or dissolution of the Company or a sale, lease, or exchange of all
or substantially all its assets.

          (b) Following a Change in Control, the Trustee shall, without direction from the Company, to
the extent designated funds are available from the Accounts of Participants or Beneficiaries, make
payments to Participants and Beneficiaries in such manner and in such amounts as the Trustee shall
determine they are entitled to be paid under the Plans based on the most recent Payment Schedule
and the terms of the appropriate Plan, provided that such payment obligations shall be fixed as of
the date of the Change in Control and shall not include any obligations or liabilities that are not
listed on the most recent Payment Schedule or that accrue after the Change in Control, except as
provided in Section 1.7 herein. A Participant or Beneficiary who believes he is eligible or
entitled to benefits under the Plan may apply directly to the Trustee for payment of such benefits.
Such application shall advise the Trustee of the information and circumstances which entitles such
Participant or Beneficiary to payments of such benefit.

     The Trustee shall make its own independent determination as to the Participant’s or
Beneficiary’s entitlement to benefits, even though the Trustee may be informed from another source
(including the Company) that payments are not due under the Plan or that a distribution called for
by the Payment Schedule and Plan should not be made. If the Trustee so desires, it may, in its
sole discretion, make such additional inquiries and take such additional measures as it deems
necessary in order to enable it to determine whether benefits are due and payable, including, but
not limited to, interviewing appropriate persons, requesting affidavits, soliciting oral or written
testimony under oath, or holding a hearing or other proceeding. The Trustee shall make its
determination whether benefits are payable as promptly as possible.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 7          

 

 

     The Trustee may engage its own counsel or other experts to assist it in making its
determination. The cost of such counsel or other expert assistance, and any other costs reasonably
incurred by the Trustee in making its determination, shall be borne by the Company. Trustee
expenses in making such determination shall be extraordinary expenses for which compensation in
addition to normal fees shall be due and payable. If the Company fails to pay any such fees and
expense when due, the Trustee may use the assets of the Trust to pay the fees and expense and
demand reimbursement from the Company. If such demand is not met the Trustee may proceed with a
collection action on behalf of the Trust against the Company.

     Following a Change in Control and during a Threatened Change in Control, the Trustee shall owe
its fiduciary duties to the Participants and Beneficiaries and shall exercise its powers hereunder
for the sole benefit of such Participants and Beneficiaries.

     Within thirty (30) days after a Change in Control, the Trustee shall notify all Participants
and Beneficiaries who are entitled to receive benefits under the Plans, in writing, of the
Trustee’s availability to aid them in pursuing any claims they may have for benefits under the
terms of those Plans under which they are covered. The Trustee shall provide such notice by using
such method or methods of delivery likely to result in full distribution. Materials sent through
the mail shall be sent by first class mail to the address of the Participant or Beneficiary listed
on the Payment Schedule. In addition, the Trustee may, at its option, provide such notification by
placing an advertisement in one newspaper of general circulation in each of the ten locations in
which the largest number of employees of the Company and its Affiliates are located as communicated
by the Company to the Trustee prior to a Change in Control.

     3.9 Return of Assets.

          (a) Prior to termination of the Trust, except (i) following a Change in Control or (ii) during
a Threatened Change in Control Period, the Trustee shall, upon the Company’s written request,
deliver all or any portion of the trust assets to the Company, and allow the cancellation of any
Credits previously contributed to the Trust, leaving a minimum corpus of $100.

          (b) Following a Change in Control, if the assets of the Trust Fund exceed the value (as
determined under generally accepted accounting principles) of the amount which would be payable to
all Participants and Beneficiaries in the Plan if all such persons were to become immediately
entitled to receive all benefits reflected on the Payment Schedule (the amount of such excess being
referred to as the “Excess Assets”), the Trustee shall, upon the Company’s written request, deliver
all or any portion of such Excess Assets to the Company.

     3.10 Excess Asset Determination. The Trustee shall determine in its sole discretion
the amount of any Excess Assets and whether any Excess Assets shall be delivered to the Company in
accordance with Section 3.8(b) above. The Company shall provide to the Trustee such information as
the Trustee shall reasonably request, and the Trustee shall be fully protected in acting on such
information.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 8          

 

 

     3.11 Letter of Credit Funding on a Change in Control or Threatened Change in Control.

          (a) In the event of a Change in Control or Threatened Change in Control, the Company may fund
part or all of its obligation under Section 2.2 through contribution of Credits and the
Trustee may draw on a Credit as it shall determine in its sole discretion.

