# EDGAR Filing Document

**Accession Number:** 0000008818
**File Stem:** 0000008818-26-000015
**Filing Date:** 2026-2
**Character Count:** 623826
**Document Hash:** 7e0d1f5cfaa58adc7e4f4b4ff76185c9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000008818-26-000015.hdr.sgml**: 20260225

**ACCESSION NUMBER**: 0000008818-26-000015

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 139

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260225

**DATE AS OF CHANGE**: 20260225

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Avery Dennison Corp
- **CENTRAL INDEX KEY:** 0000008818
- **STANDARD INDUSTRIAL CLASSIFICATION:** CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 951492269
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-07685
- **FILM NUMBER:** 26675819

**BUSINESS ADDRESS:**
- **STREET 1:** 8080 NORTON PARKWAY
- **CITY:** MENTOR
- **STATE:** OH
- **ZIP:** 44060
- **BUSINESS PHONE:** 440-534-6000

**MAIL ADDRESS:**
- **STREET 1:** 8080 NORTON PARKWAY
- **CITY:** MENTOR
- **STATE:** OH
- **ZIP:** 44060

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AVERY DENNISON CORPORATION
- **DATE OF NAME CHANGE:** 19920703

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AVERY INTERNATIONAL CORP
- **DATE OF NAME CHANGE:** 19901030

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AVERY PRODUCTS CORP
- **DATE OF NAME CHANGE:** 19760518

?xml version='1.0' encoding='ASCII'? avy-20251231

**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, DC 20549** 

**FORM 10-K**

⌧ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2025 or** 

□ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to** 

**Commission file number 1-7685**

**AVERY DENNISON CORPORATION**

***(Exact Name of Registrant as Specified in Its Charter)***

---

| | |
|:---|:---|
| **Delaware** | **95-1492269** |
| *(State of Incorporation)* | *(I.R.S. Employer Identification No.)* |
| **8080 Norton Parkway** | |
| **Mentor, Ohio** | **44060** |
| *(Address of Principal Executive Offices)* | *(Zip Code)* |

---

**Registrant's telephone number, including area code:** 

**(440) 534-6000**

**Securities registered pursuant to Section 12(b) of the Act:** 

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common stock, $1 par value | AVY | New York Stock Exchange |
| 3.750% Senior Notes due 2034 | AVY34 | Nasdaq Stock Market |
| 4.000% Senior Notes due 2035 | AVY35 | Nasdaq Stock Market |

---

**Securities registered pursuant to Section 12(g) of the Act:** 

Not applicable.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No □

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes □ No ⌧

Indicate by check mark 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 ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large Accelerated Filer ⌧ | Accelerated filer □ | Non-accelerated filer □ | Smaller reporting company□ |
| | | | Emerging growth company□ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.⌧

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. □

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes □ No ⌧

The aggregate market value of voting and non-voting common equity held by non-affiliates as of June 27, 2025, the last business day of the registrant's most recently completed second fiscal quarter, was approximately $13.6 billion.

Number of shares of common stock, $1 par value, outstanding as of January 31, 2026, the end of the registrant's most recent fiscal month: 76,877,940.

The following documents are incorporated by reference into the Parts of this Form 10-K indicated below:

---

| | |
|:---|:---|
| **Document** | **Incorporated by reference into:** |
| Portions of Definitive Proxy Statement for Annual Meeting of Stockholders to be held on April 30, 2026 | Parts III, IV |

---

------

**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**AVERY DENNISON CORPORATION** 

**FISCAL YEAR 2025 ANNUAL REPORT ON FORM 10-K**

**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
| | | **Page** |
| **<u>[PART I](#i737457f929ff47bb8b2643445cd22790_13)</u>** | | |
| <u>[Item 1.](#i737457f929ff47bb8b2643445cd22790_16)</u> | <u>[Business](#i737457f929ff47bb8b2643445cd22790_16)</u> | [2](#i737457f929ff47bb8b2643445cd22790_16) |
| <u>[Item 1A.](#i737457f929ff47bb8b2643445cd22790_19)</u> | <u>[Risk Factors](#i737457f929ff47bb8b2643445cd22790_19)</u> | [7](#i737457f929ff47bb8b2643445cd22790_19) |
| <u>[Item 1B.](#i737457f929ff47bb8b2643445cd22790_22)</u> | <u>[Unresolved Staff Comments](#i737457f929ff47bb8b2643445cd22790_22)</u> | [17](#i737457f929ff47bb8b2643445cd22790_22) |
| <u>[Item 1C.](#i737457f929ff47bb8b2643445cd22790_25)</u> | <u>[Cybersecurity](#i737457f929ff47bb8b2643445cd22790_25)</u> | [18](#i737457f929ff47bb8b2643445cd22790_25) |
| <u>[Item 2.](#i737457f929ff47bb8b2643445cd22790_28)</u> | <u>[Properties](#i737457f929ff47bb8b2643445cd22790_28)</u> | [19](#i737457f929ff47bb8b2643445cd22790_28) |
| <u>[Item 3.](#i737457f929ff47bb8b2643445cd22790_31)</u> | <u>[Legal Proceedings](#i737457f929ff47bb8b2643445cd22790_31)</u> | [19](#i737457f929ff47bb8b2643445cd22790_31) |
| <u>[Item 4.](#i737457f929ff47bb8b2643445cd22790_34)</u> | <u>[Mine Safety Disclosures](#i737457f929ff47bb8b2643445cd22790_34)</u> | [19](#i737457f929ff47bb8b2643445cd22790_34) |
| **<u>[PART II](#i737457f929ff47bb8b2643445cd22790_37)</u>** |  |  |
| <u>[Item 5.](#i737457f929ff47bb8b2643445cd22790_40)</u> | <u>[Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i737457f929ff47bb8b2643445cd22790_40)</u> | [20](#i737457f929ff47bb8b2643445cd22790_40) |
| <u>[Item 6.](#i737457f929ff47bb8b2643445cd22790_43)</u> | <u>[Reserved](#i737457f929ff47bb8b2643445cd22790_43)</u> | [21](#i737457f929ff47bb8b2643445cd22790_43) |
| <u>[Item 7.](#i737457f929ff47bb8b2643445cd22790_46)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i737457f929ff47bb8b2643445cd22790_46)</u> | [22](#i737457f929ff47bb8b2643445cd22790_46) |
| <u>[Item 7A.](#i737457f929ff47bb8b2643445cd22790_76)</u> | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i737457f929ff47bb8b2643445cd22790_76)</u> | [38](#i737457f929ff47bb8b2643445cd22790_76) |
| <u>[Item 8](#i737457f929ff47bb8b2643445cd22790_79)</u> | <u>[Financial Statements and Supplementary Data](#i737457f929ff47bb8b2643445cd22790_79)</u> | [39](#i737457f929ff47bb8b2643445cd22790_79) |
| <u>[Item 9.](#i737457f929ff47bb8b2643445cd22790_157)</u> | <u>[Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i737457f929ff47bb8b2643445cd22790_157)</u> | [84](#i737457f929ff47bb8b2643445cd22790_157) |
| <u>[Item 9A.](#i737457f929ff47bb8b2643445cd22790_160)</u> | <u>[Controls and Procedures](#i737457f929ff47bb8b2643445cd22790_160)</u> | [84](#i737457f929ff47bb8b2643445cd22790_160) |
| <u>[Item 9B.](#i737457f929ff47bb8b2643445cd22790_163)</u> | <u>[Other Information](#i737457f929ff47bb8b2643445cd22790_163)</u> | [84](#i737457f929ff47bb8b2643445cd22790_163) |
| <u>[Item 9C.](#i737457f929ff47bb8b2643445cd22790_166)</u> | <u>[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i737457f929ff47bb8b2643445cd22790_166)</u> | [84](#i737457f929ff47bb8b2643445cd22790_166) |
| **<u>[PART III](#i737457f929ff47bb8b2643445cd22790_169)</u>** |  |  |
| <u>[Item 10.](#i737457f929ff47bb8b2643445cd22790_172)</u> | <u>[Directors, Executive Officers and Corporate Governance](#i737457f929ff47bb8b2643445cd22790_172)</u> | [85](#i737457f929ff47bb8b2643445cd22790_172) |
| <u>[Item 11.](#i737457f929ff47bb8b2643445cd22790_175)</u> | <u>[Executive Compensation](#i737457f929ff47bb8b2643445cd22790_175)</u> | [88](#i737457f929ff47bb8b2643445cd22790_175) |
| <u>[Item 12.](#i737457f929ff47bb8b2643445cd22790_178)</u> | <u>[Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i737457f929ff47bb8b2643445cd22790_178)</u> | [88](#i737457f929ff47bb8b2643445cd22790_178) |
| <u>[Item 13.](#i737457f929ff47bb8b2643445cd22790_181)</u> | <u>[Certain Relationships and Related Transactions, and Director Independence](#i737457f929ff47bb8b2643445cd22790_181)</u> | [88](#i737457f929ff47bb8b2643445cd22790_181) |
| <u>[Item 14.](#i737457f929ff47bb8b2643445cd22790_184)</u> | <u>[Principal Accountant Fees and Services](#i737457f929ff47bb8b2643445cd22790_184)</u> | [88](#i737457f929ff47bb8b2643445cd22790_184) |
| **<u>[PART IV](#i737457f929ff47bb8b2643445cd22790_187)</u>** |  |  |
| <u>[Item 15.](#i737457f929ff47bb8b2643445cd22790_190)</u> | <u>[Exhibits and Financial Statement Schedules](#i737457f929ff47bb8b2643445cd22790_190)</u> | [89](#i737457f929ff47bb8b2643445cd22790_190) |
| <u>[Item 16.](#i737457f929ff47bb8b2643445cd22790_193)</u> | <u>[Form 10-K Summary](#i737457f929ff47bb8b2643445cd22790_193)</u> | [94](#i737457f929ff47bb8b2643445cd22790_193) |
|  | <u>[Signatures](#i737457f929ff47bb8b2643445cd22790_196)</u> | [95](#i737457f929ff47bb8b2643445cd22790_196) |
|  | <u>[Power of Attorney](#i737457f929ff47bb8b2643445cd22790_199)</u> | [96](#i737457f929ff47bb8b2643445cd22790_199) |

---

------

**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**Safe Harbor Statement**

The matters discussed in this Annual Report on Form 10-K contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are not statements of historical fact, contain estimates, assumptions, projections and/or expectations regarding future events, which may or may not occur. Words such as "aim," "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "foresee," "guidance," "intend," "may," "might," "objective," "plan," "potential," "project," "seek," "shall," "should," "target," "will," "would," or variations thereof, and other expressions that refer to future events and trends, identify forward-looking statements. Our forward-looking statements, and financial or other business targets, are subject to certain risks and uncertainties, which could cause our actual results to differ materially from the expected results, performance or achievements expressed or implied by such forward-looking statements.

We believe that the most significant risk factors that could affect our financial performance in the near term include: (i) the impact on underlying demand for our products from global economic conditions, tariffs, geopolitical uncertainty, and changes in environmental standards, regulations and preferences; (ii) competitors' actions, including pricing, expansion in key markets, and product offerings; (iii) the cost and availability of raw materials; (iv) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through price increases, without a significant loss of volume; (v) foreign currency fluctuations; and (vi) the execution and integration of acquisitions.

Certain risks and uncertainties are discussed in more detail under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K. Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but not limited to, risks and uncertainties related to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• International Operations — worldwide economic, geopolitical, social and labor conditions; changes in geopolitical conditions, including those related to trade relations and tariffs, China, the Russia-Ukraine war, the Israel-Hamas war and related hostilities in the Middle East; fluctuations in foreign currency exchange rates; and other risks associated with international operations, including in emerging markets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our Business — fluctuations in demand affecting sales to customers; fluctuations in the cost and availability of raw materials and energy; changes in our markets due to competitive conditions, technological developments, laws and regulations, customer preferences; environmental regulations and sustainability trends; the impact of competitive products and pricing; the execution and integration of acquisitions; selling prices; customer and supplier concentrations or consolidations; the financial condition of distributors; outsourced manufacturers; product and service quality claims; restructuring and other cost reduction actions; our ability to generate sustained productivity improvement and our ability to achieve and sustain targeted cost reductions; the timely development and market acceptance of new products, including sustainable or sustainably-sourced products; our investment in development activities and new production facilities; the collection of receivables from customers; and our sustainability and governance practices

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Information Technology — disruptions in information technology systems; cyber security events or other security breaches; and successful installation of new or upgraded information technology systems

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Income Taxes — fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; outcome of tax audits; and the realization of deferred tax assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Human Capital — recruitment and retention of employees and collective labor arrangements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our Indebtedness — our ability to obtain adequate financing arrangements and maintain access to capital; credit rating risks; fluctuations in interest rates; and compliance with our debt covenants

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ownership of Our Stock — potential significant variability of our stock price and amounts of future dividends and share repurchases

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Legal and Regulatory Matters — protection and infringement of our intellectual property; the impact of legal and regulatory proceedings, including with respect to compliance and anti-corruption, environmental, health and safety, and trade compliance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other Financial Matters — fluctuations in pension costs and goodwill impairment

Our forward-looking statements are made only as of February 25, 2026. We assume no duty to update these forward-looking statements to reflect new, changed or unanticipated events or circumstances, other than as may be required by law.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**PART I** 

**Item 1. BUSINESS**

**Company Background**

Avery Dennison Corporation ("Avery Dennison" or the "Company" and generally referred to as "we" or "us") was founded in 1935 and incorporated in Delaware in 1977 as Avery International Corporation, the successor corporation to a California corporation of the same name incorporated in 1946. In 1990, we merged one of our subsidiaries into Dennison Manufacturing Company ("Dennison"), as a result of which Dennison became our wholly-owned subsidiary and in connection with which we changed our name to Avery Dennison Corporation. You can learn more about us by visiting our website at www.averydennison.com. Our website is not intended to function as a hyperlink and the information on our website is not, nor should it be considered, part of this report or incorporated by reference into this report.

**Business Overview and Reportable Segments**

We are a global leader in materials science and digital identification solutions. We are Making Possible<sup>TM</sup> products and solutions that help advance the industries we serve, providing branding and information solutions that optimize labor and supply chain efficiency, reduce waste and mitigate loss, advance sustainability, circularity and transparency, and better connect brands and consumers. We design and develop labeling and functional materials, radio-frequency identification ("RFID") inlays and tags, software applications that connect the physical and digital, and offerings that enhance branded packaging and carry or display information that improves the customer experience. We serve an array of industries worldwide, including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive.

We believe that our exposure to diverse and growing markets, the size and scale of operations, our innovation capabilities, productivity culture, and brand strength are the primary advantages in maintaining and further developing our competitive position.

Our reportable segments for fiscal year 2025 were Materials Group and Solutions Group, which comprised approximately 69% and 31%, respectively, of our total net sales.

In 2025, international operations constituted a substantial majority of our business, representing approximately 69% of our net sales. As of December 31, 2025, we operated over 200 manufacturing and distribution facilities and had locations in more than 50 countries.

**Materials Group**

Our Materials Group is a leading global provider to the pressure-sensitive label and graphics industries. Our innovative products include label materials, graphics and reflective materials and functional bonding materials, like tapes. Our label materials enhance brands' shelf appeal, inform shoppers, advance circularity, increase transparency and improve operational supply chain efficiency. Our graphics portfolio offers highly engineered products ranging from vehicle wraps to architectural films. Our tapes portfolio includes bonding and functional materials for applications in various industry sectors such as automotive, building and construction and electronics. We leverage the group's materials science capabilities and process engineering expertise to drive further intelligent label adoption through our converter channel access.

Our Materials Group manufactures and sells Fasson<sup>®</sup>-, JAC<sup>®</sup>-, and Avery Dennison<sup>®</sup>-brand pressure-sensitive label materials and performance tapes products, Avery Dennison<sup>®</sup>- and Mactac<sup>®</sup>-brand graphics, and Avery Dennison<sup>®</sup>-brand reflective products. Materials Group's business tends not to be seasonal, except for certain outdoor graphics, building and construction, and reflective products.

Pressure-sensitive materials consist primarily of papers, plastic films and metal foils, which are coated with internally-developed and purchased adhesives, and then laminated with specially-coated backing papers and films. They are then sold in roll or sheet form with either solid or patterned adhesive coatings in a wide range of face materials, sizes, thicknesses and adhesive properties.

A pressure-sensitive, or self-adhesive, material is one that adheres to a surface by press-on contact. It generally consists of four layers: a face material, which may be paper, metal foil or plastic film; an adhesive, which may be permanent or removable; a release coating; and a backing material to protect the adhesive from premature contact with other surfaces that can also serve as a carrier for supporting and dispensing individual labels. When the products are ready for use, the release coating and protective backing are removed, exposing the adhesive so that the label or other face material may be pressed or rolled into place. Because they are easy to apply without the need for adhesive activation, self-adhesive materials can provide cost savings compared to other materials that require heat- or moisture-activated adhesives, while also offering aesthetic and other advantages over alternative technologies.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

Label materials are sold worldwide to converters for labeling, decorating and specialty applications in the food, home and personal care, beer and beverage, durables, pharmaceutical, wine and spirits and logistics market segments. When used in package decoration applications, the visual appeal of self-adhesive materials can help increase sales of the products on which the materials are applied. Self-adhesive materials are also used to convey variable information through various digital triggers, including bar codes, quick response ("QR") codes and RFID inlays, for applications such as shipping labels and weight and price information for packaged meats and other foods. Self-adhesive materials provide consistent and versatile adhesion and are available in a large selection of materials, which can be made into labels of varying sizes and shapes.

Our graphics and reflective products include a variety of films and other products that are sold to the architectural, commercial sign, digital printing and related market segments. We also sell durable cast and reflective films to the construction, automotive and fleet transportation market segments and reflective films for traffic and safety applications. We provide sign shops, commercial printers and designers a broad range of pressure-sensitive materials that allow them to create impactful and informative brand and decorative graphics. We offer a wide array of pressure-sensitive vinyl and specialty materials designed for digital imaging, screen printing and sign cutting applications.

Our performance tapes products include a variety of Fasson<sup>®</sup>-brand and Avery Dennison<sup>®</sup>-brand tapes and other pressure-sensitive adhesive-based materials and converted products, mechanical fasteners and performance polymers. Our pressure-sensitive adhesive-based materials are available in roll form and in a wide range of face materials, sizes, thicknesses and adhesive properties. These materials and converted products are used in non-mechanical fastening, bonding and sealing systems for various automotive, electronics, building and construction, general industrial, personal care, and medical applications. The mechanical fasteners are primarily precision-extruded and injection-molded plastic devices used in various automotive, general industrial and retail applications.

Our larger competitors in label materials include UPM Adhesive Materials, a subsidiary of UPM Corporation; Fedrigoni Self-Adhesives; Lintec Corporation; Flexcon Corporation, Inc.; and an array of smaller regional and local companies. For graphics and reflective products, our largest competitors are 3M Company ("3M") and the Orafol Group. For performance tapes products, our competitors include 3M; Tesa-SE, a subsidiary of Beiersdorf AG; Nitto Denko Corporation; and numerous regional and specialty suppliers. For fastener products, there is a variety of competitors supplying extruded and injection molded fasteners and fastener attaching equipment. We believe that entry of competitors into the field of pressure-sensitive adhesives and materials is limited by technical knowledge and capital requirements. We believe that our technical expertise, size and scale of operations, broad line of quality products, reliable service, product and process innovation, distribution capabilities and brand strength are the primary advantages in maintaining and further developing our competitive position.

**Solutions Group** 

Our Solutions Group is a leading provider of information and branding solutions that cover worldwide marketplace needs ranging from digital identification and data management to branding and embellishment, productivity, pricing and retail media. Our ultra-high-frequency RFID solutions empower customers across multiple retail and industry segments, including apparel, logistics, food and grocery, and general retail, to connect the physical and digital worlds by enabling a digital identity and life for physical items.

The branding solutions of the Solutions Group include brand embellishments, graphic tickets, tags, and labels, and sustainable packaging. Solutions Group's information solutions include item-level RFID solutions; visibility and loss prevention solutions; price ticketing and marking; care, content, and country of origin compliance solutions; brand protection and security solutions; and Vestcom<sup>®</sup>-brand shelf-edge productivity and media solutions.

In the Solutions Group, our primary competitors include Checkpoint Systems, Inc., a subsidiary of CCL Industries Inc.; R-pac International Corporation; SML Group Limited; Arizon RFID Technology Cayman Co Ltd; and Tageos SAS, a subsidiary of Fedrigoni Group. We believe that our product, process and solution innovation, global distribution network, reliable service, product quality and consistency, and ability to serve customers consistently with comprehensive solutions close to where they manufacture, source and sell are the key advantages in maintaining and further developing our competitive position.

**Research, Development and Innovation** 

As a global leader in materials science, we innovate to develop and introduce new products and solutions that help customers solve some of the most complex problems in the industries we serve. These include optimizing supply-chain and labor efficiency, reducing waste and mitigating loss, advancing sustainability, circularity and transparency, and helping brands and consumers to better connect. With decades of experience and deep expertise in materials science, engineering, and process technology, we continuously innovate to anticipate market needs, address customer challenges and unlock new opportunities.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

Our vision is to leverage the strengths of our Materials and Solutions groups to drive growth by delivering leading solutions at the intersection of the physical and digital worlds. Our decades of experience creating solutions for customers and our deep expertise enable us to bring innovative solutions to the industries we serve. Our innovation efforts focus on anticipating market and customer challenges and opportunities, and applying technology to address them. Our investment in innovation aims to accelerate growth by developing new products and solutions, expand margins through material re-engineering, and enable customer success by leveraging scalable innovation platforms and delivering sustainability initiatives and advanced technologies.

Many of our new products result from our research and development efforts. These efforts are directed primarily toward developing products, solutions and operating techniques and improving productivity, sustainability and product performance, often in close association with our customers or end users. These efforts provide intellectual property that leverages our research and development relating to materials science, such as adhesives, films, inks and release liners, and process engineering technology, such as coating, laminating and printing technologies in Materials Group. We focus on research projects related to RFID, external embellishments, data and digital solutions and printing technologies in Solutions Group. We have and license a number of patents in both of our reportable segments. Additionally, our research and development efforts include sustainable innovation and design of products that advance the circular economy, reduce materials and waste, use recycled content, and extend product end-of-life or enable product recycling.

**Acquisitions and Venture Investments**

In addition to our investments to support organic growth, we have pursued complementary and synergistic acquisitions. In 2025, we acquired W.F. Taylor Holdings, Inc. ("Taylor Adhesives"), a Georgia-based flooring adhesives business. The aggregate purchase consideration for this acquisition was approximately $390 million. Additionally, during 2025, we made venture investments in five companies developing technological solutions that we believe have the potential to advance our businesses. For information regarding our acquisitions, see Note 2, "Business Acquisitions," in the Notes to Consolidated Financial Statements. For information regarding our venture investments, see Note 9, "Fair Value Measurements," in the Notes to Consolidated Financial Statements.

**Patents, Trademarks and Licenses**

The loss of individual patents or licenses would not be material to us taken as a whole, nor to our operating segments individually. Our principal trademarks are Avery Dennison, our logo, and Fasson. We believe these trademarks are strong in the market segments in which we operate.

**Human Capital Resources**

***Our Global Workforce***

With approximately 69% of our 2025 net sales originating outside the U.S. and approximately 40% of our net sales originating in emerging markets (Latin America, Eastern Europe, Middle East/Northern Africa, and most countries in Asia Pacific), our employees are located in more than 50 countries to best serve our customers. Approximately 83% of our employees at year-end 2025 were located outside the U.S. and approximately 67% were located in emerging markets.

The charts below show our global employee population by region and operational function. Nearly 20,000 of our approximately 35,000 employees at year-end 2025, representing approximately 58% of our global workforce, were in Asia Pacific, serving our customers in that region. At that time, approximately 71% of our global workforce worked in the operations of our manufacturing facilities or in positions directly supporting them from other locations.

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| | |
|:---|:---|
| **Workforce by Region** | |
| Asia Pacific | 58% |
| North America | 22 |
| Europe | 17 |
| Latin America | 3 |
| **Workforce by Function**<sup>(1)</sup> |  |
| Operations | 71% |
| Non-Operations | 29 |

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<sup>(1)</sup> Reflects reclassification in 2025 of approximately 2,500 employees from Non-Operations to Operations compared to prior year.

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***Talent & Development***

We believe that attracting, developing and retaining highly-skilled talent is critical to our ability to continue delivering sustainable growth. We provide ongoing support and professional development resources to our team members worldwide to ensure that their skills evolve with our business needs, industry trends and human capital management best practices, as well as enable increased productivity, peak performance and career growth. We have strong talent review and succession planning processes that provide targeted development opportunities for our team members. We emphasize on-the-job development and coaching, and also provide facilitator-led and direct-access online training, leadership opportunities to execute special projects and, in some cases, cross-functional, cross-regional or cross-divisional work assignments. Our enterprise competency model represents our global standard for the leadership skills and behaviors that we develop in our employees so we can achieve our vision. This model, which establishes clear expectations that align with our values and strategies and increases fairness, consistency and transparency in how we hire/select, promote, develop and reward our talent, was embedded into key talent processes and practices in 2025, including performance management, development and learning.

***Compensation & Benefits***

Our total rewards philosophy is to offer market-based, competitive wages and benefits in the markets where we operate. All of our employees were paid at least the applicable legal minimum wage, and over 98% of our employees were paid above the applicable legal minimum wage, at year-end 2025. Pay is generally positioned around the market median, with variances largely based on knowledge, skills, years of experience and consistent with our pay-for-performance philosophy. In addition to base wages, our compensation and benefit programs — which vary by region, country and business unit — include short-term incentives (generally paid in cash), long-term incentives (e.g., cash- or stock-based awards), employee benefit and retirement plans, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, leave of absence benefits, and employee assistance programs. We offer the opportunity for flexible work arrangements for certain of our office-based workforce to provide them with flexibility to balance their work and personal commitments, while ensuring that we meet the needs of our business. Our information technology infrastructure, information security protocols and digital tools support employee efficiency and effectiveness wherever they work.

Pay equity is an important part of our global pay planning and practices. Each year, we engage an independent third party to evaluate internal pay equity, making merit-based pay adjustments where appropriate. In 2025, we reviewed pay, including base, annual, and long-term incentives. We continue to enhance our manager education, tools and processes to provide fair and equitable pay.

***Employee Engagement***

A highly engaged workforce not only allows us to attract and retain top-tier talent but also translates directly into better business outcomes that benefit all our stakeholders. Because we believe that an engaged workforce promotes retention and minimizes employee turnover, we annually conduct a global employee experience survey, which in 2025 leveraged for the third year a modernized platform and process, providing real-time access to results, improved analytics and ability to connect data throughout the employee experience, more meaningful comparisons to external benchmarks, and ongoing pulse survey capability. Our business and functional teams use the anonymized results of this survey to identify potential opportunities for improvement, implementing action plans as appropriate. While employee engagement is the result of many factors, we believe our strong, encouraging and open leadership, as well as our continued efforts to foster a collaborative, supportive culture, has led to strong workforce engagement.

***Workforce Health & Safety***

Safety is one of our highest priorities, and we work to ensure our manufacturing facilities, distribution centers and administrative offices focus on safety, so that anyone working in or visiting one of our locations feels and remains safe from injury. Our global Recordable Incident Rate of 0.17 in 2025 was significantly lower than the Occupational Safety and Health Administration manufacturing industry average of 2.7 in 2024 (the most recent available industry average).

***Workplace Culture***

We believe our talent is one of our greatest competitive advantages. We are dedicated to strengthening our high-performance, values-based culture—an environment grounded in fairness that provides our team members opportunities to thrive. By fostering a workplace that embraces a mix of skills, experiences and backgrounds, we empower our employees to be increasingly productive, innovative and engaged.

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**Manufacturing and Environmental Matters**

We use various raw materials — primarily paper, plastic films and resins, as well as specialty chemicals purchased from various commercial and industrial sources — that can be subject to significant price fluctuations. Although shortages can occur from time to time, these raw materials are generally available.

We produce the majority of our self-adhesive materials using water-based emulsion and hot-melt adhesive technologies. A portion of our manufacturing process for self-adhesive materials utilizes organic solvents, which, unless controlled, could be emitted into the atmosphere or contaminate soil or groundwater. Emissions from these operations contain small amounts of volatile organic compounds, which are regulated by federal, state, local and foreign governments. In connection with the maintenance and acquisition of certain manufacturing equipment, we invest in solvent capture and control units to assist in regulating these emissions.

We have developed adhesives and adhesive processing systems that minimize the use of solvents. Emulsion adhesives, hot-melt adhesives, and solventless and emulsion silicone systems have been installed in many of our facilities.

Based on current information, we do not believe that the cost of complying with applicable laws regulating the emission or discharge of materials into the environment, or otherwise relating to the protection of the environment, will have a material effect upon our capital expenditures, financial position, results of operations or competitive position.

For information regarding our potential responsibility for cleanup costs at certain hazardous waste sites, see Note 8, "Contingencies," in the Notes to Consolidated Financial Statements.

**Available Information**

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed with, or furnished to, the Securities and Exchange Commission ("SEC") pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available free of charge on our investor website at www.investors.averydennison.com as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. This website address is not intended to function as a hyperlink and the information located there is not, nor should it be considered, part of this report or incorporated by reference into this report. We also make available on the investors section of our website under "Governance Documents" the following documents as currently in effect: (i) Amended and Restated Certificate of Incorporation, as amended; (ii) Amended and Restated Bylaws; (iii) Corporate Governance Guidelines; (iv) Code of Conduct, which applies to our directors, officers and employees; (v) Code of Ethics for our Chief Executive Officer and Senior Financial Officers; (vi) charters of the Audit, Talent and Compensation, Governance, Cybersecurity, and Finance Committees of our Board of Directors; and (vii) Audit Committee Complaint Procedures for Accounting and Auditing Matters. These documents are also available free of charge upon written request to our Corporate Secretary, Avery Dennison Corporation, 8080 Norton Parkway, Mentor, Ohio 44060.

Reports filed with or furnished to the SEC may be viewed at www.sec.gov.

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**Item 1A. RISK FACTORS**

The risk factors described in this section could materially adversely affect our business, including our results of operations, cash flows and financial condition, and cause the value of our securities to decline. This list of risks is not exhaustive. Our ability to attain our goals and objectives is dependent on numerous factors and risks, including, but not limited to, the most significant ones described in this section.

**Risk Related to Our International Operations**

**The demand for our products is impacted by the effects of, and changes in, worldwide economic, geopolitical, social and labor conditions, which have had in the past and could in the future have a material adverse effect on our business.**

We have operations in more than 50 countries and our domestic and international operations are strongly influenced by matters beyond our control, including changes in economic, geopolitical, social and labor conditions, tax laws, and U.S. and international trade regulations (including tariffs), as well as the impact these changes have on demand for our products. In 2025, approximately 69% of our net sales originated outside the U.S.

Macroeconomic developments such as impacts from slower growth in the geographic regions in which we operate; inflation resulting from, among other things, increased raw material, energy and freight costs; labor shortages; geopolitical, social, supply chain and other disruptions; epidemics, pandemics or other outbreaks of illness, disease or virus; and uncertainty in global credit or financial markets could result in a material adverse effect on our business as a result of, among other things, lower consumer spending, fluctuations in foreign currency exchange rates, reduced asset valuations, diminished liquidity and credit availability, volatility in securities prices, and credit rating downgrades.

Trade-related uncertainty remains elevated between the U.S. and other regions and countries, including Canada, Mexico, China, India and the European Union. In 2025, the U.S. implemented a 10% global baseline tariff rate on nearly all imports, with higher rates on certain goods. Additionally, it applied significant tariffs on goods from Canada, Mexico, China and the European Union, each of which announced reciprocal tariffs. The amount of these tariffs or the classes of goods on which they are applied continues to evolve and could significantly change. The U.S. government continues to negotiate with countries regarding the tariffs. In July 2025, the U.S. and the European Union agreed to a framework for a trade deal that included a baseline tariff rate of 15% on most goods imported from the European Union into the U.S. While the direct impacts on our operations after our mitigating actions have not been significant, our business could be materially adversely impacted by changes in U.S. and non-U.S. trade policies, including potential modifications to existing trade agreements and additional tariffs or other restrictions on free trade, impacting our raw materials or finished products. The indirect impact on demand for our products and solutions as a result of these events, which have resulted in softer consumer volumes, continues to be uncertain and elevated. We estimate that the indirect impact of tariffs resulted in an aggregate low single digit rate decrease in sales in our overall apparel categories over the second, third and fourth quarters of 2025. On February 20, 2026, the U.S. Supreme Court issued a decision holding that the International Emergency Economic Powers Act does not authorize the President to impose tariffs. While this may provide immediate relief from these specific duties, there will likely be a period of trade policy instability. Further developments in international trade relations, including increased deglobalization, could have a material adverse effect on our business.

In addition, business and operational disruptions or delays caused by geopolitical, social or economic instability and unrest – such as recent civil, political and economic disturbances in Syria, Yemen, Iran, Turkey, North Korea, and Bangladesh and the related impact on global stability, the Russia-Ukraine war, the Israel-Hamas war, the U.S.'s engagement in Venezuela, terrorist attacks and the potential for other hostilities or natural disasters in various parts of the world – could have a material adverse effect on our business. Since the Russia-Ukraine war began in 2022, we have maintained our position of not shipping products to the Russian market. The impact of the continuing war, as well as any further retaliatory actions taken by Russia, the U.S., the European Union and other jurisdictions, is unknown and could have a material adverse effect on our business. In addition, our sales in Israel have not recovered since the beginning of the Israel-Hamas war in late 2023, with sales representing less than 1% of our total net sales in 2025. The continued impact of this war and any related hostilities in the Middle East region or elsewhere is unknown and could have a material adverse effect on our business.

We are not able to predict the duration and severity of adverse economic, geopolitical, social, or labor conditions in the U.S. or other countries.

**Foreign currency exchange rates, and fluctuations in those rates, affect our business.**

The majority of our net sales in 2025 was denominated in foreign currencies. Our financial results are therefore subject to the impact of currency translation, which may be material. Overall, our foreign currency transaction exposure is largely mitigated because the costs of our products are generally denominated in the same currencies in which they are sold.

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Fluctuations in foreign currency exchange rates, such as the unfavorable impacts associated with the Indian rupee and Brazilian real and favorable impacts associated with the euro in 2025, may result in a variety of negative effects, including lower net sales, increased costs, lower gross margins, increased allowance for credit losses and/or write-offs of accounts receivable, and required recognition of impairments of capitalized assets, including goodwill and other intangible assets. Foreign currency translation increased our 2025 net sales by approximately $29 million compared to the prior year.

We monitor our foreign currency exposures and sometimes use hedging instruments to mitigate some of our transactional exposure to changes in foreign currencies. The effectiveness of our hedges in part depends on our ability to accurately forecast our future cash flows, which is particularly difficult during periods of uncertain demand for our products and services and volatile foreign currency exchange rates. Our hedging activities may offset only a portion, or none at all, of the material adverse financial effects of unfavorable movements in foreign currency exchange rates over the limited time the hedges are in place and we may incur significant losses from these activities.

**Our operations and activities outside of the U.S. subject us to risks different from and potentially greater than those associated with our domestic operations.**

A substantial portion of our employees and assets are located outside of the U.S. and, in 2025, approximately 69% of our net sales were generated outside of the U.S. International operations and activities involve risks that are different from and potentially greater than the risks we face in our domestic operations, including changes in foreign geopolitical, regulatory and economic conditions, whether nationally, regionally or locally; changes in foreign currency exchange rates; differing levels of inflation; reduced protection of intellectual property rights; laws and regulations impacting our ability to repatriate foreign earnings; challenges complying with foreign laws and regulations, including those relating to sales, operations, taxes, employment and legal proceedings; establishing effective controls and procedures to monitor compliance with U.S. laws and regulations; differences in lending practices; and challenges with complying with applicable export and import control laws and regulations.

**Our strategy includes continuing to grow in emerging markets, which exposes us to less stable geopolitical conditions, civil unrest, economic volatility, and other risks applicable to operating in these regions.**

Approximately 40% of our net sales in 2025 originated in emerging markets. The profitable growth of our business in emerging markets is an important part of our long-term growth strategy and our regional results have and can fluctuate significantly based on their economic conditions and other events that occur more frequently in these markets and can significantly and adversely impact our operations (such as power outages, civil unrest or other hostilities, and labor stoppages). Our business operations have been and may continue to be adversely affected by the current and future political environment in China, both relating to in-country changes in laws and regulations or the interpretation thereof, as well as a result of its response to tariffs by the U.S. government on goods imported from China, tariffs by China on U.S. goods, the increasing use of economic sanctions and export control restrictions, and tensions related to Hong Kong and Taiwan.

If we are unable to successfully expand our business in emerging markets or achieve the return on capital we expect from our investments in these countries, our financial performance would be materially adversely affected. In addition to the risks applicable to our international operations, factors that have negatively impacted our operations in emerging markets from time to time include the less established or reliable legal systems and possible disruptions due to unstable geopolitical conditions, civil unrest or economic volatility. These factors can have a material adverse effect on our business in the affected markets by decreasing consumer purchasing power, reducing demand for our products or increasing our costs.

**Risks Related to Our Business**

**As a manufacturer, our sales and profitability depend upon the availability and cost of raw materials and energy, which may be subject to significant price fluctuations, and our ability to control or offset increases in raw material and labor costs. Raw material and freight cost increases have impacted our business.**

Raw materials represent a significant portion of our costs and a critical factor in our profitability. The markets for the raw materials used in our businesses can be volatile, impacting availability and pricing. Additionally, energy costs can be volatile and unpredictable. Shortages and inflationary or other increases in the costs of raw materials, labor, freight and energy have occurred in the past, and could recur. In past years, we implemented targeted price increases in our Materials Group reportable segment to address raw material inflation; more recently, we implemented deflation-related price reductions as a result of lower raw material costs. If we experience inflationary headwinds in the future, we may implement similar pricing actions. Our performance depends in part on our ability to offset increased raw material costs by raising our selling prices or re-engineering our products.

It is also important for us to obtain timely delivery of materials, equipment and other resources from suppliers, and to make timely delivery to customers. We may experience supply chain disruptions due to natural and other disasters or other events, or our existing relationships with suppliers could deteriorate or end in the future. While we undertake business continuity planning and take actions to mitigate these disruptions when they occur, such as sourcing from other regions or suppliers, any disruption in our supply chain could negatively impact our sales and profitability, and any sustained inability to obtain adequate supplies could have a material adverse effect on our business.

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**We are affected by changes in our markets due to competitive conditions, technological developments, laws and regulations, and customer preferences. If we do not compete effectively or respond appropriately to these changes, it could reduce demand for our products and solutions, or we could lose market share or reduce our selling prices to maintain market share, any of which could materially adversely affect our business.**

Growing the proportion of our portfolio in high-value categories that serve markets that are growing faster than gross domestic product, represent large pools of potential profit and leverage our core capabilities is an important part of our long-term growth strategy. High-value products and solutions include our specialty and durable label materials, graphics and reflective solutions, industrial and medical tapes, and trade and specialty adhesives; intelligent labels that use RFID tags and inlays; shelf-edge pricing, productivity and consumer engagement solutions; and external embellishments. We face the risk that existing or new competitors, which include some of our customers, distributors and suppliers, will expand in our key market segments or develop new technologies, including in high-value categories, enhancing their competitive position relative to ours. Competitors also may be able to offer products, services, lower prices or other incentives that we cannot or that, to maintain profitability, we may not be able to offer. There can be no assurance that we will be able to compete successfully against current or future competitors or new technologies.

We are also exposed to changes in customer order patterns, such as changes in the levels of inventory maintained by customers and the timing of customer purchases and new intelligent label program rollouts, which are affected by announced pricing actions, changes in our customer incentive programs, our customers' ability to achieve incentive targets, as well as changes in trade policy. Changes in customers' preferences for our products can also decrease demand for our products and have a material adverse effect on our business. In our Solutions Group reportable segment, sales in our overall apparel categories declined in 2025 as a result of tariff-related uncertainty. In our Materials Group reportable segment, as supply chain constraints eased in 2022, customers increased inventory levels following a period of reduced availability. In the fourth quarter of 2022, inventories downstream from our company began to unwind swiftly, resulting in lower demand. This continued in 2023, with volume improving sequentially throughout that year and normalizing in 2024.

**We are affected by changes in our markets due to increasing environmental regulations and sustainability trends. If we do not respond appropriately to these changes, it could negatively impact customer demand, our market share and pricing, any of which could materially adversely affect our business. Adverse weather conditions and natural disasters, including those related to the impacts of climate change, have and can adversely affect our business.**

A substantial amount of our label materials is sold for use in packaging in the food, beverage, and home and personal care market segments. In recent years, there has been an accelerated focus on sustainability and transparency in sustainability reporting, with greater concern regarding climate change and single-use plastics, corporate commitments and increasing stakeholder expectations regarding the reuse and recyclability of plastic packaging and recycled content, and increased regulation in multiple geographies regarding the collection, recycling and use of recycled content. Changes in consumer preferences, laws and regulations related to the use of raw materials and extended producer responsibility rules focused on the end-of-life of products, particularly in Europe and certain states in the United States, present the risk of reduced demand for certain of our products if customers seek decoration technology alternatives to pressure-sensitive labeling, but also the opportunity for increased demand for our more sustainable products, a significant focus of our research and development and related innovation efforts. We have established strategic innovation platforms and priorities focused, among other things, on delivering products and solutions that advance the circular economy, reduce supply chain waste and address the need for increased recyclability of packaging. We have made substantial investments in our sustainability-driven products, but there can be no assurance that they will be successful, and a significant reduction in the use of packaging could materially adversely affect demand for our products.

Changes in sustainability-focused regulation present a risk to our business. In February 2026, the U.S. Environmental Protection Agency rescinded its 2009 Greenhouse Gas Endangerment Finding, which served as the foundation for various regulations of GHG emissions. Conversely, while currently in a state of flux, reporting requirements such as the European Union's Corporate Sustainability Reporting Directive, which will impose additional disclosure requirements for our company beginning in 2028 (based on 2027 data), and the state of California's climate reporting requirements are expected to increase the amount of sustainability data we are required to generate, audit, verify through third-parties and disclose. Developments in regulatory actions regarding these matters are likely to continue and may require conflicting responses, which could divert the attention of management. In addition, costs to comply with these regulations are likely to grow and any failure to meet the requirements of these regulations could result in fines or other penalties.

The scientific consensus is that emissions of greenhouse gases ("GHG") are altering our atmosphere in ways that are adversely affecting global climate. There is continuing concern from members of the scientific community and the general public that GHG emissions and other human activities will continue causing significant changes in weather patterns and increase the frequency or severity of extreme weather events, including droughts, wildfires and flooding. These types of extreme weather events have and may continue to adversely impact us, our suppliers and our customers, including their ability to purchase our products and our ability to timely receive appropriate raw materials to manufacture and transport our products on a timely basis. The extent of the impact of climate change on our business is uncertain, as it will depend on the limits imposed by, and timing of, new or stricter laws and regulations, more stringent environmental standards and expectations, and evolving customer and consumer preferences, but it is likely to increase our costs and could have a material adverse effect on our business. After partnering with a third-party expert to assess our disclosures against the recommendations regarding the information that companies should disclose to allow their stakeholders to assess and price

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their climate-related risks, we have preliminarily aligned our reporting with Financial Stability Board's Task Force on Climate-related Financial Disclosures requirements.

Concern regarding climate change has also led and is likely to continue leading to increasing demands by legislators and regulators, customers, consumers, investors, employees and non-governmental organizations for companies to reduce their GHG emissions. We exceeded our 2025 sustainability goal to achieve a 26% absolute cumulative reduction in our GHG emissions from our 2015 baseline, delivering an absolute cumulative reduction of approximately 60%. As part of our more ambitious 2030 sustainability goals, we are aiming by 2030 to reduce our Scope 1 and 2 GHG emissions by 70% compared to our 2015 baseline and work with our supply chain to reduce Scope 3 GHG emissions. We could face risks to our reputation, investor confidence and market share if we are unable to continue reducing our GHG emissions at levels satisfactory to our stakeholders.

**We have recently acquired companies and are likely to acquire other companies. Acquisitions come with significant risks and uncertainties, including those related to integration, technology and employees.**

To drive our strategies to increase the proportion of our business from high-value categories, enhance our portfolio by growing our existing businesses and expanding into new areas, and accelerate market-driven innovation, we have made acquisitions and are likely to continue acquiring companies. In 2025, we acquired Taylor Adhesives for purchase consideration of approximately $390 million. The success of any acquisition depends on the ability of the combined company to realize the anticipated benefits from combining our businesses. Realizing these benefits depends, in part, on maintaining adequate focus on executing the business strategies of the combined company as well as the successful integration of assets, operations, functions and personnel. We continue to evaluate acquisition targets and ensure we have a pipeline of potential opportunities.

Various risks, uncertainties and costs are associated with acquisitions. Effective integration of systems, controls, employees, product lines, market segments, customers, suppliers and production facilities and cost savings can be difficult to achieve and the success of integration activities can be uncertain. While we have not experienced significant issues with our recent acquisitions, if management of our combined company is unable to minimize the potential disruption of the combined company's ongoing business during the integration process, the anticipated benefits of any acquisition may not be fully realized. In addition, the inability to successfully manage the implementation of appropriate systems, policies, benefits and compliance programs for the combined company could have a material adverse effect on our business. We may not be able to retain key employees of an acquired company or achieve the projected performance targets for the business into which an acquired company is integrated. Both before and after the closing of an acquisition, our business and that of the acquired company may suffer due to uncertainty or diversion of management attention. Future acquisitions could result in increased debt, dilution, liabilities, interest expense, restructuring charges and amortization expenses related to intangible assets. There can be no assurance that acquisitions will be successful, contribute to our profitability or drive accretive returns. Further, we may not be able to identify additional value-accretive acquisition targets that can advance our strategies or be able to successfully execute additional acquisitions in the future.

**A significant consolidation of our customer base could negatively impact our business.**

A significant consolidation of our customer base could negatively impact our business. In 2025, no single customer represented 10% or more of our net sales, with our customer base highly fragmented. In recent years, some of the converter customers served by our Materials Group reportable segment have consolidated and integrated vertically and some of our largest customers have acquired companies with similar or complementary product lines. Industry consolidation could continue to increase the concentration of our business with our largest customers. Further consolidation may increase pressure from customers for us to lower our selling prices. While we have been generally successful at managing customer consolidations in the past, increased pricing pressures from our customers could have a material adverse effect on our business.

**Because some of our products are sold by third parties, our business depends in part on the financial condition of these parties and their customers.**

Some of our products are sold by third-party distributors. Some of our distributors also market products that compete with our products. Changes in the financial or business conditions, including economic weakness, market trends or industry consolidation, or the purchasing decisions of these distributors or their customers, could materially adversely affect our business.

**Our reputation, sales, and earnings could be materially adversely affected if the quality of our products and services does not meet customer expectations. In addition, product liability claims or regulatory actions could materially adversely affect our business and reputation.**

There are times when we experience product quality issues resulting from defective materials, manufacturing, packaging or design. These issues are often discovered before shipping, causing delays in shipping, delays in the manufacturing process, or, occasionally, cancelled orders. When issues are discovered after shipment, they may result in additional shipping costs, discounts, refunds or loss of future sales. Both pre-shipping and post-shipping quality issues could have a material adverse effect on our business and negatively impact our reputation.

Claims for losses or injuries purportedly caused by some of our products arise in the ordinary course of our business. Although we maintain product liability insurance coverage, claims are subject to a deductible or may not be covered under

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the terms of the policy. In addition to the risk of substantial monetary judgments and penalties that could have a material adverse effect on our business, product liability claims or regulatory actions could result in negative publicity, reputational harm or loss of brand value. We also could be required to recall and possibly discontinue the sale of products deemed to be defective or unsafe, which could result in adverse publicity and significant expense.

**Changes in our business strategies and the restructuring of our operations affect our costs and the profitability of our businesses. In addition, our profitability may be materially adversely affected if we generate less productivity improvement from our restructuring and other cost reduction actions than anticipated.**

As our business environment changes, we have adjusted and may need to further adjust our business strategies, restructure our operations or particular businesses, or adjust our operational footprint. As we continue to develop and adjust our growth strategies, we may invest in new businesses that have short-term returns that are negative or low and whose ultimate business prospects are uncertain or could be unprofitable.

We engage in restructuring actions from time to time to reduce our costs and increase efficiencies. We expended approximately $47 million in 2025 compared to approximately $42 million related to restructuring actions in 2024. Our restructuring actions in 2025 related to various locations across our company in both our Solutions Group and Materials Group reportable segments. We had incremental savings from restructuring actions, net of transition costs, of more than $60 million in 2025. As part of our continuous efficiency improvement culture, we intend to continue our efforts to reduce costs, which have in the past included, and may continue to include, facility closures and square footage reductions, headcount reductions, organizational restructuring, process standardization, and manufacturing relocation. For example, in 2025, we completed a European footprint optimization in Belgium for our Materials Group reportable segment, and in 2024, we consolidated our Solutions Group reportable segment's operations in Mexico. The success of these efforts is not assured and targeted savings may not be realized. In addition, cost reduction actions can result in restructuring charges and could expose us to production risk, loss of sales and employee turnover. We cannot provide assurance that we will achieve the intended results of any of our restructuring and other cost reduction actions, which involve operational complexities, consume management attention and require substantial resources and effort. If we fail to achieve the intended results of such actions, our costs could increase, our assets could be impaired, and our savings from these actions could be lower than expected.

**Our ability to develop and successfully market new products and applications impacts our competitive position.**

The timely introduction of new products and improvements to current products helps determine our success. Many of our current products are the result of our research and development efforts, for which we expensed $137 million in 2025. These efforts are directed primarily toward developing new products and solutions and operating techniques and improving product performance, often in close association with our customers or end users. These efforts include patent and product development work relating to printing and coating technologies, as well as adhesive, release and ink chemistries in our Materials Group reportable segment. We focus on research projects related to RFID, external embellishments and digital solutions in our Solutions Group reportable segment. Additionally, our research and development efforts include sustainable innovation and design of products that increase the use of recycled content, reduce waste, extend life or enable recycling. Research and development requires innovation and anticipation of market trends, which means that the costs of these expenditures may not be recovered through additional sales. We could focus on products that ultimately are not accepted by customers or end users or we could experience delays in the production or launch of new products that could compromise our competitive position.

**Our infrastructure needs impact our business and expenditures.**

We continue to invest in our long-term growth and margin expansion plans, with approximately $200 million in capital expenditures, including fixed assets and information technology, in 2025. We may not be able to recoup the costs of our infrastructure investments if actual demand is not as we anticipate. In 2025, we opened our first RFID inlay and label production site in India. Additionally, in recent years, we expanded our Materials Group's manufacturing capabilities in Brazil, France, India, China and Ohio; moved our Solutions Group's Vietnam business into a new, expanded facility; and made additional investments in both capacity and business development globally for our Intelligent Labels platform. Infrastructure investments, which are long-term in nature, may not generate the expected return due to changes in the marketplace, unanticipated challenges in execution, and other factors. Significant changes from our expected need for and/or returns on our infrastructure investments could materially adversely affect our business.

**Difficulty in the collection of receivables as a result of economic conditions or other market factors could have a material adverse effect on our business.**

Although we have processes to administer credit granted to customers and believe our allowance for credit losses is adequate, we have in the past had to increase the allowance due to, among other things, epidemics, pandemics or other outbreaks of illness, supply chain challenges, regulatory restrictions and inflationary pressures, and in the future may experience losses as a result of our inability to collect some of our accounts receivable. A customer's financial difficulties are likely to result in reduced business with that customer. We may also assume higher credit risk relating to receivables of a customer experiencing financial difficulty. In January 2026, a large customer of our Materials Group reportable segment filed for prepackaged Chapter 11 bankruptcy protection; we currently expect to collect on our prepetition outstanding receivables from this customer. If these developments were to occur widely in our customer base, our inability to collect on our accounts receivable could substantially reduce our cash flows and income and have a material adverse effect on our business.

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**There is a rapidly evolving awareness and focus from certain stakeholders, including our investors, customers and employees, with respect to our company's sustainability and governance practices, which could affect our business.**

Investor and societal expectations with respect to sustainability or governance matters continue to evolve, with some stakeholders seeking companies to demonstrate progress with respect to environmental stewardship, human capital, corporate governance, support for our communities, and transparency, and other stakeholders suggesting that companies focus on delivering for their stockholders to the exclusion of focus in these other areas. A failure to adequately meet evolving stakeholder expectations and timely comply with competing regulatory requirements at the federal, state and local levels could result in loss of business, diluted market valuation, an inability to attract and retain customers and personnel, increased negative investor sentiment toward us and/or our customers and the diversion of investment to other industries, which could have a negative impact on our stock price and access to and cost of capital.

