Document:

EX-10.19.1

Exhibit 10.19.1

AVERY DENNISON CORPORATION

RESTRICTED STOCK UNIT AGREEMENT

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

WHEREAS, Company wishes to grant to Employee an Award of restricted stock units (“RSUs”) with
Dividend Equivalents (“DEs”) under the terms of the Employee Stock Option and Incentive Plan, as
amended and restated (“Plan); and

WHEREAS, the Compensation and Executive Personnel Committee of the Company’s Board of Directors
(hereinafter referred to as the “Committee”), appointed to administer the Plan, has determined that
it would be to the advantage and best interest of Company and its shareholders to grant the RSUs
with DEs (the “RSU Award”) provided for herein to Employee as an inducement to remain in the
service of Company or its Subsidiaries and as an incentive for increased efforts during such
service;

WHEREAS, the Committee has advised the Company of its determination and instructed the undersigned
officers to issue said RSU Award, as authorized under the Plan;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, Company and Employee do hereby
agree as follows:

ARTICLE I – DEFINITIONS

Terms not defined herein shall have the meaning given in the Plan. Whenever the following terms
are used in this Agreement they shall have the meaning specified below unless the context clearly
indicates to the contrary.

	 	 	 
	1.1

	 	Pronouns
	
 
	 	 
	 
	 	 
	
 
	 	The masculine pronoun shall include the feminine and neuter, and

the singular and plural, where the context so indicates.
	 
	 	 
	1.2

	 	Dividend Equivalents
	
 
	 	 

Whenever dividends are paid or distributions made with respect to the Common Stock, Employee
shall be entitled to dividend equivalents (“Dividend Equivalents”) (in an amount equal in
value to the amount of the dividend paid or property distributed on a single share of Common
Stock multiplied by the number of Restricted Stock Units in Employee’s RSU account), which
Dividend Equivalents shall be credited as additional Restricted Stock Units (including any
fractional share) to the Employee’s RSU account as of the record date for such dividend or
distribution.

ARTICLE II — TERMS OF AWARD

	 	 	 
	2.1

	 	RSU Award
	
 
	 	 
	 
	 	 
	
 
	 	In consideration of Employee’s agreement to remain in the

employment of Company or its Subsidiaries during the Restriction

Period (defined below) and for other good and valuable

consideration, on the date hereof the Company grants to Employee

a RSU Award representing * shares of the

Company’s Common Stock, subject to the terms and conditions set

forth in this Agreement and the Plan. Each RSU shall represent

one hypothetical share of Common Stock of the Company. The RSU

Award granted hereunder shall be held in the books and records

of the Company (or its designee) for the Employee’s RSU account.

The RSU Award shall be subject to the restrictions described

herein and shall vest as set forth in this Agreement.
	 
	 	 
	2.2

	 	Restriction Period
	
 
	 	 

	 	(a)	 	No portion of the RSU Award granted hereunder may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of by the Employee until the RSU
Award becomes vested. The period of time between the date hereof and the date the RSU
Award becomes vested (at which time Employee must be employed by the Company, except as
provided in Section 2.4) is referred to herein as the “Restriction Period.” At the
time the RSU Award vests, the RSUs and the DEs vest. Notwithstanding any other
provision, the RSUs and DEs must be vested before the Company is obligated to issue the
 shares of Common Stock as described in Section 3.1(e).

	 	(b)	 	After three fiscal years following the date the RSU Award was granted, the RSU
Award will vest on the date of the Committee’s certification (as described below),
provided that the Company’s return on total capital (“ROTC”) as reported in the annual
report to shareholders (or other report) for the most recently completed fiscal year
equals or exceeds the sixty-seventh (67%) percentile of the return on total capital for
the peer group companies (as listed in the Company’s proxy statement) for such third
fiscal year (the “performance test”). (For example, the initial performance test for
vesting for the RSU Award granted in December 2006 will be based on the return on total
capital for 2009.)

To facilitate the peer group performance comparison needed to determine whether the
RSU Award vests, the figures for peer group companies return on total capital will be
based upon the twelve-month performance for each company in the peer group closest to
the Company’s fiscal year end, using the most recent publicly available financial
information for such companies.

If the Company meets the performance test described above, all prior non-vested RSU
Awards eligible for vesting will vest on the date of the Committee’s certification
that the Company has met the performance test.

