SONOCO PRODUCTS COMPANY Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. OnFebruary 9, 2022 , the Board of Directors (the "Board") ofSonoco Products Company ("Sonoco" or the "Company") adopted theSonoco Products Company Change-in-Control Plan (the "Change-in-Control Plan" or the "Plan") upon the recommendation of the Executive Compensation Committee (the "Committee"). The following is a summary of the terms and conditions of the Plan. Objectives of the Plan and Participants in the Plan. The purpose of the Change-in-Control Plan is to provide management continuity by inducing selected employees to continue their employment with the Company or one of its subsidiaries pending a proposed change in control by providing such employees with severance protection under the circumstances covered by the Plan. The objective of the Plan is to help assure that, in the event of a possible change in control, in addition to the participant's regular duties, such participant may be available to be called upon to assist in the objective assessment of such proposal, to advise management and the Board as to whether such proposal would be in the best interests of the Company and its shareholders or one of its subsidiaries, and to take such other actions as management or the Board might determine reasonably appropriate and in the best interests of the Company and its shareholders. The term "change in control" under the plan means "a change in the ownership or effective control," or in "the ownership of a substantial portion of the assets of" the Company, each within the meaning of Internal Revenue Code ("IRC") Section 409A, including the events specified in the plan as interpreted under IRC Section 409A. Participants in the Change-in-Control Plan include the chief executive officer, each other corporate officer (as so designated annually by the Board), and any other individual specifically designated as a participant by the Committee by reason of such individual's importance and value to the Company in the event of a possible change in control. Cash Payments and Other Benefits Provided under the Plan. The Plan provides that, if within 24 months following a change in control, a participant's employment is terminated by the Company without cause (as defined in the Plan) or by the participant for good reason (as defined in the Plan), the participant will receive a lump sum cash payment and certain additional benefits. The lump sum cash payment will be equal to the sum of the following amounts, less applicable withholdings: (a) (i) in the case of the chief executive officer, an amount equal to his/her (1) base salary plus (2) his/her award under the Company's Performance-Based Annual Cash Incentive Plan (or any successor plan) (the "Annual Cash Plan") for the year in which the termination date occurs, calculated at target, multiplied by 2.5, (ii) in the case of any other corporate officer who reports directly to the chief executive officer, an amount equal to his/her (1) base salary plus (2) his/her award under the Annual Cash Plan for the year in which the termination date occurs, calculated at target, multiplied by 2.0, and (iii) in the case of any other participant, an amount equal to his/her (1) base salary plus (2) his/her award under the Annual Cash Plan for the year in which the termination date occurs, calculated at target, multiplied by 1.5; and (b) the participant's award under the Annual Cash Plan for the year in which the termination date occurs, calculated at the greater of target or actual performance, and prorated through termination of employment. The award under the Annual Cash Plan will not include any long term incentive compensation, commissions, stock-based compensation, or any other incentive or retention compensation, bonuses, or awards of any kind other than payment under the Annual Cash Plan. Subject to certain provisions of the plan, the lump sum cash payment will be paid to the participant on or before the 60th day after the termination date. The foregoing lump sum payment will be reduced by the aggregate amount of any termination, redundancy, severance or similar separation payments or benefits (other than state unemployment benefits) for which a participant is eligible and which the participant receives, due to the participant's termination of employment, under any other agreement or plan (including, without limitation, any severance plans of the Company or any subsidiary or affiliate or any government-mandated plans) or pursuant to any statutory, legislative, or regulatory requirement. In addition to the lump sum cash payment, participants will receive the following benefits: (a) if the participant elects COBRA continuation coverage, the participant will receive continuation of all benefits under all Company benefit plans that permit continued coverage after an employee is no longer employed and/or are benefits eligible for COBRA continuation coverage in which participant participates at the time employment is ended for whatever reason, for a period of 18 months following the termination date; (b) all outstanding equity awards issued after the effective date of the Change-in-Control Plan will vest in accordance with the provisions of the equity award agreement(s) pursuant to which they were awarded; and (c) outplacement services appropriate for a senior executive of the Company will be provided by a nationally recognized outplacement firm capable of providing such services, selected by the participant with the Company's approval, in an amount not to exceed$25,000.00 to the extent such services are used by the Participant within one year of his or her termination date. -------------------------------------------------------------------------------- Release, Covenant not to Sue, Non-Competition, Non-Solicitation and Nondisclosure Agreement. As a condition to receipt of the lump sum cash payment and the additional benefits under the plan, the participant must timely execute a Release, Covenant not to Sue, Non-Competition, Non-Solicitation and Nondisclosure Agreement, and must not revoke the agreement within the time period provided in the Plan. Such agreement provides for (a) a general release and waiver of claims by the participant, (b) a two-year non-competition covenant, (c) a two-year non-solicitation covenant with respect to the Company's customers, business partners, vendors, suppliers, and employees, (d) a nondisclosure covenant with respect to the Company's confidential information and trade secrets, and (e) a non-disparagement covenant. The foregoing is only a summary of the Change-in-Control Plan and is qualified in its entirety by reference to the more detailed provisions and definitions in the Plan. The Plan is filed herein as Exhibit 10.1.
