EX-10.15.1






AVERY DENNISON CORPORATION

DIRECTOR EQUITY PLAN




Amended and Restated





	1.	 	Purpose; Eligibility





The Directors Equity Plan (formerly the 1988 Stock Option Plan for Non-Employee Directors), as
amended and restated, herein (the “Plan”) is effective as of January 1, 2008, and is intended to
attract and retain the services of experienced and knowledgeable non-employee directors of Avery
Dennison Corporation (the “Company”) for the benefit of the Company and its stockholders and to
provide additional incentive for such directors to continue to work for the best interests of the
Company and its stockholders. The individuals eligible to receive Awards (as defined below) under
the Plan shall be those individuals who are members of the Board of Directors of the Company (the
“Board”), who are not employees of the Company or any of its subsidiaries (each, a “Director”).




	2.	 	Stock Subject to the Plan





As of December 31, 2002, there were reserved for issuance upon the exercise of stock options
(“Options”) granted under the Plan 265,000 shares of Common Stock of the Company (the “Common
Stock”); as of December 31, 2002, there were 65,000 shares available for future Awards under the
Plan. As of the Effective Date, as defined in Paragraph 12 below, the aggregate number of shares
deliverable pursuant to Awards (as defined in Paragraph 4(a) below) under the Plan shall be
increased by 250,000 for a total of 515,000 shares. Shares of Common Stock issued under the Plan
may be authorized and unissued shares of Common Stock, previously outstanding shares of Common
Stock held as treasury shares, or treasury shares that have been transferred to and held in a
grantor trust of the Company. If any Option granted under the Plan shall expire or terminate for
any reason without having been exercised in full, the shares subject thereto shall again be
available for the purposes of issuance upon the exercise of Options granted under the Plan.




	3.	 	Administration





The Plan shall be administered by the Compensation and Executive Personnel Committee
(“Committee”) (or other committee of the Board as designated by the Board). Subject to the express
provisions of the Plan, the Board shall have authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to determine the terms and provisions of Awards
(which shall comply with and be subject to the terms and conditions of the Plan) and to make all
other determinations necessary or advisable for the administration of the Plan; such determinations
of the matters referred to in this Paragraph 3 shall be conclusive.




	4.	 	Awards





(a) The following types of Awards may be made to Directors under the Plan: (i) Options
granted automatically pursuant to Paragraph 4(b); and (ii) Stock Units granted upon a Director’s
election as contemplated by Paragraph 4(c), and (iii) Stock Awards referred to in paragraph 4(d).



(b) During the term of the Plan, at every regular December meeting of the Board (or such other
Board meeting when annual grants of options are made to employees) each Director shall
automatically be granted an Option for 2,000 shares of Common Stock (subject to adjustment as
provided in Paragraph 8). Each individual who is newly elected as a Director shall also be
automatically granted an initial Option for 5,000 shares of Common Stock as of the date of his or
her election, subject to



adjustment as provided in Paragraph 8. An individual who is a member of the Board and an
employee of the Company or one of its subsidiaries and becomes a Director as a result of retiring
from such employment while remaining a member of the Board shall not receive an initial Option for
5,000 shares of Common Stock, but, to the extent he or she is otherwise eligible after becoming a
Director, shall receive annual Options pursuant to the first sentence of this Paragraph 4(b).
Directors who receive Options are sometimes referred to below as “Optionees.”



Each Option shall be evidenced by a written Stock Option Agreement (“Agreement”), which shall
be executed by the Optionee and an authorized officer of the Company and which shall contain such
other terms and conditions as the Board shall determine, consistent with the Plan.



Only non-qualified stock options (options, which do not qualify as “incentive stock options”
under Section 422A of the Internal Revenue Code of 1986, as amended (the “Code”)), shall be granted
under the Plan and such options shall comply in all respects to the requirements of Code Section
409A.



