UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 1, 1995
---------------
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
incorporation or organization) identification no.)
150 NORTH ORANGE GROVE BOULEVARD, PASADENA, CALIFORNIA 91103
(Address of principal executive offices) (Zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (818) 304-2000
Indicate by a check (checkmark) 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 (checkmarked) No
------------- ------------
Number of shares of $1 par value common stock outstanding as of April 28,
1995: 53,292,103
AVERY DENNISON CORPORATION
AND SUBSIDIARIES
INDEX TO FORM 10-Q
------------------
Page No.
--------
Part I. Financial Information (Unaudited):
Financial Statements:
Condensed Consolidated Balance Sheet
April 1, 1995 and December 31, 1994 3
Consolidated Statement of Income
Quarters Ended April 1, 1995 and April 2, 1994 4
Condensed Consolidated Statement of Cash Flows
Quarters Ended April 1, 1995 and April 2, 1994 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II. Other Information:
Exhibits and Reports on Form 8-K 9
Signatures 10
2
PART I. FINANCIAL INFORMATION
AVERY DENNISON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(Unaudited)
April 1, 1995 December 31, 1994
-------------------------------------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 3.4 $ 3.1
Trade accounts receivable, net 431.6 391.8
Inventories, net 236.1 206.4
Prepaid expenses 19.1 16.5
Other current assets 69.4 59.1
-------------------------------------
Total current assets 759.6 676.9
Property, plant and equipment, at cost 1,600.4 1,532.3
Accumulated depreciation (736.7) (700.7)
-------------------------------------
863.7 831.6
Intangibles resulting from business
acquisitions, net 128.8 127.6
Other assets 132.0 127.0
-------------------------------------
$1,884.1 $1,763.1
=====================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Short-term debt and current portion of
long-term debt $ 84.8 $ 73.4
Accounts payable 178.6 181.5
Accrued liabilities 323.4 299.2
-------------------------------------
Total current liabilities 586.8 554.1
Long-term debt 395.2 347.3
Deferred taxes and other long-term 139.8 132.7
liabilities
Shareholders' equity:
Common stock - $1 par value:
Authorized - 200,000,000 shares; Issued
- 62,063,312 shares at April 1, 1995
and December 31, 1994 62.1 62.1
Capital in excess of par value 192.2 193.0
Retained earnings 773.3 753.2
Cumulative foreign currency translation
adjustment 42.4 16.7
Cost of unallocated ESOP shares (37.6) (37.6)
Minimum pension liability (5.0) (5.0)
Treasury stock at cost, 8,794,315
shares at April 1, 1995 and 8,513,642
shares at December 31, 1994 (265.1) (253.4)
-------------------------------------
Total shareholders' equity 762.3 729.0
-------------------------------------
$1,884.1 $1,763.1
=====================================
See Notes to Consolidated Financial Statements
3
AVERY DENNISON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share amounts)
(Unaudited)
Quarter Ended
--------------------------------
April 1, 1995 April 2, 1994
--------------------------------
Net sales $773.2 $667.7
Cost of products sold 528.4 455.2
--------------------------------
Gross profit 244.8 212.5
Marketing, general and
administrative expense 180.0 161.0
--------------------------------
Operating profit 64.8 51.5
Interest expense 10.0 11.5
--------------------------------
Income before taxes 54.8 40.0
Taxes on income 20.3 14.8
--------------------------------
Net income $ 34.5 $ 25.2
================================
Weighted average number of common
shares outstanding 53.4 56.2
================================
Per common share amounts:
Net income $ .65 $ .45
================================
Dividends $ .27 $ .24
================================
See Notes to Consolidated Financial Statements
4
AVERY DENNISON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
Quarter Ended
---------------------------------
April 1, 1995 April 2, 1994
---------------------------------
OPERATING ACTIVITIES:
- ---------------------
Net income $ 34.5 $ 25.2
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 26.1 21.0
Amortization 3.5 3.1
Deferred taxes .9 5.0
Net change in assets and liabilities
net of the effect of foreign
currency translation and business
divestitures (49.3) (48.5)
---------------------------------
Net cash provided by operating
activities 15.7 5.8
---------------------------------
INVESTING ACTIVITIES:
- ---------------------
Purchase of property, plant and
equipment (36.7) (19.2)
Proceeds from sale of assets and
business divestitures .2 2.9
Other (6.5) (5.2)
---------------------------------
Net cash used in investing activities (43.0) (21.5)
---------------------------------
FINANCING ACTIVITIES:
- ---------------------
Net increase in short-term debt 7.0 12.8
Net increase in long-term debt 47.3 10.4
Dividends paid (14.4) (13.5)
Purchase of treasury stock (14.5) (1.9)
Other 2.0 3.2
---------------------------------
Net cash provided by financing
activities 27.4 11.0
---------------------------------
Effect of foreign currency translation
on cash balances .2 --
---------------------------------
Increase (decrease) in cash and cash
equivalents .3 (4.7)
---------------------------------
Cash and cash equivalents, beginning
of period 3.1 5.8
---------------------------------
Cash and cash equivalents, end of
period $ 3.4 $ 1.1
=================================
See Notes to Consolidated Financial Statements
5
AVERY DENNISON CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL
The accompanying unaudited consolidated financial statements include normal
recurring adjustments necessary for a fair presentation of the Company's
interim results. Certain prior year amounts have been reclassified to
conform with current year presentation. The condensed financial statements
and notes in this Form 10-Q are presented as permitted by Regulation S-X, and
as such, they do not contain certain information included in the Company's
1994 annual financial statements and notes.
The first quarters of 1995 and 1994 consisted of thirteen-week periods ending
April 1, 1995 and April 2, 1994, respectively. The interim results of
operations are not necessarily indicative of future financial results.
2. FOREIGN CURRENCY TRANSLATION
Transactions in foreign currencies and translation of financial statements of
subsidiaries operating in hyperinflationary economies during the first
quarters ended 1995 and 1994 resulted in losses of $.4 million and $1.4
million, respectively.
3. INVENTORIES
Inventories consisted of (in millions):
April 1, 1995 December 31, 1994
-------------------------------------
Raw materials $ 89.0 $ 81.6
Work in progress 65.1 55.9
Finished goods 119.6 105.2
LIFO adjustment (37.6) (36.3)
-------------------------------------
$236.1 $206.4
=====================================
During the first quarter of 1994, certain inventories were reduced resulting
in the liquidation of LIFO inventory carried at costs which were lower than
current costs. The effect was to reduce the cost of products sold by
approximately $1 million in the first quarter of 1994. There was no
liquidation of LIFO inventories in the first quarter of 1995.
4. INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS
Accumulated amortization of intangible assets at April 1, 1995 and December
31, 1994 was $37.3 million and $35.3 million, respectively.
5. RESEARCH AND DEVELOPMENT
Research and development expense for the first quarters of 1995 and 1994 was
$12.3 million and $11.5 million, respectively.
6
AVERY DENNISON CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Quarterly sales increased to a record $773.2 million, a 16 percent increase over
first quarter 1994 sales of $667.7 million. Excluding the impact of changes in
foreign currency rates, sales increased 13 percent. A reduced growth rate for
the U.S. economy is projected for the second quarter of 1995 and as such, the
Company expects a lower sales growth rate for the second quarter as compared to
the first quarter of 1995.
The gross profit margin for the quarter was 31.7 percent compared to 31.8
percent for the first quarter of 1994. The decrease was due to plant and major
equipment start-up costs, plus $1.3 million in expense related to LIFO
inventories compared to a benefit of $1 million in first quarter 1994.
Excluding these factors, gross profit margin was higher than prior year.
Marketing, general and administrative expense, as a percent of sales, was 23.3
percent as compared to 24.1 percent for the first quarter of 1994. The
improvement was the result of increased sales and cost reduction actions taken
in previous years.
Income before taxes as a percent of sales increased to 7.1 percent for the
quarter as compared to 6 percent for the first quarter of 1994 due to lower
marketing, general and administrative and interest expenses as a percent of
sales. Interest expense as a percent of sales was 1.3 percent for the first
quarter of 1995 compared to 1.7 percent for the first quarter of 1994. The
decrease in interest expense was due primarily to a decline in interest expense
for our Brazilian operations as a result of lower inflation and debt levels.
Net income increased 37 percent to $34.5 million compared to $25.2 million in
the first quarter of 1994. Earnings per share for the quarter reached $.65
compared to $.45 in the same period last year, a 44 percent increase;
approximately $.03 of the increase in earnings per share was attributable to a
reduction in the number of outstanding shares.
Results of Operations by Business Sector
The pressure-sensitive adhesives and materials sector reported significantly
improved sales and profitability for the first quarter of 1995 compared to the
same period last year. The U.S. operations reported a significant sales
increase primarily due to unit volume growth and pricing actions. In addition,
first quarter sales reflected some pre-price increase buying. The sales growth
rate for the second quarter of 1995 may moderate in the U.S. due to slower
economic growth. Solid profitability improvement was primarily due to sales
growth which was partially offset by plant and major equipment start-up costs.
The European operations reported a significant sales increase due to pricing
actions and sales volume growth from improved economic conditions. This sales
growth coupled with productivity improvements and effective cost reduction
programs resulted in significant profitability increases for the European
operations.
7
AVERY DENNISON CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The office products sector reported significant sales and profitability growth
for the quarter compared to the same period last year. In the U.S., sales
increased primarily as a result of successful new products, an improved product
mix and increased demand for the Company's products. Sales for the U.S.
operations may grow at a slower rate for the second quarter of 1995 when
compared to first quarter 1995 and year end 1994 as there appeared to be a rise
in inventory levels for the wholesale channel during the first quarter of 1995.
Profitability for the U.S. operations increased significantly as a result of
increased sales and lower operating expenses as a percent of sales. The
European office products businesses reported increased sales primarily as a
result of changes in foreign currency rates and improved economic conditions. A
more favorable product mix coupled with cost reduction actions taken in previous
years led to significant profitability increases over the same period last year.
The converted products sector also reported significant sales and profitability
improvements. The international converting businesses reported a significant
improvement in sales and profitability. Sales increased primarily as a result
of an improved European economy and changes in foreign currency rates.
Profitability for the international converting businesses benefitted
significantly from cost reduction actions. The U.S. label businesses also
reported a significant sales and profitability improvement due to increased
sales to the automotive, durable and consumer goods markets and lower operating
expenses as a percent of sales.
FINANCIAL CONDITION
- -------------------
During the first quarter of 1995, total debt increased $54.3 million to $480
million from year end 1994 as a result of increased working capital requirements
needed to fund the Company's sales growth. Total debt to total capital was 38.6
percent as of the end of the first quarter of 1995 and 36.6 percent at year end
1994.
Average working capital, excluding short-term debt as a percentage of sales,
decreased to 9.3 percent from 11.5 percent a year ago primarily as a result of
increased sales and current liabilities. Average inventory turns for the first
quarters of 1995 and 1994 were nine; the average number of days sales
outstanding in accounts receivable was 54 days compared to 55 days a year ago.
Shareholders' equity increased to $762.3 million from $729 million at year end
1994. During the first quarter of 1995, the Company purchased 386,000 shares of
common stock at a cost of $14.5 million. The cost of treasury stock held, net
of shares reissued under the Company's stock and incentive plans, increased
during the quarter by $11.7 million to $265.1 million from year end 1994.
Net cash flows provided by operating activities totalled $15.7 million for the
first quarter of 1995 and $5.8 million for the first quarter of 1994. In
addition to cash flows from operations, the Company has more than adequate
financing arrangements to conduct its operations.
8
PART II. OTHER INFORMATION
AVERY DENNISON CORPORATION
AND SUBSIDIARIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The registrant held its annual stockholders' meeting on April 27, 1995. The
stockholders voted to re-elect four directors to the Board of Directors as
follows:
Number of Shares Voted/1/
--------------------------------
For Withheld
----------- ---------------
Frank V. Cahouet 44,585,465 364,403
Peter W. Mullin 44,585,207 364,661
Joan T. Bok 44,567,421 382,447
Philip M. Neal 44,581,459 368,409
/1/There were no abstentions or shares otherwise not voted by brokers.
The results of the voting on the following additional items were as follows:
Broker
For Opposed Abstained Non-Votes
---------- --------- ----------- ----------
Amendments to the 1988 Stock
Option Plan for
Non-Employee Directors 33,497,889 8,809,557 2,513,839 128,583
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
a. Exhibits: 3(ii) Bylaws of Avery Dennison Corporation - amended and
restated April 27, 1995
11 Computation of Net Income Per Share Amounts
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule, Article 5
b. Reports on Form 8-K: There were no reports on Form 8-K filed for the three
months ended April 1, 1995.
9
SIGNATURES
----------
Pursuant to the requirements 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
--------------------------
(Registrant)
R. GREGORY JENKINS
----------------------------------------
R. Gregory Jenkins
Senior Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer)
THOMAS E. MILLER
----------------------------------------
Thomas E. Miller
Vice President and Controller
(Chief Accounting Officer)
May 12, 1995
10
EXHIBIT 3(ii)
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE I
---------
OFFICES
Section 1. Registered Office. The registered office of Avery Dennison
Corporation (hereinafter called the "corporation") in the State of Delaware
shall be at Suite L-100, 32 Loockerman Square, City of Dover, County of Kent,
and the name of the registered agent at that address shall be United States
Corporation Company.
