FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(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 31, 1994
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
-------------------- --------------------
COMMISSION FILE NUMBER 1-7685
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
-------------------------- ------------------------------
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 24, 1995, was approximately $1,845,860,130.
Number of shares of common stock, $1 par value, outstanding as of February
24, 1995: 53,345,232.
The following documents are incorporated by reference into the Parts of this
report below indicated:
DOCUMENT INCORPORATED BY REFERENCE INTO:
------------------------------------- ------------------------------
Annual Report to Shareholders for PARTS I, II
fiscal year ended December 31, 1994
(the "1994 Annual Report")
Definitive Proxy Statement for Annual PARTS III, IV
Meeting of Stockholders to be held
April 27, 1995 (the "1995 Proxy
Statement")
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 discussion below includes Dennison
units and operations as if Dennison had been a subsidiary of Registrant for all
relevant periods.
The principal business of Registrant and its subsidiaries (Registrant and its
subsidiaries are sometimes hereinafter referred to as the "Company") is the
production of self-adhesive materials. Some 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 office products and other
items not involving pressure-sensitive components, such as notebooks, three-
ring binders, organizing systems, felt-tip markers, glues, fasteners, business
forms, tickets, tags, and a diversified line of labeling systems 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 stock, 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 operations in Asia Pacific and Latin America. Aside from
certain risks normally attending international operations, such as currency
fluctuation, exchange control regulations and the effect of international
relations and domestic affairs of non-U.S. countries on the conduct of
business, the nature of these operations and the countries in which they are
conducted are such as to present no business risks which would have a material
adverse effect on the Company.
The Company manufactures and sells its products from 200 manufacturing
facilities and sales offices located in 27 countries, and employs a total of
approximately 15,400 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 products sector are increasingly
concentrated in a few major customers, principally discount office products
superstores and distributors. 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.
The Company's business is separated into three principal industry sectors--
Pressure-Sensitive Adhesives and Materials, Office Products, and Converted
Products (formerly Product Identification and Control Systems). The Company's
operations within each of these three sectors are further divided
organizationally into various groups, each consisting of divisions which
manufacture products similar in nature or sell to similar markets.
1
PRESSURE-SENSITIVE ADHESIVES AND MATERIALS SECTOR
These units manufacture and sell Fasson- and Avery-brand pressure-sensitive
base materials generally in unconverted form, and include Materials North
America, European Operations, Automotive and Graphic Systems, Specialty Tape
Divisions and Chemical Divisions. 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 North America (including units in Canada, Mexico, South America,
Australia and Asia Pacific) and European Operations (including 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, converters and
merchant distributors 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 and specialty
insulation paper.
Automotive and Graphic Systems units manufacture and sell a variety of films
and other products to the worldwide automotive, architectural, printing and
graphics markets. These units sell durable cast and reflective films to the
construction, fleet transportation, sign and industrial equipment markets, and
retroreflective films for government and traffic applications. In converted
form, these products and the Company's Dry Paint products, including Avloy and
Avcoat, are supplied to automotive original equipment manufacturers. In
addition, these units sell specialty print-receptive films to the industrial
label and office products markets, metallic dispersion products to the
packaging industry and proprietary woodgrain film laminates for housing
exteriors.
The Specialty Tape Divisions sell specialty tapes and bonding materials to
industrial and medical converters and original equipment manufacturers, and to
disposable-diaper producers throughout the world. Major products include
single- and double-coated adhesive films, foils and foams, transfer tapes,
specialty adhesives and release tapes.
The Chemical Divisions produce 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
relatively small 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.
OFFICE PRODUCTS SECTOR
Office 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. The business
of these units is not seasonal, except for certain stationery products sold
through various channels during the back-to-school selling season.
Office products units in North America and Europe manufacture and sell a wide
range of products for home, school and office uses, including pressure-
sensitive labels, laser and ink-jet printer labels and software, binders,
dividers, presentation and organizing systems (including indexing and tabbing
guides), adhesive products, marking devices and numerous other office products.
These units produce the Avery-brand line of stock self-adhesive products,
including copier, laser and ink-jet labels and related software; laser-printer
card and index products; unprinted labels; correction tape; file folder, color-
coding and data-processing labels; notebooks; notebook and presentation
dividers; three-ring binders; sheet protectors; and various vinyl and heat-
sealed products. These operations also manufacture and sell a wide range of
stationery products, including felt-tip markers, adhesives and specialty
products under brand names such as Avery, Marks-A-Lot, Carter's and HI-LITER,
and accounting products, note pads and business forms under the Avery and
National brand names.
2
Office products units in the United Kingdom also manufacture and distribute
office products and accessories including plastic and metal desk and office
accessories, computer storage units, filing racks and cabinets, organizers,
index systems and related items, and a wide range of manila files, folders and
wallets, lever arch files, suspension files and project covers under the Avery
Myers and Avery Guidex brand names. Office products units in France produce a
line of Doret- and Cheval-brand binder and document protection products.
