<PAGE>
PRELIMINARY COPY
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
AVERY DENNISON CORPORATION
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
AVERY DENNISON CORPORATION
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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(1) Title of each class of securities to which transaction applies:
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Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE>
- ----------------- -----------------------------------------------------------
[LOGO OF Avery Dennison Corporation
AVERY DENNISON] 150 North Orange Grove Boulevard
Pasadena, California 91103
- ----------------- -----------------------------------------------------------
NOTICE OF To the Stockholders:
ANNUAL MEETING
OF STOCKHOLDERS The Annual Meeting of Stockholders of Avery Dennison
Corporation will be held at 150 North Orange Grove
To be held Boulevard, Pasadena, California on Thursday, April 24,
April 24, 1997 1997 at 1:30 P.M. for the following purposes:
1. To elect three directors to hold office for a term of
three years and until their successors are elected and
have qualified;
2. To consider and vote upon an amendment to the Company's
Certificate of Incorporation to increase the number of
authorized Common Shares which may be issued from
200 million to 400 million; and
3. To transact such other business as may properly come
before the meeting and any adjournments thereof.
In accordance with the Bylaws, the Board of Directors has
fixed the close of business on Tuesday, February 25, 1997,
as the record date for the determination of stockholders
entitled to vote at the Annual Meeting and to receive
notice thereof.
All stockholders are cordially invited to attend the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Robert G. van Schoonenberg
Secretary
Pasadena, California
Dated: March 7, 1997
-----------------------------------------------------------
Whether or not you presently plan to attend the Annual
Meeting, in order to ensure your representation please
complete, sign and date the enclosed proxy as promptly as
possible and return it in the enclosed envelope (to which
no postage need be affixed if mailed in the United
States). If you attend the meeting and wish to vote in
person, your proxy will not be used.
-----------------------------------------------------------
<PAGE>
AVERY DENNISON CORPORATION
150 NORTH ORANGE GROVE BOULEVARD
PASADENA, CALIFORNIA 91103
PROXY STATEMENT
This proxy statement is furnished to the stockholders on behalf of the Board
of Directors of Avery Dennison Corporation, a Delaware corporation
(hereinafter called the "Company"), for solicitation of proxies for use at the
Annual Meeting of Stockholders to be held on Thursday, April 24, 1997 at 1:30
P.M. and at any and all adjournments thereof. A stockholder giving a proxy
pursuant to the present solicitation may revoke it at any time before it is
exercised by giving a subsequent proxy or by delivering to the Secretary of
the Company a written notice of revocation prior to the voting of the proxy at
the Annual Meeting. If you attend the meeting and wish to vote your shares in
person, your proxy will not be used. Votes cast by proxy or in person at the
Annual Meeting will be tabulated by the election inspectors appointed for the
meeting and will determine whether or not a quorum is present. Under the
Company's Bylaws and Delaware law: (1) shares represented by proxies that
reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee which are represented at the meeting, but with respect to which such
broker or nominee is not empowered to vote on a particular proposal) will be
counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum; (2) there is no cumulative voting and
the director nominees receiving the highest number of votes, up to the number
of directors to be elected, are elected and, accordingly, abstentions, broker
non-votes and withholding of authority to vote will not affect the election of
directors; and (3) proxies that reflect abstentions as to a particular
proposal will be treated as voted for purposes of determining the approval of
that proposal and will have the same effect as a vote against that proposal,
while proxies that reflect broker non-votes will be treated as unvoted for
purposes of determining approval of that proposal and will not be counted as
votes for or against that proposal. The Company has retained D.F. King & Co.,
Inc. to assist in soliciting proxies for this meeting at a fee estimated at
$10,000 plus out of pocket expenses. Expenses incident to the preparation and
mailing of the notice of meeting, proxy statement and form of proxy are to be
paid by the Company. This proxy statement is to be mailed to stockholders on
or about March 7, 1997.
The purpose of the meeting and the matters to be acted upon are set forth in
the foregoing attached Notice of Annual Meeting. In addition to the election
of directors, an amendment to the Company's Certificate of Incorporation to
increase the number of authorized Common Shares which may be issued from 200
million to 400 million will be submitted for approval by the Company's
stockholders. As of the date of this statement, management knows of no other
business which will be presented for consideration at the meeting. However, if
any such other business shall properly come before the meeting, votes will be
cast pursuant to said proxies in respect of any such other business in
accordance with the best judgment of the persons acting under said proxies.
See "GENERAL -- Stockholder Proposals" below.
ELECTION OF DIRECTORS (PROXY ITEM 1)
The Bylaws of the Company presently provide for ten directors, divided into
three classes. Three directors are to be elected at the 1997 Annual Meeting
and will hold office until the Annual Meeting in 2000 and until their
successors are elected and have qualified. It is intended that the persons so
appointed in the enclosed proxy will, unless authority is withheld, vote for
the election of the three nominees proposed by the Board of Directors, all of
whom are presently directors of the Company. In voting for the election of
directors each share has one vote for each position to be filled. All of the
nominees have consented to being named herein and to serve if elected. In the
event that any of them should become unavailable prior to the Annual Meeting,
the proxy will be voted for a substitute nominee or nominees designated by the
Board of Directors, or the number of directors may be reduced accordingly.
1
<PAGE>
The following information, which has been provided by the directors, shows
for each of the nominees for election to the Board of Directors and for each
director whose term continues, his or her name, age, and principal occupation
or employment during the past five years, the name of the corporation or other
organization, if any, in which such occupation or employment is or was carried
on, the period during which such person has served as a director of the
Company and the year in which each continuing director's present term as
director expires.
1997 NOMINEES
SIDNEY R. PETERSEN, age 66. During the past five years, Mr. Petersen
has been a private investor. In 1984, he retired as Chairman and
Chief Executive Officer of Getty Oil Company, a position which he
[PHOTO] had held since 1980. He is a director of Group Technologies
Corporation, NICOR, Inc., Seagull Energy Corporation and Union Bank
of California. He has been a director of Avery Dennison Corporation
since December 1981.
JOHN C. ARGUE, age 65. During the past five years, Mr. Argue has
been Of Counsel and formerly Senior Partner of the law firm of Argue
Pearson Harbison & Myers. Mr. Argue is a director of CalMat Co.,
Coast Savings Financial, Inc. and TCW Funds, Inc., a registered
[PHOTO] investment company. He is also a trustee of the TCW/DW family of
funds and the TCW/DW Term Trust 2000, TCW/DW Term Trust 2002 and
TCW/DW Term Trust 2003. Mr. Argue is an advisory director (Chairman
of advisory directors) of LAACO Ltd. He has been a director of Avery
Dennison Corporation since January 1988.
JOHN B. SLAUGHTER, age 63. Since August 1988, Dr. Slaughter has
served as President of Occidental College. Dr. Slaughter is a
[PHOTO] director of Atlantic Richfield Company, International Business
Machines Corporation, Monsanto Company and Northrop Grumman
Corporation. He has been a director of Avery Dennison Corporation
since December 1988.
2
<PAGE>
CONTINUING DIRECTORS
FRANK V. CAHOUET, age 64. Since June 1987, Mr. Cahouet has been
Chairman, President and Chief Executive Officer of Mellon Bank
Corporation. From September 1986 through June 1987, Mr. Cahouet
[PHOTO] served as President of the Federal National Mortgage Association. He
is a director of Allegheny Teledyne, Inc., Mellon Bank Corporation,
and Saint-Gobain Corporation. Mr. Cahouet has been a director of
Avery Dennison Corporation since February 1983. His present term
expires in 1998.
PETER W. MULLIN, age 56. During the past five years, Mr. Mullin has
been Chairman and Chief Executive Officer of Mullin Consulting,
Inc., formerly known as Management Compensation Group, Los Angeles,
[PHOTO] Inc., an executive compensation, benefit planning and corporate
insurance consulting firm, and related entities. He has been a
director of Avery Dennison Corporation since January 1988. His
present term expires in 1998.
JOAN T. BOK, age 67. Since February 1984, Mrs. Bok has been Chairman
of the Board of New England Electric System, a public utility
holding company and supplier of electricity, and from July 1988 to
February 1989 she served as Chairman, President and Chief Executive
[PHOTO] Officer. She is a director of Monsanto Company, John Hancock Mutual
Life Insurance Company and New England Electric System, and its
subsidiaries, New England Power Company, Massachusetts Electric
Company, and The Narragansett Electric Company. Mrs. Bok has been a
director of Avery Dennison Corporation since October 1990. Mrs. Bok
also served as a director of Dennison Manufacturing Company from
1984 to October 1990. Her present term expires in 1998.
PHILIP M. NEAL, age 56. Since December 1990, Mr. Neal has been
President and Chief Operating Officer of Avery Dennison Corporation.
From March 1990 to December 1990, he served as Executive Vice
[PHOTO] President; prior to that he served as Group Vice President and
Senior Vice President, Finance. He has been a director of Avery
Dennison Corporation since December 1990. His present term expires
in 1998.
CHARLES D. MILLER, age 69. Since November 1983, Mr. Miller has
served as Chairman and Chief Executive Officer of Avery Dennison
Corporation. Prior to 1983, he served as President and
[PHOTO] Chief Executive Officer. He is a director of Edison International,
Great Western Financial Corporation, Nationwide Health Properties,
Inc., and Pacific Mutual Life Insurance Company. He has been a
director of Avery Dennison Corporation since January 1975. His
present term expires in 1999.
3
<PAGE>
RICHARD M. FERRY, age 59. Since May 1991, Mr. Ferry has been
Chairman and Chief Executive Officer of Korn/Ferry International, an
international executive search firm. Prior to 1991, he served as
[PHOTO] President of Korn/Ferry International. He is a director of Dole Food
Company and Pacific Mutual Life Insurance Company. He has been a
director of Avery Dennison Corporation since December 1985. His
present term expires in 1999.
DWIGHT L. ALLISON, JR., age 67. Since October 1986, Mr. Allison has
been a private investor. From January 1977 to September 1986, Mr.