Section 2. Principal Office. The principal executive office for the
transaction of the business of the corporation is hereby fixed and located in
Los Angeles County, California. The board of directors is hereby granted
full power and authority to change said principal executive office from one
location to another within or without the State of California.
Section 3. Other Offices. The corporation may also have offices at such
other places within or without the State of Delaware as the board of
directors may from time to time determine, or the business of the corporation
may require.
ARTICLE II
----------
STOCKHOLDERS
Section 1. Place of Meetings. Meetings of stockholders shall be held at
any place within or outside the State of Delaware designated by the board of
directors. In the absence of any such designation, stockholders' meetings
shall be held at the principal executive office of the corporation.
Section 2. Annual Meetings of Stockholders. The annual meeting of
stockholders shall be held on the last Thursday in April of each year at 1:30
p.m. of said day, or on such other day, which shall not be a legal holiday,
as shall be determined by the board of directors. Any previously scheduled
annual meeting of stockholders may be postponed by resolution of the board of
directors upon public notice given prior to the date previously scheduled for
such annual meeting of stockholders.
Section 3. Special Meetings. A special meeting of the stockholders may
be called at any time by the board of directors, or by a majority of the
directors or by a committee authorized by the board to do so. Any previously
scheduled special meeting of the stockholders may be postponed by resolution
of the board of directors upon public notice given prior to the date
previously scheduled for such special meeting of the stockholders.
Exhibit 3(ii) - page 1 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 4. Notice of Stockholders' Meetings. All notices of meetings of
stockholders shall be sent or otherwise given in accordance with Section 5 of
this Article II not less than ten (10) nor more than sixty (60) days before
the date of the meeting being noticed. The notice shall specify the place,
date and hour of the meeting and (i) in case of a special meeting, the
general nature of the business to be transacted, or (ii) in the case of the
annual meeting, those matters which the board of directors, at the time of
giving the notice, intends to present for action by the stockholders. The
notice of any meeting at which directors are to be elected shall include the
name of any nominee or nominees who, at the time of the notice, management
intends to present for election.
Section 5. Manner of Giving Notice; Affidavit of Notice. Notice of any
meeting of stockholders shall be given either personally or by first-class
mail or telegraphic or other written communication, charges prepaid,
addressed to the stockholder at the address of such stockholder appearing on
the books of the corporation or given by the stockholder to the corporation
for the purpose of notice. If no such address appears on the corporation's
books or has been so given, notice shall be deemed to have been given if sent
by first-class mail or telegraphic or other written communication to the
corporation's principal executive office, or if published at least once in a
newspaper of general circulation in the county where such office is located.
Notice shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by telegram or other means of
written communication.
An affidavit of the mailing or other means of giving any notice
of any stockholders' meeting shall be executed by the secretary, assistant
secretary or any transfer agent of the corporation giving such notice, and
shall be filed and maintained in the minute book of the corporation.
Section 6. Quorum. The presence in person or by proxy of the holders of
a majority of the shares entitled to vote at any meeting of stockholders
shall constitute a quorum for the transaction of business. The stockholders
present at a duly called or held meeting at which a quorum is present may
continue to do business until adjournment, notwithstanding the withdrawal of
enough stockholders to leave less than a quorum, if any action taken (other
than adjournment) is approved by at least a majority of the shares required
to constitute a quorum.
Section 7. Adjourned Meeting and Notice Thereof. Any stockholders'
meeting, annual or special, whether or not a quorum is present, may be
adjourned from time to time by the Chairman of the meeting, but in the
absence of a quorum, no other business may be transacted at such meeting,
except as provided in Section 6 of this Article II.
When any meeting of stockholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at a meeting at which the
adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than thirty (30) days from the
date set for the original meeting. Notice of any such adjourned meeting, if
required, shall be given to each stockholder of record entitled to vote at
the adjourned meeting in accordance with the provisions of Sections 4 and 5
of this Article II. At any adjourned meeting the corporation may transact
any business which might have been transacted at the original meeting.
Exhibit 3(ii) - page 2 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 8. Voting. The stockholders entitled to vote at any meeting of
stockholders shall be determined in accordance with the provisions of Section
11 of this Article II. Such vote may be by voice vote or by ballot, at the
discretion of the Chairman of the meeting. Any stockholder entitled to vote
on any matter (other than the election of directors) may vote part of the
shares in favor of the proposal and refrain from voting the remaining shares
or vote them against the proposal; but, if the stockholder fails to specify
the number of shares such stockholder is voting affirmatively, it will be
conclusively presumed that the stockholder's approving vote is with respect
to all shares such stockholder is entitled to vote. If a quorum is present,
the affirmative vote of the majority of the shares represented at the meeting
and entitled to vote on any matter shall be the act of the stockholders,
unless the vote of a greater number or voting by classes is required by the
Delaware General Corporation Law or the certificate of incorporation or the
certificate of determination of preferences as to any preferred stock.
At a stockholders' meeting involving the election of directors, no
stockholder shall be entitled to cumulate (i.e., cast for any one or more
candidates a number of votes greater than the number of the stockholder's
shares). The candidates receiving the highest number of votes, up to the
number of directors to be elected, shall be elected.
Section 9. Waiver of Notice or Consent by Absent Stockholders. The
transactions of any meeting of stockholders, either annual or special,
however called and noticed, and wherever held, shall be as valid as though
had at a meeting duly held after regular call and notice, if a quorum be
present either in person or by proxy, and if, either before or after the
meeting, each person entitled to vote, not present in person or by proxy,
signs a written waiver of notice or a consent to the holding of the meeting,
or an approval of the minutes thereof. The waiver of notice or consent need
not specify either the business to be transacted or the purpose of any annual
or special meeting of stockholders. All such waivers, consents or approvals
shall be filed with the corporate records or made part of the minutes of the
meeting.
Attendance of a person at a meeting shall also constitute a waiver
of notice of such meeting, except when the person objects, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened, and except that attendance at a meeting is not a
waiver of any right to object to the consideration of matters not included in
the notice of the meeting if such objection is expressly made at the meeting.
Section 10. No Stockholder Action by Written Consent Without a Meeting.
Stockholders may take action only at a regular or special meeting of
stockholders.
Section 11. Record Date for Stockholder Notice and Voting. For purposes
of determining the holders entitled to notice of any meeting or to vote, the
board of directors may fix, in advance, a record date, which shall not be
more than sixty (60) days nor less than ten (10) days prior to the date of
any such meeting, and in such case only stockholders of record on the date so
fixed are entitled to notice and to vote, notwithstanding any transfer of any
shares on the books of the corporation after the record date fixed as
aforesaid, except as otherwise provided in the Delaware General Corporation
Law.
