EX-10.11.2.1






Exhibit 10.11.2.1




LETTER OF GRANT

as of

January 1, 2009




Mr. Dean A. Scarborough


President and Chief Executive Officer


Avery Dennison Corporation


150 North Orange Grove Boulevard


Pasadena, California 91103



Dear Mr. Scarborough:



Avery Dennison Corporation (“Company”) is adopting an amended and restated Avery Dennison
Corporation Supplemental Executive Retirement Plan (“Plan”) effective as of January 1, 2009. The
amended and restated Plan contains the necessary provisions to bring the Plan into compliance with
Internal Revenue Code Section 409A (“Section 409A”). By complying with the requirements of Section
409A, the benefits provided under such nonqualified deferred compensation plan may continue to be
tax deferred. This letter is written to advise you of the changes that the Compensation and
Executive Personnel Committee of the Board of Directors of the Company has made to the Plan in
order to comply with Section 409A.



Calculation of SERP Benefit. As an inducement for you to remain in the service of the
Company, and to provide you with additional incentive to further the growth, development and
financial success of the Company, the Company will continue to provide you with a SERP Benefit that
is determined in accordance with the provisions below and subject to the terms of the Plan.



Your “SERP Benefit” is equal to the annual payment of a straight life annuity commencing the first
day of the month following the month in which you attain age 65 (or the month in which a Payment
Event occurs, if later) with each annual payment equal to sixty-two and one-half percent (62.5%) of
your Average Compensation. To the extent your Benefit Commencement Date is before the date you
attain age 65, you will receive a SERP Benefit that is Actuarially Equivalent to the SERP Benefit
payable to you on the first day of the month following the date you attain age 65.



Finally, your SERP Benefit will be further reduced by the Specified Formula Reductions.



Time and Form of Payment. Your SERP Benefit will be paid on the Benefit Commencement Date
determined under the Amended and Restated Benefit Restoration Plan of Avery Dennison Corporation
(“BRP”) and in accordance with the form of payment specified or, if applicable, elected under the
BRP.



Key Employee Delay. If you are a Key Employee, as determined under the Avery Dennison
Corporation Key Employee Policy or by the Committee for all nonqualified plan in accordance with
the requirements of Code Section 409A, and your SERP Benefit is payable due to your Separation from
Service, as described under the BRP, your Benefit Commencement Date will be no earlier than the
first day of the month that is coincident with or next following the date that is six months after
your Separation from Service, unless an earlier payment complies with a permissible Section 409A
exception (e.g., the payment of employment taxes). To the extent your status as a Key Employee
results in a delayed payment, then, following the end of such six-month period, the Plan will
provide you with a one-time payment equal to the amount you would have been entitled to receive if
your Benefit Commencement Date had not been delayed due to your status as a Key Employee, together
with Interest.



Vesting. You will become vested in your SERP Benefit upon the earliest of the following
dates provided, in the event of (1), (2), or (3), you are an Employee on that date:



(1) The date you attain age 65;



(2) The date you suffer a Disability;



(3) The date of your death;




	(4)	 	The date you have an involuntary Separation from Service from the Company without Cause,
including an involuntary Separation from Service on account of a Change in Control; and






	(5)	 	The date of your Separation from Service for Good Reason.





Forfeiture. In the event you are terminated by the Company for Cause before you attain age
65, you will forfeit your entire SERP Benefit under the Plan.



Death Benefit. Upon your death, a Death Benefit will be paid only to the spouse to whom
you were married on the date of your death; payment will be made in a Lump Sum (which is the form
in which the “death benefit” under the BRP is paid) at the same time as the “death benefit” under
the BRP, provided such spouse is then living.



The amount of the Lump Sum Death Benefit payable to your spouse will be Actuarially Equivalent to
the amount that would have been payable to your spouse as a survivor benefit hereunder if before
your date of death you attained age 65 (or your actual age, if you are older), commenced benefits
in the form of a 50% Joint and Survivor Annuity, and then died.



No Death Benefit will be payable hereunder or under the Plan if you die while unmarried before any
scheduled Benefit Commencement Date.