Allison served in various senior executive positions (including
[PHOTO] Chairman and Chief Executive Officer, Vice Chairman and President)
with The Boston Company, a trust, banking and financial management
firm. He is a director of Mellon Bank Corporation. He has been a
director of Avery Dennison Corporation since October 1990.
Mr. Allison also served as a director of Dennison Manufacturing
Company from 1974 to October 1990. His present term expires in 1999.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares of the Company's common stock
beneficially owned by each director of the Company and each of the executive
officers named in the table on page 9, and the aggregate number of such shares
beneficially owned by all directors and executive officers as of December 31,
1996. All share amounts referred to in this proxy statement reflect the
Company's December 6, 1996, two-for-one common stock split.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS
---- ------------ --------
<S> <C> <C>
Charles D. Miller................................ 1,301,461(4) 1.06%
Sidney R. Petersen............................... 44,767(3)(5) (2)
Frank V. Cahouet................................. 67,033(3)(6) (2)
Richard M. Ferry................................. 44,000(3) (2)
John C. Argue.................................... 42,680(3)(7) (2)
Peter W. Mullin.................................. 46,400(3) (2)
John B. Slaughter................................ 35,291(8) (2)
Philip M. Neal................................... 476,100(9) (2)
Dwight L. Allison, Jr............................ 82,664(10) (2)
Joan T. Bok...................................... 30,227(11) (2)
R. Gregory Jenkins............................... 192,664(12) (2)
Stephanie A. Streeter............................ 20,200(13) (2)
Robert G. van Schoonenberg....................... 76,384(14) (2)
All Directors and Executive Officers as a Group
(29 persons, including those named)............. 3,293,209(15) 2.64
</TABLE>
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(1) Except as otherwise indicated and subject to applicable community property
and similar statutes, the persons listed as beneficial owners of the
shares have sole voting and/or investment power with respect to such
shares.
(2) Less than 1%.
(3) Includes 40,000 shares with respect to which each of Messrs. Petersen,
Cahouet, Ferry, Argue and Mullin holds options exercisable within 60 days
from December 31, 1996.
(4) Includes 953,956 shares with respect to which Mr. Miller holds options
exercisable within 60 days from December 31, 1996. Also includes 303,334
shares held in the Miller Family Trust, as to which Mr. Miller has sole
authority to vote and to dispose of the shares. Also includes 5,100 shares
held in The Candyman Trust, as to which Mr. Miller, as co-trustee, shares
the authority to vote and to dispose of the shares. Also includes 37,000
shares held in the Carolyn & Chuck Miller Foundation as to which
Mr. Miller has no pecuniary interest and disclaims beneficial ownership.
Also includes 2,071 shares held by Mrs. Charles D. Miller, as to which Mr.
Miller disclaims beneficial ownership.
(5) Includes 4,767 shares held in the Petersen Family Trust, as to which Mr.
Petersen, as co-trustee, shares the authority to vote and to dispose of
the shares.
(6) Includes 10,500 shares held in trust with respect to which Mr. Cahouet has
sole voting and disposition power. Also includes 10,500 shares held in
trust by Mrs. Frank V. Cahouet, as to which Mr. Cahouet disclaims any
beneficial ownership.
(7) Includes 2,200 shares held in trust with respect to which Mr. Argue has
sole voting power but no disposition power. Also includes 400 shares held
in trust with respect to which Mr. Argue has the authority to vote and
dispose of the shares.
5
<PAGE>
(8) Includes 31,800 shares with respect to which Dr. Slaughter holds options
exercisable within 60 days from December 31, 1996. Also includes 211
shares held by Mrs. John B. Slaughter, as to which Dr. Slaughter disclaims
any beneficial ownership.
(9) Includes 392,400 shares with respect to which Mr. Neal holds options
exercisable within 60 days from December 31, 1996.
(10) Includes 60,984 shares held in a trust in which Mr. Allison is the
primary beneficiary and Mr. and Mrs. Allison are co-trustees with shared
voting power. Also includes 1,680 shares held in a trust in which
Mrs. Dwight L. Allison, Jr. is the primary beneficiary and Mr. and Mrs.
Allison are co-trustees with shared voting power. Includes 20,000 shares
with respect to which Mr. Allison holds options exercisable within
60 days from December 31, 1996.
(11) Includes 22,000 shares with respect to which Mrs. Bok holds options
exercisable within 60 days from December 31, 1996.
(12) Includes 140,400 shares with respect to which Mr. Jenkins holds options
exercisable within 60 days from December 31, 1996.
(13) Includes 18,600 shares with respect to which Ms. Streeter holds options
exercisable within 60 days from December 31, 1996.
(14) Includes 59,200 shares with respect to which Mr. van Schoonenberg holds
options exercisable within 60 days from December 31, 1996.
(15) Includes 2,531,964 shares with respect to which all executive officers
and directors as a group hold options exercisable within 60 days from
December 31, 1996.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During 1996, there were eight meetings of the full Board of Directors and
thirteen meetings of committees of the Board. All directors of the Company
attended at least 75% of the aggregate number of meetings of the Board and
meetings of Board committees of which they were members held during the time
they served on the Board or Committee.
Standing committees of the Board of Directors include the following:
The Audit Committee, which is composed of the following directors: Sidney R.
Petersen (Chairman), Dwight L. Allison, Jr., Joan T. Bok, Richard M. Ferry and
Peter W. Mullin, met twice during 1996. The functions of the Audit Committee
are to aid the directors in undertaking and fulfilling their responsibilities
for financial reporting to the stockholders; to support and encourage efforts
to improve the financial controls exercised by management and to ensure their
adequacy for purposes of public reporting; and to provide better avenues of
communication between the Board of Directors, management and the external and
internal auditors.
The Compensation and Executive Personnel Committee, which is composed of the
following directors: John C. Argue (Chairman), Sidney R. Petersen and Frank V.
Cahouet, met six times during 1996. The functions of the Compensation and
Executive Personnel Committee are to review new or modified programs in the
areas of executive salary and incentive compensation, deferred compensation,
and stock plans; to review and make recommendations to the Board concerning
management's proposed option grants, cash incentive awards and other direct
and indirect compensation matters; and to monitor equal opportunity and
affirmative action programs and practices.
The Ethics and Conflict of Interest Committee, which is composed of the
following directors: Joan T. Bok (Chairman), John B. Slaughter and Phillip M.
Neal, met once during 1996. The functions of the Ethics and Conflict of
Interest Committee are to survey, monitor and provide counsel on a continuing
basis as to the business relationships, affiliations and financial
transactions of directors, officers and key employees, as they may relate
6
<PAGE>
to possible conflicts of interest or violations of the Company's Legal and
Ethical Conduct Policy; to monitor compliance with the Foreign Corrupt
Practices Act in connection with the Company's relationship to domestic and
foreign governments, political parties and the agencies, instrumentalities and
officials of each; and to report and make recommendations to the full Board in
all instances where it is believed that possible violations of Company policy
or that Act could exist.
The Finance Committee, which is composed of the following directors: Frank V.
Cahouet (Chairman), Charles D. Miller, Peter W. Mullin, Dwight L. Allison, Jr.,
Philip M. Neal, Sidney R. Petersen and Joan T. Bok, met once during 1996. The
functions of the Finance Committee are to assist the Board in consideration of
matters relating to the financial affairs and capital requirements of the
Company; to provide an overview of the financial planning and policies of the
Company; and to review proposed budgets, proposed acquisitions, bank loans and
changes in the financial structure of the Company.
The Nominating Committee, which is composed of the following directors:
Richard M. Ferry (Chairman), Charles D. Miller, John C. Argue and Peter W.
Mullin, met once during 1996. The functions of the Nominating Committee are to
review the qualifications of candidates for board membership, to review the
status of a director when his or her principal position and/or primary
affiliation changes, to recommend to the Board of Directors candidates for
election by stockholders at annual meetings, to recommend candidates to fill
vacancies in directorships, to recommend to the Board of Directors the removal
of a director, if in the Company's best interest, and to make recommendations
to the Board of Directors concerning selection, tenure, retirement, and
composition of the Board of Directors. Stockholders desiring to make
recommendations concerning new directors must submit the candidate's name,
together with biographical information and the candidate's written consent to
nomination, to: Secretary, Nominating Committee of the Board of Directors,
Avery Dennison Corporation, 150 North Orange Grove Boulevard, Pasadena,
California 91103. Stockholders wishing to nominate new directors for election
at an annual meeting must comply with the requirements described under the
heading "GENERAL -- Stockholder Proposals" on p. 23.
The Strategic Planning Committee, which is composed of the following
directors: Charles D. Miller (Chairman), John C. Argue, Peter W. Mullin,
Richard M. Ferry, Philip M. Neal, John B. Slaughter and Dwight L. Allison, Jr.,
met twice during 1996. The functions of the Strategic Planning Committee are to
review the Company's long-term strategic plan, objectives, programs, and
proposed acquisition candidates and divestitures; to review steps being taken
to improve shareholder value; and to make recommendations to the Board of
Directors on any of these matters.
The Executive Committee, which is composed of the following directors:
Richard M. Ferry (Chairman), Charles D. Miller, Philip M. Neal, John C. Argue
and Frank V. Cahouet, did not meet during 1996. The function of the Executive
Committee is to act on an interim basis for the full Board and to report all
such actions to the Board for ratification at its next meeting.
Each director who is not an officer of the Company is paid an annual retainer
fee of $30,000 and attendance fees of $1,200 per Board meeting attended, and
$1,200 per committee meeting attended as Chairman of the committee or $1,000
per committee meeting attended as a member of the committee. The Chairmen of
the Audit and Compensation and Executive Personnel Committees are each also
paid an annual retainer fee of $4,000, and the Chairmen of the Executive,
Finance, Nominating and the Ethics and Conflict of Interest Committees are each
paid an annual retainer fee of $3,000. Under the Directors Variable Deferred
Compensation Plan, fees which are deferred either accrue interest at a fixed
rate based on the 120-month rolling average of ten-year U.S. Treasury Notes
(plus, if the director ceases to be a director by reason of death, disability
or normal retirement, 25% of such rate per annum), or accrue at the actual rate
of return (less an administrative fee) of one of four investment funds managed
by an insurance company. Benefits payable by the Company under these plans are
secured with assets placed in an irrevocable trust.