Exhibit 3(ii) - page 3 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 11. Record Date for Stockholder Notice and Voting. (continued)
If the board of directors does not so fix a record date, the record
date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the business day
next preceding the day on which notice is given or, if notice is waived, at
the close of business on the business day next preceding the day on which the
meeting is held.
Section 12. Proxies. Every person entitled to vote for directors or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the secretary of the corporation. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the stockholder or the
stockholder's attorney in fact. A validly executed proxy which does not
state that it is irrevocable shall continue in full force and effect unless
(i) revoked by the person executing it, prior to the vote pursuant thereto,
by a writing delivered to the corporation stating that the proxy is revoked
or by a subsequent proxy executed by, or attendance at the meeting and voting
in person by, the person executing the proxy, or (ii) written notice of the
death or incapacity of the maker of such proxy is received by the corporation
before the vote pursuant thereto is counted; provided, however, that no such
proxy shall be valid after the expiration of eleven (11) months from the date
of such proxy, unless otherwise provided in the proxy.
Section 13. Inspectors of Election; Opening and Closing the Polls. The
board of directors by resolution shall appoint one or more inspectors, which
inspector or inspectors may include individuals who serve the corporation in
other capacities, including, without limitation, as officers, employees,
agents or representatives, to act at the meetings of stockholders and make a
written report thereof. One or more persons may be designated as alternate
inspectors to replace any inspector who fails to act. If no inspector or
alternate has been appointed to act or is able to act at a meeting of
stockholders, the chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging his or
her duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspectors shall have the duties prescribed by law.
The chairman of the meeting shall fix and announce at the meeting
the date and time of the opening and the closing of the polls for each matter
upon which the stockholders will vote at a meeting.
Section 14. Nomination and Stockholder Business Bylaw
(A) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the board of directors of the corporation and the proposal of
business to be considered by the stockholders may be made at an annual
meeting of stockholders (a) pursuant to the corporation's notice of meeting,
(b) by or at the direction of the board of directors or (c) by any
stockholder of the corporation who was a stockholder of record at the time of
giving of notice provided for in this Bylaw, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this Bylaw.
Exhibit 3(ii) - page 4 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 14. Nomination and Stockholder Business Bylaw (continued)
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of paragraph
(A) (1) of this Bylaw, the stockholder must have given timely notice thereof
in writing to the secretary of the corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice shall be delivered to the secretary at the principal
executive offices of the corporation not later than the close of business on
the 60th day nor earlier than the close of business on the 90th day prior to
the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is more than
30 days before or more than 60 days after such anniversary date, notice by
the stockholder to be timely must be so delivered not earlier than the close
of business on the 90th day prior to such annual meeting and not later than
the close of business on the later of the 60th day prior to such annual
meeting or the 10th day following the day on which public announcement of the
date of such meeting is first made by the corporation. In no event shall the
public announcement of an adjournment of an annual meeting commence a new
time period for the giving of a stockholder's notice as described above.
Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or
is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule
14a-11 thereunder (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected);
(b) as to any other business that the stockholder proposes to bring before
the meeting, a brief description of the business desired to be brought before
the meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the corporation's books, and of such
beneficial owner and (ii) the class and number of shares of the corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Bylaw to the contrary, in the event that the number of
directors to be elected to the board of directors of the corporation is
increased and there is no public announcement by the corporation naming all
of the nominees for director or specifying the size of the increased board of
directors at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this Bylaw shall
also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the secretary
at the principal executive offices of the corporation not later than the
close of business on the 10th day following the day on which such public
announcement is first made by the corporation.
Exhibit 3(ii) - page 5 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 14. Nomination and Stockholder Business Bylaw (continued)
(B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the corporation's notice of meeting.
Nominations of persons for election to the board of directors may be made at
a special meeting of stockholders at which directors are to be elected
pursuant to the corporation's notice of meeting (a) by or at the direction of
the board of directors or (b) provided that the board of directors has
determined that directors shall be elected at such meeting, by any
stockholder of the corporation who is a stockholder of record at the time of
giving of notice provided for in this Bylaw, who shall be entitled to vote at
the meeting and who complies with the notice procedures set forth in this
Bylaw. In the event the corporation calls a special meeting of stockholders
for the purpose of electing one or more directors to the board of directors,
any such stockholder may nominate a person or persons (as the case may be),
for election to such position(s) as specified in the corporation's notice of
meeting, if the stockholder's notice required by paragraph (A) (2) of this
Bylaw shall be delivered to the secretary at the principal executive offices
of the corporation not earlier than the close of business on the 90th day
prior to such special meeting and not later than the close of business on
t he later of the 60th day prior to such special meeting or the 10th day
following the day on which public announcement is first made of the date of
the special meeting and of the nominees proposed by the board of directors to
be elected at such meeting. In no event shall the public announcement of an
adjournment of a special meeting commence a new time period for the giving of
a stockholder's notice as described above.
(C) General. (1) Only such persons who are nominated in accordance with
the procedures set forth in this Bylaw shall be eligible to serve as directors
and only such business shall be conducted at a meeting of stockholders as shall
have been brought before the meeting in accordance with the procedures set forth
in this Bylaw. Except as otherwise provided by law, the Certificate of
Incorporation or these Bylaws, the chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this Bylaw and, if any proposed
nomination or business is not in compliance with this Bylaw, to declare that
such defective proposal or nomination shall be disregarded.
(2) For purposes of this Bylaw, public announcement shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth in this
Bylaw. Nothing in this Bylaw shall be deemed to affect any rights (i) of
stockholders to request inclusion of proposals in the corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders
of any series of Preferred Stock, if any, to elect directors under certain
circumstances.
Exhibit 3(ii) - page 6 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE III
-----------
DIRECTORS
Section 1. Powers. Subject to the provisions of the Delaware General
Corporation Law and any limitations in the certificate of incorporation and
these bylaws relating to action required to be approved by the stockholders
or by the outstanding shares, the business and affairs of the corporation
shall be managed and all corporate powers shall be exercised by or under the
direction of the board of directors.
Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the directors shall have
the power and authority to:
(a) Select and remove all officers, agents and employees of the
corporation, prescribe such powers and duties for them as may not be
inconsistent with law, the certificate of incorporation or these bylaws, fix
their compensation, and require from them security for faithful service.