          (b) If after a Change in Control or Threatened Change in Control, the Trustee receives written
notice from the Bank which issued a Credit, referencing the Credit by number, signed by an officer
of such Bank, and stating that such Credit is due to expire and has not been extended, then the
Trustee shall draw on such Credit to the full extent thereof at any time during the ten business
days prior to the expiration of such Credit unless: (1) prior to taking such action, the Trustee
has received a copy of a replacement letter of credit executed by the bank issuing a replacement
letter of credit in at least the amount of the Credit which is due to expire, or (2) the Trustee
has received a contribution from Company equal to the amount of the Credit which is due to expire.

          (c) Any direction to Wachovia pursuant to this Section shall be addressed as follows:

			
	                    	 	Wachovia Bank, National Association

Attn: Executive Benefits Group/Sonoco Products Company NC6251

One West Fourth Street

Winston-Salem, NC 27101

     All directions shall plainly reference the Plan and the Trust and provide all necessary
information for the Trustee to act.

          (d) The Trustee shall draw on any Credit only if and to the extent specifically directed or
provided for in the foregoing provisions of this Agreement. In the event that the Trustee shall
resign or be removed, and a successor trustee shall be appointed hereunder, the rights and
obligations of the Trustee under each Credit shall automatically become the rights and obligations
of the successor trustee, and the Trustee shall have no further rights, duties, obligations or
liabilities with respect to any Credit.

ARTICLE IV

TRUSTEE POWERS AND AUTHORITY

     4.1 Powers. Subject to investment guidelines agreed to in writing from time to time
by the Company and the Trustee, attached hereto as Appendix II, the Trustee shall have the
following powers and authority in the administration of the Trust:

          (a) To purchase or subscribe for any securities, including but not limited to securities of
the Company, or other property and to retain in trust such securities or other property.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 9          

 

 

          (b) To sell for cash or on credit at public or private sale, exchange, convey, transfer or
dispose of, to grant options, convert, securities or other property held at any time and to collect
and receive any and all money and other property due the Trust and to give a full discharge
therefor.

          (c) To settle, compromise or submit to arbitration, any claims, debts or damages, due or owing
to or from the Trust, to commence or defend suits or legal proceedings and to represent the Trust
in all suits or legal proceedings.

          (d) To exercise any conversion privilege and/or subscription right available in connection
with any securities or other property at any time held; to oppose or to consent to the
reorganization, consolidation, merger, or readjustment of the finances of any corporation, company
or association or to the sale, mortgage, pledge or lease of the property of any corporation,
company or association any of the securities of which may at any time be held and to do any act
with reference thereto, including the exercise of options, the making of agreements or
subscriptions, which may be deemed necessary or advisable in connection therewith, and to hold and
retain any securities or other property so acquired.

          (e) To exercise, personally or by general or by limited power of attorney, any right,
including the right to vote, appurtenant to any securities or other property held at any time.

          (f) To borrow money from any lender in such amounts and upon such terms and conditions as
shall be deemed advisable or proper to carry out the purposes of the Trust and to pledge any
securities or other property for the repayment of any such loan.

          (g) To hold part or all of the Trust uninvested.

          (h) To form corporations and to create trusts and appoint ancillary trustees to hold title to
any securities or other property, all upon such terms and conditions as may be deemed advisable.

          (i) To employ suitable agents and counsel and to pay their reasonable expenses and
compensation.

          (j) To register any securities held hereunder in the name of the Trustee or in the name of a
nominee with or without the addition of words indicating that such securities are held in a
fiduciary capacity.

          (k) To make, execute and deliver, as Trustee, any and all conveyances, contracts, waivers,
releases or other instruments in writing necessary or proper for the accomplishment of any of the
foregoing powers.

          (l) To invest and reinvest all or any specified portion of the Trust through the medium of a
mutual fund which has been or may hereafter be established and maintained by the
Trustee.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 10          

 

 

          (m) To determine how all receipts and disbursements shall be credited, charged or apportioned
as between income and principal, and the decision of the Trustee shall be final and not subject to
question by the Company or any Participant or Beneficiary.