Definitions. For purposes of determining your rights hereunder and under the Plan, the
terms:




	(1)	 	Cause, Disability, Good Reason, Lump Sum and SERP Benefit will have the meanings set forth in
the Plan;






	(2)	 	Actuarial Equivalent and/or Actuarially Equivalent, Average Compensation, and Specified
Formula Reductions will have the meanings set forth in Appendix A hereto; and






	(3)	 	Benefit Commencement Date, Change in Control, Employee, Interest (except for purposes of the
definition of Actuarial Equivalent in Appendix A), Joint and Survivor Annuity, Key Employee,
Qualified Plan, Payment Event, and Separation from Service will have the meanings set forth in
the BRP.





Neither future amendments nor termination of the Plan will adversely affect the SERP Benefit to be
provided hereunder or under the Plan without your prior written consent. The rights provided
hereunder and under the Plan may not be sold, pledged, assigned or transferred in any manner other
than by will or by the laws of descent and distribution, or in accordance with a domestic relations
order as described in the Plan.



Please acknowledge your receipt and acceptance of this Letter of Grant, and your agreement to be
bound by all of the terms hereof and of the Plan, by countersigning and dating the enclosed copy of
this letter in the space provided below and returning the same to me.



Very truly yours,



AVERY DENNISON CORPORATION



By:     

Chairman of the Compensation and Executive Personnel Committee




I hereby acknowledge having received,


read and understood this Letter of


Grant and the Plan, and agree to be


bound by the terms hereof and of the


Plan.



     


Dean A. Scarborough



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APPENDIX A




As used in the Letter of Grant to which this Appendix is attached, and herein, the following terms
will have the meanings specified:




	1.	 	“Actuarial Equivalent” or “Actuarially Equivalent” shall mean the equivalent of a given
amount (or series of amounts) payable in another manner or by another means in accordance with
actuarial principles, methods and assumptions as approved for this purpose by the Compensation
and Executive Personnel Committee of the Board of Directors of the Company and which will
include the following:






(a) Mortality – the Applicable Mortality Table defined in Internal Revenue Code Section
417(e)(3)(B) in effect each September, for adjustments made during the one-year period
beginning the subsequent


December 1.




(b) Interest — The Applicable Interest Rate defined in Internal Revenue Code Section
417(e)(3)(C) as of September of each year, for adjustments made during the one-year period
beginning the subsequent


December 1; provided, however, for purposes of the reductions described in paragraphs (3),
(4), and (5) of Appendix B, Interest shall be determined as if the “applicable percentage”
referred to in Code Section 417(e)(3)(D)(iii) were 100 percent for all years.




	2.	 	“Average Compensation” shall mean the annual average of (a) and (b) below:






	 	(a)	 	Your salary for the three highest twelve month periods out of your last sixty
months of employment with the Company as President and Chief Executive Officer; plus






	 	(b)	 	Your three highest earned annual bonuses during your last sixty months of
employment with the Company as President and Chief Executive Officer.






For this purpose your salary and bonus will include any such compensation that is deferred
by you under any Company deferred compensation plan or arrangement.




	3.	 	“Specified Formula Reductions” means the specific reductions to the Plan formula attributable
to Company-provided retirement benefits under plans and arrangements other than the Plan and
certain other amounts determined before January 1, 2009. Said reduction will equal the sum of
the amounts listed in the Specified Formula Reductions Schedule in Appendix B. To the extent
necessary, each amount will be converted to an Actuarially Equivalent straight life annuity
commencing on your Benefit Commencement Date.






APPENDIX B



Specified Formula Reduction Schedule





The Specified Formula Reduction Schedule is the schedule of amounts attributable to
Company-provided benefits and contributions for or in respect of you and certain other amounts
determined before January 1, 2009, which are taken into account in determining the Specified
Formula Reduction. The amounts are described below and such reduction will be applied as of
your applicable Benefit Commencement Date, Accordingly, to the extent necessary, each such
amount will be converted to an Actuarially Equivalent straight life annuity commencing on your
Benefit Commencement Date before such reduction is applied.