(b) Change the principal executive office or the principal business
office in the State of California from one location to another; cause the
corporation to be qualified to do business in any other state, territory,
dependency, or foreign country and conduct business within or outside the
State of California; designate any place within or without the State of
California for the holding of any stockholders' meeting or meetings,
including annual meetings; adopt, make and use a corporate seal, and
prescribe the forms of certificates of stock, and alter the form of such seal
and of such certificates from time to time as in their judgment they may deem
best, provided that such forms shall at all times comply with the provisions
of law.
(c) Authorize the issuance of shares of stock of the corporation
from time to time, upon such terms as may be lawful, in consideration of
money paid, labor done or services actually rendered, debts or securities
canceled or tangible or intangible property actually received.
(d) Borrow money and incur indebtedness for the purpose of the
corporation, and cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, hypothecations, or other evidences of debt and securities
therefor.
Section 2. Number and Qualification of Directors. The number of
directors of the corporation shall be twelve (12) until changed by a bylaw
amending this Section 2, duly adopted by the board of directors or by the
stockholders.
Exhibit 3(ii) - page 7 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 3. Election and Term of Office of Directors. Subject to Section
15 below, one class of the directors shall be elected at each annual meeting
of the stockholders, but if any such annual meeting is not held or the
directors are not elected thereat, the directors may be elected at any
special meeting of stockholders held for that purpose. All directors shall
hold office until their respective successors are elected. Irrespective of
the provisions of Section 15 of this Article III and of the preceding
sentence, a director shall automatically be retired on the date of the
expiration of the first annual meeting following his 72nd birthday.
Section 4. Vacancies. Vacancies in the board of directors may be filled
by a majority of the remaining directors, though less than a quorum, or by a
sole remaining director. Each director elected to fill a vacancy shall hold
office for the remainder of the term of the person whom he succeeds, and
until a successor has been elected and qualified.
A vacancy or vacancies in the board of directors shall be deemed to
exist in the case of the death, retirement, resignation or removal of any
director, or if the board of directors by resolution declares vacant the
office of a director who has been declared of unsound mind by an order of
court or convicted of a felony, or if the authorized number of directors be
increased, or if the stockholders fail at any meeting of stockholders at
which any director or directors are elected, to elect the full authorized
number of directors to be voted for at that meeting.
Any director may resign or voluntarily retire upon giving written
notice to the chairman of the board, the president, the secretary or the
board of directors. Such retirement or resignation shall be effective upon
the giving of the notice, unless the notice specifies a later time for its
effectiveness. If such retirement or resignation is effective at a future
time, the board of directors may elect a successor to take office when the
retirement or resignation becomes effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his term of
office. No director may be removed during his term except for cause.
Section 5. Place of Meetings and Telephonic Meetings. Regular meetings
of the board of directors may be held at any place within or without the
State of Delaware that has been designated from time to time by resolution of
the board. In the absence of such designation, regular meetings shall be
held at the principal executive office of the corporation. Special meetings
of the board shall be held at any place within or without the State of
Delaware that has been designated in the notice of the meeting or, if not
stated in the notice or there is no notice, at the principal executive office
of the corporation. Any meeting, regular or special, may be held by
conference telephone or similar communication equipment, so long as all
directors participating in such meeting can hear one another, and all such
directors shall be deemed to be present in person at such meeting.
Exhibit 3(ii) - page 8 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 6. Annual Meetings. Immediately following each annual meeting of
stockholders, the board of directors shall hold a regular meeting for the
purpose of organization, any desired election of officers and transaction of
other business. Notice of this meeting shall not be required.
Section 7. Other Regular Meetings. Other regular meetings of the board
of directors shall be held at such time as shall from time to time be
determined by the board of directors. Such regular meetings may be held
without notice provided that notice of any change in the determination of
time of such meeting shall be sent to all of the directors. Notice of a
change in the determination of the time shall be given to each director in
the same manner as for special meetings of the board of directors.
Section 8. Special Meetings. Special meetings of the board of directors
for any purpose or purposes may be called at any time by the chairman of the
board or the president or any vice president or the secretary or any two
directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at his or her address
as it is shown upon the records of the corporation. In case such notice is
mailed, it shall be deposited in the United States mail at least four (4)
days prior to the time of the holding of the meeting. In case such notice is
delivered personally, or by telephone or telegram, it shall be delivered
personally, or by telephone or to the telegraph company at least forty-eight
(48) hours prior to the time of the holding of the meeting. Any oral notice
given personally or by telephone may be communicated to either the director
or to a person at the office of the director who the person giving the notice
has reason to believe will promptly communicate it to the director. The
notice need not specify the purpose of the meeting nor the place if the
meeting is to be held at the principal executive office of the corporation.
Section 9. Quorum. A majority of the authorized number of directors
shall constitute a quorum for the transaction of business, except to adjourn
as hereinafter provided. Every act or decision done or made by a majority of
the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the board of directors. A meeting at which a
quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at least a
majority of the required quorum for such meeting.
Section 10. Waiver of Notice. The transactions of any meeting of the
board of directors, however called and noticed or wherever held, shall be as
valid as though had at a meeting duly held after regular call and notice if a
quorum be present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice, a consent to holding
the meeting or an approval of the minutes thereof. The waiver of notice or
consent need not specify the purpose of the meeting. All such waivers,
consents and approvals shall be filed with the corporate records or made a
part of the minutes of the meeting. Notice of a meeting shall also be deemed
given to any director who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice to such director.
Exhibit 3(ii) - page 9 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 11. Adjournment. A majority of the directors present, whether or
not constituting a quorum, may adjourn any meeting to another time and place.
Section 12. Notice of Adjournment. Notice of the time and place of an
adjourned meeting need not be given, unless the meeting is adjourned for more
than twenty-four (24) hours, in which case notice of such time and place
shall be given prior to the time of the adjourned meeting, in the manner
specified in Section 8 of this Article III, to the directors who were not
present at the time of the adjournment.
Section 13. Action Without Meeting. Any action required or permitted to
be taken by the board of directors may be taken without a meeting, if all
members of the board shall individually or collectively consent in writing to
such action. Such action by written consent shall have the same force and
effect as a unanimous vote of the board of directors. Such written consent
or consents shall be filed with the minutes of the proceedings of the board.
Section 14. Fees and Compensation of Directors. Directors and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses, as may be fixed or determined by resolution of the
board of directors. Nothing herein contained shall be construed to preclude
any director from serving the corporation in any other capacity as an
officer, agent, employee, or otherwise, and receiving compensation for such
services.
