EXHIBIT 10.2
SONOCO PRODUCTS COMPANY
1991 KEY EMPLOYEE STOCK OPTION PLAN
1. PURPOSE. The Sonoco Products Company 1991 Key Employee Stock Plan (the
"Plan") has been adopted by the Board of Directors (the "Board") to
encourage and create significant ownership of the Common Stock ("Common
Stock" or "Shares") of Sonoco Products Company (the "Company") by
employees. Additional purposes of the Plan include generating a
meaningful incentive to participants to make substantial contributions
to the Company's future success, enhancing the Company's ability to
attract and retain persons who will make such contributions, and
ensuring that the Company can provide competitive compensation
opportunities for its key personnel. By meeting these objectives, the
Plan is intended to benefit the shareholders of the Company.
2. TERM. The Plan shall be effective as of February 6, 1991. The
amendments to the Plan shall be effective when approved by shareholders
and until terminated pursuant to Section 14.7.
3. COMMON SHARES AVAILABLE FOR ISSUANCE. Subject to adjustments
contemplated by Section 5, 5,000,000 shares of Common Stock of the
Company became available for issuance under the Plan on February 6,
1991. Beginning on January 1, 1995, and ending on January 1, 2005, the
number of shares available for issuance under the Plan shall be
increased on each January 1 by an amount equal to 1.2% of the number of
shares of Common Stock issued on such day. Furthermore, the Committee
may designate for issuance under the Plan any shares of Common Stock
that are repurchased by the Company after April 19, 1995, and before
April 19, 2005, (the "Repurchased Shares") on the open market or in
private transactions in which the Company paid fair market value, so
long as the aggregate price paid for the Repurchased Shares does not
exceed the cumulative amount received in cash by the Company after
April 19, 1995, for the exercise of options granted under the Plan or
the 1983 Key Employee Stock Option Plan (the "Prior Plan"). Shares
available for issuance under the Plan, which are not issued in a given
year, will be carried forward and continue to be available in the
succeeding year. Any shares issued under the Plan may be either
authorized but unissued shares, or previously-issued shares reacquired
by the Company.
4. SHARE USAGE. If grants made under the Plan expire or are canceled
without the issuance of shares, the shares of stock covered by such
grants shall remain available for issuance under the Plan. Further, any
shares which are exchanged by a participant as full or partial payment
to the Company of the purchase price of shares being acquired through
the exercise of a stock option granted under the Plan or the Prior Plan
shall be added to the aggregate number of shares available for issuance
for grants other than Incentive Stock Option grants. In instances where
a Stock Appreciation Right (SAR) or a stock grant is settled in cash or
any form other than shares, then the shares covered by these
settlements shall not be deemed issued and shall remain available for
issuance under the Plan. The payment in shares of dividends in
conjunction with outstanding grants shall not be counted against the
shares available for issuance.
5. ADJUSTMENTS AND REORGANIZATIONS. The Board may make such adjustments as
it deems appropriate to meet the intent of the Plan in the event of
changes that impact the Company's share price or share status, provided
that any such actions are consistently and equitably applicable to all
affected participants.
a. In the event of any stock dividend, stock split,
combination or exchange of shares, merger,
consolidation, spin-off or other distribution (other
than normal cash dividends) of Company assets to
shareholders, or any other change affecting shares,
such proportionate adjustments, if any, as the Board
in its discretion may deem appropriate to reflect
such change shall be made with respect to (i)
aggregate number of shares that may be issued under
the Plan; (ii) each outstanding grant made under the
Plan; (iii) the price per share for any outstanding
stock options, SARs and other rights granted under
the Plan; and the limitations on share usage and
allocation set forth in Section 9. In addition, any
shares issued or settlement of grants by the Company
through the assumption or substitution of outstanding
grants or grant commitments from an acquired company
or other entity shall not be counted against the
limitations set forth in Section 3 and Section 9.
b. In the event that the Company is not the surviving
company of a merger, consolidation or amalgamation
with another company or in the event of a liquidation
or reorganization of the Company, and in the absence
of the surviving corporation's assumption of
outstanding grants made under the Plan, the Board may
provide for appropriate adjustments and settlements
of such grants either at the time of grant or at a
subsequent date.