          (n) To take any and all actions necessary to collect funds under a Letter of Credit as more
fully described within this Agreement.

          (o) Following a Change in Control, to have the sole and absolute discretion in the management
of the Trust assets including the powers set forth in this Section 4.1. In investing the Trust
assets, the Trustee shall consider:

               (1) the needs of the Plan;

               (2) the need for matching of the Trust assets with the liabilities of the Plan; and

               (3) the duty of the Trustee to act solely in the best interests of the Participants and their
Beneficiaries.

          (p) To do all acts, whether or not expressly authorized, which the Trustee may deem necessary
or desirable for the protection of the Trust.

ARTICLE V

INSURANCE AND ANNUITY CONTRACTS

     5.1 Purchase of Contracts. The Trustee, upon written direction of the Company prior
to a Change in Control, shall pay from the Trust such sums to such insurance company or companies
as the Company may direct for the purpose of procuring participating or nonparticipating insurance
and/or annuity contracts for the Plans (hereinafter referred to as “Contracts”). The Company shall
prepare, or cause to be prepared in such form as it shall prescribe, the application for any
Contract. The Trustee shall receive and hold in the Trust all Contracts so obtained.

     5.2 Trustee Powers and Duties Over Contracts. The Trustee shall be the complete and
absolute owner of Contracts held in the Trust and, upon written direction of the Company prior to a
Change in Control, shall have power, without the consent of any other person, to exercise any and
all of the rights, options or privileges that belong to the absolute owner of any Contract held in
the Trust or that are granted by the terms of any such Contract or by the terms of this Agreement.
Prior to a Change in Control, the Trustee shall have no discretion with respect to the exercise of
any of the foregoing powers or to take any other action permitted by any Contract held in the
Trust, but shall exercise such powers or take such action only upon the written direction of the
Company and the Trustee shall have no duty to exercise any of such powers or to take any such
action unless and until it shall have received such direction. After a Change in Control, the
Trustee shall exercise,

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 11          

 

 

without directions from the Company, any and all of the rights, options or privileges that belong
to the absolute owner of any Contract held in the Trust or that are granted by the terms of any
such Contract or by the terms of this Agreement. The Trustee, upon the written direction of the
Company prior to a Change in Control, shall deliver any Contract held in the Trust to such person
or persons as may be specified in the direction.

     5.3 Proceeds. The Trustee shall hold in the Trust the proceeds of any sale,
assignment or surrender of any Contract held in the Trust and any and all dividends and other
payments of any kind received in respect of any Contract held in the Trust.

     5.4 Payments of Premiums, Assessments and Dues. Upon the written direction of the
Company prior to a Change in Control, the Trustee shall pay from the proper Account premiums,
assessments, dues, charges and interest, if any, upon any Contract held in the Trust. The Trustee
shall have no duty to make any such payment unless and until it shall have received such direction.
After a Change in Control, the Trustee shall, in its discretion, pay from the proper Account
premiums, assessments, dues, charges and interest, if any, upon any Contract held in the Trust,
without direction from the Company.

     5.5 Insurance Company Not Party. Any insurance company that may issue any Contract or
Contracts held in the Trust shall not be deemed to be a party to this Agreement for any purpose, or
to be responsible in any way for the validity of this Agreement or to have any liability under this
Agreement other than as stated in each Contract that it may issue. Any insurance company may deal
with the Trustee as sole owner of any Contract issued by it and held in the Trust, without inquiry
as to the authority of the Trustee to act, and may accept and rely upon any written notice,
instruction, direction, certificate or other communication from the Trustee believed by the
insurance company to be genuine and to be signed by an officer of the Trustee and shall incur no
liability or responsibility for so doing. Any sums paid out by any insurance company under any of
the terms of a Contract issued by the insurance company and held in the Trust either to the
Trustee, or, in accordance with the direction of the Trustee, to any other person or persons
designated as payees in such Contract shall be a full and complete discharge of the liability to
pay such sums, and the insurance company shall have no obligation to look to the disposition of any
sums so paid. No insurance company shall be required to look into the terms of this Agreement, to
question any action of the Trustee or to see that any action of the Trustee is authorized by the
terms of this Agreement.