(c) The Company has established the Non-Employee Director Deferred Equity Compensation Program
(the “Deferred Equity Program”) under the Plan, pursuant to which Directors are permitted to elect
to receive, in lieu of cash meeting and retainer fees, “Stock Units” (each of which represents one
hypothetical share of Common Stock). The election to receive Stock Units in lieu of fees shall be
made in the calendar year prior to the year in which the associated services or performed, except
that the Company may allow a new Director to make an election within the first thirty days after
joining the Board to receive Stock Units in lieu of fees for services performed after the date of
such election. Stock Units granted pursuant to this Deferred Equity Program shall be paid to the
Director in the form of Common Stock within ninety (90) days of the Director’s “separation from
service” with the Company within the meaning of Code Section 409A. Whenever dividends are paid or
distributions made with respect to the Common Stock, the Director shall be entitled to dividend
equivalents in an amount equal in value to the amount of the dividend paid or property distributed
on a single share of Common Stock multiplied by the number of Stock Units credited to the
Director), which dividend equivalents shall be credited as additional Stock Units (calculated by
dividing the dividend equivalent by the price of a single share of Company Stock and including any
fractional share) to the Director’s account as of the last business day of each calendar quarter.
All Stock Units granted to any Directors under the Deferred Equity Program at any time on or after
the Effective Date, and all such additional shares, shall be settled with shares of Common Stock
issued pursuant to this Plan, subject to the limitation set forth in Paragraph 2 but in all events
within ninety (90) days after such Directors separation from service subject to compliance with all
requirements of Code Section 409A.



(d) The Board or Committee may also approve awards of stock or stock payments (“Stock Awards”)
to Directors as a portion of the directors’ compensation program, the payment of which Stock Awards
shall comply with all applicable requirements of Code Section 409A.




	5.	 	Additional Terms and Conditions of Options





(a) The per-share price (“Option Price”) to be paid for the Common Stock under each Option
shall be 100% of the Fair Market Value of a share of the Common Stock on the date such Option is
granted. Options granted may not be repriced. “Fair Market Value” of a share of Common Stock as
of a given date shall be (i) the mean between the highest and lowest selling price of a share of
Common Stock during normal business hours on the principal exchange on which shares of Common Stock
are then trading, if any, on such date, or if shares were not traded on such date, then the
weighted average of the means between the highest and lowest sales upon the nearest date before and
the nearest date after such valuation date; or (ii) if Common Stock is not traded on an exchange,
the mean between the closing representative bid and asked prices for the Common Stock during normal
business hours on such date as reported by NASDAQ or, if NASDAQ is not then in existence, by its
successor quotation system; or (iii) if Common Stock is not publicly traded, the Fair Market Value
of a share of Common Stock as established by the Board acting in good faith.



(b) Options shall become exercisable in installments of 50% of the number of shares initially
granted, commencing on the first anniversary of the grant date, such installments to be cumulative;
provided, however, that all Options held by a Director that are not yet exercisable on the date of
such director’s Retirement (as defined in Paragraph 5(d) below)at or after age seventy-two shall
become fully exercisable on that date. In no case may an Option be exercised as to fewer than 100
shares at anyone time (or the remaining shares covered by the Option if fewer than 100 during the
term of the Option). The term of each Option shall be ten (10) years from the date of grant
thereof, or such shorter period as is prescribed below in this Paragraph 5. Except as provided
below in this Paragraph 5, no Option may be exercised at any time when the Optionee is not a member
of the Board. In the event that an Option shall be exercised by any person or persons other than
the Optionee as permitted by Paragraph 7 below, appropriate proof of the right of such person or
persons to exercise the Option shall be provided to the Company.



(c) Any person exercising an Option or portion of an Option shall do so by delivering to the
Secretary or his office of all of the following:




(i) A written notice in a form supplied by the Secretary;




(ii) Full payment for the shares with respect to which the Option, or portion thereof,
is exercised in whole or in part by (A) cash; (B) certified or bank check or such other
instrument as the Company may accept; or (C) delivery (either by surrender of the shares or
by attestation) of shares unrestricted Common Stock already owned by the Optionee of the
same class as the Common Stock subject to the Stock Option (based on the Fair Market Value
of the Common Stock on the date the Stock Option is exercised); provided, however, that
such already-owned shares either were acquired by the Optionee in an open-market
transaction or have been held by the Optionee for at least six months at the time of
exercise; and




(iii) In the event that the Option shall be exercised by any person or persons other
than the Optionee, appropriate proof of the right of such person or persons to exercise the
Option.



