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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 1-7685
AVERY DENNISON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1492269
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
150 NORTH ORANGE GROVE BOULEVARD 91103
PASADENA, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code: (818) 304-2000
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH
EXCHANGE ON WHICH
TITLE OF EACH CLASS REGISTERED
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Common stock, $1 par value New York Stock Exchange
Pacific Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Not applicable.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
The aggregate market value of voting stock held by non-affiliates as of
February 25, 1997, was approximately $4,130,961,063.
Number of shares of common stock, $1 par value, outstanding as of February
25, 1997: 121,126,532.
The following documents are incorporated by reference into the Parts of this
report below indicated:
DOCUMENT INCORPORATED BY REFERENCE INTO:
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Annual Report to Shareholders for fiscal
year ended December 28, 1996 (the "1996
Annual Report")........................ PARTS I, II
Definitive Proxy Statement for Annual
Meeting of Stockholders to be held
April 24, 1997 (the "1997 Proxy
Statement")............................ PARTS III, IV
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PART I
ITEM 1. BUSINESS
Avery Dennison Corporation ("Registrant") was incorporated in 1977 in the
state of Delaware as Avery International Corporation, the successor
corporation to a California corporation of the same name which was
incorporated in 1946. In 1990, Registrant merged one of its subsidiaries into
Dennison Manufacturing Company ("Dennison"), as a result of which Dennison
became a wholly owned subsidiary of Registrant, and in connection with which
Registrant's name was changed to Avery Dennison Corporation.
The business of Registrant and its subsidiaries (Registrant and its
subsidiaries are sometimes hereinafter referred to as the "Company") include
the production of pressure-sensitive adhesives and materials and the
production of consumer and converted products. Some pressure-sensitive
adhesives and materials are "converted" into labels and other products through
embossing, printing, stamping and die-cutting, and some are sold in
unconverted form as base materials, tapes and reflective sheeting. The Company
also manufactures and sells a variety of consumer and converted products and
other items not involving pressure-sensitive components, such as notebooks,
three-ring binders, organizing systems, markers, glues, fasteners, business
forms, tickets, tags, and imprinting equipment.
A self-adhesive material is one that adheres to a surface by mere press-on
contact. It consists of four elements--a face material, which may be paper,
metal foil, plastic film or fabric; an adhesive which may be permanent or
removable; a release coating; and a backing material to protect the adhesive
against premature contact with other surfaces, and which can also serve as the
carrier for supporting and dispensing individual labels. When the products are
to be used, the release coating and protective backing are removed, exposing
the adhesive, and the label or other device is pressed or rolled into place.
Self-adhesive materials may initially cost more than materials using heat or
moisture activated adhesives, but their use often effects substantial cost
savings because of their easy and instant application, without the need for
adhesive activation. They also provide consistent and versatile adhesion,
minimum adhesive deterioration and are available in a large selection of
materials in nearly any size, shape or color.
International operations, principally in Western Europe, constitute a
significant portion of the Company's business. In addition, the Company is
currently expanding its operations in Asia Pacific, Latin America and Eastern
Europe. The Company is subject to certain risks referred to in Exhibit 99
hereto, including those normally attending international operations, such as
changes in economic conditions, currency fluctuation, exchange control
regulations and the effect of international relations and domestic affairs of
international countries on the conduct of business.
The Company manufactures and sells its products from 200 manufacturing
facilities and sales offices located in 36 countries, and employs a total of
approximately 15,800 persons worldwide.
No material part of the Company's business is dependent upon a single
customer or a few customers and the loss of a particular customer or a few
customers would not have a material adverse effect on the Company's business.
However, sales of the Company's U.S. office and consumer products business is
increasingly concentrated in a small number of major customers, principally
discount office products superstores and distributors (see Note 4 of Notes to
Consolidated Financial Statements on page 49 of the 1996 Annual Report, which
is incorporated by reference). United States export sales are an insignificant
part of the Company's business. Backlogs are not considered material in the
industries in which the Company competes.
Effective fourth quarter 1996, the Company realigned the reporting of its
businesses from three sectors to two Pressure-sensitive adhesives and
materials, and Consumer and converted products. The realignment reflects the
broadening and related scope of the Company's consumer businesses to include
products such as battery labels, postage stamps and children's school
supplies. In addition, certain businesses previously in the Pressure-sensitive
adhesives and materials sector that emphasize converting technology were
reclassified into the
1
Consumer and converted products sector. This change more effectively aligns
the Company's financial reporting with manufacturing processes and end
markets. The Company's operations within each of the two sectors are divided
organizationally into various groups, each consisting of divisions which
manufacture products similar in nature or sell to similar markets.
PRESSURE-SENSITIVE ADHESIVES AND MATERIALS SECTOR
These units manufacture and sell Fasson- and Avery Dennison-brand pressure-
sensitive base materials generally in unconverted form, and include Materials-
Americas and Asia, Materials Europe, Specialty Tape, Marking Films, and
Chemical Division. Base materials consist primarily of papers, fabrics,
plastic films and metal foils which are primed and coated with Company-
developed and purchased adhesives and laminated with specially coated backing
papers and films for protection. They can be sold in roll or sheet form with
either solid or patterned adhesive coatings, and are available in a wide range
of face materials, sizes, thicknesses and adhesive properties. The business of
these units is not seasonal.
Materials-Americas and Asia (including units in the United States, Canada,
Mexico, South America, Australia and Asia Pacific) and Materials-Europe
(including units in the major European Union countries and a unit in South
Africa) manufacture and sell a wide range of pressure-sensitive coated papers,
films and foils, in roll and sheet form, to label printers and converters for
labeling, decorating, fastening, electronic data processing and special
applications, and also provide paper and film stock for use in a variety of
industrial, commercial and consumer applications. Certain units also
manufacture and sell proprietary film face stocks, release-coated materials
and specialty insulation paper.
Specialty Tape units produce single- and double-coated tapes and transfer
adhesives for use in non-mechanical fastening systems in various industries
and are sold to industrial and medical converters, original equipment
manufacturers and disposable-diaper producers worldwide.
Marking Films units manufacture and sell a variety of films and other
products to the worldwide automotive, architectural, commercial sign, digital,
printing and graphics markets. These units sell durable cast and reflective
films to the construction, automotive after-market, fleet transportation, sign
and industrial equipment markets, and reflective films for government and
traffic applications. In addition, these units sell specialty print-receptive
films to the industrial label market, metallic dispersion products to the
packaging industry and proprietary woodgrain film laminates for housing
exteriors and automotive applications.
During 1996, the Company acquired base materials manufacturing capabilities
in Thailand, and established distribution centers in several new countries
including Argentina, India, Indonesia, Poland and Thailand to market and sell
a variety of pressure-sensitive materials.
The Chemical Division produces a range of solvent and emulsion-based acrylic
polymer adhesives, protective coatings and binders for internal uses as well
as for other companies.
The Company competes, both domestically and internationally, with a number
of medium to large firms. Entry of competitors into the field of pressure-
sensitive adhesives and materials is limited by high capital requirements and
a need for sophisticated technical know-how.
CONSUMER AND CONVERTED PRODUCTS SECTOR
The units in this sector primarily manufacture and sell a wide range of
Avery-brand office products, custom label products, specialty automotive films
and labels and fastening devices. Operations include Office and Consumer
Products, Converted Products--North America and Europe, VIP Converted Products
North America and Fastener Worldwide, Security Printing, Automotive and
Merchant Products. The business of these units is not seasonal except for
certain office and consumer products sold during the back-to-school season.