If the Company fails to meet the initial performance test described above, all prior
non-vested RSU Awards eligible for vesting will be subject to the same performance
test following the end of the next two fiscal years. If the Company fails to meet
the performance test by the end of the fifth fiscal year following the date of the
grant, then the RSU Award will be forfeited.

	 	(c)	 	Subject to the provisions of this Agreement, if the Employee’s employment with
the Company is terminated for Cause or voluntary termination, the balance of the RSU
Award, which has not vested by the time of the Employee’s Termination of Employment,
shall be forfeited by the Employee, and ownership transferred back to the Company.

	 	 	 
	2.3

	 	Lapse of Restriction Period
	
 
	 	 
	 
	 	 
	
 
	 	The Restriction Period shall lapse when the RSU Award is vested as set forth in this Agreement.
	 
	 	 
	2.4

	 	Change of Control; Good Reason
	
 
	 	 
	 
	 	 
	
 
	 	In the event of a Change of Control or a termination of Employee’s employment for Good Reason (as defined in any

employment agreement or related agreement with the Company), the restrictions in this Agreement will lapse and be

removed, and the RSU Award granted to Employee pursuant to this Agreement will vest as of the date of such Change in

Control or termination for Good Reason.
	 
	 	 
	2.5

	 	Death; Disability
	
 
	 	 
	 
	 	 
	
 
	 	If Employee’s employment with the Company or its Subsidiaries terminates by reason of Employee’s death or Disability

(as defined in any employment agreement or related agreement with the Company, or in the absence of such agreement in

the Plan) the restrictions imposed upon the RSU Award granted to Employee pursuant to this Agreement will lapse and

be removed, and the RSU Award will vest as of the last date of Employee’s employment.
	 
	 	 
	2.6

	 	Retirement
	
 
	 	 

RSU Awards, granted to employees participating in the Senior Executive or the Executive
Leadership Compensation Plans (annual bonus plans), who (i) retire under the Company’s
retirement plan, (ii) have worked for the Company for ten (10) or more years, and (iii) have
a combination of age and service with the Company of seventy five (75) or more, will vest as
of the date of Termination of Employment, provided that the Company has achieved the ROTC
performance test (described in Section 2.2 (b)) herein in at least 3 of the last 5 years
before the year of retirement.

	 	 	 
	2.7

	 	Adjustments in RSU Award
	
 
	 	 
	 
	 	 
	
 
	 	In the event that the outstanding shares of the Common Stock are

changed into or exchanged for a different number or kind of

shares of the Company or other securities of the Company by

reason of merger, consolidation, recapitalization,

reclassification, stock split-up, stock dividend, or combination

of shares, the Committee or the Company shall make an

appropriate and equitable adjustment in the number and kind of

the RSU Award granted hereunder. Such adjustment shall be made

with the intent that after the change or exchange of shares, the

Employee’s proportionate interest shall be maintained as before

the occurrence of such event.

ARTICLE III – ISSUANCE OF COMMON STOCK; SHAREHOLDER RIGHTS

	 	 	 
	3.1

	 	Conditions to and Issuance of Common Stock
	
 
	 	 
	 
	 	 
	
 
	 	The shares of Common Stock deliverable for the RSU Award, or any

part thereof, may be either previously authorized but unissued

shares or issued shares that have then been reacquired by the

Company. Such shares shall be fully paid and nonassessable.

The Company shall not be required to issue or deliver any

certificate or certificates for shares of stock prior to

fulfillment of all of the following conditions:

	 	(a)	 	The admission of such shares to listing on all stock exchanges on which such
class of stock is then listed;

	 	(b)	 	The completion of any registration or other qualification of such shares under
any state or federal law, or under rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body which the Committee or
the Company shall, in its absolute discretion, deem necessary or advisable;

	 	(c)	 	The obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee or the Company shall, in its absolute
discretion, determine to be necessary or advisable;

	 	(d)	 	The receipt by the Company of full payment for all related taxes. The Employee
shall be liable for any and all taxes, including withholding taxes, arising out of this
RSU Award or the vesting of the RSU Award hereunder. The Employee may elect to satisfy
such withholding tax obligation by having the Company retain RSUs having a fair market
value equal to the Company’s minimum withholding obligations.