     5.6 Contracts. Anything contained herein to the contrary notwithstanding, neither the
Company nor the Trustee shall be liable for the refusal of any insurance company to issue or change
any Contract or Contracts or to take any other action requested by the Trustee; nor for the form,
genuineness, validity, sufficiency or effect of any Contract or Contracts held in the Trust; nor
for the act of any person or persons that may render any such Contract or Contracts null and void;
nor for the failure of any insurance company to pay the proceeds and avails of any such Contract or
Contracts as and when the same shall become due and payable; nor for any delay in payment resulting
from any provision contained in any such Contract or Contracts; nor for the fact that for any
reason whatsoever (other than their own negligence or willful misconduct) any
Contract or Contracts shall lapse or otherwise become uncollectible.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 12          

 

 

ARTICLE VI

TRUSTEE RECORDS, COMPENSATION AND EXPENSES OF TRUSTEE

     6.1 Trustee Records. The Trustee shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder, and all accounts, books and
records relating thereto shall be open to inspection and audit at all reasonable times by any
person designated by the Company. Within 90 days after the close of each fiscal year (or such
other date as may be agreed upon in writing between the Company and the Trustee), and within 120
days after the effective date of the resignation of the Trustee, the Trustee shall file with the
Company a written account setting forth all investments, receipts, disbursements and other
transactions effected by the Trustee during the year ending on such date (but not including any
part of such year for which such an account has previously been filed) and certified as to the
accuracy of the information set forth therein. Such account may incorporate by reference any and
all schedules and other statements setting forth investments, receipts, disbursements and other
transactions effected during the period for which such account is rendered which the Trustee has
furnished to the Company prior to the filing of such account. Each account so filed (and copies of
any schedules and statements incorporated therein by reference as aforesaid) shall be open to
inspection during business hours by any Participant or Beneficiary and any person designated by
such Participant or Beneficiary for a period of 60 days immediately following the date on which the
account is filed with the Company. The Company may approve such accounts by an instrument in
writing delivered to the Trustee. In the absence of the filing in writing with the Trustee by the
Company of exceptions or objections to any such account within 90 days, the Company shall be deemed
to have approved such account; and in such case, or upon the written approval of the Company of any
such account, the Trustee shall be released, relieved and discharged with respect to all matters
and things set forth in such account as though such account had been settled by the decree of a
court of competent jurisdiction.

     6.2 Taxes. The Company shall pay all taxes of any and all kinds levied or assessed
under existing or future laws against the Trust. If requested by the Company, the Trustee shall,
at Company expense, contest the validity of such taxes in any manner deemed appropriate by the
Company or its counsel, after the Trustee receives an indemnity bond or other security satisfactory
to it to pay any expense of such contest.

     6.3 Compensation and Expenses. The Trustee shall be paid such reasonable compensation
by the Company in accordance with the Trustee’s regular schedule of fees for trust services as
shall from time to time be in effect unless otherwise agreed to by the Company and the Trustee.
The Trustee shall charge on the basis of hours for making the determination under Section 3.7 or
under Section 3.8. The Trustee shall be reimbursed by the Company for its reasonable expenses of
management and administration of the Trust, including reasonable compensation of fees of counsel
and any agent engaged by the Trustee to assist it in such management and administration. Such
compensation and all expenses and fees of administration of the Trust shall be withdrawn by the
Trustee out of the Trust unless promptly paid by the Company on demand. In the event the Trustee
must satisfy its obligations from the Trust, the Company shall immediately on
demand from the Trustee, deposit into the Trust a sum equal to the amount paid by the Trust for
such fees and expenses. In the event such demand is not met the Trustee may proceed with a
collection action against the Company.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 13          

 

 

     6.4 Judicial Settlement. Notwithstanding the foregoing the Trustee or the Company may
apply at any time for a judicial settlement of the Trustee’s Account.

ARTICLE VII

PROTECTION OF THE TRUSTEE

     7.1 Reliance. The Trustee shall be fully protected in relying upon a certification of
an authorized representative of the Company with respect to any instruction, direction or approval
of the Company, and protected also in relying upon the certification until a subsequent
certification is filed with the Trustee.

     The Trustee shall be fully protected in acting upon any instrument, certificate, or paper
believed by it to be genuine and to be signed or presented by the proper person or persons, and the
Trustee shall be under no duty to make any investigation or inquiry as to any statement contained
in any such writing but may accept the same as conclusive evidence of the truth and accuracy of the
statements therein contained.