2
Office and Consumer Products units manufacture stock products which are sold
primarily through office products wholesalers and dealers, through mass market
channels of distribution, and through discount office products superstores.
Operations in North America and Europe manufacture and sell a wide range of
Avery-brand products for home, school and office uses, including copier, laser
and ink-jet printer labels, related computer software, presentation and
organizing systems, laser-printer card and index products; data-processing
labels; notebooks; notebook and presentation dividers; three-ring binders;
sheet protectors; and various vinyl and heat-sealed products. U.S. operations
also manufacture and sell a wide range of other stationery products, including
children's laser and ink-jet labels, markers, adhesives and specialty products
under brand names such as Avery, Marks-A-Lot and HI-LITER, and accounting
products, note pads and business forms under the Avery and National brand
names. Other units in the United Kingdom also manufacture and distribute
office products and accessories under the Avery, Myers and Guidex brand names.
Office products units in France produce a line of Doret- and Cheval-brand
binder and document protection products. Other units in Latin America, Asia
Pacific and Europe have been established to market and distribute the Avery-
brand line of stock self-adhesive products, including copier, laser and ink-
jet labels and related software; laser printed card products and other
unprinted labels.
Converted Products--North America and Europe: North American operations
produce custom pressure-sensitive and heat-transfer labels for automotive and
durable goods industries and custom pressure-sensitive labels and specialty
combination products for the electronic data-processing market. These products
are sold directly to manufacturers and packagers and retailers, as well as
through international subsidiaries, distributors and licensees. European
operations produce custom and stock labels, labeling machinery and data
printing systems, which are marketed to a wide range of industrial users.
VIP Converted Products North America and Fastener Worldwide units design,
fabricate and sell a wide variety of tags and labels and an established line
of machines for imprinting, dispensing and attaching preprinted roll tags and
labels. The machine products are designed for use with tags as a complete
system. These units also design, assemble and sell integrated shipping and
receiving systems. Principal markets include apparel, retail and industrial
companies for identification, tracking and control applications principally in
North America, Europe and Asia Pacific. The Fastener business produces plastic
tying and attaching products for retail and industrial users. Products are
sold directly to end users and internationally through subsidiaries, as well
as through distributors and licensees in other countries.
The Security Printing business manufactures and sells on-battery testing
labels to battery manufacturers, and self-adhesive stamps to the U.S. and
international postal services. The Company is an integrated supplier of
adhesive coating, security printing and converting technologies for postage
stamp production. Automotive operations manufacture and convert films for
vehicle finishes, striping decoration and identification. Avloy Dry Paint film
laminates are supplied to automotive suppliers and original equipment
manufacturers. Merchant Products businesses manufacture pressure-sensitive
sheeted and die-cut papers and films, which are sold through fine-paper
merchants.
Office and Consumer Products units are generally leaders in most markets in
which they compete even though they must compete with other large
manufacturers on a global basis. Among the principal competitors in the office
and consumer products business are Esselte AB, American Brands, Inc. and
Minnesota Mining and Manufacturing Co. The Company believes that its ability
to service its customers with an extensive product line, its distribution
strength, and its ability to develop internally and to commercialize
successfully new products are probably the most important factors in
developing and maintaining the various units' competitive position. The
Converted Products business units usually occupy a solid position in most
markets in which they compete, although many face strong local competition.
The Company believes that its diverse technical foundation, including a
significant range of electronic imprinting and data control systems, high
speed printers, automatic labeling systems and fastening devices are probably
the most important factors in developing and maintaining the various units'
competitive position.
3
RESEARCH AND DEVELOPMENT
Many of the Company's current products are the result of its own research
and development efforts. The Company expended $54.6 million, $52.7 million,
and $49.1 million in 1996, 1995 and 1994, respectively, on research related
activities by operating units and the Avery Research Center (the "Research
Center"), located in Pasadena, California. A substantial amount of the
Company's research and development activities are conducted at the Research
Center. Much of the effort of the Research Center applies to both the
Company's industry sectors.
The operating units' research efforts are directed primarily toward
developing new products and processing techniques and improving product
performance, often in close association with customers. The Research Center
supports the units' patent and product development work, and focuses on
research and development in new adhesives, materials and coating processes.
Research and development generally focuses on projects affecting more than one
industry sector in such areas as printing and coating technologies, and
adhesive, release, coating and ink chemistries.
The loss of any of the Company's individual patents, trademarks or licenses,
or any group of related patents, trademarks or licenses, would not be material
to the business of the Company taken as a whole, nor to either one of the
Company's industry sectors except those referred to above.
THREE-YEAR SUMMARY OF SECTOR INFORMATION
The Business Sector Information attributable to the Company's operations for
the three years ended December 28, 1996, which appears in Note 10 of Notes to
Consolidated Financial Statements on pages 54 through 56 of the 1996 Annual
Report, is incorporated herein by reference.
OTHER MATTERS
At present, the Company produces a majority of its self-adhesive materials
using non-solvent technology. However, a significant portion of the Company's
manufacturing process for self-adhesive materials utilizes certain evaporative
organic solvents which, unless controlled, would be emitted into the
atmosphere. Emissions of these substances are regulated by instrumentalities
of federal, state, local and foreign governments. During the past several
years, the Company has made a substantial investment in solvent capture and
control units and solvent-free systems. Installation of these units and
systems has reduced atmospheric emissions and the Company's requirements for
solvents.
Major research efforts have been directed toward development of new
adhesives and solvent-free adhesive processing systems. Emulsion and hot-melt
adhesives and solventless silicone systems have been installed at the
Company's Peachtree City, Georgia; Fort Wayne and Greenfield, Indiana; Rancho
Cucamonga, California; Quakertown, Pennsylvania; Rodange, Luxembourg;
Turnhout, Belgium; Hazerswoude, The Netherlands; and Cramlington, England
facilities, as well as other plants in the United States, Australia, Brazil,
France, Germany, Korea and China.
The Company does not believe that the costs of complying with applicable
laws enacted or adopted regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment, will
have a material effect upon the capital expenditures, earnings or competitive
position of the Company.
The Company wishes to take advantage of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, and is including Exhibit 99
to this filing to incorporate this safe harbor statement.
For information regarding the Company's potential responsibility for cleanup
costs at certain hazardous waste sites, see "Legal Proceedings" (Part I, Item
3) and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" (Part II, Item 7).
4
ITEM 2. PROPERTIES
The Company operates 30 principal manufacturing facilities ranging in size
from approximately 100,000 square feet to approximately 370,000 square feet
and totaling over 5 million square feet. The following sets forth the
locations of such principal facilities and the business sectors for which they
are presently used:
PRESSURE-SENSITIVE ADHESIVES AND MATERIALS SECTOR
Domestic--Painesville and Fairport, Ohio; Peachtree City, Georgia;
Quakertown, Pennsylvania; Rancho Cucamonga, California; Greenfield,
Fort Wayne, Lowell and Schererville, Indiana.
Foreign--Hazerswoude, The Netherlands; Cramlington, England; Champ-sur-
Drac, France; Turnhout, Belgium; Ajax, Canada; Rodange, Luxembourg;
and Haan, Germany.