**Risks Related to Information Technology**

**Significant disruption to the information technology infrastructure that stores our information and runs our operations could materially adversely affect our business.** 

We rely on the efficient and uninterrupted operation of a large and complex information technology infrastructure to link our global business. Like all information technology systems, ours are susceptible to a number of risks including, but not limited to, damage or interruptions resulting from obsolescence, natural disasters, power failures, human error, viruses, social engineering, phishing, ransomware or other malicious attacks and cybersecurity events. We upgrade and install new systems, which, if installed or programmed incorrectly or on a delayed timeframe, could cause delays or cancellations of customer orders, impede the manufacture or shipment of products, or disrupt the processing of transactions. We have continued to implement measures to mitigate our risk related to system and network disruptions, but if a significant disruption were to occur, we could incur losses and remediation costs that could have a material adverse effect on our business.

Additionally, we rely on services provided by third-party vendors for certain information technology processes, including system infrastructure management, application management, and software as a service. While we have matured our cybersecurity due diligence process, this reliance on third parties makes our operations vulnerable to a failure by any one of these vendors to perform adequately or maintain effective internal controls.

**Cybersecurity or other security breaches could compromise our information and expose us to liability, which could have a material adverse effect on our business and reputation.**

We maintain information necessary to conduct our business in digital form, which is stored in data centers and on our networks and third-party cloud services, including confidential and proprietary information as well as personal information regarding our customers and employees. The secure maintenance of this information is critical to our operations. Data maintained in digital form and on cloud services is subject to the risk of intrusion, tampering and theft. We develop and maintain systems and processes at significant cost to prevent this from occurring, and conduct ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. We experience non-material cybersecurity events each year that are escalated through our documented and tested security incident response plan, and although we have not experienced a significant breach in recent years, the possibility of intrusion, tampering and theft cannot be eliminated entirely. Our information technology and infrastructure are vulnerable to attacks by threat actors or system compromises due to employee error, malfeasance or other disruptions, and the threat landscape remains challenging with our digital business transformation, remote or hybrid employees, the increasing use of artificial intelligence ("AI"), and interconnected supply chains expanding the risk of attack. Threat actors are increasingly leveraging AI for cyberattacks, and our increasing use of AI carries risks related to data security, privacy events, and potential algorithmic bias. These AI risks could lead to operational disruptions, regulatory investigations or actions, data security events and potential financial loss.

We also perform cybersecurity due diligence and mitigate identified risks during our due diligence process related to potential acquisitions; however, there is still a risk that a recent or future acquisition experiences an event that could lead to a breach before risks are able to be mitigated. Additionally, we provide confidential, proprietary and personal information to third parties when it is necessary to pursue business objectives. While we obtain written agreements and assurances that these third parties will protect this information and, where appropriate, assess the protections utilized by these third parties, we are aware of suppliers in our ecosystem who have experienced security events, and there is a risk that confidentiality of data held by third parties may be compromised.

Breaches or attacks can compromise our network, the network of a third party to whom we have disclosed confidential, proprietary or personal information, a data center where we have stored such information or a third-party cloud service provider, and the information stored there could be accessed, publicly disclosed, lost or stolen. Any access, disclosure or loss of information could disrupt our operations, impair our ability to conduct business, result in legal claims or proceedings, damage our reputation, or result in the loss or diminished value of profitable opportunities and the loss of revenue as a result of unlicensed use of our intellectual property. Contractual provisions with third parties, including cloud service providers, substantially limit our ability to fully recover these potential losses. If the personal information of our customers or employees were to be misappropriated, we could incur costs to compensate our customers or employees or

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pay damages or fines as a result of litigation or regulatory actions and our reputation with our customers and employees could be injured, resulting in loss of business or decline in employee morale. Data privacy legislation and regulation have been increasing in recent years – including, for example, the General Data Protection Regulation in the EU, the Personal Information Protection Law in China, the General Data Protection Law in Brazil and the state of California's Privacy Rights Act – and although we have made reasonable efforts to comply with all applicable laws and regulations, there can be no assurance that we will not be subject to regulatory action in the event of a data privacy violation.

Cybersecurity risk and ransomware attacks on companies continue to significantly increase and there can be no assurance that we have fully protected our information, that third parties to whom we have disclosed such information or with whom we have stored such information (in data centers and in the cloud) have taken effective precautions, or that we will not experience hacking or intrusion attempts that could have a material adverse effect on our business. In addition to maintaining a comprehensive set of endpoint, network, email and cloud security solutions, we continue to take steps to further improve the security of our networks and systems, including maturing our zero trust architecture and strategy; enhancing and testing our security incident response plan; maturing our operational technology security program; implementing more robust cloud security across multiple platforms; establishing AI policies, governance and risk management; maturing our data loss prevention framework to protect our critical data, network and site access controls; increasing network segmentation; enhancing our focus on third party risk management; and improving our capabilities based on threat intelligence and the publicized incidents experienced by other companies, as well as ones that we have experienced despite their minimal operational or financial impact to date.

**Risks Related to Income Taxes**

**Changes in our tax rates affect our business.** 

Our effective tax rate is affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws and regulations or their interpretation. The impact of these changes could materially impact our business.

**Legislation implementing changes in taxation of business activities, adoption of other corporate tax policies, or other changes in tax legislation impact our business.**

The prevention of base-erosion and tax transparency continue to be high priorities for many tax jurisdictions worldwide. As a result, policies regarding corporate income and other taxes remain under heightened scrutiny globally. Due to the size of our international business activities, any substantial change in corporate tax policies, tax enforcement activities or legislative or regulatory tax-related actions could have a material adverse effect on our business.

**The amount of income taxes we pay is subject to ongoing compliance requirements and audits by federal, state and foreign tax authorities.**

We are subject to regular examinations of our income tax returns by various tax authorities. We regularly assess the likelihood of material adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. In addition, tax enforcement has become increasingly aggressive in recent years focused primarily on transfer pricing and intercompany documentation. Our estimate of the potential outcome of uncertain tax issues requires significant judgment and is subject to our assessment of relevant risks, facts and circumstances existing at the time. We use these assessments to determine the adequacy of our provision for income taxes and other tax-related accounts. Our results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may materially adversely affect our effective tax rate.

**We have deferred tax assets that we may not be able to realize under certain circumstances.**

If we are unable to generate sufficient taxable income in certain jurisdictions, or if there is a significant change in the time period within which the underlying temporary differences become taxable or deductible, we could be required to increase our valuation allowances against our deferred tax assets. This would increase our effective tax rate and could have a material adverse effect on our business. In addition, changes in statutory tax rates may change our deferred tax asset or liability balances, with either a favorable or unfavorable impact on our effective tax rate. A significant portion of our indefinite-lived net operating loss carryforwards is concentrated in Luxembourg and may require decades to be fully utilized under our current business model. Decreases in the statutory tax rate or changes in our ability to generate sufficient future taxable income in Luxembourg could materially adversely affect our effective tax rate. In addition, the computation and assessment of the realizability of our deferred tax assets may also be materially impacted by new legislation or regulations.

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**Risks Related to Human Capital**

**For us to remain competitive, deliver on our business strategy and avoid business disruption, it is important to recruit high caliber talent, retain key management and highly-skilled employees and receive high quality service from all outsourced service providers. This includes providing market-competitive compensation and benefits and ensuring an engaged global team.**

Competition to recruit and retain critical talent was challenging in recent years. Our ongoing productivity efforts and restructuring actions can increase this challenge. When it comes to our outsourced service providers, we have experienced delays or errors and reduced resource availability and managed ongoing risk when it comes to people, processes and software.

Executive succession planning is critical to our long-term success. While we believe we have appropriate leadership development programs and succession plans in place that are regularly discussed with the Talent and Compensation Committee of our Board of Directors (our "Board"), any failure to ensure effective leadership transitions and knowledge transfer involving key management or other highly-skilled employees could hinder our strategic planning and execution.

**We have various non-U.S. collective labor arrangements, which make us subject to potential work stoppages, as well as union and works council campaigns and other labor disputes, any of which could adversely impact our business.**

Work interruptions or stoppages at our company or our suppliers could significantly impact our ability to deliver for our customers. In addition, collective bargaining agreements, union contracts and labor laws may impair our ability to close or downsize manufacturing facilities because of limitations on personnel and salary and other restrictions. A work stoppage at one or more of our facilities, or the facilities of our customers or suppliers, could have a material adverse effect on our business.

In addition, the recent and ongoing geopolitical unrest and weather-related effects of climate change in numerous regions could impact the safety and productivity of our employees. Those impacts could also hinder our ability to recruit and retain talent in the impacted regions/countries.

**Risks Related to Our Indebtedness**

**If our indebtedness increases significantly or our credit ratings are downgraded, we may have difficulty obtaining short- and long-term financing on acceptable terms and conditions.**

At December 31, 2025, we had approximately $3.73 billion of debt. Our level of indebtedness and credit ratings are significant factors in our ability to obtain short- and long-term financing. Significantly unfavorable changes in our debt leverage position and/or lower credit ratings could negatively impact our ability to issue debt at favorable terms to support our business needs and result in higher financing costs. A downgrade of our short-term credit ratings could impact our ability to access the commercial paper markets and increase our borrowing costs on commercial paper or alternative funding sources, including our revolving credit facility (the "Revolver") or other credit facilities. If our access to commercial paper markets were to become limited, we would need to obtain short-term funding under our Revolver, which would expose us to variable interest rates.

**An increase in interest rates adversely affects our business.**

In 2025, our average variable-rate borrowings were approximately $739 million. Increases in short-term interest rates directly impact the amount of interest we pay. Fluctuations in interest rates can increase our borrowing costs and have a material adverse effect on our business.

After several years of raising interest rates in an effort to curb rising inflation across the globe, the U.S. Federal Reserve and similar monetary policymaking entities around the world modestly reduced rates in 2025. As of December 31, 2025, the U.S. Federal Reserve's benchmark interest rate was between 3.50% and 3.75%, down from between 4.25% and 4.50% at year-end 2024. When long- and short-term interest rates rise, our borrowing costs increase. Continued increases in interest rates could, among other things, reduce the availability and/or increase the costs of obtaining new debt and refinancing existing indebtedness and negatively impact our business.

**Our current and future debt covenants may limit our flexibility.**

Our credit facilities and the indentures governing our medium- and long-term notes contain, and any of our future indebtedness likely would contain, restrictive covenants that impose operating and financial restrictions on us. Among other things, these covenants restrict our ability to incur additional indebtedness, incur certain liens on our assets, make certain investments, sell our assets or merge with third parties, or enter into certain transactions. The Revolver contains a financial covenant that requires us to maintain a maximum leverage ratio. Refer to "Capital Resources" in Item 7. "Management's Discussion and Analysis of Financial Condition and Result of Operations" of this Annual Report on Form 10-K for more information about this financial covenant. These restrictive covenants and ratios may limit or prohibit us from engaging in certain activities and transactions that may be in our best interest, which could materially adversely affect our business. The failure to comply with these or other covenants governing other indebtedness, including indebtedness incurred in the future,

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could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition and result of operations, including by triggering cross-defaults in other debt facilities.

**Risk Related to Ownership of Our Stock**

**Our stock price is subject to significant variability.**

Changes in our stock price, among other things, affect our access to, or cost of financing from, capital markets, our stock-based compensation arrangements and our effective tax rate. Our stock price, which declined during the second half of 2024 and remained relatively stable during 2025, is influenced by changes in the overall stock market and demand for equity securities in general. Other factors, including our financial performance on an absolute basis and relative to peer companies and competitors, as well as market expectations of our performance, the level of perceived growth or profit of the industries we serve, and other company-specific factors, may also materially adversely affect our stock price. There can be no assurance that our stock price will not continue to experience significant variability in the future.

**We cannot guarantee that we will continue to repurchase shares of our common stock or pay dividends on our common stock or that repurchases will enhance long-term stockholder value. Changes in our levels of stock repurchases or dividends could affect our stock price and increase its variability.**

In April 2025, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, in addition to the amount of shares that were then available for repurchase under our previous Board authorization. In 2025, we repurchased 3.2 million shares of our common stock at an aggregate cost of $575.6 million. As of December 31, 2025, shares of our common stock in the aggregate amount of $526.3 million remained authorized for repurchase under the 2025 Board authorization. We repurchase shares through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions. Our share repurchase authorizations do not obligate us to acquire any specific number of shares or to repurchase any specific number of shares for any fixed period. The timing and amount of our repurchases, if any, are subject to our capital allocation strategy as it may evolve from time to time, our view of intrinsic value coupled with a disciplined repurchase grid, market and economic conditions, applicable legal requirements and other relevant factors. We may limit, suspend or discontinue repurchasing shares at any time at our discretion without prior notice.

Paying a sustainable dividend is a key part of our capital allocation strategy. Although we increased our quarterly dividend rate by approximately 7% in April 2025, there can be no assurance that we will maintain this rate or approve further increases in the future. We are not obligated to continue declaring dividends, and our payment of dividends could be suspended or discontinued at any time at the discretion of our Board. We will continue to retain future earnings to develop our business, as opportunities arise, and evaluate the amount and timing of future dividends based on our operating results, financial condition, capital allocation strategies and general business conditions. The amount and timing of any future dividends may vary, and the payment of any dividend does not assure that we will pay dividends in the future.

In addition, any future repurchases of our common stock or payment of dividends, or any determination to cease repurchasing stock or paying dividends, could affect our stock price and significantly increase its variability. Additionally, any future repurchases of our common stock or payment of dividends could impact our ability to invest in our businesses or pursue acquisitions and venture investments. Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so because the market price of our common stock may decline below the levels at which we repurchased shares of stock and short-term stock price fluctuations could reduce the program's effectiveness.

**Risks Related to Legal and Regulatory Matters**

**Infringing intellectual property rights of third parties or inadequately acquiring or protecting our intellectual property could harm our ability to compete or grow.**

Because our products involve complex technology and chemistry, we are involved from time to time in litigation involving patents and other intellectual property. Parties have filed, and in the future may file, claims against us alleging that we have infringed their intellectual property rights. We were party to a litigation, which we settled in 2024, in which ADASA Inc. ("Adasa"), an unrelated third party, alleged that certain of our RFID products within our Solutions Group reportable segment infringed its patent. For more information on this litigation, see Note 8, "Contingencies," in the Notes to Consolidated Financial Statements. If we are held liable for infringement in other matters, we could be required to pay damages, obtain licenses or cease making or selling certain products. There can be no assurance that licenses would be available on commercially reasonable terms or at all. The defense of these claims, whether or not meritorious, or the development of new technologies would be costly and divert the attention of management.

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We also have valuable intellectual property upon which third parties may infringe. We seek to protect and restrict access to our intellectual property and proprietary information by relying on the patent, trademark, copyright and trade secret laws of the U.S. and other countries, as well as non-disclosure agreements. However, it may be possible for a third party to obtain our information without our authorization, independently develop similar technologies, or breach a non-disclosure agreement entered into with us. In addition, many of the countries in which we operate do not have intellectual property laws as protective as those in the U.S. The use of our intellectual property by someone else without our authorization could reduce or eliminate certain competitive advantages we have, cause us to lose sales or otherwise harm our business. Further, the costs associated with protecting our intellectual property rights could materially adversely impact our business.

We have obtained and applied for U.S. and foreign trademark registrations and patents, and will continue to evaluate whether to register additional trademarks and apply for additional patents. We cannot guarantee that any of our pending applications will be approved by the applicable governmental authorities. Further, we cannot assure that the validity of our patents or our trademarks will not be challenged. In addition, third parties may be able to develop competing products using technology that avoids our patents.

**Unfavorable developments in legal proceedings, investigations and other legal and regulatory matters, could impact us in a materially adverse manner.**

There can be no assurance that any outcome of any litigation, investigation or other legal, environmental, compliance and regulatory matter will be favorable. Our financial results could be materially adversely affected by an unfavorable outcome to pending or future litigation and investigations, and other legal, regulatory, environmental and compliance matters. See Note 8, "Contingencies," in the Notes to Consolidated Financial Statements for more information.

**We are required to comply with anti-corruption and other compliance laws and regulations of the U.S. government and various international jurisdictions, and our failure to comply with these laws and regulations could have a material adverse effect on our business.**

We are required to comply with the anti-corruption and other compliance laws and regulations of the U.S. government and various international jurisdictions, such as the U.S. Foreign Corrupt Practices Act and the UK's Bribery Act of 2010. If we fail to comply with anti-corruption laws, we could be subject to substantial civil and criminal penalties, including fines, monetary damages and incarceration for responsible employees and managers. In addition, if our distributors or agents fail to comply with these laws, our business may also be materially adversely affected through reputational harm and penalties.

**We are required to comply with environmental, health, and safety laws at our operations around the world. The costs of complying with these laws is significant and increasing.**

We are subject to national, state, provincial and/or local environmental, health, and safety laws and regulations in the U.S. and other countries in which we operate, including those related to the disposal of hazardous waste and GHG emissions from our manufacturing processes. These laws, which continue to evolve and impose additional requirements on our current and former manufacturing facilities, can result in liability for the costs of, and damages resulting from, cleaning up current sites, past spills, disposals and other releases of hazardous substances. Enforcement of these laws is subject to the discretion of governmental agencies. Any failure to comply with existing and future environmental, health and safety laws could subject us to fees, penalties, costs or liabilities, impact our production capabilities, limit our ability to sell, expand or acquire facilities, and have a material adverse effect on our business. Laws and regulations related to the environment, product content and product safety are complex, change often, and can be open to different interpretations. In addition, we could be materially and adversely impacted by any environmental or product safety enforcement action affecting our suppliers, particularly in emerging markets.

We have accrued liabilities for the environmental clean-up of certain sites where it is probable that a loss will be incurred and the cost or amount of loss can be reasonably estimated, including the ten sites for which U.S. governmental agencies have designated us as a potentially responsible party as of our 2025 fiscal year-end. Because of the uncertainties associated with environmental assessment and remediation activities, the actual expense to remediate currently identified sites could be higher than the liabilities accrued and additional sites could be identified in the future. See Note 8, "Contingencies," in the Notes to Consolidated Financial Statements for more information.

**We are subject to export and import control laws and regulations in the jurisdictions in which we do business that could subject us to liability or impair our ability to compete in these markets.**

Export control laws and economic sanctions prohibit the shipment of some of our products to embargoed or sanctioned countries, governments and persons. While we train our employees to comply with these regulations, use third party screening software and take other precautionary measures, we cannot guarantee that a violation will not occur. A prohibited shipment can have negative consequences, including government investigations, penalties, fines, civil and criminal sanctions and/or reputational harm. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could decrease our ability to export or sell our products internationally. Any limitation on our ability to export or sell our products could materially adversely affect our business.

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Some of our products are subject to export control laws and regulations and may be exported only with an export license or through an applicable export license exception. If we fail to comply with export licensing, customs regulations, economic sanctions or other laws, we could be subject to substantial civil or criminal penalties, including fines, criminal charges against responsible employees and loss of export or import privileges. In addition, if our distributors fail to obtain appropriate import, export or re-export licenses or permits, we may also be materially adversely affected through reputational harm and penalties. Obtaining the necessary export license for a particular sale may be time consuming and expensive and could result in delayed or lost sales.

**Risks Related to Other Financial Matters**

**Our pension assets and liabilities are significant and subject to market, interest and credit risk that may reduce their asset values or increase their liability values, either of which could increase our net pension liability.**

Changes in the value of our pension assets, which was approximately $733 million as of December 31, 2025, could materially adversely affect our earnings and cash flows as a result of a decline in the value of our investments due to increases in interest rates or volatility in financial markets. In addition, our pension liabilities, which were approximately $721 million as of December 31, 2025, are subject to interest and inflation risk that may increase their value. We regularly evaluate options to better manage the volatility associated with our pension assets and liabilities and may continue taking actions to reduce the financial volatility associated with our pension liabilities, which could result in significant charges. Although we mitigate these risks by investing in high quality securities, ensuring adequate diversification of our investment portfolio, monitoring our portfolio's overall risk profile and managing its liability profile, our net pension liability may nevertheless increase.

**The actuarial assumptions used in the measurement of our pension assets and liabilities affect our earnings and cash flows. Changes in accounting standards and government regulations could also affect our pension and postretirement plan expense and funding requirements.**

We evaluate the assumptions used in determining projected benefit obligations and the fair value of plan assets for our non-U.S. pension plans and other postretirement benefit plans in consultation with outside actuaries. Our pension and projected postretirement benefit expenses and funding requirements increase or decrease as a result of the assumptions we use, including the discount rate, expected long-term rate of return and mortality rates. Because of changing market conditions or changes in participant populations, the actuarial assumptions that we use may differ from actual results, which could have a significant impact on our pension and postretirement benefit obligations and related costs. Funding obligations for each plan are determined based on the value of assets and liabilities on a specific date in accordance with applicable government regulations. Our pension funding requirements, and the timing of funding payments, could also be affected by future laws or regulations. We are implementing plans to comply with the Dutch Pension Act passed in 2023, which requires traditional defined benefit plans to be phased out and transition to defined contribution plans before January 1, 2028. Our Dutch defined benefit plan includes a minimum guaranteed funding ratio that will have to be terminated as part of the transition, for which we will have to compensate the Dutch Pension Fund.

**An impairment in the carrying value of goodwill could negatively impact our results of operations and net worth.**

Goodwill is initially recorded at fair value and not amortized and is reviewed for impairment annually (or more frequently if impairment indicators are present). As of December 31, 2025, the carrying value of our goodwill was $2.27 billion. In 2025, we determined that the goodwill of our reporting units was not impaired. In performing impairment tests, we have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative assessment for goodwill impairment. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative assessment. A quantitative assessment primarily consists of comparing the fair value of a reporting unit to its carrying value, calculating goodwill valuations primarily using an income approach based on the present value of projected future cash flows of each reporting unit. In assessing fair value, we make estimates and assumptions about sales, profit margins, growth rates and discount rates based on our business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and management's judgment in applying these factors. We could be required to evaluate the carrying value of goodwill prior to the annual assessment if we experience disruptions to our business, unexpected significant declines in operating results, divestiture of a significant component of our business or sustained market capitalization declines. These events could result in goodwill impairment charges in the future, which could materially adversely affect our business in the periods in which they are made.

**Item 1B. UNRESOLVED STAFF COMMENTS**

None.

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**Item 1C. CYBERSECURITY** 

**Cybersecurity Risk Management and Strategy**

Our cybersecurity risk management program, which is designed to protect the confidentiality, integrity and availability of our critical systems and information, includes a comprehensive security incident response plan. It complements our enterprise risk management program overseen by our Board, using similar methodologies and governance processes to identify risks and mitigating strategies.

We design and assess our program based on the ISO 27000 and the National Institute of Standards and Technology ("NIST") SP-800 and Cybersecurity Framework. We use these frameworks to help us identify, assess and manage cybersecurity risks relevant to our business and do not intend to suggest that we meet any particular technical standards, specifications or requirements.

Our cybersecurity risk management program includes risk assessments designed to help identify potentially material cybersecurity risks to our critical systems, information security, products and services, as well as our broader enterprise information technology environment; an information technology security team principally responsible for managing our cybersecurity risk assessment processes, security controls and response to any cybersecurity events; the use of third party experts and service providers, where appropriate, to assess, test and otherwise assist with protecting our security environment; cybersecurity awareness training for our employees and further training for our incident response personnel and senior management; a security incident response plan that includes procedures for assessing and coordinating our response to cybersecurity events; and a third-party risk management program designed to identify and mitigate risks associated with our supply chain and vendor ecosystem, which includes initial security posture assessments, contractual security requirements and ongoing monitoring of critical third parties to address potential cybersecurity threats.

We have not experienced cybersecurity events that have materially affected our operations, results of operations or financial condition. However, we face ongoing risks from cybersecurity threats in an ever-evolving threat landscape that, if realized, could be reasonably likely to materially affect our business.

Risks and uncertainties related to cybersecurity are discussed in greater detail under "Risks Related to Information Technology" in Item 1A of this report.

**Cybersecurity Governance**

Our Board considers cybersecurity risk as part of its overall risk oversight. In 2025, its Audit Committee was primarily responsible for overseeing our strategies, policies and risk management practices related to cybersecurity and information security, engaging with management, including our Chief Information Security Officer ("CISO"), who reports to our Chief Information Officer ("CIO"), a member of our Company Leadership Team and a direct report of our Chief Executive Officer ("CEO"). During 2025, our CIO and CISO provided semiannual updates on our cybersecurity preparedness to the Audit Committee. These updates covered the overall status of our cybersecurity program, results of risk assessments, the evolving threat landscape, performance against key performance indicators and the progress with strategic information security initiatives. The Audit Committee Chair reported on these matters to our full Board. In addition, management updated the Cybersecurity Advisory Council, composed of members of our Board and management, to obtain additional insights into our cybersecurity risk management, and, if and as needed, to the Audit Committee regarding any significant cybersecurity events, as well as events that may have had lesser potential impact. Effective January 2026, our Board formed a standalone Cybersecurity Committee to be primarily responsible for overseeing our strategies, policies and risk management practices related to cybersecurity and information security and the Cybersecurity Advisory Council ceased operating.

Our cybersecurity leadership team ("CSLT") — which includes leaders accountable for security operations, incident response, risk and compliance, data security, application security, digital solutions security, vulnerability management and operational technology security — is responsible for assessing and managing our risks from cybersecurity threats. The CSLT, which is led by our CIO and CISO, is primarily responsible for our overall cybersecurity risk management program and supervises both our internal cybersecurity and information security personnel and the external consultants advising our company on these matters. Our information security management and personnel maintain a variety of technical and managerial security certifications and have broad security experience in manufacturing, finance, software and information technology environments.

The CSLT manages our efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through a variety of means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants; and reports from cybersecurity systems deployed in our information technology environment.

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**Item 2. PROPERTIES** 

As of December 31, 2025, we operated manufacturing facilities in excess of 100,000 square feet in the reportable segments and locations listed below.

**Materials Group** 

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|:---|:---|
| U.S. | Peachtree City, Georgia; Greenfield and Lowell, Indiana; Fairport Harbor, Mentor, Oak Harbor and Painesville, Ohio; and Mill Hall, Pennsylvania |
| Non-U.S. | Soignies and Turnhout, Belgium; Vinhedo, Brazil; Guangzhou, Kunshan and Zhuozhou, China; Champ-sur-Drac, France; Gotha, Germany; Noida and Pune, India; Longford, Ireland; Kibbutz Hanita, Israel; Rodange, Luxembourg; Bangi, Malaysia; Queretaro, Mexico; Chungju, South Korea; Rayong, Thailand; and Cramlington, United Kingdom |

---

**Solutions Group** 

---

| | |
|:---|:---|
| U.S. | Fort Wayne, Indiana; New Century, Kansas; Miamisburg, Ohio; and Nashville, Tennessee |
| Non-U.S. | Dhaka, Bangladesh; Guangzhou, Ningbo, Panyu, Shenzhen and Suzhou, China; Ancarano, Italy; Kulim, Malaysia; Queretaro, Mexico; and Long An Province, Vietnam |

---

In addition to the manufacturing facilities described above, our other principal facilities include our corporate headquarters and divisional office in Mentor, Ohio and our divisional and corporate offices located in Dallas, Texas; Vinhedo, Brazil; Hong Kong and Kunshan, China; and Oegstgeest, the Netherlands.

We own all of the principal properties identified above, except for the facilities in the following locations, which are leased: New Century, Kansas; Nashville, Tennessee; Hong Kong, Ningbo, Panyu, Shenzhen and Zhuozhou, China; Kibbutz Hanita, Israel; and Oegstgeest, the Netherlands.

We consider all our properties, whether owned or leased, suitable and adequate for our current needs. We generally expand production capacity as needed to meet increased demand. Owned buildings and plant equipment are insured against major losses from fire and other usual business risks, subject to applicable deductibles. We are not aware of any material defects in title to, or significant encumbrances on, our properties, except for certain mortgage liens.

**Item 3. LEGAL PROCEEDINGS** 

See Note 8, "Contingencies," in the Notes to Consolidated Financial Statements.

**Item 4. MINE SAFETY DISCLOSURES** 

Not applicable.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**PART II** 

**Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**

(a)Our common stock is listed under the ticker symbol "AVY" on the New York Stock Exchange. We did not sell securities in any unregistered transactions during fiscal year 2025. We have historically paid quarterly cash dividends. Future dividend payments are subject to the approval by our Board of Directors (our "Board") based on our earnings, capital requirements, financial condition and other factors.

We had 3,130 shareholders of record as of December 31, 2025, the last day of our 2025 fiscal year.

**Stockholder Return Performance**

The graph below compares the cumulative stockholder return on our common stock, including reinvestment of dividends, with the return on the S&P 500 Stock Index, S&P 500 Industrials Index and Dow Jones U.S. Container & Packaging Index, in each case for the five-year period ending December 31, 2025.

![917](avy-20251231_g1.jpg)

**Total Return Analysis**<sup>(1)</sup>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **12/31/2020** | **12/31/2021** | **12/31/2022** | **12/31/2023** | **12/31/2024** | **12/31/2025** |
| Avery Dennison | $100 | $141 | $120 | $137 | $128 | $127 |
| Dow Jones U.S. Container & Packaging Index | 100 | 112 | 93 | 99 | 113 | 101 |
| S&P 500 Industrials Index | 100 | 121 | 114 | 135 | 159 | 190 |
| S&P 500 Index | 100 | 129 | 105 | 133 | 166 | 196 |

---

<sup>(1)</sup> Assumes $100 invested on December 31, 2020 and reinvestment of dividends.

(b)Not applicable.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

(c)Repurchases of Equity Securities by Issuer

Repurchases by us or our "affiliated purchasers" (as defined in Rule 10b-18(a)(3) of the Securities Exchange Act of 1934, as amended) of registered equity securities in the fourth quarter of 2025 are shown in the table below. Repurchased shares may be reissued under our long-term incentive plan or used for other corporate purposes.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period**<sup>(1)</sup> | **Total number**<br>**of shares**<br>**purchased**<sup>(2)</sup> | **Average**<br>**price paid**<br>**per share**<sup>(3)</sup> | **Total number of**<br>**shares**<br>**purchased as**<br>**part of publicly**<br>**announced**<br>**plans**<sup>(2)(4)</sup>  | **Approximate**<br>**dollar value**<br>**of shares that**<br>**may yet be**<br>**purchased**<br>**under the**<br>**plans**<sup>(5)</sup> |
| September 28, 2025 – October 25, 2025 | 265.4 | $160.9 | 265.4 | $604.4 |
| October 26, 2025 – November 22, 2025 | 256.4 | 173.6 | 256.4 | 559.9 |
| November 23, 2025 – December 31, 2025 | 191.9 | 175.4 | 191.9 | 526.3 |
| Total | 713.7 | $169.3 | 713.7 | $526.3 |

---

<sup>(1)</sup> The periods shown are our fiscal months during the quarter ended December 31, 2025.

<sup>(2)</sup> Shares in thousands.

<sup>(3)</sup> Average price paid per share includes transaction costs to acquire the shares and excludes the non-deductible 1% excise tax on the net value of repurchases imposed under the Inflation Reduction Act of 2022.

<sup>(4)</sup> In April 2025, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, excluding any fees, commissions or other expenses related to such purchases, in addition to the amount outstanding under our previous Board authorization. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased.

<sup>(5)</sup> Dollars in millions.

**Item 6. RESERVED** 

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**ORGANIZATION OF INFORMATION** 

Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, provides management's views on our financial condition and results of operations, should be read in conjunction with the Consolidated Financial Statements and related notes thereto, and includes the sections shown below.

---

| | |
|:---|:---|
| <u>[Non-GAAP Financial Measures](#i737457f929ff47bb8b2643445cd22790_52)</u> | [22](#i737457f929ff47bb8b2643445cd22790_52) |
| <u>[Overview and Outlook](#i737457f929ff47bb8b2643445cd22790_55)</u> | [23](#i737457f929ff47bb8b2643445cd22790_55) |
| <u>[Analysis of Results of Operations](#i737457f929ff47bb8b2643445cd22790_61)</u> | [25](#i737457f929ff47bb8b2643445cd22790_61) |
| <u>[Results of Operations by Reportable Segment](#i737457f929ff47bb8b2643445cd22790_64)</u> | [27](#i737457f929ff47bb8b2643445cd22790_64) |
| <u>[Financial Condition](#i737457f929ff47bb8b2643445cd22790_67)</u> | [29](#i737457f929ff47bb8b2643445cd22790_67) |
| <u>[Critical Accounting Estimates](#i737457f929ff47bb8b2643445cd22790_70)</u> | [35](#i737457f929ff47bb8b2643445cd22790_70) |
| <u>[Recent Accounting Requirements](#i737457f929ff47bb8b2643445cd22790_73)</u> | [37](#i737457f929ff47bb8b2643445cd22790_73) |

---

**NON-GAAP FINANCIAL MEASURES** 

We report our financial results in conformity with accounting principles generally accepted in the United States of America, or GAAP, and also communicate with investors using certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. These non-GAAP financial measures are intended to supplement the presentation of our financial results prepared in accordance with GAAP. We use these non-GAAP financial measures internally to evaluate trends in our underlying performance, as well as to facilitate comparisons with the results of competitors for quarters and year-to-date periods, as applicable. Based on feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are also useful to their assessments of our performance and operating trends, as well as liquidity. Reconciliations of our non-GAAP financial measures from the most directly comparable GAAP financial measures are provided in accordance with Regulations G and S-K.

Our non-GAAP financial measures exclude the impact of certain events, activities or strategic decisions. The accounting effects of these events, activities or decisions, which are included in the GAAP financial measures, may make it more difficult to assess our underlying performance in a single period. By excluding the accounting effects, positive or negative, of certain items (e.g., restructuring charges, outcomes of certain legal matters and settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, gains or losses from curtailment or settlement of pension obligations, gains or losses on sales of certain assets, gains or losses on venture and other investments, currency adjustments due to highly inflationary economies, and other items), we believe that we are providing meaningful supplemental information that facilitates an understanding of our core operating results and liquidity measures. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency or timing.

We use the non-GAAP financial measures described below in this MD&A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Sales change ex. currency* refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, currency adjustments for transitional reporting of highly inflationary economies, and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for the estimated impact of extra days in our fiscal year and the calendar shift resulting from extra days in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current period average exchange rates to exclude the effect of foreign currency fluctuations. Our 2025 fiscal year began on December 29, 2024 and ended on December 31, 2025; fiscal years 2026 and beyond will be coincident with the calendar year beginning on January 1 and ending on December 31.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Organic sales change* refers to sales change ex. currency, excluding the estimated impact of acquisitions and product line divestitures.

We believe that sales change ex. currency and organic sales change assist investors in evaluating the sales change from the ongoing activities of our businesses and enhance their ability to evaluate our results from period to period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• Adjusted free cash flow* refers to cash flow provided by operating activities, less payments for property, plant and equipment, less payments for software and other deferred charges, plus proceeds from company-owned life insurance policies, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from insurance and sales (purchases) of investments, less net cash used for Argentine Blue Chip Swap securities. Where applicable, adjusted free cash flow is also adjusted for certain acquisition-related transaction costs. We believe that adjusted free cash flow assists investors by showing the amount of cash we have available for debt reductions, dividends, share repurchases, and acquisitions.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Operational working capital as a percentage of annualized current quarter net sales* refers to trade accounts receivable and inventories, net of accounts payable, and excludes cash and cash equivalents, short-term borrowings, deferred taxes, other current assets and other current liabilities divided by annualized current quarter net sales. We believe that operational working capital as a percentage of annualized current quarter net sales assists investors in assessing our working capital requirements because it excludes the impact of fluctuations attributable to our financing and other activities (which affect cash and cash equivalents, deferred taxes, other current assets and other current liabilities) that tend to be disparate in amount, frequency or timing, and may increase the volatility of working capital as a percentage of sales from period to period. The items excluded from this measure are not significantly influenced by our day-to-day activities managed at the operating level and do not necessarily reflect the underlying trends in our operations.

**OVERVIEW AND OUTLOOK** 

***Fiscal Year***

In January 2025, the Audit Committee of our Board of Directors approved a change to our previous 52- or 53-week fiscal year generally ending on the Saturday closest to December 31 to a fiscal year coincident with the calendar year. Our 2025 fiscal year began on December 29, 2024 and ended on December 31, 2025, which resulted in four extra days compared to prior years; fiscal years 2026 and beyond will be coincident with the calendar year beginning on January 1 and ending on December 31.

Our 2024 and 2023 fiscal years consisted of 52-week periods ending December 28, 2024 and December 30, 2023, respectively.

***Net Sales***

The factors impacting reported net sales change, as compared to the prior-year period, are shown in the table below.

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Reported net sales change | 1% | 5% |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  |  |
| &nbsp;&nbsp;&nbsp;Impact of extra days |  |  |
| Sales change ex. currency<sup>(1)</sup> | —% | 5% |
| &nbsp;&nbsp;&nbsp;Acquisitions |  | (1) |
| Organic sales change<sup>(1)</sup> | —% | 5% |

---

<sup>(1)</sup> Totals may not sum due to rounding.

In 2025, net sales on an organic basis were comparable to the prior year, reflecting the impact of higher volume offset by the impact of raw material deflation-related price reductions. In 2024, net sales increased on an organic basis primarily due to higher volume, partially offset by the impact of raw material deflation-related price reductions.

***Net Income***

Net income decreased from approximately $705 million in 2024 to approximately $688 million in 2025. The primary factors affecting this decrease were:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The net impact of raw material deflation-related price reductions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Higher employee-related costs

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Higher interest expense

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Growth investments

These items were partially offset by the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Higher volume/mix

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

***Cost Reduction Actions***

*2025 Actions*

During 2025, we recorded $48.8 million in restructuring charges, net of reversals, related to our 2025 actions. These charges consisted of severance and related costs for the reduction of approximately 1,200 positions, as well as asset impairment charges, at numerous locations across our company, as a result of actions taken to optimize our operational footprint.

In the fourth quarter of 2024, we recorded $13.1 million in restructuring charges related to our 2025 actions. These charges consisted of severance and related costs for the reduction of approximately 90 positions, as well as asset impairment charges, reflecting actions at numerous locations in our Solutions Group reportable segment.

The cumulative restructuring charges, net of reversals, related to our 2025 actions was approximately $62 million.

*2023 Actions*

During 2024, we recorded $28.8 million in restructuring charges, net of reversals, related to these actions. These charges consisted of severance and related costs for the reduction of approximately 1,280 positions, as well as asset impairment charges, at numerous locations across our company.

During 2025, we recorded $1.6 million of reversals related to our 2023 Actions that were completed in the fourth quarter of 2025.

*Savings from Restructuring Actions*

We realized more than $60 million in incremental savings from restructuring actions, net of transition costs, in each of 2025 and 2024.

Restructuring charges were included in "Other expense (income), net" in the Consolidated Statements of Income. Refer to Note 13, "Cost Reduction Actions," to the Consolidated Financial Statements for more information.

***Business Acquisitions***

*2025 Business Acquisition*

On October 20, 2025, we completed our business acquisition of W.F. Taylor Holdings, Inc. ("Taylor Adhesives"), a Georgia-based flooring adhesives business, for the purchase price of approximately $390 million. This acquisition expanded the high-value category portfolio in our Materials Group reportable segment.

We funded the Taylor Adhesives acquisition using cash and proceeds from our issuance of senior notes in September 2025.

The final allocations of purchase consideration to assets and liabilities are ongoing as we continue to evaluate certain balances, estimates and assumptions during the measurement period (up to one year from the acquisition date). Our valuation of certain acquired assets and liabilities is currently pending finalization within the allowable time to complete our assessment.

The Taylor Adhesives acquisition was not material to the Consolidated Financial Statements.

*2023 Business Acquisitions*

On November 23, 2023, we completed our business acquisition of Silver Crystal Group ("Silver Crystal"), a Canada-based provider of sports apparel customization and application solutions across in-venue, direct-to-business and e-commerce platforms. On May 22, 2023, we completed our business acquisition of LG Group, Inc. ("Lion Brothers"), a Maryland-based designer and manufacturer of apparel brand embellishments. On March 6, 2023, we completed our business acquisition of Thermopatch, Inc. ("Thermopatch"), a New York-based manufacturer specializing in labeling, embellishments and transfers for the sports, industrial laundry, workwear and hospitality industries. These acquisitions expanded the product portfolio in our Solutions Group reportable segment. The acquisitions of Silver Crystal, Lion Brothers and Thermopatch are referred to collectively as the "2023 Acquisitions."

The aggregate purchase consideration, including purchase consideration payable, for the 2023 Acquisitions was approximately $231 million. We funded the 2023 Acquisitions using cash and commercial paper borrowings. In addition to the cash paid at closing, the sellers in one of these acquisitions are eligible for earn-out payments of up to $5 million, subject to the acquired company achieving certain post-acquisition performance targets. As of the acquisition date, we included an estimate of the fair value of these earn-out payments in the aggregate purchase consideration.

The 2023 Acquisitions were not material, individually or in the aggregate, to the Consolidated Financial Statements.

***Accounting Guidance Updates***

Refer to Note 1, "Summary of Significant Accounting Policies," to the Consolidated Financial Statements for this information.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

***Cash Flow*** 

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Net cash provided by operating activities | $881.4 | $938.8 | $826 |
| Purchases of property, plant and equipment | (169.0) | (208.8) | (265.3) |
| Purchases of software and other deferred charges | (31.4) | (31.0) | (19.8) |
| Proceeds from company-owned life insurance policies |  |  | 48.1 |
| Purchases of Argentine Blue Chip Swap securities |  | (34.2) |  |
| Proceeds from sales of Argentine Blue Chip Swap securities |  | 24.0 |  |
| Proceeds from sales of property, plant and equipment | 22.6 | .6 | 1.0 |
| Proceeds from insurance and sales (purchases) of investments, net | 3.5 | 10.1 | 1.9 |
| Adjusted free cash flow | $707.1 | $699.5 | $591.9 |

---

In 2025, net cash provided by operating activities decreased compared to 2024 primarily due to higher incentive compensation payments, higher tax payments, net of refunds, lower net income and higher trade rebate payments, partially offset by the prior-year settlement payment for the Adasa legal matter and changes in operational working capital. In 2025, adjusted free cash flow increased compared to 2024 primarily due to lower purchases of property, plant and equipment and higher proceeds from sales of property, plant and equipment, partially offset by lower net cash provided by operating activities.

***Outlook*** 

Beginning in the first quarter of 2025, the U.S. announced tariffs on goods imported into the U.S. from numerous countries, many of which responded with reciprocal tariffs and other actions on goods imported from the U.S. The U.S. government continues to negotiate with countries regarding the tariffs. As it relates to the direct impact of these tariffs, a relatively small portion of our global materials purchases is impacted. To mitigate this direct impact to our operations, we have implemented strategic sourcing adjustments and pricing actions. The indirect impact on demand for our products and solutions is more uncertain. While a majority of our products and solutions relates to less discretionary consumer staples, we also serve more discretionary and cyclical markets, such as industrials, durables and apparel. The indirect impact of tariffs resulted in an aggregate low single digit rate decrease in sales in our overall apparel categories over the second, third and fourth quarters of 2025. While our outlook assumes that tariff-related uncertainty will persist, further developments in international trade relations and their broader impact to macroeconomic conditions could have a material adverse effect on our business.

Certain factors that we believe will contribute to our 2026 results are described below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We anticipate a favorable impact to our full-year net sales and operating income from foreign currency translation, based on recent rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We anticipate an unfavorable impact to our operating income from higher interest expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We anticipate our full-year effective tax rate to be in the mid-twenty percent range.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We anticipate incremental savings from restructuring actions, net of transition costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We anticipate an unfavorable impact to our operating income from normalization of the majority of our 2025 temporary cost savings, which was largely related to lower incentive compensation.

**ANALYSIS OF RESULTS OF OPERATIONS** 

**Income before Taxes** 

---

| | | | |
|:---|:---|:---|:---|
| **(In millions, except percentages)** | **2025** | **2024** | **2023** |
| Net sales | $8855.5 | $8755.7 | $8364.3 |
| Cost of products sold | 6309.2 | 6225.0 | 6086.8 |
| Gross profit | 2546.3 | 2530.7 | 2277.5 |
| Marketing, general and administrative expense | 1422.5 | 1415.3 | 1313.7 |
| Other expense (income), net | 77.5 | 71.6 | 180.9 |
| Interest expense | 135.4 | 117.0 | 119.0 |
| Other non-operating expense (income), net | (14.2) | (26.7) | (30.8) |
| Income before taxes | $925.1 | $953.5 | $694.7 |

---

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

***Gross Profit***

Gross profit in 2025 increased compared to 2024 primarily due to benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, and higher volume, partially offset by the net impact of raw material deflation-related price reductions and higher employee-related costs.

Gross profit in 2024 increased compared to 2023 primarily due to higher volume and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, partially offset by higher employee-related costs and the net impact of raw material deflation-related price reductions.

***Marketing, General and Administrative Expense*** 

Marketing, general and administrative expense increased in 2025 compared to 2024 primarily due to growth investments, partially offset by benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, and lower employee-related costs.

Marketing, general and administrative expense increased in 2024 compared to 2023 primarily due to higher employee-related costs, partially offset by benefits from productivity initiatives, including savings from restructuring actions, net of transition costs.

**Other Expense (Income), Net**

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Other expense (income), net, by type** |  |  |  |
| Restructuring charges, net of reversals: |  |  |  |
| &nbsp;&nbsp;&nbsp;Severance and related costs, net of reversals | $43.2 | $35.4 | $70.8 |
| &nbsp;&nbsp;&nbsp;Asset impairment and lease cancellation charges | 4.0 | 6.5 | 8.6 |
| Other items: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on venture and other investments, net | 23.3 | 19.2 | 1.5 |
| &nbsp;&nbsp;&nbsp;Losses from Argentine peso remeasurement and Blue Chip Swap transactions | 5.6 | 16.4 | 29.9 |
| &nbsp;&nbsp;&nbsp;Transaction and related costs | 5.1 | .3 | 5.3 |
| &nbsp;&nbsp;&nbsp;Outcomes of legal matters and settlements, net | 9.2 | (6.2) | 64.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sales of assets | (12.9) |  | .5 |
| Other expense (income), net | $77.5 | $71.6 | $180.9 |

---

Refer to Note 13, "Cost Reduction Actions," to the Consolidated Financial Statements for more information regarding restructuring charges, net of reversals.

Refer to Note 9, "Fair Value Measurements," to the Consolidated Financial Statements for more information regarding (gain) loss on venture and other investments, net.

Refer to Note 8, "Contingencies," and Note 15, "Segment and Disaggregated Revenue Information," to the Consolidated Financial Statements for more information regarding outcomes of legal matters and settlements, net.

***Interest Expense***

Interest expense increased in 2025 compared to 2024 primarily due to the €500 million of senior notes we issued in September 2025 and the €500 million of senior notes we issued in November 2024.

Interest expense decreased in 2024 compared to 2023 primarily due to a decrease in commercial paper borrowings, partially offset by higher debt balances.

***Other Non-Operating Expense (Income), Net***

Other non-operating income decreased in 2025 compared to 2024 primarily due to lower interest income and benefits from net actuarial gains in our defined benefit plans.

Other non-operating income decreased in 2024 compared to 2023 due to lower interest income, primarily in Argentina.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**Net Income and Earnings per Share** 

---

| | | | |
|:---|:---|:---|:---|
| **(In millions, except percentages and per share amounts)** | **2025** | **2024** | **2023** |
| Income before taxes | $925.1 | $953.5 | $694.7 |
| Provision for income taxes | 237.1 | 248.6 | 191.7 |
| Net income | $688.0 | $704.9 | $503.0 |
| Net income per common share | $8.81 | $8.77 | $6.23 |
| Net income per common share, assuming dilution | 8.79 | 8.73 | 6.20 |
| Effective tax rate | 25.6% | 26.1% | 27.6% |

---

***Provision for Income Taxes***

Our effective tax rate in 2025 decreased compared to 2024 primarily due to higher benefits from the release of valuation allowance as a result of completing a foreign restructuring transaction and a favorable ruling related to deductibility of interest expense, partially offset by lower excess tax benefits associated with stock-based payments. Our effective tax rate in 2024 decreased compared to 2023 primarily due to lower non-deductible expenses resulting from the impact of the Argentine peso remeasurement loss and lower tax charges from the recognition of uncertain tax positions in certain foreign jurisdictions, partially offset by higher tax charges from valuation allowances.

Refer to Note 14, "Taxes Based on Income," to the Consolidated Financial Statements for more information.

**RESULTS OF OPERATIONS BY REPORTABLE SEGMENT** 

Our CODM uses segment adjusted operating income to evaluate segment performance and allocate resources. Segment adjusted operating income is defined as income before taxes adjusted for other expense (income), net; interest expense, other non-operating expense (income), net; and other items.

Refer to Note 15, "Segment and Disaggregated Revenue Information," to the Consolidated Financial Statements for more information.

***Materials Group***

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Net sales including intersegment sales | $6267.3 | $6175.8 | $5968.4 |
| Less intersegment sales | (174.0) | (162.8) | (157.1) |
| Net sales | $6093.3 | $6013.0 | $5811.3 |
| Segment adjusted operating income<sup>(1)</sup> | 922.2 | 924.7 | 789.2 |

---

<sup>(1)</sup> Segment adjusted operating income excluded other expense (income), net, and other items of $31.6 million, $40.4 million and $88.3 million in 2025, 2024, and 2023, respectively. Exclusions related to charges associated with restructuring actions, outcomes of legal matters and settlements, net, (gain) loss on venture and other investments, transaction and related costs, losses from Argentine peso remeasurement and Blue Chip Swap transactions and (gain) loss on sales of assets.

*Net Sales* 

The factors impacting reported net sales change are shown in the table below.

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Reported net sales change | 1% | 4% |
| &nbsp;&nbsp;&nbsp;Reclassification of sales between segments | (1) |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation | (1) |  |
| &nbsp;&nbsp;&nbsp;Impact of extra days |  |  |
| Sales change ex. currency<sup>(1)</sup> |  | 4 |
| &nbsp;&nbsp;&nbsp;Acquisitions |  |  |
| Organic sales change<sup>(1)</sup> | (1)% | 4% |

---

<sup>(1)</sup> Totals may not sum due to rounding.

In 2025, net sales on an organic basis decreased compared to the prior year primarily due to the impact of raw material deflation-related price reductions, partially offset by favorable volume/mix. On an organic basis, net sales increased by a low single digit rate in North America, and decreased by low single digit rates in Europe, the Middle East and North Africa, Asia Pacific and Latin America.

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In 2024, net sales on an organic basis increased compared to the prior year due to higher volume, partially offset by the impact of raw material deflation-related price reductions. On an organic basis, net sales increased by low single digit rates in North America and Europe, the Middle East and North Africa and mid-single digit rates in Asia Pacific and Latin America.

*Segment Adjusted Operating Income*

Segment adjusted operating income decreased in 2025 compared to 2024 primarily due the net impact of pricing and raw material input costs, as well as higher employee-related costs, partially offset by favorable volume/mix and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs.

Segment adjusted operating income increased in 2024 compared to 2023 primarily due to higher volume and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, partially offset by higher employee-related costs and the net impact of pricing and raw material input costs.

***Solutions Group***

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Net sales including intersegment sales | $2817.3 | $2795.0 | $2588.5 |
| Less intersegment sales | (55.1) | (52.3) | (35.5) |
| Net sales | $2762.2 | $2742.7 | $2553.0 |
| Segment adjusted operating income<sup>(1)</sup> | 286.3 | 289.3 | 252.0 |

---

<sup>(1)</sup> Segment adjusted operating income excluded other expense (income), net, and other items of $39.0 million, $37.5 million and $86.3 million in 2025, 2024, and 2023, respectively. Exclusions related to charges associated with restructuring actions, outcomes of legal matters and settlements, net, (gain) loss on venture and other investments, (gain) loss on sales of assets and transaction and related costs.

*Net Sales* 

The factors impacting reported net sales change are shown in the table below.

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Reported net sales change | 1% | 7% |
| &nbsp;&nbsp;&nbsp;Reclassification of sales between segments | 2 |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  | 1 |
| &nbsp;&nbsp;&nbsp;Impact of extra days |  |  |
| Sales change ex. currency<sup>(1)</sup> | 2 | 8 |
| &nbsp;&nbsp;&nbsp;Acquisitions |  | (2) |
| Organic sales change<sup>(1)</sup> | 2% | 6% |

---

<sup>(1)</sup> Totals may not sum due to rounding.