     The Trustee shall not be liable for the proper application of any part of the Trust Fund if
distributions are made in accordance with the terms of the Plan or the information otherwise
furnished to the Trustee or the Company.

     The Trustee shall not be liable hereunder for any loss or diminution of the Trust Fund
resulting from any action taken or omitted.

     The Company hereby indemnifies the Trustee and holds it harmless from and against all losses,
damages, costs, expenses and liabilities (“Liabilities”), including reasonable attorneys fees and
other costs of litigation, to which the Trustee may become subject to, arising out of, occasioned
by, incurred in connection with or in any way associated with this Trust, except for any act or
omission due to its gross negligence or willful misconduct, including, without limiting the
generality of the foregoing, any claim or liability brought against the Trustee by the Company.

     If one or more Liabilities shall arise, or if the Company fails to indemnify the Trustee as
provided herein, or both, then the Trustee may engage counsel of the Trustee’s choice, but at
Company expense, either to conduct the defense against such Liabilities or to conduct such actions
as may be necessary to obtain the indemnity provided for herein, or to take both such actions.

     If the Trustee shall be entitled to indemnification by the Company pursuant to this Article
and this Trust and the Company shall not provide such indemnification on demand, the Trustee may
apply assets of the Trust in full satisfaction of the obligations for indemnity by the Company, and
any legal proceeding by the Trustee against the Company for such indemnification shall be on
behalf of the Trust.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 14          

 

 

     7.2 Advice of Counsel. The Trustee may consult with legal counsel, including counsel
to the Trustee and (except following a Change in Control) counsel to the Company with respect to
the construction of this Agreement, its duties hereunder, or any act it proposes to take or omit,
and shall not be liable for any action taken or omitted in good faith pursuant to such advice.
Expenses of such counsel shall be deemed to be expenses of management and administration of the
Trust and shall be paid by the Company and, if not promptly paid by the Company, charged to the
Trust.

ARTICLE VIII

RESIGNATION AND REMOVAL

     8.1 Resignation. The Trustee may resign on 60 days prior written notice to the
Company. Promptly after the resignation of the Trustee, the Company (or, if a Change in Control
shall previously have occurred, the Company with the approval of more than fifty percent (50%) of
the Participants) shall appoint a successor Trustee (the “Successor Trustee”), which shall be a
bank or trust company with a market capitalization of at least $10 billion. Such successor’s
appointment shall be effective as of the date of resignation of the Trustee. Any Successor Trustee
shall have the same powers and duties as those conferred upon the Trustee hereunder and the
appointment of the Successor Trustee shall be by a written instrument delivered to the Trustee
executed by the Company and the Successor Trustee.

     If the Trustee and the Participants are unable to agree on a successor thirty (30) days after
such notice, the Trustee shall be entitled, at the expense of the Company, to petition a United
States District Court or the court of a state having jurisdiction to appoint a successor.

     8.2 Removal. The Company (or if a Change in Control shall previously have occurred,
the Company with the approval of more than fifty percent (50%) of the Participants) may remove the
Trustee at any time by giving 90 days written notice to the Trustee. Upon removal the Company (or
if a Change in Control shall previously have occurred, the Company with the approval of more than
fifty percent (50%) of the Participants) shall appoint a Successor Trustee, which shall be a bank
or trust company with a market capitalization of at least $10 billion. Such removal shall be
effective as expressed in the notice. Such Successor Trustee shall have the same powers and duties
as those conferred upon the Trustee hereunder. The appointment of the Successor Trustee shall be
by a written instrument delivered to the Trustee executed by the Company and the Successor Trustee.