(d) In the event that an Optionee shall cease to be a member of the Board, other than by
reason of retirement after age seventy-two (hereinafter “Retirement”) or death, he may exercise his
Options within three months after such termination, but not after the expiration of the Options, to
the extent of the number of shares exercisable by him at the date of termination of his membership
on the Board.



(e) In the event that an Optionee shall cease to be a member of the Board because of
Retirement, he may exercise his Options within sixty months after Retirement, but not after the
expiration of the Options, to the extent of the number of shares exercisable by him at the date of
Retirement.



(f) In the event of the death of an Optionee, any of his Options that were outstanding at the
time of his death that have not been previously terminated pursuant to the provisions of Paragraph
5(d) or 5(e) may be exercised at any time within twelve months of the date of the Optionee’s death,
but not after the expiration of the Option, to the extent of the number of shares exercisable by
the Optionee at the date of his death. Designation, revocation and redesignation of Beneficiaries
must be made by notice in writing in accordance with rules established by the Board or Committee
and shall be effective upon delivery of such notice to the Board.



(g) Nothing in the Plan or in any Option granted pursuant to the Plan shall confer on any
individual any right to continue as a member of the Board or interfere in any way with the right of
the Company to terminate his membership on the Board at any time.




	6.	 	Conditions to Issuance of Stock Certificates





(a) The Board may require each person purchasing or receiving shares of Common Stock pursuant
to an Award, as a condition to delivery of such shares, to represent to and agree with the Company
in writing that such person is acquiring the shares without a view to the distribution thereof and
to provide such other representations and such documents as the Board, in its absolute discretion,
deems necessary or appropriate to effect compliance with all applicable laws. Such shares may be
delivered in by book entry or in certificate form, with such legends or other notations as the
Board deems appropriate to reflect any restrictions on transfer.



(b) Notwithstanding any other provision of the Plan or any Agreement, the Company shall not be
required to issue or deliver any shares of Common Stock under the Plan prior to fulfillment of all
of the following conditions:




(i) Listing or approval for listing upon notice of issuance, of such shares on the New
York Stock Exchange, Inc., or such other securities exchange as may at the time be the
principal market for the Common Stock;




(ii) Any registration or other qualification of such shares under any state or federal
law or regulation, or the maintaining in effect of any such registration or other
qualification which the Board shall, in its absolute discretion upon the advice of counsel,
deem necessary or advisable;




(iii) Obtaining any other consent, approval, or permit from any state or federal
governmental agency, which the Board shall, in its absolute discretion after receiving the
advice of counsel, determine to be necessary or advisable;




(iv) The lapse of such reasonable period of time following the exercise of an Option
or the event that results in the delivery of such Shares, as the Board may establish from
time to time for reasons of administrative convenience; and




(v) The receipt by the Company of full payment (if any) for such shares and the
satisfaction of any tax withholding obligations relating thereto.



A Director shall not be, nor have any of the rights or privileges of, a stockholder of the
Company in respect of any shares of Common Stock that may become deliverable pursuant to the Plan
unless and until such shares have been delivered to the Director.




	7.	 	Transferability and Stockholder Rights of Holders of Awards





(a) Options granted under the Plan may be transferred to one or more Transferees (as defined
below) or to a Beneficiary (as defined below). Options may be exercised (i) during the Optionee’s
lifetime, only by the Optionee or a Transferee, and (ii) after the Optionee’s death, only by a
Transferee or a Beneficiary. “Transferee” shall mean “family members” as defined in the Securities
and Exchange Commission Release No. 33-7646 and 34-41109, who have acquired the Option through a
gift or a domestic relations order, and includes any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the employee’s household (other than a tenant or employee), a trust in which these persons
have more than fifty percent of the beneficial interest, a foundation in which these persons (or
the employee) control the management of assets, and any other entity in which these persons (or the
employee) own more than fifty percent of the voting interests.



(b) Other Awards granted under the Plan may not be transferred, except to a Beneficiary (as
defined below).



(c) Each Director shall be permitted to designate one or more Beneficiaries to receive his
Awards under the Plan upon his death, on such form and in accordance with such procedures as the
Board or Secretary may from time to time establish. If a Director dies at a time when he has no
Beneficiary designation in effect, his estate shall be his Beneficiary.