In 2025, on an organic basis, net sales increased by a mid-single digit rate in high-value categories and decreased by a low single digit rate in the base business compared to the prior year. Company-wide, on an organic basis, sales of intelligent labels increased by a low single digit rate compared to the prior year.

In 2024, on an organic basis, net sales increased by a low single digit rate in high-value categories and a low-double digit rate in the base business compared to the prior year. Company-wide, on an organic basis, sales of intelligent labels increased by a high single digit rate compared to the prior year.

*Segment Adjusted Operating Income* 

Segment adjusted operating income decreased in 2025 compared to 2024 primarily due to higher employee-related costs, the net impact of pricing and raw material input costs, and growth investments, partially offset by benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, and higher volume.

Segment adjusted operating income increased in 2024 compared to 2023 primarily due to higher volume and benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, partially offset by higher employee-related costs and growth investments.

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**FINANCIAL CONDITION** 

***Liquidity***

**Operating Activities** 

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Net income | $688.0 | $704.9 | $503.0 |
| Depreciation | 206.4 | 197.1 | 187.4 |
| Amortization | 121.8 | 115.1 | 111.0 |
| Provision for credit losses and sales returns | 51.2 | 47.4 | 49.9 |
| Stock-based compensation | 27.9 | 28.7 | 22.3 |
| Deferred taxes and other non-cash taxes | (19.9) | (18.5) | (24.4) |
| Other non-cash expense and loss (income and gain), net | 48.8 | 67.2 | 37.1 |
| Trade accounts receivable | 44.0 | (107.3) | (16.7) |
| Inventories | 53.2 | (90.7) | 111.7 |
| Accounts payable | (144.4) | 106.7 | (87.6) |
| Taxes on income | (5.1) | 40.2 | (18.7) |
| Other assets | 3.8 | (48.0) | 37.7 |
| Other liabilities | (194.3) | (104.0) | (86.7) |
| Net cash provided by operating activities | $881.4 | $938.8 | $826.0 |

---

In 2025, cash flow provided by operating activities decreased compared to 2024 primarily due to higher incentive compensation payments, higher tax payments, net of refunds, lower net income and higher trade rebate payments, partially offset by the prior-year settlement payment for the Adasa legal matter and changes in operational working capital.

In 2024, cash flow provided by operating activities increased compared to 2023 primarily due to higher net income, lower incentive compensation payments and lower tax payments, net of refunds, partially offset by changes in operational working capital and the settlement payment for the Adasa legal matter.

**Investing Activities** 

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Purchases of property, plant and equipment | $(169.0) | $(208.8) | $(265.3) |
| Purchases of software and other deferred charges | (31.4) | (31.0) | (19.8) |
| Proceeds from company-owned life insurance policies |  |  | 48.1 |
| Purchases of Argentine Blue Chip Swap securities |  | (34.2) |  |
| Proceeds from sales of Argentine Blue Chip Swap securities |  | 24.0 |  |
| Proceeds from sales of property, plant and equipment | 22.6 | .6 | 1.0 |
| Proceeds from insurance and sales (purchases) of investments, net | 3.5 | 10.1 | 1.9 |
| Proceeds from settlement of net investment hedges | 6.2 |  |  |
| Payments for settlement of net investment hedges | (26.1) |  |  |
| Payments for acquisitions, net of cash acquired, and venture investments | (401.8) | (3.8) | (224.9) |
| Net cash used in investing activities | $(596.0) | $(243.1) | $(459.0) |

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*Purchases of Property, Plant and Equipment* 

In 2025, in our Materials Group reportable segment, we primarily invested in equipment to support growth in the U.S., certain countries in Europe and certain countries in Asia Pacific, primarily China; in our Solutions Group reportable segment, we primarily invested in buildings and equipment to support growth in certain countries in Asia Pacific, including China and Vietnam, the U.S. and certain countries in Latin America, primarily Mexico.

In 2024, in our Solutions Group reportable segment, we primarily invested in buildings and equipment to support growth in certain countries in Asia Pacific, including China and Malaysia, the U.S. and certain countries in Latin America, primarily Mexico; in our Materials Group reportable segment, we primarily invested in buildings and equipment to support growth in the U.S., and certain countries in Europe, primarily France, and Asia Pacific, primarily China.

In 2023, in our Solutions Group reportable segment, we primarily invested in buildings and equipment to support growth in certain countries in Asia Pacific, primarily Malaysia, the U.S. and certain countries in Latin America, primarily Mexico; in our Materials Group reportable segment, we primarily invested in buildings and equipment to support growth in the U.S. and certain countries in Europe, primarily France, and Asia Pacific, primarily China.

*Purchases of Software and Other Deferred Charges* 

In 2025, we primarily invested in information technology upgrades in the U.S. In 2024 and 2023, we invested in information technology upgrades worldwide.

*Proceeds from Company-Owned Life Insurance Policies*

In 2023, we utilized approximately $48 million of the cash surrender value available under our company-owned life insurance policies.

*Purchases and Proceeds from Argentine Blue Chip Swap Securities*

In 2024, we entered into Blue Chip Swap transactions that resulted in losses of approximately $10 million. Refer to Note 16, "Supplemental Financial Information," to the Consolidated Financial Statements for more information.

*Proceeds from Sales of Property, Plant and Equipment* 

In 2025, we primarily received proceeds from the sales of properties in China, Vietnam and Argentina.

*Proceeds from Insurance and Sales (Purchases) Investments, net* 

In 2024, we received approximately $8 million of insurance proceeds for losses related to damaged property, plant and equipment.

*Settlement of Net Investment Hedges*

In 2025, we settled €920 million notional amount of net investment hedges.

*Payments for Acquisitions, Net of Cash Acquired, and Venture Investments* 

We paid consideration, net of cash acquired, of approximately $390 million for the 2025 acquisition of Taylor Adhesives and $223 million for the 2023 Acquisitions. We funded the Taylor Adhesives acquisition using cash and proceeds from our issuance of senior notes in September 2025. We funded the 2023 Acquisitions using cash and commercial paper borrowings. We also made certain venture investments in 2025, 2024 and 2023.

Refer to Note 2, "Business Acquisitions," to the Consolidated Financial Statements for more information.

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**Financing Activities** 

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Net increase (decrease) in borrowings with maturities of three months or less | $422.5 | $(269.0) | $(36.6) |
| Additional long-term borrowings | 576.5 | 539.2 | 394.9 |
| Repayments of long-term debt and finance leases | (559.4) | (308.1) | (255.9) |
| Dividends paid | (288.4) | (277.5) | (256.7) |
| Share repurchases | (572.3) | (247.5) | (137.5) |
| Net (tax withholding) proceeds related to stock-based compensation | (12.8) | (8.4) | (23.8) |
| Proceeds from settlement of fair value hedges | 32.8 |  |  |
| Payments for settlement of fair value hedges | (13.5) |  |  |
| Other | (.3) | (4.8) | (1.6) |
| Net cash used in financing activities | $(414.9) | $(576.1) | $(317.2) |

---

*Borrowings and Repayment of Debt* 

During 2025, 2024 and 2023, our commercial paper borrowings funded various activities, including repayments of long-term debt, acquisitions, dividend payments, share repurchases, capital expenditures and other general corporate purposes.

In September 2025, we issued €500 million of senior notes, due September 11, 2035, which bear an interest rate of 4.000% per year, payable annually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were approximately €494 million ($577 million), which we used in part to finance the Taylor Adhesives acquisition and repay existing indebtedness under our commercial paper program. Refer to Note 2, "Business Acquisitions," to the Consolidated Financial Statements for more information regarding our acquisition of Taylor Adhesives.

In the third quarter of 2025, we repaid our $5 million of medium-term notes at maturity using cash flows from operations and commercial paper borrowings.

In the second quarter of 2025, we repaid our $25 million of medium-term notes at maturity using cash flows from operations and commercial paper borrowings.

In the first quarter of 2025, we repaid our €500 million of senior notes at maturity using the net proceeds from the €500 million of senior notes we issued in the fourth quarter of 2024, cash flows from operations and commercial paper borrowings.

In November 2024, we issued €500 million of senior notes, due November 4, 2034, which bear an interest rate of 3.750% per year, payable annually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were approximately €495 million ($539 million), which we used to repay our €500 million of senior notes maturing in March 2025 and for general corporate purposes.

In August 2024, we repaid our $300 million of senior notes at maturity using cash flows from operations and commercial paper borrowings.

In March 2023, we issued $400 million of senior notes, due March 15, 2033, which bear an interest rate of 5.750% per year, payable semiannually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were $394.9 million, which we used to repay indebtedness under our commercial paper programs and our $250 million of senior notes that matured on April 15, 2023.

Refer to Note 4, "Debt" to the Consolidated Financial Statements for more information.

*Dividends Paid* 

We paid dividends per share of $3.70, $3.45 and $3.18 in 2025, 2024 and 2023, respectively. In April 2025, we increased our quarterly dividend rate to $0.94 per share, representing an increase of approximately 7% from our previous quarterly dividend rate of $0.88 per share. In April 2024, we increased our quarterly dividend to $0.88 per share, representing an increase of approximately 9% from our previous dividend rate of $0.81 per share.

*Share Repurchases* 

From time to time, our Board authorizes the repurchase of shares of our outstanding common stock. Repurchased shares may be reissued under our long-term incentive plan or used for other corporate purposes. In 2025, 2024 and 2023, we repurchased approximately 3.2 million, 1.2 million and 0.8 million shares of our common stock, respectively.

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In April 2025, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, excluding any fees, commissions or other expenses related to such purchases and in addition to the amount outstanding under our previous Board authorization. Shares of our common stock in the aggregate amount of $526.3 million remained authorized for repurchase under this Board authorization as of December 31, 2025. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased.

*Net (Tax Withholding) Proceeds Related to Stock-Based Compensation* 

Approximately 0.1 million stock options were exercised in 2024, resulting in proceeds of approximately $10 million. Refer to Note 12, "Long-Term Incentive Compensation," to the Consolidated Financial Statements for more information.

*Settlement of Fair Value Hedges*

In 2025, we settled €920 million notional amount of fair value hedges.

***Analysis of Selected Balance Sheet Accounts***

*Long-lived Assets* 

Property, plant and equipment, net, increased by approximately $21 million to $1.61 billion at year-end 2025, which primarily reflected purchases of property, plant and equipment and the impact of foreign currency translation, partially offset by current year depreciation expense.

Goodwill increased by approximately $296 million to $2.27 billion at year-end 2025, which primarily reflected the acquired goodwill associated with the Taylor Adhesives acquisition and the impact of foreign currency translation.

Other intangibles resulting from business acquisitions, net, increased by approximately $72 million to $827.5 million at year-end 2025, primarily reflecting the valuation of intangible assets associated with the Taylor Adhesives acquisition, partially offset by current year amortization expense.

Refer to Note 3, "Goodwill and Other Intangibles Resulting from Business Acquisitions," to the Consolidated Financial Statements for more information.

Other assets increased by approximately $81 million to $978.4 million at year-end 2025, primarily reflecting an increase in the funded status of certain of our non-U.S. pension plans and higher capitalized implementation costs associated with our cloud computing arrangements.

*Shareholders' Equity Accounts* 

The balance of our shareholders' equity decreased by approximately $70 million to $2.24 billion at year-end 2025. Refer to Note 11, "Supplemental Equity and Comprehensive Income Information," to the Consolidated Financial Statements for more information.

**Impact of Foreign Currency Translation** 

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Change in net sales | $29 | $(33) |

---

In 2025, international operations generated approximately 69% of our net sales. Our future results are subject to changes in worldwide economic conditions, tariffs, social, geopolitical, and market conditions in the regions in which we operate and the impact of fluctuations in foreign currency exchange and interest rates.

The favorable impact of foreign currency translation on net sales in 2025 compared to 2024 was primarily related to euro-denominated sales, partially offset by sales in India and Brazil.

***Effect of Foreign Currency Transactions***

The impact on net income from foreign currency transactions is largely mitigated because the costs of our products are generally denominated in the same currencies in which they are sold. In addition, to reduce our income and cash flow exposure to transactions in foreign currencies, we enter into foreign currency exchange forward, option and swap contracts where available and appropriate. Refer to Note 5, "Financial Instruments," to the Consolidated Financial Statements for more information.

During 2025, 2024 and 2023, the Argentine peso devalued significantly compared to the U.S. dollar, resulting in remeasurement losses of approximately $6 million, $16 million and $30 million, respectively, which were included in "Other expense (income), net" in the Consolidated Statements of Income. The 2024 losses included Blue Chip Swap transactions that resulted in losses of approximately $10 million. Refer to Note 16, "Supplemental Financial Information," to the Consolidated Financial Statements for more information.

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***Analysis of Selected Financial Ratios***

We utilize the financial ratios discussed below to assess our financial condition and operating performance. We believe this information assists our investors in understanding the factors impacting our cash flow other than net income and capital expenditures.

*Operational Working Capital Ratio* 

Operational working capital, as a percentage of annualized current-quarter net sales, is reconciled to working capital below. Our objective is to minimize our investment in operational working capital, as a percentage of annualized current-quarter net sales, to maximize our cash flow and return on investment. Operational working capital, as a percentage of annualized current-quarter net sales, in 2025 increased compared to 2024. Further information regarding the components of operational working capital is provided below.

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| | | |
|:---|:---|:---|
| **(In millions, except percentages)** | **2025** | **2024** |
| (A)Working capital | $336.7 | $216.1 |
| Reconciling items: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | (202.8) | (329.1) |
| &nbsp;&nbsp;&nbsp;Other current assets | (307.8) | (305.3) |
| &nbsp;&nbsp;&nbsp;Short-term borrowings and current portion of long-term debt and finance leases | 522.9 | 592.3 |
| &nbsp;&nbsp;&nbsp;Current income taxes payable and other current accrued liabilities | 869.0 | 929.6 |
| (B)Operational working capital | $1218.0 | $1103.6 |
| (C)Fourth-quarter net sales, annualized | $9084.8 | $8742.8 |
| Operational working capital, as a percentage of annualized current-quarter net sales (B) ÷ (C) | 13.4% | 12.6% |

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*Accounts Receivable Ratio* 

The average number of days sales outstanding was 63 days in 2025 compared to 61 days in 2024, calculated using the accounts receivable balance at year-end divided by the average daily sales in the fourth quarter of 2025 and 2024, respectively. The increase in average number of days sales outstanding primarily reflected the impact of foreign currency translation.

*Inventory Ratio* 

Average inventory turnover was 6.4 in both 2025 and 2024, calculated using the annualized fourth-quarter cost of products sold in 2025 and 2024, respectively, and divided by the inventory balance at the respective year-end.

*Accounts Payable Ratio* 

The average number of days payable outstanding was 74 days in 2025 compared to 77 days in 2024, calculated using the accounts payable balance at year-end divided by the annualized fourth-quarter cost of products sold in 2025 and 2024, respectively. The decrease in average number of days payable outstanding primarily reflected the timing of vendor payments, partially offset by the impact of foreign currency translation.

***Capital Resources***

Capital resources include cash flows from operations, cash and cash equivalents and debt financing, including access to commercial paper borrowings supported by our revolving credit facility (the "Revolver"). We use these resources to fund our operational needs.

At year-end 2025, we had cash and cash equivalents of $202.8 million held in accounts at third-party financial institutions in numerous locations throughout the world. At year-end 2025, the majority of our cash and cash equivalents was held by our foreign subsidiaries, primarily in the Asia Pacific region.

To meet our U.S. cash requirements, we have several cost-effective liquidity options available. These options include borrowing funds at reasonable rates, including borrowings from our foreign subsidiaries, and repatriating foreign earnings and profits. However, if we were to repatriate foreign earnings and profits, a portion would be subject to cash payments of withholding taxes imposed by foreign tax authorities. Additional U.S. taxes may also result from the impact of foreign currency fluctuations related to these earnings and profits.

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In June 2024, we entered into a Credit Agreement (the "Credit Agreement") related to our Revolver to borrow up to an aggregate of $1.2 billion through its maturity date of June 26, 2029. The Revolver refinanced the prior revolving credit facility under the Fifth Amended and Restated Credit Agreement dated as of February 13, 2020, as amended. Pursuant to the Credit Agreement, the commitments under the Revolver may be increased by up to $600 million, subject to lender approvals and customary requirements. Under certain circumstances, we may request that the commitments under the Revolver be extended for one-year periods in accordance with the terms and conditions of the Credit Agreement. We use the Revolver as a back-up facility for our commercial paper program and for other corporate purposes.

The Revolver contains a financial covenant that requires us to maintain a maximum leverage ratio (calculated as a ratio of consolidated debt minus unrestricted cash and cash equivalents in excess of $50 million to consolidated EBITDA as defined in the agreement) of not more than 3.50 to 1.00; provided that, in the event of an acquisition by us that exceeds $250 million, which occurred when we acquired Taylor Adhesives, the maximum leverage ratio increases to 4.00 to 1.00 for the fiscal quarter in which the acquisition occurs and the three fiscal quarters immediately following that fiscal quarter. As of December 31, 2025 and December 28, 2024, our ratio was substantially below the maximum ratio allowed by the Revolver.

In addition to the Revolver, we have short-term lines of credit available in various countries of approximately $222 million in the aggregate at December 31, 2025. These lines may be cancelled at any time by us or the issuing banks. Borrowings under our short-term lines of credit were not material as of December 31, 2025 or December 28, 2024.

We are exposed to financial market risk resulting from changes in interest and foreign currency exchange rates, and to possible liquidity and credit risks of our counterparties.

*Capital from Debt* 

The carrying value of our total debt increased by approximately $581 million to $3.73 billion at year-end 2025 from year-end 2024, primarily reflecting our September 2025 issuance of €500 million of senior notes due in 2035, higher commercial paper borrowings and the revaluation of our euro-denominated debt, partially offset by our repayment of €500 million of senior notes, $25 million of medium-term notes and $5 million of medium term notes at their maturity in the first, second and third quarters of 2025, respectively.

Credit ratings are a significant factor in our ability to raise short- and long-term financing. The credit ratings assigned to our company also impact the interest rates we pay and our access to commercial paper, credit facilities, and other borrowings. A downgrade of our short-term credit ratings could impact our ability to access commercial paper markets. If our access to commercial paper markets were to become limited, the Revolver and our other credit facilities would be available to meet our short-term funding requirements. When determining our credit rating, we believe that rating agencies primarily consider our competitive position, business outlook, consistency of cash flows, debt level and liquidity, geographic footprint and management team. We remain committed to maintaining an investment grade rating.

*Fair Value of Debt* 

The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities or euro government bond securities, as applicable, on notes with similar rates, credit ratings and remaining maturities. The fair value of short-term borrowings, which includes commercial paper issuances and short-term lines of credit, approximates their carrying value given their short duration. The fair value of our total debt was $3.67 billion at December 31, 2025 and $3.01 billion at December 28, 2024. Fair value amounts were determined based primarily on Level 2 inputs. Refer to Note 1, "Summary of Significant Accounting Policies," for more information.

**Contractual Obligations, Commitments and Off-Balance Sheet Arrangements** 

*Material Cash Requirements at End of Year 2025* 

We have short- and long-term material cash requirements related to our contractual obligations that arise in the normal course of business. In addition to principal and interest payments on our outstanding debt obligations, our contractual obligations primarily consist of lease payments.

Refer to Note 4, "Debt," to the Consolidated Financial Statements for a summary of our principal payments for short-term borrowings and long-term debt obligations as of December 31, 2025. Future interest payments for long-term debt as of December 31, 2025 are approximately $124 million in 2026; $124 million in 2027; $124 million in 2028; $99 million in 2029; $94 million in 2030; and $302 million from 2031 through maturity. Refer to Note 7, "Commitments and Leases," to the Consolidated Financial Statements for a summary of our lease obligations as of December 31, 2025.

Refer to Note 6, "Pension and Other Postretirement Benefits," to the Consolidated Financial Statements for information regarding our defined benefit pension plan contributions and future benefit payments, deferred compensation plan benefit payments and unfunded termination indemnity benefits.

Refer to Note 12, "Long-term Incentive Compensation," to the Consolidated Financial Statements for information regarding cash-based awards to employees under one of our long-term incentive compensation plans.

Refer to Note 14, "Taxes Based on Income," to the Consolidated Financial Statements for more information regarding our unrecognized tax benefits of approximately $81 million.

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**CRITICAL ACCOUNTING ESTIMATES** 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions for the reporting period and as of the financial statement date. These estimates and assumptions affect our reported amounts of assets and liabilities, disclosure of contingent liabilities, and reported amounts of revenue and expense. Actual results could differ from these estimates.

Critical accounting estimates are those that are important to our financial condition and results, and which require us to make difficult, subjective and/or complex judgments. Critical accounting estimates cover accounting matters that are inherently uncertain because their future resolution is unknown. We believe our critical accounting estimates include accounting for goodwill, business combinations, pension and postretirement benefits, taxes based on income and long-term incentive compensation.

***Goodwill***

Business combinations are accounted for using the acquisition method, with the excess of the acquisition cost over the fair value of acquired net tangible assets and identified intangible assets considered goodwill. As a result, we disclose goodwill separately from other intangible assets. Our reporting units are composed of either a discrete business or an aggregation of businesses with similar economic characteristics.

We perform our annual impairment test of goodwill during the fourth quarter. Certain factors may cause us to perform an impairment test prior to the fourth quarter, including significant underperformance of a business relative to expected operating results, significant adverse economic or industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, or a decision to divest a portion of a reporting unit. In performing impairment tests, we have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative assessment for goodwill impairment. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative assessment.

A quantitative assessment primarily consists of using the present value (discounted cash flow) method to determine the fair value of reporting units with goodwill. We compare the fair value of each reporting unit to its carrying amount, and, to the extent the carrying amount exceeds the unit's fair value, we recognize an impairment of goodwill for the excess up to the amount of goodwill of that reporting unit.

In consultation with outside specialists, we estimate the fair value of our reporting units using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions, including a reporting unit's forecasted sales, profit margins and growth rates, as well as discount rates. Our assumptions about discount rates are based on the weighted average cost of capital of comparable companies. Our assumptions about sales, profit margins and growth rates are based on our forecasts, business plans, economic projections, anticipated future cash flows, and marketplace data. We also make assumptions for varying perpetual growth rates for periods beyond our long-term business plan period. We base our fair value estimates on projected financial information and assumptions that we believe are reasonable. However, actual future results may differ materially from these estimates and projections. The valuation methodology we use to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions.

In our annual impairment test in the fourth quarter of 2025, the goodwill of all reporting units in our Materials Group and Solutions Group reportable segments were tested utilizing a qualitative assessment. Based on this assessment, we determined that the fair values of these reporting units were more-likely-than-not greater than their respective carrying values. Therefore, the goodwill of our reporting units was not impaired.

***Business Combinations***

The results of acquired businesses are included in our Consolidated Financial Statements from their acquisition date. Assets and liabilities of an acquired business are recorded at their estimated fair values on the acquisition date. We engage third-party valuation specialists to assist us in determining these fair values where necessary. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill.

The allocation of purchase price requires management to make significant estimates and assumptions. While we believe our assumptions and estimates are reasonable, they are inherently uncertain and based in part on our experience, market conditions, our projections of future performance, and information obtained from management of the acquired companies. Critical estimates include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Future revenue and profit margins;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Royalty rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Discount rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Customer retention rates;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Technology migration curves; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Useful lives assigned to acquired intangible assets.

Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis to marketing, general and administrative expense over their estimated useful lives.

***Pension and Postretirement Benefits***

The assumptions we use in determining projected benefit obligations and the fair value of plan assets for our defined benefit pension plans and other postretirement benefit plans are evaluated by management in consultation with outside actuaries. In the event that we determine that changes are warranted in the assumptions we use, such as the discount rate, expected long-term rate of return or health care costs, future pension and postretirement benefit expenses could increase or decrease. Due to changes in market conditions or participant population, the actuarial assumptions we use may differ from actual results, which could have a significant impact on our pension and postretirement liabilities and related costs.

*Discount Rate* 

In consultation with our actuaries, we annually review and determine the discount rates to use in valuing our postretirement obligations. The assumed discount rates for our non-U.S. pension plans reflect market rates for currently available high quality corporate bonds. Our discount rates are determined by evaluating yield curves consisting of large populations of high quality corporate bonds. The projected pension benefit payment streams are then matched with the bond portfolios to determine a rate that reflects the liability duration unique to our pension and postretirement benefit plans. As of December 31, 2025, a 0.25% increase in the discount rates associated with our non-U.S. plans would have decreased our year-end projected benefit obligation by approximately $26 million and would not have a significant impact on expected periodic benefit cost for the coming year. Conversely, a 0.25% decrease in the discount rates associated with our non-U.S. plans would have increased our year-end projected benefit obligation by approximately $26 million and would not have a significant impact on expected periodic benefit cost for the coming year.

We use the full yield curve approach to estimate the service and interest cost components of net periodic benefit cost for our pension and other postretirement benefit plans. Using this approach, we apply multiple discount rates from a yield curve composed of the rates of return on several hundred high-quality, fixed income corporate bonds available at the measurement date. We believe this approach provides a more precise measurement of service and interest cost by aligning the timing of plan liability cash flows to the corresponding rates on the yield curve.

*Long-term Return on Plan Assets* 

We determine the long-term rate of return assumption for plan assets by reviewing the historical and expected returns of both the equity and fixed income markets, taking into account our asset allocation, the correlation between returns in our asset classes, and our mix of active and passive investments. Additionally, current market conditions, including interest rates, are evaluated and market data is reviewed for reasonableness and appropriateness. An increase or decrease of 0.25% in the long-term return on assets associated with our non-U.S. plans would have decreased or increased our expected periodic benefit cost for the coming year by approximately $2 million.

***Taxes Based on Income***

Because we are subject to income tax in the U.S. and multiple foreign jurisdictions, judgment is required in evaluating and estimating our worldwide provision for income taxes, accruals for taxes, deferred taxes and tax positions. Our provision for income taxes is determined using the asset and liability approach in accordance with GAAP. Under this approach, deferred tax assets represent amounts available to reduce income taxes payable in future years. These assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating losses and tax credit carryforwards. These amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. We evaluate the realizability of these future tax deductions and credits by assessing the period over which recoverability is allowed by law and the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. Our assessment of these sources of income relies heavily on estimates. Our forecasted earnings by jurisdiction are determined by how we operate our business and any changes to our operations may affect our effective tax rate. For example, our future income tax rate could be adversely affected by earnings being lower than anticipated in jurisdictions in which we have significant deferred tax assets that are dependent on such earnings to be realized. We use our historical experience and operating forecasts to evaluate expected future taxable income. To the extent we do not consider it more-likely-than-not that a deferred tax asset will be recovered, a valuation allowance is established in the period we make that determination.

We calculate our current and deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified.

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Tax laws and regulations are complex and subject to different interpretations by taxpayers and governmental taxing authorities. We review our tax positions quarterly and adjust the balances if and as new information becomes available. Significant judgment is required in determining our tax expense and evaluating our tax positions, including evaluating uncertainties. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of relevant facts and circumstances existing at the balance sheet date, taking into consideration existing laws, regulations and practices of the governmental taxing authorities exercising jurisdiction over our operations. We recognize and measure our uncertain tax positions following the more-likely-than-not threshold for recognition and measurement for tax positions we take or expect to take on a tax return.

Refer to Note 14, "Taxes Based on Income," to the Consolidated Financial Statements for more information.

***Long-Term Incentive Compensation***

*Valuation of Stock-Based Awards* 

We base our stock-based compensation expense on the fair value of awards, adjusted for estimated forfeitures, amortized on a straight-line basis over the requisite service period for stock options and restricted stock units ("RSUs"). We base compensation expense for performance units ("PUs") on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis as these awards cliff-vest at the end of the requisite performance period. We base compensation expense related to market-leveraged stock units ("MSUs") on the fair value of awards, adjusted for estimated forfeitures, and amortized on a graded-vesting basis over their respective performance periods.

Compensation expense for awards with a market condition as a performance objective, which includes PUs and MSUs, is not adjusted if the condition is not met, as long as the requisite service period is met.

We determine the fair value of RSUs and the component of PUs that is subject to the achievement of a performance objective based on a financial performance condition based on the fair market value of our common stock as of the grant date, adjusted for foregone dividends. Over the performance period of the PUs, the estimated number of shares of our common stock issuable upon vesting is adjusted upward or downward based on the probability of achieving the target performance objectives established for the award.

We determine the fair value of stock-based awards that are subject to achievement of performance objectives based on a market condition, which includes MSUs and the other component of PUs, using the Monte-Carlo simulation model, which utilizes multiple input variables, including expected stock price volatility and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the respective target performance objectives established for the award.

*Forfeiture Rate* 

Changes in estimated forfeiture rates are recorded as cumulative adjustments in the period estimates are revised.

Certain of our assumptions are based on management's estimates, in consultation with outside specialists. Significant changes in assumptions for future awards and actual forfeiture rates could materially impact our stock-based compensation expense and results of operations.

*Valuation of Cash-Based Awards* 

Cash-based awards consist of long-term incentive units ("LTI Units"). LTI Units are classified as liability awards and remeasured at each quarter-end over the applicable vesting or performance period. In addition to LTI Units with terms and conditions that mirror those of RSUs, we also grant certain employees LTI Units with terms and conditions similar to those of PUs and MSUs.

**RECENT ACCOUNTING REQUIREMENTS** 

Refer to Note 1, "Summary of Significant Accounting Policies," to the Consolidated Financial Statements for this information.

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**Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** 

***Risk Management***

We are exposed to the impact of changes in foreign currency exchange rates and interest rates. We generally do not purchase or hold foreign currency or interest rate or commodity contracts for trading purposes.

Our objective in managing our exposure to foreign currency changes is to reduce the risk to our earnings and cash flow associated with foreign currency exchange rate changes. As a result, we enter into foreign currency exchange forward, option and swap contracts to reduce risks associated with the value of our existing foreign currency assets, liabilities, firm commitments and anticipated foreign revenues and costs, when available and appropriate. The gains and losses on these contracts are intended to offset changes in the related exposures. We do not hedge our foreign currency translation exposure in a manner that would entirely eliminate the effects of changes in foreign currency exchange rates on our net income.

Our objective in managing our exposure to interest rate changes is to reduce the impact of interest rate changes on earnings and cash flows. To achieve this objective, we may periodically use interest rate contracts to manage our exposure to interest rate changes.

Additionally, we enter into certain natural gas futures contracts to reduce the risks associated with natural gas we anticipate using in our manufacturing operations. These amounts are not material to our financial statements.

In the normal course of operations, we also face other risks that are either non-financial or non-quantifiable. These risks principally include changes in economic or political conditions, other risks associated with international operations, commodity price risk, and legal and compliance risk, which are not reflected in the analyses described below.

***Foreign Exchange Value-At-Risk***

We use a Value-At-Risk ("VAR") model to determine the estimated maximum potential one-day loss in earnings associated with our foreign exchange positions and contracts. This approach assumes that market rates or prices for foreign exchange positions and contracts are normally distributed. VAR model estimates are made assuming normal market conditions. The model includes foreign exchange derivative instruments. Forecasted transactions, firm commitments, accounts receivable and accounts payable denominated in foreign currencies, which certain of these instruments are intended to hedge, are excluded from the model.

The VAR model is a risk analysis tool and does not represent actual losses in fair value that we could incur, nor does it consider the potential effect of favorable changes in market factors.

In both 2025 and 2024, the VAR was estimated using a variance-covariance methodology. The currency correlation was based on one-year historical data obtained from one of our domestic banks. A 95% confidence level was used for a one-day time horizon.

The estimated maximum potential one-day loss in earnings for our foreign exchange positions and contracts was not significant at year-end 2025 or 2024.

***Interest Rate Sensitivity***

An assumed 29 and 44 basis point increase in interest rates affecting our variable-rate borrowings (10% of our weighted average interest rate on floating rate debt) in 2025 and 2024, respectively, would not have had a significant impact on interest expense.

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**Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

---

| | |
|:---|:---|
| **Index to Consolidated Financial Statements** | **Page** |
| <u>[Report of Independent Registered Public Accounting Firm (PCAOB ID](#i737457f929ff47bb8b2643445cd22790_82)238[)](#i737457f929ff47bb8b2643445cd22790_82)</u>  | [40](#i737457f929ff47bb8b2643445cd22790_82) |
| [Consolidated Financial Statements:](#i737457f929ff47bb8b2643445cd22790_85) |  |
| &nbsp;&nbsp;&nbsp;<u>[Consolidated Balance Sheets as of December](#i737457f929ff47bb8b2643445cd22790_88)[31](#i737457f929ff47bb8b2643445cd22790_88)[, 202](#i737457f929ff47bb8b2643445cd22790_88)[5](#i737457f929ff47bb8b2643445cd22790_88)[and December](#i737457f929ff47bb8b2643445cd22790_88)[28](#i737457f929ff47bb8b2643445cd22790_88)[, 202](#i737457f929ff47bb8b2643445cd22790_88)[4](#i737457f929ff47bb8b2643445cd22790_88)</u> | [42](#i737457f929ff47bb8b2643445cd22790_88) |
| &nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Income for 202](#i737457f929ff47bb8b2643445cd22790_91)[5](#i737457f929ff47bb8b2643445cd22790_91)[, 202](#i737457f929ff47bb8b2643445cd22790_91)[4](#i737457f929ff47bb8b2643445cd22790_91)[and 202](#i737457f929ff47bb8b2643445cd22790_91)[3](#i737457f929ff47bb8b2643445cd22790_91)</u> | [43](#i737457f929ff47bb8b2643445cd22790_91) |
| &nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Comprehensive Income for 202](#i737457f929ff47bb8b2643445cd22790_94)[5](#i737457f929ff47bb8b2643445cd22790_94)[, 202](#i737457f929ff47bb8b2643445cd22790_94)[4](#i737457f929ff47bb8b2643445cd22790_94)[and 202](#i737457f929ff47bb8b2643445cd22790_94)[3](#i737457f929ff47bb8b2643445cd22790_94)</u> | [44](#i737457f929ff47bb8b2643445cd22790_94) |
| &nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Shareholders' Equity for 202](#i737457f929ff47bb8b2643445cd22790_97)[5](#i737457f929ff47bb8b2643445cd22790_97)[, 202](#i737457f929ff47bb8b2643445cd22790_97)[4](#i737457f929ff47bb8b2643445cd22790_97)[and 202](#i737457f929ff47bb8b2643445cd22790_97)[3](#i737457f929ff47bb8b2643445cd22790_97)</u> | [45](#i737457f929ff47bb8b2643445cd22790_97) |
| &nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Cash Flows for 202](#i737457f929ff47bb8b2643445cd22790_100)[5](#i737457f929ff47bb8b2643445cd22790_100)[, 202](#i737457f929ff47bb8b2643445cd22790_100)[4](#i737457f929ff47bb8b2643445cd22790_100)[and 202](#i737457f929ff47bb8b2643445cd22790_100)[3](#i737457f929ff47bb8b2643445cd22790_100)</u> | [46](#i737457f929ff47bb8b2643445cd22790_100) |
| &nbsp;&nbsp;&nbsp;<u>[Notes to Consolidated Financial Statements](#i737457f929ff47bb8b2643445cd22790_103)</u> | [47](#i737457f929ff47bb8b2643445cd22790_103) |

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**Report of Independent Registered Public Accounting Firm**

To the Board of Directors and Shareholders of Avery Dennison Corporation

**Opinions on the Financial Statements and Internal Control over Financial Reporting**

We have audited the accompanying consolidated balance sheets of Avery Dennison Corporation and its subsidiaries (the "Company") as of December 31, 2025 and December 28, 2024, and the related consolidated statements of income, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the COSO.

**Basis for Opinions**

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

**Definition and Limitations of Internal Control over Financial Reporting**

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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**Critical Audit Matters**

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Revenue Recognition from Certain Product Revenue*

As described in Notes 1 and 15 to the consolidated financial statements, revenue is recognized for an amount that reflects the consideration which is expected from the sale of products when the Company satisfies a performance obligation by transferring control of products to a customer. Management considers a number of factors in determining when control has been transferred to a customer, including the following: (i) the Company's present right to payment; (ii) the customer's legal title to the asset; (iii) physical possession of the asset; (iv) the customer's significant risks and rewards of ownership of the asset; and (v) the customer's acceptance of the asset. Control generally transfers to a customer upon shipment or delivery, depending on the specific terms of sale with the customer. The Company's consolidated net sales were $8,855.5 million for the year ended December 31, 2025, of which a majority relates to certain product revenue in the Company's Materials Group and Solutions Group reportable segments.

The principal consideration for our determination that performing procedures relating to revenue recognition from certain product revenue is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company's revenue recognition from certain product revenue.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the recognition of certain product revenue for an amount that reflects the consideration which is expected from the sale of products when the Company satisfies a performance obligation. These procedures also included, among others (i) testing certain product revenue transactions, on a sample basis, by obtaining and inspecting source documents, such as purchase orders, invoices, contracts, proof of shipment or delivery, and subsequent payment receipts; and (ii) confirming, on a sample basis, outstanding customer invoice balances as of December 31, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as purchase orders, invoices, proof of shipment or delivery, and subsequent payment receipts.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California <br> February 25, 2026

We have served as the Company's auditor since at least 1960, which is when the Company became subject to SEC reporting requirements. We have not been able to determine the specific year we began serving as auditor of the Company or a predecessor company.

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**Consolidated Balance Sheets**

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| | | |
|:---|:---|:---|
| **(Dollars in millions, except per share amount)** | **December 31, 2025** | **December 28, 2024** |
| **Assets** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $202.8 | $329.1 |
| &nbsp;&nbsp;&nbsp;Trade accounts receivable, less allowances of $28.1 and $29.0 at year-end 2025 and 2024, respectively | 1503.9 | 1466.2 |
| &nbsp;&nbsp;&nbsp;Inventories | 975.8 | 978.1 |
| &nbsp;&nbsp;&nbsp;Other current assets | 307.8 | 305.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 2990.3 | 3078.7 |
| Property, plant and equipment, net | 1607.7 | 1586.7 |
| Goodwill | 2272.5 | 1976.2 |
| Other intangibles resulting from business acquisitions, net | 827.5 | 755.3 |
| Deferred tax assets | 125.3 | 110.0 |
| Other assets | 978.4 | 897.3 |
| Total assets | $8801.7 | $8404.2 |
| **Liabilities and Shareholders' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Short-term borrowings and current portion of long-term debt and finance leases | $522.9 | $592.3 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1261.7 | 1340.7 |
| &nbsp;&nbsp;&nbsp;Accrued payroll and employee benefits | 232.7 | 288.9 |
| &nbsp;&nbsp;&nbsp;Accrued trade rebates | 169.8 | 157.9 |
| &nbsp;&nbsp;&nbsp;Income taxes payable | 86.1 | 74.7 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 380.4 | 408.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 2653.6 | 2862.6 |
| Long-term debt and finance leases | 3210.0 | 2559.9 |
| Long-term retirement benefits and other liabilities | 432.0 | 434.6 |
| Deferred tax liabilities and income taxes payable | 264.0 | 234.8 |
| Commitments and contingencies (see Notes 7 and 8) |  |  |
| Shareholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $1 par value per share, authorized – 400,000,000 shares at year-end 2025 and 2024; issued – 124,126,624 shares at year-end 2025 and 2024; outstanding – 76,877,487 and 79,800,396 shares at year-end 2025 and 2024, respectively | 124.1 | 124.1 |
| &nbsp;&nbsp;&nbsp;Capital in excess of par value | 834.3 | 840.6 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 5597.5 | 5151.2 |
| &nbsp;&nbsp;&nbsp;Treasury stock at cost, 47,249,137 and 44,326,228 shares at year-end 2025 and 2024, respectively | (3904.1) | (3347.5) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (409.7) | (456.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 2242.1 | 2312.3 |
| Total liabilities and shareholders' equity | $8801.7 | $8404.2 |

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See Notes to Consolidated Financial Statements

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**Consolidated Statements of Income**

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| | | | |
|:---|:---|:---|:---|
| **(In millions, except per share amounts)** | **2025** | **2024** | **2023** |
| Net sales | $8855.5 | $8755.7 | $8364.3 |
| Cost of products sold | 6309.2 | 6225.0 | 6086.8 |
| Gross profit | 2546.3 | 2530.7 | 2277.5 |
| Marketing, general and administrative expense | 1422.5 | 1415.3 | 1313.7 |
| Other expense (income), net | 77.5 | 71.6 | 180.9 |
| Interest expense | 135.4 | 117.0 | 119.0 |
| Other non-operating expense (income), net | (14.2) | (26.7) | (30.8) |
| Income before taxes | 925.1 | 953.5 | 694.7 |
| Provision for income taxes | 237.1 | 248.6 | 191.7 |
| Net income | $688.0 | $704.9 | $503.0 |
| Per share amounts: |  |  |  |
| Net income per common share | $8.81 | $8.77 | $6.23 |
| Net income per common share, assuming dilution | $8.79 | $8.73 | $6.20 |
| Weighted average number of shares outstanding: |  |  |  |
| &nbsp;&nbsp;&nbsp;Common shares | 78.1 | 80.4 | 80.7 |
| &nbsp;&nbsp;&nbsp;Common shares, assuming dilution | 78.3 | 80.7 | 81.1 |

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See Notes to Consolidated Financial Statements

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**Consolidated Statements of Comprehensive Income**

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| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Net income | $688.0 | $704.9 | $503.0 |
| Other comprehensive income (loss), net of tax: |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Translation gain (loss) | 16.5 | (46.9) | (14.6) |
| &nbsp;&nbsp;&nbsp;Pension and other postretirement benefits: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gain (loss) recognized from actuarial gain/loss and prior service cost/credit | 26.7 | (1.3) | (25.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassifications to net income | 2.1 | .8 | (1.0) |
| &nbsp;&nbsp;&nbsp;Cash flow hedges: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) recognized on cash flow hedges | 1.9 | (5.4) | (7.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassifications to net income | 2.8 | 2.8 | 3.7 |
| &nbsp;&nbsp;&nbsp;Fair value hedges: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in excluded components of fair value hedges | (3.6) | 2.0 |  |
| Other comprehensive income (loss), net of tax | 46.4 | (48.0) | (44.1) |
| Total comprehensive income, net of tax | $734.4 | $656.9 | $458.9 |

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See Notes to Consolidated Financial Statements

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**Consolidated Statements of Shareholders' Equity**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(Dollars in millions, except per share amounts)** | **Common<br>stock, $1<br>par value** | **Capital in<br>excess<br>of<br>par value** | **Retained<br>earnings** | **Treasury<br>stock** | **Accumulated<br>other<br>comprehensive<br>loss** | **Total** |
| Balance as of December 31, 2022 | $124.1 | $879.3 | $4414.6 | $(3021.8) | $(364.0) | $2032.2 |
| Net income |  |  | 503.0 |  |  | 503.0 |
| Other comprehensive income (loss), net of tax |  |  |  |  | (44.1) | (44.1) |
| Repurchase of 780,721 shares for treasury |  |  |  | (137.5) |  | (137.5) |
| Issuance of 297,885 shares under stock-based compensation plans |  | (24.8) | 8.9 | 16.5 |  | .6 |
| Contribution of 168,404 shares to 401(k) plan |  |  | 22.0 | 8.4 |  | 30.4 |
| Dividends of $3.18 per share |  |  | (256.7) |  |  | (256.7) |
| Balance as of December 30, 2023 | $124.1 | $854.5 | $4691.8 | $(3134.4) | $(408.1) | $2127.9 |
| Net income |  |  | 704.9 |  |  | 704.9 |
| Other comprehensive income (loss), net of tax |  |  |  |  | (48.0) | (48.0) |
| Repurchase of 1,184,780 shares for treasury |  |  |  | (247.5) |  | (247.5) |
| Issuance of 340,048 shares under stock-based compensation plans |  | (13.9) | 7.7 | 26.8 |  | 20.6 |
| Contribution of 149,543 shares to 401(k) plan |  |  | 24.3 | 7.6 |  | 31.9 |
| Dividends of $3.45 per share |  |  | (277.5) |  |  | (277.5) |
| Balance as of December 28, 2024 | $124.1 | $840.6 | $5151.2 | $(3347.5) | $(456.1) | $2312.3 |
| Cumulative-effect adjustment upon adoption of accounting standard update<sup>(1)</sup> |  |  | 10.2 |  |  | 10.2 |
| Net income |  |  | 688.0 |  |  | 688.0 |
| Other comprehensive income (loss), net of tax |  |  |  |  | 46.4 | 46.4 |
| Repurchase of 3,236,106 shares for treasury |  |  |  | (575.6) |  | (575.6) |
| Issuance of 119,495 shares under stock-based compensation plans |  | (6.3) | 13.2 | 8.4 |  | 15.3 |
| Contribution of 193,703 shares to 401(k) plan |  |  | 23.3 | 10.6 |  | 33.9 |
| Dividends of $3.70 per share |  |  | (288.4) |  |  | (288.4) |
| Balance as of December 31, 2025 | $124.1 | $834.3 | $5597.5 | $(3904.1) | $(409.7) | $2242.1 |

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<sup>(1)</sup> In the first quarter of 2025, we adopted accounting guidance that requires crypto assets to be measured at fair value, which resulted in an adjustment to reflect the difference between the carrying value of our holdings in crypto assets and their fair value as of the beginning of 2025. Crypto assets were not material to the Consolidated Financial Statements.

See Notes to Consolidated Financial Statements

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**Consolidated Statements of Cash Flows**

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| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Operating Activities** |  |  |  |
| Net income | $688 | $704.9 | $503 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 206.4 | 197.1 | 187.4 |
| &nbsp;&nbsp;&nbsp;Amortization | 121.8 | 115.1 | 111.0 |
| &nbsp;&nbsp;&nbsp;Provision for credit losses and sales returns | 51.2 | 47.4 | 49.9 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 27.9 | 28.7 | 22.3 |
| &nbsp;&nbsp;&nbsp;Deferred taxes and other non-cash taxes | (19.9) | (18.5) | (24.4) |
| &nbsp;&nbsp;&nbsp;Other non-cash expense and loss (income and gain), net | 48.8 | 67.2 | 37.1 |
| Changes in assets and liabilities and other adjustments: |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade accounts receivable | 44.0 | (107.3) | (16.7) |
| &nbsp;&nbsp;&nbsp;Inventories | 53.2 | (90.7) | 111.7 |
| &nbsp;&nbsp;&nbsp;Accounts payable | (144.4) | 106.7 | (87.6) |
| &nbsp;&nbsp;&nbsp;Taxes on income | (5.1) | 40.2 | (18.7) |
| &nbsp;&nbsp;&nbsp;Other assets | 3.8 | (48.0) | 37.7 |
| &nbsp;&nbsp;&nbsp;Other liabilities | (194.3) | (104.0) | (86.7) |
| Net cash provided by operating activities | 881.4 | 938.8 | 826.0 |
| **Investing Activities** |  |  |  |
| Purchases of property, plant and equipment | (169.0) | (208.8) | (265.3) |
| Purchases of software and other deferred charges | (31.4) | (31.0) | (19.8) |
| Proceeds from company-owned life insurance policies |  |  | 48.1 |
| Purchases of Argentine Blue Chip Swap securities |  | (34.2) |  |
| Proceeds from sales of Argentine Blue Chip Swap securities |  | 24.0 |  |
| Proceeds from sales of property, plant and equipment | 22.6 | .6 | 1.0 |
| Proceeds from insurance and sales (purchases) of investments, net | 3.5 | 10.1 | 1.9 |
| Proceeds from settlement of net investment hedges | 6.2 |  |  |
| Payment for settlement of net investment hedges | (26.1) |  |  |
| Payments for acquisitions, net of cash acquired, and venture investments | (401.8) | (3.8) | (224.9) |
| Net cash used in investing activities | (596.0) | (243.1) | (459.0) |
| **Financing Activities** |  |  |  |
| Net increase (decrease) in borrowings with maturities of three months or less | 422.5 | (269.0) | (36.6) |
| Additional long-term borrowings | 576.5 | 539.2 | 394.9 |
| Repayments of long-term debt and finance leases | (559.4) | (308.1) | (255.9) |
| Dividends paid | (288.4) | (277.5) | (256.7) |
| Share repurchases | (572.3) | (247.5) | (137.5) |
| Net (tax withholding) proceeds related to stock-based compensation | (12.8) | (8.4) | (23.8) |
| Proceeds from settlement of fair value hedges | 32.8 |  |  |
| Payments for settlement of fair value hedges | (13.5) |  |  |
| Other | (.3) | (4.8) | (1.6) |
| Net cash used in financing activities | (414.9) | (576.1) | (317.2) |
| Effect of foreign currency translation on cash balances | 3.2 | (5.5) | (2.0) |
| Increase (decrease) in cash and cash equivalents | (126.3) | 114.1 | 47.8 |
| Cash and cash equivalents, beginning of year | 329.1 | 215.0 | 167.2 |
| Cash and cash equivalents, end of year | $202.8 | $329.1 | $215.0 |

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See Notes to Consolidated Financial Statements

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**Notes to Consolidated Financial Statements**

**NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Nature of Operations***

We are a global leader in materials science and digital identification solutions. We are Making Possible<sup>TM</sup> products and solutions that help advance the industries we serve, providing branding and information solutions that optimize labor and supply chain efficiency, reduce waste and mitigate loss, advance sustainability, circularity and transparency, and better connect brands and consumers. We design and develop labeling and functional materials, radio-frequency identification ("RFID") inlays and tags, software applications that connect the physical and digital, and offerings that enhance branded packaging and carry or display information that improves the customer experience. We serve an array of industries worldwide, including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive.

***Principles of Consolidation***

Our Consolidated Financial Statements include the accounts of majority-owned and controlled subsidiaries. Intercompany accounts, transactions and profits are eliminated in consolidation.

***Fiscal Year***

In January 2025, the Audit Committee of our Board of Directors approved a change to our previous 52- or 53-week fiscal year generally ending on the Saturday closest to December 31 to a fiscal year coincident with the calendar year. Our 2025 fiscal year began on December 29, 2024 and ended on December 31, 2025, which resulted in four extra days compared to prior years; fiscal years 2026 and beyond will be coincident with the calendar year beginning on January 1 and ending on December 31.

Our 2024 and 2023 fiscal years consisted of 52-week periods ending December 28, 2024 and December 30, 2023, respectively.

***Accounting Guidance Updates***

*Crypto Assets*

In the first quarter of 2025, we adopted guidance related to the accounting for and disclosure of crypto assets that requires crypto assets to be measured at fair value, which resulted in an adjustment to reflect the difference between the carrying value of our crypto assets and their fair value as of the beginning of 2025. The impact of our adoption of this guidance was not material to our financial statements or disclosures.

*Income Taxes*

In the fourth quarter of 2025, we prospectively adopted guidance that requires additional disclosures in the income tax rate reconciliation and income taxes paid. See Note 14, "Taxes Based on Income," for more information.

***Use of Estimates***

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions for the reporting period and as of the date of our financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenue and expense. As the effects of future events cannot be determined, actual results could differ significantly from these estimates.

***Cash and Cash Equivalents***

Cash and cash equivalents generally consist of cash on hand, deposits in banks, cash-in-transit, and bank drafts and short-term investments with maturities of three months or less when purchased or received. The carrying value of these assets approximates fair value due to the short maturity of these instruments.

***Inventories***

We state inventories at the lower of cost or net realizable value and categorize them as raw materials, work-in-progress or finished goods. Cost is determined using the first-in, first-out method. We record inventory that is damaged, obsolete, excess and slow-moving to cost of products sold and establish a lower cost basis for that inventory. Slow-moving inventory is reviewed by category and may be recognized partially or fully to cost of products sold depending on the type of product, level of usage and length of time the product has been included in inventory.

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***Trade Accounts Receivable***

We record trade accounts receivable at the invoiced amount. Our allowances for credit losses reflect customer trade accounts receivable that are estimated to be partially or entirely uncollectible. These allowances are used to reduce gross trade receivables to their net realizable values. We record these allowances based on estimates related to the financial condition of customers; the aging of receivable balances; our historical collection experience; and current and expected future macroeconomic and market conditions.

***Property, Plant and Equipment***

We generally compute depreciation using the straight-line method over the estimated useful lives of the respective assets, ranging from ten to 45 years for buildings and improvements and three to 15 years for machinery and equipment. Leasehold improvements are depreciated over the shorter of the asset's useful life and the associated lease term. We expense maintenance and repair costs as incurred; we capitalize renewals and improvements. Upon the sale or retirement of assets, the accounts are relieved of the cost and the related accumulated depreciation, with any resulting gain or loss included in net income.