CONSUMER AND CONVERTED PRODUCTS SECTOR
Domestic--Gainesville, Georgia; Rochelle and Rolling Meadows, Illinois;
Chicopee, Framingham and Springfield, Massachusetts; Meridian,
Mississippi; Philadelphia, Pennsylvania; Clinton, South Carolina
and Crossville, Tennessee.
Foreign--Bowmanville, Canada; and La Monnerie, Troyes, France; and Utrecht,
The Netherlands.
In addition to the Company's principal manufacturing facilities described
above, the Company's principal facilities include its corporate headquarters
facility and Research Center in Pasadena, California, and offices located in
Maidenhead, England; Leiden, The Netherlands; Concord, Ohio and Framingham,
Massachusetts.
All of the Company's principal properties identified above are owned in fee
except Rolling Meadows, Illinois; Springfield, Massachusetts; Ajax, Canada;
Haan, Germany and small portions of the Framingham, Massachusetts; and La
Monnerie, France facilities, all of which are leased.
All of the buildings comprising the facilities identified above were
constructed after 1954, except parts of the Framingham, Massachusetts plant
and office complex. All buildings owned or leased are well maintained and of
sound construction, and are considered suitable and generally adequate for the
Company's present needs. The Company intends to expand capacity and provide
facilities to meet future increased demand. Owned buildings and plant
equipment are insured against major losses from fire and other usual business
risks. The Company knows of no material defects in title to, or encumbrances
on, any of its properties except for mortgage liens against the Meridian,
Mississippi; and Turnhout, Belgium plants and three other facilities not
listed separately above.
ITEM 3. LEGAL PROCEEDINGS
The Company, like other U.S. corporations, has periodically received notices
from the U.S. Environmental Protection Agency ("EPA") and state environmental
agencies alleging that the Company is a potentially responsible party ("PRP")
for past and future cleanup costs at hazardous waste sites. The Company has
been designated by the EPA and/or other responsible state agencies as a PRP at
17 waste disposal or waste recycling sites which are the subject of separate
investigations or proceedings concerning alleged soil and/or groundwater
contamination and for which no settlement of the Company's liability has been
agreed upon. Litigation has been initiated by a governmental authority with
respect to four of these sites, but the Company does not believe that any such
proceedings will result in the imposition of monetary sanctions. The Company
is participating with other PRPs at all such sites, and anticipates that its
share of cleanup costs will be determined pursuant to remedial agreements
entered into in the normal course of negotiations with the EPA or other
governmental authorities. The Company has accrued liabilities for all sites,
including sites in which governmental agencies have designated the Company as
a PRP, where it is probable that a loss will be incurred and the amount of the
loss can be
5
reasonably estimated. However, because of the uncertainties associated with
environmental assessment and remediation activities, future expense to
remediate the currently identified sites, and sites which could be identified
in the future for cleanup, could be higher than the liability currently
accrued. Based on current site assessments, management believes the potential
liability over the amounts currently accrued would not materially affect the
Company.
The Registrant and its subsidiaries are involved in various other lawsuits,
claims and inquiries, most of which are routine to the nature of the business.
In the opinion of the Company's management, the resolution of these matters
will not materially affect the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
6
EXECUTIVE OFFICERS OF THE REGISTRANT*
SERVED AS FORMER POSITIONS AND
NAME AGE OFFICER SINCE OFFICES WITH REGISTRANT
- - ---- --- ------------- -----------------------
Charles D. Miller....... 69 May 1965 1964-1983 Various positions of
Chairman and Chief increasing responsibility
Executive Officer (Also
Director of Registrant)
Philip M. Neal.......... 56 January 1974 1974-1990 Various positions of
President and Chief increasing responsibility
Operating Officer (Also
Director of Registrant)
R. Gregory Jenkins...... 60 July 1981 1974-1988 Various positions of
Senior Vice President, increasing responsibility
Finance and Chief
Financial Officer
Alan J. Gotcher......... 47 November 1984 1984-1990 Vice President, Corporate
Senior Vice President, Research
Manufacturing and
Technology
Robert G. van 50 December 1981 1981-1996 Vice President, General
Schoonenberg........... Counsel and Secretary
Senior Vice President,
General Counsel and
Secretary
Wayne H. Smith.......... 55 June 1979 None
Vice President and
Treasurer
Thomas E. Miller........ 49 March 1994 1973-1993 Various positions of
Vice President and increasing responsibility
Controller
1993-1994 V.P. and Assistant
Controller
Diane B. Dixon.......... 45 December 1985 1982-1985 Director of Communications
Vice President,
Corporate
Communications
Susan B. Garelli........ 45 October 1994 **1991-1993 Senior V.P., Human Resources
Vice President, Human and Corporate
Resources Communications, JWP, Inc.
**1993-1994 Consultant, JWP, Inc.
Paul B. Germeraad....... 49 May 1991 None
Vice President and
Director,
Corporate Research
Johan J. Goemans........ 53 October 1992 1975-1990 Various positions of
Vice President, increasing
Management responsibility
Information Systems 1991-1992 Director of Distribution and
Logistics, Fasson Roll
Division U.S.
Daniel R. O'Bryant...... 39 March 1996 1990-1993 Various positions of
Vice President, increasing
Operations Audit and responsibility
Business Consulting 1994 Vice President, Finance, and
Administrative Services,
Europe
1995 Vice President, Operations
Planning
7
SERVED AS FORMER POSITIONS AND
NAME AGE OFFICER SINCE OFFICES WITH REGISTRANT
- - ---- --- ------------- -----------------------
James L. Fletcher....... 55 June 1993 1988-1991 Various positions of
Vice President, increasing
Customer 1991-1993 responsibility
Service and Logistics V.P., Customer Logistics
Gary A. McCue........... 60 November 1987 1987-1994 Vice President and
Vice President, 1994 Controller
Strategic Value Vice President, Corporate
Development Value Planning and
Development
Kim. A. Caldwell........ 49 June 1990 1974-1990 Various positions of
Senior Group Vice increasing
President, responsibility
Worldwide Materials--
Americas and Asia
Geoffrey T. Martin...... 42 January 1994 1986-1988 Managing Director, Label
Senior Vice President, 1988-1992 Systems
Worldwide Tape & V.P. and General Manager,
Converting and 1992-1993 Label Systems UK and
Materials--Europe Ireland
1993-1994 V.P., Office Products Group
Europe
Group Vice President,
Converting and Office
Products Europe
Stephanie A. Streeter... 39 March 1996 1985-1991 Various positions of
Group Vice President, increasing
Worldwide Office 1991-1993 responsibility
Products 1993-1994 V.P. and General Manager,
Avery Office Labels
V.P. and General Manager,
Avery Dennison Brands
James E. Shaw........... 65 February 1994 1986-1991 Various positions of
Group Vice President, increasing
Automotive and Graphic responsibility
Systems 1991-1994 V.P. and General Manager,
Automotive and Graphic
System Division
Robert D. Fletcher...... 61 March 1976 1967-1988 Various positions of
Group Vice President, increasing
Asia Pacific responsibility
1988-1993 Group Vice President,
International Converting
Group
Flavio T. Lacerda....... 50 May 1996 **1991-1994 Latin America Regional
Group Vice President, Manager,
Latin America **1995-1996 Loctite Corporation
America President for Latin America
and South Africa, Loctite
Corporation
Donald R. McKee......... 60 December 1995 1971-1993 Various positions of
Vice President, Label increasing
Ventures responsibility
1993-1995 Vice President and General
Manager, Soabar Systems
Division
1995 Vice President, Soabar
Products and Fastener
Divisions
1996 Group Vice President,
Converted and Fastener
Products North
America
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* All officers are elected to serve a one year term and until their successors
are elected and quality.