ARTICLE IX

CLAIMS OF COMPANY CREDITORS

CERTAIN TRANSACTIONS AND AMENDMENTS

     9.1 Insolvency. As used in this Article IX, the Company shall be deemed to be
“Insolvent” if (1) the Company is unable to pay its debts as they come due, or (2) the Company is
subject to a pending proceeding as a debtor under the United States Bankruptcy Code (or any
successor federal statute). In the event the Company shall be deemed Insolvent, the assets of the
Trust shall be subject to claims of general creditors of the Company (hereinafter referred to as
“Bankruptcy Creditors”), as hereinafter provided. Participants and Beneficiaries will be included
among the Bankruptcy Creditors to the extent their benefits are unpaid and to the extent provided
for by the United States Bankruptcy Code.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 15          

 

 

     9.2 Determination of Insolvency. If at any time a person claiming to be a creditor of
the Company or the Company alleges in writing to the Trustee that the Company has become Insolvent,
the Trustee shall independently determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payments of benefits under this Agreement, shall hold
the Trust Fund for the benefit of the Company’s Bankruptcy Creditors, and shall resume payments of
benefits under this Agreement in accordance with Article II hereof only after the Trustee has
determined that the Company is not Insolvent (or is no longer Insolvent, if the Trustee initially
determined the Company to be Insolvent) or upon receipt of an order of a court of competent
jurisdiction requiring such payments. The Chief Executive Officer of the Company shall be
obligated to give the Trustee prompt written notice in the event that the Company becomes Insolvent
with the same consequences as provided in the immediately preceding sentence. In determining
whether the Company is Insolvent, the Trustee may rely conclusively upon, and shall be protected in
relying upon, court records showing that the Company is Insolvent, a current report or statement
from a nationally recognized credit reporting agency showing that the Company is Insolvent or any
other evidence provided to the Trustee that provides the Trustee with a reasonable basis for making
a determination concerning the Company’s solvency. For purposes of this Agreement, knowledge and
information concerning the Company which is not in the possession of employees of the Trustee’s
Trust Department shall not be imputed to the Trustee (except to the extent that such information
can reasonably be imputed to the Trustee under normal bank procedures). The Trustee shall have no
duty or obligation to ascertain whether the Company is Insolvent unless and until it receives a
writing alleging that the Company is Insolvent as described in the first or second sentence of this
Section.

If the Trustee determines that the Company is Insolvent as provided above or has knowledge that the
Company is Insolvent, the Trustee shall discontinue payments to Participants and Beneficiaries and
shall hold the Trust Fund for the benefit of the Company’s Bankruptcy Creditors and disburse the
Trust Fund to satisfy such claims as a court of competent jurisdiction shall direct. The Trustee
shall as soon as practicable after making the determination of the Company’s Insolvency invest all
of the assets of the Trust Fund, with the exception of any insurance policies that may be held in
force, in short-term federal government securities or in a mutual fund invested in such securities.

     Provided that there are sufficient assets, if the Trustee discontinues payment of benefits
pursuant to the first paragraph of this Section and subsequently resumes such payments, the payment
to a Participant or Beneficiary following such discontinuance shall include an aggregate amount
equal to the difference between the payments which would have been made to such Participant or
Beneficiary under this Agreement but for this Section and the aggregate payments actually made to
such Participant or Beneficiary by the Company during any such period of discontinuance.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 16          

 

 

     9.3 Company Obligations. If at any time an amount is paid from the Trust Fund to
Bankruptcy Creditors of the Company, the Company shall upon demand by the Trustee deposit into the
Trust Fund a sum equal to the amount paid by the Trust Fund to such Bankruptcy Creditors, to the
extent such amount has not been paid by the Company directly to Participants and Beneficiaries.

     9.4 Certain Transactions. The Company shall not engage in any transaction (or series
of transactions) with a Related Person (as defined below) or any affiliate or associate (as such
terms are defined in Rule 12b-2 under the Securities Exchange Act of 1934) of such Related Person
unless prior to such transaction, the Related Person (or, if there is more than one Related Person,
the Related Person which is the ultimate parent of the Related Persons, as determined by the
Trustee) either (i) guarantees the obligations of the Company pursuant to this Agreement, or (ii)
demonstrates to the satisfaction of the Trustee that the proposed transaction will not result
immediately after the transaction in a diminution of the Company’s net worth. If there shall be a
transaction with a Related Person or an affiliate or associate of such Related Person, the Company
shall notify the Trustee in writing within ten days following such transaction. The Trustee shall
thereupon determine if such transaction violates this Section. If the Trustee determines that the
transaction does violate this Section, the Trustee shall demand rescission. If rescission is not
made within 20 days following such demand, the Trustee shall take such action as it deems prudent
or advisable to recover payment. For purposes of this Section a Related Person shall mean any
person other than any employee benefit plan of the Company or its affiliates who directly or
indirectly (i) is or becomes the beneficial owner as defined in Rule 13d-3 and 13d-5 under the
Securities Exchange Act of 1934 of 10% or more of the total voting power represented by the
Company’s then outstanding voting securities, or (ii) engaged in a proxy contest as a result of
which one or more of such person’s nominees were elected to the Board of Directors of the Company.
Voting securities shall mean any securities of the Company having the right under ordinary
circumstances to vote at an election of the Board of Directors.