***Leases***

Our leases primarily relate to office and warehouse space, machinery, transportation, and equipment for information technology. We determine if an arrangement is a lease or contains a lease at inception. For lease accounting purposes, we do not separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short-term leases. We have options to renew or terminate some of our leases. We evaluate renewal and termination options at the lease commencement date and over the lease term to determine if we are reasonably certain to exercise these options. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. We recognize expense for operating leases on a straight-line basis over the lease term, with variable lease payments recognized in the periods in which they are incurred.

***Software***

We capitalize software costs incurred during the application development stage of software development, including costs incurred for design, coding, installation to hardware, testing, and upgrades and enhancements that provide the software or hardware with additional functionalities and capabilities. We expense software costs, including internal and external training costs and maintenance costs, incurred during the preliminary project stage and the post-implementation and/or operation stage. Capitalized software, which is included in "Other assets" in the Consolidated Balance Sheets, is amortized on a straight-line basis over the estimated useful life of the software, which is generally between five and ten years.

***Cloud Computing Arrangements***

We capitalize certain costs incurred during the application development stage of implementation under a hosting arrangement that is a service contract. We expense costs incurred during the preliminary project stage and the post-implementation and/or operation stage. Capitalized implementation costs, which are included in "Other assets" in the Consolidated Balance Sheets, are amortized on a straight-line basis over the term of the hosting arrangement plus optional renewal periods, which is generally between five and ten years.

***Venture Investments***

We primarily invest in privately held companies and utilize the measurement alternative for venture investments that do not have readily determinable fair values, measuring them at cost less impairment plus or minus observable price changes in an orderly transaction. Venture investments that are publicly traded companies are recorded at fair value using Level 1 inputs. The carrying value of our venture investments is included in "Other assets" in the Consolidated Balance Sheets.

See Note 9, "Fair Value Measurements," for more information.

***Impairment of Long-lived Assets***

We record impairment charges when the carrying amounts of long-lived assets are determined not to be recoverable. We measure recoverability by comparing the undiscounted cash flows expected from the applicable asset or asset group's use and eventual disposition to its carrying value. We calculate the amount of impairment loss as the excess of the carrying value over the fair value. Historically, changes in market conditions and management strategy have caused us to reassess the carrying amount of our long-lived assets.

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***Goodwill and Other Intangibles Resulting from Business Acquisitions***

We account for business combinations using the acquisition method, with the excess of the acquisition cost over the fair value of acquired net tangible assets and identified intangible assets considered goodwill. As a result, we disclose goodwill separately from other intangible assets. Other identifiable intangibles include customer relationships, patented and other developed technology, and trade names and trademarks.

We perform an annual impairment test of goodwill during the fourth quarter and, as necessary, if changes in facts and circumstances that indicate the fair value of a reporting unit may be less than its carrying value. Factors that may cause us to perform an impairment test outside of our annual assessment include significant underperformance of a business relative to expected operating results, significant adverse economic or industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, or our decision to divest a portion of a reporting unit. In performing impairment tests, we have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative assessment for goodwill impairment. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative assessment. A quantitative assessment primarily uses the present value (discounted cash flow) method to determine the fair value of reporting units with goodwill.

We compare the fair value of each reporting unit to its carrying amount, and, to the extent the carrying amount exceeds the unit's fair value, we recognize an impairment of goodwill for the excess up to the amount of goodwill of that reporting unit.

In consultation with outside specialists, we estimate the fair value of our reporting units using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions, including a reporting unit's forecasted sales, profit margins and growth rates, as well as discount rates. Our assumptions about discount rates are based on the weighted average cost of capital of comparable companies. Our assumptions about sales, profit margins and growth rates are based on our forecasts, business plans, economic projections, anticipated future cash flows, and marketplace data. We also make assumptions for varying perpetual growth rates for periods beyond our long-term business plan period. We base our fair value estimates on projected financial information and assumptions that we believe are reasonable. However, actual future results may differ materially from these estimates and projections. The valuation methodology we use to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions.

We test indefinite-lived intangible assets, consisting of trade names and trademarks, for impairment in the fourth quarter or whenever events or circumstances indicate that it is more-likely-than-not that their carrying amounts exceed their fair values. In performing the impairment tests, we have the option first to assess qualitative factors to determine whether it is necessary to perform a quantitative assessment for indefinite-lived intangible asset impairment. If we decide not to perform a qualitative assessment, or if the qualitative assessment indicates that it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is less than its carrying value, we perform a quantitative assessment. Fair value is estimated as the discounted value of future revenues using a royalty rate that a third party would pay to use the asset. Variation in the royalty rates could impact our estimate of fair value. If the carrying amount of an asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

We amortize finite-lived intangible assets, consisting of customer relationships, patented and other developed technology, trade names and trademarks, and other intangibles, on a straight-line basis over their estimated useful lives.

See Note 3, "Goodwill and Other Intangibles Resulting from Business Acquisitions," for more information.

***Foreign Currency***

We translate asset and liability accounts of international operations into U.S. dollars at current rates. Revenues and expenses are translated at the weighted average currency rate for the fiscal year. We record gains and losses resulting from hedging the value of investments in certain international operations and from the translation of balance sheet accounts directly as a component of other comprehensive income.

We account for our operations in Argentina as highly inflationary because the country's three-year cumulative inflation rate exceeds 100%. As a result, the functional currency of our Argentine subsidiary is the U.S. dollar.

***Financial Instruments***

We enter into foreign currency exchange derivative instruments to reduce our risk from exchange rate fluctuations associated with receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. From time to time, we enter into interest rate contracts to help manage our exposure to certain interest rate fluctuations. We also enter into futures contracts to hedge certain price fluctuations for a portion of our anticipated domestic purchases of natural gas. The maximum length of time for which we hedge our exposure to the variability in future cash flows is 36 months for forecasted foreign currency exchange and commodity transactions and ten years for cross-currency swap transactions.

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On the date we enter into a derivative instrument, we determine whether the it will be designated as a hedge. Other derivative instruments not designated as hedges are recorded at fair value, with changes in fair value recognized in earnings. Our policy is not to purchase or hold any foreign currency, interest rate or commodity contracts for trading purposes.

All derivative instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated Balance Sheets. Accounting for the gain or loss resulting from changes in the fair value of a derivative instrument depends on whether it has been designated as part of a hedging relationship and is highly effective, as well as the nature of the hedging activity. We formally document all relationships between derivative instruments accounted for as designated hedges, the hedged item, the method for assessing effectiveness and the treatment of excluded components. These financial instruments can be designated as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fair value hedges - Hedges of the change in the fair value of a recognized asset or liability. The gain or loss from the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in income during the period of the change in fair value. Hedge effectiveness is based on the spot method and expected to be perfectly effective. Excluded components are not included in the effectiveness assessment, recognized in a systematic and rational method over the term of the contracts and recorded to the same income statement line as the item being hedged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash flow hedges - Hedges to reduce the variability of future expected cash flows. For derivative instruments that are designated and qualify as cash flow hedges, the entire gain or loss on the derivative instrument is reported as a component of "Accumulated other comprehensive loss" and reclassified into earnings in the same period(s) during which the hedged transaction impacts earnings. Gains and losses on these derivative instruments, representing hedge components excluded from the assessment of effectiveness, are recognized in current earnings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net investment hedges - Hedges of the currency exposure related to a net investment in a foreign operation. The gain or loss from the derivative instrument is recognized as foreign currency translation in "Accumulated other comprehensive loss" until the hedged net investment is either sold or substantially liquidated. Hedge effectiveness is based on the spot method, with no ineffectiveness expected over the duration of the hedging relationship. Excluded components are not included in the effectiveness assessment, recorded in a systematic and rational basis over the term of the contracts and recorded to "Marketing, general and administrative expense" in the Consolidated Statements of Income.

We assess, both at the inception of any hedge and on an ongoing basis, whether our hedges are highly effective. If we determine that a hedge is not highly effective, we prospectively discontinue hedge accounting. For cash flow hedges, we record gains and losses as components of other comprehensive income and reclassify them into earnings in the same period during which the hedged transaction affects earnings. In the event that the anticipated transaction is no longer highly probable to occur, we recognize the change in fair value of the hedging instrument in current period earnings. We recognize changes in fair value hedges in current period earnings. We also recognize changes in the fair value of underlying hedged items (such as recognized assets or liabilities) in current period earnings and offset the changes in the fair value of the derivative instrument.

In the Consolidated Statements of Cash Flows, hedges are classified in the same category as the hedged item.

See Note 5, "Financial Instruments," for more information.

***Fair Value Measurements***

We define fair value as the price that would be received from selling an asset or paid for transferring a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability.

We determine fair value based on a three-tier fair value hierarchy, which we use to prioritize the inputs used in measuring fair value. These tiers consist of Level 1, which are observable inputs such as quoted prices in active markets; Level 2, which are inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which are unobservable inputs for which little or no market data exists, requiring us to develop our own assumptions to determine the best estimate of fair value.

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***Revenue Recognition***

Substantially all of our revenue is derived from the sale of products. Our Materials Group reportable segment sells pressure-sensitive label materials (including label materials with RFID inlays), films for graphic and reflective products, performance tapes and other adhesive products for industrial, medical and other applications, as well as fastener solutions. Our Solutions Group reportable segment sells a wide variety of branding and information solutions-oriented products, such as tickets, tags, labels (including RFID inlays), as well as related equipment, services and supplies. We recognize revenue in an amount that reflects the consideration which we expect from the sale of our products when we satisfy a performance obligation by transferring control of our products to a customer. We consider a number of factors in determining when we have transferred control to a customer, including the following: (i) our present right to payment; (ii) the customer's legal title to the asset; (iii) physical possession of the asset; (iv) the customer's significant risks and rewards of ownership of the asset; and (v) the customer's acceptance of the asset. Generally, there are no substantive differences in revenue recognition considerations among our various products. Control generally transfers to a customer upon shipment or delivery, depending on the specific terms of sale with the customer.

Our payment terms with customers are generally consistent with those used in the industries and regions in which we operate.

We accept sales returns in certain limited circumstances. We record a liability for estimated returns and a corresponding reduction to sales in the amount we expect to repay or credit customers, which we base on historical returns and outstanding customer claims. We update our estimates each reporting period.

Sales rebates, discounts and other customer concessions represent variable consideration and are common in the industries and regions in which we operate, which we account for as a reduction to sales based on estimates at the time at which products are sold. We base these estimates on our historical experience, as well as current information such as sales forecasts. We regularly review our estimates and adjust the revenue recognized from sales as necessary as additional information becomes available.

We exclude sales, value-added and other taxes we collect from customers from sales. We account for shipping and handling activities after control of a product is transferred to a customer as fulfillment costs and not as separate performance obligations. As a practical expedient, we have elected not to disclose the value of unsatisfied performance obligations for contracts with an expected length of less than one year. We expense sales commissions when incurred because their expected amortization period is one year or less. We record these costs in "Marketing, general and administrative expense" in the Consolidated Statements of Income.

***Research and Development***

Research and development costs are related to research, design and testing of new products and applications, which we expense as incurred.

***Long-Term Incentive Compensation***

No long-term incentive compensation expense was capitalized in 2025, 2024 or 2023.

*Valuation of Stock-Based Awards*

We base our stock-based compensation expense on the fair value of awards, adjusted for estimated forfeitures, amortized on a straight-line basis over the requisite service period for stock options and restricted stock units ("RSUs"). We base compensation expense for performance units ("PUs") on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis as these awards cliff-vest at the end of the requisite service period. We base compensation expense related to market-leveraged stock units ("MSUs") on the fair value of awards, adjusted for estimated forfeitures, and amortized on a graded-vesting basis over their respective performance periods.

Compensation expense for awards with a market condition as a performance objective, which includes MSUs and a component of PUs, is not adjusted if the condition is not met, as long as the requisite service period is met.

We estimate the fair value of stock options as of the grant date using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate and expected option term.

We determine the fair value of RSUs and the component of PUs that is subject to the achievement of a performance objective using a financial performance condition based on the fair market value of our common stock as of the grant date, adjusted for foregone dividends. Over the performance period of the PUs, the estimated number of shares of our common stock issuable upon vesting is adjusted upward or downward from the target shares based on the probability of the performance objectives established for the award being achieved.

We determine the fair value of stock-based awards that are subject to the achievement of performance objectives based on a market condition, which includes MSUs and the other component of PUs, using the Monte-Carlo simulation method, which utilizes multiple input variables, including expected stock price volatility and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the performance objectives established for the award.

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Certain of these assumptions are based on management's estimates, in consultation with outside specialists. Significant changes in assumptions for future awards and actual forfeiture rates could materially impact stock-based compensation expense and our results of operations.

*Valuation of Cash-Based Awards*

Cash-based awards consist of long-term incentive units ("LTI Units"). We classify LTI Units as liability awards and remeasure them at each quarter-end over the applicable vesting or performance period. In addition to LTI Units with terms and conditions that mirror those of RSUs, we also grant certain employees LTI Units with terms and conditions that mirror those of PUs and MSUs.

*Forfeitures*

We estimate expected forfeitures in determining the compensation cost to be recognized each period, rather than accounting for forfeitures as they occur. We record changes in estimated forfeiture rates as cumulative adjustments in the period estimates are revised.

See Note 12, "Long-term Incentive Compensation," for more information.

***Taxes Based on Income***

Because we are subject to income tax in the U.S. and multiple foreign jurisdictions, judgment is required in evaluating and estimating our worldwide provision for income taxes, accruals for taxes, deferred taxes and tax positions. Our provision for income taxes is determined using the asset and liability approach in accordance with GAAP. Under this approach, deferred taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets when uncertainty regarding their realizability exists. We recognize and measure our uncertain tax positions following the more-likely-than-not threshold for recognition and measurement for tax positions we take or expect to take on a tax return.

See Note 14, "Taxes Based on Income," for more information.

***Reclassifications***

Certain prior-period amounts have been reclassified to conform to the current-year presentation. Refer to Note 15, "Segment and Disaggregated Revenue Information," to the Consolidated Financial Statements for more information.

***Recent Accounting Requirements***

In September 2025, the Financial Accounting Standards Board ("FASB") issued guidance changing the capitalization criteria for internal-use software, eliminating references to project stages and requiring that projects meet completion probability before costs can be capitalized. This guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. We are currently assessing the impact of adopting this guidance on our consolidated financial statements.

In November 2024, the FASB issued guidance expanding the disclosure requirements for certain expenses in notes to consolidated financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently assessing the impact of adopting this guidance on our consolidated financial statement disclosures.

**NOTE 2. BUSINESS ACQUISITIONS**

***2025 Business Acquisition***

On October 20, 2025, we completed our business acquisition of W.F. Taylor Holdings, Inc. ("Taylor Adhesives"), a Georgia-based flooring adhesives business, for the purchase price of approximately $390 million. This acquisition expanded the high-value category portfolio in our Materials Group reportable segment.

We funded the Taylor Adhesives acquisition using cash and proceeds from our issuance of senior notes in September 2025.

The final allocations of purchase consideration to assets and liabilities are ongoing as we continue to evaluate certain balances, estimates and assumptions during the measurement period (up to one year from the acquisition date). Our valuation of certain acquired assets and liabilities is currently pending finalization within the allowable time to complete our assessment.

The Taylor Adhesives acquisition was not material to the Consolidated Financial Statements.

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***2023 Business Acquisitions***

On November 23, 2023, we completed our business acquisition of Silver Crystal Group ("Silver Crystal"), a Canada-based provider of sports apparel customization and application solutions across in-venue, direct-to-business and e-commerce platforms. On May 22, 2023, we completed our business acquisition of LG Group, Inc. ("Lion Brothers"), a Maryland-based designer and manufacturer of apparel brand embellishments. On March 6, 2023, we completed our business acquisition of Thermopatch, Inc. ("Thermopatch"), a New York-based manufacturer specializing in labeling, embellishments and transfers for the sports, industrial laundry, workwear and hospitality industries. These acquisitions expanded the product portfolio in our Solutions Group reportable segment. The acquisitions of Silver Crystal, Lion Brothers and Thermopatch are referred to collectively as the "2023 Acquisitions."

The aggregate purchase consideration, including purchase consideration payable, for the 2023 Acquisitions was approximately $231 million. We funded the 2023 Acquisitions using cash and commercial paper borrowings. In addition to the cash paid at closing, the sellers in one of these acquisitions are eligible for earn-out payments of up to $5 million, subject to the acquired company achieving certain post-acquisition performance targets. As of the acquisition date, we included an estimate of the fair value of these earn-out payments in the aggregate purchase consideration.

The 2023 Acquisitions were not material, individually or in the aggregate, to the Consolidated Financial Statements.

**NOTE 3. GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS** 

***Goodwill***

Results from our annual goodwill impairment test in the fourth quarter of 2025 indicated that no impairment occurred during 2025. The assumptions used in our assessment were primarily based on Level 3 inputs.

Changes in the net carrying amount of goodwill for 2025 and 2024 by reportable segment are shown below.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **Materials Group** | **Solutions Group** | **Total** |
| Goodwill as of December 30, 2023 | $630.7 | $1382.9 | $2013.6 |
| Acquisition adjustments<sup>(1)</sup> |  | (2.7) | (2.7) |
| Translation adjustments | (24.6) | (10.1) | (34.7) |
| Goodwill as of December 28, 2024 | 606.1 | 1370.1 | 1976.2 |
| Acquisition<sup>(2)</sup> | 237.6 |  | 237.6 |
| Translation adjustments | 42.3 | 16.4 | 58.7 |
| Goodwill as of December 31, 2025 | $886.0 | $1386.5 | $2272.5 |

---

<sup>(1)</sup> Measurement period adjustments related to the finalization of the purchase price allocation for our 2023 Acquisitions.

<sup>(2)</sup> Goodwill acquired related to our 2025 acquisition of Taylor Adhesives. We expect nearly all of the recognized goodwill related to this acquisition not to be deductible for income tax purposes.

The carrying amounts of goodwill at December 31, 2025 and December 28, 2024 were net of accumulated impairment losses of approximately $820 million recognized in fiscal year 2009 by our Solutions Group reportable segment.

***Indefinite-Lived Intangible Assets***

In connection with our acquisition of Taylor Adhesives, we acquired $18.7 million of identifiable indefinite lived intangible assets, consisting of trade names and trademarks. We utilized the income approach to estimate the fair values of intangible assets, primarily using Level 3 inputs. We applied significant judgment in determining the fair value of intangible assets, which included our estimates and assumptions with respect to the estimated future revenue and related profit margins, royalty rates, discount rates and economic lives assigned to the acquired intangible assets.

Results from our annual indefinite-lived intangible assets impairment test in the fourth quarter indicated that no impairment occurred during 2025. The carrying value of indefinite-lived intangible assets resulting from business acquisitions, consisting of trade names and trademarks, was $174.8 million and $154.5 million at December 31, 2025 and December 28, 2024, respectively.

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***Finite-Lived Intangible Assets***

In connection with our acquisition of Taylor Adhesives, we acquired $139.6 million of identifiable finite-lived intangible assets, which consisted of customer relationships and developed technology. We utilized the income approach to estimate the fair value of acquired identifiable intangibles, primarily using Level 3 inputs. We applied significant judgment in determining the fair value of intangible assets, which included our estimates and assumptions with respect to estimated future revenue and related profit margins, customer retention rates, technology migration curves, royalty rates, discount rates and economic lives assigned to the acquired intangible assets.

The table below summarizes the amounts and useful lives of the intangible assets associated with our acquisition of Taylor Adhesives as of the acquisition date.

---

| | | |
|:---|:---|:---|
| | **Amount<br>(in millions)** | **Amortization**<br>**period**<br>**(in years)** |
| Customer relationships | $112.5 | 9 |
| Developed technology | 27.1 | 8 |

---

Refer to Note 2, "Business Acquisitions," for more information.

The table below sets forth our finite-lived intangible assets resulting from business acquisitions at December 31, 2025 and December 28, 2024, which continue to be amortized.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
|<br>**(In millions)** | **Gross<br>Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net<br>Carrying<br>Amount** | **Gross<br>Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net<br>Carrying<br>Amount** |
| Customer relationships | $1040.8 | $509.5 | $531.3 | $916.0 | $438.5 | $477.5 |
| Patented and other developed technology | 305.0 | 187.2 | 117.8 | 275.2 | 156.8 | 118.4 |
| Trade names and trademarks | 17.5 | 14.0 | 3.5 | 17.1 | 12.8 | 4.3 |
| Other intangibles | 3.3 | 3.2 | .1 | 3.2 | 2.6 | .6 |
| Total | $1366.6 | $713.9 | $652.7 | $1211.5 | $610.7 | $600.8 |

---

Amortization expense for finite-lived intangible assets resulting from business acquisitions was $92.8 million for 2025, $89.4 million for 2024 and $86.3 million for 2023.

We expect estimated amortization expense for finite-lived intangible assets resulting from business acquisitions for each of the next five fiscal years and thereafter to be as follows:

---

| | |
|:---|:---|
| **(In millions)** | **Estimated<br>Amortization<br>Expense** |
| 2026 | $102.0 |
| 2027 | 101.7 |
| 2028 | 93.6 |
| 2029 | 78.4 |
| 2030 | 76.5 |
| 2031 and thereafter | 200.5 |

---

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**NOTE 4. DEBT**

***Short-Term Borrowings***

We had $101.5 million in outstanding borrowings from U.S. commercial paper as of December 31, 2025 with a weighted average interest rate of 3.93% and no outstanding borrowings from U.S. commercial paper as of December 28, 2024.

We have a Euro-Commercial Paper Program under which we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $500 million. Proceeds from issuances under this program may be used for general corporate purposes. The maturities of the notes vary, but may not exceed 364 days from the date of issuance. Our payment obligations with respect to any notes issued under this program are backed by our revolving credit facility (the "Revolver"). There are no financial covenants under this program. Under this program, we had a $415.5 million outstanding balance as of December 31, 2025 with a weighted average interest rate of 2.19% and no outstanding balance as of December 28, 2024.

***Short-Term Credit Facilities***

In June 2024, we entered into a Credit Agreement (the "Credit Agreement") related to the Revolver to borrow up to an aggregate of $1.2 billion through its maturity date of June 26, 2029. The Revolver refinanced the prior revolving credit facility under the Fifth Amended and Restated Credit Agreement dated as of February 13, 2020, as amended. Pursuant to the Credit Agreement, the commitments under the Revolver may be increased by up to $600 million, subject to lender approvals and customary requirements. Under certain circumstances, we may request that the commitments under the Revolver be extended for one-year periods in accordance with the terms and conditions of the Credit Agreement. We use the Revolver as a back-up facility for our commercial paper program and for other corporate purposes.

No balance was outstanding under the Revolver as of December 31, 2025 or December 28, 2024. Commitment fees associated with revolving credit facilities in 2025, 2024 and 2023 were $1.3 million, $1.5 million and $1.2 million, respectively.

In addition to the Revolver, we have short-term lines of credit available in various countries of approximately $222 million in the aggregate at December 31, 2025. These lines may be cancelled at any time by us or the issuing banks. Borrowings under our short-term lines of credit were not material as of December 31, 2025 or December 28, 2024.

From time to time, we provide guarantees on certain arrangements with banks. Our exposure to these guarantees is not material.

***Long-Term Borrowings***

In September 2025, we issued €500 million of senior notes, due September 11, 2035, which bear an interest rate of 4.000% per year, payable annually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were approximately €494 million ($577 million), which we used in part to finance the Taylor Adhesives acquisition and repay existing indebtedness under our commercial paper program. Refer to Note 2, "Business Acquisitions," to the Consolidated Financial Statements for more information regarding our acquisition of Taylor Adhesives.

In the third quarter of 2025, we repaid our $5 million of medium-term notes at maturity using cash flows from operations and commercial paper borrowings.

In the second quarter of 2025, we repaid our $25 million of medium-term notes at maturity using cash flows from operations and commercial paper borrowings.

In the first quarter of 2025, we repaid our €500 million of senior notes at maturity using the net proceeds from the €500 million of senior notes we issued in the fourth quarter of 2024, cash flows from operations and commercial paper borrowings.

In November 2024, we issued €500 million of senior notes, due November 4, 2034, which bear an interest rate of 3.750% per year, payable annually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were approximately €495 million ($539 million), which we used to repay our €500 million of senior notes maturing in March 2025 and for general corporate purposes.

In August 2024, we repaid our $300 million of senior notes at maturity using cash flows from operations and commercial paper borrowings.

During 2024, we reclassified our $5 million of medium-term notes due in the third quarter of 2025, $25 million of medium-term notes due in the second quarter of 2025 and €500 million of senior notes due in the first quarter of 2025 from "Long-term debt and finance leases" to "Short-term borrowings and current portion of long-term debt and finance leases" in the Consolidated Balance Sheets.

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In March 2023, we issued $400 million of senior notes, due March 15, 2033, which bear an interest rate of 5.750% per year, payable semiannually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were $394.9 million, which we used to repay indebtedness under our commercial paper programs and our $250 million of senior notes that matured on April 15, 2023.

Our long-term debt, and related interest rates, at year-end 2025 and 2024 is shown below.

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| **Long-term debt** |  |  |
| Medium-term notes: |  |  |
| &nbsp;&nbsp;&nbsp;Series 1995 due 2025 | $— | $30.0 |
| Long-term notes: |  |  |
| &nbsp;&nbsp;&nbsp;Senior notes due 2025 at 1.250%<sup>(1)</sup> |  | 521.1 |
| &nbsp;&nbsp;&nbsp;Senior notes due 2028 at 4.875% | 498.0 | 497.4 |
| &nbsp;&nbsp;&nbsp;Senior notes due 2030 at 2.650% | 497.4 | 496.7 |
| &nbsp;&nbsp;&nbsp;Senior notes due 2032 at 2.250% | 496.3 | 495.7 |
| &nbsp;&nbsp;&nbsp;Senior notes due 2033 at 6.000% | 149.4 | 149.3 |
| &nbsp;&nbsp;&nbsp;Senior notes due 2033 at 5.750% | 396.3 | 395.8 |
| &nbsp;&nbsp;&nbsp;Senior notes due 2034 at 3.750%<sup>(1)</sup> | 582.0 | 515.9 |
| &nbsp;&nbsp;&nbsp;Senior notes due 2035 at 4.000%<sup>(1)</sup> | 579.6 |  |
| Less amount classified as current |  | (551.1) |
| Total long-term debt<sup>(2)</sup> | $3199.0 | $2550.8 |

---

<sup>(1)</sup> These senior notes are euro-denominated, each with a face value of €500 million.

<sup>(2)</sup> Included unamortized debt issuance costs and debt discounts of $14.6 million and $10.2 million, respectively, as of year-end 2025 and $12.6 million and $7.9 million, respectively, as of year-end 2024.

At year-end 2024, our medium-term notes had accrued interest at a weighted average fixed rate of 7.5%.

We expect maturities of our long-term debt for each of the next five fiscal years and thereafter to be as follows:

---

| | |
|:---|:---|
| **Year** | **(In millions)** |
| 2026 | $— |
| 2027 |  |
| 2028 | 500.0 |
| 2029 |  |
| 2030 | 500.0 |
| 2031 and thereafter | 2223.8 |

---

Refer to Note 7, "Commitments and Leases," for information related to finance leases.

***Other***

The Revolver contains a financial covenant requiring that we maintain a specified ratio of total debt minus unrestricted cash and cash equivalents in excess of $50 million to a certain measure of income. As of December 31, 2025 and December 28, 2024, we were in compliance with this financial covenant.

Our total interest costs in 2025, 2024 and 2023 were $138.3 million, $124.0 million and $126.5 million, respectively, of which $2.9 million, $7.0 million and $7.5 million, respectively, was capitalized as part of the cost of property, plant and equipment, capitalized software and capitalized implementation costs associated with cloud computing arrangements.

The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities or euro government bond securities, as applicable, on notes with similar rates, credit ratings and remaining maturities. The fair value of short-term borrowings, which includes commercial paper issuances and short-term lines of credit, approximates their carrying value given their short duration. The fair value of our total debt was $3.67 billion at December 31, 2025 and $3.01 billion at December 28, 2024. Fair value amounts were determined based primarily on Level 2 inputs. Refer to Note 1, "Summary of Significant Accounting Policies," for more information.

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**NOTE 5. FINANCIAL INSTRUMENTS** 

We use various derivative instruments to manage risks in foreign currency exchange rates, commodity prices and interest rates. We recognize derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets.

***Fair Value Hedges***

We enter into foreign currency forward contracts to hedge our euro-denominated debt to offset changes in the fair value of the hedged item attributable to foreign currency risk. As of December 31, 2025, the foreign currency forward contracts hedging our €500 million of senior notes due in the third quarter of 2035 and our €500 million of senior notes due in the fourth quarter of 2034 mature in September 2026 and December 2026, respectively.

***Cash Flow Hedges***

We entered into U.S. dollar to euro cross-currency swap contracts with a total notional amount of $250 million to effectively convert our fixed-rate U.S. dollar-denominated debt into euro-denominated debt, including semiannual interest payments and the payment of principal at maturity. During the term of the contracts, which end on April 30, 2030, we pay fixed-rate interest in euros and receive fixed-rate interest in U.S. dollars.

We designate commodity forward contracts on forecasted purchases of commodities as cash flow hedges.

During 2025 and 2024, we entered into interest rate forward-starting swap contracts that we designated as cash flow hedges that were terminated upon the issuance of our €500 million of senior notes due in the third quarter of 2035 and our €500 million of senior notes due in the fourth quarter of 2034. The resulting gains and losses will be amortized to interest expense over the term of the hedged fixed-rate interest payments.

***Net Investment Hedges***

We enter into foreign currency contracts and zero-cost collars, which are combined as net investment hedges for accounting purposes. The net investment hedges minimize the effect of foreign currency exchange rates on our net investment in certain foreign operations between the sold put strike and bought call strike rates of the contracts. As of December 31, 2025, the notional value of these hedges totaled €1.0 billion, consisting of two €500 million tranches that mature in September 2026 and December 2026.

***Other Derivative Instruments***

Our outstanding foreign currency exchange contracts as of December 31, 2025 were recorded in various currencies, primarily the U.S. dollar, Canadian dollar, euro, Chinese renminbi, British pound sterling and Hong Kong dollar. We enter into foreign currency exchange contracts to reduce the risk from foreign currency exchange rate fluctuations associated with our receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. For other derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings.

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***Derivative Instrument Financial Statement Impacts***

The following table shows the fair value and balance sheet locations of our derivative instruments as of December 31, 2025 and December 28, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(In millions)** | **Notional Amount** | **Other Current Assets** | **Other Non-Current Assets** | **Other Current Liabilities** | **Other Non-Current Liabilities** | **Type of Hedge** |
| December 31, 2025 |  |  |  |  |  |  |
| &nbsp;&nbsp;Derivatives designated as hedges: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency forward contracts | $1173.8 | $— | $— | $— | $4.5 | Fair value |
| &nbsp;&nbsp;&nbsp;&nbsp;Cross-currency swap contracts | 250.0 |  |  |  | 9.9 | Cash flow |
| &nbsp;&nbsp;&nbsp;&nbsp;Commodity contracts | 1.7 |  |  | .3 |  | Cash flow |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency forward contracts with collars | 1173.8 |  | 2.6 |  |  | Net investment |
| Total |  | $— | $2.6 | $.3 | $14.4 |  |
| &nbsp;&nbsp;Derivatives not designated as hedges: | &nbsp;&nbsp;Derivatives not designated as hedges: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange contracts | $1467.5 | $4.2 | $— | $3.4 | $— |  |
| December 28, 2024 |  |  |  |  |  |  |
| &nbsp;&nbsp;Derivatives designated as hedges: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency forward contracts | $958.9 | $.2 | $— | $36.7 | $— | Fair value |
| &nbsp;&nbsp;&nbsp;&nbsp;Cross-currency swap contracts | 250.0 |  | 10.9 |  |  | Cash flow |
| &nbsp;&nbsp;&nbsp;&nbsp;Commodity contracts | 2.9 | .4 |  | .4 |  | Cash flow |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency forward contracts with collars | 958.9 | 17.8 |  | .2 |  | Net investment |
| Total |  | $18.4 | $10.9 | $37.3 | $— |  |
| &nbsp;&nbsp;Derivatives not designated as hedges: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange contracts | $1741.8 | $11.9 | $— | $4.2 | $— |  |

---

The following tables show the components of the net gains (losses) recognized in income related to derivative instruments designated as fair value hedges:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Gain (loss) on derivatives designated as fair value hedges: |  |  |  |
| &nbsp;&nbsp;Foreign currency forward contracts - Marketing, general and administrative expense | $70.2 | $(36.4) | $— |

---

The impact of the hedged items associated with the derivative instrument in the table above are recorded to the same income statement line as the derivative instrument. The net gains (losses) recognized in income related to our cross-currency swap contracts and commodity contracts were not material in 2025, 2024 or 2023.

The loss recognized in translation for net investment hedges was approximately $49 million for the year ended December 31, 2025. The gain recognized in translation for net investment hedges was approximately $15 million for the year ended December 28, 2024.

The following table shows the components of the net gains (losses) recognized in income related to the derivative instruments not designated as hedges:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(In millions)** | **Statements of Income Location** | **2025** | **2024** | **2023** |
| Foreign currency exchange contracts | Cost of products sold | $(.9) | $3.2 | $3.4 |
| Foreign currency exchange contracts | Marketing, general and administrative expense | 1.9 | (15.2) | 5.5 |
|  |  | $1.0 | $(12.0) | $8.9 |

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**NOTE 6. PENSION AND OTHER POSTRETIREMENT BENEFITS** 

***Defined Benefit Plans***

We sponsor a number of defined benefit plans, the accrual of benefits under some of which has been frozen, covering eligible employees in the U.S. and certain other countries. Benefits payable to an employee are based primarily on years of service and the employee's compensation during the course of his or her employment with our company.

We are also obligated to pay unfunded termination indemnity benefits to certain employees outside the U.S., which are subject to applicable agreements, laws and regulations. No costs related to these benefits have been included in the disclosures below because they have not been significant.

***Plan Assets***

Assets in our non-U.S. plans are invested in accordance with locally accepted practices and primarily include equity securities, fixed income securities, insurance contracts and cash. Asset allocations and investments vary by country and plan. Our target plan asset investment allocation for our non-U.S. plans in the aggregate is approximately 26% in equity securities, 58% in fixed income securities and cash, and 16% in insurance contracts and other investments, subject to periodic fluctuations among these asset classes.

***Fair Value Measurements***

The valuation methodologies we use for assets measured at fair value are described below.

Cash is valued at nominal value. Cash equivalents and mutual funds are valued at fair value as determined by quoted market prices, based upon the net asset value ("NAV") of shares held at year-end. Pooled funds are structured as collective trusts, not publicly traded and valued by calculating NAV per unit based on the NAV of the underlying funds/trusts as a practical expedient for the fair value of the pooled funds. The pooled funds are categorized by the investment strategy, which is primarily equity and fixed income securities. The pooled funds categorized as other investments are primarily investments in real estate funds. Insurance contracts are valued at book value, which approximates fair value and is calculated using the prior-year balance plus or minus investment returns and changes in cash flows.

These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While we believe these valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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The following table sets forth, by level within the fair value hierarchy (as applicable), non-U.S. plan assets at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
|<br>**(In millions)** |<br>**Total** | **Quoted<br>Prices<br>in Active<br>Markets<br>(Level 1)** | **Significant<br>Other<br>Observable<br>Inputs<br>(Level 2)** | **Significant<br>Other<br>Unobservable<br>Inputs<br>(Level 3)** |
| **2025** |  |  |  |  |
| Cash | $1.6 | $1.6 | $— | $— |
| Insurance contracts | 52.6 |  |  | 52.6 |
| Pooled funds – real estate investment trusts | 4.2 |  |  | 4.2 |
| Pooled funds – fixed income securities<sup>(1)</sup> | 412.4 |  |  |  |
| Pooled funds – equity securities<sup>(1)</sup> | 198.6 |  |  |  |
| Pooled funds – other investments<sup>(1)</sup> | 63.1 |  |  |  |
| Total non-U.S. plan assets at fair value | $732.5 |  |  |  |
| **2024** |  |  |  |  |
| Cash | $2.1 | $2.1 | $— | $— |
| Insurance contracts | 39.0 |  |  | 39.0 |
| Pooled funds – real estate investment trusts | 5.3 |  |  | 5.3 |
| Pooled funds – fixed income securities<sup>(1)</sup> | 381.0 |  |  |  |
| Pooled funds – equity securities<sup>(1)</sup> | 174.2 |  |  |  |
| Pooled funds – other investments<sup>(1)</sup> | 57.9 |  |  |  |
| Total non-U.S. plan assets at fair value | $659.5 |  |  |  |

---

<sup>(1)</sup> Pooled funds that are measured at fair value using the NAV per unit (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table reconcile to total non-U.S. plan assets.

The following table presents a reconciliation of Level 3 non-U.S. plan asset activity during 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
| | **Level 3 Assets** | **Level 3 Assets** | **Level 3 Assets** |
|<br>**(In millions)** | **Insurance Contracts** | **Pooled Funds –<br>Real Estate<br>Investment Trusts** | **Total** |
| Balance at December 30, 2023 | $42.6 | $6.4 | $49.0 |
| Net realized and unrealized gain (loss) | 1.1 | (1.0) | .1 |
| Purchases | 3.7 |  | 3.7 |
| Settlements | (5.8) |  | (5.8) |
| Impact of changes in foreign currency exchange rates | (2.6) | (.1) | (2.7) |
| Balance at December 28, 2024 | 39.0 | 5.3 | 44.3 |
| Net realized and unrealized gain (loss) | 1.2 | (1.5) | (.3) |
| Purchases | 5.5 |  | 5.5 |
| Settlements | (2.6) |  | (2.6) |
| Transfer | 4.4 |  | 4.4 |
| Impact of changes in foreign currency exchange rates | 5.1 | .4 | 5.5 |
| Balance at December 31, 2025 | $52.6 | $4.2 | $56.8 |

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***Plan Assumptions***

*Discount Rate* 

In consultation with our actuaries, we annually review and determine the discount rates used to value our pension and other postretirement obligations. The assumed discount rate for each pension plan reflects market rates for currently available high quality corporate bonds. Our discount rate is determined by evaluating yield curves consisting of large populations of high quality corporate bonds. The projected pension benefit payment streams are then matched with bond portfolios to determine a rate that reflects the liability duration unique to our plans.

We use the full-yield curve approach to estimate the service and interest cost components of net periodic benefit cost for our pension and other postretirement benefit plans. Under this approach, we apply multiple discount rates from a yield curve composed of the rates of return on several hundred high-quality, fixed income corporate bonds available at the measurement date. We believe that this approach provides a more precise measurement of service and interest cost by aligning the timing of a plan's liability cash flows to its corresponding rates on the yield curve.

*Long-term Return on Assets*

We determine the long-term rate of return assumption for plan assets by reviewing the historical and expected returns of both the equity and fixed income markets, taking into account our asset allocation, the correlation between returns in our asset classes, and our mix of active and passive investments. Additionally, we evaluate current market conditions, including interest rates, and review market data for reasonableness and appropriateness.

*Measurement Date* 

When applicable, we measure the actuarial value of our benefit obligations and plan assets using the calendar month-end closest to our fiscal year-end and adjust for any contributions or other significant events between the measurement date and our fiscal year-end.

***Plan Balance Sheet Reconciliations***

The following table provides a reconciliation of benefit obligations, plan assets, funded status of the plans and accumulated other comprehensive loss for our non-U.S. defined benefit plans:

*Plan Benefit Obligations*

---

| | | |
|:---|:---|:---|
| | **Pension Benefits** | **Pension Benefits** |
|<br>**(In millions)** | **2025** | **2024** |
| **Change in projected benefit obligations** |  |  |
| Projected benefit obligations at beginning of year | $664.4 | $679.9 |
| Service cost | 14.7 | 13.8 |
| Interest cost | 26.2 | 24.1 |
| Participant contributions | 5.1 | 4.7 |
| Amendments | 1.4 | 5.1 |
| Actuarial (gain) loss | (82.2) | 2.8 |
| Transfer | 4.1 |  |
| Benefits paid | (27.2) | (24.5) |
| Settlements |  | (6.0) |
| Foreign currency translation | 73.7 | (35.5) |
| Projected benefit obligations at end of year | $680.2 | $664.4 |
| Accumulated benefit obligations at end of year | $629.4 | $608.0 |

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The actuarial gain we recorded in 2025 was primarily due to higher discount rates used to measure our projected benefit obligations at the end of the year.

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*Plan Assets*

---

| | | |
|:---|:---|:---|
| | **Pension Benefits** | **Pension Benefits** |
|<br>**(In millions)** | **2025** | **2024** |
| **Change in plan assets** |  |  |
| Plan assets at beginning of year | $659.5 | $663.2 |
| Actual return on plan assets | (4.8) | 41.6 |
| Transfer | 4.4 |  |
| Employer contributions | 19.2 | 15.5 |
| Participant contributions | 5.1 | 4.7 |
| Benefits paid | (27.2) | (24.5) |
| Settlements |  | (6.0) |
| Foreign currency translation | 76.3 | (35.0) |
| Plan assets at end of year | $732.5 | $659.5 |

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*Funded Status*

---

| | | |
|:---|:---|:---|
| | **Pension Benefits** | **Pension Benefits** |
|<br>**(In millions)** | **2025** | **2024** |
| **Funded status of the plans** |  |  |
| Other assets | $138.7 | $84.7 |
| Other accrued liabilities | (4.4) | (3.2) |
| Long-term retirement benefits and other liabilities | (82.0) | (86.4) |
| Plan assets more (less) than benefit obligations | $52.3 | $(4.9) |

---

---

| | | |
|:---|:---|:---|
| | **Pension Benefits**  | **Pension Benefits**  |
| | **2025** | **2024** |
| **Weighted average assumptions used to determine year-end benefit obligations** |  |  |
| Discount rate | 4.57% | 3.95% |
| Compensation rate increase | 2.68 | 2.80 |

---

For non-U.S. plans, the projected benefit obligations and fair values of plan assets for pension plans with projected benefit obligations in excess of plan assets were approximately $268 million and $181 million, respectively, at year-end 2025 and approximately $245 million and $156 million, respectively, at year-end 2024.

For non-U.S. plans, the accumulated benefit obligations and fair values of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were approximately $227 million and $152 million, respectively, at year-end 2025 and approximately $230 million and $151 million, respectively, at year-end 2024.

*Accumulated Other Comprehensive Loss*

The pre-tax amounts related to our non-U.S. defined benefit plans recognized in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets are detailed below:

---

| | | |
|:---|:---|:---|
| | **Pension Benefits** | **Pension Benefits** |
|<br>**(In millions)** | **2025** | **2024** |
| Net actuarial loss | $31.2 | $69.4 |
| Prior service cost | 3.7 | 2.3 |
| Net amount recognized in accumulated other comprehensive loss | $34.9 | $71.7 |

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The following table shows the pre-tax amounts recognized in "Other comprehensive loss (income)":

---

| | | | |
|:---|:---|:---|:---|
| | **Pension Benefits** | **Pension Benefits** | **Pension Benefits** |
|<br>**(In millions)** | **2025** | **2024** | **2023** |
| Net actuarial (gain) loss | $(36.8) | $(3.4) | $32.6 |
| Prior service credit | 1.4 | 5.1 | (.1) |
| Amortization of unrecognized: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net actuarial (gain) loss | (1.5) | (.4) | 2.1 |
| &nbsp;&nbsp;&nbsp;Prior service cost | .1 | .5 | .4 |
| Settlements |  | .1 | .1 |
| Net amount recognized in other comprehensive loss (income) | $(36.8) | $1.9 | $35.1 |

---

***Plan Income Statement Reconciliations***

The following table shows the components of net periodic benefit cost for our non-U.S. defined benefit plans:

---

| | | | |
|:---|:---|:---|:---|
| | **Pension Benefits** | **Pension Benefits** | **Pension Benefits** |
|<br>**(In millions)** | **2025** | **2024** | **2023** |
| Service cost | $14.7 | $13.8 | $10.5 |
| Interest cost | 26.2 | 24.1 | 24.7 |
| Expected return on plan assets | (36.6) | (37.4) | (33.2) |
| Amortization of actuarial (gain) loss | 1.5 | .4 | (2.1) |
| Amortization of prior service cost | (.1) | (.5) | (.4) |
| Recognized gain on settlements |  | (.1) | (.1) |
| Net periodic benefit cost (credit) | $5.7 | $.3 | $(.6) |

---

Service cost and components of net periodic benefit cost other than service cost were included in "Marketing, general and administrative expense" and "Other non-operating expense (income), net" in the Consolidated Statements of Income, respectively.

The following table shows the weighted average assumptions used to determine net periodic cost:

---

| | | | |
|:---|:---|:---|:---|
| | **Pension Benefits** | **Pension Benefits** | **Pension Benefits** |
| | **2025** | **2024** | **2023** |
| Discount rate | 3.95% | 3.78% | 4.36% |
| Expected return on assets | 4.72 | 5.04 | 4.71 |
| Compensation rate increase | 2.80 | 2.73 | 2.75 |

---

***Plan Contributions***

We make contributions to our defined benefit plans sufficient to meet the minimum funding requirements of applicable laws and regulations, plus additional amounts, if any, we determine to be appropriate. Our expected contributions in 2026 for our non-U.S. defined benefit plans is $21.3 million.

***Future Benefit Payments***

The future benefit payments of our non-U.S. defined benefit plans shown below reflect the expected service periods for eligible participants.

---

| | |
|:---|:---|
| **(In millions)** | **Pension<br>Benefits** |
| 2026 | $34.1 |
| 2027 | 29.0 |
| 2028 | 31.6 |
| 2029 | 29.6 |
| 2030 | 31.8 |
| 2031-2035 | 176.2 |

---

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***U.S. Defined Benefit Pension Plans***

Our U.S. defined benefit plans, the accrual of benefits which has been frozen, cover certain eligible employees in the U.S. Benefits payable to an employee were based primarily on years of service and the employee's compensation during the course of his or her employment with our company. Our policy is to fund the cost of these benefits from operating cash flows. At year-end 2025, our U.S. defined pension benefit obligation and related loss recorded in "Accumulated other comprehensive loss" were approximately $41 million and $8 million, respectively. At year-end 2024, our U.S. defined pension benefit obligations and related loss recorded in "Accumulated other comprehensive loss" were approximately $45 million and $9 million, respectively. Net periodic benefit cost was not material in 2025, 2024 or 2023.

***Postretirement Health Benefits***

We provide postretirement health benefits to certain of our retired U.S. employees up to the age of 65 under a cost-sharing arrangement and provide supplemental Medicare benefits to certain of our U.S. retirees over the age of 65. Our postretirement health benefit plan was closed to new participants retiring after December 31, 2021. Our policy is to fund the cost of these postretirement benefits from operating cash flows. While we do not intend to terminate these postretirement health benefits, we may do so at any time, subject to applicable laws and regulations. At year-end 2025, our postretirement health benefits obligation and related loss recorded in "Accumulated other comprehensive loss" were approximately $2 million and $9 million, respectively. At year-end 2024, our postretirement health benefits obligation and related loss recorded in "Accumulated other comprehensive loss" were approximately $2 million and $9 million, respectively. Net periodic benefit cost was not material in 2025, 2024 or 2023.

***Defined Contribution Plans***

We sponsor various defined contribution plans worldwide, the largest of which is the Avery Dennison Corporation Employee Savings Plan ("Savings Plan"), a 401(k) plan for our U.S. employees.

We recognized expense of $34.0 million, $31.9 million and $30.3 million in 2025, 2024 and 2023, respectively, related to our employer contributions and employer match of participant contributions to the Savings Plan.

***Other Retirement Plans***

We have deferred compensation plans and programs that permit eligible employees to defer a portion of their compensation. The compensation voluntarily deferred by the participant, together with certain employer contributions, earns specified and variable rates of return. As of year-end 2025 and 2024, we had accrued $99.8 million and $99.0 million, respectively, for our obligations under these plans. A portion of the interest on certain of our contributions may be forfeited by participants if their employment terminates before age 55 other than by reason of death or disability.

Our Directors Deferred Equity Compensation Program allows our non-employee directors to elect to receive their cash compensation in deferred stock units ("DSUs") issued under our equity plan. Additionally, two legacy deferred compensation plans had DSUs that were issued under our then-active equity plans. Dividend equivalents, representing the value of dividends per share paid on shares of our common stock and calculated with reference to the number of DSUs held as of a quarterly dividend record date, are credited in the form of additional DSUs on the applicable dividend payable date. DSUs are converted into shares of our common stock, less fractional shares, and issued to a participating director upon his or her separation from our Board. DSUs in the amount of 0.03 million and 0.04 million were outstanding as of year-end 2025 and 2024, respectively, with an aggregate value of approximately $5 million and $8 million, respectively.

We hold company-owned life insurance policies, the proceeds from which are payable to us upon the death of covered participants. The cash surrender values of these policies, net of outstanding loans, which are included in "Other assets" in the Consolidated Balance Sheets, were $259.7 million and $247.4 million at year-end 2025 and 2024, respectively.

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**NOTE 7. COMMITMENTS AND LEASES** 

Supplemental cost information related to leases is shown below.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Operating lease costs | $77.7 | $75.1 | $73.6 |

---

Lease costs related to finance leases were not material in 2025, 2024 or 2023.

Supplemental balance sheet information related to leases is shown below.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **Balance Sheet Location** | **2025** | **2024** |
| **Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating | Other assets | $215.8 | $227.5 |
| &nbsp;&nbsp;&nbsp;Finance<sup>(1)</sup> | Property, plant and equipment, net | 15.9 | 32.5 |
| Total leased assets |  | $231.7 | $260.0 |
| **Liabilities** |  |  |  |
| Current: |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating | Other current liabilities | $53.1 | $49.6 |
| &nbsp;&nbsp;&nbsp;Finance | Short-term borrowings and current portion of long-term debt and finance leases | 5.2 | 4.3 |
| Non-current: |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating | Long-term retirement benefits and other liabilities | 167.6 | 176.1 |
| &nbsp;&nbsp;&nbsp;Finance | Long-term debt and finance leases | 11.0 | 9.1 |
| Total lease liabilities |  | $236.9 | $239.1 |

---

<sup>(1)</sup> Finance lease assets are net of accumulated amortization of $16.0 million and $18.7 million as of year-end 2025 and 2024, respectively.

Supplemental cash flow information related to leases is shown below.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Cash paid for amounts included in measurement of operating lease liabilities | $63.8 | $61.0 | $55.8 |
| Operating lease assets obtained in exchange for operating lease liabilities | 47.6 | 93.0 | 92.4 |

---

Cash flows related to finance leases were not material in 2025, 2024 or 2023.

Weighted average remaining lease term and discount rate information related to leases as of December 31, 2025 and December 28, 2024 is shown below.

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| Weighted average remaining lease term (in years): |  |  |
| &nbsp;&nbsp;&nbsp;Operating | 6.5 | 6.7 |
| &nbsp;&nbsp;&nbsp;Finance | 3.6 | 3.6 |
| Weighted average discount rate (percentage): |  |  |
| &nbsp;&nbsp;&nbsp;Operating | 4.7% | 4.6% |
| &nbsp;&nbsp;&nbsp;Finance | 4.7 | 4.7 |

---

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Operating and finance lease liabilities by maturity date from December 31, 2025 are shown below.

---

| | | |
|:---|:---|:---|
| **(In millions)** | **Operating Leases** | **Finance Leases** |
| 2026 | $59.7 | $6 |
| 2027 | 46.9 | 5.0 |
| 2028 | 33.6 | 3.3 |
| 2029 | 28.1 | 2.3 |
| 2030 | 22.2 | 1.0 |
| 2031 and thereafter | 66.9 | .3 |
| Total lease payments | 257.4 | 17.9 |
| Less: imputed interest | (36.7) | (1.7) |
| Present value of lease liabilities | $220.7 | $16.2 |

---

As of December 31, 2025, we had no significant operating or finance leases that had not yet commenced.

**NOTE 8. CONTINGENCIES**

***Legal Proceedings***

We are involved in various lawsuits, claims, inquiries and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should we incur liabilities that were not previously accrued. Probable insurance reimbursements are not offset against potential liabilities.

Because of the uncertainties associated with claims resolution and litigation, future expenses to resolve legal proceedings could be higher than the liabilities we have accrued. If information were to become available that allowed us to reasonably estimate an amount higher or lower than what we have accrued in the range of potential expenses determined to be probable, we would adjust our accrued liabilities accordingly. Additional lawsuits, claims, inquiries and other regulatory and compliance matters could arise in the future. The range of expenses for resolving any future matters would be assessed as they arise; until then, a range of potential expenses for their resolution cannot be determined. Based upon current information, we believe that the impact of the resolution of legal proceedings would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows.