Section 15. Classification of Directors. The board of directors shall be
and is divided into three classes, Class I, Class II and Class III. The
number of directors in each class shall be the whole number contained in the
quotient arrived at by dividing the authorized number of directors by three,
and if a fraction is also contained in such quotient then if such fraction is
one-third (1/3) the extra director shall be a member of Class III and if the
fraction is two-thirds (2/3) one of the extra directors shall be a member of
Class III and the other shall be a member of Class II. Each director shall
serve for a term ending on the date of the third annual meeting following the
annual meeting at which such director was elected.
In the event of any increase or decrease in the authorized number
of directors, (a) each director then serving as such shall nevertheless
continue as a director of the class of which he is a member until the
expiration of his current term, or his prior death, resignation or removal,
and (b) the newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the board of directors to such
class or classes as shall, so far as possible, bring the number of directors
in the respective classes into conformity with the formula in this Section
15, as applied to the new authorized number of directors.
Exhibit 3(ii) - page 10 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE IV
----------
COMMITTEES
Section 1. Committees of Directors. The board of directors may, by
resolution adopted by a majority of the authorized number of directors,
designate one or more committees, including an executive committee, each
consisting of two or more directors, to serve at the pleasure of the board.
The board may designate one or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the committee.
Any such committee, to the extent provided in the resolution of the board,
shall have all the authority of the board, except with respect to:
(a) the approval of any action which, under the General Corporation
Law of Delaware, also requires stockholders' approval or approval of the
outstanding shares;
(b) the filling of vacancies on the board of directors or in any
committee;
(c) the fixing of compensation of the directors for serving on the
board or on any committee;
(d) the amendment or repeal of bylaws or the adoption of new
bylaws;
(e) the amendment or repeal of any resolution of the board of
directors which by its express terms is not so amendable or repealable;
(f) a distribution to the stockholders of the corporation, except
at a rate or in a periodic amount or within a price range determined by the
board of directors; or
(g) the appointment of any other committees of the board of
directors or the members thereof.
Section 2. Meetings and Action of Committees. Meetings and action of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article III of these bylaws, Sections 5 (place of meetings), 7
(regular meetings), 8 (special meetings and notice), 9 (quorum), 10 (waiver
of notice), 11 (adjournment), 12 (notice of adjournment) and 13 (action
without meetings), with such changes in the context of those bylaws as are
necessary to substitute the committee and its members for the board of
directors and its members, except that the time of regular meetings of
committees may be determined by resolution of the board of directors as well
as the committee, special meetings of committees may also be called by
resolution of the board of directors, and notice of special meetings of
committees shall also be given to all alternate members, who shall have the
right to attend all meetings of the committee. The board of directors may
adopt rules for the government of any committee not inconsistent with the
provisions of these bylaws.
Exhibit 3(ii) - page 11 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE V
---------
OFFICERS
Section 1. Officers. The officers of the corporation shall be the
chairman of the board, the president, a vice president, a secretary and a
treasurer. The corporation may also have, at the discretion of the board of
directors, one or more additional vice presidents, one or more assistant
secretaries, one or more assistant treasurers, and such other officers as may
be appointed in accordance with the provisions of Section 3 of this Article
V. Any number of offices may be held by the same person.
Section 2. Election of Officers. The officers of the corporation, except
such officers as may be appointed in accordance with the provisions of
Section 3 or Section 5 of this Article V, shall be chosen annually by the
board of directors, and each shall hold his office until he shall resign or
be removed or otherwise disqualified to serve or his successor shall be
elected and qualified.
Section 3. Subordinate Officers, etc. The board of directors may
appoint, and may empower the chairman of the board to appoint, such other
officers as the business of the corporation may require, each of whom shall
hold office for such period, have such authority and perform such duties as
are provided in the bylaws or as the board of directors may from time to time
determine.
Section 4. Removal and Resignation of Officers. Any officer may be
removed, either with or without cause, by the board of directors, at any
regular or special meeting thereof, or, except in case of an officer chosen
by the board of directors, by any officer upon whom such power of removal may
be conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any such resignation shall take effect at the date of the
receipt of such notice or at any later time specified therein; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 5. Vacancies in Office. A vacancy in any office because of
death, resignation, removal, disqualification, or any other cause shall be
filled in the manner prescribed in these bylaws for regular appointments to
such office.
Section 6. Chairman of the Board. The chairman of the board shall be the
chief executive officer of the corporation and shall, subject to the control
of the board of directors, have general supervision, direction and control of
the business and affairs of the corporation.
Section 7. President. The president shall be the chief operating officer
of the corporation and shall exercise and perform such powers and duties with
respect to the administration of the business and affairs of the corporation
as may from time to time be assigned to him by the chairman of the board or
by the board of directors, or as may be prescribed by the bylaws.
Exhibit 3(ii) - page 12 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 8. Vice Presidents. In the absence or disability of the
president, a vice president designated by the board of directors shall
perform all the duties of the president, and when so acting shall have all
the powers of, and be subject to all the restrictions upon, the president.
The vice presidents shall have such other powers and perform such other
duties as from time to time may be prescribed for them respectively by the
board of directors or the bylaws.
Section 9. Secretary. The secretary shall keep or cause to be kept, at
the principal executive office or such other place as the board of directors
may order, a book of minutes of all meetings and actions of directors,
committees of directors and stockholders, with the time and place of holding,
whether regular or special, and, if special, how authorized, the notice
thereof given, the names of those present at directors' and committee
meetings, the number of shares present or represented at stockholders'
meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, as determined by resolution of the board of directors, a stock
register, or a duplicate register, showing the names of all stockholders and
their addresses, the number and classes of shares held by each, the number
and date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all
meetings of the stockholders and of the board of directors required by the
bylaws or by law to be given, and he shall keep the seal of the corporation
in safe custody, and shall have such other powers and perform such other
duties as may be prescribed by the board of directors or by the bylaws.
Section 10. Treasurer. The treasurer shall keep and maintain, or cause
to be kept and maintained, adequate and correct books and records of accounts
of the properties and business transactions of the corporation, including
accounts of its assets, liabilities, receipts, disbursements, gains, losses,
capital, retained earnings and shares. The books of account shall be open at
all reasonable times to inspection by any director.
The treasurer shall deposit all monies and other valuables in the
name and to the credit of the corporation with such depositories as may be
designated by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors, shall render to the
chairman of the board and directors, whenever they request it, an account of
all of his transactions as treasurer and of the financial condition of the
corporation, and shall have other powers and perform such other duties as may
be prescribed by the board of directors or the bylaws.
Section 11. Assistant Secretaries and Assistant Treasurers. Any
assistant secretary may perform any act within the power of the secretary,
and any assistant treasurer may perform any act within the power of the
treasurer, subject to any limitations which may be imposed in these bylaws or
in board resolutions.