Directors are also eligible to participate in the Retirement Plan for
Directors, whereby individuals who serve on the Company's Board of Directors
after 1982 and subsequently terminate their service as a director with at
7
<PAGE>
least five years' tenure, are entitled to receive an annual benefit from the
Company equal to the annual director retainer fee plus 12 times the regular
meeting fee, as such fees are in effect on the date of termination, payable to
the director (or to the director's surviving spouse of at least one year or
other designated beneficiary) for the number of full or partial years the
director served on the Company's Board. Following the death of the director's
surviving spouse, or if there is no surviving spouse living at the time of the
death of the director, any benefits will be paid to one or more secondary
beneficiaries designated by the director prior to his or her death until the
first to occur of (i) receipt of the maximum benefit to which the director
would have been entitled had he or she survived, (ii) the death of the
secondary beneficiaries, if natural persons or (iii) benefits have been paid
under the plan to the director, surviving spouse, and/or the secondary
beneficiaries for a combined period of ten years.
Non-employee directors also participate in the 1988 Stock Option Plan for
Non-Employee Directors ("1988 Plan"), pursuant to which options to purchase a
total of 16,000 shares (2,000 shares for each non-employee director) of
Company common stock were granted in 1996 to the non-employee directors
eligible to receive grants under such plan. The option price for each such
option granted is 100% of the fair market value of Company common stock on the
date of grant. All options granted have a term of ten years, and become
exercisable in two cumulative installments of 50% of the number of shares with
respect to which the option was initially granted, on each of the first and
second anniversaries of the grant date, except that all options owned by a
director which are unexercisable on the date the director retires at or after
age 72 will become fully exercisable on the date of such retirement. The plan
calls for each non-employee director to receive an option grant with respect
to 5,000 shares upon joining the Board of Directors, and automatic annual
grants of 2,000 shares thereafter to each continuing non-employee director.
8
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
The following table and accompanying notes show for the Chief Executive
Officer and the other four most highly compensated executive officers of the
Company for 1996, the compensation paid by the Company to such persons for
services in all capacities during 1996 and the preceding two fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------- --------------------- ----------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) (1) ($) (1) ($) ($) (#) (2) ($)(3) ($) (4)
------------------ ---- -------- ---------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles D. Miller 1996 $796,667 $ * -- -- 180,000 $1,253,000 $121,535
Chairman and Chief 1995 731,667 1,000,000 -- -- 200,000 -- 177,728
Executive Officer 1994 695,000 850,000 -- -- 334,000 217,000 167,904
Philip M. Neal 1996 $519,000 $ * -- -- 90,000 $ 813,500 $ 56,198
President and Chief 1995 471,333 600,000 -- -- 100,000 -- 62,936
Operating Officer 1994 440,000 500,000 -- -- 166,000 137,400 54,014
R. Gregory Jenkins 1996 $315,533 $ * -- -- 40,000 $ 491,000 $ 33,405
Senior Vice President, 1995 285,000 225,000 -- -- 40,000 -- 38,517
Finance and Chief 1994 267,000 200,000 -- -- 66,000 83,400 35,960
Financial Officer
Stephanie A. Streeter 1996 $270,000 $ * -- -- 34,000 $ 100,000 $ 17,725
Group Vice President 1995 212,083 131,500 -- -- 19,000 -- 8,919
Worldwide Office 1994 181,333 -- -- 33,000 15,000 7,801
Products 75,000
Robert G. van
Schoonenberg 1996 $282,500 $ * -- -- 74,200 $ 384,500 $ 26,352
Senior Vice President 1995 223,333 175,000 -- -- 16,000 -- 28,765
General Counsel & 1994 206,667 109,000 -- -- 28,800 12,000 19,809
Secretary
</TABLE>
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(1) Amounts shown include amounts earned but deferred at the election of
executive officers under the Company's deferred compensation plans and the
Company's Employee Savings Plan, a qualified defined contribution plan
under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code").
(2) Amounts for 1994 consist of options granted in February and December 1994.
The December grant was a result of a decision by the Board of Directors to
change the date of grants from the regular meeting of the Board in each
February to the date of the regular meeting of the Board in each December
and consequently the two grants in 1994 represent grants with respect to
two years of service. Amounts for each of 1995 and 1996 consist of only
one option grant, except for Mr. van Schoonenberg who had two grants in
1996.
(3) Amounts for 1994 and 1996 consist of cash payments under the Company's Key
Executive Long-Term Incentive Plan and Amended and Restated Key Executive
Long-Term Incentive Plan for the cycles which were completed on December
31, 1993 and December 31, 1995, respectively. The determination of cash
payments, if any, under the Company's Second Amended and Restated Key
Executive Long-Term Incentive Plan for the cycle which was completed on
December 31, 1996 will not be made until the second quarter of 1997.
(4) Amounts consist of (i) Company contributions to deferred compensation
plans and Company contributions to the Company's Employee Savings Plan, a
401(k) plan ("Savings Plan"); (ii) Company contributions to the Company's
Stock Holding and Retirement Enhancement Plan, a leveraged employee stock
ownership plan which offsets benefits under the Retirement Plan for
Employees of Avery Dennison Corporation; and (iii) interest earned on
deferred compensation accounts above 120% of the applicable federal rate
("above market interest"). These amounts for 1996 are $49,225, $6,073 and
$66,237, respectively for Mr. Miller; $34,350, $6,073 and $15,775,
respectively for Mr. Neal; $16,216, $6,073 and $11,116, respectively for
Mr. Jenkins; $11,550, $6,073 and $102, respectively for Ms. Streeter; and
$13,725, $6,073 and $6,554, respectively for Mr. van Schoonenberg.
- --------
* 1996 bonus amounts will be determined prior to the filing of, and will be
reflected in, the Company's definitive proxy statement.
9
<PAGE>
OPTION GRANTS
The following table shows information regarding options granted in 1996 to
each of the named executive officers under the 1990 Stock Option and Incentive
Plan for Key Employees (the "1990 Plan" or "1990 Stock Option Plan") and 1996
Stock Incentive Plan (the "1996 Plan"), pursuant to the Company's Third
Amended and Restated Key Executive Long-Term Incentive Plan (the "LTIP").
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------
NUMBER OF
SECURITIES % OF
UNDERLYING TOTAL OPTIONS EXERCISE
OPTIONS GRANTED TO OR BASE
GRANTED EMPLOYEES IN PRICE EXPIRATION GRANT DATE
NAME (#) (1) (2) FISCAL YEAR ($/SH) DATE PRESENT VALUE ($) (3)
---- ----------- ------------- -------- ---------- ---------------------
<S> <C> <C> <C> <C> <C>
Charles D. Miller 180,000 11.31% $34.9375 12/5/2006 $1,578,600
Philip M. Neal 90,000 5.66% 34.9375 12/5/2006 789,300
R. Gregory Jenkins 40,000 2.51% 34.9375 12/5/2006 350,800
Stephanie A. Streeter 34,000 2.14% 34.9375 12/5/2006 298,180
Robert G. van
Schoonenberg 34,200 2.15% 34.9375 12/5/2006 299,934
40,000 2.51% 27.9375 3/16/2006 280,514
</TABLE>
- --------
(1) Non-qualified stock options were granted at fair market value for a term
of ten years under the 1990 or the 1996 Plan, pursuant to the LTIP. With
the exception of Mr. van Schoonenberg's second grant of options which vest
ratably over four years, the options vest nine years and nine months from
the date of grant, but are eligible for accelerated vesting, beginning
three years from the date of grant, if the Company meets the "return on
total capital" (as defined in the LTIP) test set forth in the LTIP. This
test generally measures the Company's return on total capital against that
of a specified group of other companies approved by the Compensation and
Executive Personnel Committee.
(2) The Compensation and Executive Personnel Committee may accelerate the time
at which an option becomes exercisable, and in the event of a "change of
control" of the Company (as defined in the option agreement) options
become immediately exercisable.
(3) Option grant date values were determined using a Black-Scholes option
pricing model adapted for use in valuing executive stock options. In
determining the Black-Scholes value, the following underlying assumptions
were used: (i) stock price volatility is measured as the standard
deviation of the Company's stock price over the three years prior to grant
(ranges from .1684 to .1858); (ii) dividend yield is measured as the
cumulative dividends paid the last twelve months as a percentage of the
twelve month average of the month-end closing prices (for the month in
which the dividend was declared) prior to grant of the option (ranges from
2.09% to 2.86%); (iii) the risk-free rate of return represents the weekly
average of the ten-year Treasury bond rates for the 52 weeks immediately
preceding the grant date of the options (ranges from 6.25% to 7.06%); (iv)
option term represents the period from the date of grant of each option to
the expiration of the term of each option (10 years); (v) vesting
restrictions are reflected by reducing the value of the option determined
by the Black-Scholes model by 5% for each full year of vesting
restrictions, assuming that exercisability of the options was accelerated
to the fifth anniversary of the option grant date as a result of meeting
the performance condition described in footnote (1) as of that date (i.e.,
25%). In the event that the performance condition described in footnote
(1) is met later than the fifth anniversary of the grant date, or is not
met during the term of the options, the grant date present value of the
options would be lower. In the event that such performance condition is
not met at all and the options become exercisable nine years and nine
months after the options are granted, the grant date present value of the
options would be $1,078,000 for Mr. Miller; $539,100 for Mr. Neal;
$239,600 for Mr. Jenkins; $203,660 for Ms. Streeter; and $204,900 and
$186,957, respectively for Mr. van Schoonenberg. The Black-Scholes option
pricing model establishes a cash equivalent value for an option on the
date of grant. The Company's use of such model is not intended to forecast
any future appreciation in the price of the Company's stock. In addition,
no gain to the optionees is possible without appreciation in the price of
the Company's common stock, which will benefit all stockholders. If the
market price of the stock does not exceed the exercise price of the
options at some time after the options become exercisable or if they
terminate unvested or unexercised, the value of the options will
ultimately be zero.