We were party to a patent infringement litigation filed by ADASA Inc. ("Adasa"), an unrelated third party, in 2017 regarding certain RFID products within our Solutions Group reportable segment. We recorded a contingent liability in the amount of $26.6 million related to this matter in 2021. We increased our contingent liability to $82.9 million as of December 30, 2023, reflecting our best estimate of the anticipated judgment following a July 2023 jury retrial that affirmed the patent's validity.

On April 25, 2024, we entered into a Settlement Agreement, License and Mutual Release with Adasa pursuant to which, among other things, (i) we agreed to pay $75.0 million to Adasa without any concessions or admissions of liability; (ii) Adasa agreed to grant us a worldwide, nonexclusive, nontransferable fully-paid up, and ongoing royalty-free perpetual license, without the right to sublicense, to the patents at issue in the litigation; and (iii) the parties mutually released all claims against one another. We paid the agreed-upon settlement amount to Adasa on April 26, 2024 and Adasa filed a Stipulation of Satisfaction of Judgment with the trial court on April 29, 2024. The settlement payment and adjustments to our prior contingent liability are reflected in our fiscal 2024 and 2023 consolidated financial statements.

***Environmental Expenditures***

Environmental expenditures are generally expensed. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these matters could affect future results of operations should our exposure be materially different from our estimates or should we incur liabilities that were not previously accrued. Probable insurance reimbursements are not offset against potential liabilities. We review our estimates of the costs of complying with environmental laws related to the remediation and cleanup of various sites, including sites in which governmental agencies have designated us as a potentially responsible party ("PRP"). However, environmental expenditures for newly acquired assets and those that extend or improve the economic useful life of existing assets are capitalized and amortized over the shorter of the estimated useful life of the acquired asset or the remaining life of the existing asset.

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As of December 31, 2025, we have been designated by the U.S. Environmental Protection Agency ("EPA") and/or other responsible state agencies as a PRP at ten waste disposal or waste recycling sites that are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination. No settlement of our liability related to any of these sites has been agreed upon. We are participating with other PRPs at these sites and anticipate that our share of remediation costs will be determined pursuant to agreements that we negotiate with the EPA or other governmental authorities.

These estimates could change as a result of changes in planned remedial actions, remediation technologies, site conditions, the estimated time to complete remediation, environmental laws and regulations, and other factors. Because of the uncertainties associated with environmental assessment and remediation activities, our future expenses to remediate these sites could be higher than the liabilities we have accrued. If information were to become available that allowed us to reasonably estimate an amount higher or lower than what we have accrued in the range of potential expenses, we would adjust our environmental liabilities accordingly. In addition, we may be identified as a PRP at additional sites in the future. The range of expenses for remediation of any future-identified sites would be addressed as they arise; until then, a range of expenses for their remediation cannot be determined.

The activity related to our environmental liabilities in 2025 and 2024 is shown below:

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| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Balance at beginning of year | $13.0 | $24.5 |
| Charges, net of reversals | 2.9 | 1.9 |
| Payments | (5.9) | (13.4) |
| Balance at end of year | $10.0 | $13.0 |

---

Approximately $2 million and $5 million of this balance was classified as short-term and included in "Other current liabilities" in the Consolidated Balance Sheets as of December 31, 2025 and December 28, 2024, respectively.

**NOTE 9. FAIR VALUE MEASUREMENTS**

***Recurring Fair Value Measurements***

Assets and liabilities carried at fair value, measured on a recurring basis, as of December 31, 2025 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
|<br>**(In millions)** |<br>**Total** | **Quoted<br>Prices in<br>Active<br>Markets<br>(Level 1)** | **Significant<br>Other<br>Observable<br>Inputs<br>(Level 2)** | **Significant<br>Other<br>Unobservable<br>Inputs<br>(Level 3)** |
| **Assets** | | | | |
| &nbsp;&nbsp;&nbsp;Investments | $49.1 | $24.1 | $25.0 | $— |
| &nbsp;&nbsp;&nbsp;Derivative assets | 7.2 |  | 7.2 |  |
| &nbsp;&nbsp;&nbsp;Bank drafts | 7.5 | 7.5 |  |  |
| **Liabilities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Derivative liabilities | $18.0 | $.3 | $17.7 | $— |
| &nbsp;&nbsp;&nbsp;Contingent consideration liabilities | 2.7 |  |  | 2.7 |

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Assets and liabilities carried at fair value, measured on a recurring basis, as of December 28, 2024 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
|<br>**(In millions)** |<br>**Total** | **Quoted<br>Prices in<br>Active<br>Markets<br>(Level 1)** | **Significant<br>Other<br>Observable<br>Inputs<br>(Level 2)** | **Significant<br>Other<br>Unobservable<br>Inputs<br>(Level 3)** |
| **Assets** | | | | |
| &nbsp;&nbsp;&nbsp;Investments | $48.0 | $24.2 | $23.8 | $— |
| &nbsp;&nbsp;&nbsp;Derivative assets | 41.2 | .4 | 40.8 |  |
| &nbsp;&nbsp;&nbsp;Bank drafts | 5.2 | 5.2 |  |  |
| **Liabilities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Derivative liabilities | $41.5 | $.4 | $41.1 | $— |
| &nbsp;&nbsp;&nbsp;Contingent consideration liabilities | 4.8 |  |  | 4.8 |

---

Investments included fixed income securities (primarily U.S. government and corporate debt securities) measured at fair value using quoted prices/bids and a money market fund measured at fair value using NAV. As of December 31, 2025, investments of $1.1 million, $46.9 million, and $1.1 million were included in "Cash and cash equivalents," "Other current assets," and "Other assets," respectively, in the Consolidated Balance Sheets. As of December 28, 2024, investments of $1.5 million, $38.1 million, and $8.4 million were included in "Cash and cash equivalents," "Other current assets," and "Other assets," respectively, in the Consolidated Balance Sheets. Derivative instruments that are exchange-traded are measured at fair value using quoted market prices and classified within Level 1 of the valuation hierarchy. Derivative instruments measured based on foreign currency exchange rate inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy. Bank drafts (maturities greater than three months) are valued at face value due to their short-term nature and were included in "Other current assets" in the Consolidated Balance Sheets.

Contingent consideration liabilities relate to estimated earn-out payments associated with an acquisition completed in 2022, which is subject to the acquired company achieving certain post-acquisition performance targets. This liability was recorded based on the expected payments and has been classified as Level 3. Activity related to contingent consideration was immaterial in 2025 and 2024.

In addition to the investments described above, we hold venture investments that had a total carrying value of approximately $58 million and $45 million as of December 31, 2025 and December 28, 2024, respectively, which was included in "Other assets" in the Consolidated Balance Sheets. We hold certain venture investments based on Level 1 inputs; the fair value of these investments was $1.1 million as of December 31, 2025, and $8.4 million as of December 28, 2024. We recognized $23.3 million and $19.2 million in net losses in 2025 and 2024, respectively, and no net gains or losses in 2023 in our venture and other investments. These net gains or losses were recorded in "Other expense (income), net" in the Consolidated Statements of Income.

**NOTE 10. NET INCOME PER COMMON SHARE**

Net income per common share was computed as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions, except per share amounts)** | **2025** | **2024** | **2023** |
| (A) Net income | $688.0 | $704.9 | $503.0 |
| (B) Weighted average number of common shares outstanding | 78.1 | 80.4 | 80.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dilutive shares (additional common shares issuable under stock-based awards) | .2 | .3 | .4 |
| (C) Weighted average number of common shares outstanding, assuming dilution | 78.3 | 80.7 | 81.1 |
| Net income per common share (A) ÷ (B) | $8.81 | $8.77 | $6.23 |
| Net income per common share, assuming dilution (A) ÷ (C) | $8.79 | $8.73 | $6.20 |

---

Certain stock-based compensation awards were excluded from the computation of net income per common share, assuming dilution, because they would not have had a dilutive effect. Stock-based compensation awards excluded from the computation totaled 0.1 million shares in 2025, 2024 and 2023.

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**NOTE 11. SUPPLEMENTAL EQUITY AND COMPREHENSIVE INCOME INFORMATION**

***Common Stock and Share Repurchase Program***

Our Amended and Restated Certificate of Incorporation, as amended, authorizes five million shares of $1 par value preferred stock (of which no shares are outstanding), with respect to which our Board may fix the series and terms of issuance, and 400 million shares of $1 par value voting common stock.

From time to time, our Board authorizes the repurchase of shares of our outstanding common stock. Repurchased shares may be reissued under our long-term incentive plan or used for other corporate purposes. In 2025, we repurchased approximately 3.2 million shares of our common stock at an aggregate cost of $575.6 million. In 2024, we repurchased approximately 1.2 million shares of our common stock at an aggregate cost of $247.5 million.

In April 2025, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, excluding any fees, commissions or other expenses related to such purchases and in addition to the amount outstanding under our previous Board authorization. Shares of our common stock in the aggregate amount of $526.3 million remained authorized for repurchase under this Board authorization as of December 31, 2025. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased.

***Treasury Shares Reissuance***

We fund a portion of our employee-related costs using shares of our common stock held in treasury. We reduce capital in excess of par value based on the grant date fair value of vesting awards and record net gains or losses associated with using treasury shares to retained earnings.

***Accumulated Other Comprehensive Loss***

The changes in "Accumulated other comprehensive loss" (net of tax) for 2025 and 2024 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(In millions)** | **Foreign**<br>**Currency**<br>**Translation**<sup>(1)</sup> | **Pension and<br>Other<br>Postretirement<br>Benefits** | **Cash Flow<br>Hedges** | **Fair Value Hedges** | **Total** |
| Balance as of December 30, 2023 | $(328.6) | $(77.5) | $(2.0) | $— | $(408.1) |
| Other comprehensive income (loss) before reclassifications, net of tax | (46.9) | (1.3) | (5.4) | 2.0 | (51.6) |
| Reclassifications to net income, net of tax |  | .8 | 2.8 |  | 3.6 |
| Net current-period other comprehensive income (loss), net of tax | (46.9) | (.5) | (2.6) | 2.0 | (48.0) |
| Balance as of December 28, 2024 | $(375.5) | $(78.0) | $(4.6) | $2.0 | $(456.1) |
| Other comprehensive income (loss) before reclassifications, net of tax | 16.5 | 26.7 | 1.9 | (3.6) | 41.5 |
| Reclassifications to net income, net of tax |  | 2.1 | 2.8 |  | 4.9 |
| Net current-period other comprehensive income (loss), net of tax | 16.5 | 28.8 | 4.7 | (3.6) | 46.4 |
| Balance as of December 31, 2025 | $(359.0) | $(49.2) | $.1 | $(1.6) | $(409.7) |

---

<sup>(1)</sup> Included the impact of our foreign currency forward contracts and zero-cost collars, accounted for as net investment hedges. Refer to Note 5, "Financial Instruments," to the Consolidated Financial Statements for more information.

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The following table sets forth the income tax expense (benefit) allocated to each component of other comprehensive income (loss):

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| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Foreign currency translation: |  |  |  |
| &nbsp;&nbsp;&nbsp;Translation gain (loss) | $(4.9) | $.1 | $1.2 |
| Pension and other postretirement benefits: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net gain (loss) recognized from actuarial gain/loss and prior service cost/credit | 8.6 | (.6) | (8.2) |
| &nbsp;&nbsp;&nbsp;Reclassifications to net income | .7 | .4 | (.3) |
| Cash flow hedges: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain (loss) recognized on cash flow hedges | .5 | (1.7) | (2.2) |
| &nbsp;&nbsp;&nbsp;Reclassifications to net income | 1.0 | .9 | 1.2 |
| Fair value hedges: |  |  |  |
| &nbsp;&nbsp;&nbsp;Changes in excluded components of fair value hedges | (1.1) | .6 |  |
| Income tax expense (benefit) allocated to components of other comprehensive income (loss) | $4.8 | $(.3) | $(8.3) |

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**NOTE 12. LONG-TERM INCENTIVE COMPENSATION**

***Stock-Based Awards***

*Stock-Based Compensation*

We generally grant our annual stock-based compensation awards to eligible employees in March and non-employee directors in May. Certain awards granted to retirement-eligible employees one or more years before their retirement date vest upon retirement; these awards are accounted for as fully vested one year from the grant date.

Our 2017 Incentive Award Plan, a long-term incentive plan for employees and non-employee directors, allows us to grant stock-based compensation awards – including stock options, RSUs, PUs, MSUs and DSUs – or a combination of these and other awards. Under this plan, 5.4 million shares were made available for issuance, with each full value award counted as 1.5 shares for purposes of the number of shares authorized for issuance. Full value awards include RSUs, PUs and MSUs.

Stock-based compensation expense and the related recognized tax benefit were as follows:

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| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Stock-based compensation expense | $27.9 | $28.7 | $22.3 |
| Tax benefit | 3.2 | 2.6 | 2.4 |

---

This expense was included in "Marketing, general and administrative expense" in the Consolidated Statements of Income.

As of December 31, 2025, we had approximately $40 million of unrecognized compensation expense related to unvested stock-based awards, which is expected to be recognized over the remaining weighted average requisite service period of approximately two years.

*Stock Options*

Stock options may be granted to employees and non-employee directors at no less than 100% of the fair market value of our common stock on the grant date and generally vest over a four-year period. Options expire ten years from the grant date.

The fair value of stock options is estimated as of the grant date using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate and the expected option term.

No stock options were granted in fiscal years 2025 or 2024. The weighted average grant date fair value per share for stock options granted in 2023 was $47.65.

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The following assumptions are used in estimating the fair value of granted stock options:

Risk-free interest rate is based on the 52-week average of the Treasury-Bond rate that has a term corresponding to the expected option term. For 2023, it was 3.84%.

Expected stock price volatility represents an average of the implied and historical volatility. For 2023, it was 23.90%.

Expected dividend yield is based on the current annual dividend divided by the 12-month average of our monthly stock price prior to grant. For 2023, it was 1.84%.

Expected option term is determined based on historical experience under our long-term incentive plans. For 2023, it was 6.31 years.

The following table summarizes information related to stock options:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Number of**<br>**options**<br>**(in thousands)**  | **Weighted average<br>exercise price** | **Weighted average<br>remaining<br>contractual life<br>(in years)** | **Aggregate<br>intrinsic value<br>(in millions)** |
| Outstanding at December 28, 2024 | 63.0 | $190.54 | 8.68 | $— |
| Exercised |  |  |  |  |
| Outstanding at December 31, 2025 | 63.0 | $190.54 | 7.67 | $— |
| Options vested and expected to vest at December 31, 2025 | 58.5 | 190.54 | 7.67 |  |
| Options exercisable at December 31, 2025 |  | $— |  | $— |

---

There were no stock option exercises in 2025 or 2023. The total intrinsic value of stock options exercised in 2024 was $19.5 million. We received approximately $10 million in 2024 from the exercise of stock options, and the tax benefit associated with these exercised options was $4.8 million. The intrinsic value of a stock option is based on the amount by which the market value of our stock exceeds the exercise price of the option.

*Performance Units ("PUs")*

PUs are performance-based awards granted to eligible employees under our equity plan. PUs are payable in shares of our common stock at the end of a three- or four-year cliff vesting period provided that the designated performance objectives are achieved at the end of the period. Over the performance period, the estimated number of shares of our common stock issuable upon vesting is adjusted upward or downward based on the probability of achieving the performance objectives established for the award. The number of shares issued generally ranges from 0% to 200% of the target shares at the time of grant; however the shares issued for certain special PU awards can range up to 300% of the target shares at time of grant. The weighted average grant date fair value for PUs was $175.53, $224.82 and $180.12 in 2025, 2024 and 2023, respectively.

The following table summarizes information related to awarded PUs:

---

| | | |
|:---|:---|:---|
| | **Number of<br> PUs<br>(in thousands)** | **Weighted<br> average<br>grant-date<br> fair value** |
| Unvested at December 28, 2024 | 292.1 | $181.94 |
| Granted at target | 154.2 | 175.53 |
| Adjustment for performance achievement<sup>(1)</sup> | (32.5) | 162.57 |
| Vested | (38.7) | 164.91 |
| Forfeited/cancelled | (16.9) | 184.27 |
| Unvested at December 31, 2025 | 358.2 | $182.66 |

---

<sup>(1)</sup> Reflects adjustments for performance for the 2022-2024 PUs.

The fair value of vested PUs was $6.4 million in 2025, $20.6 million in 2024 and $22.7 million in 2023.

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*Market-Leveraged Stock Units ("MSUs")* 

MSUs are performance-based awards granted to eligible employees under our equity plan. MSUs are payable in shares of our common stock over a four-year period provided that the designated performance objective is achieved as of the end of each vesting period. MSUs accrue dividend equivalents during the vesting period, which are earned and paid only at vesting provided that, at a minimum, threshold-level performance is achieved. The number of shares earned is based upon our absolute total shareholder return at each vesting date and can range from 0% to 200% of the target amount of MSUs subject to vesting. Each of the four vesting periods represents one tranche of MSUs and the fair value of each of these four tranches was determined using the Monte-Carlo simulation model, which utilizes multiple input variables, including expected stock price volatility and other assumptions, to estimate the probability of achieving the performance objective established for the award. The weighted average grant date fair value for MSUs was $190.36, $259.75 and $192.53 in 2025, 2024 and 2023, respectively.

The following table summarizes information related to awarded MSUs:

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| | | |
|:---|:---|:---|
| | **Number of<br>MSUs<br>(in thousands)** | **Weighted<br>average<br>grant-<br>date fair<br>value** |
| Unvested at December 28, 2024 | 163.7 | $202.83 |
| Granted at target | 83.7 | 190.36 |
| Adjustment for performance achievement<sup>(1)</sup> | .3 | 204.59 |
| Vested | (67.5) | 195.87 |
| Forfeited/cancelled | (9.8) | 196.20 |
| Unvested at December 31, 2025 | 170.4 | $200.85 |

---

<sup>(1)</sup> Reflects adjustments for performance for the tranches of MSUs vesting in 2025.

The fair value of vested MSUs was $13.2 million in 2025, $14.6 million in 2024 and $16.1 million in 2023.

*Restricted Stock Units ("RSUs")*

RSUs are service-based awards granted to eligible employees and non-employee directors under our equity plan. RSUs granted to employees generally vest over a period between one and four years. RSUs granted to non-employee directors generally vest in one year. The vesting of RSUs is subject to continued service through the applicable vesting date. If that condition is not met, unvested RSUs are generally forfeited. The weighted average grant date fair value for RSUs was $171.82, $210.74 and $175.88 in 2025, 2024 and 2023, respectively.

The following table summarizes information related to awarded RSUs:

---

| | | |
|:---|:---|:---|
| | **Number of<br>RSUs<br>(in thousands)** | **Weighted<br>average<br>grant-date<br>fair value** |
| Unvested at December 28, 2024 | 94.9 | $191.22 |
| Granted | 73.4 | 171.82 |
| Vested | (64.7) | 191.49 |
| Forfeited/cancelled | (1.8) | 184.65 |
| Unvested at December 31, 2025 | 101.8 | $177.19 |

---

The fair value of vested RSUs was $12.4 million, $3.2 million and $2.7 million in 2025, 2024 and 2023, respectively.

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***Cash-Based Awards***

*Long-Term Incentive Units ("LTI Units")*

LTI Units are cash-based awards granted to eligible employees under our long-term incentive unit plan. LTI Units are service-based awards that generally vest ratably over a four-year period. The settlement value equals the number of vested LTI Units multiplied by the average of the high and low market prices of our common stock on the vesting date. The compensation expense related to these awards is amortized on a straight-line basis and the fair value is remeasured using the estimated percentage of units expected to be earned multiplied by the average of the high and low market prices of our common stock at each quarter-end.

We also grant cash-based awards in the form of performance and market-leveraged LTI Units to eligible employees. Performance LTI Units are payable in cash at the end of a three-year cliff vesting period provided that certain performance objectives are achieved at the end of the performance period. Market-leveraged LTI Units are payable in cash and vest ratably over a period of four years. The number of performance and market-leveraged LTI Units earned at vesting is adjusted upward or downward based upon the probability of achieving the performance objectives established for the respective award and the actual number of units issued can range from 0% to 200% of the designated target units subject to vesting. Performance and market-leveraged LTI Units are remeasured using the estimated percentage of units expected to be earned multiplied by the average of the high and low market prices of our common stock at each quarter-end over their respective performance periods. The compensation expense related to performance LTI Units is amortized on a straight-line basis over their respective performance periods. The compensation expense related to market-leveraged LTI Units is amortized on a graded-vesting basis over their respective performance periods.

The compensation expense related to LTI Units was $12.9 million in 2025, $14.9 million in 2024 and $16.3 million in 2023. This expense was included in "Marketing, general and administrative expense" in the Consolidated Statements of Income. The total recognized tax benefit related to LTI Units was $3.2 million in 2025, $3.6 million in 2024 and $3.9 million in 2023.

**NOTE 13. COST REDUCTION ACTIONS** 

***Restructuring Charges***

We have plans that provide eligible employees with severance benefits in the event of an involuntary termination. We calculate severance using the benefit formulas under the applicable plans. We record restructuring charges from qualifying cost reduction actions for severance and other exit costs (including asset impairment charges and lease and other contract cancellation costs) when they are probable and estimable.

***2025 Actions***

During 2025, we recorded $48.8 million in restructuring charges, net of reversals, related to our 2025 actions. These charges consisted of severance and related costs for the reduction of approximately 1,200 positions, as well as asset impairment charges, at numerous locations across our company, as a result of actions taken to optimize our operational footprint.

In the fourth quarter of 2024, we recorded $13.1 million in restructuring charges related to our 2025 actions. These charges consisted of severance and related costs for the reduction of approximately 90 positions, as well as asset impairment charges, reflecting actions at numerous locations in our Solutions Group reportable segment.

***2023 Actions***

During 2024, we recorded $28.8 million in restructuring charges, net of reversals, related to these actions. These charges consisted of severance and related costs for the reduction of approximately 1,280 positions, as well as asset impairment charges, at numerous locations across our company.

During 2025, we recorded $1.6 million of reversals related to our 2023 Actions that were completed in the fourth quarter of 2025.

Accruals for severance and related costs and lease cancellation costs were included in "Other current liabilities" and "Long-term retirement benefits and other liabilities" in the Consolidated Balance Sheets. Asset impairment charges were based on the estimated market value of the assets, less selling costs, if applicable. Restructuring charges were included in "Other expense (income), net" in the Consolidated Statements of Income.

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During 2025, restructuring charges and payments were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(In millions)** | **Accrual at<br>December 28,<br>2024** | **Charges,<br>Net of<br>Reversals** | **Cash<br>Payments** | **Non-cash<br>Impairment** | **Foreign<br>Currency<br>Translation** | **Accrual at<br>December 31,<br>2025** |
| **2025 Actions** | | | | | | |
| Severance and related costs | $10.0 | $45.7 | $(41.5) | $— | $.2 | $14.4 |
| Asset impairment charges |  | 3.1 |  | (3.1) |  |  |
| Total | $10.0 | $48.8 | $(41.5) | $(3.1) | $.2 | $14.4 |

---

During 2024, restructuring charges and payments were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(In millions)** | **Accrual at<br>December 30,<br>2023** | **Charges,<br>Net of<br>Reversals** | **Cash<br>Payments** | **Non-cash<br>Impairment** | **Foreign<br>Currency<br>Translation** | **Accrual at<br>December 28,<br>2024** |
| **2025 Actions** | | | | | | |
| Severance and related costs | $— | $10.0 | $— | $— | $— | $10.0 |
| Asset impairment charges |  | 3.1 |  | (3.1) |  |  |
| **2023 Actions** |  |  |  |  |  |  |
| Severance and related costs | 27.7 | 25.4 | (43.3) |  | (.6) | 9.2 |
| Asset impairment charges |  | 3.0 |  | (3.0) |  |  |
| Lease cancellation costs |  | .4 | (.6) |  |  | (.2) |
| Total | $27.7 | $41.9 | $(43.9) | $(6.1) | $(.6) | $19.0 |

---

The table below shows the total amount of restructuring charges incurred by reportable segment and Corporate.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Restructuring charges by reportable segment and Corporate** |  |  |  |
| Materials Group | $22.9 | $5.7 | $52.4 |
| Solutions Group | 23.4 | 35.8 | 23.2 |
| Corporate | .9 | .4 | 3.8 |
| Total | $47.2 | $41.9 | $79.4 |

---

**NOTE 14. TAXES BASED ON INCOME**

Taxes based on income were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Current: |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. federal tax | $45.9 | $36.0 | $42.5 |
| &nbsp;&nbsp;&nbsp;State taxes | 11.0 | 10.6 | 9.0 |
| &nbsp;&nbsp;&nbsp;Foreign taxes | 205.3 | 214.9 | 160.8 |
|  | 262.2 | 261.5 | 212.3 |
| Deferred: |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. federal tax | (17.2) | (8.7) | (29.0) |
| &nbsp;&nbsp;&nbsp;State taxes | (1.3) | (3.3) | (3.5) |
| &nbsp;&nbsp;&nbsp;Foreign taxes | (6.6) | (.9) | 11.9 |
|  | (25.1) | (12.9) | (20.6) |
| Provision for income taxes | $237.1 | $248.6 | $191.7 |

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A reconciliation of our provision for income taxes to the amount computed by multiplying the U.S. federal statutory tax rate to income before taxes for the year ended December 31, 2025 is provided below:

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| | | |
|:---|:---|:---|
| | **2025** | **2025** |
|<br>**(In millions, except percentages)** | **Amount** | **Percent** |
| U.S. federal statutory tax rate | $194.3 | 21.0% |
| &nbsp;&nbsp;&nbsp;State and local income taxes, net of federal income tax effect<sup>(1)</sup> | 7.7 | .8% |
| &nbsp;&nbsp;&nbsp;Foreign tax effects |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China | 18.0 | 1.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Netherlands |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nontaxable or nondeductible items | (9.9) | (1.1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 5.4 | .6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Germany |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in valuation allowances | (10.6) | (1.1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 2.5 | .3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other foreign jurisdictions | 44.9 | 4.9% |
| &nbsp;&nbsp;&nbsp;Effect of cross-border tax laws | (18.1) | (2.0)% |
| &nbsp;&nbsp;&nbsp;Tax credits | (8.8) | (1.0)% |
| &nbsp;&nbsp;&nbsp;Changes in valuation allowances | 8.3 | .9% |
| &nbsp;&nbsp;&nbsp;Nontaxable or nondeductible items | 2.9 | .3% |
| &nbsp;&nbsp;&nbsp;Changes in unrecognized tax benefits | .5 | .1% |
| Provision for income taxes and effective tax rate | $237.1 | 25.6% |

---

<sup>(1)</sup> State taxes in California, Illinois, Pennsylvania, Wisconsin, New York and New Jersey made up the majority of the tax effect in this category.

A reconciliation of our provision for income taxes to the amount computed by multiplying the U.S. federal statutory tax rate to income before taxes previously disclosed for the years ended December 28, 2024 and December 30, 2023 is provided below:

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| | | |
|:---|:---|:---|
| **(In millions)** | **2024** | **2023** |
| Tax provision computed at U.S. federal statutory rate<sup>(1)</sup> | $200.2 | $145.9 |
| Increase (decrease) in taxes resulting from: |  |  |
| &nbsp;&nbsp;&nbsp;State taxes, net of federal tax benefit | 2.7 | 2.6 |
| &nbsp;&nbsp;&nbsp;Foreign earnings taxed at different rates<sup>(1)</sup> | 49.5 | 50.4 |
| &nbsp;&nbsp;&nbsp;Global intangible low-taxed income high-tax exclusion election, net<sup>(2)</sup> | (6.2) | (10.0) |
| &nbsp;&nbsp;&nbsp;Valuation allowances | 15.9 | 2.6 |
| &nbsp;&nbsp;&nbsp;U.S. federal research and development tax credits | (7.7) | (8.3) |
| &nbsp;&nbsp;&nbsp;Tax contingencies and audit settlements | 1.9 | 11.9 |
| &nbsp;&nbsp;&nbsp;Other items, net | (7.7) | (3.4) |
| Provision for income taxes | $248.6 | $191.7 |

---

<sup>(1)</sup> Both years included certain U.S. international tax provisions and foreign earnings taxed in the U.S., net of credits.

<sup>(2)</sup> In 2024, we recognized $6.2 million from our current year global intangible low-taxed income exclusion election. In 2023, we recognized $4.4 million from our 2023 exclusion election and $5.6 million related to the exclusion election made on our 2022 U.S. federal tax return.

Income before taxes from our U.S. and foreign operations was as follows:

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| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| U.S. | $160.4 | $211.4 | $187.2 |
| Foreign | 764.7 | 742.1 | 507.5 |
| Income before taxes | $925.1 | $953.5 | $694.7 |

---

Our effective tax rate was 25.6%, 26.1% and 27.6% for fiscal years 2025, 2024 and 2023, respectively.

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Our 2025 provision for income taxes included (i) $15.4 million of net tax charge related to the tax on global intangible low-taxed income ("GILTI") of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from foreign-derived intangible income ("FDII"); (ii) $10.6 million of tax benefit from the release of valuation allowance as a result of completing a foreign restructuring transaction; and (iii) net tax benefit from a favorable ruling related to deductibility of interest expense.

Our 2024 provision for income taxes included (i) $15.9 million of net tax charge related to the tax on GILTI of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from FDII; (ii) $15.9 million of tax charge from valuation allowances due to the uncertainty of the realization of certain deferred tax assets; and (iii) excess tax benefits associated with stock-based payments, and return-to-provision benefits related to our 2023 U.S. federal tax return, partially offset by net tax charge primarily from the recognition of uncertain tax positions and tax audit settlements in certain foreign jurisdictions.

Our 2023 provision for income taxes included (i) $16.4 million of net tax charge related to the tax on GILTI of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from FDII; (ii) $14.7 million of return-to-provision benefit primarily related to our GILTI exclusion election and benefits from additional foreign tax credits recognized under temporary relief granted by the Internal Revenue Service ("IRS") in July 2023, related to our 2022 U.S. federal tax return, (iii) $10.5 million of tax charge related to non-deductible expenses resulting from the impact of the Argentine peso remeasurement loss; and (iv) $9.5 million of net tax charge primarily from the recognition of uncertain tax positions in certain foreign jurisdictions, partially offset by decreases in tax reserves as a result of closing tax years.

***Deferred Taxes***

Deferred taxes reflect the temporary differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts utilized for tax purposes. The primary components of the temporary differences that gave rise to our deferred tax assets and liabilities were as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Accrued expenses not currently deductible | $32.2 | $29.8 |
| Net operating loss carryforwards | 144.7 | 137.9 |
| Tax credit carryforwards | 24.3 | 14.8 |
| Capitalized research expenses | 94.0 | 81.7 |
| Stock-based compensation | 9.0 | 8.8 |
| Pension and other postretirement benefits | 13.7 | 31.1 |
| Inventory reserve | 19.7 | 19.2 |
| Lease liabilities | 44.8 | 44.7 |
| Other assets | 38.8 | 31.6 |
| Valuation allowances | (77.5) | (72.7) |
| &nbsp;&nbsp;&nbsp;Total deferred tax assets<sup>(1)</sup> | 343.7 | 326.9 |
| Depreciation and amortization | (335.9) | (306.0) |
| Repatriation accrual | (33.0) | (24.2) |
| Foreign operating loss recapture |  | (3.1) |
| Lease assets | (44.5) | (44.3) |
| &nbsp;&nbsp;&nbsp;Total deferred tax liabilities<sup>(1)</sup> | (413.4) | (377.6) |
| Total net deferred tax assets (liabilities) | $(69.7) | $(50.7) |

---

<sup>(1)</sup> Reflect gross amounts before jurisdictional netting of deferred tax assets and liabilities.

We assess available positive and negative evidence to estimate if sufficient future taxable income is expected to be generated to use existing deferred tax assets. On the basis of our assessment, we record valuation allowances only with respect to the portion of the deferred tax asset that is not more-likely-than-not to be realized. Our assessment of the future realizability of our deferred tax assets relies heavily on our forecasted earnings in certain jurisdictions determined by the manner in which we operate our business and the relevant carryforward periods. Any changes to our operations may affect our assessment of deferred tax assets considered realizable if the positive evidence no longer outweighs the negative evidence.

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Net operating loss carryforwards of foreign subsidiaries at December 31, 2025 and December 28, 2024 were approximately $495 million and $466 million, respectively. Tax credit carryforwards of both domestic and foreign subsidiaries at December 31, 2025 and December 28, 2024 totaled approximately $24 million and $15 million, respectively. If unused, foreign net operating losses and tax credit carryforwards will expire as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **Net Operating Losses**<sup>(1)</sup> | **Tax Credits** |
| **Year of Expiry** | | |
| 2026 | $2.3 | $.2 |
| 2027 | 3.2 | .3 |
| 2028 | 5.7 | .7 |
| 2029 | 21.4 | .4 |
| 2030 | 13.7 | 1.4 |
| 2031-2045 | 24.9 | 20.3 |
| Indefinite life/no expiry | 423.4 | 1.0 |
| Total | $494.6 | $24.3 |

---

<sup>(1)</sup> Net operating losses are presented before tax effects and valuation allowances.

Certain indefinite-lived foreign net operating losses may require decades to be fully utilized under our current business model.

At December 31, 2025, we had net operating loss carryforwards in certain states of approximately $681 million before tax effects. Based on our estimates of future state taxable income, it is more-likely-than-not that the majority of these carryforwards will not be realized before they expire. Accordingly, a valuation allowance has been recorded on approximately $660 million of these carryforwards.

As of December 31, 2025, our provision for income taxes did not materially benefit from applicable tax holidays in foreign jurisdictions.

***Unrecognized Tax Benefits***

As of December 31, 2025, our unrecognized tax benefits totaled approximately $81 million, $73 million of which, if recognized, would reduce our annual effective income tax rate. As of December 28, 2024, our unrecognized tax benefits totaled approximately $81 million, $74 million of which, if recognized, would reduce our annual effective income tax rate.

Where applicable, we accrue potential interest and penalties related to unrecognized tax benefits in income tax expense. The interest and penalties we recognized during fiscal years 2025, 2024 and 2023 were not material, individually or in aggregate, to the Consolidated Statements of Income. We have approximately $18 million and $17 million of accrued interest and penalties, net of tax benefit, in the Consolidated Balance Sheets at December 31, 2025 and December 28, 2024, respectively.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is provided below.

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Balance at beginning of year | $81.1 | $88.0 |
| Additions for tax positions of current year | 9.4 | 11.4 |
| Additions (reductions) for tax positions of prior years, net | (8.2) | (7.2) |
| Settlements with tax authorities | (.2) | (4.6) |
| Expirations of statutes of limitations | (4.7) | (3.7) |
| Changes due to foreign currency translation | 3.5 | (2.8) |
| Balance at end of year | $80.9 | $81.1 |

---

The amount of income taxes we pay is subject to ongoing audits by taxing jurisdictions around the world. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts, and circumstances existing at the time. We believe we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate. The final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our tax provision for income taxes and the related liabilities. To date, we and our U.S. subsidiaries have completed the IRS' Compliance Assurance Process through 2023. With limited exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2010.

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***Cash Paid for Income Taxes (Net of Refunds Received)***

Cash paid for income taxes, net of refunds received, for the year ended December 31, 2025 was as follows:

---

| | |
|:---|:---|
| **(In millions)** | **2025** |
| U.S. federal | $35.7 |
| State | 10.4 |
| Foreign |  |
| &nbsp;&nbsp;&nbsp;&nbsp;China | 58.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;The Netherlands | 18.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;India | 16.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 125.6 |
| Cash paid for income taxes (net of refunds received) | $265.0 |

---

Cash paid for income taxes, net of refunds received, for the years ended December 28, 2024 and December 30, 2023 was $226.8 million and $234.9 million, respectively.

**NOTE 15. SEGMENT AND DISAGGREGATED REVENUE INFORMATION** 

***Segment Reporting***

We have the following reportable segments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Materials Group — manufactures and sells pressure-sensitive label materials (including label materials with RFID inlays), films for graphic and reflective products, performance tapes and other adhesive products for industrial, medical and other applications, as well as fastener solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Solutions Group — designs, manufactures and sells a wide variety of branding and information solutions, including brand and price tickets, tags and labels (including RFID inlays), and related services, supplies and equipment.

Our President and Chief Executive Officer is the chief operating decision maker ("CODM") and is responsible for the allocation of resources and evaluation of performance of our reportable segments. The CODM's oversight includes establishing performance targets to advance our long-term strategy and increase stockholder value, allocating capital to our reportable segments to achieve those targets, developing compensation programs to incentivize segment leaders to achieve those targets, and analyzing key performance metrics to track progress against those targets. The CODM reviews the performance of each segment by comparing each reportable segment's current period results with its annual operating plan targets, its most recent quarterly forecast, and the prior year to assess how segment results impacted our company's overall results.

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***Disaggregated Revenue Information***

Disaggregated revenue information is shown below in the manner that best reflects how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Revenue from our Materials Group reportable segment is attributed to geographic areas based on the location from which products are shipped. Revenue from our Solutions Group reportable segment is shown by product group.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025**<sup>(2)</sup> | **2024** | **2023** |
| **Net sales to unaffiliated customers**<sup>(1)</sup> |  |  |  |
| Materials Group: |  |  |  |
| &nbsp;&nbsp;&nbsp; North America | $1943.1 | $1879.6 | $1846.3 |
| &nbsp;&nbsp;&nbsp; Europe, the Middle East and North Africa | 2146.4 | 2091.0 | 2007.1 |
| &nbsp;&nbsp;&nbsp; Asia | 1534.3 | 1552.7 | 1483.7 |
| &nbsp;&nbsp;&nbsp; Latin America | 469.5 | 489.7 | 474.2 |
| Total Materials Group | 6093.3 | 6013.0 | 5811.3 |
| Solutions Group: |  |  |  |
| &nbsp;&nbsp;&nbsp;Apparel and other | 1811.8 | 1876.8 | 1662.9 |
| &nbsp;&nbsp;&nbsp;Identification Solutions and Vestcom | 950.4 | 865.9 | 890.1 |
| Total Solutions Group | 2762.2 | 2742.7 | 2553.0 |
| Net sales to unaffiliated customers | $8855.5 | $8755.7 | $8364.3 |

---

<sup>(1)</sup> Certain prior-year amounts have been reclassified to conform to the current-year presentation.

<sup>(2)</sup> Beginning in the first quarter of 2025 and to better align with our growth strategy, revenue for certain radio-frequency identification products were reflected in the Materials Group reportable segment; in prior years, these revenues were reflected in the Solutions Group reportable segment. Prior-year amounts were not material.

Revenue from our Materials Group reportable segment by product group is shown below.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Net sales to unaffiliated customers**<sup>(1)</sup> |  |  |  |
| Materials Group: |  |  |  |
| &nbsp;&nbsp;&nbsp;Labels, graphics and reflectives  | $5332.2 | $5266.0 | $5076.8 |
| &nbsp;&nbsp;&nbsp; Performance materials<sup>(2)</sup> | 547.2 | 516.6 | 522.8 |
| &nbsp;&nbsp;&nbsp; Other | 213.9 | 230.4 | 211.7 |
| Total Materials Group | $6093.3 | $6013.0 | $5811.3 |

---

<sup>(1)</sup> Certain prior-year amounts have been reclassified to conform to the current-year presentation.

<sup>(2)</sup> Performance materials includes industrial and medical tapes, trade adhesives and Taylor Adhesives.

Our total company revenue by geographic area is shown below. Revenue is attributed to geographic areas based on the location from which products are shipped.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Net sales to unaffiliated customers** |  |  |  |
| U.S. | $2751.0 | $2613.4 | $2578.3 |
| Europe, the Middle East and North Africa | 2457.1 | 2418.6 | 2306.7 |
| Asia | 2726.8 | 2763.1 | 2545.2 |
| Latin America | 567.3 | 599.8 | 582.3 |
| Other | 353.3 | 360.8 | 351.8 |
| Net sales to unaffiliated customers | $8855.5 | $8755.7 | $8364.3 |

---

Net sales to unaffiliated customers in Asia included sales in China (including Hong Kong) of $1.35 billion in 2025, $1.40 billion in 2024 and $1.30 billion in 2023.

No single customer represented 10% or more of our net sales in year-end 2025, 2024 or 2023. Our ten largest customers, which include apparel retailers and brand owners, in the aggregate represented approximately 17% of our net sales during 2025 and approximately 16% of our net sales during 2024 and 2023.

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***Segment Information***

Our CODM uses segment adjusted operating income to evaluate segment performance and allocate resources. Segment adjusted operating income is defined as income before taxes adjusted for other expense (income), net; interest expense, other non-operating expense (income), net; and other items. Segment results and reconciliation to income before taxes are presented below.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Materials Group** |  |  |  |
| Net sales to unaffiliated customers | $6093.3 | $6013.0 | $5811.3 |
| Segment expense<sup>(1)</sup> | 5171.1 | 5088.3 | 5022.1 |
| Segment adjusted operating income | $922.2 | $924.7 | $789.2 |
| **Solutions Group** |  |  |  |
| Net sales to unaffiliated customers | $2762.2 | $2742.7 | $2553.0 |
| Segment expense<sup>(1)</sup> | 2475.9 | 2453.4 | 2301.0 |
| Segment adjusted operating income | $286.3 | $289.3 | $252.0 |

---

<sup>(1)</sup> Segment expense included cost of products sold and marketing, general and administrative expense and excluded other expense (income), net, and other items.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Segment adjusted operating income** |  |  |  |
| Materials Group | $922.2 | $924.7 | $789.2 |
| Solutions Group | 286.3 | 289.3 | 252.0 |
| Total | 1208.5 | 1214.0 | 1041.2 |
| Corporate expense | (84.7) | (91.9) | (77.4) |
| Other expense (income), net and other items | (77.5) | (78.3) | (180.9) |
| Interest expense | (135.4) | (117.0) | (119.0) |
| Other non-operating expense (income), net | 14.2 | 26.7 | 30.8 |
| Income before taxes | $925.1 | $953.5 | $694.7 |

---

***Additional Segment Information***

Additional financial information by reportable segment is shown below.

Intersegment sales are recorded at or near market prices and are eliminated in determining consolidated net sales. We do not disclose total assets by reportable segment since we neither generate nor review that information internally. As our reporting structure is neither organized nor reviewed internally by country, results by individual country are not provided.

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Intersegment sales** |  |  |  |
| Materials Group | $174.0 | $162.8 | $157.1 |
| Solutions Group | 55.1 | 52.3 | 35.5 |
| Intersegment sales | $229.1 | $215.1 | $192.6 |
| **Capital expenditures**<sup>(1)(2)</sup> |  |  |  |
| Materials Group | $96.2 | $96.3 | $117.8 |
| Solutions Group | 75.1 | 120.8 | 148.7 |
| Capital expenditures | $171.3 | $217.1 | $266.5 |
| **Depreciation and amortization expense**<sup>(1)</sup> |  |  |  |
| Materials Group | $137.4 | $130.9 | $127.8 |
| Solutions Group | 190.8 | 181.3 | 170.6 |
| Depreciation and amortization expense | $328.2 | $312.2 | $298.4 |

---

<sup>(1)</sup> Corporate capital expenditures and depreciation and amortization expense are allocated to the reportable segments based on their respective percentage of consolidated net sales.

<sup>(2)</sup> Capital expenditures for property, plant and equipment included accruals.

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***Entity-wide Information***

Other expense (income), net, by type were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| **Other expense (income), net, by type** |  |  |  |
| Restructuring charges, net of reversals: |  |  |  |
| &nbsp;&nbsp;&nbsp;Severance and related costs, net of reversals | $43.2 | $35.4 | $70.8 |
| &nbsp;&nbsp;&nbsp;Asset impairment and lease cancellation charges | 4.0 | 6.5 | 8.6 |
| Other items: |  |  |  |
| &nbsp;&nbsp;&nbsp;(Gain) loss on venture and other investments, net | 23.3 | 19.2 | 1.5 |
| &nbsp;&nbsp;&nbsp;Losses from Argentine peso remeasurement and Blue Chip Swap transactions | 5.6 | 16.4 | 29.9 |
| &nbsp;&nbsp;&nbsp;Transaction and related costs | 5.1 | .3 | 5.3 |
| &nbsp;&nbsp;&nbsp;Outcomes of legal matters and settlements, net<sup>(1)</sup> | 9.2 | (6.2) | 64.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sales of assets | (12.9) |  | .5 |
| Other expense (income), net | $77.5 | $71.6 | $180.9 |

---

<sup>(1)</sup> Amount for 2023 included an additional contingent liability of $56.3 million related to the Adasa litigation. Refer to Note 8, "Contingencies" for more information.

Long-lived assets (including property, plant and equipment, net, and operating lease assets) in our U.S. and non-U.S. operations were as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| **Long-lived assets** |  |  |
| U.S. | $615.6 | $642.7 |
| Non-U.S. | 1207.9 | 1171.5 |
| Long-lived assets | $1823.5 | $1814.2 |

---

Long-lived assets located in China (including Hong Kong) were approximately $273 million and $288 million in 2025 and 2024, respectively.

**NOTE 16. SUPPLEMENTAL FINANCIAL INFORMATION**

***Inventories***

Inventories at year-end were as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Raw materials | $387.6 | $435.0 |
| Work-in-progress | 242.5 | 224.9 |
| Finished goods | 345.7 | 318.2 |
| Inventories | $975.8 | $978.1 |

---

***Property, Plant and Equipment, Net***

Major classes of property, plant and equipment, stated at cost, at year-end were as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Land | $37.4 | $35.1 |
| Buildings and improvements | 903.5 | 852.3 |
| Machinery and equipment | 3192.6 | 2903.4 |
| Construction-in-progress | 138.4 | 202.7 |
| Property, plant and equipment | 4271.9 | 3993.5 |
| Accumulated depreciation | (2664.2) | (2406.8) |
| Property, plant and equipment, net | $1607.7 | $1586.7 |

---

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***Software***

Capitalized software costs at year-end were as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Cost | $396.3 | $360.0 |
| Accumulated amortization | (278.7) | (249.3) |
| Software, net | $117.6 | $110.7 |

---

Software amortization expense was $28.5 million in 2025, $25.1 million in 2024 and $23.4 million in 2023.

***Cloud Computing Arrangements***

Capitalized implementation costs at year-end were as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Cost | $134.4 | $97.1 |
| Accumulated amortization | (29.7) | (17.9) |
| Capitalized implementation costs, net | $104.7 | $79.2 |

---

Capitalized implementation cost amortization expense was $11.7 million in 2025, $8.0 million in 2024 and $4.5 million in 2023.

***Allowance for Credit Losses***

Given the short-term nature of trade receivables, our allowance for credit losses is based on the financial condition of customers, the aging of receivable balances, our historical collections experience, and current and expected future macroeconomic and market conditions. Balances are written off in the period in which they are determined to be uncollectible.

The activity related to our allowance for credit losses was as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Balance at beginning of year | $29.0 | $34.4 |
| Provision for credit losses | 3.2 | 4.6 |
| Amounts written off | (5.9) | (8.9) |
| Other, including foreign currency translation | 1.8 | (1.1) |
| Balance at end of year | $28.1 | $29.0 |

---

The provision for credit losses was $4.4 million in 2023.

***Research and Development***

Research and development expense, which was included in "Marketing, general and administrative expense" in the Consolidated Statements of Income, was as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Research and development expense | $136.6 | $137.8 | $135.8 |

---

***Supplemental Cash Flow Information***

Cash paid for interest was as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(In millions)** | **2025** | **2024** | **2023** |
| Interest | $131.3 | $111.8 | $109.9 |

---

The accrued amount of excise taxes payable on 2025 share repurchases was $4.9 million as of December 31, 2025.

***Foreign Currency Effects***

Gains and losses resulting from foreign currency transactions are included in income in the period incurred. Transactions in foreign currencies (including receivables, payables and loans denominated in currencies other than the functional currency), including hedging impacts, were not material in 2025, 2024 or 2023.

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***Deferred Revenue***

Deferred revenue primarily relates to constrained variable consideration on supply agreements for sales of products, as well as payments received in advance of performance under a contract. Deferred revenue is recognized as revenue as or when we perform under a contract.

The following table shows the amounts and balance sheet locations of deferred revenue as of December 31, 2025 and December 28, 2024:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **December 31, 2025** | **December 28, 2024** |
| Other current liabilities | $16.2 | $15.5 |
| Long-term retirement benefits and other liabilities | 1.6 | 1.2 |
| Total deferred revenue | $17.8 | $16.7 |

---

Revenue recognized from amounts included in deferred revenue as of December 28, 2024 was $14.9 million in 2025. Revenue recognized from amounts included in deferred revenue as of December 30, 2023 was $17.5 million in 2024. Revenue recognized from amounts included in deferred revenue as of December 31, 2022 was $21.0 million in 2023. This revenue was included in "Net sales" in the Consolidated Statements of Income.

***Supplier Finance Programs***

We have agreements with third-party financial institutions to facilitate payments to suppliers. These third-party financial institutions offer voluntary supply chain finance programs that enable certain of our suppliers, at the supplier's sole discretion, to sell our payment obligations to a financial institution on terms directly negotiated with the financial institution. Participating suppliers decide which payment obligations are sold to the financial institution and we have no economic interest in a supplier's decision to sell these payment obligations. We make payments to the financial institution on the invoice due date, regardless of whether an individual invoice is sold by the supplier to the financial institution. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers' decisions to sell amounts under these arrangements. Amounts due under our supply chain finance programs are included in accounts payable in our Consolidated Balance Sheets and activities related to these programs are presented as operating activities in our Consolidated Statements of Cash Flows. As of December 31, 2025 and December 28, 2024, the amounts due to financial institutions for suppliers that participate in these programs were $383.8 million and $384.6 million, respectively.

The activity related to our supplier finance programs was as follows:

---

| | | |
|:---|:---|:---|
| **(In millions)** | **2025** | **2024** |
| Balance at beginning of year | $384.6 | $397.4 |
| Invoices confirmed during the year | 1291.3 | 1339.3 |
| Invoices paid during the year | (1316.6) | (1328.9) |
| Other, including foreign currency translation | 24.5 | (23.2) |
| Balance at end of year | $383.8 | $384.6 |

---

***Argentine Blue Chip Swap Transactions***

In 2019, the Argentine government instituted exchange controls restricting the ability of entities and individuals to exchange Argentine pesos for foreign currencies or remit foreign currency out of Argentina. Due to these restrictions, markets in Argentina use a legal trading mechanism known as the Blue Chip Swap that allows entities to transfer U.S. dollars in and out of Argentina. During 2024, we entered into Blue Chip Swap transactions that resulted in losses of approximately $10 million that we recorded in "Other expense (income), net" in our Consolidated Statements of Income. Purchases and the proceeds from sales of Argentine Blue Chip Swap securities were included in investing activities in our Consolidated Statements of Cash Flows.

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**Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE** 

None.

**Item 9A. CONTROLS AND PROCEDURES**

*Disclosure Controls and Procedures*. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in providing reasonable assurance that information is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer as appropriate, to allow for timely decisions regarding required disclosure.

*Management's Report on Internal Control Over Financial Reporting.* We are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.

The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in the Report of Independent Registered Public Accounting Firm contained in Item 8 of this report.

*Changes in Internal Control over Financial Reporting.* There have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. OTHER INFORMATION**

On November 24, 2025, Mitchell R. Butier, our Chairman, adopted a Rule 10b5-1 trading plan providing for the potential sale of up to 113,000 shares of our common stock beginning on March 5, 2026 and ending on March 31, 2026, unless terminated sooner in accordance with the terms of the plan and our insider trading policy. As of February 25, 2026, Mr. Butier directly held 303,331 shares of our common stock, excluding shares held in the Avery Dennison Corporation Employee Savings Plan. Mr. Butier's trading plan is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and our insider trading policy.

There were no other Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K) adopted or terminated by any of our directors or executive officers during the fourth quarter of 2025.

**Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS** 

Not applicable.

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**PART III** 

**Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE** 

The information concerning directors and corporate governance required by this Item is incorporated herein by reference from the definitive proxy statement for our Annual Meeting of Stockholders to be held on April 30, 2026 (our "2026 Proxy Statement"), which will be filed with the SEC pursuant to Regulation 14A within 120 days of the end of the fiscal year covered by this report. The information concerning executive officers required by this Item appears, in part, as referenced below. If applicable, information concerning any late filings under Section 16(a) of the Exchange Act is incorporated by reference from our 2026 Proxy Statement.

The information required by this Item concerning our Audit Committee is incorporated by reference from our 2026 Proxy Statement.