Office 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 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 channel 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.
CONVERTED PRODUCTS SECTOR (FORMERLY PRODUCT IDENTIFICATION AND CONTROL SYSTEMS)
Converted products units manufacture and sell a wide range of converted
products including labels, tags, fasteners and automated labeling and
imprinting equipment to a wide variety of customers for industrial and retail
applications. They include European Operations, the Label Divisions North
America and the Soabar Products and Fastener Divisions. Converted products
include pressure-sensitive base materials, and paper or plastic film which are
converted into labels and other products by embossing, printing, stamping and
die-cutting. These products are sold by units in this sector directly to
manufacturers and packagers, as well as through international subsidiaries,
distributors and licensees. The business of these units is not seasonal.
The European Operations group manufactures and sells a wide range of custom
pressure-sensitive labels for functional, decorative and information purposes,
and automated label application and imprinting machines to the automotive,
pharmaceutical, cosmetic, durable goods and consumer packaged goods markets.
The group also produces and sells a line of stock self-adhesive products,
including copier, laser and ink-jet labels, unprinted labels, file folder
labels, color coding labels and data processing labels. Its products are sold
by subsidiaries located in Western Europe. This group also furnishes
production, merchandising and technical information to independent licensees
operating in several foreign countries to assist them in converting self-
adhesive base materials, and in selling a product line similar to that of the
group's subsidiaries.
The Label Divisions North America produce custom pressure-sensitive, heat-
transfer and in-mold film labels and automated label application machinery for
the automotive, durable goods, cosmetics, pharmaceutical and consumer packaged
goods industries. Custom pressure-sensitive products similar to those sold by
the European Operations units are sold directly to a wide range of industrial
users in similar markets in North America, and custom pressure-sensitive labels
and specialty forms/label combination products are sold to the electronic data
processing market, primarily in North America. Self-adhesive stamps are also
produced for the U.S. and international postal services.
Soabar Products and Fastener Divisions 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 Division 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 non-U.S. countries.
These business units usually occupy a strong position in most markets in
which they compete, although many face strong local competition. The Company
believes that its diverse technical foundation, including a
3
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.
ASIA PACIFIC GROUP
The Asia Pacific Group was created in 1994 to strengthen and expand the
Company's presence in the Asia Pacific region. Divisions in the Group are
included in the three industry sectors described above for financial reporting
purposes. Included in the Group are Fasson Australia, which manufactures and
sells pressure-sensitive base materials in Australia and New Zealand; Soabar
Ticketing Services Division Hong Kong, which produces and sells promotional and
price marking bar-coded tags and labels for the Asian garment industry; Avery
Dennison Australia, which manufactures office product labels, variable-
information printed labels and Therimage-brand decorating systems for
distribution in the Asia Pacific region; and Avery Korea, which manufactures
and distributes pressure-sensitive base materials principally in Korea. Also
included in the Asia Pacific Group are organizations for the distribution of
fasteners, base materials and office products in Southeast Asia and Japan. The
Company is also constructing a base materials manufacturing plant, located near
Shanghai, China, which is expected to begin production in the second half of
1995.
RESEARCH AND DEVELOPMENT
Many of the Company's current products are the result of its own research and
development efforts. The Company expended $49.1 million, $45.5 million and
$46.7 million in 1994, 1993 and 1992, 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 two or more of the
Company's industry sectors, and cannot readily be allocated among such sectors.
In addition, many such expenditures are for products and projects at a
relatively early stage of development, and the sector in which they will be
utilized cannot be determined at the time the expenditures are made. However,
research and development expenditures which can be identified by Company
industry sectors are approximately proportional to the percentages of Company
sales represented by each such sector.
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' product development work, and focuses closely on basic
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 any of the Company's
three 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 31, 1994, which appears in Note 9 of Notes to
Consolidated Financial Statements on pages 46 and 47 of the 1994 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.
4
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; Rodange, Luxembourg; Turnhout, Belgium; Hazerswoude, Holland; and
Cramlington, England facilities, as well as other plants in the United States,
Australia, Brazil, France, Germany, Korea and Mexico.
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.
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).
ITEM 2. PROPERTIES
The Company operates 27 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 and Schererville, Indiana.
Foreign--Hazerswoude, Holland; Cramlington, England; Champ-sur-Drac, France;
Turnhout, Belgium; Ajax, Canada; and Rodange, Luxembourg.
OFFICE PRODUCTS SECTOR
Domestic--Torrance, California; Gainesville, Georgia; Rochelle and Rolling
Meadows, Illinois; Chicopee and Springfield, Massachusetts;
Meridian, Mississippi; and Crossville, Tennessee.
Foreign--Bowmanville, Canada; and La Monnerie and Troyes, France.
CONVERTED PRODUCTS SECTOR
Domestic--Philadelphia, Pennsylvania; and Framingham, Massachusetts.