10
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table shows for each of the named executive officers the
shares acquired on exercise of options during 1996, the difference between the
option exercise price and the market value of the underlying shares on the
date of such exercise, and (as to outstanding options at December 31, 1996)
the number of unexercised options and the aggregate unrealized appreciation on
"in-the-money", unexercised options held at such date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR- FISCAL YEAR-
END (#) END ($) (2)
--------------- ---------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) (1) UNEXERCISABLE UNEXERCISABLE
---- --------------- ---------------- --------------- ---------------------
<S> <C> <C> <C> <C>
Charles D. Miller 200,000 $3,643,740 953,956/714,000 $22,443,885/9,159,679
Philip M. Neal 47,316 814,720 392,400/356,000 9,306,210/4,559,495
R. Gregory Jenkins 80,570 1,289,084 140,400/146,000 3,358,619/1,821,123
Stephanie A. Streeter 1,600 36,650 17,550/ 87,050 398,249/ 927,230
Robert G. van
Schoonenberg -- -- 55,800/122,400 1,258,273/1,195,586
</TABLE>
- --------
(1) Market value of the common stock at the exercise date minus the exercise
price of the options exercised. Amounts in this column represent the value
realized by the named executive upon the exercise of stock options granted
in prior years. All options had exercise prices equal to the market price
of the Company's stock on the date the options were granted, and vested on
the basis of the executive's continued employment with the Company. Thus,
the amount realized upon exercise of the options resulted directly from
appreciation in the Company's stock price during the executives' tenure
with the Company.
(2) Market value of the common stock at December 31, 1996 minus the exercise
price of "in-the-money" options.
11
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS
Under the LTIP, key executives recommended by the Company's Chief Executive
Officer and designated by the Compensation and Executive Personnel Committee
of the Board of Directors (the "Committee") are eligible to receive annual
grants of stock options and to earn a deferred cash incentive award based on
the financial performance of the Company and, in some cases, its business
units. Participants in the LTIP are eligible to earn a deferred cash incentive
award after the end of each three-year performance cycle, which cycles
generally begin every other year (e.g., 1993 and 1995). The 1995-1997 cycle
was shortened to two years (1995-1996) because of changes in certain
management reporting responsibilities and in order to refocus management
efforts on value based management (economic value added) performance
measurements. A new cycle commenced in 1996 (1996-1998) and future cycles will
commence every other year (e.g., 1998 and 2000). Option grants pursuant to the
LTIP are made under the 1990 Plan or the 1996 Plan.
The following table shows, for each of the named executive officers, the
estimated future payouts, if any, under the LTIP for the performance cycle
which began in 1996. Threshold amounts are the minimum amounts which could be
paid under the LTIP and assume that the minimum level of performance is
achieved with respect to only one of the three pre-established performance
objectives (return on total capital, earnings per share and cumulative
economic value added) during the performance cycle. If such performance is not
achieved, amounts would be zero. In addition, maximum awards would not be paid
unless the Company achieved pre-established objectives substantially in excess
of these objectives.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUT UNDER
NUMBER OF SHARES, OTHER PERIOD UNTIL NON-STOCK PRICE BASED PLANS (3) (4)
UNITS OR OTHER MATURATION OR ------------------------------------
NAME RIGHTS (#) PAYOUT (2) THRESHOLD ($) TARGET ($) MAXIMUM ($)
---- ----------------- ------------------ ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Charles D. Miller -- 3 years $171,832 $737,082 $1,474,163
Philip M. Neal -- 3 years 112,110 480,901 1,082,027
R. Gregory Jenkins -- 3 years 68,377 293,305 659,935
Stephanie A. Streeter -- 3 years 60,770 260,675 586,519
Robert G. van
Schoonenberg -- 3 years 62,865 269,664 606,744
</TABLE>
- ----------
(1) Each listed executive officer has been designated by the Committee as a
participant in the LTIP for the performance cycle which began in 1996 and
is eligible to receive a deferred cash incentive award after the end of
that cycle of a percentage of the named executive's base salary in effect
at the end of the performance cycle. The threshold (minimum), target and
maximum awards are 18.6 percent, 80 percent and 160 percent of the
executive's base salary, respectively. The amount of the executive's award
will depend on the Company's actual performance during the performance
cycle versus the pre-established performance objectives. See "Report of
Compensation and Executive Personnel Committee on Executive Compensation"
for a more detailed description of the LTIP.
(2) The performance cycle began on January 1, 1996 and ends on December 31,
1998.
(3) Estimated future payouts under the LTIP are calculated using projected
salaries for the executive officers at December 31, 1998, the end of the
performance cycle.
(4) Upon a "change of control" (as defined in the LTIP) of the Company, each
executive will be entitled to receive a cash payment equal to the named
executive's target award based on his or her annual base salary rate in
effect at the time of the change of control.
12
<PAGE>
RETIREMENT PLAN
The Company provides retirement benefits for employees under the Retirement
Plan for Employees of Avery Dennison Corporation (the "Retirement Plan") and
the Benefit Restoration Plan (the "BRP"), described below. Benefits under the
Retirement Plan are based on compensation and are calculated separately for
each year of service using the formula 1.25% times compensation up to the
breakpoint (currently $25,920, which is the average of the Social Security
wage bases for the preceding 35 years) plus 1.75% times compensation in excess
of the breakpoint. The results of the calculation for each year of service are
added together to determine the annual single life annuity Retirement Plan
benefit for an employee at normal retirement (age 65). The benefit is not
subject to deductions for Social Security payments or other offsets.
Amounts payable under the Retirement Plan may be reduced in accordance with
certain Code provisions which, as applied to plan years beginning on or after
December 1, 1994, limited the amount of compensation used to determine annual
benefit accruals under the Retirement Plan to the first $150,000 of covered
compensation and which limited the annual pension benefit payable under the
Retirement Plan to $120,000. The Company established the BRP in 1995 to
provide for the payment of supplemental retirement benefits to eligible
employees, including each of the individuals listed in the table on page 9,
whose Retirement Plan benefits are limited under the foregoing Code
provisions. The BRP is an unfunded excess benefit plan which is administered
by the Company. Benefits are payable under the BRP in amounts equal to the
amount by which a participant's benefits otherwise payable under the
Retirement Plan, with respect to periods from and after December 1, 1994, are
reduced under the applicable provisions of the Code.
Compensation covered by the Retirement Plan includes both salary and bonus
amounts, less amounts deferred at the election of employees under the
Company's deferred compensation plans and the Company's Employee Savings Plan.
However, the BRP covers compensation without deduction of amounts deferred
under such plans. Hence the retirement benefits payable to each of the
individuals listed in the table on page 9 under the Retirement Plan and the
BRP, taken together, will be based (for each year of service from and after
December 1, 1994) on the sum of the salary and bonus amounts (including all
deferred amounts), earned in each such year. The estimated annual benefits
payable to each of these individuals at normal retirement are $208,180 for Mr.
Miller, $282,539 for Mr. Neal, $123,452 for Mr. Jenkins, $208,363 for Ms.
Streeter, and $166,046 for Mr. van Schoonenberg, respectively. These estimated
benefits do not include any assumption for annual increases in compensation.
Benefits under the Company's Retirement Plan and the BRP are coordinated
with benefits from the Stock Holding and Retirement Enhancement Plan (the
"SHARE Plan"), a leveraged employee stock ownership plan. Under this
arrangement, the pension benefit to which an employee would otherwise be
entitled under the Retirement Plan and the BRP ("basic pension benefit") is
provided first under the SHARE Plan and then, to the extent necessary, under
the Retirement Plan and the BRP. If the sum of the Retirement Plan benefit
accrued before adoption of the SHARE Plan and the SHARE Plan benefit exceeds
the basic pension benefit, the employee receives the higher benefit.
The Supplemental Executive Retirement Plan (the "SERP"), adopted in 1983, is
designed to provide its participants with additional incentives to further the
Company's growth and development and as an inducement to remain in its
service. Participants designated by the Committee of the Board of Directors
are offered benefits under this plan to supplement those to which they may be
entitled at the time of their retirement. The Committee has designated Charles
D. Miller as a participant in this plan. Mr. Miller's participation has been
set to commence upon his retirement after age 65 at a benefit level which,
when added to the benefits to which he will be entitled from the Retirement
Plan, the BRP and the SHARE Plan at the time of his retirement, Company
contributions to the Employee Savings Plan and Social Security, will equal
62.5% of his final three-year average compensation, plus an additional 0.5% of
such compensation for each year of employment after age 65 (or during which
termination compensation payments under his October 24, 1990 agreement with
the Company are being made). Assuming retirement at age 70, and certain
increases in compensation over the next two years, Mr. Miller's estimated
annual retirement benefit under the SERP would be $538,000. Survivor and
disability benefits are also payable under the SERP under certain
circumstances. Benefits payable under the SERP are secured with assets
13
<PAGE>
placed in an irrevocable trust. The cost of benefits payable under the SERP
will be recovered from the proceeds of life insurance purchased by the Company
if assumptions made as to life expectancy, policy dividends, and other factors
are realized.