6. PLAN ADMINISTRATION
6.1 THE COMMITTEE. A Committee (the "Committee") appointed by the
Board shall be responsible for administering the Plan. The
Committee shall be comprised of three or more members of the
Board who qualify to administer the Plan as contemplated by
Rule 16b-3 under the Securities Exchange Act of 1934 (the
"1934 Act"), or any successor rule.
6.2 POWERS OF THE COMMITTEE. Subject only to the express
restrictions and limitations otherwise set forth in the Plan,
the Committee shall have sole, absolute and full authority and
power to:
(a) Interpret the Plan and undertake such actions and
make such determinations and decisions as it deems
necessary and appropriate to carry out the Plan
intent;
(b) Select individuals to receive grants;
(c) Determine the amount of shares to be covered by each
grant;
(d) Decide the type grant or grants to be made to each
participant and the terms and conditions applicable
to each such grant;
(e) Award grants to individuals who are foreign nationals
or employed outside the United States or both, on
such terms and conditions (which may be different
than specified by the Plan) which it deems are
necessary to assure the viability of such grants in
meeting the purposes of the Plan;
(f) Enter into grant agreements evidencing grants made
under the Plan and their respective terms and
conditions;
(g) Establish, amend and repeal rules and regulations
relating to the Plan; and
(h) Amend the Plan to the extent permitted by Section
14.6.
6.3 DELEGATION OF AUTHORITY. The Committee may designate persons
other than members of the Committee or the Board to carry out
its responsibilities subject to such limitations, restrictions
and conditions as it may prescribe, except that the Committee
may not delegate its authority with regard to the awarding of
grants to persons subject to Section 16 of the 1934 Act.
Further, the Committee may not delegate its authority if such
delegation would cause the Plan not to comply with the
requirements of Rule 16b-3 or any successor rule under the
1934 Act.
6.4 DIVIDENDS AND DIVIDEND EQUIVALENTS. The Committee may provide
that grants awarded under the Plan earn dividends or dividend
equivalents. Such dividend equivalents may be paid currently
or may be credited to a participant's account. In addition,
dividends paid on outstanding grants or issued shares may be
credited to a participant's account, including additional
shares or share equivalents, rather than paid currently. Any
crediting of dividends or dividend equivalents may be subject
to such restrictions and conditions as the Committee may
establish, including reinvestment in additional shares or
share equivalents.
6.5 DEFERRALS AND SETTLEMENTS. The Committee may require or permit
participants to elect to defer the issuance of shares or the
settlement of grants in cash under such rules and procedures
as it may establish under the Plan. It may also provide that
deferred settlements include the payment or crediting of
interest on the deferral amounts or the payment or crediting
of dividend equivalents on deferred settlements denominated in
shares. The Committee may also require or permit grants to be
settled in the form of other grant types.
6.6 DOCUMENTATION OF GRANTS. Grants under the Plan shall be
evidenced by written agreements or such other appropriate
documentation as the Committee shall prescribe. The Committee
need not require the execution of any instrument or
acknowledgment of notice of a grant under the Plan, in which
case acceptance of such a grant by the respective participant
will constitute agreement to the terms of the grant.
7. PLAN ELIGIBILITY. Any employee of the Company (including any entity
that is directly or indirectly controlled by the Company or any entity
in which the Company has a significant equity interest, as determined
by the Committee) shall be eligible to be designated a participant
under the Plan.
8. GRANT TYPES. Awards under the Plan may consist of single, combination,
tandem or replacement grants of the following types.
8.1 STOCK OPTIONS. A stock option shall confer on a participant
the right to purchase a specified number of shares from the
Company subject to the terms and conditions of the stock
option grant. A stock option may be in the form of an
incentive stock option or any other option type. Any incentive
stock option grant shall comply with the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended,
(the "Code"), and accordingly, the aggregate fair market value
at the time of grant of the shares covered by incentive stock
option grants exercisable by any one optionee in any calendar
year shall not exceed $100,000 (or such other limit as may be
required by the Code). The recipient of a stock option grant
shall pay for the shares at the time of exercise in cash or
such other form as the Committee may approve, including the
transfer of shares (whether actual or constructive), valued at
their fair market value on the date of exercise, or in a
combination of payment forms.