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**INFORMATION ABOUT OUR EXECUTIVE OFFICERS**<sup>(1)</sup>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name and Position** | **Age** | **Executive Officer<br>Since** | **Former Positions within Past Five Years/<br>Officer Positions with Avery Dennison** | **Former Positions within Past Five Years/<br>Officer Positions with Avery Dennison** |
| &nbsp;&nbsp;&nbsp;Deon M. Stander<br>President and <br>Chief Executive Officer | 57 | August 2016 | 2022-2023 | President and Chief Operating Officer |
| &nbsp;&nbsp;&nbsp;Deon M. Stander<br>President and <br>Chief Executive Officer |  |  | 2015-2022 | Vice President and General Manager, RBIS |
| &nbsp;&nbsp;&nbsp;Deon M. Stander<br>President and <br>Chief Executive Officer |  |  | 2013-2015 | Vice President and General Manager, <br>Global Commercial and Innovation, RBIS |
| &nbsp;&nbsp;&nbsp;Deon M. Stander<br>President and <br>Chief Executive Officer |  |  | 2010-2012 | Vice President and General Manager, <br>Global Commercial, RBIS |
| &nbsp;&nbsp;&nbsp;Gregory S. Lovins<br>Senior Vice President and <br>Chief Financial Officer | 53 | March 2017 | 2017 | Vice President and Interim Chief Financial Officer |
| &nbsp;&nbsp;&nbsp;Gregory S. Lovins<br>Senior Vice President and <br>Chief Financial Officer |  |  | 2016-2017 | Vice President and Treasurer |
| &nbsp;&nbsp;&nbsp;Gregory S. Lovins<br>Senior Vice President and <br>Chief Financial Officer |  |  | 2011-2016 | Vice President, Global Finance, Materials Group |
| &nbsp;&nbsp;&nbsp;Danny G. Allouche<br>Senior Vice President and <br>Chief Strategy and Corporate Development Officer | 51 | November 2024 | 2024-2025 | Senior Vice President, Chief Strategy and Corporate Development Officer, and Interim Chief Financial Officer |
| &nbsp;&nbsp;&nbsp;Danny G. Allouche<br>Senior Vice President and <br>Chief Strategy and Corporate Development Officer |  |  | 2022-2024 | Senior Vice President and Chief Strategy and Corporate Development Officer |
| &nbsp;&nbsp;&nbsp;Danny G. Allouche<br>Senior Vice President and <br>Chief Strategy and Corporate Development Officer |  |  | 2021-2022 | Vice President, Chief Strategy and Corporate Development Officer |
| &nbsp;&nbsp;&nbsp;Danny G. Allouche<br>Senior Vice President and <br>Chief Strategy and Corporate Development Officer |  |  | 2016-2021 | Vice President, Corporate Development |
| &nbsp;&nbsp;&nbsp;Danny G. Allouche<br>Senior Vice President and <br>Chief Strategy and Corporate Development Officer |  |  | 2015-2016 | Vice President, Treasury and Corporate Development |
| &nbsp;&nbsp;&nbsp;Deena Baker-Nel<br>Senior Vice President and <br>Chief Human Resources Officer | 55 | September 2020 | 2020-2022 | Vice President and Chief Human Resources Officer |
| &nbsp;&nbsp;&nbsp;Deena Baker-Nel<br>Senior Vice President and <br>Chief Human Resources Officer |  |  | 2018-2020 | Vice President, Human Resources, LGM |
| &nbsp;&nbsp;&nbsp;Deena Baker-Nel<br>Senior Vice President and <br>Chief Human Resources Officer |  |  | 2015-2018 | Vice President, Human Resources, RBIS |
| &nbsp;&nbsp;&nbsp;Nicholas R. Colisto<br>Senior Vice President and <br>Chief Information Officer | 59 | September 2020 | 2018-2022 | Vice President and Chief Information Officer |
| &nbsp;&nbsp;&nbsp;Nicholas R. Colisto<br>Senior Vice President and <br>Chief Information Officer |  |  | 2012-2018 | Senior Vice President and Chief Information Officer, Xylem Inc. |
| &nbsp;&nbsp;&nbsp;Divina F. Santiago<br>Vice President, Controller | 56 | September 2023 | 2022-2023 | Vice President, Finance |
| &nbsp;&nbsp;&nbsp;Divina F. Santiago<br>Vice President, Controller |  |  | 2008-2022 | Senior Director, Finance |
| &nbsp;&nbsp;&nbsp;Ignacio J. Walker<br>Senior Vice President and<br>Chief Legal Officer | 49 | September 2020 | 2020-2022 | Vice President and Chief Legal Officer |
| &nbsp;&nbsp;&nbsp;Ignacio J. Walker<br>Senior Vice President and<br>Chief Legal Officer |  |  | 2020 | Vice President and Assistant General Counsel, Americas |
| &nbsp;&nbsp;&nbsp;Ignacio J. Walker<br>Senior Vice President and<br>Chief Legal Officer |  |  | 2018-2019 | Vice President and Assistant General Counsel |
| &nbsp;&nbsp;&nbsp;Ignacio J. Walker<br>Senior Vice President and<br>Chief Legal Officer |  |  | 2013-2017 | Vice President and Assistant General Counsel, RBIS |
| &nbsp;&nbsp;&nbsp;Ryan D. Yost<br>President, Materials Group | 50 | March 2024 | 2023-2024 | Vice President and General Manager, Identification Solutions and Vestcom |
| &nbsp;&nbsp;&nbsp;Ryan D. Yost<br>President, Materials Group |  |  | 2021-2023 | Vice President and General Manager, Identification Solutions |
|  |  |  | 2019-2021 | Vice President and General Manager, <br>Printer Solutions |

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______________________

<sup>(1)</sup> Executive officers are generally elected on the date of our annual stockholder meeting to serve a one-year term or until their successors are duly elected and qualified.

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***Insider Trading Policy***

We have adopted an insider trading policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable exchange listing standards. Our current insider trading policy is filed as Exhibit 19 to this Annual Report on Form 10-K.

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**Item 11. EXECUTIVE COMPENSATION** 

The information required by this Item is incorporated by reference from our 2026 Proxy Statement.

**Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

The information required by this Item is incorporated by reference from our 2026 Proxy Statement.

**Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

The information required by this Item is incorporated by reference from our 2026 Proxy Statement.

**Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The information required by this Item is incorporated by reference from our 2026 Proxy Statement.

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**PART IV** 

**Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Financial Statements, Financial Statement Schedule and Exhibits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Financial statements filed as part of this report are listed on the accompanying Index to Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)All financial statement schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Exhibits filed as a part of this report are listed on the accompanying Exhibit Index. Each management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K is identified as such on the Exhibit Index.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The exhibits required to be filed by Item 601 of Regulation S-K are set forth on the accompanying Exhibit Index.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**AVERY DENNISON CORPORATION** 

**EXHIBIT INDEX** 

**For the Year Ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| **Exhibit No.** | **Exhibit Name** | **Originally<br>Filed as<br>Exhibit No.** | **Filing**<sup>(1)</sup> |
| 3.1(i) | <u>[Amended and Restated Certificate of Incorporation, as filed on April 28, 2011 with the Office of Delaware Secretary of State](https://www.sec.gov/Archives/edgar/data/8818/000129993311001274/exhibit1.htm)</u> | 3.1 | Current Report on Form 8-K, filed April 29, 2011 |
| 3.1(ii) | <u>[Certificate of Amendment to Amended and Restated Certificate of Incorporation, effective as of April 25, 2024.](https://www.sec.gov/Archives/edgar/data/8818/000000881824000007/ex318k4-26x24.htm)</u> | 3.1 | Current Report on Form 8-K, filed April 26, 2024 |
| 3.1(iii) | <u>[Amended and Restated Bylaws, effective as of April 25, 2024](https://www.sec.gov/Archives/edgar/data/8818/000000881824000007/ex328k4-26x24.htm)</u> | 3.2 | Current Report on Form 8-K,<br>filed April 26, 2024 |
| 4.1 | Indenture, dated as of March 15, 1991, between Registrant and Security Pacific National Bank, as Trustee (the "1991 Indenture") | 4.1 | Registration Statement on Form S-3 (File No. 33-39491), filed March 19, 1991 |
| 4.2 | First Supplemental Indenture, dated as of March 16, 1993, between Registrant and BankAmerica National Trust Company, as successor Trustee (the "Supplemental Indenture") | 4.4 | Registration Statement on Form S-3 (File No. 33-59642), filed March 17, 1993 |
| 4.3 | <u>[Officers' Certificate establishing a series of Securities entitled "Medium-Term Notes, Series C" under the 1991 Indenture, as amended by the Supplemental Indenture](https://www.sec.gov/Archives/edgar/data/8818/0000898430-95-000821.txt)</u> | 4.1 | Current Report on Form 8-K, filed May 12, 1995 |
| 4.4 | <u>[Indenture, dated as of July 3, 2001, between Registrant and Chase Manhattan Bank and Trust Company, National Association, as trustee (the "2001 Indenture")](https://www.sec.gov/Archives/edgar/data/8818/000095015001500424/a73918orex4-1.txt)</u> | 4.1 | Registration Statement on Form S-3 (File No. 333-64558), filed July 3, 2001 |
| 4.5 | <u>[Officers' Certificate establishing Securities entitled "6.000% Notes due 2033" under the 2001 Indenture](https://www.sec.gov/Archives/edgar/data/8818/000095015003000062/a87057exv4w2.txt)</u> | 4.2 | Current Report on Form 8-K, filed January 16, 2003 |
| 4.6 | <u>[6.000% Notes Due 2033](https://www.sec.gov/Archives/edgar/data/8818/000095015003000062/a87057exv4w4.htm)</u> | 4.4 | Current Report on Form 8-K, filed January 16, 2003 |
| 4.7 | <u>[Indenture, dated as of November 20, 2007, between Registrant and Bank of New York](https://www.sec.gov/Archives/edgar/data/8818/000095015007000050/a35886exv4w2.htm)[Trust Company, N.A.](https://www.sec.gov/Archives/edgar/data/8818/000095015007000050/a35886exv4w2.htm)</u> | 4.2 | Current Report on Form 8-K, filed November 20, 2007 |
| 4.8 | <u>[Third Supplemental Indenture, dated as of April 8, 2013, between Registrant and](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)[The](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)[Bank of N](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)[ew](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)[Y](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)[ork Mellon Trust Company, N.A. ("BNY M](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)[ello](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)[n") as Trustee](https://www.sec.gov/Archives/edgar/data/8818/000110465913027681/a13-9684_1ex4d2.htm)</u> | 4.2 | Current Report on Form 8-K, filed April 8, 2013 |
| 4.9 | <u>[Fourth Supplemental Indenture, dated as of March 3, 2017, between Registrant and](https://www.sec.gov/Archives/edgar/data/8818/000110465917014095/a17-6848_4ex4d2.htm)[BNY Mellon](https://www.sec.gov/Archives/edgar/data/8818/000110465917014095/a17-6848_4ex4d2.htm)[as Trustee](https://www.sec.gov/Archives/edgar/data/8818/000110465917014095/a17-6848_4ex4d2.htm)</u> | 4.2 | Current Report on Form 8-K, filed March 3, 2017 |
| 4.10 | <u>[Fifth Supplemental Indenture, dated as of December 6, 2018, between Registrant and BNY Mellon, as Trustee (including Form of 4.875% Senior Notes due 2028 on Exhibit A thereto)](https://www.sec.gov/Archives/edgar/data/8818/000110465918071629/a18-41196_1ex4d2.htm)</u> | 4.2 | Current Report on Form 8-K, filed December 6, 2018 |

---

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

---

| | | | |
|:---|:---|:---|:---|
| **Exhibit No.** | **Exhibit Name** | **Originally<br>Filed as<br>Exhibit No.** | **Filing**<sup>(1)</sup> |
| 4.11 | <u>[Sixth Supplemental Indenture, dated as of March 11, 2020, between Registrant and BNY Mellon, as Trustee (including Form of 2.650% Senior Notes due 2030 on Exhibit A thereto)](https://www.sec.gov/Archives/edgar/data/8818/000110465920031939/tm2012374d1_4-2.htm)</u> | 4.2 | Current Report on Form 8-K, filed March 11, 2020 |
| 4.12 | <u>[Seventh Supplemental Indenture, dated as of August 18, 2021, between Registrant and BNY Mellon, as Trustee](https://www.sec.gov/Archives/edgar/data/8818/000119312521250382/d206178dex42.htm)</u> | 4.2 | Current Report on Form 8-K filed on August 18, 2021 |
| 4.13 | <u>[Eighth Supplemental Indenture, dated as of August 18, 2021, between Registrant and BNY Mellon, as Trustee (including Form of 2.250% Senior Notes due 2032 on Exhibit A thereto)](https://www.sec.gov/Archives/edgar/data/8818/000119312521250382/d206178dex43.htm)</u> | 4.3 | Current Report on Form 8-K filed on August 18, 2021 |
| 4.14 | <u>[Ninth Supplemental Indenture, dated as of March 15, 2023, between Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee (including Form of 5.750% Senior Notes due 2033 on Exhibit A thereto)](https://www.sec.gov/Archives/edgar/data/8818/000119312523071285/d476188dex42.htm)</u> | 4.2 | Current Report on Form 8-K filed on March 15, 2023 |
| 4.15 | <u>[Tenth Supplemental Indenture between Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of November 4, 2024 (including Form of 3.750% Senior Notes due 2034 on Exhibit A thereto)](https://www.sec.gov/Archives/edgar/data/8818/000119312524250629/d902920dex42.htm)</u> | 4.2 | Current Report on Form 8-K, filed on November 4, 2024 |
| 4.16 | <u>[Eleventh Supplemental Indenture between Avery](https://www.sec.gov/Archives/edgar/data/8818/000119312525201336/d918827dex42.htm)[Dennison Corporation and The Bank of New York](https://www.sec.gov/Archives/edgar/data/8818/000119312525201336/d918827dex42.htm)[Mellon Trust Company, N.A., as Trustee, dated as of](https://www.sec.gov/Archives/edgar/data/8818/000119312525201336/d918827dex42.htm)[September 11, 2025 (including Form of 4.000%](https://www.sec.gov/Archives/edgar/data/8818/000119312525201336/d918827dex42.htm)[Senior Notes due 2035 on Exhibit A thereto)](https://www.sec.gov/Archives/edgar/data/8818/000119312525201336/d918827dex42.htm)</u> | 4.2 | Current Report on Form 8-K,<br>filed on September 11, 2025 |
| 4.17† | <u>[Description of Securities](ex-417avyx20251231.htm)</u> | N/A | N/A |
| 10.1 | <u>[Credit Agreement, dated as of June 26, 2024, among Registrant, as borrower; a syndicate of lenders party thereto; Mizuho Bank, Ltd., as administrative agent; Mizuho Bank, Ltd. and Bank of America, N.A., as syndication agents; and Citibank, N.A., as documentation agent](https://www.sec.gov/Archives/edgar/data/8818/000119312524170372/d844816dex101.htm)</u> | 10.1 | Current Report on Form 8-K, filed June 27, 2024 |
| 10.2\* | <u>[Amended and Restated Supplemental Executive Retirement Plan ("SERP")](https://www.sec.gov/Archives/edgar/data/8818/000095012309034055/v53459exv10w11w1.htm)</u> | 10.11.1 | Quarterly Report on Form 10-Q, filed August 12, 2009 |
| 10.3\* | <u>[Complete Restatement and Amendment of Executive Variable Deferred Compensation Plan ("EVDCP")](https://www.sec.gov/Archives/edgar/data/8818/0000898430-95-000424.txt)</u> | 10.16 | 1994 Annual Report on Form 10-K, filed March 30, 1995 |
| 10.4\* | <u>[Amendment No. 1 to EVDCP](https://www.sec.gov/Archives/edgar/data/8818/000110465900000110/0001104659-00-000110.txt)</u> | 10.16.1 | 1999 Annual Report on Form 10-K, filed March 30, 2000 |
| 10.5\* | <u>[Amended and Restated 2005 Directors Variable Deferred Compensation Plan](https://www.sec.gov/Archives/edgar/data/8818/000095012311048393/v58917exv10w18w2.htm)</u> | 10.18.2 | Quarterly Report on Form 10-Q, filed May 10, 2011 |
| 10.6\* | <u>[2017 Incentive Award Plan ("](https://www.sec.gov/Archives/edgar/data/8818/000104746917001451/a2231126zdef14a.htm#AppB)[Equity](https://www.sec.gov/Archives/edgar/data/8818/000104746917001451/a2231126zdef14a.htm#AppB)[Plan")](https://www.sec.gov/Archives/edgar/data/8818/000104746917001451/a2231126zdef14a.htm#AppB)</u> | B | 2017 Proxy Statement on Schedule 14A, filed March 10, 2017 |
| 10.7\*† | <u>[A](ex-107avyx20251231.htm)[mendment No. 1 to Equity Plan](ex-107avyx20251231.htm)</u> | N/A | N/A |

---

------

**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

---

| | | | |
|:---|:---|:---|:---|
| **Exhibit No.** | **Exhibit Name** | **Originally<br>Filed as<br>Exhibit No.** | **Filing**<sup>(1)</sup> |
| 10.8\* | <u>[Amended and Restated Annual Incentive Plan](https://www.sec.gov/Archives/edgar/data/8818/000110465920055617/avy-20200331xex10d1.htm)</u> | 10.1 | Quarterly Report on Form 10-Q, filed May 1, 2020 |
| 10.9\* | <u>[Complete Restatement and Amendment of Executive Deferred Retirement Plan ("EDRP")](https://www.sec.gov/Archives/edgar/data/8818/0000898430-95-000424.txt)</u> | 10.28 | 1994 Annual Report on Form 10-K, filed March 30, 1995 |
| 10.10\* | <u>[Amendment No. 1 to EDRP](https://www.sec.gov/Archives/edgar/data/8818/000110465900000110/0001104659-00-000110.txt)</u> | 10.28.1 | 1999 Annual Report on Form 10-K, filed March 30, 2000 |
| 10.11\* | <u>[Amendment No. 2 to EDRP](https://www.sec.gov/Archives/edgar/data/8818/000102140802003030/dex10282.txt)</u> | 10.28.2 | 2001 Annual Report on Form 10-K, filed March 4, 2002 |
| 10.12\* | <u>[2005 Executive Variable Deferred Retirement Plan, amended and restated January 1, 2019](https://www.sec.gov/Archives/edgar/data/8818/000000881824000016/ex447-30x24.htm)</u> | 4.4 | Registration Statement on Form S-8, filed July 30, 2024 |
| 10.13\* | <u>[Amended and Restated Key Executive Change of Control Severance Plan](https://www.sec.gov/Archives/edgar/data/8818/000000881825000003/ex-1014avyx20241228.htm)</u> | 10.14 | 2024 Annual Report on<br>Form 10-K, filed February 26,<br>2025 |
| 10.14\* | <u>[Amended and Restated Executive Severance Plan](https://www.sec.gov/Archives/edgar/data/8818/000000881825000003/ex-1015avyx20241228.htm)</u> | 10.15 | 2024 Annual Report on<br>Form 10-K, filed February 26,<br>2025 |
| 10.15\* | <u>[Form of Executive Severance Agreement](https://www.sec.gov/Archives/edgar/data/8818/000000881825000003/ex-1016avyx20241228.htm)</u> | 10.16 | 2024 Annual Report on<br>Form 10-K, filed February 26,<br>2025 |
| 10.16\* | <u>[Amended and Restated Long-Term Incentive Unit Plan ("LTI Unit Plan")](https://www.sec.gov/Archives/edgar/data/8818/000110465920055617/avy-20200331xex10d2.htm)</u> | 10.2 | Quarterly Report on Form 10-Q, filed May 1, 2020 |
| 10.17\* | <u>[Form of Long-Term Incentive Unit Agreement under](https://www.sec.gov/Archives/edgar/data/8818/000104746914001386/a2218447zex-10_41.htm)[LTI Unit](https://www.sec.gov/Archives/edgar/data/8818/000104746914001386/a2218447zex-10_41.htm)[Plan](https://www.sec.gov/Archives/edgar/data/8818/000104746914001386/a2218447zex-10_41.htm)</u> | 10.41 | 2013 Annual Report on Form 10-K, filed February 26, 2014 |
| 10.18\* | <u>[Form of Director Restricted Stock Unit Agreement under](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d2.htm)[E](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d2.htm)[quity](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d2.htm)[Plan](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d2.htm)</u> | 10.2 | Quarterly Report on Form 10-Q, filed August 1, 2017 |
| 10.19\* | <u>[Form of Employee Market-Leveraged Stock Unit Agreement under](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d3.htm)[E](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d3.htm)[quity](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d3.htm)[Plan](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d3.htm)</u> | 10.3 | Quarterly Report on Form 10-Q, filed August 1, 2017 |
| 10.20\* | <u>[Form of Employee Performance Unit Agreement under](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d4.htm)[E](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d4.htm)[quity](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d4.htm)[Plan](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d4.htm)</u> | 10.4 | Quarterly Report on Form 10-Q, filed August 1, 2017 |
| 10.21\* | <u>[Form of Employee Restricted Stock Unit Agreement under](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d5.htm)[E](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d5.htm)[quity](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d5.htm)[Plan](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d5.htm)</u> | 10.5 | Quarterly Report on Form 10-Q, filed August 1, 2017 |
| 10.22\* | <u>[Form of Employee Non-Qualified Stock Option Agreement under](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d6.htm)[E](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d6.htm)[qu](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d6.htm)[ity](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d6.htm)[Plan](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d6.htm)</u> | 10.6 | Quarterly Report on Form 10-Q, filed August 1, 2017 |
| 10.23\* | <u>[Offer Letter to Gregory Lovins, dated July 10, 2017](https://www.sec.gov/Archives/edgar/data/8818/000110465917048434/a17-13273_1ex10d1.htm)</u> | 10.1 | Quarterly Report on Form 10-Q, filed August 1, 2017 |

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

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| | | | |
|:---|:---|:---|:---|
| **Exhibit No.** | **Exhibit Name** | **Originally<br>Filed as<br>Exhibit No.** | **Filing**<sup>(1)</sup> |
| 10.24\* | <u>[Offer Letter to Ignacio Walker, dated August 25, 2020](https://www.sec.gov/Archives/edgar/data/8818/000000881822000009/avy-2022050310qex102.htm)</u> | 10.2 | Quarterly Report on Form 10-Q,<br>filed May 3, 2022 |
| 10.25\* | <u>[Offer Letter to Francisco Melo, dated February 27, 2023](https://www.sec.gov/Archives/edgar/data/8818/000000881823000009/avy-2023050210qex102.htm)</u> | 10.2 | Quarterly Report on Form 10-Q, filed May 2, 2023 |
| 10.26\* | <u>[Offer Letter to Mitchell Butier, dated May 25, 2023](https://www.sec.gov/Archives/edgar/data/8818/000000881823000015/avy-2023080110qex101.htm)</u> | 10.1 | Quarterly Report on Form 10-Q, filed August 1, 2023 |
| 10.27\* | <u>[Offer Letter to Deon Stander, dated May 25, 2023](https://www.sec.gov/Archives/edgar/data/8818/000000881823000015/avy-2023080110qex102.htm)</u> | 10.2 | Quarterly Report on Form 10-Q, filed August 1, 2023 |
| 10.28\* | <u>[Offer Letter to Ryan Yost, dated February 12, 2024](https://www.sec.gov/Archives/edgar/data/8818/000000881824000009/avy-20244030x10qex101.htm)</u> | 10.1 | Quarterly Report on Form 10-Q, filed April 30, 2024 |
| 10.29\* | <u>[Promotion](https://www.sec.gov/Archives/edgar/data/8818/000000881825000012/avy-20250429x10qex101.htm)[Letter to Danny Allouche, dated November 14, 2024](https://www.sec.gov/Archives/edgar/data/8818/000000881825000012/avy-20250429x10qex101.htm)</u> | 10.1 | Quarterly Report on Form 10-Q,<br>filed April 29, 2025 |
| 10.30\* | <u>[Promotion Letter to Deena Baker-Nel,](https://www.sec.gov/Archives/edgar/data/8818/000000881825000012/avy-20250429x10qex102.htm)[dated February 27, 2025](https://www.sec.gov/Archives/edgar/data/8818/000000881825000012/avy-20250429x10qex102.htm)</u> | 10.2 | Quarterly Report on Form 10-Q,<br>filed April 29, 2025 |
| 19† | <u>[Insider Trading Compliance Policy and Procedures](ex-19avy20251231.htm)</u> | N/A | N/A |
| 21† | <u>[List of Subsidiaries](ex-21avyx20251231.htm)</u> | N/A | N/A |
| 23† | <u>[Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm](ex-23avyx20251231.htm)</u> | N/A | N/A |
| 24† | <u>[Power of Attorney (see Signatures – Power of Attorney)](#i737457f929ff47bb8b2643445cd22790_199)</u> | N/A | N/A |
| 31.1† | <u>[Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex-311avyx20251231.htm)</u> | N/A | N/A |
| 31.2† | <u>[Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex-312avyx20251231.htm)</u> | N/A | N/A |
| 32.1†† | <u>[Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex-321avyx20251231.htm)</u> | N/A | N/A |
| 32.2†† | <u>[Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex-322avyx20251231.htm)</u> | N/A | N/A |
| 97 | <u>[Policy for Recovery of Erroneously Awarded Compensation](https://www.sec.gov/Archives/edgar/data/8818/000000881824000003/ex-97avyx20231230.htm)</u> | 97 | 2023 Annual Report on Form<br>10-K, filed February 21, 2024 |
| 101.INS††† | Inline XBRL Instance Filing – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | N/A | N/A |

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

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| | | | |
|:---|:---|:---|:---|
| **Exhibit No.** | **Exhibit Name** | **Originally<br>Filed as<br>Exhibit No.** | **Filing**<sup>(1)</sup> |
| 101.SCH††† | Inline XBRL Extension Schema Filing | N/A | N/A |
| 101.CAL††† | Inline XBRL Extension Calculation Linkbase Filing | N/A | N/A |
| 101.DEF††† | Inline XBRL Extension Definition Linkbase Filing | N/A | N/A |
| 101.LAB††† | Inline XBRL Extension Label Linkbase Filing | N/A | N/A |
| 101.PRE††† | Inline XBRL Extension Presentation Linkbase Filing | N/A | N/A |
| 104††† | Inline XBRL for the cover page of this Annual Report on Form 10-K, included as part of the Exhibit 101 inline XBRL document set |  |  |

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______________________

---

| | |
|:---|:---|
| <sup>(1)</sup> | Unless otherwise noted, the File Number for all filings is File No. 1-7685. |
| \* | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K pursuant to Item 15(b) of Form 10-K. |
| † | Filed herewith. |
| †† | This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
| ††† | Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |

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**Item 16. FORM 10-K SUMMARY** 

Not applicable.

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**SIGNATURES** 

Pursuant to the requirements of Section 13 or 15(d) 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.

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| | |
|:---|:---|
| | AVERY DENNISON CORPORATION |
| By: | /s/ Gregory S. Lovins |
|  | Gregory S. Lovins |
|  | Senior Vice President and Chief Financial Officer |

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Dated: February 25, 2026

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**<u>[**Table of Contents**](#i737457f929ff47bb8b2643445cd22790_7)</u>**

**POWER OF ATTORNEY** 

Each person whose signature appears below does hereby constitute and appoint Gregory S. Lovins and Ignacio J. Walker, and each of them, with full power of substitution, his or her true and lawful attorney-in-fact to act for him or her in any and all capacities, to sign this Annual Report on Form 10-K and any or all amendments or supplements thereto, and to file each of the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully, to all intents and purposes, as he or she could do in person, hereby ratifying and confirming all that said attorneys-in-fact or substitutes, or any of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and as of the dates indicated.

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| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Deon M. Stander | President, Chief Executive Officer <br>and Director <br>(Principal Executive Officer) | February 25, 2026 |
| Deon M. Stander | President, Chief Executive Officer <br>and Director <br>(Principal Executive Officer) | February 25, 2026 |
| /s/ Gregory S. Lovins | Senior Vice President <br>and Chief Financial Officer<br>(Principal Financial Officer) | February 25, 2026 |
| Gregory S. Lovins | Senior Vice President <br>and Chief Financial Officer<br>(Principal Financial Officer) | February 25, 2026 |
| /s/ Divina F. Santiago | Vice President, Controller<br>(Principal Accounting Officer) | February 25, 2026 |
| Divina F. Santiago | Vice President, Controller<br>(Principal Accounting Officer) | February 25, 2026 |
| /s/ Mitchell R. Butier | Chairman | February 25, 2026 |
| Mitchell R. Butier | Chairman | February 25, 2026 |
| /s/ Bradley A. Alford | Director | February 25, 2026 |
| Bradley A. Alford | Director | February 25, 2026 |
| /s/ Ward H. Dickson | Director | February 25, 2026 |
| Ward H. Dickson | Director | February 25, 2026 |
| /s/ David E. Flitman | Director | February 25, 2026 |
| David E. Flitman | Director | February 25, 2026 |
| /s/ Andres A. Lopez | Director | February 25, 2026 |
| Andres A. Lopez | Director | February 25, 2026 |
| /s/ Maria Fernanda Mejia | Director | February 25, 2026 |
| Maria Fernanda Mejia | Director | February 25, 2026 |
| /s/ Francesca Reverberi | Director | February 25, 2026 |
| Francesca Reverberi | Director | February 25, 2026 |
| /s/ Patrick T. Siewert | Director | February 25, 2026 |
| Patrick T. Siewert | Director | February 25, 2026 |
| /s/ William R. Wagner | Director | February 25, 2026 |
| William R. Wagner | Director | February 25, 2026 |

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## Exhibit 4.17

**Exhibit 4.17**

**DESCRIPTION OF THE REGISTRANT'S SECURITIES**

**REGISTERED PURSUANT TO SECTION 12 OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

As of December 31, 2025, Avery Dennison Corporation ("Avery Dennison", "we", or the "Company") had three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"): (i) common stock**,** $1.00 par value per share, (ii) 3.750% Senior Notes due 2034, and (iii) 4.000% Senior Notes due 2035. The Company's shares of common stock are listed on the New York Stock Exchange (the "NYSE") and the Company's Senior Notes are listed on the Nasdaq Stock Market ("Nasdaq").

**DESCRIPTION OF AVERY DENNISON CORPORATION COMMON STOCK**

The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the applicable provisions of the Delaware General Corporation Law, or the DGCL, our Amended and Restated Certificate of Incorporation, or Amended and Restated Certificate, and our Amended and Restated Bylaws, or Bylaws. Copies of our Amended and Restated Certificate and our Bylaws are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this Exhibit is a part. Refer to our Amended and Restated Certificate, our Bylaws and the applicable provisions of the DGCL for additional information.

Pursuant to our Amended and Restated Certificate, our authorized capital stock consists of 400,000,000 shares of common stock, par value $1.00 per share, and 5,000,000 shares of preferred stock, par value $1.00 per share.

We may offer from time to time shares of our common stock. We may also offer common stock issuable upon the conversion of debt securities, preferred securities or depositary shares or the exercise of warrants and pursuant to stock purchase contracts.

**Voting Rights**

Unless otherwise provided in our Amended and Restated Certificate, in the DGCL, or other applicable law, the holders of our common stock are entitled to one vote per share on all matters voted upon by the stockholders, subject to any preferential rights that our board of directors may grant in connection with the future issuance of preferred stock. Shares of our common stock do not have cumulative voting rights. If a quorum is present, the affirmative vote of a majority in voting power of the shares represented at the meeting and entitled to vote on any matter shall be the act of the stockholders, unless otherwise provided by the DGCL, the Amended and Restated Certificate (including the certificate of designations of preferences as to any preferred stock), or the rules and regulations of any stock exchange applicable to us or any other applicable law.

**Dividend and Liquidation Rights**

Each holder of common stock is entitled to receive ratably any dividends declared on the common stock by our board of directors from funds legally available for distribution. In the event of our liquidation, dissolution or winding up, after we pay all debts and other liabilities and any liquidation preference on the preferred stock, each holder of common stock would be entitled to share ratably in all of our remaining assets. The common stock has no subscription, redemption, conversion or preemptive rights. All shares of common stock are fully paid and nonassessable.

**Certain Anti-Takeover Matters**

Certain provisions of our organizational documents and the DGCL may have the effect of delaying, deferring or preventing a change in control. The provisions described below may also reduce our vulnerability to an unsolicited takeover attempt. The summary of the provisions set forth below does not purport to be complete and is qualified in its entirety by reference to our Amended and Restated Certificate, Bylaws and the DGCL.

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*No Written Consent of Stockholders*

Our Bylaws provide that stockholders are not entitled to act by written consent in lieu of a meeting. This provision could discourage potential acquisition proposals and could delay or prevent a change of control.

*Advance Notice Requirements*

Our Bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of stockholders. These procedures provide that notice of such stockholder proposals must be timely given in writing to the Secretary of Avery Dennison prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in our Bylaws.

*Delaware General Corporation Law Section 203*

As a corporation organized under the laws of the State of Delaware, we are subject to Section 203 of the DGCL which restricts certain business combinations between us and an "interested stockholder" (in general, a stockholder owning 15% or more of our outstanding voting stock) or that stockholder's affiliates or associates for a period of three years following the date on which the stockholder becomes an "interested stockholder." The restrictions do not apply if:

 • prior to an interested stockholder becoming such, our board of directors approves either the business combination or the transaction in which the stockholder becomes an interested stockholder;

•  upon consummation of the transaction in which the stockholder becomes an interested stockholder, the interested stockholder owns at least 85% of our voting stock outstanding at the time the transaction commenced, subject to certain exceptions; or

•  on or after the date an interested stockholder becomes such, the business combination is both approved by our board of directors and authorized at an annual or special meeting of our stockholders (and not by written consent) by the affirmative vote of at least 66 2/3% of the outstanding voting stock not owned by the interested stockholder.

*Blank Check Preferred Stock*

Our Amended and Restated Certificate provides for 5,000,000 authorized shares of "blank check" preferred stock, the terms of which may be determined by our board of directors without obtaining stockholder approval. Undesignated or "blank check" preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and to thereby protect the continuity of our management.

On October 23, 1997, our board of directors adopted a Rights Agreement and declared a dividend distribution of one preferred share purchase right, or a Right, on each outstanding share of our common stock. The Rights expired on October 31, 2007. We have not yet redesignated the Series A Junior Participating preferred stock underlying the Rights.

Our board of directors has no present intention to introduce additional measures that might have an anti-takeover effect; however, our board of directors expressly reserves the right to introduce these measures in the future, including, for example, by renewing the Rights, if our board determines in the exercise of its fiduciary duties that the adoption of such measure would be in the best interests of our company and stockholders.

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**Listing Exchange; Transfer Agent and Registrar**

Our common stock is listed on the NYSE under the symbol "AVY." The transfer agent and registrar for our common stock is Broadridge Corporate Issuer Solutions, Inc.

**DESCRIPTION OF AVERY DENNISON CORPORATION 3.750% SENIOR NOTES DUE 2034**

The following description is a summary of the material provisions of the notes and the indenture (as defined below) under which the notes were issued. This description does not describe every provision of the notes or the indenture. Refer to the indenture for a complete description of what we describe in summary form in this Exhibit. The indenture has been filed as an exhibit to the Annual Report on Form 10-K of which this Exhibit is a part.

**General**

The notes constitute a series of debt securities issued under the Indenture, dated November 20, 2007, between Avery Dennison Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee (the "trustee"), as supplemented by a Supplemental Indenture entered into between us and the trustee, as amended (together, the "indenture"). We appointed The Bank of New York Mellon, London Branch to act as paying agent solely with respect to the notes. We also appointed The Bank of New York Mellon Trust Company, N.A. to act as transfer agent and registrar.

The aggregate principal amount of the notes is €500,000,000. The notes will mature and become due and payable, together with any accrued and unpaid interest thereon, on November 4, 2034. The notes bear interest at the rate of 3.750% per annum from November 4, 2024.

Interest on the notes is payable annually in arrears on November 4 of each year, beginning on November 4, 2025 to the persons in whose names the respective notes are registered at the close of business on the October 21 preceding the respective interest payment dates. If any payment date is not a business day, then payment will be made on the next succeeding business day, but without any additional interest or other amount.

Interest on the notes is computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the notes (or November 4, 2024 if no interest has been paid on the notes), to but excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

The notes do not have the benefit of any sinking fund.

The notes are represented by one or more registered notes in global form, but in certain limited circumstances may be represented by notes in definitive registered form. See "—Book-Entry Procedures" below. The notes are issued in euros and only in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.

**Listing**

The notes are listed on Nasdaq under the symbol "AVY34."

**Further Issues**

We may, from time to time, without notice to or consent of the holders of the notes, create and issue additional notes ranking equally and ratably with the notes in all respects (or in all respects except for the payment of interest accruing prior to the issue date of such additional notes or except, in some cases, for the first payment of interest

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following the issue date of such additional notes). Any such additional notes may be consolidated and form a single series with the notes and will have the same terms as to status, redemption or otherwise as the notes; provided, that if any such additional notes are not fungible with the notes offered hereby for U.S. federal income tax purposes, such additional notes will be issued under a different CUSIP number.

**Ranking**

The notes are our senior unsecured obligations and:

 • rank equally and ratably with all of our other existing and future unsecured and unsubordinated indebtedness and other liabilities;

 • rank senior in right of payment to all of our existing and future subordinated indebtedness, if any;

 • are effectively junior to all of our future secured indebtedness, if any, to the extent of the value of the assets securing such indebtedness; and

 • are structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries.

The indenture does not limit the aggregate principal amount of debt securities that the Company may issue. The indenture does not contain any provisions that would limit the ability of the Company or its Subsidiaries to incur additional unsecured indebtedness.

**Issuance in Euros; Payment on the Notes**

Initial holders are required to pay for the notes in euros, and all payments on the notes are payable in euros. The amount payable on any date in euros will be converted into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on the second business day prior to the relevant payment date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the basis of the most recent U.S. dollar/euro exchange rate published in *The Wall Street Journal* on or prior to the second business day prior to the relevant payment date, or in the event *The Wall Street Journal* has not published such exchange rate, such rate as determined in our sole discretion on the basis of the most recently available market exchange rate for the euro. Neither the trustee nor the paying agent has any responsibility for obtaining exchange rates, effecting conversions or otherwise handling redenominations in connection with the foregoing.

**Payments and Paying Agents**

We will pay principal, premium, if any, interest, additional amounts, if any, and any other amounts due on the notes in euros and to the paying agent at the corporate trust office of the trustee. We may also choose to pay interest by mailing checks or making wire transfers. We may also arrange for additional paying agent offices, and may change these offices, including our use of the trustee's corporate trust office.

We have appointed The Bank of New York Mellon, London Branch to act as paying agent in connection with the notes, and we have appointed The Bank of New York Mellon Trust Company, N.A. to act as transfer agent and registrar. We may also choose to act as our own paying agent.

**Optional Redemption**

Prior to August 4, 2034, the date falling three months prior to the maturity date of the notes (the "Par Call Date"), the notes are redeemable in whole or in part, at our option, at any time or from time to time at a redemption price equal to the greater of (a) 100% of the principal amount of the notes to be redeemed and (b) an amount equal

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to the sum of the present values of the Remaining Scheduled Payments of principal and interest thereon that would have been payable in respect of the notes calculated as if the maturity date of the notes was the Par Call Date, not including any portion of any payments of interest accrued to the redemption date, discounted to such redemption date on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate, plus 25 basis points, plus, in the case of each of (i) and (ii), accrued and unpaid interest on the notes, if any, to, but not including, the redemption date.

Notice of any redemption will be transmitted not less than 10 days and not more than 60 days prior to the redemption date to each holder of notes to be redeemed. In connection with any redemption of notes, any such redemption may, at our discretion, be subject to one or more conditions precedent. In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice will state that, in our discretion, the redemption date may be delayed until the time that any or all such conditions shall be satisfied (or waived by us in our sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions have not been satisfied (or waived by us in our sole discretion) by the redemption date (whether the original redemption date or the redemption date so delayed). In addition, we may provide in such notice that payment of the redemption price and performance of our obligations with respect to such redemption may be performed by another person.

Unless we default in payment of the redemption price, from and after the redemption date, interest will cease to accrue on the notes or portions thereof called for redemption. If less than all of the notes are to be redeemed, the notes to be redeemed will be selected by lot and may provide for the selection for redemption of a portion of the principal amount of notes held by a holder equal to an authorized denomination. If the Company redeems less than all of the notes and the notes are then held in book-entry form, the redemption will be made in accordance with the depositary's customary procedures.

For purposes of the optional redemption provisions of the notes, the following definitions are applicable:

"Comparable Government Bond" means, in relation to any Comparable Government Bond Rate calculation a German government bond (*Bundesanleihe*) whose maturity is closest to the Par Call Date, or if an independent investment bank selected by the Company in its discretion determines that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by such independent investment bank, determine to be appropriate for determining the Comparable Government Bond Rate.

"Comparable Government Bond Rate" means, with respect to any redemption date, the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded upwards), at which the gross redemption yield on the notes, if they were to be purchased at such price on the third business day prior to the date fixed for redemption, would be equal to the gross redemption yield on such business day of the Comparable Government Bond on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by the Company.

"Remaining Scheduled Payments" means the remaining scheduled payments of the principal and interest on the notes to be redeemed that would be due after the related redemption date but for such redemption; *provided, however*, that if such redemption date is not an interest payment date, the amount of the next scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to, but not including, such redemption date.

**Change of Control Offer**

If a Change of Control Triggering Event occurs, unless we have exercised our option to redeem the notes as described above, we will be required to make an offer (a "Change of Control Offer") to each holder of the notes to repurchase all or any part (equal to €100,000 or an integral multiple of €1,000 in excess thereof) of that holder's notes on the terms set forth in the notes. In a Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of notes repurchased, plus accrued and unpaid interest, if any, on

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the notes repurchased to, but not including, the repurchase date (a "Change of Control Payment"), subject to the rights of the holders on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control Triggering Event or, at our option, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice will be mailed (or electronically delivered) to holders of the notes describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase such notes on the repurchase date specified in the applicable notice, which date will be no earlier than 30 days and no later than 60 days from the date on which such notice is mailed (or electronically delivered) (a "Change of Control Payment Date").

The notice will, if mailed (or electronically delivered) prior to the date of consummation of the Change of Control, state that the Change of Control Offer is conditioned on the Change of Control Triggering Event occurring prior to or on the applicable Change of Control Payment Date specified in the notice.

On each Change of Control Payment Date, we will, to the extent lawful:

 • accept for payment all notes or portions of notes properly tendered pursuant to the applicable Change of Control Offer;

•  deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered pursuant to the applicable Change of Control Offer; and

•  deliver or cause to be delivered to the trustee the notes properly accepted together with an officer's certificate stating the aggregate principal amount of notes or portions of notes being repurchased.

We will not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by us, and the third party repurchases all notes properly tendered and not withdrawn under its offer. In addition, we will not repurchase any notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the indenture, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.

We will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the notes, we will comply with those securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control Offer provisions of the notes by virtue of any such conflict.

For purposes of the Change of Control Offer provisions of the notes, the following definitions will be applicable:

"Change of Control" means the occurrence of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or more series of related transactions, of all or substantially all of our assets and our Subsidiaries' assets, taken as a whole, to any person, other than us or one of our Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of

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our outstanding Voting Stock or other Voting Stock into which the Company's Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. the adoption of a plan relating to our liquidation or dissolution.

Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (a) we become a direct or indirect wholly-owned Subsidiary of a holding company and (b)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction or (2) immediately following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company. The term "person," as used in this definition, has the meaning given thereto in Section 13(d)(3) of the Exchange Act.

"Change of Control Triggering Event" means the occurrence of both a Change of Control and a Rating Event.

"Investment Grade" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB– (or the equivalent) by S&P, and the equivalent Investment Grade credit rating from any replacement Rating Agency or Rating Agencies selected by us.

"Moody's" means Moody's Investors Service, Inc., and its successors.

"Rating Agencies" means (a) each of Moody's and S&P; and (b) if either Moody's or S&P ceases to rate the notes or fails to make a rating of the notes publicly available for reasons outside of our control, a "nationally recognized statistical rating organization" within the meaning of Section 3(a)(62) of the Exchange Act selected by us (as certified by a resolution of the Company's Board of Directors) as a replacement agency for Moody's or S&P, or each of them, as the case may be.

"Rating Event" means the rating on the notes is lowered by each of the Rating Agencies and the notes are rated below Investment Grade by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the occurrence of a Change of Control or our intention to effect a Change of Control; *provided*, *however*, that a Rating Event otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform us in writing that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Event). The trustee will not be charged with knowledge of, or be responsible for monitoring, the ratings of the notes.

"S&P" means S&P Global Ratings, and its successors.

"Voting Stock" means, with respect to any specified "person" (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, transfer, conveyance or other disposition of "all or substantially all" of our assets and the assets of our Subsidiaries, taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require us to repurchase such holder's notes as a result of a sale, transfer, conveyance of other disposition of less than all of our and our Subsidiaries' assets, taken as a whole, to any person or group or persons may be uncertain.

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**Redemption for Tax Reasons**

If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws or treaties) of the United States (or any political subdivision of or taxing authority in the United States), or any change in, or amendment to, an official position regarding the application or interpretation of such laws, regulations, rulings or treaties, which change or amendment is announced or becomes effective on or after the date of issuance, we become or, based upon a written opinion of independent counsel selected by us, there is a substantial probability that we will become, obligated to pay additional amounts as described under the heading "—Payment of Additional Amounts" below with respect to the notes, then we may at any time at our option redeem, in whole, but not in part, the notes on not less than 30 nor more than 60 days' prior notice, at a redemption price equal to 100% of their principal amount, together with accrued and unpaid interest on the notes to, but not including, the date fixed for redemption.

**Payment of Additional Amounts**

All payments of principal and interest in respect of the notes will be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, duties, assessments or other governmental charges of whatsoever nature required to be deducted or withheld by the United States or any political subdivision or taxing authority thereof or therein, unless such withholding or deduction is then required by law or the official interpretation or administration thereof.

In the event any withholding or deduction on payments in respect of the notes for or on account of any present or future tax, assessment or other governmental charge is required to be deducted or withheld by the United States or any political subdivision or taxing authority thereof or therein, we will pay such additional amounts on the notes as will result in receipt by each holder of a note that is not a U.S. Person (as defined below) of such amounts (after all such withholding or deduction, including on any additional amounts) as would have been received by such holder had no such withholding or deduction been required. We will not be required, however, to make any payment of additional amounts for or on account of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any tax, assessment or other governmental charge that would not have been imposed but for (1) the existence of any present or former connection (other than a connection arising solely from the ownership of those notes or the receipt of payments in respect of those notes) between a holder of a note (or the beneficial owner for whose benefit such holder holds such note), or between a fiduciary, settlor, beneficiary of, member or shareholder of, or possessor of a power over, that holder or beneficial owner (if that holder or beneficial owner is an estate, trust, partnership or corporation) and the United States, including that holder or beneficial owner, or that fiduciary, settlor, beneficiary, member, shareholder or possessor, being or having been a citizen or resident or treated as a resident of the United States or being or having been engaged in a trade or business or present in the United States or having had a permanent establishment in the United States or (2) the presentation of a note for payment on a date more than 30 days after the later of the date on which that payment becomes due and payable and the date on which payment is duly provided for;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any estate, inheritance, gift, sales, transfer, capital gains, excise, personal property, wealth or similar tax, assessment or other governmental charge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any tax, assessment, or other governmental charge imposed by reason of the holder's or beneficial owner's past or present status as a passive foreign investment company, a controlled foreign corporation, a foreign tax exempt organization or a personal holding company with respect to the United States or as a corporation that accumulates earnings to avoid U.S. federal income tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any tax, assessment or other governmental charge which is payable otherwise than by withholding or deducting from payment of principal of or premium, if any, or interest on such notes;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of and premium, if any, or interest on any note if that payment can be made without withholding by at least one other paying agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any tax, assessment or other governmental charge which would not have been imposed but for the failure of a beneficial owner or any holder of notes that is not a U.S. Person to establish its status as such when doing so is required in order to qualify for exemption for U.S. withholding tax or to otherwise satisfy certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of the beneficial owner or any holder of the notes (including, but not limited to, the requirement to provide Internal Revenue Service Forms W-8BEN, W-8BEN-E, W-8ECI, or any subsequent versions thereof or successor thereto, and including, without limitation, any documentation requirement under an applicable income tax treaty that is necessary to qualify for exemption or reduction of the applicable rate of U.S. withholding tax);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any tax, assessment or other governmental charge imposed on interest due to the holder's or beneficial owner's status as (A) a 10-percent shareholder (as defined in Section 871(h)(3)(B) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and the regulations that may be promulgated thereunder) of the Company, (B) a controlled foreign corporation that is related to the Company within the meaning of Section 864(d)(4) of the Code, or (C) a bank receiving interest described in Section 881(c)(3)(A) of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any tax, assessment or other governmental charge required to be withheld or deducted under Sections 1471 through 1474 of the Code (or any amended or successor version of such Sections that is substantively comparable) (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or "FATCA"), any regulations or other guidance thereunder, or any agreement (including any intergovernmental agreement) entered into in connection therewith; or any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an intergovernmental agreement in respect of FATCA; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any combination of items (a), (b), (c), (d), (e), (f), (g) and (h);

nor will we pay any additional amounts to any holder that is not the sole beneficial owner of such notes, or a portion of such notes, or that is a fiduciary or partnership or a limited liability company, to the extent that a beneficiary or settlor with respect to that fiduciary or a member of that partnership or limited liability company or a beneficial owner thereof would not have been entitled to the payment of those additional amounts had that beneficiary, settlor, member or beneficial owner been the holder of those notes.

The notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the notes. Except as specifically provided under this heading "—Payment of Additional Amounts," we will not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision.

As used under this heading "—Payment of Additional Amounts" and under the heading "—Redemption for Tax Reasons," the term "United States" means the United States of America, the states of the United States, and the District of Columbia, and the term "U.S. Person" means any individual who is a citizen or resident of the United States for U.S. federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia (other than a partnership that is not treated as a United States person under any applicable U.S. Treasury regulations), or any estate or trust the income of which is subject to United States federal income taxation regardless of its source.

Any reference in the terms of the notes to any amounts in respect of the notes shall be deemed also to refer to any additional amounts which may be payable under this provision.

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**Covenants**

We will not be restricted by the indenture from incurring unsecured indebtedness or other obligations. We will also not be restricted by the indenture from paying dividends or making distributions on our capital stock, or purchasing or redeeming our capital stock. The indenture also will not require the maintenance of any financial ratios or specified levels of net worth or liquidity.

***Restriction on Secured Debt***

The Company will not, nor will it permit any of its Subsidiaries to, incur, issue, assume or guarantee any Debt secured by a Lien on any of its or any Subsidiary's Principal Property, or on any share of capital stock or Debt of any Subsidiary, unless the Company secures or causes such Subsidiary to secure the notes equally and ratably with (or, at the Company's option, prior to) such secured Debt, for so long as such secured Debt is so secured; *provided*, *however*, that the foregoing restrictions will not apply to Debt secured by the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. any Lien existing on the date of issuance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Liens on property of, or on any shares of capital stock of or Debt of, any Person existing at the time such Person is merged with or into or consolidated with the Company or any Subsidiary or otherwise becomes a Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Liens in the Company's favor or in favor of any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Liens in favor of governmental bodies to secure progress, advance or other payments pursuant to any contract or provision of any statute;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Liens on property existing at the time of acquisition thereof by the Company or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. any Lien securing indebtedness incurred to finance the purchase price or cost of construction of property (or additions, substantial repairs, alterations or substantial improvements thereto), provided that such Lien and the indebtedness secured thereby are incurred within twelve months of the later of acquisition or completion of construction (or addition, repair, alteration or improvement) and full operation thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Liens securing industrial revenue bonds, pollution control bonds or similar types of bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. mechanics and similar Liens arising in the ordinary course of business in respect of obligations not due or being contested in good faith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Liens arising from deposits with, or the giving of any form of security to, any governmental agency required as a condition to the transaction of business or exercise of any privilege, franchise or license;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Liens for taxes, assessments or governmental charges or levies which are not then delinquent or are being contested in good faith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Liens put on any property in contemplation of its disposition, provided the Company has a binding agreement to sell at the time the Lien is imposed and the Company disposes of the property within one year after the creation of the Liens and that any indebtedness secured by the Liens is without recourse to the Company or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Liens (including judgment liens) arising from legal proceedings being contested in good faith (and, in the case of judgment liens, execution thereof is stayed); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. any amendment, extension, renewal or replacement of any Liens referred to in the foregoing clauses (1) through (12) inclusive or any Debt secured thereby, provided that such extension, renewal or replacement will be limited to all or part of the same property, shares of capital stock or Debt that secured the Lien extended, renewed or replaced.