OTHER INFORMATION
On October 24, 1990, the Company entered into an agreement with Mr. Miller,
providing that if Mr. Miller's employment with the Company is terminated for
any reason other than cause, retirement at or after age 70 or voluntary
resignation or following a "change of control" of the Company (as defined in
the agreement), the Company must for three years thereafter or until he
reaches age 70, whichever first occurs, pay Mr. Miller (or his beneficiary,
should he die before all such payments have been made) annual termination
compensation equal to the highest compensation (salary plus bonus) paid to him
in any of the three previous years (half of his average annual compensation
over this period for disability termination) and continue coverage during such
period for Mr. Miller, and to the extent possible for his spouse, under
existing life, accident, medical and dental plans. Amounts to which Mr. Miller
would be entitled under this agreement are reduced to the extent of any
compensation he earns from any new employment. If he dies while receiving
disability termination payments, or if his employment is terminated by death,
his spouse will be entitled to receive such disability termination payments,
as well as medical and dental benefits, until her death or September 1, 1997,
whichever first occurs. Following a change of control, payments to which Mr.
Miller would otherwise be entitled under other plans on account of a change of
control are to be limited to an aggregate amount equal to 2.99 times the "base
amount" as defined in Section 280G of the Code. If Mr. Miller's employment is
terminated for any reason other than cause, he will be entitled to purchase
the Company automobile, if any, then being provided for his use at the
depreciated book value thereof, and to have assigned to him at no cost
(although Mr. Miller must reimburse the Company for the cash value of the
policy, if any), and with no apportionment of prepaid premiums, any assignable
insurance policy then owned by the Company relating specifically to him (paid
up to age 70).
On October 23, 1990, Mr. Neal entered into an agreement with the Company
substantially the same as that of Mr. Miller described above, except (i) Mr.
Neal receives no benefits from the Company except those provided under other
Company plans under the agreement if his employment is terminated by death or
disability, (ii) the period of compensation following termination other than
for cause, voluntary resignation or retirement (at or after age 65) or
following a change of control is 18 months or until age 65, whichever first
occurs, (iii) Mr. Neal must use his best efforts to secure new employment
following termination and compensation earned from such employment offsets
payments due under this agreement and (iv) following a change of control, Mr.
Neal's rights will be governed by the Company's Executive Employment Security
Policy described below, instead of this agreement. On March 16, 1996, the
Company entered into an agreement with Mr. van Schoonenberg providing that if
his employment with the Company is terminated for any reason other than for
death, disability or cause, he will receive a payment equivalent to two years
salary and bonus; continue to participate in benefit and incentive plans for a
two-year period, his unvested options will be accelerated and he will receive
the minimum age and service credit required for early retirement eligibility
and other purposes; in the event of such termination within two years of a
change of control, he will receive a payment equal to three times salary and
bonus, payment for LTIP and reimbursement for excise taxes.
Messrs. Neal, Jenkins and van Schoonenberg have been designated by the
Committee as participants under the Company's Executive Employment Security
Policy (the "Policy"). The Policy provides that if within three years of a
"change of control" of the Company, as defined in the Policy, the employment
of an officer is terminated for reasons other than cause, death, disability,
normal retirement at or after age 65 or voluntary resignation (except for
resignation following a reduction in status or compensation), the officer will
be entitled to receive, for a period of one, two or three years, depending on
length of service (but in no event after the officer's 65th birthday), monthly
termination indemnity payments equal to one-twelfth of the highest annual
compensation (salary plus bonus) paid to such officer within the previous
three years. During this period the officer and his or her spouse are entitled
to the benefits provided under the Company's then existing life, accident,
medical and dental insurance plans, reduced to the extent they are provided by
another employer or under another group plan, and to the benefit of continued
accrual of benefits provided under the Company's Retirement Plan. During this
period the officer must use his or her best efforts to secure new employment,
and termination
14
<PAGE>
indemnity payments will be reduced by half the amount of any compensation he or
she receives from new employment. Ms. Streeter has been designated by the
Committee as a participant under the Company's 1985 Executive Employment
Security Policy. This policy is in all respects identical to the Policy except
that it prohibits participants from receiving termination compensation in
excess of an amount which would subject such compensation to the excise tax
provided in Section 4999 of the Code.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act") requires the Company's officers and directors, and persons who own more
than ten percent of a registered class of the Company's equity securities
(collectively, "Insiders"), to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the "SEC")
and the New York Stock Exchange. Insiders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on its review of the copies of such reports
furnished to the Company and written representations from certain Insiders that
no other reports were required for such Insiders, the Company believes that,
during the 1996 fiscal year, Insiders complied with all applicable Section
16(a) filing requirements.
REPORT OF COMPENSATION AND EXECUTIVE PERSONNEL COMMITTEE ON EXECUTIVE
COMPENSATION
The Committee has furnished the following report on executive compensation.
OVERALL POLICY
The Company's executive compensation program is designed to be closely linked
to Company performance and returns to stockholders. To this end, the Company
developed several years ago overall compensation strategy and specific
compensation plans that tie a significant portion of executive compensation to
the Company's success in meeting specified performance goals and to
appreciation in the Company's stock price. The overall objectives of this
strategy are to attract and retain the best possible executive talent, to
motivate these executives to achieve the goals inherent in the Company's
business strategy, to link executive and stockholders interests through equity
based plans and finally to provide a compensation package that recognizes
individual contributions as well as overall business results.
Each year the Committee, which is comprised exclusively of non-employee
directors, conducts a review of the Company's executive compensation program.
This review includes an assessment of the effectiveness of the Company's
compensation program and a comparison of the Company's executive compensation
and performance to comparable public corporations, including companies within
the Peer Group described under "Stockholder Return Performance". The Company
retains from time to time the services of executive compensation consultants to
provide to the Company and the Committee comparative data, benefit design
advice and analysis of the cost of incentives provided.
The Committee determines the compensation of the Company's 21 executive
officers, including the individuals whose compensation is detailed in this
proxy statement, and sets policies for and reviews the compensation awarded to
another approximately 48 highly compensated executives. This is designed to
ensure consistency throughout the executive compensation program. In reviewing
the individual performance of the 21 executive officers (other than Mr.
Miller), the Committee takes into account the detailed performance reviews and
recommendations of Mr. Miller.
The key elements of the Company's executive compensation program consist of
base salary, annual bonus, stock options, and, for certain executives,
participation in the Company's LTIP. The Committee's policies with respect to
each of these elements, including the basis for the compensation paid and
awarded to Mr. Miller, the Company's Chairman and Chief Executive Officer, are
discussed below. In addition, while the elements of compensation described
below are considered separately, the Committee takes into account the full
compensation package afforded by the Company to the individual.
15
<PAGE>
Under the 1993 Omnibus Budget Reconciliation Act ("OBRA"), income tax
deductions of publicly-traded companies may be limited to the extent total
compensation for certain executive officers exceeds $1 million (less the
amount of any "excess parachute payments" as defined in Section 280G of the
Code) in any one year, except for compensation payments which qualify as
"performance-based." The Committee has designed certain of the Company's
compensation programs to conform with the OBRA legislation and related
regulations so that total compensation paid to any employee covered by the
OBRA legislation will not exceed $1 million in any one year, except for
compensation payments which qualify as "performance-based." However, the
Company may pay compensation which is not deductible in certain circumstances
when sound management of the Company so requires. In addition, consistent with
its other objectives, the Committee may consider alternatives to provide for
the deductibility of compensation payments.
BASE SALARIES
Base salaries for new executive officers are initially determined by
evaluating the responsibilities of the position to be held and the experience
of the individual, and by reference to the competitive marketplace for
executive talent, including a comparison to base salaries for comparable
positions at other companies. The Company participates each year in two
nationwide salary surveys of between approximately 350 and 400 large public
companies performed by nationally recognized compensation consulting firms.
The Committee uses the data compiled from these surveys to assist it in
establishing base salaries. In general, base salaries and total compensation
for executives are targeted to a range that is within the third quartile (the
fourth quartile being the highest) of the compensation paid by such other
companies. Mr. Miller's base salary is also targeted in this range, and his
total compensation is targeted to a range within the fourth quartile. In
addition, in establishing salary levels within that range, the Committee
considers the competitiveness of the executives' entire compensation package.
For 1996, salary levels were within or below this range, based on competitive
salary data compiled in 1995 and updated for use in 1996.
Annual salary adjustments are determined by evaluating the performance of
the Company and of each executive officer, reviewing base salaries for
comparable positions at other companies contained in the salary surveys
described above, and, for selected senior executives, including Mr. Miller,
comparing the total compensation packages of the executives, including base
salary, with those of the companies in the Peer Group described under
"Stockholder Return Performance". In addition, the Committee takes into
account any new responsibilities. In the case of executive officers with
responsibility for a particular business unit, such unit's financial results
are also considered. The Committee, where appropriate, also considers non-
financial performance measures. These include increases in market share,
manufacturing efficiency gains, and improvements in product quality, customer
service, working capital management, employee safety, relations with employees
and leadership development.
With respect to the base salary granted to Mr. Miller in 1996, the Committee
took into account a comparison of base salaries of chief executive officers of
the other companies contained in the salary surveys described above; the total
compensation packages of the executives, including base salary, of the
companies in the Peer Group described under "Stockholder Return Performance",
the Company's success in exceeding several financial goals in 1996, including
return on total capital ("ROTC") and earnings per share ("EPS"); the
performance of the Company's common stock; and the assessment by the Committee
of Mr. Miller's individual performance, including his leadership with respect
to the development of long-term business strategies for the Company to improve
its economic value, leadership development, succession planning and management
continuity. The Committee also took into account the longevity of Mr. Miller's
service to the Company and its belief that Mr. Miller is an excellent
representative of the Company to the public by virtue of his stature in the
community and the industries in which the Company operates. Mr. Miller was
granted a base salary of $820,000 for 1996 (effective May 1996), an increase
of 9.3% over his $750,000 base salary for 1995.
16
<PAGE>
ANNUAL BONUS
The Company's executive officers, other than Messrs. Miller and Neal, are
eligible for an annual cash bonus under the Company's Executive Incentive
Compensation Plan (the "Executive Bonus Plan"). Under the Executive Bonus
Plan, individual and corporate performance objectives are established at the
beginning of each year. Eligible executives are assigned threshold, target and
maximum bonus levels. The Company performance measure for bonus payments is
based on several financial goals, including, in 1996, ROTC and EPS. For
executive officers with responsibility for a particular group, each of which
consists of several business units, the performance measure is based on the
group's net income and ROTC. The Committee weighs these financial goals very
heavily. Each of the specified financial performance measures is given
approximately equal weight. In 1996, the Company exceeded each of its targeted
financial goals. The Committee also considers the individual non-financial
performance measures described above under "Base Salaries" in determining
bonuses under the Executive Bonus Plan, but to a much lesser extent than the
financial goals described above.