	 	(e)	 	Subject to the conditions in this Section and Section 4.5 below, the Company
shall issue to the Employee the number of shares of Common Stock represented by the
number of vested RSUs as soon as practical following the vesting of same, but in no
event later than two and one-half (2-1/2) months after the calendar year in which the
RSUs vests. Such issuance of shares of Common Stock constitutes payment of the vested
RSUs and shall satisfy the Company’s obligations under this Agreement.

	 	 	 
	3.2

	 	Shareholder Rights
	
 
	 	 
	 
	 	 
	
 
	 	During the Restriction Period, the Employee shall not have the

rights of a shareholder with respect to the RSU Award granted

hereunder except for the right to Dividend Equivalents on the

RSUs, provided, however, that dividends paid, if any, with

respect to RSUs that have not vested at the time of the dividend

payment, shall be reflected in the books and records of the

Company (or its designee), and shall be subject to the same

restrictions that apply to the corresponding RSUs.

ARTICLE IV – MISCELLANEOUS

	4.1	 	Agreement Subject to Plan

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

	 	 	 
	4.2

	 	Administration
	
 
	 	 
	 
	 	 
	
 
	 	The Committee or the Company shall have the power to interpret

the Plan and this Agreement and to adopt such procedures for the

administration, interpretation and application of the Plan as

are consistent therewith and to interpret or revoke any such

procedures. Nothing in this Agreement or the Plan shall be

construed to create or imply any contract or right of continued

employment between the Employee and the Company (or any of its

Subsidiaries).
	 
	 	 
	4.3

	 	Notices
	
 
	 	 
	 
	 	 
	
 
	 	Any notice to be given under the terms of this Agreement to the

Company shall be addressed to the Company in care of its

Secretary and any notice to be given to the Employee shall be

addressed to him at the address given beneath his signature

hereto. By a notice given pursuant to this Section, either

party may hereafter designate a different address for notices to

be given to him. Any notice that is required to be given to

Employee shall, if Employee is then deceased, be given to

Employee’s Beneficiary or personal representative if such

individual has previously informed the Company of his status and

address by written notice under this Section.
	 
	 	 
	4.4

	 	Titles
	
 
	 	 
	 
	 	 
	
 
	 	Titles are provided herein for convenience only and are not to

serve as a basis for interpretation or construction of this

Agreement.
	 
	 	 
	4.5

	 	Code Section 409A
	
 
	 	 
	 
	 	 
	
 
	 	The RSUs and DEs are not intended to constitute “nonqualified

deferred compensation” within the meaning of Section 409A of the

Internal Revenue Code of 1986, as amended, (“Section 409A”) and

this Agreement shall be interpreted accordingly. However, if at

any time the Committee determines that the RSUs or DEs may be

subject to Section 409A, the Committee or the Company shall have

the right, in its sole discretion, to amend this

Agreement as it may determine is necessary or desirable

either for the RSUs and/or and DEs to be exempt from the

application of Section 409A or to satisfy the requirements of

Section 409A. In order to comply with the requirements of

Section 409A, the Committee or the Company may in its sole

discretion delay the issuance and delivery of Common Stock to

the Employee (as described in Section 3.1 (e) herein), if the

Employee is a “key employee” (as defined in Section 409A or in

associated regulations), for a period of six (6) months from the

date of separation from service (for example, in the event of a

termination of employment for Good Reason or Retirement (as

defined in the Plan and referred to in Section 2.6 herein)).
	 
	 	 
	4.6

	 	Construction
	
 
	 	 
	 
	 	 
	
 
	 	This Agreement and the Plan and all actions taken thereunder

shall be governed by and construed in accordance with the laws

of the State of Delaware, without reference to principles of

conflict of laws.

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

Employee Avery Dennison Corporation

	 	 	 
	
 
	 	By: *
	
 
	 	 
	*

	 	President and Chief Executive Officer

By: *
	 

	 	 
	Address*:

	 	Secretary

• Refer to attached Award Notice.

