Exhibit 10.8.4.1
AMENDMENT TO RETENTION AGREEMENT
This Amendment to Retention Agreement is entered into by and between Avery
Dennison Corporation, a Delaware corporation (the “Company”) and Daniel R.
O’Bryant (the “Executive”), effective as of January 1, 2008.
WHEREAS the Company and the Executive have previously entered into that certain
Retention Agreement effective as of March 31, 2005 (the “Retention Agreement”);
WHEREAS with the enactment of section 409A of the Internal Revenue Code of 1986,
as amended (“Code Section 409A”), certain modifications are made to the
Retention Agreement with retroactive effect to January 1, 2008; and
WHEREAS the Company and the Executive desire to amend the Retention Agreement to
comply with Code Section 409A;
NOW, THEREFORE, the Retention Agreement is hereby amended as follows:
1. Annual Stock Option Grants. Section 3(iii) of the Retention Agreement is
amended to provide that the three remaining stock options grants for each of
2009, 2010 and 2011 shall be granted at the time of the Company’s annual grant
with respect to such year, which annual grant may occur in the following year;
provided, that the final grant of stock options under Section 3(iii) is expected
to be made in February 2012.
2. Change in Control. The Retention Agreement is amended to rename Section 4
“Termination of Employment and Change in Control” and to add the following new
Sections 4(f) and 4(g):
(f) Vesting Event Change in Control.
For purposes of this Agreement, “Vesting Event Change in Control” shall mean:
     (i) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (A) the then-outstanding shares of common stock of the Company (the
“Outstanding Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(4) any acquisition by any corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii); or

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     (ii) individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
     (iii) consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets of another corporation (a
“Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 30% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
     (iv) approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
(g) Payment Event Change in Control.
For purposes of this Agreement, “Payment Event Change in Control” shall mean a
change in “the ownership or effective control” or in “the ownership of a
substantial portion of the assets” of the Company, within the meaning of Code
Section 409A, and shall include any of the following events as such concepts are
interpreted under Code Section 409A:

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     (i) the date on which a majority of members of the Company’s Board of
Directors is replaced during any twelve-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Company’s Board of Directors before the date of the appointment or election; or
     (ii) the acquisition, by any one person, or by a corporation owned by a
group of persons that has entered into a merger, acquisition, consolidation,
purchase, stock acquisition, asset acquisition, or similar business transaction
with the Company, of: (A) ownership of stock of the Company, that, together with
any stock previously held by such person or group, constitutes more than fifty
percent (50%) of either (1) the total fair market value or (2) the total voting
power of the stock of the Company; (B) ownership of stock of the Company
possessing thirty percent (30%) or more of the total voting power of the
Company, during the twelve-month period ending on the date of such acquisition;
or (C) assets from the Company that have a total gross fair market value equal
to or more than forty percent (40%) of the total gross fair market value of all
of the assets of the Company during the twelve-month period ending on the date
of such acquisition; provided, however, that any transfer of assets to a related
person as defined under Section 409A shall not constitute a Change of Control.
3. Obligations of the Company upon Certain Terminations and Change in Control.
The Retention Agreement is amended to rename Section 5 “Obligations of the
Company upon Termination and Change in Control” and to amend and restate Section
5(a) in its entirety to provide as follows:
If the Company shall terminate the Executive’s employment other than for Cause
or Disability or the Executive shall terminate his employment for Good Reason or
if there should be a Vesting Event Change in Control, the benefits provided to
the Executive under paragraph 3(i) and 3(ii) shall vest as of the date of such
termination or Vesting Event Change in Control. If the Company shall terminate
the Executive’s employment other than for Cause or Disability or the Executive
shall terminate his employment for Good Reason or if there should be a Payment
Event Change in Control, the Company will pay to the Executive the remaining
value of the benefit under paragraph 3(iii) (such payment to be calculated as
$180,000 times the number of years remaining for which the Executive had not
received incremental annual stock options under said paragraph.
4. Certain Additional Payments by the Company. Section 7 of the Retention
Agreement is amended to provide that any Gross-Up Payment or Underpayment
pursuant to Section 7 of the Retention Agreement shall be paid in compliance
with Code Section 409A in all events, by the end of the calendar year next
following the calendar year in which the Executive pays the applicable Excise
Tax to applicable taxing authorities.
5. Compliance With Code Section 409A. The Retention Agreement is amended to add
the following new Section 12 entitled “Compliance With Code Section 409A.”
(a) All payments of “nonqualified deferred compensation” (within the meaning of
Code Section 409A) are intended to comply with the requirements of Code
Section 409A, and shall be interpreted in accordance therewith. Neither party
individually or in combination may accelerate any such deferred payment, except
in compliance with Code Section 409A, and no amount shall be paid prior to the
earliest date on which it is