Messrs. Miller and Neal are eligible for an annual cash bonus under the
Company's Senior Executive Incentive Compensation Plan (the "Senior Executive
Bonus Plan") which was approved by stockholders in 1994 as part of the
Company's policy to design certain of the Company's compensation programs to
conform with the OBRA legislation and related regulations. Payments under the
Senior Executive Bonus Plan are based solely on the achievement of one or more
of the following pre-established objective performance goals: ROTC, EPS,
return on sales, economic value added, return on equity, net income, cash
flow, sales and total shareholder return (defined as cumulative shareholder
return, including the reinvestment of dividends, on the Company's common
stock), subject to the Committee's discretion to decrease awards which would
otherwise be payable under the Senior Executive Bonus Plan. In addition, no
bonuses are payable to the chief executive officer, chief operating officer or
chief financial officer (who is currently a participant in the Executive Bonus
Plan) unless the Company's pre-tax return on stockholders' equity exceeds a
minimum threshold and, in such event, the total of such executives' bonuses
may not exceed a specified percentage of the Company's pre-tax return on
stockholders' equity in excess of that minimum threshold. In 1996, the Company
substantially exceeded each of its targeted performance goals (ROTC and EPS)
under the Senior Executive Bonus Plan. Based on this performance, Mr. Miller
was awarded a bonus of * , a % increase over the bonus paid in 1995.
STOCK OPTIONS
Under the 1990 Plan and 1996 Plan, which was approved by the Committee and
adopted by the Board this year, stock options are granted to the Company's
executive officers. The size of stock option awards is determined by the
Committee using as a guideline a formula which takes into account competitive
compensation data and the executive's total cash compensation opportunity
(base salary and bonus opportunity). The formula does not take into account
the amount of stock options previously awarded to the executive officers
although the Committee may do so. In the event of poor Company or individual
performance, the Committee can elect not to award options or grant options on
fewer shares.
Stock options are designed to align the interests of executives with those
of the stockholders. The Committee believes that significant equity interests
in the Company held by the Company's management align the interests of
stockholders and management. The Company has adopted a stock ownership
philosophy for officers and directors which encourages each officer and
director to achieve and maintain certain specified levels of stock ownership
during his or her tenure with the Company.
Stock options are granted with an exercise price equal to the market price
of the common stock on the date of grant and with a ten-year term. Options for
LTIP participants (including the individuals whose compensation is detailed in
this proxy statement) vest nine years and nine months from the date of grant,
subject to accelerated vesting beginning three years from the date of grant if
the Company meets the ROTC test set forth in the LTIP. Options for the rest of
the Company's executives vest 25% per year over four years. This approach is
designed to promote the creation of stockholder value over the long-term since
the full benefit of the compensation package cannot be realized unless stock
price appreciation occurs over a number of years.
- --------
* 1996 bonus amount will be determined prior to filing of, and will be
reflected in, the Company's definitive proxy statement.
17
<PAGE>
In 1996, Mr. Miller received options to purchase 180,000 shares with an
exercise price of $34.9375 per share. Mr. Miller now owns directly 303,334
shares of the Company's common stock and, with the 1996 grant, holds options
to purchase an additional 1,667,956 shares, of which options to purchase
953,956 shares were exercisable at December 31, 1996.
LTIP
Under the LTIP, key executives recommended by the Company's Chief Executive
Officer and designated by the Committee are eligible to receive annual grants
of stock options, as described above, and to earn a deferred cash incentive
award based on the financial performance of the Company and, in some cases,
its business units. Participants in the LTIP are eligible to earn a deferred
cash incentive award after the end of each multi-year performance cycle, which
cycles generally begin every other year (e.g., 1993 and 1995). Option grants
pursuant to the LTIP are made under the 1990 Plan and 1996 Plan and are
described above under "Stock Options".
During 1996, the Committee accelerated the cycle commencing in 1995 because
of changes in certain management reporting responsibilities and in order to
refocus management efforts on value based management (economic value added)
performance measurements. The Committee also designated each of the executive
officers whose compensation is detailed in this proxy statement, and certain
other executives, as participants in the LTIP for the performance cycle which
began in 1996. The determination of cash payouts, if any, under the Company's
Second Amended and Restated Key Executive Long-Term Incentive Plan (the
predecessor of the LTIP) for the performance cycle begun in 1995 and ending in
1996 is not expected to be made until the second quarter of 1997.
Each of the most senior group of executives who is designated as a
participant in the LTIP (including Mr. Miller and the other executives whose
compensation is detailed in this proxy statement) ("Senior Executives") is
eligible to receive (after the end of the performance cycle (1998)) a deferred
cash incentive award of a percentage of his or her base salary in effect at
the end of the cycle. The threshold (i.e., minimum), target and maximum awards
are 18.6 percent, 80 percent and 160 percent of the executive's base salary,
respectively. The award is based on the Company's achievement of certain pre-
established ROTC, EPS and cumulative economic value added objectives, each of
which is given equal weight. The threshold award of 18.6 percent of base
salary will be earned if the Company meets at least 80 percent of the ROTC,
EPS, or cumulative EVA objective. The target award of 80 percent of base
salary will be earned if the Company achieves 100 percent of each of the ROTC,
EPS and cumulative economic value added objectives. The maximum award will be
earned only if the Company achieves pre-established objectives substantially
in excess of these objectives.
Participants other than Senior Executives ("Other Participants") are divided
into categories under the LTIP based on their positions with the Company.
Target and threshold awards are based on the Company's achievement of certain
pre-established ROTC and EPS objectives (each of which is given equal weight)
or, for executives who are responsible for a business unit, the unit's
achievement of pre-established ROTC, net income and cumulative business unit
economic value added objectives (each of which is given equal weight).
Threshold awards for Other Participants, ranging from 7 percent to 14 percent
of base salary (depending on the category), will be earned if at least 80%
percent of one of the applicable objectives is met. Target awards ranging from
30 percent to 60 percent of base salary will be earned if 100 percent of all
three objectives are achieved. Maximum awards ranging from 60 percent to 120
percent of base salary, depending on the category, will be earned only if the
Company achieves pre-established objectives substantially in excess of these
objectives and, for executives who are responsible for a business unit, such
business unit reaches certain levels of achievement of its ROTC, net income
and cumulative business unit economic value added objectives. In addition, for
Other Participants, the Committee may, in its discretion, provide for deferred
cash incentive awards in excess of the awards which would be made based on the
formulae contained in the LTIP.
CONCLUSION
Through the programs described above, a very significant portion of the
Company's executive compensation is linked directly to individual and Company
performance and stock price appreciation. In 1996, approximately 50% of the
Company's executive compensation (over 70% for the individuals listed in the
table on page 9)
18
<PAGE>
consisted of these performance-based variable elements. In the case of Mr.
Miller, approximately 80% of his 1996 compensation consisted of performance-
based variable elements. The Committee intends to continue the policy of
linking executive compensation to Company performance and returns to
stockholders, recognizing that the ups and downs of the business cycle from
time to time may result in an imbalance for a particular period.
February 27, 1997
John C. Argue, Chairman
Frank V. Cahouet
Sidney R. Petersen
STOCKHOLDER RETURN PERFORMANCE
The graph on the next page compares the Company's cumulative stockholder
return on its common stock, including the reinvestment of dividends, with the
return on the Standard & Poor's 500 Stock Index (the "S&P 500 Index") and the
average return, weighted by market capitalization, of a peer group of
companies (the "Peer Group"). In addition, the Company has included the median
return of the Peer Group in the graph because, under the Company's LTIP,
Company performance is measured against the performance of other companies
using a percentile approach in which each company is given equal weight
regardless of its size.
The Peer Group is comprised of Air Products & Chemicals Inc., Armstrong
World Industries Inc., Arvin Industries Inc., Baker-Hughes, Inc., Bemis
Company, Inc., Boise Cascade Corporation, Cabot Corporation, Crane Co.,
Danaher Corporation, Dresser Industries, Inc., Eaton Corporation, Ecolab Inc.,
Engelhard Corporation, Ethyl Corporation, Federal-Mogul Corporation, Ferro
Corporation, H. B. Fuller Company, The B. F. Goodrich Co., W. R. Grace & Co.,
Great Lakes Chemical Corporation, Harris Corporation, Harsco Corporation,
Hercules Inc., Illinois Tool Works Inc., Ingersoll-Rand Co., James River
Corporation of Virginia, Mark IV Industries Inc., The Mead Corporation, Moore
Corporation Ltd., Morton International Inc., Nacco Industries, Nalco Chemical
Co., Newell Co., Olin Corporation, P.P.G. Industries Inc., Parker-Hannifin
Corporation, Pentair Inc., Pitney Bowes Inc., Premark International Inc.,
Rubbermaid Inc., Sequa Corporation, The Sherwin-Williams Co., Snap-On Tools
Corp., Sonoco Products Co., Stanley Works, Tecumseh Products Co., Union Camp
Corporation, Union Carbide Corporation, Westvaco Corporation, and Witco
Corporation.
19
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
OF AVERY DENNISON, S&P 500 INDEX AND PEER GROUP,
WEIGHTED AVERAGE (2) AND MEDIAN
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period AVERY S&P PEER GROUP PEER GROUP
(Fiscal Year Covered) DENNISON 500 INDEX (WT. AVERAGE) (MEDIAN)
- --------------------- -------- --------- ------------- ----------
<S> <C> <C> <C> <C>
Measurement Pt-12/91 $100.00 $100.00 $100.00 $100.00
FYE 12/92 $117.00 $108.00 $110.00 $110.00
FYE 12/93 $123.00 $118.00 $132.00 $131.00
FYE 12/94 $153.00 $120.00 $134.00 $129.00
FYE 12/95 $222.00 $165.00 $176.00 $165.00
FYE 12/96 $321.00 $203.00 $202.00 $194.00
</TABLE>
- --------
(1) Assumes $100 invested on December 31, 1991 and the reinvestment of
dividends; chart reflects performance on a calendar year basis.