AVERY DENNISON CORPORATION

RESTRICTED STOCK UNIT AGREEMENT

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

WHEREAS, Company wishes to grant to Employee an Award of restricted stock units (“RSUs”) with
Dividend Equivalents (“DEs”) under the terms of the Employee Stock Option and Incentive Plan, as
amended and restated (“Plan); and

WHEREAS, the Compensation and Executive Personnel Committee of the Company’s Board of Directors
(hereinafter referred to as the “Committee”), appointed to administer the Plan, has determined that
it would be to the advantage and best interest of Company and its shareholders to grant the RSUs
with DEs (the “RSU Award”) provided for herein to Employee as an inducement to remain in the
service of Company or its Subsidiaries and as an incentive for increased efforts during such
service;

WHEREAS, the Committee has advised the Company of its determination and instructed the undersigned
officers to issue said RSU Award, as authorized under the Plan;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, Company and Employee do hereby
agree as follows:

ARTICLE I – DEFINITIONS

Terms not defined herein shall have the meaning given in the Plan. Whenever the following terms
are used in this Agreement they shall have the meaning specified below unless the context clearly
indicates to the contrary.

	 	 	 
	1.1

	 	Pronouns
	
 
	 	 
	 
	 	 
	
 
	 	The masculine pronoun shall include the feminine and neuter,

and the singular and plural, where the context so indicates.
	 
	 	 
	1.2

	 	Dividend Equivalents
	
 
	 	 

Whenever dividends are paid or distributions made with respect to the Common Stock, Employee
shall be entitled to dividend equivalents (“Dividend Equivalents”) (in an amount equal in
value to the amount of the dividend paid or property distributed on a single share of Common
Stock multiplied by the number of Restricted Stock Units in Employee’s RSU account), which
Dividend Equivalents shall be credited as additional Restricted Stock Units (including any
fractional share) to the Employee’s RSU account as of the record date for such dividend or
distribution.

ARTICLE II — TERMS OF AWARD

	 	 	 
	2.1

	 	RSU Award
	
 
	 	 
	 
	 	 
	
 
	 	In consideration of Employee’s agreement to remain in the

employment of Company or its Subsidiaries during the Restriction

Period (defined below) and for other good and valuable

consideration, on the date hereof the Company grants to Employee

a RSU Award representing * shares of the

Company’s Common Stock, subject to the terms and conditions set

forth in this Agreement and the Plan. Each RSU shall represent

one hypothetical share of Common Stock of the Company. The RSU

Award granted hereunder shall be held in [book-entry form in the

books and records] of the Company (or its designee) for the

Employee’s RSU account. The RSU Award shall be subject to the

restrictions described herein and shall vest as set forth in the

Award Notice or as set forth in this Agreement.
	 
	 	 
	2.2

	 	Restriction Period
	
 
	 	 

	 	(a)	 	No portion of the RSU Award granted hereunder may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of by the Employee until the RSU
Award becomes vested. The period of time between the date hereof and the date the RSU
Award becomes vested (at which time Employee must be employed by the Company, except as
provided in Section 2.4) is referred to herein as the “Restriction Period.” At the
time the RSU Award vests, the RSUs and the DEs vest. Notwithstanding any other
provision, the RSUs and DEs must be vested before the Company is obligated to issue the
 shares of Common Stock as described in Section 3.1(e).

	 	(b)	 	Subject to the provisions of this Agreement, if the Employee’s employment with
the Company is terminated for Cause or voluntary termination, the balance of the RSU
Award, which has not vested by the time of the Employee’s Termination of Employment,
shall be forfeited by the Employee, and ownership transferred back to the Company.

	2.3	 	Lapse of Restriction Period

The Restriction Period shall lapse when the RSU Award is vested as set forth in the Award
Notice ( * years from the date of this Agreement) or as otherwise set forth in this
Agreement.

	 	 	 
	2.4

	 	Change of Control; Good Reason
	
 
	 	 
	 
	 	 
	
 
	 	In the event of a Change of Control or a termination of

Employee’s employment for Good Reason (as defined in any

employment agreement or related agreement with the Company), the

restrictions in this Agreement will lapse and be removed, and

the RSU Award granted to Employee pursuant to this Agreement

will vest as of the date of such Change in Control or

termination for Good Reason.
	 