On
Performance Contingent Restricted
Name Stock Unit Awards Restricted Stock Units
Threshold Target Maximum
R. H. Coker 35,522 71,044 142,088 45,836
J. C. Albrecht 8,953 17,906 35,812 11,553
R. D. Fuller 10,686 21,371 42,742 13,788
J. M. Florence 5,776 11,552 23,104 7,453
J. S. Tomaszewski 4,332 8,664 17,328 5,590
All other officers 14,437 28,874 57,748 19,532
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Performance Contingent Restricted Stock Unit Awards
The material terms and conditions of the 2022 grants of performance contingent
restricted stock units ("PCSUs") are as follows:
Grant Features
Grant Date: February 9, 2022
Plan Structure: 3-year performance plan
Performance Cycle: January 1, 2022 through December 31,
2024
Payout: Goals will be established forthree levels of performance: acceptable,
superior and outstanding.
•200% of target shares vest if outstanding (maximum) performance is achieved
after three years
•100% of target shares vest if superior (target) performance is achieved
after three years
•50% of target shares vest if acceptable (threshold) performance is achieved
after three years
•If performance levels fall below threshold achievement, participants forfeit
awards for that performance period.
Measures: Return on Invested Capital (ROIC) 50% weighting
Three-year Cumulative Growth in 50% weighting
Adjusted Base Earnings Per Share (BEPS)
Clawback Policy: It is Sonoco's policy that, if Sonocois required to restate its financial results because
of its material noncompliance with any financial reporting requirement under the
securities laws, the Committee will review all awards or payments of any form of bonus or
incentive-based compensation made to
current and former executive officers of
within the three-year period
immediately preceding the date on which
prepare the restatement. If the Committee determines that any such bonus and incentive
awards or payments were based on erroneous data and would have been lower had they been
calculated based on the restated results, and further determines that fraud, gross
negligence, or intentional misconduct by any such executive officer was a contributing
factor to Sonoco's having to restate its financial results, the Committee will review the
facts and circumstances of such actions and, to the extent permitted by applicable law,
may seek to recover for the benefit
of
or paid and the amounts that would have been awarded or paid based on the restated
results. The Committee has sole discretion to determine whether, and the extent to which,
to require any such repayment and to determine the form and timing of the repayment, which
may include repayment by the executive officer or an adjustment to the payout of a future
incentive. These remedies would be in addition to, and not in lieu of, any penalties
imposed by law enforcement agencies, regulators or other authorities.
For purposes of this policy, "executive
officers" include all persons designated by the Board as Section 16 reporting officers.
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Other Award Provisions
Dividends and Stock Dividend equivalents will not be credited to unvested PCSUs. The number of Splits: PCSUs will be adjusted for stock
dividends and stock splits and other
corporate events set forth in Section 11.2 of the 2019 Omnibus Incentive
Plan.
Termination of Except as provided below, no PCSUs will vest if an individual is not
Employment: employed by Sonoco at the end of the
performance period (
2024).
In the event of involuntary termination, for reasons other than due to
death, disability or retirement (defined as age 60 or older and a minimum
of 5 years of service), the participant will forfeit all unvested PCSUs.
If the participant terminates due to death, disability, or retirement
during the three-year performance period, the participant will be entitled
to a settlement of any PCSUs that would otherwise vest at the end of the
three-year performance period on a prorated basis equal to the time
employed during the performance period. Participants who leave the company
for other reasons will forfeit all awards. Any vested PCSUs that were not
subject to a deferral election will be settled at the regular time.
Sale, Divestitures The impact of corporate transactions such as acquisitions and divestitures and/or acquisition: will be evaluated by the Committee to
ensure the plan payouts correlate to
the effort and results of the business and are consistent with the
original intent of the performance goals. Any adjustments are not intended
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description of Exhibit 10.1 Sonoco Products Company Change-In-Control Plan 104 Cover Page Interactive Data File (formatted as
Inline XBRL and contained in
Exhibit 101)
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