In addition to the Company's principal manufacturing facilities described
above, the Company's principal facilities include its corporate headquarters
facility in Pasadena, California, offices located in Leiden, Holland; Concord,
Ohio and Framingham, Massachusetts and the Research Center, located in
Pasadena, California.
All of the Company's principal properties identified above are owned in fee
except the Torrance, California; Rolling Meadows, Illinois; Springfield,
Massachusetts; Ajax, Canada; 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, construction of the first portion of which was completed in
1893 and which has been enlarged on several occasions thereafter; and the West
Midlands, England plant building which was constructed in 1938. All buildings
owned or leased are well maintained and of sound construction, and are
considered suitable and adequate for the Company's presently foreseeable
5
needs, although the Company intends to expand capacity 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; La Monnerie and Troyes,
France 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
sixteen waste disposal or waste recycling sites which are the subject of
separate investigations or proceedings concerning alleged soil and/or
groundwater contamination. Litigation has been initiated by a governmental
authority with respect to three 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 PRP's 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 where it is probable that a loss will be incurred and the amount of
the loss can be 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.
The Registrant and its subsidiaries are involved in various other lawsuits,
claims and inquiries, most of which are routine to the nature of their
business. In the opinion of the Company's management, the resolution of these
matters will not materially affect the financial position, results of
operations or liquidity of 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.
EXECUTIVE OFFICERS OF THE REGISTRANT*
SERVED AS FORMER POSITIONS AND
NAME AGE OFFICER SINCE OFFICES WITH REGISTRANT
---- --- ------------- -----------------------
Charles D. Miller 67 May 1965 1964-1983 Various positions of
Chairman and Chief increasing
Executive Officer responsibility
(Also Director of
Registrant)
Philip M. Neal 54 January 1974 1974-1990 Various positions of
President and Chief increasing
Operating Officer responsibility
(Also Director of 1990 Executive Vice President
Registrant)
R. Gregory Jenkins 58 July 1981 1974-1988 Various positions of
Senior Vice President, increasing
Finance responsibility
and Chief Financial
Officer
Alan J. Gotcher 45 November 1984 1984-1990 Vice President, Corporate
Senior Vice President, Research
Manufacturing and
Technology
--------
*All officers are elected to serve a one year term and until their successors
are elected and qualify.
6
EXECUTIVE OFFICERS OF THE REGISTRANT* (CONTINUED)
SERVED AS FORMER POSITIONS AND
NAME AGE OFFICER SINCE OFFICES WITH REGISTRANT
---- --- ------------- -----------------------
Kim A. Caldwell 47 June 1990 1974-1985 Various positions of
Senior Group Vice increasing
President, responsibility
Worldwide Materials 1985-1990 Vice President and General
Mgr., Fasson Roll Div.
(U.S.)
Donald L. Thompson 54 October 1993 1973-1988 Various positions of
Group Vice President, increasing
Office Products responsibility
1988-1993 V.P. and General Manager,
Commercial Products
Division
1993 V.P., Sales and Customer
Operations, North America
Geoffrey T. Martin 40 January 1994 1986-1988 Managing Director, Label
Senior Vice President, Systems
European Operations 1988-1992 V.P. and General Manager,
Label Systems UK
and Ireland
1992-1993 V.P., Office Products
Group Europe
1993-1994 Group Vice President,
Converting and Office
Products Europe
James E. Shaw 63 February 1994 1986-1991 V.P. and General Manager,
Group Vice President, Graphic Systems Division
Automotive and 1991-1994 V.P. and General Manager,
Graphic Systems Automotive and Graphic
Systems Divisions
Robert D. Fletcher 59 March 1976 1967-1988 Various positions of
Group Vice President, increasing
Asia Pacific responsibility
1988-1993 Group Vice President,
International Converting
Group
Bent Lindner 51 December 1991 1981-1989 General Manager,
Vice President, Roll Label Systems, Denmark
Materials 1989-1991 V.P., General Manager,
and Converting Europe Label Systems (France)
1991-1994 Group Vice President,
Materials Europe
Wayne H. Smith 53 June 1979 None
Vice President and
Treasurer
Gary A. McCue 58 November 1987 1987-1994 Vice President and
Vice President, Controller
Strategic Value 1994 Vice President, Corporate
Development Value Planning and
Development
--------
*All officers are elected to serve a one year term and until their successors
are elected and qualify.