	(1)	 	The Actuarial Equivalent amount payable to or in respect of you under the Qualified Plan
(without regard to any offsets thereunder) and any successor qualified defined benefit
retirement plan offered by the Company; provided such amounts satisfies the requirements of
Treasury regulation section 1.409A-1(a)(2).






	(2)	 	The Actuarial Equivalent amount payable to or in respect of you under the BRP at the same
time and in the same form as your SERP Benefit.






	(3)	 	The Actuarial Equivalent of the Lump Sum amount of your “Company Contributions Account” and
your “Prior Account” under the Avery Dennison Employee Savings Plan and any successor
qualified defined contribution retirement plan offered by the Company; provided such amount
satisfies the requirements of Treasury Regulation Section 1.409A-1(a)(2).






	(4)	 	The Actuarial Equivalent of the fixed Lump Sum amounts shown in the following table, where
such fixed amounts equal the Company contributions (plus interest) in your account as of
December 31, 2008 under the Avery Dennison Corporation Executive Deferred Retirement Plan, and
the Avery Dennison Corporation Executive Variable Deferred Retirement Plan projected with
fixed assumed contributions with earnings (as specified in the table) as follows:




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Projected Account Balance as of December 31



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year-End	 	Age	 	Company Contributions	 	Earnings	 	Account Balance
	2008	 	53	 	 	 	 	 	 	 	 	 	actual balance*
	2009

	 	 	54	 	 	 	53,110	 	 	 	5.86	%	 	

	2010

	 	 	55	 	 	 	55,200	 	 	 	5.86	%	 	

	2011

	 	 	56	 	 	 	57,550	 	 	 	5.86	%	 	

	2012

	 	 	57	 	 	 	59,870	 	 	 	5.86	%	 	

	2013

	 	 	58	 	 	 	62,320	 	 	 	5.86	%	 	

	2014

	 	 	59	 	 	 	64,820	 	 	 	7.35	%	 	

	2015

	 	 	60	 	 	 	67,470	 	 	 	7.35	%	 	

	2016

	 	 	61	 	 	 	70,210	 	 	 	7.35	%	 	

	2017

	 	 	62	 	 	 	73,100	 	 	 	7.35	%	 	

	2018

	 	 	63	 	 	 	75,990	 	 	 	7.35	%	 	

	2019

	 	 	64	 	 	 	79,120	 	 	 	7.35	%	 	

	2020

	 	 	65	 	 	 	82,700	 	 	 	7.35	%	 	








*Actual balance to be determined at the end of 2008




For Benefit Commencement Dates between the dates in the table above, earnings (under the
table) for the applicable year to be applied to the Reduction Amount for the immediately
preceding year will be computed by multiplying the applicable amount of earnings for the year
shown in the table by a fraction the numerator of which equals the number of whole calendar
months after the preceding date shown in the table, and the denominator of which is 12. The
contribution amount shown in the table will not be added to the Reduction Amount or adjusted
for earnings (under the table) until the last day of the applicable year. These amounts are not
subject to any additional changes on and after January 1, 2009.




	(5)	 	The Actuarial Equivalent of the fixed Lump Sum amounts shown in the following table
(representing the estimated lump sum value, determined as of December 31, 2008, of 12 times
your estimated monthly Primary Social Security Benefit as of the first day of the month next
following the date you attain age 65).





	 	 	 
	Date

	 	Value
	 

	 	 
	December 31, 2008$168,000

	December 31, 2009$179,000

	December 31, 2010

December 31, 2011

December 31, 2012

December 31, 2013

December 31, 2014

December 31, 2015

December 31, 2016

December 31, 2017

December 31, 2018

December 31, 2019

December 31, 2020

	 	$192,000

$205,000

$220,000

$236,000

$253,000

$272,000

$294,000

$318,000

$344,000

$371,000

$401,000






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For Benefit Commencement Dates between the dates in the table above, an interpolated amount will be
computed by multiplying the difference between the values shown in the table at the most recent and
the next succeeding dates by a fraction the numerator of which equals the number of whole calendar
months after the most recent date shown in the table, and the denominator of which is 12. These
amounts will not be subject to any additional changes on and after January 1, 2009.




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