	 	 
	2.5

	 	Death; Disability
	
 
	 	 
	 
	 	 
	
 
	 	If Employee’s employment with the Company or its Subsidiaries

terminates by reason of Employee’s death or Disability (as

defined in any employment agreement or related agreement with

the Company, or in the absence of such agreement in the Plan)

the restrictions imposed upon the RSU Award granted to Employee

pursuant to this Agreement will lapse and be removed, and the

RSU Award will vest as of the last date of Employee’s

employment.
	 
	 	 
	2.6

	 	Retirement
	
 
	 	 

RSU Awards, granted to employees participating in the Senior Executive or the Executive
Leadership Compensation Plans (annual bonus plans), who (i) retire under the Company’s
retirement plan, (ii) have worked for the Company for ten (10) or more years, and (iii) have
a combination of age and service with the Company of seventy five (75) or more, will vest as
of the date of Termination of Employment.

	 	 	 
	2.7

	 	Adjustments in RSU Award
	
 
	 	 
	 
	 	 
	
 
	 	In the event that the outstanding shares of the Common Stock are

changed into or exchanged for a different number or kind of

shares of the Company or other securities of the Company by

reason of merger, consolidation, recapitalization,

reclassification, stock split-up, stock dividend, or combination

of shares, the Committee or the Company shall make an

appropriate and equitable adjustment in the number and kind of

the RSU Award granted hereunder. Such adjustment shall be made

with the intent that after the change or exchange of shares, the

Employee’s proportionate interest shall be maintained as before

the occurrence of such event.

ARTICLE III – RSU CERTIFICATES; SHAREHOLDER RIGHTS

	 	 	 
	3.1

	 	Conditions to and Issuance of Common Stock
	
 
	 	 
	 
	 	 
	
 
	 	The shares of Common Stock deliverable for the RSU Award, or any

part thereof, may be either previously authorized but unissued

shares or issued shares that have then been reacquired by the

Company. Such shares shall be fully paid and nonassessable.

The Company shall not be required to issue or deliver any

certificate or certificates for shares of stock prior to

fulfillment of all of the following conditions:

	 	(a)	 	The admission of such shares to listing on all stock exchanges on which such
class of stock is            then listed;

	 	(b)	 	The completion of any registration or other qualification of such shares under
any state or federal law, or under rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body which the Committee or
the Company shall, in its absolute discretion, deem necessary or advisable;

	 	(c)	 	The obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee or the Company shall, in its absolute
discretion, determine to be necessary or advisable;

	 	(d)	 	The receipt by the Company of full payment for all related taxes. The Employee
shall be liable for any and all taxes, including withholding taxes, arising out of this
RSU Award or the vesting of the RSU Award hereunder. The Employee may elect to satisfy
such withholding tax obligation by having the Company retain RSUs having a fair market
value equal to the Company’s minimum withholding obligations.

	 	(e)	 	Subject to the conditions in this Section, the Company shall issue to the
Employee the number of shares of Common Stock represented by the number of vested RSUs
as soon as practical following the vesting of same, but in no event later than two and
one-half (2-1/2) months after the calendar year in which the RSUs vests. Such issuance
of shares of Common Stock constitutes payment of the vested RSUs and shall satisfy the
Company’s obligations under this Agreement.

	 	 	 
	3.2

	 	Shareholder Rights
	
 
	 	 
	 
	 	 
	
 
	 	During the Restriction Period, the Employee shall not have the

rights of a shareholder with respect to the RSU Award granted

hereunder except for the right to Dividend Equivalents on the

RSU, provided, however, that dividends paid, if any, with

respect to RSUs that have not vested at the time of the dividend

payment, shall be reflected in the books and records of the

Company (or its designee), and shall be subject to the same

restrictions that apply to the corresponding RSUs.

ARTICLE IV – MISCELLANEOUS

	4.1	 	Agreement Subject to Plan

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

	 	 	 
	4.2

	 	Administration
	
 
	 	 
	 
	 	 
	
 
	 	The Committee or the Company shall have the power to interpret

the Plan and this Agreement and to adopt such procedures for the

administration, interpretation and application of the Plan as

are consistent therewith and to interpret or revoke any such

procedures. Nothing in this Agreement or the Plan shall be

construed to create or imply any contract or right of continued

employment between the Employee and the Company (or any of its

Subsidiaries).
	 