7
EXECUTIVE OFFICERS OF THE REGISTRANT* (CONTINUED)
SERVED AS FORMER POSITIONS AND
NAME AGE OFFICER SINCE OFFICES WITH REGISTRANT
---- --- ------------- -----------------------
Robert G. van 48 December 1981 None
Schoonenberg
Vice President, General
Counsel and Secretary
Diane B. Dixon 43 December 1985 1982-1985 Director of Communications
Vice President,
Corporate
Communications
Thomas E. Miller 47 March 1994 1973-1989 Various positions of
Vice President increasing
and Controller responsibility
1989-1990 Assistant Controller,
Business Operations
1990-1993 Assistant Controller
1993-1994 V.P. and Assistant
Controller
James L. Fletcher 53 June 1993 1988-1991 Senior Manufacturing
Vice President, Systems Consultant
Customer 1991-1993 V.P., Customer Logistics
Service and Logistics
Paul B. Germeraad 47 May 1991 **1989-1991 Director, Flexible
Vice President and Packaging Technical Group,
Director, Corporate James River Corporation
Research
Johan J. Goemans 51 October 1992 1975-1984 Various positions of
Vice President, increasing
Management responsibility
Information Systems 1984-1990 Director of MIS, Materials
Group U.S.
1991-1992 Director of Distribution
and Logistics, Fasson Roll
Division U.S.
Susan B. Garelli 43 October 1994 **1987-1991 V.P., Human Resources,
Vice President, Columbia Pictures
Human Resources Entertainment, Inc.
**1991-1993 Senior V.P., Human
Resources and Corporate
Communications, JWP, Inc.
**1993-1994 Consultant, JWP, Inc.
--------
*All officers are elected to serve a one year term and until their successors
are elected and qualify.
**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 52 of Registrant's
1994 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 30 and 31 of Registrant's 1994 Annual Report and is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
1994 1993 1992
-------- -------- --------
(DOLLARS IN MILLIONS)
Net sales............................................ $2,856.7 $2,608.7 $2,622.9
Cost of products sold................................ 1,948.9 1,790.6 1,784.7
-------- -------- --------
Gross profit......................................... 907.8 818.1 838.2
Marketing, general and administrative expense........ 691.9 642.7 665.7
-------- -------- --------
Operating profit..................................... $ 215.9 $ 175.4 $ 172.5
Gross profit margin as a percent of sales............ 31.8 31.4 32.0
Operating profit as a percent of sales............... 7.6 6.7 6.6
Sales increased to a record $2.86 billion in 1994, a 10 percent increase over
1993 sales of $2.61 billion. Changes in foreign currency had little effect on
1994 total year sales. Sales during 1993 reflected a decrease of less than 1
percent from 1992 sales of $2.62 billion. Excluding the impact of changes in
foreign currency, 1993 sales increased 2 percent over 1992. Each of the
Company's 1994, 1993 and 1992 fiscal years had 52 weeks.
Gross profit margins for the years ended 1994, 1993 and 1992 were 31.8
percent, 31.4 percent and 32 percent, respectively. The improved gross profit
margin during 1994 was primarily due to productivity improvements throughout
the Company and an improved product mix on increased sales. The gross profit
margin increased despite plant start-up costs for a number of large facilities,
rising raw material prices for all business sectors and almost no benefit from
the reduction of LIFO inventories in 1994, compared to a benefit of
$11.4 million in 1993. No LIFO benefits are anticipated overall for 1995. Raw
material price increases during 1994 did not materially impact gross profit
margins since appropriate pricing actions were taken; additional pricing
actions are planned for 1995 in anticipation of continuing raw material price
increases for all business sectors. Gross margins in 1993 as compared to 1992
were negatively affected by lower average selling prices, increased promotional
spending and incentives for the U.S. office products businesses, a $6.4 million
reduction in benefits from the reduction of LIFO inventories and negative
currency effects within Europe.
Marketing, general and administrative expense as a percent of sales was 24.2
percent in 1994, 24.6 percent in 1993 and 25.4 percent in 1992. The improvement
in 1994 was primarily attributable to cost reduction efforts throughout the
Company on increased sales, and was achieved despite major investments in
geographic expansion, business realignment and new product programs. The
decrease in 1993 from 1992 was primarily due to companywide cost reduction
efforts.
9
As a result of the above, operating profit as a percent of sales during 1994
increased to 7.6 percent from 6.7 percent and 6.6 percent in 1993 and 1992,
respectively. Interest expense as a percent of sales was 1.5 percent in 1994,
1.7 percent in 1993 and 1.6 percent in 1992. The decrease in 1994 was due to
comparable interest expense on increased sales. The increase in interest
expense during 1993 compared to 1992 was due to inflationary rates of interest
in Brazil.
Income before taxes, as a percent of sales, was 6.1 percent for 1994, 5.1
percent for 1993 and 5 percent in 1992. The increase in 1994 was primarily due
to improved gross profit margins and lower operating expenses as a percent of
sales. The effective tax rate was 36.7 percent in 1994, 37 percent in 1993 and
38.5 percent in 1992. The lower effective tax rate in 1994 was primarily due to
the relative mix of U.S. and non-U.S. taxable income. The decrease in 1993 was
primarily due to the composition of non-U.S. taxable income.