Exhibit 3(ii) - page 13 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE VI
----------
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. Indemnification. The corporation shall indemnify, in the
manner and to the full extent permitted by law, any person (or the estate of
any person) who was or is a party to, or is threatened to be made a party to,
any threatened, pending or completed action, suit or proceeding, whether or
not by or in the right of the corporation, and whether civil, criminal,
administrative, investigative or otherwise, by reason of the fact that such
person is a director or officer of the corporation, and at the discretion of
the board of directors may indemnify any person (or the estate of any person)
who is such a party or threatened to be made such a party by reason of the
fact that such person is or was an employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise. Unless otherwise permitted by law, the indemnification
provided for herein shall be made only as authorized in the specific case
upon a determination, in the manner provided by law, that indemnification of
the director, officer, employee or agent is proper in thecircumstances. The
corporation may, to the full extent permitted by law, purchase and maintain
insurance on behalf of any such person against any liability which may be
asserted against him. To the full extent permitted by law, the
indemnification provided herein shall include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, and, in the manner
provided by law, any such expenses may be paid by the corporation in advance
of the final disposition of such action, suit or proceeding. The
indemnification provided herein shall not be deemed to limit the right of the
corporation to indemnify any other person for any such expenses to the full
extent permitted by law, nor shall it be deemed exclusive of any other rights
to which any person seeking indemnification from the corporation may be
entitled under any agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
Section 2. Fiduciaries of Corporate Employee Benefit Plan. This Article
VI does not apply to any proceeding against any trustee, investment manager
or other fiduciary of an employee benefit plan in such person's capacity as
such, even though such person may also be an agent of the corporation as
defined in Section 1 of this Article VI. Nothing contained in this Article
VI shall limit any right to indemnification to which such a trustee,
investment manager or other fiduciary may be entitled by contract or
otherwise, which shall be enforceable to the extent permitted by Section 410
of the Employee Retirement Income Security Act of 1974, as amended, other
than this Article VI.
Exhibit 3(ii) - page 14 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE VII
-----------
RECORDS AND REPORTS
Section 1. Maintenance and Inspection of Stock Register. The corporation
shall keep at its principal executive office, or at the office of its
transfer agent or registrar, if either be appointed, and as determined by
resolution of the board of directors, a record of its stockholders, giving
the names and addresses of all stockholders and the number and class of
shares held by each stockholder.
A stockholder or stockholders of the corporation holding at least
five percent (5%) in the aggregate of the outstanding voting shares of the
corporation may (i) inspect and copy the records of stockholders' names and
addresses and stockholders during usual business hours upon five days prior
written demand upon the corporation, and/or (ii) obtain from the transfer
agent of the corporation, upon written demand and upon the tender of such
transfer agent's usual charges for such list, a list of the stockholders'
names and addresses, who are entitled to vote for the election of directors,
and their shareholdings as of the most recent record date for which such list
has been compiled or as of a date specified by the stockholder subsequent to
the date of demand. Such list shall be made available to such stockholder or
stockholders by the transfer agent on or before the later of five (5) days
after the demand is received or the date specified therein as the date as of
which the list is to be compiled.
The record of stockholders shall be open to inspection upon the
written demand of any stockholder or holder of a voting trust certificate, at
any time during usual business hours, for a purpose reasonably related to such
holder's interests as a stockholder or as the holder of a voting trust
certificate. Any inspection and copying under this Section 1 may be made in
person or by an agent or attorney of the stockholder or holder of a voting trust
certificate making such demand.
Section 2. Maintenance and Inspection of Bylaws. The corporation shall
keep at its principal executive office the original or a copy of the bylaws
as amended to date, which shall be open to inspection by the stockholders at
all reasonable times during office hours.
Section 3. Maintenance and Inspection of Other Corporate Records. The
accounting books and records and minutes of proceedings of the stockholders
and the board of directors and any committee or committees of the board of
directors shall be kept at such place or places designated by the board of
directors, or, in the absence of such designation, at the principal executive
office of the corporation. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form. Such minutes and
accounting books and records shall be open to inspection upon the written
demand of any stockholder or holder of a voting trust certificate, at any
reasonable time during usual business hours, for a purpose reasonably related
to such holder's interests as a stockholder or as a holder of a voting trust
certificate. Such inspection may be made in person or by an agent or
attorney, and shall include the right to copy and make extracts. The
foregoing rights of inspection shall extend to the records of each subsidiary
corporation of the corporation.
Exhibit 3(ii) - page 15 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 4. Inspection by Directors. Every director shall have the
absolute right at any reasonable time to inspect all books, records and
documents of every kind and the physical properties of the corporation and
each of its subsidiary corporations. Such inspection by a director may be
made in person or by agent or attorney and the right of inspection includes
the right to copy and make extracts.
Section 5. Annual Report to Stockholders. The board of directors shall
cause an annual report to be sent to the stockholders not later than one
hundred twenty (120) days after the close of the fiscal year adopted by the
corporation. Such report shall be sent at least fifteen (15) days prior to
the annual meeting of stockholders to be held during the next fiscal year and
in the manner specified in Section 5 of Article II of these bylaws for giving
notice to stockholders of the corporation. The annual report shall contain a
balance sheet and statement of changes in financial position for such fiscal
year, accompanied by any report thereon of independent accountants.
Section 6. Financial Statements. A copy of any annual financial
statement and any income statement of the corporation for each quarterly
period of each fiscal year, and any accompanying balance sheet for the
corporation as of the end of each such period, that has been prepared by the
corporation shall be kept on file in the principal executive office of the
corporation for twelve (12) months and each such statement shall be exhibited
at all reasonable times to any stockholder demanding an examination of any
such statement or a copy shall be mailed to any such stockholder.
If a stockholder or stockholders holding at least five percent (5%)
of the outstanding shares of any class of stock of the corporation make a
written request to the corporation for an income statement of the corporation
for the three-month, six-month or nine-month period of the current fiscal
year ended more than thirty (30) days prior to the date of the request, and a
balance sheet of the corporation as of the end of such period, the treasurer
shall cause such statement to be prepared, if not already prepared, and shall
deliver personally or mail such statement or statements to the person making
the request within thirty (30) days after the receipt of such request. If
the corporation has not sent to the stockholders its annual report for the
last fiscal year, this report shall likewise be delivered or mailed to such
stockholder or stockholders within thirty (30) days after such request.
The corporation also shall, upon the written request of any
stockholder, mail to the stockholder a copy of the last annual, semi-annual
or quarterly income statement which it has prepared and a balance sheet as of
the end of such period.
The quarterly income statements and balance sheets referred to in
this section shall be accompanied by the report thereon, if any, of any
independent accountants engaged by the corporation, or the certificate of an
authorized officer of the corporation that such financial statements were
prepared without audit from the books and records of the corporation.