** Business experience prior to service with Registrant.
8
PART II
ITEM 5. MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The information called for by this item appears on page 60 of Registrant's
1996 Annual Report and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data for each of Registrant's last five fiscal years
appears on pages 36 and 37 of Registrant's 1996 Annual Report and is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
1996 1995 1994
-------- -------- --------
(DOLLARS IN MILLIONS)
Net sales........................................ $3,222.5 $3,113.9 $2,856.7
Cost of products sold............................ 2,204.2 2,156.6 1,948.9
-------- -------- --------
Gross profit..................................... 1,018.3 957.3 907.8
Marketing, general and administrative expense.... 712.4 689.8 691.9
Net gain on divestitures and restructuring
charges.......................................... 2.1 1.5 --
-------- -------- --------
Earnings before interest and taxes............... $ 308.0 $ 269.0 $ 215.9
Sales increased 3.5 percent to $3.22 billion in 1996, compared to $3.11
billion in 1995. Excluding the impact of business divestitures and changes in
foreign currency exchange rates, sales increased 6.4 percent. In 1995, sales
increased 9 percent over 1994 sales of $2.86 billion. Excluding the impact of
sales from the divested operations and changes in foreign currency exchange
rates for 1995, sales increased approximately 7 percent. During the fourth
quarter of 1995, the Company sold a portion of its North American label
converting operations. These businesses accounted for approximately 2 percent
of the Company's 1995 total sales. Each of the Company's 1996, 1995 and 1994
fiscal years consisted of 52 weeks.
Gross profit margins for the years ended 1996, 1995 and 1994 were 31.6
percent, 30.7 percent and 31.8 percent, respectively. Gross profit margins
during 1996 improved compared to 1995 due primarily to an improved product
mix, new products, cost reduction and control programs and increased capacity
utilization. There was also a $3.2 million LIFO benefit reported during 1996.
The decline in the gross profit percentage during 1995 was primarily due to a
shift in product mix, plant and major production line start-ups, and
$1.6 million in expense related to LIFO inventories compared to a benefit of
$400,000 for 1994.
Marketing, general and administrative expense as a percent of sales was 22.1
percent in 1996, 22.2 percent in 1995 and 24.2 percent in 1994. The
improvement in 1996 over 1995 was primarily attributable to cost control and
reduction efforts throughout the Company and was achieved despite major
investments in geographic expansion, business realignment and new product
programs. The improvement during 1995 was primarily attributable to benefits
from the Company's cost reduction programs, a shift in product mix and
increased sales.
During the third quarter of 1996, restructuring actions were taken,
resulting in a net pretax gain of $2.1 million. The Company sold its equity
interest in a label operation in Japan for $28.4 million, resulting in a
pretax gain of $17.9 million. The Company also recorded $15.8 million of
restructuring charges, which included an asset impairment write-down of $6.3
million for long-lived assets held in the Company's Consumer and converted
products sector. The restructuring program also included the reorganization of
certain manufacturing, distribution and administrative sites. These costs
consisted of severance and related costs for approximately 200 positions
worldwide ($7.4 million) and the discontinuance of product lines and related
asset write-offs ($2.1 million). These actions are expected to be completed
during 1997 and are expected to result in estimated annual savings of
approximately $9 million to $11 million when fully implemented.
9
Business restructuring actions taken during the fourth quarter of 1995
resulted in a net pretax gain of $1.5 million. Certain businesses which no
longer met the Company's strategy for converting technology were sold for $95
million. A $40.7 million pretax gain on the sale of these businesses was
offset by restructuring charges of $39.2 million which included the closure of
four plants and the reorganization of certain manufacturing, distribution and
administrative sites. These costs consisted of severance and related costs for
approximately 400 positions worldwide ($16.2 million), discontinuance of
product lines and related asset write-offs ($13.1 million), and plant closure
and other costs ($9.9 million). This program is also expected to be completed
during 1997 and is expected to result in estimated annual savings of $14
million to $17 million when fully implemented. The 1996 and 1995 programs are
an integral part of the Company's ongoing effort to identify opportunities to
improve its administrative and manufacturing cost structures.
Interest expense as a percent of sales was 1.2 percent in 1996, 1.4 percent
in 1995 and 1.5 percent in 1994. The decrease in 1996 was primarily due to the
expiration of interest rate swap agreements during the fourth quarter of 1995
and an overall lower cost of borrowing. Interest expense increased in 1995 due
to higher debt levels, but was more than offset by the impact of increased
sales.
Income before taxes, as a percent of sales, was 8.4 percent for 1996, 7.2
percent for 1995 and 6.1 percent for 1994. The improvement during 1996 was
primarily due to higher gross profit margins and lower interest expense as a
percent of sales. The improvement during 1995 was primarily due to lower
operating and interest expenses as a percent of sales. The effective tax rate
was 35 percent in 1996, 36 percent in 1995, and 36.7 percent in 1994.
1996 1995 1994
------ ------ ------
(IN MILLIONS, EXCEPT
PER COMMON SHARE
AMOUNTS)
Net income............................................. $175.9 $143.7 $109.4
Net income per common share............................ 1.68 1.35 .98
Net income per fully-diluted common share.............. 1.62 1.31 .96
Average common shares outstanding...................... 105.0 106.5 111.1
Average fully-diluted common shares outstanding........ 108.3 109.3 113.7
Net income increased to $175.9 million in 1996 compared to $143.7 million in
1995, reflecting a 22 percent increase over 1995. Net income in 1994 was
$109.4 million. Net income, as a percent of sales, was 5.5 percent, 4.6
percent and 3.8 percent in 1996, 1995 and 1994, respectively.
Net income per common share reached $1.68 in 1996 compared to $1.35 in 1995,
a 24 percent increase over prior year. Net income per common share was $.98 in
1994. Primarily due to the significant increase in the Company's stock price
during 1996 and share repurchases, the Company is now required to report net
income per share on a fully-diluted basis. Net income per fully-diluted common
share was $1.62 in 1996, $1.31 in 1995 and $.96 in 1994.
RESULTS OF OPERATIONS BY BUSINESS SECTOR
Effective fourth quarter 1996, the Company realigned the reporting of its
businesses from three sectors to two--Pressure-sensitive adhesives and
materials, and Consumer and converted products. The realignment reflects the
broadening and related scope of the Company's consumer businesses to include
products such as battery labels, postage stamps and children's school
supplies. In addition, certain businesses previously in the Pressure-sensitive
adhesives and materials sector that emphasize converting technology were
reclassified into the Consumer and converted products sector. This change more
effectively aligns the Company's financial reporting with manufacturing
processes and end markets. Sector information for 1995 and 1994 has been
reclassified to conform with the 1996 sector presentation.
10
PRESSURE-SENSITIVE ADHESIVES AND MATERIALS:
1996 1995 1994
-------- -------- --------
(IN MILLIONS)
Net sales........................................ $1,693.5 $1,589.7 $1,389.7
Income from operations before interest and taxes. 157.7 144.8 138.8
The Pressure-sensitive adhesives and materials sector reported increased
sales and profits for 1996 compared to 1995. The sector's income results
include restructuring charges of $7.1 million in 1996 and $15.1 million in
1995. The U.S. operations reported sales growth for the year primarily due to
increased volume and new products. Profitability improved as a result of cost
reduction actions, increased capacity utilization and improved operating
efficiencies. The international businesses reported increased sales primarily
due to its geographic expansion in emerging markets and increased volume.