	 	 
	4.3

	 	Notices
	
 
	 	 
	 
	 	 
	
 
	 	Any notice to be given under the terms of this Agreement to the

Company shall be addressed to the Company in care of its

Secretary and any notice to be given to the Employee shall be

addressed to him at the address given beneath his signature

hereto. By a notice given pursuant to this Section, either

party may hereafter designate a different address for notices to

be given to him. Any notice that is required to be given to

Employee shall, if Employee is then deceased, be given to

Employee’s Beneficiary or personal representative if such

individual has previously informed the Company of his status and

address by written notice under this Section.
	 
	 	 
	4.4

	 	Titles
	
 
	 	 
	 
	 	 
	
 
	 	Titles are provided herein for convenience only and are not to

serve as a basis for interpretation or construction of this

Agreement.
	 
	 	 
	4.5

	 	Code Section 409A
	
 
	 	 
	 
	 	 
	
 
	 	The RSUs are not intended to constitute “nonqualified deferred

compensation” within the meaning of Section 409A of the Internal

Revenue Code of 1986, as amended (“Section 409A”) and this

Agreement shall be interpreted accordingly. However, if at any

time the Committee determines that the RSUs may be subject to

Section 409A, the Committee shall have the right, in its sole

discretion, to amend this Agreement as it may determine is

necessary or desirable either for the RSUs to be exempt from the

application of Section 409A or to satisfy the requirements of

Section 409A.
	 
	 	 
	4.6

	 	Construction
	
 
	 	 
	 
	 	 
	
 
	 	This Agreement and the Plan and all actions taken thereunder

shall be governed by and construed in accordance with the laws

of the State of Delaware, without reference to principles of

conflict of laws.

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

Employee Avery Dennison Corporation

	 	 	 
	*

Address*:

     

	 	By: *

—

President and Chief Executive Officer

By: *

—

Secretary

• Refer to attached Award Notice.

AVERY DENNISON CORPORATION

RESTRICTED STOCK UNIT AGREEMENT

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

WHEREAS, Company wishes to grant to Employee an Award of restricted stock units (“RSUs”) with
Dividend Equivalents (“DEs”) under the terms of the Employee Stock Option and Incentive Plan, as
amended and restated (“Plan); and

WHEREAS, the Compensation and Executive Personnel Committee of the Company’s Board of Directors
(hereinafter referred to as the “Committee”), appointed to administer the Plan, has determined that
it would be to the advantage and best interest of Company and its shareholders to grant the RSUs
with DEs (the “RSU Award”) provided for herein to Employee as an inducement to remain in the
service of Company or its Subsidiaries and as an incentive for increased efforts during such
service;

WHEREAS, the Committee has advised the Company of its determination and instructed the undersigned
officers to issue said RSU Award, as authorized under the Plan;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, Company and Employee do hereby
agree as follows:

ARTICLE I – DEFINITIONS

Terms not defined herein shall have the meaning given in the Plan. Whenever the following terms
are used in this Agreement they shall have the meaning specified below unless the context clearly
indicates to the contrary.

	 	 	 
	1.1

	 	Pronouns
	
 
	 	 
	 
	 	 
	
 
	 	The masculine pronoun shall include the feminine and neuter,

and the singular and plural, where the context so indicates.
	 
	 	 
	1.2

	 	Dividend Equivalents
	
 
	 	 

Whenever dividends are paid or distributions made with respect to the Common Stock, Employee
shall be entitled to dividend equivalents (“Dividend Equivalents”) (in an amount equal in
value to the amount of the dividend paid or property distributed on a single share of Common
Stock multiplied by the number of Restricted Stock Units in Employee’s RSU account), which
Dividend Equivalents shall be credited as additional Restricted Stock Units (including any
fractional share) to the Employee’s RSU account as of the record date for such dividend or
distribution.

ARTICLE II — TERMS OF AWARD

	 	 	 
	2.1

	 	RSU Award
	
 
	 	 
	 
	 	 
	
 
	 	In consideration of Employee’s agreement to remain in the

employment of Company or its Subsidiaries during the Restriction

Period (defined below) and for other good and valuable

consideration, on the date hereof the Company grants to Employee

a RSU Award representing * shares of the

Company’s Common Stock, subject to the terms and conditions set

forth in this Agreement and the Plan. Each RSU shall represent

one hypothetical share of Common Stock of the Company. The RSU

Award granted hereunder shall be held in [book-entry form in the

books and records] of the Company (or its designee) for the

Employee’s RSU account. The RSU Award shall be subject to the

restrictions described herein and shall vest as set forth in the

Award Notice or as set forth in this Agreement.
	 