8.2 STOCK APPRECIATION RIGHTS (SAR). A SAR grant shall confer on a
participant the right to receive in shares, cash or a
combination of both, up to the positive difference, if any,
between the fair market value of a designated number of shares
on the date the SARs are exercised and the designated price of
the SARs contained in the terms and conditions of the grant.
Shares issued in settlement of the exercise of SARs shall be
valued at their fair market value on the date of the exercise
of the SARs.
8.3 STOCK GRANTS. A stock grant shall confer on a participant the
right to receive a specified number of shares, cash equal in
value to a designated number of shares or a combination of
both, subject to the terms and conditions of the grant, which
may include forfeitability contingencies based on continued
employment with the Company or the meeting of performance
criteria or both. The performance criteria that may be used by
the Committee in awarding contingent stock grants will consist
of total shareholders' return, earnings growth, revenue
growth, and/or profitability measured by return ratios. The
Committee may select one criterion or multiple criteria for
measuring performance, and the measurement may be based on
absolute Company or business unit performance or based on
comparative performance with other companies. A stock grant
may be received by a participant as part of or in lieu of the
participant's normal compensation or as part of or in lieu of
a payment under another incentive compensation or employee
benefit plan of the Company, subject to such rules and
conditions as the Committee may establish for such grants.
8.4 DEFERRED COMPENSATION STOCK OPTIONS. The Committee may, at its
sole discretion, require or permit that designated grants
under the Plan be settled in the form of deferred compensation
stock options. The Committee may also, at its sole discretion,
require or permit eligible employees to receive deferred
compensation stock options in lieu of a payment of normal
compensation or a payment under another incentive compensation
or employee benefit plan of the Company. The number of shares
to be subject to such a grant shall be the quotient (rounded
down to the nearest whole number) resulting from the following
formula:
Amount of Compensation to be Deferred
__________________________________________ = Number of Shares
Fair Market Value at Time of Grant - Option Price
9. GRANT LIMITS. Subject to adjustments contemplated by Section 5, the
following limitations on the usage of shares of Common Stock shall be
effective for grants made after April 19, 1995:
9.1 STOCK OPTIONS AND SARS. Commencing with 1995, no individual
may receive a stock option or SAR, or combination of both, in
any one calendar year that covers more than 200,000 shares
plus unused shares carried forward for up to five years
commencing in 1995. The aggregate number of shares that may be
covered by incentive stock options granted under the Plan
cannot exceed 5,000,000 shares.
9.2 STOCK GRANTS. Commencing with 1995, no individual may receive
a stock grant in any one calendar year that covers more than
100,000 shares plus unused shares carried forward for up to
five years commencing in 1995. The aggregate number of shares
that may be covered by stock grants made in any one calendar
year shall not exceed 0.4% of the number of issued shares of
Common Stock as of the first day of such calendar year
commencing in 1995, plus any unused shares which were
available for stock grants in any prior years commencing in
1995.
10. TRANSFERABILITY AND EXERCISABILITY
10.1 TRANSFERABILITY. Any grant under the Plan will be
non-transferable and, accordingly, shall not be assignable,
alienable, salable or otherwise transferable by the
participant other than as provided in Section 10.2 or:
(a) By will or the laws of descent and distribution;
(b) Pursuant to a qualified domestic relations order, to
the extent permitted by the Committee, either at the
time of grant or subsequently; and
(c) By gift or other transfer to, either (i) a trust or
estate in which the participant or such person's
spouse, or other relative has a substantial interest,
or (ii) the participant's spouse or other relative,
to the extent permitted by the Committee, either at
time of grant or subsequently, provided further that
for any such transfer by a person subject to Section
16 of the 1934 Act, the Committee may require the
shares covered by such grant to continue to be deemed
beneficially owned.