Profitability for the international businesses increased primarily due to the
extent of restructuring charges taken in 1995 compared to 1996. This increase
was partially offset by costs related to continued investments in geographic
expansion and major equipment start-up costs.
The Pressure-sensitive adhesives and materials sector reported increased
sales and profitability for 1995 compared to 1994. Profitability for the
sector increased despite the $15.1 million in restructuring charges taken in
1995. The U.S. operations reported a significant increase in sales due to unit
volume growth and pricing actions. Profitability improvement was primarily due
to sales growth and lower operating expenses as a percent of sales, but was
partially offset by plant and major equipment start-up costs for capacity
expansion, and the reorganization of certain manufacturing sites. Sales for
the European operations increased significantly primarily as a result of
volume growth from improved economic conditions over 1994, pricing actions and
changes in foreign currency rates. Profitability increased, despite costs
taken for restructuring programs, primarily as a result of sales growth, lower
operating expenses as a percent of sales and a more favorable product mix.
CONSUMER AND CONVERTED PRODUCTS:
1996 1995 1994
-------- -------- --------
(IN MILLIONS)
Net sales........................................ $1,670.5 $1,588.6 $1,488.6
Income from operations before interest and taxes. 159.0 147.8 102.1
The Consumer and converted products sector reported increased sales and
profitability for 1996 compared to 1995. The sector's income results include
restructuring charges of $8.7 million for 1996 compared to a $16.6 million net
gain on divestitures and restructuring charges in 1995. The U.S. operations
reported increased sales primarily due to the growth of its battery label
business and for its Avery-brand products. Profitability improved primarily
due to increased sales volume, new products and operating improvements,
including improved logistics. The international businesses reported higher
sales due to geographic expansion and growth of its office label businesses;
however, this sales increase was partially offset by sales declines in a
portion of the French operations. Profitability in 1996 for the international
businesses was comparable to 1995. Profit improvements from cost control
programs and product pruning were offset by lower sales in one of the French
operations and start-up costs related to geographic expansion.
The Consumer and converted products sector reported increased sales and
profits for 1995 compared to 1994. Profits in 1995 included a $40.7 million
gain from the sale of certain nonstrategic North American label converting
operations, which was partially offset by $24.1 million in restructuring
charges. The U.S. operations reported increased sales for 1995 primarily due
to sales growth of its Avery-brand and postage stamp businesses. Profitability
increased for the U.S. operations due to successful new products, an improved
product mix and cost reduction actions, including the consolidations of
distribution warehouses and sales forces in the United States. The
international businesses reported increased sales as a result of new products,
an improved European economy and changes in foreign currency rates. A more
favorable product mix coupled with cost reduction actions taken in previous
years and lower operating expenses as a percent of sales resulted in
significantly higher profitability over 1994.
11
FINANCIAL CONDITION
Average working capital, excluding short-term debt, as a percent of sales
was 9.1 percent in 1996, 9.6 percent in 1995 and 10 percent in 1994. The
decrease in 1996 was primarily due to higher sales and an increase in current
liabilities. Average inventory turnover was 9.3 in 1996, 9.0 in 1995 and 9.3
in 1994; the average number of days sales outstanding in accounts receivable
was 55 days in 1996, 1995 and 1994.
Net cash flow from operating activities was $304 million in 1996, $187.9
million in 1995 and $265 million in 1994. The increase in net cash flow in
1996 was due primarily to the change in working capital requirements and the
Company's improved profitability. The decrease in 1995 was primarily due to a
change in working capital requirements which was partially offset by the
increase in net income.
Total debt increased $17.5 million to $466.9 million compared to year end
1995. Total debt to total capital was 35.9 percent at year end 1996 compared
to 35.5 percent at year end 1995. Long-term debt as a percent of total long-
term capital increased to 30.8 percent from 29 percent at year end 1995.
In October 1996, the Company established the Avery Dennison Corporation
Employee Stock Benefit Trust (the "Trust") to fund a portion of the Company's
obligations arising from various current and future employee benefit plans. As
a result, the Company sold 18 million shares of treasury stock to the Trust at
fair market value. This transaction had no impact on the Company's financial
condition. The Trust has a 15-year life during which it will utilize the stock
to satisfy certain Company obligations.
Shareholders' equity increased to $832 million from $815.8 million at year
end 1995. During 1996, the Company repurchased 3.8 million shares of common
stock at a cost of $109.3 million. The cost of treasury stock held, after the
sale of shares to the Trust and net of shares reissued under the Company's
stock option and incentive plans, at year end 1996 decreased $212.4 million to
$67.5 million from year end 1995. In January 1995, the Board of Directors
authorized the repurchase of an additional ten million shares of the Company's
outstanding common stock for an aggregate of 30.4 million shares authorized
for repurchase. As of year end 1996, a cumulative 25.4 million shares of
common stock had been purchased under this authorization.
The return on average shareholders' equity was 21.4 percent in 1996, 18.6
percent in 1995 and 14.8 percent in 1994. The improvements during 1996 and
1995 were primarily due to a significant increase in profitability and the
impact from share repurchases. The return on average total capital for those
three years was 16.4 percent, 14.4 percent and 12.1 percent, respectively. The
increases during those years were primarily due to profitability improvements
and more effective utilization of the Company's assets.
The Company, like other U.S. corporations, has periodically received notices
from the U.S. Environmental Protection Agency and state environmental agencies
alleging that the Company is a potentially responsible party (PRP) for past
and future cleanup costs at hazardous waste sites. The Company has received
requests for information, notices and/or claims with respect to 17 waste sites
in which the Company has no ownership interest. Litigation has been initiated
by a governmental authority with respect to four of these sites, but the
Company does not believe that any such proceedings will result in the
imposition of monetary sanctions. Environmental investigatory and remediation
projects are also being undertaken on property presently owned by the Company.
The Company has accrued liabilities for all sites where it is probable that a
loss will be incurred and the minimum cost or amount of the loss can be
reasonably estimated. However, because of the uncertainties associated with
environmental assessments and remediation activities, future expense to
remediate the currently identified sites, and sites which could be identified
in the future for cleanup, could be higher than the liability currently
accrued. Based on current site assessments, management believes that the
potential liability over the amounts currently accrued would not materially
affect the Company.
LIQUIDITY AND CAPITAL RESOURCES
In addition to cash flow from operations, the Company has more than adequate
financing arrangements, at competitive rates, to conduct its operations.
12
During the fourth quarter of 1996, the Company registered with the
Securities and Exchange Commission $150 million in principal amount of medium-
term notes. As of year end 1996, no notes had been issued. Proceeds from the
medium-term notes will be used to reduce debt and for other general corporate
purposes. The Company's currently outstanding medium-term notes have
maturities from 1997 through 2025 and have a weighted-average interest rate of
7.2 percent.
The Company's restructuring programs included the 1996 $28.4 million sale of
its equity interest in a label operation in Japan and the 1995 $95 million
sale of certain non-strategic label converting businesses. The restructuring
programs had an estimated cost of $15.8 million and $39.2 million for 1996 and
1995, respectively. At year end 1996 and 1995, $16 million and $24.5 million,
respectively, remained accrued for both programs and related primarily to
employee severance and plant closure costs. By year end 1996 and 1995, total
cash expenditures paid for both restructuring programs totalled $14.5 million
and $1.5 million, respectively, and related primarily to employee severance
and plant closure costs.