	 	 
	2.2

	 	Restriction Period
	
 
	 	 

	 	(a)	 	No portion of the RSU Award granted hereunder may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of by the Employee until the RSU
Award becomes vested. The period of time between the date hereof and the date the RSU
Award becomes vested (at which time Employee must be employed by the Company, except as
provided in Section 2.4) is referred to herein as the “Restriction Period.” At the
time the RSU Award vests, the RSUs and the DEs vest. Notwithstanding any other
provision, the RSUs and DEs must be vested before the Company is obligated to issue the
 shares of Common Stock as described in Section 3.1(e).

	 	(b)	 	Subject to the provisions of this Agreement, if the Employee’s employment with
the Company is terminated for Cause or voluntary termination, the balance of the RSU
Award, which has not vested by the time of the Employee’s Termination of Employment,
shall be forfeited by the Employee, and ownership transferred back to the Company.

	2.3	 	Lapse of Restriction Period

The Restriction Period shall lapse when the RSU Award is vested as set forth in the Award
Notice ( * years from the date of this Agreement) or as otherwise set forth in this
Agreement.

	 	 	 
	2.4

	 	Change of Control; Good Reason
	
 
	 	 
	 
	 	 
	
 
	 	In the event of a Change of Control or a termination of

Employee’s employment for Good Reason (as defined in any

employment agreement or related agreement with the Company), the

restrictions in this Agreement will lapse and be removed, and

the RSU Award granted to Employee pursuant to this Agreement

will vest as of the date of such Change in Control or

termination for Good Reason.
	 
	 	 
	2.5

	 	Death; Disability
	
 
	 	 
	 
	 	 
	
 
	 	If Employee’s employment with the Company or its Subsidiaries

terminates by reason of Employee’s death or Disability (as

defined in any employment agreement or related agreement with

the Company, or in the absence of such agreement in the Plan)

the restrictions imposed upon the RSU Award granted to Employee

pursuant to this Agreement will lapse and be removed, and the

RSU Award will vest as of the last date of Employee’s

employment.
	 
	 	 
	2.6

	 	Adjustments in RSU Award
	
 
	 	 
	 
	 	 
	
 
	 	In the event that the outstanding shares of the Common Stock are

changed into or exchanged for a different number or kind of

shares of the Company or other securities of the Company by

reason of merger, consolidation, recapitalization,

reclassification, stock split-up, stock dividend, or combination

of shares, the Committee or the Company shall make an

appropriate and equitable adjustment in the number and kind of

the RSU Award granted hereunder. Such adjustment shall be made

with the intent that after the change or exchange of shares, the

Employee’s proportionate interest shall be maintained as before

the occurrence of such event.

ARTICLE III – RSU CERTIFICATES; SHAREHOLDER RIGHTS

	 	 	 
	3.1

	 	Conditions to and Issuance of Common Stock
	
 
	 	 
	 
	 	 
	
 
	 	The shares of Common Stock deliverable for the RSU Award, or any

part thereof, may be either previously authorized but unissued

shares or issued shares that have then been reacquired by the

Company. Such shares shall be fully paid and nonassessable.

The Company shall not be required to issue or deliver any

certificate or certificates for shares of stock prior to

fulfillment of all of the following conditions:

	 	(a)	 	The admission of such shares to listing on all stock exchanges on which such
class of stock is            then listed;

	 	(b)	 	The completion of any registration or other qualification of such shares under
any state or federal law, or under rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body which the Committee or
the Company shall, in its absolute discretion, deem necessary or advisable;

	 	(c)	 	The obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee or the Company shall, in its absolute
discretion, determine to be necessary or advisable;

	 	(d)	 	The receipt by the Company of full payment for all related taxes. The Employee
shall be liable for any and all taxes, including withholding taxes, arising out of this
RSU Award or the vesting of the RSU Award hereunder. The Employee may elect to satisfy
such withholding tax obligation by having the Company retain RSUs having a fair market
value equal to the Company’s minimum withholding obligations.