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Notwithstanding the foregoing, the Company and its Subsidiaries may issue, assume or guarantee Debt secured by a Lien which would otherwise be subject to the restrictions described above, provided that the aggregate amount of all such secured Debt, together with all the Company and its Subsidiaries' Attributable Debt with respect to sale and leaseback transactions involving Principal Properties (with the exception of such transactions which are excluded as described in "—Restriction on Sale and Leaseback Transactions" below), may not exceed 15% of Consolidated Net Tangible Assets.

***Restriction on Sale and Leaseback Transactions***

The Company will not, nor will it permit any of its Subsidiaries to, enter into any sale and leaseback transaction involving any Principal Property, *provided*, *however*, the Company or any of its Subsidiaries may enter into a sale and leaseback transaction if any of the following occurs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the lease is for a period, including renewal rights, of not in excess of three years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the sale or transfer of the Principal Property is made within a specified period after its acquisition or construction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the lease secures or relates to industrial revenue bonds, pollution control bonds or other similar types of bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. the transaction is between the Company and a Subsidiary or between Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. the Company or a Subsidiary, within 360 days after the Company or a Subsidiary makes a sale or transfer, applies an amount equal to the greater of the net proceeds of the sale of the Principal Property leased pursuant to such arrangement or the fair market value of the Principal Property so leased at the time of entering into such arrangement (as determined in any manner approved by the Company's Board of Directors) to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. the retirement of the notes or the Company's other Funded Debt ranking on a parity with or senior to the notes, or the retirement of the securities or other Funded Debt of a Subsidiary; provided, however, that the amount to be applied to the retirement of the Company's Funded Debt or a Subsidiary's Funded Debt shall be reduced by (x) the principal amount of any notes (or other notes or debentures constituting such Funded Debt) delivered within such 360-day period to the trustee for retirement and cancellation and (y) the principal amount of such Funded Debt, other than items referred to in the preceding clause (x), voluntarily retired by the Company or a Subsidiary within 360 days after such sale; and provided further, that notwithstanding the foregoing, no retirement referred to in this subclause (a) may be effected by payment at maturity or pursuant to any mandatory sinking fund payment or any mandatory prepayment provision, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. the purchase of other property which will constitute a Principal Property having a fair market value, in the Company's determination, at least equal to the fair market value of the Principal Property leased in such sale and leaseback transaction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. after giving effect to the transaction, the aggregate amount of all Attributable Debt with respect to such transactions plus all Debt secured by Liens on Principal Properties, or on shares of capital stock or Debt of Subsidiaries (with the exception of secured Debt which is excluded as described in "—Restrictions on Secured Debt" above), would not exceed 15% of Consolidated Net Tangible Assets.

***Certain Definitions***

The terms set forth below are defined in the indenture as follows:

"Attributable Debt" means, as to any particular lease under which any Person is at the time liable and at any date as of which the amount thereof is to be determined, the total net amount of rent required to be paid by such

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Person under such lease during the remaining primary term thereof, discounted from the respective due dates to such date at the actual percentage rate inherent in such arrangement as the Company has determined in good faith. The net amount of rent required to be paid under any such lease for any such period shall be the aggregate amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water rates and similar charges. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

"Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) less (i) all liabilities, other than deferred income taxes and Funded Debt, and (ii) goodwill, trade names, trademarks, patents, organizational expenses and other like intangibles owned by the Company as well as the Company's consolidated Subsidiaries and computed in accordance with generally accepted accounting principles.

"Debt" means debt issued, assumed or guaranteed by the Company or a Subsidiary for money borrowed.

"Funded Debt" means (i) all indebtedness for money borrowed having a maturity of more than 12 months from the date as of which the determination is made or having a maturity of 12 months or less but by its terms being renewable or extendible beyond 12 months from such date at the option of the borrower and (ii) rental obligations payable more than 12 months from such date under leases which are capitalized in accordance with generally accepted accounting principles (such rental obligations to be included as Funded Debt at the amount so capitalized and to be included for the purposes of the definition of Consolidated Net Tangible Assets both as an asset and as Funded Debt at the amount so capitalized).

"GAAP" means, with respect to any computation required or permitted under the indenture, generally accepted accounting principles in effect in the United States of America which are applicable at the date of such computation and which are consistently applied for all applicable periods.

"Lien" means any lien, mortgage or pledge.

"Person" means an individual, a corporation, a limited liability company, a partnership, a joint-stock company, a trust, an unincorporated organization or a government or an agency or political subdivision thereof.

"Principal Property" means any real property the Company or any Subsidiaries own or hereafter acquire (including related land and improvements thereon and all machinery and equipment included therein without deduction of any depreciation reserves) of which on the date as of which the determination is being made exceeds 2% of Consolidated Net Tangible Assets other than (i) any property which in the Company's determination is not of material importance to the total business conducted by the Company and its Subsidiaries as an entirety or (ii) any portion of a particular property which is similarly found not to be of material importance to the use or operation of such property.

"Subsidiary" means, when used with respect to any Person, any corporation or other entity of which a majority of (a) the voting power of the voting equity securities or (b) in the case of a partnership of any other entity other than a corporation, the outstanding equity interests of which are owned, directly or indirectly, by such Person. For the purposes of this definition, "voting equity securities" means equity securities having voting power for the election of directors, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.

**Merger, Consolidation or Sale of Assets**

The Company shall not consolidate with or merge with or into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, unless:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. either the Company shall be the continuing entity or the entity (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, lease or transfer all or substantially all of the assets of the Company shall be an entity organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and shall expressly assume the Company's obligations under the indenture and the performance of every covenant and condition of the indenture on the part of the Company to be performed or observed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. immediately after giving effect to such transaction, no default has occurred and is continuing under the indenture; and

the Company has delivered to the trustee an officer's certificate and an opinion of counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture complies with this covenant and that all conditions precedent provided for in the indenture relating to such transaction have been complied with.

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Company in accordance with this covenant, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under the indenture and the notes.

**Events of Default**

An "Event of Default" means one of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. default in any payment of interest on the notes when due and payable and the default continues for a period of 30 days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. default in the payment of principal of, and premium, if any, on the notes when due and payable at maturity, upon required repurchase, upon acceleration, by call for redemption or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the failure of the Company for 90 days (or 120 days in the case of a breach of the reporting covenant contained in the indenture) to comply with any of its other agreements contained in the indenture or the notes after written notice of such default from the trustee or holders of at least 25% in principal amount of the outstanding notes has been received by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. the Company fails to pay at maturity or the acceleration of any of its or its Subsidiaries' indebtedness, other than non-recourse indebtedness, at any one time in an amount in excess of $100 million, if the indebtedness is not discharged or the acceleration is not annulled within 30 days after written notice to the Company by the trustee or the holders of at least 25% in principal amount of the outstanding notes; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. the Company files for bankruptcy or other specified events in bankruptcy, insolvency, receivership or reorganization occur.

If any one or more of the above-described Events of Default shall happen (other than an Event of Default specified in paragraph (5) above), then, and in each and every such case, during the continuance of any such Event of Default, the trustee or the holders of 25% or more in principal amount of the notes then outstanding may (and upon the written request of the holders of a majority in principal amount of the notes than outstanding, the trustee shall) declare the principal of and all accrued but unpaid interest on all the notes then outstanding, if not then due and payable, to be due and payable, and upon any such declaration the same shall become and be immediately due and payable, anything in the indenture or in the notes contained to the contrary notwithstanding. If an Event of Default specified in paragraph (5) above occurs, then the principal of and all accrued but unpaid interest on all the notes then

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outstanding will *ipso facto* become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder. Upon payment of such amounts, all obligations of the Company in respect of the payment of principal of and interest on the notes shall terminate.

If at any time after the principal of all the notes shall have been so declared to be due and payable, and before a judgment or decree for payment of the money due has been obtained by the trustee provided in the indenture:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the Company has paid or deposited with the trustee a sum sufficient to pay:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. all amounts owing the trustee and any predecessor trustee under the indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. all arrears of interest, if any, upon the notes (with interest, to the extent that interest thereon shall be legally enforceable, on any overdue installment of interest at the rate borne by the notes);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. the principal of and premium, if any, on the notes that have become due otherwise than by such declaration of acceleration and interest thereon; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. all other sums payable under the indenture (except the principal of the notes which would not be due and payable were it not for such declaration); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. every other default and Event of Default under the indenture shall have been resolved so that the conditions that caused such default or Event of Default are no longer outstanding or have otherwise been remedied to the reasonable satisfaction of the trustee or of the holders of a majority in principal amount of the notes then outstanding, or provision deemed by the trustee or by such holders to be adequate therefor shall have been made, then and in every such case the holders of a majority in principal amount of the notes then outstanding may, by written notice to the Company and the trustee, on behalf of the holders of all the notes, waive the Event of Default by reason of which the principal of the notes shall have been so declared to be due and payable and may rescind and annul such declaration and its consequences; provided, however, that no such waiver, rescission or annulment shall extend to or affect any subsequent default or Event of Default or impair any right consequent thereon.

**Modification of Indenture**

***Changes Not Requiring Approval of Holders of the Notes***

The Company (when authorized by a board resolution) and the trustee, at any time and from time to time, may enter into one or more supplemental indentures, in form satisfactory to the trustee, for any one or more of or all the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. to add to the covenants and agreements of the Company to be observed thereafter and during the period, if any, in such supplemental indenture or indentures expressed, and to add Events of Default, in each case for the protection or benefit of the holders of the notes, or to surrender any right or power herein conferred upon the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. to add to or change any of the provisions of the indenture to change or eliminate any restrictions on the payment of principal of or premium, if any, on the notes; provided that any such action shall not adversely affect the interests of the holders of the notes in any material respect, or to permit or facilitate the issue of the notes in uncertificated form;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. to change or eliminate any of the provisions of the indenture; provided that any such change or elimination shall become effective only when there are no outstanding notes created prior to the execution of such supplemental indenture that are entitled to the benefit of such provision and as to which such supplemental indenture would apply;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. to evidence the succession of another corporation to the Company, or successive successions, and the assumption by such successor of the covenants and obligations of the Company contained in the notes and in the indenture or any supplemental indenture;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the notes and to add to or change any of the provisions of the indenture as shall be necessary for or facilitate the administration of the trusts hereunder by more than one trustee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. to secure the notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. to cure any ambiguity or to correct or supplement any provision contained herein or in any indenture supplemental hereto which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. to comply with the requirements of the Trust Indenture Act or the rules and regulations of the SEC thereunder in order to effect or maintain the qualification of the indenture under the Trust Indenture Act, as contemplated by the indenture or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. to add guarantors or co-obligors with respect to the notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. to make any change in the notes that does not adversely affect in any material respect the interests of the holders of the notes; provided that no such change shall be deemed to adversely affect the holders of the notes if such change is made to conform the terms of the notes to the terms described in the prospectus supplement related to the issuance of the notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. to prohibit the authentication and delivery of additional series of notes; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. to establish the form and terms of the notes as permitted in the indenture or to authorize the issuance of additional debt securities previously authorized or to add to the conditions, limitations or restrictions on the authorized amount, terms or purposes of issue, authentication or delivery of the notes, as set forth in the indenture, or other conditions, limitations or restrictions thereafter to be observed.

***Changes Requiring Approval of Holders of the Notes***

With the consent of the holders of a majority in aggregate principal amount of the notes outstanding, the Company (when authorized by a board resolution) and the trustee may, from time to time and at any time, enter into an indenture or supplemental indenture for the purpose of adding any provisions to or changing in any manner or eliminating any provisions of the indenture or of modifying in any manner the rights of the holders of the notes; *provided*, *however*, that no such supplemental indenture shall, without the consent of the holder of each notes affected thereby,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. extend the stated maturity of the principal of, or any installment of interest on, the notes, or reduce the principal amount thereof or the interest thereon or any premium payable upon redemption thereof, or extend the stated maturity of, or change the currency in which the principal of, premium, if any, or interest on the notes are denominated or payable, or impair the right to institute suit for the enforcement of any payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. reduce the percentage in principal amount of the outstanding notes, the consent of whose holders is required for any supplemental indenture, or the consent of whose holders is required for any waiver of compliance with certain provisions of the indenture or certain defaults under the indenture and their consequences provided for in the indenture; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. modify any of the provisions of the indenture relating to supplemental indentures and waivers of certain covenants and past defaults, except to increase any of the respective percentages referred to therein or to provide that certain other provisions of the indenture cannot be modified or waived without the consent of the holder of each notes affected thereby; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. modify, without the written consent of the trustee, the rights, duties or immunities of the trustee.

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It will not be necessary for any act of holders under the preceding paragraph to approve the particular form of any proposed supplemental indenture, but it will be sufficient if such act will approve the substance thereof.

**Effect of Supplemental Indenture**

A supplemental indenture which changes or eliminates any covenant or other provision of the indenture with respect to the notes or which modifies the rights of the holders of the notes with respect to such covenant or other provision, will be deemed not to affect the rights under the indenture of holders of other series of debt securities. Similarly, a supplemental indenture which changes or eliminates any covenant or other provision of the indenture with respect to debt securities of any other series or which modifies the rights of the holders of debt securities of any other series with respect to such covenant or other provision, will be deemed not to affect the rights under the indenture of holders of the notes.

**Defeasance and Discharge**

The indenture shall, at the Company's option, cease to be of further effect and the trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of the indenture, when,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. all notes theretofore authenticated and delivered (other than (i) notes that have been destroyed, lost or stolen and that have been replaced or paid and (ii) notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the trustee for cancellation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. all notes not theretofore delivered to the trustee for cancellation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) have become due and payable, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) will become due and payable at maturity within one year, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice by the trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on the notes for principal, premium, if any, and interest to the date of such deposit or to the stated maturity or redemption date, as the case may be; provided, however, in the event a petition for relief under federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, is filed with respect to the Company within 91 days after the deposit and the trustee is required to return the moneys then on deposit with the trustee to the Company, the obligations of the Company under the indenture shall not be deemed terminated or discharged;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the Company has delivered to the trustee an officer's certificate and an opinion of counsel each stating that all conditions precedent provided for in the indenture relating to the satisfaction and discharge of the indenture have been complied with.

At the Company's option, either (a) the Company shall be deemed to have been Discharged from its obligations with respect to the notes on the first day after the applicable conditions set forth below have been satisfied or (b) the Company shall cease to be under any obligation to comply with any term, provision or condition set forth in "—Covenants" above at any time after the applicable conditions set forth below have been satisfied:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the Company shall have deposited or caused to be deposited irrevocably with the trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the notes (A) money in an amount, or (B) U.S. Government Obligations that through the payment of interest and principal in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount or (C) a combination of (A) and (B), sufficient to pay and discharge each installment of principal of, premium, if any, and interest on, the notes on the dates such installments of principal, premium, if any, and interest are due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. no Event of Default or event (including such deposit) that, with notice or lapse of time, or both, would become an Event of Default with respect to the notes shall have occurred and be continuing on the date of such deposit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the Company shall have delivered to the trustee an opinion of counsel to the effect that holders and beneficial owners of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Company's exercise of its option under this paragraph and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such action had not been exercised and, in the case of the notes being Discharged, such opinion shall be based on either a change in applicable U.S. federal income tax law since the date of the indenture or a ruling received by the Company from, or that is published by, the U.S. Internal Revenue Service.

"Discharged" means that the Company will be deemed to have paid and discharged the entire indebtedness represented by, and obligations under, the notes and to have satisfied all the obligations under the indenture relating to the notes (and the trustee, at the expense of the Company, will have executed proper instruments acknowledging the same), except (a) the rights of holders of the notes to receive, from the trust fund described in paragraph (1) above, payment of the principal of, premium, if any, and interest on such notes when such payments are due, (b) the Company's obligations with respect to the notes under the indenture and (c) the rights, powers, trusts, duties and immunities of the trustee under the indenture.

"U.S. Government Obligations" means securities that are (a) direct obligations of the United States for the payment of which its full faith and credit is pledged, or (b) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in the case of clause (a) or (b) above, are not callable or redeemable at the option of the issuer thereof, and will also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; *provided* that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt.

**Liability for Notes**

No recourse shall be had for the payment of the principal of, premium, if any, or interest on, the notes or for any claim based thereon or otherwise in respect thereof or of the indebtedness represented thereby, or upon any obligation, covenant or agreement of the indenture, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the indenture and the notes are solely corporate obligations, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, because of the incurring of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants, promises or agreements contained in the indenture or in the notes, or to be implied herefrom or therefrom, and that all

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liability, if any, of that character against every such incorporator, stockholder, officer and director is, by the acceptance of the notes and as a condition of, and as part of the consideration for, the execution of the indenture and the issue of the notes expressly waived and released.

**Book-Entry Procedures**

*Global Clearance and Settlement*

The notes were issued in the form of one or more global notes (each a "global note") in fully registered form, without coupons, and were deposited on the closing date with, or on behalf of, a common depositary, and registered in the name of the nominee of the common depositary, for, and in respect of interests held through, Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, SA ("Clearstream"). Except as described herein, certificates will not be issued in exchange for beneficial interests in the global notes.

Except as set forth below, the global notes may be transferred, in whole and not in part, only to a common depositary for Euroclear or Clearstream or their nominee.

Beneficial interests in the global notes will be represented, and transfers of such beneficial interests will be effected, through accounts of financial institutions acting on behalf of beneficial owners as direct or indirect participants in Euroclear or Clearstream. Those beneficial interests will be in denominations of €100,000 and integral multiples of €1,000 in excess thereof. Investors may hold notes directly through Euroclear or Clearstream, if they are participants in such systems, or indirectly through organizations that are participants in such systems. It is possible that the clearing systems may process trades that could result in amounts being held in denominations smaller than the minimum denominations. If definitive notes are required to be issued in relation to such notes in accordance with the provisions of the relevant global notes, a holder who does not have the minimum denomination or a multiple of €1,000 in excess thereof in its account with the relevant clearing system at the relevant time may not receive all of its entitlement in the form of definitive notes unless and until such time as its holding satisfies the minimum denomination requirement.

Owners of beneficial interests in the global notes will not be entitled to have notes registered in their names, and will not receive or be entitled to receive physical delivery of notes in definitive form. Except as provided below, beneficial owners will not be considered the owners or holders of the notes under the indenture, including for purposes of receiving any reports delivered by us or the trustee pursuant to the indenture. Accordingly, each beneficial owner must rely on the procedures of the clearing systems and, if such person is not a participant of the clearing systems, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the indenture. Under existing industry practices, if we request any action of holders or a beneficial owner desires to give or take any action which a holder is entitled to give or take under the indenture, the clearing systems would authorize their participants holding the relevant beneficial interests to give or take action and the participants would authorize beneficial owners owning through the participants to give or take such action or would otherwise act upon the instructions of beneficial owners. Conveyance of notices and other communications by the clearing systems to their participants, by the participants to indirect participants and by the participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in certificated form. These limits and laws may impair the ability to transfer beneficial interests in global notes.

Persons who are not Euroclear or Clearstream participants may beneficially own notes held by the common depositary for Euroclear and Clearstream only through direct or indirect participants in Euroclear and Clearstream. So long as the common depositary for Euroclear and Clearstream is the registered owner of the global note, the common depositary for all purposes will be considered the sole holder of the notes represented by the global note under the indenture and the global notes.

*Certificated Notes*

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If the applicable depositary is at any time unwilling or unable to continue as depositary for any of the global notes and a successor depositary is not appointed by us within 90 days, or if we have been notified that both Clearstream and Euroclear have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available, we will issue the notes in definitive registered form in exchange for the applicable global notes. We will also issue the notes in definitive registered form in exchange for the global notes if an event of default has occurred with regard to the notes represented by the global notes and has not been cured or waived. In addition, we may at any time and in our sole discretion determine not to have the notes represented by the global notes and, in that event, will issue the notes in definitive registered form in exchange for the global notes. In any such instance, an owner of a beneficial interest in the global notes will be entitled to physical delivery in definitive registered form of the notes represented by the global notes equal in principal amount to such beneficial interest and to have such notes registered in its name. The notes so issued in definitive form will be issued as registered in minimum denominations of €100,000 and integral multiples of €1,000 thereafter, unless otherwise specified by us. The notes in definitive form can be transferred by presentation for registration to the registrar at our office or agency for such purpose and must be duly endorsed by the holder or his attorney duly authorized in writing, or accompanied by a written instrument or instruments of transfer in form satisfactory to us or the registrar duly executed by the holder or his attorney duly authorized in writing. We may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer of definitive notes.

*Clearing Systems*

We have been advised by Euroclear and Clearstream, respectively, as follows:

*Euroclear.* Euroclear advises that it was created in 1968 to hold securities for its participants and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear provides various other services, including securities lending and borrowing, and interfaces with domestic markets in several countries. All operations are conducted by Euroclear Bank, S.A./N.V. and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with Euroclear Bank, not the cooperative. The cooperative establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the underwriters ("Euroclear participants"). Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

Securities clearance accounts and cash accounts with the Euroclear Bank are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (collectively, the "Euroclear terms and conditions"). The Euroclear terms and conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payment with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Bank acts under the Euroclear terms and conditions only on behalf of Euroclear participants, and has no record of or relationship with persons holding through Euroclear participants.

Distributions with respect to notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear participants in accordance with the Euroclear terms and conditions, to the extent received by the Euroclear Bank and by Euroclear.

*Clearstream.* Clearstream is incorporated under the laws of Luxembourg as a professional depositary. Clearstream holds securities for Clearstream participants, and facilitates the clearance and settlement of securities transactions between Clearstream participants through electronic book-entry changes in accounts of Clearstream participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to its

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participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Monetary Institute. Clearstream participants are financial institutions around the world, including securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear through, or maintain a custodial relationship with, a Clearstream participant either directly or indirectly.

Distributions with respect to the notes held beneficially through Clearstream will be credited to cash accounts of Clearstream participants in accordance with its rules and procedures, to the extent received by Clearstream.

*Euroclear and Clearstream Arrangements*

So long as Euroclear or Clearstream or their nominee or their common depositary is the registered holder of the global notes, Euroclear, Clearstream or their nominee or their common depositary is the registered holder of the global notes, Euroclear, Clearstream or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such notes for all purposes under the indenture and the notes. Payments of principal, interest and premium, if any, in respect of the global notes will be made to Euroclear, Clearstream, such nominee or such common depositary, as the case may be, as registered holder thereof. None of us, the trustee, the paying agent, any underwriter and any affiliate of any of the above or any person by whom any of the above is controlled (as such term is defined in the U.S. Securities Act of 1933, as amended (the "Securities Act")) will have any responsibility or liability for any records relating to or payments made on account of beneficial ownership interests in the global notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Distributions of principal, premium, if any, and interest with respect to the global note will be credited in euros to the extent received by Euroclear or Clearstream from the trustee or the paying agent, as applicable, to the cash accounts of Euroclear or Clearstream customers in accordance with the relevant system's rules and procedures.

Because Euroclear and Clearstream can only act on behalf of participants, who in turn act on behalf of indirect participants, the ability of a person having an interest in the global notes to pledge such interest to persons or entities which do not participate in the relevant clearing system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate in respect of such interest.

The holdings of book-entry interests in the global notes through Euroclear and Clearstream will be reflected in the book-entry accounts of each such institution. As necessary, the registrar will adjust the amounts of the global notes on the register for the accounts of the common depositary to reflect the amounts of notes held through Euroclear and Clearstream, respectively.

*Initial Settlement*

Investors holding their notes through Euroclear or Clearstream accounts will follow the settlement procedures applicable to conventional eurobonds in registered form. Subject to applicable procedures of Clearstream and Euroclear, notes will be credited to the securities custody accounts of Euroclear and Clearstream holders on the settlement date against payment for value on the settlement date.

*Secondary Market Trading*

Because the purchaser determines the place of delivery, it is important to establish at the time of trading of any notes where both the purchaser's and seller's accounts are located to ensure that settlement can be made on the desired value date.

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Secondary market sales of book-entry interests in the notes held through Euroclear or Clearstream to purchasers of book-entry interests in the global notes through Euroclear or Clearstream will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream and will be settled using the procedures applicable to conventional eurobonds in same-day funds.

Investors will only be able to make and receive deliveries, payments and other communications involving the notes through Euroclear and Clearstream on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States.

In addition, because of time-zone differences there may be problems with completing transactions involving Euroclear and Clearstream on the same business day as in the United States. U.S. investors who wish to transfer their interests in the notes, or to make or receive a payment or delivery of the notes, on a particular day, may find that the transactions will not be performed until the next business day in Luxembourg or Brussels, depending on whether Euroclear or Clearstream is used.

Euroclear and Clearstream will credit payments to the cash accounts of Euroclear participants or Clearstream customers in accordance with the relevant system's rules and procedures, to the extent received by its depositary. Clearstream or the Euroclear Operator, as the case may be, will take any other action permitted to be taken by a holder under the indenture on behalf of a Euroclear participant or Clearstream customer only in accordance with its relevant rules and procedures.

Euroclear and Clearstream have agreed to the foregoing procedures in order to facilitate transfers of the notes among participants of Euroclear and Clearstream. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue those procedures at any time.

The information in this section concerning Euroclear and Clearstream and their book-entry systems has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy of that information. In addition, the description of the clearing systems in this section reflects our understanding of the rules and procedures of Clearstream and Euroclear as they are currently in effect. Those clearing systems could change their rules and procedures at any time.

None of the Company, the underwriters or the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of the beneficial interests in a global note, or for maintaining, supervising or reviewing any records relating to such beneficial interests.

**Governing Law**

The indenture and the notes are governed by and construed in accordance with the laws of the State of New York.

**Concerning the Trustee**

The trustee has provided various services to us in the past and may do so in the future in the ordinary course of its regular business.

**DESCRIPTION OF AVERY DENNISON CORPORATION 4.000% SENIOR NOTES DUE 2035**

The following description is a summary of the material provisions of the notes and the indenture (as defined below) under which the notes were issued. This description does not describe every provision of the notes or the indenture. Refer to the indenture for a complete description of what we describe in summary form in this Exhibit. The indenture has been filed as an exhibit to the Annual Report on Form 10-K of which this Exhibit is a part.

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**General**

The notes constitute a series of debt securities issued under the Indenture, dated November 20, 2007, between Avery Dennison Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee (the "trustee"), as supplemented by a Supplemental Indenture entered into between us and the trustee, as amended (together, the "indenture"). We appointed The Bank of New York Mellon, London Branch to act as paying agent solely with respect to the notes. We also appointed The Bank of New York Mellon Trust Company, N.A. to act as transfer agent and registrar.

The aggregate principal amount of the notes is €500,000,000. The notes will mature and become due and payable, together with any accrued and unpaid interest thereon, on September 11, 2035. The notes bear interest at the rate of 4.000% per annum from September 11, 2025.

Interest on the notes is payable annually in arrears on September 11 of each year, beginning on September 11, 2026 to the persons in whose names the respective notes are registered at the close of business on the August 27 preceding the respective interest payment dates. If any payment date is not a business day, then payment will be made on the next succeeding business day, but without any additional interest or other amount.

Interest on the notes is computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the notes (or September 11, 2025 if no interest has been paid on the notes), to but excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

The notes do not have the benefit of any sinking fund.

The notes are represented by one or more registered notes in global form, but in certain limited circumstances may be represented by notes in definitive registered form. See "—Book-Entry Procedures" below. The notes are issued in euros and only in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.

**Listing**

The notes are listed on Nasdaq under the symbol "AVY35."

**Further Issues**

We may, from time to time, without notice to or consent of the holders of the notes, create and issue additional notes ranking equally and ratably with the notes in all respects (or in all respects except for the payment of interest accruing prior to the issue date of such additional notes or except, in some cases, for the first payment of interest following the issue date of such additional notes). Any such additional notes may be consolidated and form a single series with the notes and will have the same terms as to status, redemption or otherwise as the notes; provided, that if any such additional notes are not fungible with the notes offered hereby for U.S. federal income tax purposes, such additional notes will be issued under a different CUSIP number.

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**Ranking**

The notes are our senior unsecured obligations and:

 • rank equally and ratably with all of our other existing and future unsecured and unsubordinated indebtedness and other liabilities;

 • rank senior in right of payment to all of our existing and future subordinated indebtedness, if any;

 • are effectively junior to all of our future secured indebtedness, if any, to the extent of the value of the assets securing such indebtedness; and

 • are structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries.

The indenture does not limit the aggregate principal amount of debt securities that the Company may issue. The indenture does not contain any provisions that would limit the ability of the Company or its Subsidiaries to incur additional unsecured indebtedness.

**Issuance in Euros; Payment on the Notes**

Initial holders are required to pay for the notes in euros, and all payments on the notes are payable in euros. The amount payable on any date in euros will be converted into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on the second business day prior to the relevant payment date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the basis of the most recent U.S. dollar/euro exchange rate published in *The Wall Street Journal* on or prior to the second business day prior to the relevant payment date, or in the event *The Wall Street Journal* has not published such exchange rate, such rate as determined in our sole discretion on the basis of the most recently available market exchange rate for the euro. Neither the trustee nor the paying agent has any responsibility for obtaining exchange rates, effecting conversions or otherwise handling redenominations in connection with the foregoing.

**Payments and Paying Agents**

We will pay principal, premium, if any, interest, additional amounts, if any, and any other amounts due on the notes in euros and to the paying agent at the corporate trust office of the trustee. We may also choose to pay interest by mailing checks or making wire transfers. We may also arrange for additional paying agent offices, and may change these offices, including our use of the trustee's corporate trust office.

We have appointed The Bank of New York Mellon, London Branch to act as paying agent in connection with the notes, and we have appointed The Bank of New York Mellon Trust Company, N.A. to act as transfer agent and registrar. We may also choose to act as our own paying agent.

**Optional Redemption**

Prior to June 11, 2035, the date falling three months prior to the maturity date of the notes (the "Par Call Date"), the notes are redeemable in whole or in part, at our option, at any time or from time to time at a redemption price equal to the greater of (a) 100% of the principal amount of the notes to be redeemed and (b) an amount equal to the sum of the present values of the Remaining Scheduled Payments of principal and interest thereon that would have been payable in respect of the notes calculated as if the maturity date of the notes was the Par Call Date, not including any portion of any payments of interest accrued to the redemption date, discounted to such redemption date on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate, plus 25 basis points, plus, in the case of each of (i) and (ii), accrued and unpaid interest on the notes, if any, to, but not including, the redemption date.

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Notice of any redemption will be transmitted not less than 10 days and not more than 60 days prior to the redemption date to each holder of notes to be redeemed. In connection with any redemption of notes, any such redemption may, at our discretion, be subject to one or more conditions precedent. In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice will state that, in our discretion, the redemption date may be delayed until the time that any or all such conditions shall be satisfied (or waived by us in our sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions have not been satisfied (or waived by us in our sole discretion) by the redemption date (whether the original redemption date or the redemption date so delayed). In addition, we may provide in such notice that payment of the redemption price and performance of our obligations with respect to such redemption may be performed by another person.

Unless we default in payment of the redemption price, from and after the redemption date, interest will cease to accrue on the notes or portions thereof called for redemption. If less than all of the notes are to be redeemed, the notes to be redeemed will be selected by lot and may provide for the selection for redemption of a portion of the principal amount of notes held by a holder equal to an authorized denomination. If the Company redeems less than all of the notes and the notes are then held in book-entry form, the redemption will be made in accordance with the depositary's customary procedures.

For purposes of the optional redemption provisions of the notes, the following definitions are applicable:

"Comparable Government Bond" means, in relation to any Comparable Government Bond Rate calculation a German government bond (*Bundesanleihe*) whose maturity is closest to the Par Call Date, or if an independent investment bank selected by the Company in its discretion determines that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by such independent investment bank, determine to be appropriate for determining the Comparable Government Bond Rate.

"Comparable Government Bond Rate" means, with respect to any redemption date, the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded upwards), at which the gross redemption yield on the notes, if they were to be purchased at such price on the third business day prior to the date fixed for redemption, would be equal to the gross redemption yield on such business day of the Comparable Government Bond on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by the Company.

"Remaining Scheduled Payments" means the remaining scheduled payments of the principal and interest on the notes to be redeemed that would be due after the related redemption date but for such redemption; *provided, however*, that if such redemption date is not an interest payment date, the amount of the next scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to, but not including, such redemption date.

**Change of Control Offer**

If a Change of Control Triggering Event occurs, unless we have exercised our option to redeem the notes as described above, we will be required to make an offer (a "Change of Control Offer") to each holder of the notes to repurchase all or any part (equal to €100,000 or an integral multiple of €1,000 in excess thereof) of that holder's notes on the terms set forth in the notes. In a Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of notes repurchased, plus accrued and unpaid interest, if any, on the notes repurchased to, but not including, the repurchase date (a "Change of Control Payment"), subject to the rights of the holders on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control Triggering Event or, at our option, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice will be mailed (or electronically delivered) to holders of the notes describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase such notes on the repurchase date

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specified in the applicable notice, which date will be no earlier than 30 days and no later than 60 days from the date on which such notice is mailed (or electronically delivered) (a "Change of Control Payment Date").

The notice will, if mailed (or electronically delivered) prior to the date of consummation of the Change of Control, state that the Change of Control Offer is conditioned on the Change of Control Triggering Event occurring prior to or on the applicable Change of Control Payment Date specified in the notice.

On each Change of Control Payment Date, we will, to the extent lawful:

 • accept for payment all notes or portions of notes properly tendered pursuant to the applicable Change of Control Offer;

•  deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered pursuant to the applicable Change of Control Offer; and

•  deliver or cause to be delivered to the trustee the notes properly accepted together with an officer's certificate stating the aggregate principal amount of notes or portions of notes being repurchased.

We will not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by us, and the third party repurchases all notes properly tendered and not withdrawn under its offer. In addition, we will not repurchase any notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the indenture, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.

We will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the notes, we will comply with those securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control Offer provisions of the notes by virtue of any such conflict.

For purposes of the Change of Control Offer provisions of the notes, the following definitions will be applicable:

"Change of Control" means the occurrence of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or more series of related transactions, of all or substantially all of our assets and our Subsidiaries' assets, taken as a whole, to any person, other than us or one of our Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting Stock or other Voting Stock into which the Company's Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. the adoption of a plan relating to our liquidation or dissolution.

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Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (a) we become a direct or indirect wholly-owned Subsidiary of a holding company and (b)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction or (2) immediately following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company. The term "person," as used in this definition, has the meaning given thereto in Section 13(d)(3) of the Exchange Act.

"Change of Control Triggering Event" means the occurrence of both a Change of Control and a Rating Event.

"Investment Grade" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB– (or the equivalent) by S&P, and the equivalent Investment Grade credit rating from any replacement Rating Agency or Rating Agencies selected by us.

"Moody's" means Moody's Investors Service, Inc., and its successors.

"Rating Agencies" means (a) each of Moody's and S&P; and (b) if either Moody's or S&P ceases to rate the notes or fails to make a rating of the notes publicly available for reasons outside of our control, a "nationally recognized statistical rating organization" within the meaning of Section 3(a)(62) of the Exchange Act selected by us (as certified by a resolution of the Company's Board of Directors) as a replacement agency for Moody's or S&P, or each of them, as the case may be.

"Rating Event" means the rating on the notes is lowered by each of the Rating Agencies and the notes are rated below Investment Grade by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the occurrence of a Change of Control or our intention to effect a Change of Control; *provided*, *however*, that a Rating Event otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform us in writing that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Event). The trustee will not be charged with knowledge of, or be responsible for monitoring, the ratings of the notes.

"S&P" means S&P Global Ratings, and its successors.

"Voting Stock" means, with respect to any specified "person" (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, transfer, conveyance or other disposition of "all or substantially all" of our assets and the assets of our Subsidiaries, taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require us to repurchase such holder's notes as a result of a sale, transfer, conveyance of other disposition of less than all of our and our Subsidiaries' assets, taken as a whole, to any person or group or persons may be uncertain.

**Redemption for Tax Reasons**

If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws or treaties) of the United States (or any political subdivision of or taxing authority in the United States), or any change in, or amendment to, an official position regarding the application or interpretation of such laws, regulations,

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rulings or treaties, which change or amendment is announced or becomes effective on or after the date of issuance, we become or, based upon a written opinion of independent counsel selected by us, there is a substantial probability that we will become, obligated to pay additional amounts as described under the heading "—Payment of Additional Amounts" below with respect to the notes, then we may at any time at our option redeem, in whole, but not in part, the notes on not less than 30 nor more than 60 days' prior notice, at a redemption price equal to 100% of their principal amount, together with accrued and unpaid interest on the notes to, but not including, the date fixed for redemption.

**Payment of Additional Amounts**

All payments of principal and interest in respect of the notes will be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, duties, assessments or other governmental charges of whatsoever nature required to be deducted or withheld by the United States or any political subdivision or taxing authority thereof or therein, unless such withholding or deduction is then required by law or the official interpretation or administration thereof.

In the event any withholding or deduction on payments in respect of the notes for or on account of any present or future tax, assessment or other governmental charge is required to be deducted or withheld by the United States or any political subdivision or taxing authority thereof or therein, we will pay such additional amounts on the notes as will result in receipt by each holder of a note that is not a U.S. Person (as defined below) of such amounts (after all such withholding or deduction, including on any additional amounts) as would have been received by such holder had no such withholding or deduction been required. We will not be required, however, to make any payment of additional amounts for or on account of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any tax, assessment or other governmental charge that would not have been imposed but for (1) the existence of any present or former connection (other than a connection arising solely from the ownership of those notes or the receipt of payments in respect of those notes) between a holder of a note (or the beneficial owner for whose benefit such holder holds such note), or between a fiduciary, settlor, beneficiary of, member or shareholder of, or possessor of a power over, that holder or beneficial owner (if that holder or beneficial owner is an estate, trust, partnership or corporation) and the United States, including that holder or beneficial owner, or that fiduciary, settlor, beneficiary, member, shareholder or possessor, being or having been a citizen or resident or treated as a resident of the United States or being or having been engaged in a trade or business or present in the United States or having had a permanent establishment in the United States or (2) the presentation of a note for payment on a date more than 30 days after the later of the date on which that payment becomes due and payable and the date on which payment is duly provided for;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any estate, inheritance, gift, sales, transfer, capital gains, excise, personal property, wealth or similar tax, assessment or other governmental charge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any tax, assessment, or other governmental charge imposed by reason of the holder's or beneficial owner's past or present status as a passive foreign investment company, a controlled foreign corporation, a foreign tax exempt organization or a personal holding company with respect to the United States or as a corporation that accumulates earnings to avoid U.S. federal income tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any tax, assessment or other governmental charge which is payable otherwise than by withholding or deducting from payment of principal of or premium, if any, or interest on such notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of and premium, if any, or interest on any note if that payment can be made without withholding by at least one other paying agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any tax, assessment or other governmental charge which would not have been imposed but for the failure of a beneficial owner or any holder of notes that is not a U.S. Person to

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establish its status as such when doing so is required in order to qualify for exemption for U.S. withholding tax or to otherwise satisfy certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of the beneficial owner or any holder of the notes (including, but not limited to, the requirement to provide Internal Revenue Service Forms W-8BEN, W-8BEN-E, W-8ECI, or any subsequent versions thereof or successor thereto, and including, without limitation, any documentation requirement under an applicable income tax treaty that is necessary to qualify for exemption or reduction of the applicable rate of U.S. withholding tax);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any tax, assessment or other governmental charge imposed on interest due to the holder's or beneficial owner's status as (A) a 10-percent shareholder (as defined in Section 871(h)(3)(B) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and the regulations that may be promulgated thereunder) of the Company, (B) a controlled foreign corporation that is related to the Company within the meaning of Section 864(d)(4) of the Code, or (C) a bank receiving interest described in Section 881(c)(3)(A) of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any tax, assessment or other governmental charge required to be withheld or deducted under Sections 1471 through 1474 of the Code (or any amended or successor version of such Sections that is substantively comparable) (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or "FATCA"), any regulations or other guidance thereunder, or any agreement (including any intergovernmental agreement) entered into in connection therewith; or any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an intergovernmental agreement in respect of FATCA; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any combination of items (a), (b), (c), (d), (e), (f), (g) and (h);

nor will we pay any additional amounts to any holder that is not the sole beneficial owner of such notes, or a portion of such notes, or that is a fiduciary or partnership or a limited liability company, to the extent that a beneficiary or settlor with respect to that fiduciary or a member of that partnership or limited liability company or a beneficial owner thereof would not have been entitled to the payment of those additional amounts had that beneficiary, settlor, member or beneficial owner been the holder of those notes.

The notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the notes. Except as specifically provided under this heading "—Payment of Additional Amounts," we will not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision.

As used under this heading "—Payment of Additional Amounts" and under the heading "—Redemption for Tax Reasons," the term "United States" means the United States of America, the states of the United States, and the District of Columbia, and the term "U.S. Person" means any individual who is a citizen or resident of the United States for U.S. federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia (other than a partnership that is not treated as a United States person under any applicable U.S. Treasury regulations), or any estate or trust the income of which is subject to United States federal income taxation regardless of its source.

Any reference in the terms of the notes to any amounts in respect of the notes shall be deemed also to refer to any additional amounts which may be payable under this provision.

**Covenants**

We will not be restricted by the indenture from incurring unsecured indebtedness or other obligations. We will also not be restricted by the indenture from paying dividends or making distributions on our capital stock, or purchasing or redeeming our capital stock. The indenture also will not require the maintenance of any financial ratios or specified levels of net worth or liquidity.

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***Restriction on Secured Debt***

The Company will not, nor will it permit any of its Subsidiaries to, incur, issue, assume or guarantee any Debt secured by a Lien on any of its or any Subsidiary's Principal Property, or on any share of capital stock or Debt of any Subsidiary, unless the Company secures or causes such Subsidiary to secure the notes equally and ratably with (or, at the Company's option, prior to) such secured Debt, for so long as such secured Debt is so secured; *provided*, *however*, that the foregoing restrictions will not apply to Debt secured by the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. any Lien existing on the date of issuance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Liens on property of, or on any shares of capital stock of or Debt of, any Person existing at the time such Person is merged with or into or consolidated with the Company or any Subsidiary or otherwise becomes a Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Liens in the Company's favor or in favor of any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Liens in favor of governmental bodies to secure progress, advance or other payments pursuant to any contract or provision of any statute;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Liens on property existing at the time of acquisition thereof by the Company or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. any Lien securing indebtedness incurred to finance the purchase price or cost of construction of property (or additions, substantial repairs, alterations or substantial improvements thereto), provided that such Lien and the indebtedness secured thereby are incurred within twelve months of the later of acquisition or completion of construction (or addition, repair, alteration or improvement) and full operation thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Liens securing industrial revenue bonds, pollution control bonds or similar types of bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. mechanics and similar Liens arising in the ordinary course of business in respect of obligations not due or being contested in good faith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Liens arising from deposits with, or the giving of any form of security to, any governmental agency required as a condition to the transaction of business or exercise of any privilege, franchise or license;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Liens for taxes, assessments or governmental charges or levies which are not then delinquent or are being contested in good faith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Liens put on any property in contemplation of its disposition, provided the Company has a binding agreement to sell at the time the Lien is imposed and the Company disposes of the property within one year after the creation of the Liens and that any indebtedness secured by the Liens is without recourse to the Company or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Liens (including judgment liens) arising from legal proceedings being contested in good faith (and, in the case of judgment liens, execution thereof is stayed); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. any amendment, extension, renewal or replacement of any Liens referred to in the foregoing clauses (1) through (12) inclusive or any Debt secured thereby, provided that such extension, renewal or replacement will be limited to all or part of the same property, shares of capital stock or Debt that secured the Lien extended, renewed or replaced.

Notwithstanding the foregoing, the Company and its Subsidiaries may issue, assume or guarantee Debt secured by a Lien which would otherwise be subject to the restrictions described above, provided that the aggregate amount of all such secured Debt, together with all the Company and its Subsidiaries' Attributable Debt with respect to sale and leaseback transactions involving Principal Properties (with the exception of such transactions which are excluded as described in "—Restriction on Sale and Leaseback Transactions" below), may not exceed 15% of Consolidated Net Tangible Assets.

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***Restriction on Sale and Leaseback Transactions***

The Company will not, nor will it permit any of its Subsidiaries to, enter into any sale and leaseback transaction involving any Principal Property, *provided*, *however*, the Company or any of its Subsidiaries may enter into a sale and leaseback transaction if any of the following occurs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the lease is for a period, including renewal rights, of not in excess of three years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the sale or transfer of the Principal Property is made within a specified period after its acquisition or construction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the lease secures or relates to industrial revenue bonds, pollution control bonds or other similar types of bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. the transaction is between the Company and a Subsidiary or between Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. the Company or a Subsidiary, within 360 days after the Company or a Subsidiary makes a sale or transfer, applies an amount equal to the greater of the net proceeds of the sale of the Principal Property leased pursuant to such arrangement or the fair market value of the Principal Property so leased at the time of entering into such arrangement (as determined in any manner approved by the Company's Board of Directors) to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. the retirement of the notes or the Company's other Funded Debt ranking on a parity with or senior to the notes, or the retirement of the securities or other Funded Debt of a Subsidiary; provided, however, that the amount to be applied to the retirement of the Company's Funded Debt or a Subsidiary's Funded Debt shall be reduced by (x) the principal amount of any notes (or other notes or debentures constituting such Funded Debt) delivered within such 360-day period to the trustee for retirement and cancellation and (y) the principal amount of such Funded Debt, other than items referred to in the preceding clause (x), voluntarily retired by the Company or a Subsidiary within 360 days after such sale; and provided further, that notwithstanding the foregoing, no retirement referred to in this subclause (a) may be effected by payment at maturity or pursuant to any mandatory sinking fund payment or any mandatory prepayment provision, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. the purchase of other property which will constitute a Principal Property having a fair market value, in the Company's determination, at least equal to the fair market value of the Principal Property leased in such sale and leaseback transaction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. after giving effect to the transaction, the aggregate amount of all Attributable Debt with respect to such transactions plus all Debt secured by Liens on Principal Properties, or on shares of capital stock or Debt of Subsidiaries (with the exception of secured Debt which is excluded as described in "—Restrictions on Secured Debt" above), would not exceed 15% of Consolidated Net Tangible Assets.

***Certain Definitions***

The terms set forth below are defined in the indenture as follows:

"Attributable Debt" means, as to any particular lease under which any Person is at the time liable and at any date as of which the amount thereof is to be determined, the total net amount of rent required to be paid by such Person under such lease during the remaining primary term thereof, discounted from the respective due dates to such date at the actual percentage rate inherent in such arrangement as the Company has determined in good faith. The net amount of rent required to be paid under any such lease for any such period shall be the aggregate amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water rates and similar charges. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of

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such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

"Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) less (i) all liabilities, other than deferred income taxes and Funded Debt, and (ii) goodwill, trade names, trademarks, patents, organizational expenses and other like intangibles owned by the Company as well as the Company's consolidated Subsidiaries and computed in accordance with generally accepted accounting principles.

"Debt" means debt issued, assumed or guaranteed by the Company or a Subsidiary for money borrowed.

"Funded Debt" means (i) all indebtedness for money borrowed having a maturity of more than 12 months from the date as of which the determination is made or having a maturity of 12 months or less but by its terms being renewable or extendible beyond 12 months from such date at the option of the borrower and (ii) rental obligations payable more than 12 months from such date under leases which are capitalized in accordance with generally accepted accounting principles (such rental obligations to be included as Funded Debt at the amount so capitalized and to be included for the purposes of the definition of Consolidated Net Tangible Assets both as an asset and as Funded Debt at the amount so capitalized).

"GAAP" means, with respect to any computation required or permitted under the indenture, generally accepted accounting principles in effect in the United States of America which are applicable at the date of such computation and which are consistently applied for all applicable periods.

"Lien" means any lien, mortgage or pledge.

"Person" means an individual, a corporation, a limited liability company, a partnership, a joint-stock company, a trust, an unincorporated organization or a government or an agency or political subdivision thereof.

"Principal Property" means any real property the Company or any Subsidiaries own or hereafter acquire (including related land and improvements thereon and all machinery and equipment included therein without deduction of any depreciation reserves) of which on the date as of which the determination is being made exceeds 2% of Consolidated Net Tangible Assets other than (i) any property which in the Company's determination is not of material importance to the total business conducted by the Company and its Subsidiaries as an entirety or (ii) any portion of a particular property which is similarly found not to be of material importance to the use or operation of such property.

"Subsidiary" means, when used with respect to any Person, any corporation or other entity of which a majority of (a) the voting power of the voting equity securities or (b) in the case of a partnership of any other entity other than a corporation, the outstanding equity interests of which are owned, directly or indirectly, by such Person. For the purposes of this definition, "voting equity securities" means equity securities having voting power for the election of directors, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.

**Merger, Consolidation or Sale of Assets**

The Company shall not consolidate with or merge with or into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. either the Company shall be the continuing entity or the entity (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, lease or transfer all or substantially all of the assets of the Company shall be an entity organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and shall expressly assume the Company's obligations

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under the indenture and the performance of every covenant and condition of the indenture on the part of the Company to be performed or observed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. immediately after giving effect to such transaction, no default has occurred and is continuing under the indenture; and

the Company has delivered to the trustee an officer's certificate and an opinion of counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture complies with this covenant and that all conditions precedent provided for in the indenture relating to such transaction have been complied with.

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Company in accordance with this covenant, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under the indenture and the notes.

**Events of Default**

An "Event of Default" means one of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. default in any payment of interest on the notes when due and payable and the default continues for a period of 30 days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. default in the payment of principal of, and premium, if any, on the notes when due and payable at maturity, upon required repurchase, upon acceleration, by call for redemption or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the failure of the Company for 90 days (or 120 days in the case of a breach of the reporting covenant contained in the indenture) to comply with any of its other agreements contained in the indenture or the notes after written notice of such default from the trustee or holders of at least 25% in principal amount of the outstanding notes has been received by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. the Company fails to pay at maturity or the acceleration of any of its or its Subsidiaries' indebtedness, other than non-recourse indebtedness, at any one time in an amount in excess of $100 million, if the indebtedness is not discharged or the acceleration is not annulled within 30 days after written notice to the Company by the trustee or the holders of at least 25% in principal amount of the outstanding notes; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. the Company files for bankruptcy or other specified events in bankruptcy, insolvency, receivership or reorganization occur.

If any one or more of the above-described Events of Default shall happen (other than an Event of Default specified in paragraph (5) above), then, and in each and every such case, during the continuance of any such Event of Default, the trustee or the holders of 25% or more in principal amount of the notes then outstanding may (and upon the written request of the holders of a majority in principal amount of the notes than outstanding, the trustee shall) declare the principal of and all accrued but unpaid interest on all the notes then outstanding, if not then due and payable, to be due and payable, and upon any such declaration the same shall become and be immediately due and payable, anything in the indenture or in the notes contained to the contrary notwithstanding. If an Event of Default specified in paragraph (5) above occurs, then the principal of and all accrued but unpaid interest on all the notes then outstanding will *ipso facto* become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder. Upon payment of such amounts, all obligations of the Company in respect of the payment of principal of and interest on the notes shall terminate.

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If at any time after the principal of all the notes shall have been so declared to be due and payable, and before a judgment or decree for payment of the money due has been obtained by the trustee provided in the indenture:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the Company has paid or deposited with the trustee a sum sufficient to pay:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. all amounts owing the trustee and any predecessor trustee under the indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. all arrears of interest, if any, upon the notes (with interest, to the extent that interest thereon shall be legally enforceable, on any overdue installment of interest at the rate borne by the notes);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. the principal of and premium, if any, on the notes that have become due otherwise than by such declaration of acceleration and interest thereon; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. all other sums payable under the indenture (except the principal of the notes which would not be due and payable were it not for such declaration); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. every other default and Event of Default under the indenture shall have been resolved so that the conditions that caused such default or Event of Default are no longer outstanding or have otherwise been remedied to the reasonable satisfaction of the trustee or of the holders of a majority in principal amount of the notes then outstanding, or provision deemed by the trustee or by such holders to be adequate therefor shall have been made, then and in every such case the holders of a majority in principal amount of the notes then outstanding may, by written notice to the Company and the trustee, on behalf of the holders of all the notes, waive the Event of Default by reason of which the principal of the notes shall have been so declared to be due and payable and may rescind and annul such declaration and its consequences; provided, however, that no such waiver, rescission or annulment shall extend to or affect any subsequent default or Event of Default or impair any right consequent thereon.