Capital expenditures were $187.6 million in 1996 and $190.3 million in 1995.
Capital expenditures for 1997 are expected to be approximately $190 to $200
million.
The annual dividend rate per share increased to $.62 in 1996 from $.55 in
1995 and $.50 in 1994.
The Company continues to expand its operations in Asia Pacific, Latin
America and Europe. The Company's future results are subject to changes in
economic conditions and the impact of fluctuations in foreign currency
exchange and interest rates. To manage its exposure to these fluctuations, the
Company may enter into forward exchange and interest rate contracts, where
appropriate.
Effective 1997, Mexico will be treated as a hyperinflationary economy for
accounting purposes due to the cumulative inflation rate over the past three
years. As a result, the functional currency of subsidiaries operating in
Mexico will change from the peso to the dollar and translation gains and
losses will be included in net income. These operations, including those
located in Brazil which also operate in a hyperinflationary economy, are not
significant to the Company's consolidated financial position.
FUTURE ACCOUNTING REQUIREMENTS
In July 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". The
standard revised the guidelines for recognition, measurement and disclosure of
transfers and servicing of financial assets and extinguishment of debt. It
will be effective for transactions occurring after December 31, 1996. The
Company will implement the standard during the first quarter of 1997, if
applicable; however, the impact has yet to be determined.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information called for by this item is contained in Registrant's
Consolidated Financial Statements and the Notes thereto appearing on pages 42
through 56, and in the Report of Independent Certified Public Accountants on
page 57 of Registrant's 1996 Annual Report and is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors called for by this item is incorporated
by reference from pages 2, 3 and 4 of the 1997 Proxy Statement which is to be
filed with the Securities and Exchange Commission pursuant to Regulation 14A
within 120 days of the end of the fiscal year covered by this report.
Information concerning executive officers called for by this item appears in
Part I of this report. The information concerning late filings under Section
16(a) of the Securities Exchange Act of 1934, as amended, is incorporated by
reference from page 15 of the 1996 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information called for by items 11, 12 and 13 is incorporated by
reference from pages 5 through 21 of the 1997 Proxy Statement which is to be
filed with the Securities and Exchange Commission pursuant to Regulation 14A
within 120 days of the end of the fiscal year covered by this report.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) (2) Financial statements and financial statement schedules filed as
part of this report are listed in the accompanying Index to Financial
Statements and Financial Statement Schedules.
(3) Exhibits filed as a part of this report are listed in the Exhibit
Index, which follows the financial statements and schedules referred to
above. Each management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c)
is identified in the Exhibit Index.
(b) Reports on Form 8-K: Registrant filed two Reports on Form 8-K for the
three months ended December 28, 1996:
Form 8-K dated December 16, 1996, with respect to its execution of
certain agreements in connection with Medium Term Notes, Series D
(Registration No. 333-16375).
Form 8-K dated October 24, 1996, with respect to its execution of certain
agreements in connection with the Employee Stock Benefit Trust.
(c) Those Exhibits, and the Index thereto, required to be filed by Item 601
of Regulation S-K are attached hereto.
(d) Those financial statement schedules required by Regulation S-X which are
excluded from Registrant's 1996 Annual Report by Rule 14a-3(b)(1), and which
are required to be filed as financial statement schedules to this report, are
indicated in the accompanying Index to Financial Statements and Financial
Statement Schedules.
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Avery Dennison Corporation
By /s/ R. Gregory Jenkins
___________________________________
R. Gregory Jenkins
Senior Vice President, Finance and
Chief Financial Officer
Dated: March 27, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Charles D. Miller Chairman and Chief Executive March 27, 1997
____________________________________ Officer; Director
Charles D. Miller
/s/ Philip M. Neal President and Chief March 27, 1997
____________________________________ Operating Officer; Director
Philip M. Neal
/s/ R. Gregory Jenkins Senior Vice President, March 27, 1997
____________________________________ Finance and Chief Financial
R. Gregory Jenkins Officer (Principal
Financial Officer)
/s/ Thomas E. Miller Vice President and March 27, 1997
____________________________________ Controller (Principal
Thomas E. Miller Accounting Officer)
15
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Dwight L. Allison, Jr. Director March 27, 1997
____________________________________
Dwight L. Allison, Jr.
/s/ John C. Argue Director March 27, 1997
____________________________________
John C. Argue
/s/ Joan T. Bok Director March 27, 1997
____________________________________
Joan T. Bok
/s/ Frank V. Cahouet Director March 27, 1997
____________________________________
Frank V. Cahouet
/s/ Richard M. Ferry Director March 27, 1997
____________________________________
Richard M. Ferry
/s/ Peter W. Mullin Director March 27, 1997
____________________________________
Peter W. Mullin
/s/ Sidney R. Petersen Director March 27, 1997
____________________________________
Sidney R. Petersen
/s/ John B. Slaughter Director March 27, 1997
____________________________________
John B. Slaughter
16
AVERY DENNISON CORPORATION
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES
REFERENCE (PAGE)
-------------------
FORM
10-K ANNUAL
ANNUAL REPORT TO
REPORT SHAREHOLDERS
------ ------------
Data incorporated by reference from the attached portions
of the 1996 Annual Report to Shareholders of Avery
Dennison Corporation:
Report of Independent Certified Public Accountants....... -- 57
Consolidated Balance Sheet at December 28, 1996 and
December 30, 1995...................................... -- 42
Consolidated Statement of Income for 1996, 1995 and
1994................................................... -- 43
Consolidated Statement of Shareholders' Equity for 1996,
1995 and 1994.......................................... -- 44
Consolidated Statement of Cash Flows for 1996, 1995 and
1994................................................... -- 45
Notes to Consolidated Financial Statements.............. -- 46-56
Individual financial statements of 50% or less owned entities accounted for by
the equity method have been omitted because, considered in the aggregate or as a
single subsidiary, they do not constitute a significant subsidiary.
With the exception of the consolidated financial statements and the
accountants' report thereon listed in the above index, and the information
referred to in Items 1, 5 and 6, which is included in the 1996 Annual Report and
incorporated herein by reference, the 1996 Annual Report is not to be deemed
"filed" as part of this report.
Data submitted herewith:
Report of Independent Certified Public Accountants...... S-2 --
Financial Statement Schedules (for 1996, 1995 and 1994):
II--Valuation and Qualifying Accounts and Reserves.... S-3 --
Consent of Independent Accountants...................... S-4 --
All other schedules are omitted since the required information is not present
or is not present in amounts sufficient to require submission of the schedule,
or because the information required is included in the consolidated financial
statements and notes thereto.