Exhibit 3(ii) - page 16 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE VIII
------------
GENERAL CORPORATE MATTERS
Section 1. Record Date for Purposes Other Than Notice and Voting. For
purposes of determining the stockholders entitled to receive payment of any
dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action, the board of
directors may fix, in advance, a record date, which shall not be more than
sixty (60) days prior to any such action, and in such case only stockholders
of record on the date so fixed are entitled to receive the dividend,
distribution or allotment of rights or to exercise the rights, as the case
may be, notwithstanding any transfer of any shares on the books of the
corporation after the record date fixed as aforesaid, except as otherwise
provided in the Delaware General Corporation Law. If the board of directors
does not so fix a record date, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which
the board adopts the resolution relating thereto, or the sixtieth (60th)
day prior to the date of such action, whichever is later.
Section 2. Checks, Drafts, Evidences of Indebtedness. All checks, drafts
or other orders for payment of money, notes or other evidences of
indebtedness, issued in the name of or payable to the corporation shall be
signed or endorsed by such person or persons and in such manner as, from time
to time, shall be determined by resolution of the board of directors.
Section 3. Corporate Contracts and Instruments; How Executed. The board
of directors, except as otherwise provided in these bylaws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances; and, unless so
authorized or ratified by the board of directors or within the agency power
of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or to any amount.
Section 4. Stock Certificates. A certificate or certificates for shares
of the capital stock of the corporation shall be issued to each stockholder
when any such shares are fully paid. All certificates shall be signed in the
name of the corporation by the chairman of the board or the president or vice
president and by the treasurer or an assistant treasurer or the secretary or
any assistant secretary, certifying the number of shares and the class or
series of shares owned by the stockholder. Any or all of the signatures on
the certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with
the same effect as if such person were an officer, transfer agent or
registrar at the date of issue.
Exhibit 3(ii) - page 17 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
Section 5. Lost Certificates. Except as hereinafter in this Section 5
provided, no new stock certificate shall be issued in lieu of an old
certificate unless the latter is surrendered to the corporation and canceled
at the same time. The board of directors may in case any stock certificate
or certificate for any other security is lost, stolen or destroyed, authorize
the issuance of a new certificate in lieu thereof, upon such terms and
conditions as the board of directors may require, including provision for
indemnification of the corporation secured by a bond or other adequate
security sufficient to protect the corporation against any claim that may be
made against it, including any expense or liability, on account of the
alleged loss, theft or destruction of such certificate or the issuance of
such new certificate.
Section 6. Representation of Stock of Other Corporations. The chairman
of the board, the president, or any vice president, or any other person
authorized by resolution of the board of directors by any of the foregoing
designated officers, is authorized to vote on behalf of the corporation any
and all stock of any other corporation or corporations, foreign or domestic,
standing in the name of the corporation. The authority herein granted to
said officers to vote or represent on behalf of the corporation any and all
stock by the corporation in any other corporation or corporations may be
exercised by any such officer in person or by any person authorized to do so
by proxy duly executed by said officer.
Section 7. Construction and Definitions. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in
the Delaware General Corporation Law shall govern the construction of the
bylaws. Without limiting the generality of the foregoing, the singular
number includes the plural, the plural number includes the singular, and the
term "person" includes both a corporation and a natural person.
Section 8. Fiscal Year. The fiscal year of the corporation shall
commence the first day of the calendar year.
Section 9. Seal. The seal of the corporation shall be round and shall
bear the name of the corporation and words and figures denoting its
organization under the laws of the State of Delaware and year thereof, and
otherwise shall be in such form as shall be approved from time to time by the
board of directors.
Exhibit 3(ii) - page 18 of 19
AVERY DENNISON CORPORATION & SUBSIDIARIES
BYLAWS OF AVERY DENNISON CORPORATION
AMENDED AND RESTATED APRIL 27, 1995
ARTICLE IX
----------
AMENDMENTS
Section 1. Amendment by Stockholders. New bylaws may be adopted or these
bylaws may be amended or repealed by the vote of not less than 80% of the
total voting power of all shares of stock of the corporation entitled to vote
in the election of directors, considered for purposes of this Section 1 as
one class.
Section 2. Amendment by Directors. Subject to the rights of the
stockholders as provided in Section 1 of this Article IX, to adopt, amend or
repeal bylaws, bylaws may be adopted, amended or repealed by the board of
directors.
As Amended 4/27/95
Exhibit 3(ii) - page 19 of 19
EXHIBIT 11
AVERY DENNISON CORPORATION
COMPUTATION OF NET INCOME PER SHARE AMOUNTS
Quarter Ended
------------------------------------
April 1, 1995 April 2, 1994
------------- -------------
(A) Weighted average number of common shares 53,434,552 56,217,315
outstanding
Additional common shares issuable under employee
stock options using the treasury stock method 1,614,466 704,653
------------------------------------
(B) Weighted average number of common shares
outstanding assuming the exercise of stock options 55,049,018 56,921,968
====================================
(C) Net income applicable to common stock $34,500,000 $25,200,000
====================================
Net income per share as reported (C / A) $.65 $.45
==== ====
Net income per share giving effect to the
exercise of outstanding stock options (C / B) $.63 $.44
==== ====
Exhibit 11
EXHIBIT 12
AVERY DENNISON CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Quarter Ended
-----------------------------------------
April 1, 1995 April 2, 1994
-----------------------------------------
Earnings:
Income before taxes $54.8 $40.0
Add: Fixed Charges* 14.5 16.1
Amortization of capitalized
interest .3 .3
Less: Capitalized interest (.8) (.7)
-----------------------------------------
$68.8 $55.7
=========================================
*Fixed charges:
Interest expense 10.0 11.5
Capitalized interest .8 .7
Amortization of debt issuance .1 .1
Interest portion of leases 3.6 3.8
-----------------------------------------
$14.5 $16.1
=========================================
Ratio of Earnings to Fixed
Charges 4.7 3.5
=========================================
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings consist of income before taxes
plus fixed charges (excluding capitalized interest), and fixed charges
consist of interest expense, capitalized interest, amortization of debt
issuance costs and the portion of rent expense (estimated to be 35%) on
operating leases deemed representative of interest.
Exhibit 12
5
1,000
3-MOS
DEC-30-1995
JAN-01-1995
APR-01-1995
3,400
0
431,600
0
236,100
759,600
1,600,400
(736,700)
1,884,100
586,800
395,200
62,100
0
0
700,200
1,884,100
773,200
773,200
528,400
528,400
180,000
0
10,000
54,800
20,300
34,500
0
0
0
34,500
.65
0
Accounts receivable are shown net of any allowances.