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permitted to be paid under Code Section 409A. In the event that the Executive is
determined to be a “specified employee” (as defined and determined under Code
Section 409A) of Company at a time when its stock is deemed to be publicly
traded on an established securities market, payments determined to be
“nonqualified deferred compensation” payable following termination of employment
or Change in Control, to the extent required under Code Section 409A, shall be
made after the earlier of (i) the last day of the sixth (6th) complete calendar
month following such termination of employment, or (ii) the Executive’s death.
Any payment delayed by reason of the prior sentence shall be paid out in a
single lump sum on the first day of the month following the end of such required
delay period in order to catch up to the original payment schedule.
Notwithstanding anything herein to the contrary, no amendment may be made to
this Agreement if it would cause the Agreement or any payment hereunder not to
be in compliance with Code Section 409A.
(b) Unless otherwise expressly provided, any payment of compensation by Company
to the Executive (or to Executive’s estate, as applicable), whether pursuant to
this Agreement or otherwise, shall be made within two and one-half months (21/2
months) after the end of the later of the calendar year or the Company’s fiscal
year in which the Executive’s right to such payment vests (i.e., is not subject
to a substantial risk of forfeiture for purposes of Code Section 409A). Such
amounts shall not be subject to the requirements of subsection (a) above
applicable to “nonqualified deferred compensation.”
(c) Section (a) above shall not apply to that portion of any amounts payable
upon termination of employment which shall qualify as “involuntary severance”
under Section 409A because such amount does not exceed the lesser of (1) two
hundred percent (200%) of the Executive’s annualized compensation from the
Company for the calendar year immediately preceding the calendar year during
which the Date of Termination occurs, or (2) two hundred percent (200%) of the
annual limitation amount under Section 401(a)(17) of the Code (the maximum
amount of compensation that may be taken into account for purposes of a
tax-qualified retirement plan) for the calendar year during which the Date of
Termination occurs.
(d) All benefit plans, programs and policies sponsored by the Company shall
comply with all requirements of Code Section 409A or be structured so as to be
exempt from the application of Code Section 409A. In particular, all taxable
expense reimbursement payments and in kind benefits provided to the Executive
shall be structured in compliance with Code Section 409A and reimbursements
shall be paid by the Company to the Executive by no later than the end of the
calendar year following the calendar year in which the Executive incurs such
expenses, and the Executive shall take all actions necessary to claim all such
reimbursements on a timely basis to permit the Company to make all such
reimbursement payments prior to the end of said period.
(e) Notwithstanding anything in this Agreement to the contrary, to the extent
that any payment or benefit constitutes non-exempt “nonqualified deferred
compensation” for purposes of Section 409A, and such payment or benefit would
otherwise be payable or distributable hereunder by reason of Executive’s
termination of employment, all references to Executive’s termination of
employment shall be construed to mean a “separation from service,” as defined in
Treasury Regulation Section 1.409A-1(h), and Executive shall not be considered
to have a termination of employment unless such termination constitutes a
“separation from service” with respect to Executive.

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IN WITNESS WHEREOF, the parties have executed this Amendment to Retention
Agreement effective as of the day and year first above written.

                     AVERY DENNISON CORPORATION       EXECUTIVE    
 
               
   By:
               
 
               
 
  August 11, 2009       August 11, 2009    

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