S-1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of Avery Dennison Corporation
Our report on the consolidated financial statements of Avery Dennison
Corporation and subsidiaries has been incorporated by reference in this Form
10-K from page 57 of the 1996 Annual Report to Shareholders of Avery Dennison
Corporation. In connection with our audits of such financial statements, we
have also audited the related financial statement schedule listed in the index
on page S-1 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
January 28, 1997
S-2
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN MILLIONS)
ADDITIONS
---------------------
BALANCE CHARGED DEDUCTIONS--
AT TO COSTS UNCOLLECTIBLE BALANCE
BEGINNING AND FROM ACCOUNTS AT END
OF YEAR EXPENSES ACQUISITIONS WRITTEN OFF OF YEAR
--------- -------- ------------ ------------- -------
1996
Allowance for doubtful
accounts.............. $17.6 $4.1 $-- $4.2 $17.5
===== ==== === ==== =====
1995
Allowance for doubtful
accounts.............. $18.5 $4.7 $-- $5.6 $17.6
===== ==== === ==== =====
1994
Allowance for doubtful
accounts.............. $16.7 $7.5 $-- $5.7 $18.5
===== ==== === ==== =====
S-3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of Avery Dennison Corporation on Form S-8 (File Nos. 2-47617, 2-60937, 2-
82207, 33-1132, 33-3645, 33-3637, 33-27275, 33-35995-01,33-41238, 33-45376,
33-54411, 33-58921 and 33-63979) of our report, which appears on page 57 of
the 1996 Annual Report to Shareholders and is incorporated by reference in
this Annual Report on Form 10-K. We also consent to the incorporation by
reference of our report on the financial statement schedule listed in the
index on page S-1.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
March 28, 1997
S-4
AVERY DENNISON CORPORATION
EXHIBIT INDEX
FOR THE YEAR ENDED DECEMBER 28, 1996
INCORPORATED BY REFERENCE:
ORIGINALLY
FILED AS
EXHIBIT EXHIBIT
NO. ITEM NO. DOCUMENT
------- ---- ---------- --------
(3.1) Restated Articles of B
Incorporation.......... Proxy Statement dated February 28,
1977 for Annual Meeting of
Stockholders March 30, 1977;
located in
File No. 0-225 at Securities and
Exchange Commission, 450 5th St.,
N.W., Washington, D.C.
(3.1.1) Amendment to Certificate
of Incorporation, filed
April 10, 1984 with
Office of Delaware
Secretary of State..... 3.1.1 1983 Annual Report on Form 10-K
(3.1.2) Amendment to Certificate
of Incorporation, filed
April 11, 1985 with
Office of Delaware
Secretary of State..... 3.1.2 1984 Annual Report on Form 10-K
(3.1.3) Amendment to Certificate
of Incorporation filed
April 6, 1987 with
Office of Delaware
Secretary of State..... 3.1.3 1986 Annual Report on Form 10-K
(3.1.4) Amendment to Certificate
of Incorporation filed
October 17, 1990 with
Office of Delaware
Secretary of State..... Current Report on Form 8-K filed
October 31, 1990
(3.2) By-laws, as amended..... 3(ii) First Quarterly Report for 1996 on
Form 10-Q
(4.1) Rights Agreement dated
as of June 30, 1988.... Current Report on Form 8-K filed
July 9, 1988
(4.1.1) Amendment to Rights
Agreement dated as of
December 9, 1994....... Current Report on Form 8-K filed
December 14, 1994
(4.2) Indenture, dated as of
March 15, 1991, between
Registrant and Security
Pacific National Bank,
as Trustee (the
"Indenture")........... Registration Statement on Form S-3
(File No. 33-39491)
(4.3) Officers' Certificate
establishing a series
of Securities entitled
"Medium-Term Notes"
under the Indenture.... Current Report on Form 8-K filed
March 25, 1991
(4.4) First Supplemental
Indenture, dated as of
March 16, 1993, between
Registrant and
BankAmerica National
Trust Company, as
successor Trustee (the
"Supplemental
Indenture")............ Registration Statement on Form S-3
(File No. 33-59642)
1
ORIGINALLY
FILED AS
EXHIBIT EXHIBIT
NO. ITEM NO. DOCUMENT
------- ---- ---------- --------
(4.5) Officers' Certificate
establishing a series of
Securities entitled
"Medium-Term
Notes" under the
Indenture, as amended by
the Supplemental
Indenture............... Current Report on Form 8-K filed
April 7, 1993
(4.6) Officers' Certificate
establishing a series of
Securities entitled
"Medium-Term Notes,
Series B" under the
Indenture, as amended by
the Supplemental
Indenture............... Current Report on Form 8-K filed
March 29, 1994
(4.7) Officers' Certificate
establishing a series of
Securities entitled
"Medium-Term Notes,
Series C" under the
Indenture, as amended by
the Supplemental
Indenture............... Current Report on Form 8-K filed
May 12, 1995
(4.8) Officers' Certificate
establishing a series of
Securities entitled
"Medium-Term Notes,
Series D" under the
Indenture, as amended by
the Supplemental
Indenture............... Current Report on Form 8-K filed
December 16, 1996
(10.1) *Amended 1973 Stock
Option and Stock
Appreciation Rights Plan
for Key Employees of
Avery International
Corporation ("1973
Plan").................. 10.1 1987 Annual Report on Form 10-K
(10.1.1) *Form of Incentive Stock
Option Agreement for use
under 1973 Plan......... 10.1.3 1984 Annual Report on Form 10-K
(10.1.2) *Form of Non-Qualified
Stock Option Agreement
for use under 1973 Plan. 10.1.4 1987 Annual Report on Form 10-K
(10.1.3) *Form of coupled Stock
Appreciation Right
Agreement for use under
1973 Plan............... 10.1.5 1985 Annual Report on Form 10-K
(10.1.4) 1985 U.K. Stock Option
Scheme.................. 10.1.7 1985 Annual Report on Form 10-K
(10.1.5) Form of Incentive Stock
Option Agreement for use
under U.K. Stock Option
Scheme.................. 10.1.8 1985 Annual Report on Form 10-K
(10.1.6) Form of Stock Option
Agreement for use under
U.K. Stock Option
Scheme.................. 10.1.9 1985 Annual Report on Form 10-K
(10.2.2) *Form of Incentive Stock
Option Agreement for use
under 1988 Plan......... 10.2.2 1991 Annual Report on Form 10-K
(10.3) *Deferred Compensation
Plan for Directors...... 10.3 1981 Annual Report on Form 10-K
(10.5) *Executive Medical and
Dental Plan (description). 10.5 1981 Annual Report on Form 10-K
(10.6) *Executive Financial
Counseling Service
(description)............. 10.6 1981 Annual Report on Form 10-K
(10.7.1) *Executive Employment
Security Policy dated
February 1, 1983........ 10.7.1 1982 Annual Report on Form 10-K
2
ORIGINALLY
FILED AS
EXHIBIT EXHIBIT
NO. ITEM NO. DOCUMENT
------- ---- ---------- --------
(10.7.2) *Executive Employment
Security Policy dated
February 1, 1985........ 10.13 1984 Annual Report on Form 10-K
(10.7.3) *Executive Employment
Security Policy dated
November 19, 1987....... 10.7.3 1993 Annual Report on Form 10-K
(10.8.1) *Agreement dated October
24, 1990 with Charles D.
Miller.................. 10.8.1 1990 Annual Report on Form 10-K
(10.8.2) *Agreement dated October
23, 1990 with Philip M.
