Exhibit 10.41

 

AVERY DENNISON CORPORATION

 

LONG-TERM INCENTIVE UNIT AGREEMENT

 

THIS AGREEMENT, dated *, is made by and between Avery Dennison Corporation, a
Delaware corporation (“Company”) and *, an employee of the Company or a
Subsidiary (“Employee”).

 

WHEREAS, the Compensation and Executive Personnel Committee of the Company’s
Board of Directors (“Committee”) or the Chief Executive Officer (“CEO”), as
authorized by the Committee, has decided to grant an Award of long-term
incentive units (“LTI Units”) provided for herein to Employee under the terms of
the Long-Term Incentive Unit Plan (“Plan”).

 

NOW, THEREFORE, Company and Employee agree as follows:

 

ARTICLE 1 – DEFINITIONS

 

Terms not defined herein shall have the meaning given in the Plan.

 

ARTICLE 2 – TERMS OF AWARD

 

2.1  LTI Units

As of the date of this Agreement, Company grants to Employee an award of * LTI
Units, subject to the terms and conditions set forth in this Agreement and the
Plan.  The LTI Units shall be held on the books and records of the Company (or
its designee) for Employee’s account.  The LTI Units shall be earned, vested and
paid as set forth in this Agreement.  Except as set forth in Sections 2.4
through 2.6, the LTI Units shall vest as follows, subject to Employee’s
continued employment with the Company through each such vesting date:

 

 

2.2  Restriction Period

(a)  No portion of the LTI Units may be sold, transferred, assigned, pledged or
otherwise encumbered by Employee until all or a portion of the LTI Units are
vested and settled.  The period of time between the date hereof and the date all
or a portion of the LTI Units becomes vested is referred to herein as the
“Restriction Period.”  At the time all or a portion of the LTI Units vest, all
or a portion of the LTI Units vest, as applicable.  Notwithstanding any other
provision, the LTI Units must be vested before the Company is obligated to
settle the LTI Units as described in Article 3.

 

(b)  Subject to Sections 2.4 through 2.6, any portion of the LTI Units that has
not vested by the time of Employee’s Termination of Service shall be forfeited
by Employee.

 

2.3  Lapse of Restriction Period

The Restriction Period shall lapse when the LTI Units vest as set forth above or
as otherwise set forth in this Agreement.

 

2.4  Change of Control

In the event of a Change in Control, the restrictions in this Agreement will
lapse and be removed if the surviving or successor corporation or parent or
subsidiary thereof terminates Employee’s employment or service without Cause
upon or within 24 months following the Change in Control and the LTI Units
granted to Employee pursuant to this Agreement will be earned and vested as of
the date of such termination.

 

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2.5 Death; Disability

If Employee’s employment with the Company or its Subsidiaries terminates by
reason of Employee’s death or Disability, the restrictions imposed upon the LTI
Units granted to Employee pursuant to this Agreement will lapse and be removed,
and the LTI Units will be earned and vested as of the date of Termination of
Service.

 

2.6 Retirement

If Employee’s employment with the Company or its Subsidiaries terminates by
reason of Employee’s Retirement, the restrictions imposed upon the LTI Units
granted to Employee pursuant to this Agreement will lapse and be removed, and
the LTI Units will be earned and vested as of the date of Termination of
Service.

 

2.7  Adjustments in LTI Units

In the event of an Equity Restructuring, the Committee or the Company shall make
appropriate and equitable adjustments to the LTI Units granted hereunder.

 

ARTICLE 3 – SETTLEMENT OF LTI UNITS

 

3.1 Settlement of LTI Units

 

Settlement of the LTI Units is subject to the following conditions:

 

(a)  The receipt by the Company of full payment or withholding for all related
taxes.  Employee shall be liable for any and all taxes, including withholding
taxes, arising out of this LTI Units or the vesting of the LTI Units hereunder;
and

 

(b)  The Company shall make a cash payment to Employee in an amount equal to the
product of (i) the aggregate number of such vested LTI Units and (ii) the Fair
Market Value of a share of the Company’s common stock as of the date of vesting
(less withholding taxes) as soon as practical following the vesting of same, but
in no event later than two and one-half (2.5) months after the calendar year in
which the LTI Units vest; provided, however, that, if Employee is determined at
the time of his separation from service to be a “specified employee” for
purposes of Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as
amended (“Code”), to the extent delayed payment of the LTI Units is required in
order to avoid a prohibited distribution under Section 409A(2)(B)(i) of the
Code, such payment shall be made on the earlier of (A) the expiration of the
six-month period measured from the date of Employee’s “separation from service”
with the Company (as such term is defined in the Department of Treasury
Regulations issued under Section 409A of the Code) or (B) the date of Employee’s
death, but in no event earlier than the date on which the LTI Units are paid to
active employees pursuant to this Section 3.1(b). The determination of whether
Employee is a “specified employee” shall be made by the Company in accordance
with the terms of Section 409A of the Code and applicable guidance thereunder. 
Immediately following payment with respect to vested LTI Units, Employee shall
forfeit such vested LTI Units for no consideration and they shall be of no
further value whatsoever.

 

ARTICLE 4 – MISCELLANEOUS

 

4.1  Agreement Subject to Plan

The Agreement is subject to the terms of the Plan, and in the event of any
conflict between this Agreement and the Plan, the Plan shall control.

 

4.2  Administration / Compensation Recovery

The Committee or the Company shall have the power to interpret the Plan and this
Agreement and to adopt such procedures for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret, modify
or revoke any such procedures.  Nothing in this Agreement or the Plan shall be
construed to create or imply any contract or right of continued employment
between Employee and the Company (or any of its Subsidiaries).

 

In the case of fraud or other intentional misconduct on the part of Employee (or
any other event or circumstance set forth in any clawback policy implemented by
the Company or any Subsidiary) that necessitates a restatement of the Company’s
financial results, Employee will be required to reimburse the Company for any
Common Stock issued to Employee under this Award in excess of the amount that
would have been issued to Employee based on the restated financial results.

 

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4.3  Code Section 409A

The LTI Units granted hereunder is intended to be exempt from or comply in all
respects with Section 409A and this Agreement shall be interpreted accordingly. 
However, if at any time the Committee or the Company determines that the LTI
Units may be subject to penalty taxes for noncompliance with Section 409A, the
Committee or the Company shall have the right, in its sole discretion, to amend
this Agreement as it may determine is necessary or desirable for the LTI Units
to satisfy the requirements of Section 409A.  No provision of this Agreement or
the Plan shall be interpreted or construed to transfer any liability for failure
to comply with the requirements of Section 409A from Employee or any other
individual to the Company or any of its affiliates, employees or agents.

 

4.4  Construction

This Agreement and the Plan and all actions taken thereunder shall be governed
by and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.  Titles are provided herein for
convenience only and shall not serve as a basis for interpretation or
construction of this Agreement.

 

 

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.

 

Employee

Avery Dennison Corporation

 

 

*                                                                                   

 

By: /s/ Dean A. Scarborough

 

 

Chairman, President & Chief Executive Officer

Address

 

 

 

*                                                                                   

 

 

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