(2) Weighted average is weighted by market capitalization.
Stock price performance of the Company reflected in the above graph is not
necessarily indicative of future price performance.
20
<PAGE>
CERTAIN TRANSACTIONS
Peter W. Mullin is the chairman and chief executive officer and a director
of Mullin Insurance Services, Inc. ("MINC") and PWM Insurance Services, Inc.
("PWM"), executive compensation and benefit consultants and insurance agents.
Mr. Mullin is also the majority stockholder of MINC and the principal
stockholder of PWM. During 1996, the Company paid insurance companies premiums
for life insurance placed by MINC and PWM in 1996 and prior years in
connection with various Company employee benefit plans. In 1996, MINC and PWM
earned commissions from such insurance companies in an aggregate amount of
approximately $590,200 for the placement and renewal of this insurance, in
which Mr. Mullin had direct and indirect interests approximating $446,900.
Richard M. Ferry is co-founder, chairman and chief executive officer, a
director and stockholder of Korn/Ferry International ("Korn/Ferry"), an
executive search firm. During 1996, Korn/Ferry received an aggregate of
approximately $565,524 in payments from the Company for worldwide executive
search services, in which Mr. Ferry had an indirect interest approximating
$40,152. In addition, in 1996 Korn/Ferry and PCM had interests in Strategic
Compensation Associates ("SCA"). During 1996, the Company paid SCA a total of
$67,431 for consulting assignments, in which Mr. Ferry and Mr. Mullin had
indirect interests approximating $864 and $13,701, respectively.
VOTING SHARES
Stockholders of record at the close of business on February 25, 1997, are
entitled to notice of, and to vote at, the Annual Meeting. There were * shares
of common stock of the Company outstanding on February 25, 1997.
PRINCIPAL STOCKHOLDERS
Whenever in this proxy statement information is presented as to "beneficial
ownership", please note that such ownership indicates only that the person
shown, directly or indirectly, has or shares with others the power to vote (or
to direct the voting of) or the power to dispose of (or to direct the
disposition of) such shares; he or she may or may not have any economic
interest in the shares. The reporting of information herein does not
constitute an admission that any such person is, for the purpose of Section 13
or 16 of the 1934 Act, the "beneficial owner" of the shares shown herein.
To the knowledge of the Company, the following was the only person or group
who, as of December 31, 1996, owned beneficially 5% or more of the outstanding
common stock of the Company.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
<S> <C> <C>
Avery Dennison Corporation
Employee Stock Benefit Trust ("ESBT")............. 17,959,358(1) 14.8%
Wachovia Bank of North Carolina, N.A., Trustee
101 North Main Street
Winston-Salem, NC 27150-3099
</TABLE>
- --------
(1) The Trust and Wachovia Bank of North Carolina, as Trustee, disclaim
beneficial ownership of these shares.
The Company's Employee Savings Plan and SHARE Plan (the "Plans") together
owned a total of 11,600,533 shares of Company common stock on December 31,
1996, or 9.5% of Common Stock then outstanding. Although the Company is the
Administrator of the Plans, each plan was established and is administered to
achieve the different purposes for which it was created for the exclusive
benefit of its participants, and employees participating in the Plans are
entitled to vote all shares allocated to their accounts. Accordingly, such
plans do not constitute a "group" within the meaning of Section 13(d) of the
1934 Act.
- --------
* Amounts will be determined prior to filing of, and will be reflected in, the
Company's definitive proxy statement.
21
<PAGE>
AMENDMENT OF THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK (PROXY ITEM 2)
The Board of Directors is presenting, for approval by the stockholders, an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 200 million to 400 million, with a
par value of $1.00 each.
On October 24, 1996, the Board approved a two-for-one split of the Company's
Common Stock. The stock split was effected in the form of a distribution to
stockholders on December 20, 1996, of one additional share of Common Stock for
each share owned as of December 6, 1996. The Board authorized the stock split
because the Board believed it would broaden the market for, and increase the
liquidity of, the Company's Common Stock. Although the stock split resulted in
a doubling of the number of shares of Common Stock outstanding, it did not
increase the total number of shares of Common Stock authorized for issuance
under the Company's Certificate of Incorporation.
As of February 25, 1997, * shares of Common Stock have been
issued and are outstanding and another 9,500,000 shares have been reserved for
future issuance pursuant to stock options outstanding or that may be granted
in the future under the Company's 1988 Plan and 1990 Plan, for a total of
* shares of Common Stock outstanding or reserved for issuance
upon exercise of options. Pursuant to the Company's Preferred Share Purchase
Rights Plan, as amended in December 1994 ("Rights Plan"), preferred share
purchase rights have been reserved for possible issuance thereunder in an
amount equal to the number of shares of Common Stock outstanding or reserved
for issuance. In certain circumstances, shares of Common Stock could become
issuable upon exercise of such rights, in an amount not determinate until such
time as the rights become exercisable.
On January 30, 1997, the Board of Directors of the Company authorized an
amendment to subparagraph (a) of Article IV of the Certificate of
Incorporation to increase the total authorized shares of Common Stock from 200
million to 400 million, subject to stockholder approval at the Annual meeting
on April 24, 1997. The text of subparagraph (a) as so amended is set forth in
Appendix A to this proxy statement.
The Board believes it is advisable for the Company, particularly in light of
the December 1996 stock split, to have an increased number of authorized
shares of Common Stock which would be available for future issuance for
various corporate purposes. If approved by the shareholders, such additional
authorized shares would be available for issuance at the discretion of the
Board of Directors without further shareholder approval (subject to
requirements of the New York Stock Exchange) to take advantage of future
opportunities for equity financing, to improve the Company's capital
structure, in connection with possible acquisitions, splits or stock
dividends, and for other corporate purposes. Except as indicated above in
connection with the Company's 1988 Plan, 1990 Plan, 1996 Plan, Savings Plan,
SHARE Plan and the Rights Plan, there are at present no plans, arrangements,
negotiations or commitments which will result in the issuance of additional
shares of Company Common Stock. The Board does not intend to issue any of the
additional shares that will be authorized under the amendment except upon
terms that the Board deems to be in the best interests of the Company. Holders
of Common Stock have no preemptive or other subscription rights with respect
to future share issuances.
The additional shares of Common Stock to be authorized by the proposed
amendment could be issued in the future by the Board in ways that would make
more difficult a change in control of the Company, for instance through a
private sale to purchasers allied with management, diluting the stock
ownership of the person seeking to gain control of the Company. In addition,
the issuance of additional Common Stock could have a dilutive effect on
earnings per share and on the equity and voting rights of the present holders
of Common Stock. However, the proposed amendment is not the result of
knowledge by management of any specific effort by any person or group to
obtain control of the Company, and the Company has no present intention of
issuing additional shares (other than shares already reserved) to discourage
any such effort or for any other purpose.
* Amounts will be determined prior to filing of, and will be reflected in, the
Company's definitive proxy statement.
22
<PAGE>
VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of the shares entitled to vote at the
Annual Meeting is required to approve this amendment to the Certificate of
Incorporation. Your Board of Directors recommends a vote FOR this amendment.
GENERAL
INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P. to serve as the
Company's independent accountants for the 1997 fiscal year. One or more
representatives of Coopers & Lybrand L.L.P. will be present at the Annual
Meeting to respond to appropriate questions and will be given an opportunity to
make a statement if they so desire.
STOCKHOLDER PROPOSALS
Stockholder proposals for presentation at the annual meeting scheduled to be
held on April 30, 1998, must be received at the Company's principal executive
offices on or before November 7, 1997. The Company's Bylaws provide that
stockholders desiring to nominate persons for election to the board of
directors or to bring any other business before the stockholders at an annual
meeting must notify the Secretary of the Company thereof in writing 60 to 90
days prior to the first anniversary of the preceding year's annual meeting (or,
if the date of the annual meeting is more than 30 days before or more than 60
days after such anniversary date, 60 to 90 days prior to such annual meeting or
within 10 days after the public announcement of the date of such meeting is
first made by the Company; or, if the number of directors to be elected to the
board of directors is increased and the Company does not make a public
announcement naming all of the nominees for director or specifying the size of
the increased board at least 70 days prior to the first anniversary of the
preceding year's annual meeting, within 10 days after such public announcement
is first made by the Company (with respect to nominees for any newly created
positions only)). Such notice must include (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or
is otherwise required, in each case pursuant to Regulation 14A under the 1934
Act and Rule 14a-11 thereunder, (b) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of such
business, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made, and (c) the name and
record address, and class and number of shares owned beneficially and of
record, of such stockholder and any such beneficial owner.
23
<PAGE>
ANNUAL REPORT
The Company's 1996 Annual Report to Stockholders has recently been mailed to
all stockholders of record.
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, AND RETURN THE ACCOMPANYING
PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
Robert G. van Schoonenberg
Secretary
Dated: March 7, 1997
24
<PAGE>
APPENDIX A
CERTIFICATE OF INCORPORATION
ARTICLE IV
(a) The Corporation is authorized to issue two classes of shares to be
designated, respectively, "Common Stock" and "Preferred Stock". The total
number of shares which the Corporation shall have authority to issue is Four
Hundred Five Million (405,000,000) shares, and the aggregate par value of all
shares which are to have a par value is Four Hundred Five Million Dollars
($405,000,000). The total number of shares of Preferred Stock which the
Corporation shall have authority to issue is Five Million (5,000,000) shares,
and the par value of each share of Preferred Stock is One Dollar ($1.00). The
total number of shares of Common Stock which the Corporation shall have
authority to issue is Four Hundred Million (400,000,000) shares, and the par
value of each share of Common Stock is One Dollar ($1.00).