	 	(e)	 	Subject to the conditions in this Section, the Company shall issue to the
Employee the number of shares of Common Stock represented by the number of vested RSUs
as soon as practical following the vesting of same, but in no event later than two and
one-half (2-1/2) months after the calendar year in which the RSUs vests. Such issuance
of shares of Common Stock constitutes payment of the vested RSUs and shall satisfy the
Company’s obligations under this Agreement.

	 	 	 
	3.2

	 	Shareholder Rights
	
 
	 	 
	 
	 	 
	
 
	 	During the Restriction Period, the Employee shall not have the

rights of a shareholder with respect to the RSU Award granted

hereunder except for the right to Dividend Equivalents on the

RSU, provided, however, that dividends paid, if any, with

respect to RSUs that have not vested at the time of the dividend

payment, shall be reflected in the books and records of the

Company (or its designee), and shall be subject to the same

restrictions that apply to the corresponding RSUs.

ARTICLE IV – MISCELLANEOUS

	4.1	 	Agreement Subject to Plan

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

	 	 	 
	4.2

	 	Administration
	
 
	 	 
	 
	 	 
	
 
	 	The Committee or the Company shall have the power to interpret

the Plan and this Agreement and to adopt such procedures for the

administration, interpretation and application of the Plan as

are consistent therewith and to interpret or revoke any such

procedures. Nothing in this Agreement or the Plan shall be

construed to create or imply any contract or right of continued

employment between the Employee and the Company (or any of its

Subsidiaries).
	 
	 	 
	4.3

	 	Notices
	
 
	 	 
	 
	 	 
	
 
	 	Any notice to be given under the terms of this Agreement to the

Company shall be addressed to the Company in care of its

Secretary and any notice to be given to the Employee shall be

addressed to him at the address given beneath his signature

hereto. By a notice given pursuant to this Section, either

party may hereafter designate a different address for notices to

be given to him. Any notice that is required to be given to

Employee shall, if Employee is then deceased, be given to

Employee’s Beneficiary or personal representative if such

individual has previously informed the Company of his status and

address by written notice under this Section.
	 
	 	 
	4.4

	 	Titles
	
 
	 	 
	 
	 	 
	
 
	 	Titles are provided herein for convenience only and are not to

serve as a basis for interpretation or construction of this

Agreement.
	 
	 	 
	4.5

	 	Code Section 409A
	
 
	 	 
	 
	 	 
	
 
	 	The RSUs are not intended to constitute “nonqualified deferred

compensation” within the meaning of Section 409A of the Internal

Revenue Code of 1986, as amended (“Section 409A”) and this

Agreement shall be interpreted accordingly. However, if at any

time the Committee determines that the RSUs may be subject to

Section 409A, the Committee shall have the right, in its sole

discretion, to amend this Agreement as it may determine is

necessary or desirable either for the RSUs to be exempt from the

application of Section 409A or to satisfy the requirements of

Section 409A.
	 
	 	 
	4.6

	 	Construction
	
 
	 	 
	 
	 	 
	
 
	 	This Agreement and the Plan and all actions taken thereunder

shall be governed by and construed in accordance with the laws

of the State of Delaware, without reference to principles of

conflict of laws.

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

Employee Avery Dennison Corporation

	 	 	 
	*

Address*:

     

	 	By: *

—

President and Chief Executive Officer

By: *

—

Secretary

• Refer to attached Award Notice.EX-10.1

Exhibit 10.1

TERMINATION OF CONSULTING AGREEMENT

The undersigned parties to the Consulting Agreement dated August 25, 2005, as amended on
August 23, 2006, (the “Agreement”) hereby agree to terminate the Agreement effective as of November
19, 2006.

IN WITNESS WHEREOF, the parties have caused this Termination of Consulting Agreement to be
executed by their duly authorized representative.

	 	 	 
	Cyberonics, Inc.

	 	BK Consulting
	 

	 	 
	 
	 	 
	By:     /s/ David S. Wise      

	 	By:     /s/ Reese S. Terry, Jr.     
	 

	 	 
	 
	 	 
	David S. Wise, Vice President

	 	Reese S. Terry, Jr.
	 

	 	 
	 
	 	 
	Date:     December 13, 2006     

	 	Date:     December 13, 2006

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