(d) References in the Plan to an Optionee or Director (other than such references that relate
to membership on the Board or termination thereof) shall be deemed to refer to a Transferee or
Beneficiary where appropriate.




	8.	 	Adjustments upon Changes in Common Stock





In the event of a stock dividend, stock split, reverse stock split, share combination,
recapitalization, merger, consolidation, acquisition of property or shares, separation, spinoff,
reorganization, stock rights offering, liquidation, sale of a subsidiary or similar event, the
Board or Committee shall make such adjustments (if any) as it deems appropriate and equitable, in
its discretion, to the following:



(a) the aggregate number of shares of Common Stock available under Paragraph 2;



(b) the number of shares subject to automatic Option grants under Paragraph 4;



(c) the number of shares of Common Stock covered by outstanding Awards;



(d) the option price of outstanding Options; and



(e) such other adjustments to outstanding Awards as the Board or Committee may determine to be
appropriate and equitable.



Such adjustments may include, without limitation, (i) the cancellation of outstanding Awards
in exchange for payments of cash, property or a combination thereof having an aggregate value equal
to the value of such Awards, as determined by the Committee in its sole discretion, and (ii) the
substitution of other property (including, without limitation, other securities) for the Stock
covered by outstanding Awards.




	9.	 	Change in Control





(a) Impact of Event. Notwithstanding any other provision of the Plan to the contrary, in the
event of a Change in Control, any Options outstanding as of the date such Change in Control is
determined to have occurred, and which are not then exercisable and vested, shall become fully
exercisable and vested, and shall remain exercisable until their expiration date notwithstanding
any termination of the Optionee’s membership on the Board.



(b) Definition of Change in Control. For purposes of the Plan, a “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:




(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 persons acting as a group, 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 (i) the total
fair market value, or (ii) 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
immediately before such acquisition, 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 Code Section
409A shall not constitute a Change of Control.






	10.	 	Amendment and Termination





Unless the Plan shall theretofore have been terminated as hereinafter provided, the Plan shall
terminate on, and no Awards shall be made after, January 31, 2010; provided, however, that such
termination shall have no effect on Awards granted prior thereto (and the provisions of the Plan
shall continue to apply thereto). The Board may amend, suspend or terminate the Plan at any time,
but no such amendment, suspension or termination shall impair the rights of Directors under Awards
previously granted without the Director’s consent. In addition, no such amendment shall be made
without the approval of the Company’s stockholders to the extent such approval is required by
applicable law or the rules of any exchange on which the Common Shares are then listed.
Notwithstanding the forgoing, the Company may unilaterally amend the Plan or any Award as necessary
to comply with the requirements of Code Section 409A.




	11.	 	Withholding





Upon the transfer of Common Stock as a result of the exercise of an Option or pursuant to
another Award, the Company shall have the right to retain or sell, without notice, sufficient
shares of stock (taken at their Fair Market Value, as defined in Paragraph 5(a) above, on the date
of exercise or transfer) to cover the amount of any tax required by any government to be withheld
or otherwise deducted and paid with respect to such payment, remitting any balance to the Director;
provided, however, that the Director shall have the right to provide the Company with the funds to
enable it to pay such tax.




	12.	 	Approval by Stockholders





The Plan was approved by the Company’s stockholders at the meeting of the stockholders held on
April 24, 2003. The Plan, as amended and restated herein, was approved by the Compensation and
Executive Personnel Committee of the Board and was ratified by the Board on December 4, 2008.




	13.	 	Titles; Gender





Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan. Whenever the masculine gender is used, it shall
include the feminine and neuter, and whenever a singular pronoun is used it shall include the
plural, unless the context clearly indicates otherwise.




	14.	 	Unfunded Status of Plan





It is presently intended that the Plan constitutes an “unfunded” plan for incentive and
deferred compensation. The Board may authorize the creation of trusts or other arrangements to
meet the obligations created under the Plan to deliver Common Stock or make payments; provided,
however, that unless the Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the “unfunded” status of the Plan.




	15.	 	Construction





This Plan and any Agreements hereunder shall be administered and interpreted under the laws of
the State of Delaware.