<PAGE>
PROXY
SOLICITED BY BOARD OF DIRECTORS AVERY DENNISON CORPORATION
ANNUAL MEETING - APRIL 24, 1997 150 NORTH ORANGE GROVE BOULEVARD
PASADENA, CALIFORNIA PASADENA, CALIFORNIA 91103
[LOGO OF AVERY DENNISON]
- ------------------------
The undersigned hereby appoints Charles D. Miller, Philip M. Neal, and Richard
M. Ferry, or each or any of them with power of substitution, proxies for the
undersigned to act and vote at the 1997 annual meeting of stockholders of Avery
Dennison Corporation and at any adjournments thereof as indicated upon the
matters referred to on the reverse side and described in the proxy statement for
the meeting, and, in their discretion, upon any other matters which may properly
come before the meeting.
1. Election of Directors
NOMINEES: Sidney R. Petersen, John C. Argue and John B. Slaughter
2. Approval of the amendment to the Company's Certificate of Incorporation to
increase the number of authorized Common Shares to 400 million.
IF NO OTHER INDICATION IS MADE, THE PROXIES SHALL VOTE FOR THE ELECTION
OF THE DIRECTOR NOMINEES AND FOR PROPOSAL NUMBER 2.
(OVER)
(continued and to be signed on other side)
<PAGE>
-- PLEASE FOLD AND DETACH HERE --
Dear Stockholder:
You are receiving in this mailing a proxy statement and this proxy card. As a
stockholder of Avery Dennison, your vote is very important. PLEASE COMPLETE
THIS PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED so that your
vote can be tabulated prior to the Annual Meeting of Stockholders which will be
held on April 24, 1997.
If you have any questions concerning the proxy statement or this proxy card,
please contact me at (818) 304-2032.
Thank you for taking advantage of this opportunity to participate as a
stockholder of your Company and promptly returning the proxy card.
Sincerely,
Robert G. van Schoonenberg
Secretary
<PAGE>
Please mark [X]
your votes as
indicated in
this example
A vote FOR ALL nominees is A vote FOR is recommended
recommended by the Board by the Board of Directors.
of Directors.
1. Election of Directors 2. Approval of the amendment to the
(page 1) Company's Certificate of Incorporation
to increase the number of authorized
Common Shares to 400 million (page 22)
FOR WITHHELD
FOR ALL EXCEPT the following ALL FROM ALL FOR AGAINST ABSTAIN
nominee(s):
_______________________ [_] [_] [_] [_] [_]
PLEASE DO NOT FOLD OR
PERFORATE THIS CARD
IMPORTANT--PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. THANK YOU.
Send admission ticket for meeting [_]
Signature(s) of Stockholder(s) Date , 1997
----------------- -------------
NOTE: If acting as attorney, executor, trustee, or in other representative
capacity, please sign name and title.
-- PLEASE FOLD AND DETACH HERE --
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS AVERY DENNISON CORPORATION
150 NORTH ORANGE GROVE BOULEVARD
PASADENA, CALIFORNIA 91103
[LOGO OF AVERY DENNISON]
- ------------------------
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK AS TABULATING AGENT FOR THE TRUSTEE
OF THE AVERY DENNISON CORPORATION SAVINGS PLAN AND SHARE PLAN
VOTING INSTRUCTIONS SOLICITED BY THE TRUSTEE ON BEHALF OF THE BOARD OF
DIRECTORS OF AVERY DENNISON CORPORATION FOR THE ANNUAL MEETING OF
STOCKHOLDERS, APRIL 24, 1997.
The undersigned hereby authorizes U.S. Trust Company of California, N.A., as
Trustee, to act and vote at the 1997 annual meeting of stockholders of Avery
Dennison Corporation and at any adjournments thereof as indicated upon the
matters referred to on the reverse side and described in the proxy statement for
the meeting, and, in its discretion, upon any other matters which may properly
come before the meeting.
1. Election of Directors
NOMINEES: Sidney R. Petersen, John C. Argue and John B. Slaughter
2. Approval of the amendment to the Company's Certificate of Incorporation to
increase the number of authorized Common Shares to 400 million.
IF NO OTHER INDICATION IS MADE, THE SHARES SHALL BE VOTED FOR THE ELECTION
OF THE DIRECTOR NOMINEES AND FOR PROPOSAL NUMBER 2.
(OVER)
(continued and to be signed on other side)
<PAGE>
-- PLEASE FOLD AND DETACH HERE --
Dear Avery Dennison Employee:
As a participant in the Avery Dennison Corporation Savings Plan and SHARE Plan,
your voice in Company-related matters is important to our success.
You are receiving in this mailing a proxy statement and this voting instruction
card. I urge you to take seriously your voting rights as a Plan participant.
PLEASE COMPLETE THIS CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED NO
LATER THAN APRIL 21, 1997 so that your instructions can be tabulated prior to
the Annual Meeting of Stockholders which will be held on April 24, 1997.
If you have any questions concerning the proxy statement or this card in
reference to the Avery Dennison Corporation Savings Plan or SHARE Plan, please
contact the Trustee, U.S. Trust Company of California, at (800) 535-3093 between
8:30 a.m. and 5:00 p.m. Pacific Standard Time, Monday through Friday.
Thank you for taking advantage of this opportunity to participate as a Plan
participant and promptly returning this card.
Sincerely,
Robert G. van Schoonenberg
Secretary
<PAGE>
Please mark [X]
your votes as
indicated in
this example
A vote FOR ALL nominees is A vote FOR is recommended
recommended by the Board by the Board of Directors.
of Directors.
1. Election of Directors 2. Approval of the amendment to the
(page 1) Company's Certificate of Incorporation
to increase the number of authorized
Common Shares to 400 million (page 22)
FOR WITHHELD
FOR ALL EXCEPT the following ALL FROM ALL FOR AGAINST ABSTAIN
nominee(s):
[_] [_] [_] [_] [_]
_______________________
PLEASE DO NOT FOLD OR
PERFORATE THIS CARD
IMPORTANT--PLEASE MARK, SIGN, DATE AND
RETURN THIS CARD PROMPTLY IN THE ENCLOSED
ENVELOPE. THANK YOU.
Send admission ticket for meeting [_]
Signature of Employee __________________ Date ____________, 1997
NOTE: If acting as attorney, executor, trustee, or in other representative
capacity, please sign name and title.
-- PLEASE FOLD AND DETACH HERE --
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS AVERY DENNISON CORPORATION
150 NORTH ORANGE GROVE BOULEVARD
PASADENA, CALIFORNIA 91103
[LOGO OF AVERY DENNISON]
- ------------------------
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK AS TABULATING AGENT FOR THE TRUSTEE
OF THE AVERY DENNISON CORPORATION EMPLOYEE STOCK BENEFIT TRUST
VOTING INSTRUCTIONS SOLICITED BY THE TRUSTEE ON BEHALF OF THE BOARD OF
DIRECTORS OF AVERY DENNISON CORPORATION FOR THE ANNUAL MEETING OF
STOCKHOLDERS, APRIL 24, 1997.
The undersigned hereby authorizes Wachovia Bank of North Carolina, N.A., as
Trustee, to act and vote at the 1997 annual meeting of stockholders of Avery
Dennison Corporation and at any adjournments thereof as indicated upon the
matters referred to on the reverse side and described in the proxy statement for
the meeting, and, in its discretion, upon any other matters which may properly
come before the meeting.
1. Election of Directors
NOMINEES: Sidney R. Petersen, John C. Argue and John B. Slaughter
2. Approval of the amendment to the Company's Certificate of Incorporation to
increase the number of authorized Common Shares to 400 million.
IF NO OTHER INDICATION IS MADE, THE SHARES SHALL BE VOTED FOR THE ELECTION
OF THE DIRECTOR NOMINEES AND FOR PROPOSAL NUMBER 2.
(OVER)
(continued and to be signed on other side)
<PAGE>
-- PLEASE FOLD AND DETACH HERE --
Dear Avery Dennison Optionee:
As an employee and a holder of vested stock options from Avery Dennison, your
voice in Company-related matters is important to our success. Under the terms
of the Avery Dennison Corporation Employee Stock Benefit Trust (which was
established in October 1996 to satisfy Company obligations under certain
employee benefit plans, including the 1990 Stock Option Plan), you are entitled,
along with other optionees, to instruct the Trustee how to vote shares held by
the Trust.
You are receiving in this mailing a proxy statement and this voting instruction
card. I urge you to take seriously your voting rights as an optionee. PLEASE
COMPLETE THE CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED so that your
instructions can be tabulated prior to the Annual Meeting of Stockholders which
will be held on April 24, 1997.
If you have any questions concerning the proxy statement or this card in
reference to the Employee Stock Benefit Trust, please contact the Trustee,
Wachovia Bank of North Carolina, at (800)642-0891.
Thank you for taking advantage of this opportunity to participate as an optionee
and promptly returning this card.
Sincerely,
Robert G. van Schoonenberg
Secretary
<PAGE>
Please mark [X]
your votes as
indicated in
this example
A vote FOR ALL nominees A vote FOR is recommended by the Board of
is recommended by the Directors.
Board of Directors.
1. Election of Directors 2. Approval of the amendment to the
(page 1) Company's Certificate of Incorporation
to increase the number of authorized
Common Shares to 400 million (page 22)
WITHHELD
FOR ALL EXCEPT the following FOR ALL FROM ALL FOR AGAINST ABSTAIN
nominee(s): [_] [_] [_] [_] [_]
_______________________
PLEASE DO NOT FOLD OR
PERFORATE THIS CARD
IMPORTANT--PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. THANK YOU.
Send admission ticket for meeting [_]
Signature of Optionee Date , 1997
------------------------------- ----------
NOTE: If acting as attorney, executor, trustee, or in other representative
capacity, please sign name and title.
-- PLEASE FOLD AND DETACH HERE --
