1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-11261
SONOCO PRODUCTS COMPANY
INCORPORATED UNDER THE LAWS I.R.S. EMPLOYER IDENTIFICATION
OF SOUTH CAROLINA NO. 57-0248420
POST OFFICE BOX 160
HARTSVILLE, SOUTH CAROLINA 29551-0160
TELEPHONE: 843-383-7000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of exchange on which registered
------------------- ------------------------------------
No par value common stock New York Stock Exchange, Inc.
Series A Cumulative Preferred Stock New York Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting common stock held by nonaffiliates of the
registrant (based on the New York Stock Exchange closing price) on February 28,
1999, was $2,296,649,282. Registrant does not have any non-voting common stock
outstanding.
As of February 28, 1999, there were 101,845,073 shares of no par value common
stock outstanding.
Documents Incorporated by Reference
Portions of the Annual Report to Shareholders for the fiscal year ended December
31, 1998, are incorporated by reference in Parts I and II; portions of the Proxy
Statement for the annual meeting of shareholders to be held on April 21, 1999,
are incorporated by reference in Part III.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART I
ITEM 1 BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS - The Company is a South
Carolina corporation founded in Hartsville, South Carolina in
1899 as the Southern Novelty Company. The name was
subsequently changed to Sonoco Products Company. The following
items from the 1998 Annual Report to Shareholders (the "1998
Annual Report") are incorporated herein by reference:
Management's Discussion and Analysis on pages 25 - 31, and
Notes 2 and 3 to the Consolidated Financial Statements on
pages 38 - 39.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS - Note 18 to the
Consolidated Financial Statements on page 45 of the 1998
Annual Report is incorporated herein by reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS - The Operations Reviews on
pages 8, 9, 12, and 13 and Management's Discussion & Analysis
on pages 25 - 33 of the 1998 Annual Report are incorporated
herein by reference. As of December 31, 1998, the Company had
approximately 16,500 employees.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
AND EXPORT SALES - Note 18 to the Consolidated Financial
Statements on page 45 of the 1998 Annual Report is
incorporated herein by reference.
(e) EXECUTIVE OFFICERS OF THE REGISTRANT - Certain information
with respect to persons who are, or may be deemed to be,
executive officers of the Company is set forth under the
caption "Executive Officers" on pages 50 - 51 of the 1998
Annual Report and is incorporated herein by reference.
ITEM 2 PROPERTIES - Page 31 of Management's Discussion & Analysis of the
1998 Annual Report is incorporated herein by reference.
ITEM 3 LEGAL PROCEEDINGS - Note 15 to the Consolidated Financial Statements
on page 44 of the 1998 Annual Report is incorporated herein by
reference.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER - None.
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS - The following items from the 1998 Annual Report are herein
incorporated by reference: the Selected Quarterly Financial Data on
page 24 and Management's Discussion & Analysis on page 30. The
Company's common stock is traded on the New York Stock Exchange under
the stock symbol "SON". At December 31, 1998, there were approximately
43,000 shareholder accounts.
ITEM 6 SELECTED FINANCIAL DATA - The Selected Eleven-Year Financial Data
provided on pages 46 - 47 of the 1998 Annual Report are incorporated
herein by reference.
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Management's Discussion & Analysis on pages 25
- 33 of the 1998 Annual Report is incorporated herein by reference.
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3
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART II (CONTINUED)
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - Pages
30 -31 of Management's Discussion & Analysis of the 1998 Annual Report
is incorporated herein by reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - The following items
provided in the 1998 Annual Report are incorporated herein by
reference: the Selected Quarterly Financial Data on page 24; the
Consolidated Financial Statements and Notes to the Consolidated
Financial Statements on pages 34 - 45; and the Report of Independent
Certified Public Accountants on page 48.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE - None.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - The sections
entitled "Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" as shown on pages 4 - 9 and page 27,
respectively, of the Company's definitive Proxy Statement, set forth
information with respect to the directors of the Company and compliance
with Section 16(a) of the Securities Exchange Act of 1934 and are
incorporated herein by reference.
ITEM 11 EXECUTIVE COMPENSATION - Information with respect to the
compensation of directors and certain executive officers as shown on
pages 18 - 24 of the Company's definitive Proxy Statement under the
captions "Summary Compensation Table", "Long-Term Incentive Plans -
Awards in Last Fiscal Year", "Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values", "Option Grants in Last Fiscal Year",
"Pension Table", "Directors' Compensation", and "Compensation Committee
Interlocks and Insider Participation", is incorporated herein by
reference.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -
Information with respect to the beneficial ownership of the Company's
Common Stock by management and others as shown on pages 12 - 13 under
the caption "Security Ownership of Management" of the Company's
definitive Proxy Statement is incorporated herein by reference.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - The following items
contained in the Company's definitive Proxy Statement are incorporated
herein by reference: the sections titled "Compensation Committee
Interlocks and Insider Participation" on pages 23 - 24; and
"Transactions with Management" on page 24.