1994 1993 1992
------ ----- -----
(IN MILLIONS,
EXCEPT PER SHARE
AMOUNTS)
Net income.................................................. $109.4 $84.4 $80.1
Net income per share........................................ 1.97 1.46 1.33
Average shares outstanding.................................. 55.6 58.0 60.4
Net income increased 30 percent to $109.4 million in 1994 compared to $84.4
million in 1993, reflecting the Company's fourth consecutive year of improved
profitability. Earnings per share reached a record high of $1.97 in 1994
compared to $1.46 in 1993, a 35 percent increase over the prior year. Excluding
the effect of accounting changes, net income for 1993 was $83.3 million, or
$1.44 per share. Net income was $80.1 million, or $1.33 per share, in 1992. Net
income, as a percent of sales, was 3.8 percent, 3.2 percent and 3.1 percent in
1994, 1993 and 1992, respectively.
RESULTS OF OPERATIONS BY BUSINESS SECTOR
PRESSURE-SENSITIVE ADHESIVES AND MATERIALS
1994 1993 1992
-------- -------- --------
(IN MILLIONS)
Net sales............................................ $1,526.9 $1,336.9 $1,324.4
Income from operations before interest and taxes..... 150.7 126.4 113.0
The pressure-sensitive adhesives and materials sector reported significant
sales and profitability improvements for 1994 compared to 1993. The U.S.
operations reported a significant sales increase due to improved economic
conditions in major markets, and revenue and unit volume growth as a result of
new products and pricing actions. Solid profitability improvement was primarily
due to sales growth and cost reduction programs. Improved economic conditions,
pricing actions, and volume growth led to a significant sales increase for the
European operations. The sales growth, coupled with productivity improvements
and cost reduction programs, resulted in significant profitability increases
for the European operations. The Company experienced no significant adverse
effects from the Mexican currency devaluation during 1994, and effects are not
expected to be signficant to the Company's operating results in 1995.
In 1993, the sector reported a solid profitability improvement on a modest
increase in sales compared to 1992. The U.S. operations reported significant
sales and profitability growth in 1993. The growth was attributable to
successful new product introductions, increased market share and effective cost
reduction programs. Improvements at the U.S. operations were partially offset
by declines at the European materials and automotive businesses. The negative
effects of foreign currency, pricing pressures and the recessionary European
economies adversely impacted the sales and profitability of the European
operations during 1993.
10
OFFICE PRODUCTS
1994 1993 1992
------ ------ ------
(IN MILLIONS)
Net sales................................................. $805.8 $765.4 $758.0
Income from operations before interest and taxes.......... 63.8 55.2 79.8
The office products sector reported a solid growth in sales and profitability
for 1994 compared to the prior year. In the U.S., sales and profitability
increased primarily as a result of successful new products and promotional
programs and an improved product mix. Profitability improved at the U.S.
operations despite significantly lower benefits from the reduction of LIFO
inventories in 1994 compared to 1993 and higher costs related to the
consolidations of distribution warehouses and sales forces. Sales for the U.S.
operations in 1995 may grow at a slower rate as the Company continues to limit
growth of lower margin business and focuses on higher margin new products. The
European office products businesses reported significantly improved
profitability on decreased sales compared to 1993. Decreased sales were
primarily due to the effects of non-core product pruning and the weak French
economy in early 1994. Profitability improved significantly primarily as a
result of cost reduction actions taken in previous years and an improved
product mix, and was achieved despite costs related to continuous business
improvement programs.
In 1993, the office products sector reported flat sales and a significant
decline in profitability compared to 1992. In the U.S., increased sales from
market share gains for Avery-brand products were partially offset by declines
at the other U.S. businesses. Profitability in the U.S. was negatively affected
by increased promotional spending and incentives and lower benefits from the
reduction of LIFO inventories during 1993 compared to 1992. European sales and
profitability declined significantly, particularly in France, due to the
recessionary European economies and the negative effects of foreign currency
translation.
CONVERTED PRODUCTS
(formerly Product Identification and Control Systems)
1994 1993 1992
------ ------ ------
(IN MILLIONS)
Net sales................................................. $614.7 $575.8 $607.0
Income from operations before interest and taxes.......... 34.1 25.4 13.3
The converted products sector reported significant profitability improvements
on solid sales growth for 1994 compared to 1993. Profitability increased
despite costs incurred to improve operations and significantly lower benefits
from the reduction of LIFO inventories in 1994 compared to 1993. Sales for the
Soabar and fastener businesses increased due to improving retail and apparel
markets and new products. Profitability was up significantly primarily due to
increased sales, coupled with the elimination of unprofitable product lines and
lower operating expenses as a result of cost reduction actions. The
international converting businesses reported modest sales growth and decreased
profitability for 1994. The effects of an improved European economy on sales
were partially offset by sales lost from the elimination of unprofitable lines
of business. Profitability declined primarily as a result of costs incurred to
improve operations. The U.S. label businesses reported a solid increase in
sales and significant profitability gains due primarily to increased sales to
the automotive, durable and consumer goods markets and lower operating expenses
as a percent of sales.