10.2 THIRD PARTY EXERCISES. In the event that a participant
terminates employment with the Company to assume a position
with a governmental, charitable, educational or similar
non-profit institution, the Committee may subsequently
authorize a third party, including but not limited to a
"blind" trust, to act on behalf of and for the benefit of the
respective participant with respect to any outstanding grants
held by the participant subsequent to such termination of
employment. If permitted by the Committee, a participant may
designate a beneficiary or beneficiaries to exercise the
rights of the participant and receive any distributions under
the Plan upon the death of the participant.
11. GRANT TERMS AND CONDITIONS. The Committee shall determine the
provisions and duration of grants made under the Plan, including the
purchase prices for all stock options, the established prices for all
SARs, the consideration, if any, to be required from participants for
all other grants and the conditions under which a participant will
retain rights in the event of the participant's termination of
employment while holding outstanding grants made under the Plan.
However, any stock option (other than a deferred compensation grant
made pursuant to Section 8.4) or SAR may not have an exercise or
designated price of less than 100% of the fair market value of the
covered shares on the date of grant, except that, in the case of a
stock option or SAR granted retroactively in tandem with or as a
substitution for another grant, the exercise or designated price may be
the same as the exercise or designated price of such other grant.
12. TAX WITHHOLDING. The Company shall have the right to deduct from any
settlement of a grant made under the Plan, including the delivery or
vesting of shares, a sufficient amount to cover withholding of any
federal, state or local taxes required by law or to take such other
action as may be necessary to satisfy any such withholding obligations.
The Committee may permit shares to be used to satisfy required tax
withholding and such shares shall be valued at their fair market value
as of the settlement date of the applicable grant.
13. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Unless otherwise
determined by the Committee, settlements of grants received by
participants under the Plan shall not be deemed a part of a
participant's regular, recurring compensation for purposes of
calculating payments or benefits from any Company benefit or severance
program (or severance pay law of any country). The above
notwithstanding, the Company may adopt other compensation programs,
plans or arrangements as it deems appropriate or necessary.
14. GENERAL. The following provisions are applicable to the Plan generally:
14.1 FUTURE RIGHTS. No person shall have any claim or rights to be
awarded a grant under the Plan, and no participant shall have
any rights under the Plan to be retained in the employ of the
Company.
14.2 FAIR MARKET VALUE. The term "fair market value" as used in the
Plan means the closing price of a share of Common Stock on the
date of the applicable transaction or such other appropriate
valuation method as the Committee may determine.
14.3 NO FRACTIONAL SHARES. No fractional shares shall be issued
under the Plan and cash shall be paid in lieu of any
fractional shares in settlement of grants awarded under the
Plan.
14.4 UNFUNDED PLAN. Unless otherwise determined by the Committee,
the Plan shall be unfunded and shall not create (or be
construed to create) a trust or a separate fund or funds. The
Plan shall not establish any fiduciary relationship between
the Company and any participant or other person. To the extent
any person holds any rights by virtue of a grant awarded under
the Plan, such right (unless otherwise determined by the
Committee) shall be no greater than the right of an unsecured
general creditor of the Company.
14.5 SUCCESSORS AND ASSIGNS. The Plan shall be binding on all
successors and assigns of a participant, including, without
limitation, the estate of such participant and the executor,
administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the participant's
creditors.
14.6 PLAN AMENDMENT. The Committee may amend the Plan as it deems
necessary or appropriate to better achieve the purposes of the
Plan, except that no amendment without the approval of the
Company's shareholders shall be made which would:
(a) Subject to adjustments contemplated by Section 5,
increase the total number of shares available for
issuance under Section 3 or the share limits set
forth in Section 9; and
(b) Reduce the minimum exercise or designated price for
any stock options or SARs granted under the Plan.
14.7 PLAN TERMINATION. The Board may terminate the Plan at any
time. However, if so terminated, then-existing
previously-awarded grants shall remain outstanding and in
effect in accordance with their applicable terms and
conditions.
14.8 GOVERNING LAW. The validity, construction and effect of the
Plan and any actions taken or relating to the Plan shall be
determined in accordance with the laws of the State of South
Carolina and applicable federal law.