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4
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements: Consolidated Balance Sheets as of December 31,
1998 and 1997; Consolidated Statements of Operations for the years
ended December 31, 1998, 1997 and 1996; Consolidated Statements of
Shareholders' Equity for the years ended December 31, 1998, 1997 and
1996; and Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997 and 1996.
2. Financial Statement Schedules: All schedules are omitted because they
are not required, are not applicable or the required information is
given in the financial statements or notes thereto.
3. Exhibits
3-1 Articles of Incorporation (incorporated by reference to the
Registrant's 1994 Annual Report on Form 10-K)
3-2 By-Laws (incorporated by reference to the Registrant's Form
10-Q for the quarter ended March 31, 1997)
4 Instruments Defining the Rights of Securities Holders,
including Indentures (incorporated by reference to the
Registrant's Forms S-3 (File Numbers 33-40538, 33-50501, and
33-50503))
10-1 1983 Sonoco Products Company Key Employee Stock Option Plan
(incorporated by reference to the Registrant's Form S-8 dated
September 4, 1985)
10-2 1991 Sonoco Products Company Key Employee Stock Plan
(incorporated by reference to the Registrant's Form S-8 dated
June 7, 1995)
10-3 Sonoco Products Company 1996 Non-Employee Directors' Stock
Plan (incorporated by reference to the Registrant's Form S-8
dated September 25, 1996)
10-4 Sonoco Products Company Employee Savings and Stock Ownership
Plan (incorporated by reference to the Registrant's Form S-8
dated November 27, 1989)
10-5 Engraph, Inc. Retirement Plus Plan (incorporated by reference
to the Registrant's Form S-8 dated November 22, 1993)
10-6 Sonoco Products Company Centennial Shares Plan (incorporated
by reference to the Registrant's Form S-8 dated December 30,
1998)
13 1998 Annual Report to Shareholders (portions incorporated by
reference)
21 Subsidiaries of the Registrant
23 Consent of Independent Accountants
27 Financial Data Schedule
99-1 Proxy Statement, filed in conjunction with annual
shareholders' meeting scheduled for April 21, 1999 (previously
filed)
99-2 Form 11-K Annual Report - 1991 Sonoco Products Company Key
Employee Stock Option Plan
(b) Reports on 8-K: No reports on Form 8-K were filed by the Company during
the fourth quarter of 1998.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on this 26th day of
March 1999.
SONOCO PRODUCTS COMPANY
/s/ Peter C. Browning
--------------------------------------
Peter C. Browning
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report is signed below by the following person on behalf of the Registrant
and in the capacities indicated on this 26th day of March 1999.
/s/ F. T. Hill, Jr.
--------------------------------------
F. T. Hill, Jr.
Vice President and
Chief Financial Officer
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
SIGNATURES, CONTINUED
/s/ C. W. Coker Director (Chairman)
- ---------------------------
C. W. Coker
/s/ P. C. Browning President, Chief Executive Officer and
- --------------------------- Director
P. C. Browning
/s/ C. J. Bradshaw Director
- ---------------------------
C. J. Bradshaw
/s/ R. J. Brown Director
- ---------------------------
R. J. Brown
/s/ F. L. H. Coker Director
- ---------------------------
F. L. H. Coker
/s/ J. L. Coker Director
- ---------------------------
J. L. Coker
/s/ T. C. Coxe, III Director
- ---------------------------
T. C. Coxe, III
/s/ H. E. DeLoach, Jr. Director
- ---------------------------
H. E. DeLoach, Jr.
/s/ A. T. Dickson Director
- ---------------------------
A. T. Dickson
/s/ P. Fulton Director
- ---------------------------
P. Fulton
/s/ B. L. M. Kasriel Director
- ---------------------------
B. L. M. Kasriel
/s/ E. H. Lawton, Jr. Director
- ---------------------------
E. H. Lawton, Jr.
/s/ H. L. McColl, Jr. Director
- ---------------------------
H. L. McColl, Jr.
/s/ Dona Davis Young Director
- ---------------------------
Dona Davis Young
/s/ C. D. Spangler, Jr. Director
- ---------------------------
C. D. Spangler, Jr.
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SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
13 1998 Annual Report to Shareholders (portions
incorporated by reference)
21 Subsidiaries of the Registrant
23 Consent of Independent Accountants
27 Financial Data Schedule
99-2 Form 11-K Annual Report - 1991 Sonoco Products
Company Key Employee Stock Option Plan