In 1993, the converted products sector showed significant profitability
improvement on decreased sales compared to 1992. The elimination of
unprofitable lines of business decreased combined sales for the Soabar tag and
ticketing businesses, while effective cost control measures resulted in
significant combined profitability improvements. The international converting
businesses reported a significant decline in sales due to the recessionary
European economies and the negative effects of foreign currency translation.
The North American label businesses reported flat sales and decreased
profitability in 1993 when compared to 1992. Sector profitability was
positively affected in 1993 by a greater reduction of LIFO inventories than in
1992.
11
FINANCIAL CONDITION
Average working capital, excluding short-term debt, as a percent of sales was
10 percent in 1994, 12.3 percent in 1993 and 15.2 percent in 1992. The decrease
was primarily due to higher sales, improvement in inventory turnover and days
sales outstanding in accounts receivable, and an increase in current
liabilities. Average inventory turnover was 9.3 turns in 1994, 8.7 in 1993 and
7.5 in 1992; the average number of days sales outstanding in accounts
receivable was 55 days in 1994, compared to 57 days in 1993 and 59 days in
1992.
Net cash flow from operating activities was $265 million in 1994 and $247
million in 1993. The increase in net cash flow was due primarily to a decrease
in working capital and the net change in non-current deferred taxes and other
long-term liabilities.
In 1994, total debt increased $23.2 million to $420.7 million compared to
year end 1993. Total debt to total capital was 36.6 percent at year end 1994
compared to 35.6 percent a year ago. Long-term debt as a percent of total long-
term capital increased to 32.3 percent at year end 1994 compared to 30.2
percent at year end 1993. During 1994, the Company issued $100 million in
principal amount of medium-term notes which have an average interest rate of
7.7 percent and maturities ranging from August 2002 through August 2004.
Shareholders' equity increased to $729 million from $719.1 million at year
end 1993. During 1994, the Company repurchased 3.2 million shares of common
stock at a cost of $105.7 million. The cost of treasury stock held, net of
shares reissued under the Company's stock option and incentive plans, at year
end 1994 increased $89.3 million to $253.4 million from year end 1993. In
January 1995, the Board of Directors authorized the repurchase of an additional
five million shares of the Company's outstanding common stock for an aggregate
of 15.2 million shares authorized for repurchase. As of year end 1994, an
aggregate 9.9 million shares of common stock had been purchased under the
cumulative authorizations.
The return on average shareholders' equity was 14.8 percent in 1994, 11
percent in 1993 and 9.7 percent in 1992. The improvements during 1994 and 1993
were primarily due to a significant increase in profitability and the Company's
share repurchase program. The return on average total capital for those three
years was 12.1 percent, 9.3 percent and 8.3 percent, respectively. The
increases during 1994 and 1993 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 16 waste sites
in which the Company has no ownership interest. Litigation has been initiated
by a governmental authority with respect to three 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 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.
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.
The Company is currently expanding its operations in Asia Pacific and Latin
America. The Company's future results are subject to 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.
12
Capital expenditures increased to $163.3 million in 1994 from $100.6 million
in 1993. Capital spending was accelerated in the second half of 1994 to meet
increased demand, particularly in the pressure-sensitive adhesives and
materials businesses. Capital expenditures for 1995 are expected to be
approximately $175 million.
Annual dividends per share increased to $.99 in 1994 from $.90 in 1993 and
$.82 in 1992.
During 1994, the Company experienced broad increases in raw materials prices.
These inflationary pressures are expected to continue in 1995 and should be
substantially offset by pricing actions and productivity improvements.
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 36
through 47 and page 49 of Registrant's 1994 Annual Report and is incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors called for by this item is incorporated
by reference from pages 2, 3 and 4 of the 1995 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 14 of the 1995 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 20 (up to the caption "The 1988 Stock Option
Plan for Non-Employee Directors (Proxy Item 2)") of the 1995 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.
13
(b) During the fourth quarter of 1994, Registrant filed a Current Report on
Form 8-K dated December 14, 1994 reporting an amendment of the Rights
Agreement, dated as of June 30, 1988, between Registrant and First Interstate
Bank of California (as successor to Security Pacific National Bank, by
amendment), as Rights Agent.
(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 1994 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
/s/ R. Gregory Jenkins
By___________________________________
R. Gregory Jenkins
Senior Vice President, Finance and
Chief Financial Officer
Dated: March 29, 1995
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 29, 1995
------------------------------------ Officer; Director
Charles D. Miller
/s/ Philip M. Neal President and Chief Operating March 29, 1995
------------------------------------ Officer; Director
Philip M. Neal
/s/ R. Gregory Jenkins Senior Vice President, March 29, 1995
------------------------------------ Finance and Chief Financial
R. Gregory Jenkins Officer
(Principal Financial Officer)
/s/ Thomas E. Miller Vice President and March 29, 1995
------------------------------------ Controller (Principal
Thomas E. Miller Accounting Officer)
/s/ Stanton Avery Founder and March 29, 1995
------------------------------------ Chairman Emeritus; Director
R. Stanton Avery
/s/ H. Russel Smith Chairman of the March 29, 1995
------------------------------------ Executive Committee;
H. Russell Smith Director
15
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Dwight L. Allison, Jr. Director March 29, 1995
------------------------------------
Dwight L. Allison, Jr.