Neal.................... 10.8.2 1990 Annual Report on Form 10-K
(10.9) *Executive Group Life
Insurance Plan.......... 10.9 1982 Annual Report on Form 10-K
(10.10) *Form of Indemnity
Agreements between
Registrant and certain
directors and officers.. 10.10 1986 Annual Report on Form 10-K
(10.10.1) *Form of Indemnity
Agreement between
Registrant and certain
directors and officers.. 10.10.1 1993 Annual Report on Form 10-K
(10.11) *Supplemental Executive
Retirement Plan......... 10.11 1983 Annual Report on Form 10-K
(10.11.1) *Amended Letter of Grant
to C.D. Miller under
Supplemental Executive
Retirement Plan......... 10.11.2 1992 Annual Report on Form 10-K
(10.12) *Complete Restatement and
Amendment of Avery
Dennison Corporation
Executive Deferred
Compensation Plan....... 10.12 1994 Annual Report on Form 10-K
(10.12.1) *Form of Enrollment
Agreement for use under
Executive Deferred
Compensation Plan....... 10.13.2 1985 Annual Report on Form 10-K
(10.13) *Fourth Amended Avery
Dennison Retirement Plan
for Directors........... 10.13.2 1992 Annual Report on Form 10-K
(10.15) *1988 Stock Option Plan
for Non-Employee
Directors ("Director
Plan").................. 10.15 1987 Annual Report on Form 10-K
(10.15.1) *Amendment No. 1 to 1988
Stock Option Plan for
Non-Employee Directors
("Director Plan")......... 10.15.1 1994 Annual Report on Form 10-K
(10.15.2) *Form of Non-Employee
Director Stock Option
Agreement for use under
Director Plan........... 10.15.2 1994 Annual Report on Form 10-K
(10.16) *Complete Restatement and
Amendment of Avery
Dennison Corporation
Executive Variable
Deferred Compensation
Plan.................... 10.16 1994 Annual Report on Form 10-K
(10.16.1) *Form of Enrollment
Agreement for use under
Executive Variable
Deferred Compensation
Plan.................... 10.16.1 1987 Annual Report on Form 10-K
(10.17) *Complete Restatement and
Amendment of Avery
Dennison Corporation
Directors Deferred
Compensation Plan....... 10.17 1994 Annual Report on Form 10-K
3
ORIGINALLY
FILED AS
EXHIBIT EXHIBIT
NO. ITEM NO. DOCUMENT
------- ---- ---------- --------
(10.17.1) *Form of Enrollment
Agreement for use under
Directors Deferred
Compensation Plan....... 10.17.2 1985 Annual Report on Form 10-K
(10.18) *Complete Restatement and
Amendment of Avery
Dennison Corporation
Directors Variable
Deferred Compensation
Plan.................... 10.18 1994 Annual Report on Form 10-K
(10.18.1) *Form of Enrollment
Agreement for use under
Directors Variable
Deferred Compensation
Plan.................... 10.18.1 1989 Annual Report on Form 10-K
(10.19) *1990 Stock Option and
Incentive Plan for Key
Employees of Avery
International
Corporation ("1990
Plan").................. 10.19 1989 Annual Report on Form 10-K
(10.19.1) *Amendment No. 1 to 1990
Plan.................... 10.19.1 1993 Annual Report on Form 10-K
(10.19.2) *Form of Incentive Stock
Option Agreement for use
under 1990 Plan......... 10.19.2 1991 Annual Report on Form 10-K
(10.19.3) *Form of Non-Qualified
Stock Option Agreement
for use under 1990 Plan. 10.19.3 1994 Annual Report on Form 10-K
(10.19.4) *Form of Non-Qualified
Stock Option Agreement
for use under 1990 Plan
(for LTIP Participants)... 10.19.4 1994 Annual Report on Form 10-K
(10.20.1) *1982 Incentive Stock
Option Plan of Dennison Registration Statement on Form S-8
Manufacturing Company... (File No. 33-35995-01)
(10.20.2) *1985 Incentive Stock
Option Plan of Dennison Registration Statement on Form S-8
Manufacturing Company... (File No. 33-35995-01)
(10.20.3) *1988 Stock Option Plan
of Dennison Registration Statement on Form S-8
Manufacturing Company... (File No. 33-35995-01)
(10.20.4) *Amendments effective as
of October 16, 1990 to
the 1982 Incentive Stock
Option Plan, 1985
Incentive Stock Option
Plan and 1988 Stock
Option Plan of Dennison Registration Statement on Form S-8
Manufacturing Company... (File No. 33-35995-01)
(10.27.1) *Amended and Restated Key
Executive Long-Term
Incentive Plan ("LTIP")... 10.27.1 1993 Annual Report on Form 10-K
(10.27.2) *Second Amended and
Restated
Key Executive Long-Term
Incentive Plan.......... 1995 Annual Report on Form 10-K
(10.28) *Complete Restatement and
Amendment of Avery
Dennison Corporation
Executive Deferred
Retirement Plan......... 10.28 1994 Annual Report on Form 10-K
(10.28.1) *Form of Enrollment
Agreement for use under
Executive Deferred
Retirement Plan......... 10.28.1 1992 Annual Report on Form 10-K
4
ORIGINALLY
FILED AS
EXHIBIT EXHIBIT
NO. ITEM NO. DOCUMENT
------- ---- ---------- --------
(10.29) *Executive Incentive
Compensation
Plan................... 10.29 1993 Annual Report on Form 10-K
(10.30) *Senior Executive
Incentive Compensation
Plan................... 10.30 1993 Annual Report on Form 10-K
(10.31) *Executive Variable
Deferred Retirement 10.31 Registration Statement on Form S-8
Plan................... (File No. 33-63979)
(10.31.1) *Amended and Restated
Executive Variable
Deferred Retirement
Plan................... 10.31.1 1995 Annual Report on Form 10-K
(10.32) *Benefit Restoration
Plan................... 10.32 1995 Annual Report on Form 10-K
(10.33.1) *Trust Agreement for
Employee Stock Benefit 10.1 Current Report on Form 8-K filed
Trust.................. October 24, 1996
(10.33.2) *Common Stock Purchase Current Report on Form 8-K filed
Agreement.............. 10.2 October 24, 1996
(10.33.3) *Promissory Note........ 10.3 Current Report on Form 8-K filed
October 24, 1996
- - --------
* Management contract or compensatory plan or arrangement required to be filed
as an Exhibit to this Form 10-K pursuant to Item 14(c).
5
SUBMITTED HEREWITH:
EXHIBIT
NO. ITEM
------- ----
3.2 Bylaws, as amended
10.8.3 *Agreement dated March 16, 1996 with R.G. van Schoonenberg
10.19.5 *Amendment No. 2 to 1990 Plan
10.21 *1996 Stock Incentive Plan of Avery Dennison Corporation
10.27.3 *Third Amended and Restated Key Executive Long-Term Incentive Plan
11 Statement re Computation of Net Income Per Share Amounts
13 Portions of Annual Report to Shareholders for fiscal year ended
December 28, 1996
21 List of Subsidiaries
23 Consent of Independent Accountants (see page S-4)
27 Financial Data Schedule
99 Cautionary Statement for Purposes of the "Safe Harbor" Provisions of
the Private Securities Litigation Reform Act of 1995
- - --------
* Management contract or compensatory plan or arrangement required to be filed
as an Exhibit to this Form 10-K pursuant to Item 14(c).
STATEMENT AND AGREEMENT REGARDING
LONG-TERM DEBT OF REGISTRANT
Except as indicated above, Registrant has no instrument with respect to
long-term debt under which securities authorized thereunder equal or exceed
10% of the total assets of Registrant and its subsidiaries on a consolidated
basis. Registrant agrees to furnish a copy of its long-term debt instruments
to the Commission upon request.
6