AMENDMENT
TO RETENTION AGREEMENT
This
Amendment to Retention Agreement is entered into by and between
Avery Dennison Corporation, a Delaware corporation (the
“Company”) and Daniel R. O’Bryant (the
“Executive”), effective as of January 1,
2008.
WHEREAS the
Company and the Executive have previously entered into that certain
Retention Agreement effective as of March 31, 2005 (the
“Retention Agreement”);
WHEREAS
with the enactment of section 409A of the Internal Revenue Code of
1986, as amended (“Code Section 409A”), certain
modifications are made to the Retention Agreement with retroactive
effect to January 1, 2008; and
WHEREAS the
Company and the Executive desire to amend the Retention Agreement
to comply with Code Section 409A;
NOW,
THEREFORE, the Retention Agreement is hereby amended as
follows:
1.
Annual Stock Option Grants. Section 3(iii) of the
Retention Agreement is amended to provide that the three remaining
stock options grants for each of 2009, 2010 and 2011 shall be
granted at the time of the Company’s annual grant with
respect to such year, which annual grant may occur in the following
year; provided, that the final grant of stock options under
Section 3(iii) is expected to be made in
February 2012.
2.
Change in Control. The Retention Agreement is amended to
rename Section 4 “Termination of Employment and Change
in Control” and to add the following new Sections 4(f) and
4(g):
(f) Vesting
Event Change in Control.
For
purposes of this Agreement, “Vesting Event Change in
Control” shall mean:
(i)
the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (A) the then-outstanding shares of common stock
of the Company (the “Outstanding Common Stock”) or
(B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (4) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (iii); or
1
(ii)
individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
(iii)
consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially
all of the assets of the Company or the acquisition of assets of
another corporation (a “Business Combination”), in each
case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then-outstanding
shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 30% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the
board of directors of the
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