/s/ John C. Argue Director March 29, 1995
------------------------------------
John C. Argue
/s/ Joan T. Bok Director March 29, 1995
------------------------------------
Joan T. Bok
/s/ Frank V. Cahouet Director March 29, 1995
------------------------------------
Frank V. Cahouet
/s/ Richard M. Ferry Director March 29, 1995
------------------------------------
Richard M. Ferry
/s/ F. Daniel Frost Director March 29, 1995
------------------------------------
F. Daniel Frost
/s/ Peter W. Mullin Director March 29, 1995
------------------------------------
Peter W. Mullin
/s/ Sidney R. Petersen Director March 29, 1995
------------------------------------
Sidney R. Petersen
/s/ John B. Slaughter Director March 29, 1995
------------------------------------
John B. Slaughter
/s/ Lawrence R. Tollenaere Director March 29, 1995
------------------------------------
Lawrence R. Tollenaere
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 por-
tions of the 1994 Annual Report to Shareholders of
Avery Dennison Corporation:
Report of Independent Certified Public Accountants.... -- 49
Consolidated Balance Sheet at December 31, 1994 and
January 1, 1994...................................... -- 36
Consolidated Statement of Income for 1994, 1993 and
1992................................................. -- 37
Consolidated Statement of Shareholders' Equity for
1994, 1993 and 1992.................................. -- 38
Consolidated Statement of Cash Flows for 1994, 1993
and 1992............................................. -- 39
Notes to Consolidated Financial Statements............ -- 40-47
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, all of which is included in the 1994 Annual
Report and incorporated herein by reference, the 1994 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 1994, 1993 and
1992):
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 49 of the 1994 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 31, 1995
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
--------- -------- ------------ ------------- -------
1994
Allowance for doubtful
accounts............... $16.7 $7.5 $-- $5.7 $18.5
===== ==== ==== ==== =====
1993
Allowance for doubtful
accounts............... $18.4 $7.7 $-- $9.4 $16.7
===== ==== ==== ==== =====
1992
Allowance for doubtful
accounts............... $18.4 $8.3 $-- $8.3 $18.4
===== ==== ==== ==== =====
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 and 33-
54411) of our report, which includes an explanatory paragraph regarding the
Company's adoption of the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards ("SFAS") No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions", SFAS
No. 109, "Accounting for Income Taxes" and SFAS No. 112, "Employers' Accounting
for Postemployment Benefits" during 1993, dated January 31, 1995, which appears
on page 49 of the 1994 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 29, 1995
S-4
AVERY DENNISON CORPORATION
EXHIBIT INDEX
FOR THE YEAR ENDED DECEMBER 31, 1994
----------------
INCORPORATED BY REFERENCE:
ORIGINALLY
FILED AS
EXHIBIT EXHIBIT
NO. ITEM NO. DOCUMENT
------- ---- ---------- --------
(3.1) Restated Articles of In- Proxy Statement dated February
corporation............ B 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 Of-
fice of Delaware Secre-
tary 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 Of-
fice of Delaware Secre-
tary 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 Of-
fice of Delaware Secre-
tary 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 Sec- 3.1 Current Report on Form 8-K filed
retary of State........ October 31, 1990
(4.1) Rights Agreement dated
as of June 30, 1 Current Report on Form 8-K filed
1988................... July 9, 1988
(4.1.1) Amendment to Rights
Agreement dated as of 1 Current Report on Form 8-K filed
December 9, 1994....... December 14, 1994
(4.2) Indenture, dated as of
March 15, 1991,
between Registrant and
Security Pacific
National Bank, as
Trustee (the "Inden- 4 Registration Statement on Form S-
ture")................. 3 (File No. 33-39491)
(4.3) Officers' Certificate
establishing a series
of Securities entitled
"Medium-Term Notes" un- 28.1 Current Report on Form 8-K filed
der the Indenture...... March 25, 1991
(4.4) First Supplemental In-
denture, dated as of
March 16, 1993, between
Registrant and
BankAmerica National
Trust Company, as suc-
cessor Trustee (the
"Supplemental Inden- 4.2 Registration Statement on Form S-
ture")................. 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" un-
der the Indenture, as
amended by the Supple- 4.1 Current Report on Form 8-K filed
mental Indenture....... April 7, 1993
(4.6) Officers' Certificate
establishing a series
of Securities entitled
"Medium-Term Notes, Se-
ries B" under the In-
denture, as amended by
the Supplemental 4.1 Current Report on Form 8-K filed
Indenture.............. March 29, 1994
(10.1) *Amended 1973 Stock Op-
tion and Stock Appreci-
ation Rights Plan for
Key Employees of Avery
International Corpora-
tion ("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) *1988 Stock Option and
Stock Appreciation
Rights Plan for Key Em-
ployees of Avery Inter-
national Corporation
("1988 Plan").......... 10.2 1987 Annual Report on Form 10-K
(10.2.1) *Form of Non-Qualified
Stock Option Agreement
for use under 1988
Plan................... 10.2.1 1990 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 (descrip-
tion).................. 10.5 1981 Annual Report on Form 10-K
(10.6) *Executive Financial
Counseling Service (de-
scription)............. 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
--------
*Management contract or compensatory plan or arrangement required to be filed
as an Exhibit to this Form 10-K pursuant to Item 14(c).