**Modification of Indenture**

***Changes Not Requiring Approval of Holders of the Notes***

The Company (when authorized by a board resolution) and the trustee, at any time and from time to time, may enter into one or more supplemental indentures, in form satisfactory to the trustee, for any one or more of or all the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. to add to the covenants and agreements of the Company to be observed thereafter and during the period, if any, in such supplemental indenture or indentures expressed, and to add Events of Default, in each case for the protection or benefit of the holders of the notes, or to surrender any right or power herein conferred upon the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. to add to or change any of the provisions of the indenture to change or eliminate any restrictions on the payment of principal of or premium, if any, on the notes; provided that any such action shall not adversely affect the interests of the holders of the notes in any material respect, or to permit or facilitate the issue of the notes in uncertificated form;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. to change or eliminate any of the provisions of the indenture; provided that any such change or elimination shall become effective only when there are no outstanding notes created prior to the execution of such supplemental indenture that are entitled to the benefit of such provision and as to which such supplemental indenture would apply;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. to evidence the succession of another corporation to the Company, or successive successions, and the assumption by such successor of the covenants and obligations of the Company contained in the notes and in the indenture or any supplemental indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the notes and to add to or change any of the provisions of the indenture as shall be necessary for or facilitate the administration of the trusts hereunder by more than one trustee;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. to secure the notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. to cure any ambiguity or to correct or supplement any provision contained herein or in any indenture supplemental hereto which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. to comply with the requirements of the Trust Indenture Act or the rules and regulations of the SEC thereunder in order to effect or maintain the qualification of the indenture under the Trust Indenture Act, as contemplated by the indenture or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. to add guarantors or co-obligors with respect to the notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. to make any change in the notes that does not adversely affect in any material respect the interests of the holders of the notes; provided that no such change shall be deemed to adversely affect the holders of the notes if such change is made to conform the terms of the notes to the terms described in the prospectus supplement related to the issuance of the notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. to prohibit the authentication and delivery of additional series of notes; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. to establish the form and terms of the notes as permitted in the indenture or to authorize the issuance of additional debt securities previously authorized or to add to the conditions, limitations or restrictions on the authorized amount, terms or purposes of issue, authentication or delivery of the notes, as set forth in the indenture, or other conditions, limitations or restrictions thereafter to be observed.

***Changes Requiring Approval of Holders of the Notes***

With the consent of the holders of a majority in aggregate principal amount of the notes outstanding, the Company (when authorized by a board resolution) and the trustee may, from time to time and at any time, enter into an indenture or supplemental indenture for the purpose of adding any provisions to or changing in any manner or eliminating any provisions of the indenture or of modifying in any manner the rights of the holders of the notes; *provided*, *however*, that no such supplemental indenture shall, without the consent of the holder of each notes affected thereby,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. extend the stated maturity of the principal of, or any installment of interest on, the notes, or reduce the principal amount thereof or the interest thereon or any premium payable upon redemption thereof, or extend the stated maturity of, or change the currency in which the principal of, premium, if any, or interest on the notes are denominated or payable, or impair the right to institute suit for the enforcement of any payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. reduce the percentage in principal amount of the outstanding notes, the consent of whose holders is required for any supplemental indenture, or the consent of whose holders is required for any waiver of compliance with certain provisions of the indenture or certain defaults under the indenture and their consequences provided for in the indenture; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. modify any of the provisions of the indenture relating to supplemental indentures and waivers of certain covenants and past defaults, except to increase any of the respective percentages referred to therein or to provide that certain other provisions of the indenture cannot be modified or waived without the consent of the holder of each notes affected thereby; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. modify, without the written consent of the trustee, the rights, duties or immunities of the trustee.

It will not be necessary for any act of holders under the preceding paragraph to approve the particular form of any proposed supplemental indenture, but it will be sufficient if such act will approve the substance thereof.

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**Effect of Supplemental Indenture**

A supplemental indenture which changes or eliminates any covenant or other provision of the indenture with respect to the notes or which modifies the rights of the holders of the notes with respect to such covenant or other provision, will be deemed not to affect the rights under the indenture of holders of other series of debt securities. Similarly, a supplemental indenture which changes or eliminates any covenant or other provision of the indenture with respect to debt securities of any other series or which modifies the rights of the holders of debt securities of any other series with respect to such covenant or other provision, will be deemed not to affect the rights under the indenture of holders of the notes.

**Defeasance and Discharge**

The indenture shall, at the Company's option, cease to be of further effect and the trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of the indenture, when,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. all notes theretofore authenticated and delivered (other than (i) notes that have been destroyed, lost or stolen and that have been replaced or paid and (ii) notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the trustee for cancellation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. all notes not theretofore delivered to the trustee for cancellation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) have become due and payable, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) will become due and payable at maturity within one year, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice by the trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on the notes for principal, premium, if any, and interest to the date of such deposit or to the stated maturity or redemption date, as the case may be; provided, however, in the event a petition for relief under federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, is filed with respect to the Company within 91 days after the deposit and the trustee is required to return the moneys then on deposit with the trustee to the Company, the obligations of the Company under the indenture shall not be deemed terminated or discharged;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the Company has delivered to the trustee an officer's certificate and an opinion of counsel each stating that all conditions precedent provided for in the indenture relating to the satisfaction and discharge of the indenture have been complied with.

At the Company's option, either (a) the Company shall be deemed to have been Discharged from its obligations with respect to the notes on the first day after the applicable conditions set forth below have been satisfied or (b) the Company shall cease to be under any obligation to comply with any term, provision or condition set forth in "—Covenants" above at any time after the applicable conditions set forth below have been satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the Company shall have deposited or caused to be deposited irrevocably with the trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the notes (A) money in an amount, or (B) U.S. Government Obligations that through the payment of interest and principal in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount or (C) a

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combination of (A) and (B), sufficient to pay and discharge each installment of principal of, premium, if any, and interest on, the notes on the dates such installments of principal, premium, if any, and interest are due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. no Event of Default or event (including such deposit) that, with notice or lapse of time, or both, would become an Event of Default with respect to the notes shall have occurred and be continuing on the date of such deposit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the Company shall have delivered to the trustee an opinion of counsel to the effect that holders and beneficial owners of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Company's exercise of its option under this paragraph and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such action had not been exercised and, in the case of the notes being Discharged, such opinion shall be based on either a change in applicable U.S. federal income tax law since the date of the indenture or a ruling received by the Company from, or that is published by, the U.S. Internal Revenue Service.

"Discharged" means that the Company will be deemed to have paid and discharged the entire indebtedness represented by, and obligations under, the notes and to have satisfied all the obligations under the indenture relating to the notes (and the trustee, at the expense of the Company, will have executed proper instruments acknowledging the same), except (a) the rights of holders of the notes to receive, from the trust fund described in paragraph (1) above, payment of the principal of, premium, if any, and interest on such notes when such payments are due, (b) the Company's obligations with respect to the notes under the indenture and (c) the rights, powers, trusts, duties and immunities of the trustee under the indenture.

"U.S. Government Obligations" means securities that are (a) direct obligations of the United States for the payment of which its full faith and credit is pledged, or (b) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in the case of clause (a) or (b) above, are not callable or redeemable at the option of the issuer thereof, and will also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; *provided* that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt.

**Liability for Notes**

No recourse shall be had for the payment of the principal of, premium, if any, or interest on, the notes or for any claim based thereon or otherwise in respect thereof or of the indebtedness represented thereby, or upon any obligation, covenant or agreement of the indenture, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the indenture and the notes are solely corporate obligations, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, because of the incurring of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants, promises or agreements contained in the indenture or in the notes, or to be implied herefrom or therefrom, and that all liability, if any, of that character against every such incorporator, stockholder, officer and director is, by the acceptance of the notes and as a condition of, and as part of the consideration for, the execution of the indenture and the issue of the notes expressly waived and released.

 -36- <br>

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**Book-Entry Procedures**

*Global Clearance and Settlement*

The notes were issued in the form of one or more global notes (each a "global note") in fully registered form, without coupons, and were deposited on the closing date with, or on behalf of, a common depositary, and registered in the name of the nominee of the common depositary, for, and in respect of interests held through, Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, SA ("Clearstream"). Except as described herein, certificates will not be issued in exchange for beneficial interests in the global notes.

Except as set forth below, the global notes may be transferred, in whole and not in part, only to a common depositary for Euroclear or Clearstream or their nominee.

Beneficial interests in the global notes will be represented, and transfers of such beneficial interests will be effected, through accounts of financial institutions acting on behalf of beneficial owners as direct or indirect participants in Euroclear or Clearstream. Those beneficial interests will be in denominations of €100,000 and integral multiples of €1,000 in excess thereof. Investors may hold notes directly through Euroclear or Clearstream, if they are participants in such systems, or indirectly through organizations that are participants in such systems. It is possible that the clearing systems may process trades that could result in amounts being held in denominations smaller than the minimum denominations. If definitive notes are required to be issued in relation to such notes in accordance with the provisions of the relevant global notes, a holder who does not have the minimum denomination or a multiple of €1,000 in excess thereof in its account with the relevant clearing system at the relevant time may not receive all of its entitlement in the form of definitive notes unless and until such time as its holding satisfies the minimum denomination requirement.

Owners of beneficial interests in the global notes will not be entitled to have notes registered in their names, and will not receive or be entitled to receive physical delivery of notes in definitive form. Except as provided below, beneficial owners will not be considered the owners or holders of the notes under the indenture, including for purposes of receiving any reports delivered by us or the trustee pursuant to the indenture. Accordingly, each beneficial owner must rely on the procedures of the clearing systems and, if such person is not a participant of the clearing systems, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the indenture. Under existing industry practices, if we request any action of holders or a beneficial owner desires to give or take any action which a holder is entitled to give or take under the indenture, the clearing systems would authorize their participants holding the relevant beneficial interests to give or take action and the participants would authorize beneficial owners owning through the participants to give or take such action or would otherwise act upon the instructions of beneficial owners. Conveyance of notices and other communications by the clearing systems to their participants, by the participants to indirect participants and by the participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in certificated form. These limits and laws may impair the ability to transfer beneficial interests in global notes.

Persons who are not Euroclear or Clearstream participants may beneficially own notes held by the common depositary for Euroclear and Clearstream only through direct or indirect participants in Euroclear and Clearstream. So long as the common depositary for Euroclear and Clearstream is the registered owner of the global note, the common depositary for all purposes will be considered the sole holder of the notes represented by the global note under the indenture and the global notes.

*Certificated Notes*

If the applicable depositary is at any time unwilling or unable to continue as depositary for any of the global notes and a successor depositary is not appointed by us within 90 days, or if we have been notified that both Clearstream and Euroclear have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done

 -37- <br>

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so and no successor clearing system is available, we will issue the notes in definitive registered form in exchange for the applicable global notes. We will also issue the notes in definitive registered form in exchange for the global notes if an event of default has occurred with regard to the notes represented by the global notes and has not been cured or waived. In addition, we may at any time and in our sole discretion determine not to have the notes represented by the global notes and, in that event, will issue the notes in definitive registered form in exchange for the global notes. In any such instance, an owner of a beneficial interest in the global notes will be entitled to physical delivery in definitive registered form of the notes represented by the global notes equal in principal amount to such beneficial interest and to have such notes registered in its name. The notes so issued in definitive form will be issued as registered in minimum denominations of €100,000 and integral multiples of €1,000 thereafter, unless otherwise specified by us. The notes in definitive form can be transferred by presentation for registration to the registrar at our office or agency for such purpose and must be duly endorsed by the holder or his attorney duly authorized in writing, or accompanied by a written instrument or instruments of transfer in form satisfactory to us or the registrar duly executed by the holder or his attorney duly authorized in writing. We may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer of definitive notes.

*Clearing Systems*

We have been advised by Euroclear and Clearstream, respectively, as follows:

*Euroclear.* Euroclear advises that it was created in 1968 to hold securities for its participants and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear provides various other services, including securities lending and borrowing, and interfaces with domestic markets in several countries. All operations are conducted by Euroclear Bank, S.A./N.V. and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with Euroclear Bank, not the cooperative. The cooperative establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the underwriters ("Euroclear participants"). Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

Securities clearance accounts and cash accounts with the Euroclear Bank are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (collectively, the "Euroclear terms and conditions"). The Euroclear terms and conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payment with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Bank acts under the Euroclear terms and conditions only on behalf of Euroclear participants, and has no record of or relationship with persons holding through Euroclear participants.

Distributions with respect to notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear participants in accordance with the Euroclear terms and conditions, to the extent received by the Euroclear Bank and by Euroclear.

*Clearstream.* Clearstream is incorporated under the laws of Luxembourg as a professional depositary. Clearstream holds securities for Clearstream participants, and facilitates the clearance and settlement of securities transactions between Clearstream participants through electronic book-entry changes in accounts of Clearstream participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Monetary Institute. Clearstream participants are financial institutions around the world, including securities brokers and

 -38- <br>

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dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear through, or maintain a custodial relationship with, a Clearstream participant either directly or indirectly.

Distributions with respect to the notes held beneficially through Clearstream will be credited to cash accounts of Clearstream participants in accordance with its rules and procedures, to the extent received by Clearstream.

*Euroclear and Clearstream Arrangements*

So long as Euroclear or Clearstream or their nominee or their common depositary is the registered holder of the global notes, Euroclear, Clearstream or their nominee or their common depositary is the registered holder of the global notes, Euroclear, Clearstream or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such notes for all purposes under the indenture and the notes. Payments of principal, interest and premium, if any, in respect of the global notes will be made to Euroclear, Clearstream, such nominee or such common depositary, as the case may be, as registered holder thereof. None of us, the trustee, the paying agent, any underwriter and any affiliate of any of the above or any person by whom any of the above is controlled (as such term is defined in the U.S. Securities Act of 1933, as amended (the "Securities Act")) will have any responsibility or liability for any records relating to or payments made on account of beneficial ownership interests in the global notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Distributions of principal, premium, if any, and interest with respect to the global note will be credited in euros to the extent received by Euroclear or Clearstream from the trustee or the paying agent, as applicable, to the cash accounts of Euroclear or Clearstream customers in accordance with the relevant system's rules and procedures.

Because Euroclear and Clearstream can only act on behalf of participants, who in turn act on behalf of indirect participants, the ability of a person having an interest in the global notes to pledge such interest to persons or entities which do not participate in the relevant clearing system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate in respect of such interest.

The holdings of book-entry interests in the global notes through Euroclear and Clearstream will be reflected in the book-entry accounts of each such institution. As necessary, the registrar will adjust the amounts of the global notes on the register for the accounts of the common depositary to reflect the amounts of notes held through Euroclear and Clearstream, respectively.

*Initial Settlement*

Investors holding their notes through Euroclear or Clearstream accounts will follow the settlement procedures applicable to conventional eurobonds in registered form. Subject to applicable procedures of Clearstream and Euroclear, notes will be credited to the securities custody accounts of Euroclear and Clearstream holders on the settlement date against payment for value on the settlement date.

*Secondary Market Trading*

Because the purchaser determines the place of delivery, it is important to establish at the time of trading of any notes where both the purchaser's and seller's accounts are located to ensure that settlement can be made on the desired value date.

Secondary market sales of book-entry interests in the notes held through Euroclear or Clearstream to purchasers of book-entry interests in the global notes through Euroclear or Clearstream will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream and will be settled using the procedures applicable to conventional eurobonds in same-day funds.

 -39- <br>

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Investors will only be able to make and receive deliveries, payments and other communications involving the notes through Euroclear and Clearstream on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States.

In addition, because of time-zone differences there may be problems with completing transactions involving Euroclear and Clearstream on the same business day as in the United States. U.S. investors who wish to transfer their interests in the notes, or to make or receive a payment or delivery of the notes, on a particular day, may find that the transactions will not be performed until the next business day in Luxembourg or Brussels, depending on whether Euroclear or Clearstream is used.

Euroclear and Clearstream will credit payments to the cash accounts of Euroclear participants or Clearstream customers in accordance with the relevant system's rules and procedures, to the extent received by its depositary. Clearstream or the Euroclear Operator, as the case may be, will take any other action permitted to be taken by a holder under the indenture on behalf of a Euroclear participant or Clearstream customer only in accordance with its relevant rules and procedures.

Euroclear and Clearstream have agreed to the foregoing procedures in order to facilitate transfers of the notes among participants of Euroclear and Clearstream. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue those procedures at any time.

The information in this section concerning Euroclear and Clearstream and their book-entry systems has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy of that information. In addition, the description of the clearing systems in this section reflects our understanding of the rules and procedures of Clearstream and Euroclear as they are currently in effect. Those clearing systems could change their rules and procedures at any time.

None of the Company, the underwriters or the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of the beneficial interests in a global note, or for maintaining, supervising or reviewing any records relating to such beneficial interests.

**Governing Law**

The indenture and the notes are governed by and construed in accordance with the laws of the State of New York.

**Concerning the Trustee**

The trustee has provided various services to us in the past and may do so in the future in the ordinary course of its regular business.

 -40- <br>

## Exhibit 10.7

**Exhibit 10.7**

**First Amendment to the** 

**Avery Dennison Corporation** 

**2017 Incentive Award Plan**

&nbsp;&nbsp;&nbsp;&nbsp;This First Amendment (this "<u>Amendment</u>") to the Avery Dennison Corporation 2017 Incentive Award Plan (the "<u>Plan</u>") has been approved by the Compensation and Executive Personnel Committee (the "<u>Committee</u>") of the Board of Directors (the "<u>Board</u>") of Avery Dennison Corporation (the "<u>Company</u>") on October 24, 2018 and ratified by the Board on October 25, 2018 (the "<u>Amendment Date</u>"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company maintains the Plan as approved by the Committee and ratified by the Board on February 23, 2017 and further approved by the Company's stockholders on April 27, 2017;

&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company desires to amend the Plan pursuant to the authority given to it under Section 13.1 of the Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, this Amendment, together with the Plan (as of immediately prior to the Amendment Date), constitutes the entire Plan as amended.

NOW, THEREFORE, effective as of the Amendment Date, the Plan is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The last sentence of Section 5.2, which reads as follows:

In determining the amount earned under these Awards, the Administrator (i) shall, unless otherwise provided in an Award Agreement, have the right to decrease or eliminate the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant, including the assessment of individual or corporate performance for the Performance Period, but (ii) in no event shall the Administrator have the right to increase the amount payable.

is hereby replaced with the following:

In determining the amount earned under these Awards, the Administrator (i) shall, unless otherwise provided in an Award Agreement, have the right to decrease or eliminate the amount payable at a given level of performance to take into account (A) individual performance during the Performance Period that is below satisfactory standards, (B) the occurrence of any act, omission, event or circumstance that could constitute "Cause" for purposes of Termination of Service of the Awardee or (C) any other fraudulent, willful or negligent acts or omissions of the Awardee that could adversely affect the business, financial performance or reputation of the Company or any Subsidiary, but (ii) in no event shall the Administrator have the right to increase the amount payable.

\|US-DOCS\103317421.1\|\|

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The change described in Section 1 above shall only to awards granted after the Amendment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Except as set forth in this Amendment, the Plan (as in effect prior to the Amendment Date) shall remain in full force and effect on and following the Amendment Date.

\* \* \* \* \*

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This Amendment has been executed on the Amendment Date.

**AVERY DENNISON CORPORATION**

<u>/s/</u> <u>Mitchell R. Butier</u> 

By: &nbsp;&nbsp;&nbsp;&nbsp;Mitchell R. Butier

Its: &nbsp;&nbsp;&nbsp;&nbsp; President and Chief Executive Officer

## Ex-19

**Exhibit 19**

**Avery Dennison Corporation<br>Insider Trading Compliance Policy and Procedures**

Federal and state laws prohibit trading in the securities of a company while in possession of material nonpublic information and in breach of a duty of trust or confidence. These laws also prohibit anyone who is aware of material nonpublic information from providing this information to others who may trade. Violating such laws can undermine investor trust, harm the reputation and integrity of Avery Dennison Corporation (together with its subsidiaries, the "<u>Company</u>"), and result in dismissal from the Company or even serious criminal and civil charges against the individual and the Company. The Company reserves the right to take whatever disciplinary or other measure(s) it determines in its sole discretion to be appropriate in any particular situation, including disclosure of wrongdoing to governmental authorities.

**<u>Persons Covered and Administration of Policy</u>**

This Insider Trading Compliance Policy and Procedures (this "<u>Policy</u>") applies to all officers, directors and employees of the Company. For purposes of this Policy, "officers" refer to those individuals who meet the definition of "officer" under Section 16 of the Securities Exchange Act of 1934 (as amended, the "<u>Exchange Act</u>"). Individuals subject to this Policy are responsible for ensuring that members of their household comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy, including any corporations, limited liability companies, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy as if they were for the individual's own account. The Company may determine that this Policy applies to additional persons with access to material nonpublic information, such as contractors or consultants. Officers, directors and employees, together with any other person designated as being subject to this Policy by the Corporate Secretary or his or her designee (the "<u>Compliance Officer</u>"), are referred to collectively as "<u>Covered Persons.</u>"

&nbsp;&nbsp;&nbsp;&nbsp;Questions regarding the Policy should be directed to the Compliance Officer, who is responsible for the administration of this Policy, which first became effective as of February 27, 2023.

**<u>Policy Statement</u>**

No Covered Person shall purchase or sell any type of security while in possession of material nonpublic information relating to the security or the issuer of such security in breach of a duty of trust or confidence, whether the issuer of such security is the Company or any other company. In addition, if a Covered Person is in possession of material nonpublic information about other publicly-traded companies, such as suppliers, customers, competitors or potential acquisition targets, the Covered Person may not trade in such other companies' securities until the information becomes public or is no longer material. Further, no Covered Person shall purchase or sell any security of any other company, including another company in the Company's industry, while in possession of material nonpublic information about that company if such information is obtained in the course of the Covered Person's employment or service with the Company.

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In addition, Covered Persons shall not directly or indirectly communicate material nonpublic information to anyone outside the Company (except in accordance with the Company's policies regarding confidential information) or to anyone within the Company other than on a "need-to-know" basis.

*"*<u>Securities</u>*"* includes stocks, bonds, notes, debentures, options, warrants, equity and other convertible securities, as well as derivative instruments.

*"*<u>Purchase</u>*"* and *"*<u>sale</u>*"* are defined broadly under the federal securities law. *"*Purchase*"* includes not only the actual purchase of a security, but also any contract to purchase or otherwise acquire a security. *"*Sale*"* includes not only the actual sale of a security, but also any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions, including conventional cash-for-stock transactions, conversions, the exercise of stock options, transfers, gifts, and acquisitions and exercises of warrants or puts, calls, pledging and margin loans, or other derivative securities. Changes in the level of participation in the Company Stock Fund in the Company's Employee Savings Plan and the transfer of funds into or out of the Company Stock Fund will be treated as purchases and sales of Company stock.

The laws and regulations concerning insider trading are complex, and Covered Persons are encouraged to seek guidance prior to considering a transaction in Company securities.

**<u>Blackout Periods</u>**

No member of the Company's Board of Directors, employee serving as an officer or in a director-level position or above or any other person so designated by the Compliance Officer (as well as any individual or entity covered by this Policy by virtue of their relationship to such individual), shall purchase or sell any security of the Company during the period beginning two weeks before the end of each fiscal quarter (such period to begin on each of March 17, June 16, September 16 and December 17) and ending after completion of the second trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period determined by the Compliance Officer, such period, a "<u>blackout period</u>." A "trading day" is a day on which U.S. national stock exchanges are open for trading. If, for example, the Company were to make an announcement on Monday, then the blackout period would terminate *after* the close of trading on Tuesday.

These prohibitions do not apply to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• purchases of the Company's securities from the Company, or sales of the Company's securities to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exercises of stock options or other equity awards or the surrender of shares to the Company in payment of the exercise price or in satisfaction of any tax withholding obligations in a manner permitted by the applicable equity award agreement, or vesting of equity-based awards, in each case, that do not involve a market sale of the Company's securities (the "cashless exercise" of a Company stock option or other equity award through a broker does involve a market sale of the Company's securities, and therefore would not qualify under this exception);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *bona fide* gifts of the Company's securities, unless the individual making the gift knows, or is reckless in not knowing, the recipient intends to sell the securities while the donor is in possession of material nonpublic information about the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• purchases or sales of the Company's securities made pursuant to a plan adopted to comply with the Exchange Act Rule 10b5-1 ("<u>Rule 10b5-1</u>").

The Compliance Officer may recommend that directors, officers, employees or others suspend trading in Company securities because of developments that have not yet been disclosed to the public. Subject to the exceptions noted above, all of those individuals affected should not trade in the Company's securities while the suspension is in effect, and should not disclose to others that the Company has suspended trading.

**<u>Preclearance of Trades by Directors, Officers and Employees</u>**

All transactions in the Company's securities by individuals subject to blackout periods (each, a "<u>Preclearance Person</u>") must be precleared by the Compliance Officer. Preclearance should not be understood to represent legal advice by the company that a proposed transaction complies with the law. A request for preclearance must be in writing and the Company, in its sole discretion, may adopt additional requirements for preclearance.

Notwithstanding receipt of preclearance, if the Preclearance Person becomes aware of material nonpublic information, or becomes subject to a blackout period before the transaction is effected, the transaction may not be completed. Transactions under a previously established Rule 10b5-1 Trading Plan that has been preapproved in accordance with this Policy (or was preapproved by the Compliance Officer prior to the effective date of this Policy) are not subject to further preclearance.

None of the Company, the Compliance Officer, or the Company's other employees will have any liability for any delay in reviewing, or refusal of, a request for preclearance.

**<u>Material Nonpublic Information</u>**

Information is considered "<u>material</u>" if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell, or hold a security, or if the information is likely to have a significant effect on the market price of the security. Material information can be positive or negative, and can relate to virtually any aspect of a company's business or to any type of security, debt, or equity. Also, information that something is likely to happen in the future—or even just that it may happen—could be deemed material.

Examples of material information may include (but are not limited to) information about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• corporate earnings or earnings forecasts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• possible mergers, acquisitions, tender offers, or dispositions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• major new products or product developments;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• important business developments, such as developments regarding strategic collaborations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• management or control changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant financing developments including pending public sales or offerings of debt or equity securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• defaults on borrowings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• bankruptcies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cybersecurity or data security incidents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant litigation or regulatory actions.

Information is "<u>nonpublic</u>" if it is not available to the general public. In order for information to be considered "<u>public</u>," it must be widely disseminated in a manner that makes it generally available to investors in a Regulation FD-compliant method, such as through a press release, a filing with the U.S. Securities and Exchange Commission (the "<u>SEC</u>") or a Regulation FD-compliant conference call. The Compliance Officer shall have sole discretion to decide whether information is public for purposes of this Policy.

The circulation of rumors, even if accurate and reported in the media, does not constitute public dissemination. In addition, even after a public announcement, a reasonable period of time may need to lapse in order for the market to react to the information.

**<u>Post-Termination Transactions</u>**

If an individual is in possession of material nonpublic information when the individual's service terminates, the individual may not trade in the Company's securities until that information has become public or is no longer material.

**<u>Prohibited Transactions</u>**

The Company has determined that there is a heightened legal risk and the appearance of improper or inappropriate conduct if persons subject to this Policy engage in certain types of transactions. Therefore, Covered Persons shall comply with the following policies with respect to certain transactions in the Company's securities.

*Short Sales*

Short sales of the Company's securities are prohibited by this Policy. Short sales of the Company's securities, or sales of shares that the insider does not own at the time of sale, or sales of shares against which the insider does not deliver the shares within 20 days after the sale, evidence an expectation on the part of the seller that the securities will decline in value, and, therefore, signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, Section 16(c) of the Exchange Act prohibits Section 16 reporting persons (i.e., directors, officers, and the Company's 10% stockholders) from making short sales of the Company's equity securities.

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*Options*

Transactions in puts, calls, or other derivative securities involving the Company's equity securities, on an exchange, on an over-the-counter market, or in any other organized market, are prohibited by this Policy. A transaction in options is, in effect, a bet on the short-term movement of the Company's stock and, therefore, creates the appearance that a Covered Person is trading based on material nonpublic information. Transactions in options, whether traded on an exchange, on an over-the-counter market, or any other organized market, also may focus a Covered Person's attention on short-term performance at the expense of the Company's long-term objectives.

*Hedging Transactions*

Hedging transactions involving the Company's securities, such as prepaid variable forward contracts, equity swaps, collars and exchange funds, or other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company's equity securities, are prohibited by this Policy. Such transactions allow the Covered Person to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the Covered Person may no longer have the same objectives as the Company's other stockholders.

*Margin Accounts and Pledging*

Members of the Company's Board of Directors and employees serving as officers are prohibited (and all other non-officer Covered Persons are strongly discouraged) from pledging Company securities as collateral for a loan, purchasing Company securities on margin (i.e., borrowing money to purchase the securities), or placing Company securities in a margin account. This prohibition does not apply to cashless exercises of stock options under the Company's equity plans.

**<u>Rule 10b5-1 Trading Plans</u>**

The trading restrictions set forth in this Policy, other than those transactions described under "<u>Prohibited Transactions</u>," do not apply to transactions under a previously established contract, plan or instruction to trade in the Company's securities entered into in accordance with Rule 10b5-1 (a "<u>Trading Plan</u>") that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• has been submitted to and preapproved by the Compliance Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• includes a "Cooling Off Period" for

oSection 16 reporting persons that extends to the later of 90 days after adoption or modification of a Trading Plan or two business days after filing the Form 10-K or Form 10-Q covering the fiscal quarter in which the Trading Plan was adopted, up to a maximum of 120 days; and

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oemployees and any other persons, other than the Company, that extends 30 days after adoption or modification of a Trading Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• for Section 16 reporting persons, includes a representation in the Trading Plan that the Section 16 reporting person is (1) not aware of any material nonpublic information about the Company or its securities and (2) adopting the Trading Plan in good faith and not as part of a plan or scheme to evade Rule 10b-5; 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• has been entered into in good faith at a time when the individual was not in possession of material nonpublic information about the Company and not otherwise in a blackout period, and the person who entered into the Trading Plan has acted in good faith with respect to the Trading Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• either (1) specifies the amounts, prices, and dates of all transactions under the Trading Plan or (2) provides a written formula, algorithm, or computer program for determining the amount, price, and date of the transactions, and (3) prohibits the individual from exercising any subsequent influence over the transactions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• complies with all other applicable requirements of Rule 10b5-1.

The Compliance Officer may impose such other conditions on the implementation and operation of the Trading Plan as the Compliance Officer deems necessary or advisable. Individuals may not adopt more than one Trading Plan at a time except under the limited circumstances permitted by Rule 10b5-1 and subject to preapproval by the Compliance Officer.

An individual may only modify a Trading Plan outside of a blackout period and, in any event, when the individual does not possess material nonpublic information. Modifications to and terminations of a Trading Plan are subject to preapproval by the Compliance Officer and modifications of a Trading Plan that change the amount, price, or timing of the purchase or sale of the securities underlying a Trading Plan will trigger a new Cooling-Off Period.

The Company reserves the right to publicly disclose, announce, or respond to inquiries from the media regarding the adoption, modification, or termination of a Trading Plan and non-Rule 10b5-1 trading arrangements, or the execution of transactions made under a Trading Plan. The Company also reserves the right from time to time to suspend, discontinue, or otherwise prohibit transactions under a Trading Plan if the Compliance Officer or the Board of Directors, in its discretion, determines that such suspension, discontinuation, or other prohibition is in the best interests of the Company.

Compliance of a Trading Plan with the terms of Rule 10b5-1 and the execution of transactions pursuant to the Trading Plan are the sole responsibility of the person initiating the Trading Plan, and none of the Company, the Compliance Officer, or the Company's other employees assumes any liability for any delay in reviewing and/or refusing to approve a Trading Plan submitted for approval, nor the legality or consequences relating to a person entering into, informing the Company of, or trading under, a Trading Plan.

------

**<u>Interpretation, Amendment, and Implementation of this Policy</u>**

The Compliance Officer shall have the authority to interpret and update this Policy and all related policies and procedures. In particular, such interpretations and updates of this Policy, as authorized by the Compliance Officer, may include amendments to or departures from the terms of this Policy, to the extent consistent with the general purpose of this Policy and applicable securities laws.

Actions taken by the Company, the Compliance Officer, or any other Company personnel do not constitute legal advice, nor do they insulate you from the consequences of noncompliance with this Policy or with securities laws.

**<u>Certification of Compliance</u>**

Directors, officers, employees and others subject to this Policy may be asked periodically to certify their compliance with the terms and provisions of this Policy.

## Ex-21

**Exhibit 21** 

---

| | |
|:---|:---|
| **SUBSIDIARY**<sup>(1)</sup> | **U.S. STATE OR COUNTRY IN<br>WHICH ORGANIZED** |

---

---

| | |
|:---|:---|
| ADC PHILIPPINES, INC. | PHILIPPINES |
| ADESPAN S.R.L. | ITALY |
| ADHIPRESS BANGLADESH LTD. | BANGLADESH |
| AVERY CORP. | DELAWARE |
| AVERY DE MEXICO, S. DE R.L. DE C.V. | MEXICO |
| AVERY DENNISON ATMA d.o.o. | CROATIA |
| AVERY DENNISON ATMA GMBH | AUSTRIA |
| AVERY DENNISON AUSTRALIA INTERNATIONAL HOLDINGS PTY LTD. | AUSTRALIA |
| AVERY DENNISON AUSTRALIA PTY LTD. | AUSTRALIA |
| AVERY DENNISON BELGIE BV | BELGIUM |
| AVERY DENNISON BELGIUM MANAGEMENT SERVICES SRL | BELGIUM |
| AVERY DENNISON BENELUX BV | BELGIUM |
| AVERY DENNISON BV | NETHERLANDS |
| AVERY DENNISON CANADA CORPORATION | CANADA |
| AVERY DENNISON CENTRAL EUROPE GMBH | GERMANY |
| AVERY DENNISON CHILE S.A. | CHILE |
| AVERY DENNISON COLOMBIA S. A.S. | COLOMBIA |
| AVERY DENNISON COMMERCIAL EL SALVADOR, S.A. DE C.V. | EL SALVADOR |
| AVERY DENNISON CONVERTED PRODUCTS DE MEXICO, S.A. DE C.V. | MEXICO |
| AVERY DENNISON CONVERTED PRODUCTS EL SALVADOR S. A. DE C. V. | EL SALVADOR |
| AVERY DENNISON, C.A. | VENEZUELA |
| AVERY DENNISON DE ARGENTINA S.R.L. | ARGENTINA |
| AVERY DENNISON DO BRASIL LTDA. | BRAZIL |
| AVERY DENNISON DOMINICAN REPUBLIC, S.R.L. | DOMINICAN REPUBLIC |
| AVERY DENNISON ETIKET TICARET LIMITED SIRKETI | TURKEY |
| AVERY DENNISON EUROPE HOLDING (DEUTSCHLAND) GMBH & CO KG | GERMANY |
| AVERY DENNISON FINANCE GERMANY GMBH | GERMANY |
| AVERY DENNISON FRANCE MANAGEMENT SERVICES SAS | FRANCE |
| AVERY DENNISON G HOLDINGS I LLC | DELAWARE |
| AVERY DENNISON G HOLDINGS III LLC | DELAWARE |
| AVERY DENNISON G INVESTMENTS III LIMITED | GIBRALTAR |
| AVERY DENNISON G INVESTMENTS V LIMITED | GIBRALTAR |
| AVERY DENNISON GROUP DANMARK APS | DENMARK |
| AVERY DENNISON GROUP SINGAPORE PTE LTD | SINGAPORE |
| AVERY DENNISON GULF FZCO | UNITED ARAB EMIRATES |
| AVERY DENNISON HOLDING FRANCE S.A.S. | FRANCE |
| AVERY DENNISON HOLDING GMBH | GERMANY |
| AVERY DENNISON HOLDING LIMITED | UNITED KINGDOM |
| AVERY DENNISON HOLDING LUXEMBOURG S. A. R. L. | LUXEMBOURG |
| AVERY DENNISON HOLDING & FINANCE THE NETHERLANDS BV | NETHERLANDS |
| AVERY DENNISON HOLDINGS LLC | DELAWARE |
| AVERY DENNISON HONG KONG B.V. | NETHERLANDS |
| AVERY DENNISON HONG KONG HOLDING I B.V. | NETHERLANDS |
| AVERY DENNISON IBERICA, S.A. | SPAIN |
| AVERY DENNISON INNOVATIONS LLC | DELAWARE |
| AVERY DENNISON INTELLIGENT HEALTHCARE SOLUTIONS LLC | DELAWARE |

---

------

---

| | |
|:---|:---|
| AVERY DENNISON INTELLIGENT LABELS EUROPE S.R.L. | ROMANIA |
| AVERY DENNISON INTELLIGENT LABELS HK LIMITED | HONG KONG |
| AVERY DENNISON INVESTMENT LUXEMBOURG II SARL | LUXEMBOURG |
| AVERY DENNISON INVESTMENTS LUXEMBOURG III SARL | LUXEMBOURG |
| AVERY DENNISON INVESTMENTS LUXEMBOURG IV SARL | LUXEMBOURG |
| AVERY DENNISON ISRAEL LTD. | ISRAEL |
| AVERY DENNISON ITALIA S.R.L. | ITALY |
| AVERY DENNISON JAPAN KK | JAPAN |
| AVERY DENNISON KOREA LIMITED | SOUTH KOREA |
| AVERY DENNISON LANKA (PRIVATE) LIMITED | SRI LANKA |
| AVERY DENNISON LUXEMBOURG SALES SARL | LUXEMBOURG |
| AVERY DENNISON LUXEMBOURG S.A.R.L. | LUXEMBOURG |
| AVERY DENNISON MANAGEMENT GMBH | GERMANY |
| AVERY DENNISON MANAGEMENT SERVICES NETHERLANDS BV | NETHERLANDS |
| AVERY DENNISON MATERIALS BELGIUM SRL | BELGIUM |
| AVERY DENNISON MATERIALS EUROPE B.V. | NETHERLANDS |
| AVERY DENNISON MATERIALS EUROPE GMBH | SWITZERLAND |
| AVERY DENNISON MATERIALS FRANCE S.A.R.L. | FRANCE |
| AVERY DENNISON MATERIALS GMBH | GERMANY |
| AVERY DENNISON MATERIALS IRELAND LIMITED | IRELAND |
| AVERY DENNISON MATERIALS NEDERLAND BV | NETHERLANDS |
| AVERY DENNISON MATERIALS NEW ZEALAND LIMITED | NEW ZEALAND |
| AVERY DENNISON MATERIALS PTY LTD | AUSTRALIA |
| AVERY DENNISON MATERIALS ROM SRL | ROMANIA |
| AVERY DENNISON MATERIALS RUSSIA LLC | RUSSIA |
| AVERY DENNISON MATERIALS SALES BELGIUM SRL | BELGIUM |
| AVERY DENNISON MATERIALS SALES FRANCE S. A. S. | FRANCE |
| AVERY DENNISON MATERIALS SALES GERMANY GMBH | GERMANY |
| AVERY DENNISON MATERIALS SDN BHD | MALAYSIA |
| AVERY DENNISON MATERIALS UKRAINE LLC | UKRAINE |
| AVERY DENNISON MATERIALS U.K. LIMITED | UNITED KINGDOM |
| AVERY DENNISON MAURITIUS LTD. | MAURITIUS |
| AVERY DENNISON MEDICAL LIMITED | IRELAND |
| AVERY DENNISON NETHERLANDS INVESTMENT I BV | NETHERLANDS |
| AVERY DENNISON NETHERLANDS INVESTMENT II BV | NETHERLANDS |
| AVERY DENNISON NETHERLANDS INVESTMENT VIII BV | NETHERLANDS |
| AVERY DENNISON NORDIC APS | DENMARK |
| AVERY DENNISON NTP A.S. | NORWAY |
| AVERY DENNISON OFFICE PRODUCTS COMPANY | NEVADA |
| AVERY DENNISON OFFICE PRODUCTS HOLDINGS COMPANY | NEVADA |
| AVERY DENNISON OFFICE PRODUCTS MANUFACTURING U.K. LTD. | UNITED KINGDOM |
| AVERY DENNISON OVERSEAS CORPORATION | MASSACHUSETTS |
| AVERY DENNISON PENSION TRUSTEE LIMITED | UNITED KINGDOM |
| AVERY DENNISON PERU S. R. L. | PERU |
| AVERY DENNISON POLSKA SP. Z O.O. | POLAND |
| AVERY DENNISON PRAHA SPOL. S R. O. | CZECH REPUBLIC |
| AVERY DENNISON RBIS INDIA PRIVATE LIMITED | INDIA |
| AVERY DENNISON RBIS PTY LTD | AUSTRALIA |
| AVERY DENNISON RBIS (CAMBODIA) CO. LTD | CAMBODIA |
| AVERY DENNISON RBIS (CAMBODIA) TRADING CO., LTD. | CAMBODIA |

---

------

---

| | |
|:---|:---|
| AVERY DENNISON RETAIL INFORMATION SERVICES COLOMBIA S. A.S. | COLOMBIA |
| AVERY DENNISON RETAIL INFORMATION SERVICES DE MEXICO, S. A. DE C.V. | MEXICO |
| AVERY DENNISON RETAIL INFORMATION SERVICES EL SALVADOR, LTDA. DE C. V. | EL SALVADOR |
| AVERY DENNISON RETAIL INFORMATION SERVICES GUATEMALA, S. A. | GUATEMALA |
| AVERY DENNISON RETAIL INFORMATION SERVICES HONDURAS, S. DE R.L. | HONDURAS |
| AVERY DENNISON RETAIL INFORMATION SERVICES LLC | NEVADA |
| AVERY DENNISON RETAIL INFORMATION SERVICES PERÚ SAC | PERU |
| AVERY DENNISON RETAIL INFORMATION SERVICES UK LTD. | UNITED KINGDOM |
| AVERY DENNISON RETAIL INFORMATION SERVICES (PTY) LTD | SOUTH AFRICA |
| AVERY DENNISON RFID COMPANY | DELAWARE |
| AVERY DENNISON RIS TAIWAN LTD. | TAIWAN |
| AVERY DENNISON RIS VIETNAM CO., LIMITED | VIETNAM |
| AVERY DENNISON R.I.S. FRANCE S. A. S. | FRANCE |
| AVERY DENNISON R.I.S. IBERIA S.L. | SPAIN |
| AVERY DENNISON R.I.S. ITALIA S.R.L. | ITALY |
| AVERY DENNISON SCANDINAVIA AB | SWEDEN |
| AVERY DENNISON SCANDINAVIA APS | DENMARK |
| AVERY DENNISON SECURITY PRINTING EUROPE APS | DENMARK |
| AVERY DENNISON SHARED SERVICES, INC. | NEVADA |
| AVERY DENNISON SINGAPORE (PTE) LTD | SINGAPORE |
| AVERY DENNISON SMARTRAC DE MEXICO, SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE | MEXICO |
| AVERY DENNISON SMARTRAC (SHANGHAI) IOT TECHNOLOGY CO. LTD. | CHINA |
| AVERY DENNISON SMARTRAC LATAM LTDA. | BRAZIL |
| AVERY DENNISON SMARTRAC TECHNOLOGY (GUANGZHOU) CO., LTD. | CHINA |
| AVERY DENNISON SOUTH AFRICA (PROPRIETARY) LIMITED | SOUTH AFRICA |
| AVERY DENNISON SUPPORT SERVICES GMBH | SWITZERLAND |
| AVERY DENNISON S.R.L. | ROMANIA |
| AVERY DENNISON TEKSTIL URUNLERI SANAYI VE TICARET LIMITED SIRKETI | TURKEY |
| AVERY DENNISON TRADING COMPANY LTD. | BANGLADESH |
| AVERY DENNISON TREASURY MANAGEMENT BV | NETHERLANDS |
| AVERY DENNISON U.K. II LIMITED | UNITED KINGDOM |
| AVERY DENNISON U.K. LIMITED | UNITED KINGDOM |
| AVERY DENNISON WORLDON VIETNAM JOINT VENTURE COMPANY LIMITED | VIETNAM |
| AVERY DENNISON YONGLE TAPE SDN. BHD. | MALAYSIA |
| AVERY DENNISON (ASIA) HOLDINGS LIMITED | MAURITIUS |
| AVERY DENNISON (CHANGZHOU) FILMS TECHNOLOGY CO., LTD | CHINA |
| AVERY DENNISON (CHINA) COMPANY LIMITED | CHINA |
| AVERY DENNISON (GUANGZHOU) CONVERTED PRODUCTS LIMITED | CHINA |
| AVERY DENNISON (GUANGZHOU) CO., LTD. | CHINA |
| AVERY DENNISON (HONG KONG) LIMITED | HONG KONG |
| AVERY DENNISON (INDIA) PRIVATE LIMITED | INDIA |
| AVERY DENNISON (IRELAND) LIMITED | IRELAND |
| AVERY DENNISON (KENYA) PRIVATE LIMITED | KENYA |
| AVERY DENNISON (KUNSHAN) MATERIALS COMPANY LIMITED | CHINA |
| AVERY DENNISON (SUZHOU) CO. LIMITED | CHINA |
| AVERY DENNISON (THAILAND) LTD. | THAILAND |

---

------

---

| | |
|:---|:---|
| AVERY DENNISON (VIETNAM) LIMITED | VIETNAM |
| AVERY DENNISON, S.A. DE C.V. | MEXICO |
| AVERY GRAPHIC SYSTEMS, INC. | DELAWARE |
| AVERY LLC | DELAWARE |
| AVERY OFFICE PRODUCTS PUERTO RICO L.L.C. | PUERTO RICO |
| AVERY PACIFIC LLC | CALIFORNIA |
| AVERY PROPERTIES PTY. LIMITED | AUSTRALIA |
| AWESOME PROFITS LIMITED | BRITISH VIRGIN ISLANDS |
| CB VELOCITY HOLDINGS, LLC | DELAWARE |
| CB VELOCITY MIDCO, INC. | DELAWARE |
| CHOICE CLEVER PROFITS LIMITED | BRITISH VIRGIN ISLANDS |
| CREATERO GMBH | GERMANY |
| DENNISON INTERNATIONAL COMPANY | MASSACHUSETTS |
| DENNISON MANUFACTURING COMPANY | NEVADA |
| DIGIPRO BV | NETHERLANDS |
| ELECTRONIC IMAGING SERVICES, INC. | DELAWARE |
| EUSTON FINANCIAL LIMITED | BRITISH VIRGIN ISLANDS |
| HANITA COATINGS, USA, LLC | DELAWARE |
| HEBEI YONGLE TAPE CO., LTD | CHINA |
| INTEGRATED RETAIL LIMITED | UNITED KINGDOM |
| JAC ASIA PACIFIC SDN BHD | MALAYSIA |
| JAC CARIBE C.S.Z. | DOMINICAN REPUBLIC |
| JAC DO BRASIL - LOCAÇÃO DE EQUIPAMENTOS INDUSTRIAIS LTDA | BRAZIL |
| JACKSTADT FRANCE S.N.C. | FRANCE |
| L&E AMERICAS SERVICIOS, S. A. DE C.V. | MEXICO |
| LG GROUP, INC. | DELAWARE |
| LION BROTHERS COMPANY, INC. | DELAWARE |
| LION BROTHERS FAR EAST LIMITED | HONG KONG |
| LION BROTHERS (SHENZHEN) COMPANY LIMITED | CHINA |
| LION-REDCLIFFE & COMPANY LIMITED | HONG KONG |
| MODERN MARK INTERNATIONAL LIMITED | HONG KONG |
| NINGBO AVERY DENNISON SHENZHOU EMBELLISHMENT CO. LTD. | CHINA |
| PAXAR BANGLADESH LIMITED | BANGLADESH |
| PAXAR B.V. | NETHERLANDS |
| PAXAR CANADA CORPORATION | CANADA |
| PAXAR CORPORATION | NEW YORK |
| PAXAR DE EL SALVADOR S. A. DE C. V. | EL SALVADOR |
| PAXAR DE GUATEMALA, S. A. | GUATEMALA |
| PAXAR DE MEXICO S. A. DE C. V. | MEXICO |
| PAXAR DO BRASIL LTDA | BRAZIL |
| PAXAR FAR EAST LIMITED | HONG KONG |
| PAXAR PACKAGING (GUANGZHOU) LTD. | CHINA |
| PAXAR PAKISTAN (PRIVATE) LIMITED | PAKISTAN |
| PAXAR (CHINA) LTD. | HONG KONG |
| PT AVERY DENNISON INDONESIA | INDONESIA |
| PT AVERY DENNISON PACKAGING INDONESIA | INDONESIA |
| PT AVERY DENNISON TRADING INDONESIA | INDONESIA |
| P. T. PACIFIC LABEL INDONESIA | INDONESIA |
| P. T. PAXAR INDONESIA | INDONESIA |
| RIETVELD SERIGRAFIE B.V. | NETHERLANDS |

---

------

---

| | |
|:---|:---|
| RVL AMERICAS, S DE R.L. DE C.V. | MEXICO |
| RVL CENTRAL AMERICA, S. A. | GUATEMALA |
| RVL PACKAGING FAR EAST LIMITED | HONG KONG |
| RVL SERVICE, S. DE R. L. DE C. V. | MEXICO |
| SCI JO-LIO | FRANCE |
| SECURITY PRINTING DIVISION, INC. | DELAWARE |
| SKILLFIELD INVESTMENTS LIMITED | BRITISH VIRGIN ISLANDS |
| SMARTRAC INVESTMENT B.V. | NETHERLANDS |
| SMARTRAC SPECIALTY GMBH | GERMANY |
| SMARTRAC TECHNOLOGY FLETCHER, INC. | DELAWARE |
| SMARTRAC TECHNOLOGY GERMANY GMBH | GERMANY |
| SMARTRAC TECHNOLOGY GMBH | GERMANY |
| SMARTRAC TECHNOLOGY MALAYSIA SDN. BHD | MALAYSIA |
| TEXTRACE AG | SWITZERLAND |
| THERMOPATCH BV | NETHERLANDS |
| THERMOPATCH BORDUUR BV | NETHERLANDS |
| THERMOPATCH DEUTSCHLAND GMBH | GERMANY |
| THERMOPATCH FRANCE SAS | FRANCE |
| THERMOPATCH INTERNATIONAL BV | NETHERLANDS |
| THERMOPATCH POLSKA SP ZOO | POLAND |
| THERMOPATCH SPORTS LTD | UNITED KINGDOM |
| THERMOPATCH UK LTD. | UNITED KINGDOM |
| VESTCOM PARENT HOLDINGS, INC. | DELAWARE |
| W.F. TAYLOR HOLDINGS, INC. | DELAWARE |
| W.F. TAYLOR LLC | DELAWARE |
| WORLDWIDE RISK INSURANCE, INC. | HAWAII |
| YONGLE TAPE LTD | BERMUDA |

---

(1) Each subsidiary listed on this Exhibit 21 is a Consolidated Subsidiary

## Ex-23

**Exhibit 23** 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-286478) and Form S-8 (Nos. 033-54411, 033-58921, 033-63979, 333-38707, 333-38709, 333-107370, 333-107371, 333-107372, 333-109814, 333-124495, 333-143897, 333-152508, 333-166832, 333-166836, 333-166837, 333-181221, 333-197631, 333-217534, 333-226484, 333-268096 and 333-281100) of Avery Dennison Corporation of our report dated February 25, 2026 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

February 25, 2026

## Exhibit 31.1

**Exhibit 31.1** 

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER** 

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

**<u>CERTIFICATION</u>**

I, Deon M. Stander, certify that:

1. I have reviewed this annual report on Form 10-K of Avery Dennison Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/ Deon M. Stander |
| Deon M. Stander |
| President and Chief Executive Officer |

---

February 25, 2026

## Exhibit 31.2

**Exhibit 31.2** 

**CERTIFICATION OF CHIEF FINANCIAL OFFICER** 

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

**<u>CERTIFICATION</u>**

I, Gregory S. Lovins, certify that:

1. I have reviewed this annual report on Form 10-K of Avery Dennison Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/ Gregory S. Lovins |
| Gregory S. Lovins |
| Senior Vice President and<br>Chief Financial Officer |

---

February 25, 2026

## Exhibit 32.1

**Exhibit 32.1** 

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER\*** 

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2025 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 25, 2026

---

| |
|:---|
| /s/ Deon M. Stander |
| Deon M. Stander |
| President and Chief Executive Officer |

---

\*The above certification accompanies the Company's Annual Report on Form 10-K and is furnished, not filed, as provided in SEC Release 33-8238, dated June 5, 2003.

## Exhibit 32.2

**Exhibit 32.2** 

**CERTIFICATION OF CHIEF FINANCIAL OFFICER\*** 

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2025 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 25, 2026

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| |
|:---|
| /s/ Gregory S. Lovins |
| Gregory S. Lovins |
| Senior Vice President and<br>Chief Financial Officer |

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\*The above certification accompanies the Company's Annual Report on Form 10-K and is furnished, not filed, as provided in SEC Release 33-8238, dated June 5, 2003.

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