     9.5 Amendment. This Agreement may be amended any time and to any extent by a written
instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan, make the Trust revocable after it has become
irrevocable or retroactively change or deprive Participants or Beneficiaries of rights already
accrued under the Plan.

ARTICLE X

MISCELLANEOUS

     10.1 Governing Law. This Agreement and the Trust hereby created shall be construed
under and regulated by the laws of the State of North Carolina.

     10.2 Titles and Headings. The titles to Articles and the Section headings in this
Agreement are placed herein for convenience of reference only and in case of any conflict the text
of this Agreement, rather than such titles and headings, shall control.

     10.3 Affiliates. As used in this Agreement, the term “affiliate” as applied to the
Company or to the Trustee means any person or entity that directly, or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control with, the Company or
the Trustee, as the case may be.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 17          

 

 

     10.4 Assignment. This Agreement may not be assigned by either party without the prior
written consent of the other, and any purported assignment without such prior written consent shall
be null and void. This Agreement shall be binding upon the successors and permitted assigns of
each party hereto.

     10.5 Entire Agreement. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof and supersedes any and all prior agreements,
arrangements and understandings. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and legal representatives.

     10.6 Severability. In the event any provision of this Agreement shall be determined
by a court to be invalid or unenforceable the remainder of this Agreement shall not be affected
thereby.

[signature page follows]

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 18          

 

 

     IN WITNESS WHEREOF, the Company and Trustee have caused this Agreement to be executed by their
duly authorized officers and their respective seals to be hereunto affixed as of the date set forth
above.

	 	 	 	 	 
	Attest: 

 	 
	/s/ Sandy L. Jones
 	 
	 	 
	 	 
	 
	Attest: 

 	 
	/s/ Tracy C. Hartsell
 	 
	 	 
	 	 
	 

	 	 	 	 	 
	SONOCO PRODUCTS COMPANY

 	 
	By:  	/s/  Ritchie L. Bond                    [Seal]
 	 
	 	 	 
	 	 	 
	 
	WACHOVIA BANK, National Association

 	 
	By:  	/s/ D. Michael Hill                    [Seal]
 	 
	 	 	 
	 	 	 
	 

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 19          

 

 

APPENDIX I

     The following plans constitute the Plan as defined in this Trust and are covered under this
Agreement:

	1.	 	Deferred Compensation Plan for Outside Directors of Sonoco Products Company
	 
	2.	 	Sonoco Products Company 2008 Long Term Incentive Plan

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 20          

 

 

APPENDIX II

INVESTMENT GUIDELINES

	1.	 	During a Threatened Change in Control Period the Trustee shall invest the funds contributed in
accordance with Section 2.2 (b) in any of the following:

	 	a)	 	Direct obligations of the United States of America, or any agency thereof, or obligations
guaranteed by the United States of America, provided that such obligations mature within 90 days
from the date of acquisition thereof;
	 
	 	b)	 	Acquisitions of certificates of deposit maturing within 90 days from the date of acquisition,
bankers’ acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case issued by,
created by, or with a bank or trust company organized under the laws of the United States of
America or any state thereof having capital and surplus aggregating at least $100,000,000;
	 
	 	c)	 	Acquisitions of commercial paper given a rating of “A2” or better by Standard & Poor’s
Corporation or “P2” or better by Moody’s Investors Service, Inc. and maturing not more than 90 days
from the date of creation thereof; or
	 
	 	d)	 	Investments in money market investment programs registered under the Investment Company Act of
1940, as amended, which are administered by financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the character described in
the foregoing clauses (a) through (c).

	2.	 	Subsequent to a Change in Control, the Trustee shall have discretion to invest the funds in a
manner that best satisfies its fiduciary duty to the Participants and Beneficiaries.

 

 

			
	 	 	 
	Sonoco Products Company	 	 
	Amended and Restated Directors Deferral Trust Agreement
	 	Page 21

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