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 Reg-
istrant and certain di-
rectors and officers... 10.10 1986 Annual Report on Form 10-K
(10.10.1) *Form of Indemnity
Agreement between Reg-
istrant and certain di-
rectors 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
(10.12.1) *Form of Enrollment
Agreement for use under
Executive Deferred
Compensa-tion 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 Direc-
tors ("Director Plan"). 10.15 1987 Annual Report on Form 10-K
(10.16.1) *Form of Enrollment
Agreement for use under
Executive Variable De-
ferred Compensation
Plan................... 10.16.1 1987 Annual Report on Form 10-K
(10.17.1) *Form of Enrollment
Agreement for use under
Directors Deferred Com-
pensation Plan......... 10.17.2 1985 Annual Report on Form 10-K
(10.18.1) *Form of Enrollment
Agreement for use under
Directors Variable De-
ferred 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 In-
ternational Corporation
("1990 Plan").......... 10.19 1989 Annual Report on Form 10-K
(10.19.1) *Amendment No. 1 to 1990
Plan................... 10.19.3 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
--------
*Management contract or compensatory plan or arrangement required to be filed
as an Exhibit to this Form 10-K pursuant to Item 14(c).
3
ORIGINALLY
FILED AS
EXHIBIT EXHIBIT
NO. ITEM NO. DOCUMENT
------- ---- ---------- --------
(10.20.1) *1982 Incentive Stock
Option Plan of Dennison 4.3 Registration Statement on Form S-
Manufacturing Company.. 8 (File No. 33-35995-01)
(10.20.2) *1985 Incentive Stock
Option Plan of Dennison 4.4 Registration Statement on Form S-
Manufacturing Company.. 8 (File No. 33-35995-01)
(10.20.3) *1988 Stock Option Plan
of Dennison Manufactur- 4.5 Registration Statement on Form S-
ing Company............ 8 (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 Op-
tion Plan of Dennison 4.6 Registration Statement on Form S-
Manufacturing Company.. 8 (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
(10.28.1) *Form of Enrollment
Agreement for use under
Executive Deferred Re-
tirement Plan.......... 10.28.1 1992 Anual Report on Form 10-K
(10.29) *Executive Incentive
Compensation Plan...... 10.29 1993 Annual Report on Form 10-K
(10.30) *Senior Executive Incen-
tive Compensation Plan. 10.30 1993 Annual Report on Form 10-K
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*Management contract or compensatory plan or arrangement required to be filed
as an Exhibit to this Form 10-K pursuant to Item 14(c).
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SUBMITTED HEREWITH:
EXHIBIT NO. ITEM
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3.2 Bylaws, as amended
10.12 *Complete Restatement and Amendment of Avery Dennison Corporation
Executive Deferred Compensation Plan
10.15.1 *Amendment No. 1 to 1988 Stock Option Plan for Non-Employee
Directors ("Director Plan")
10.15.2 *Form of Non-Employee Director Stock Option Agreement for use
under Director Plan
10.16 *Complete Restatement and Amendment of Avery Dennison Corporation
Executive Variable Deferred Compensation Plan
10.17 *Complete Restatement and Amendment of Avery Dennison Corporation
Directors Deferred Compensation Plan
10.18 *Complete Restatement and Amendment of Avery Dennison Corporation
Directors Variable Deferred Compensation Plan
10.19.3 *Form of Non-Qualified Stock Option Agreement for use under 1990
Plan
10.19.4 *Form of Non-Qualified Stock Option Agreement for use under 1990
Plan (for LTIP Participants)
10.28 *Complete Restatement and Amendment of Avery Dennison Corporation
Executive Deferred Retirement Plan
11 Statement re Computation of Net Income Per Share Amounts
13 Portions of Annual Report to Shareholders for fiscal year ended
December 31, 1994
21 List of Subsidiaries
23 Consent of Independent Accountants (see page S-4)
27 Financial Data Schedule
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*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.
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[LOGO OF AVERY DENNISON]