Avery Dennison Corporation
Compensation And Executive Personnel Committee Charter
The Compensation and Executive Personnel Committee ("Committee") is appointed by the Board to discharge the Board's responsibilities relating to compensation of the Company's Directors and Chief Executive Officer ("CEO") and other senior executive officers ("Senior Executives"). The Committee has overall responsibility for approving and evaluating compensation plans, policies and programs of the Company, as they affect the Directors, CEO and Senior Executives. In addition, the Committee will review plans and candidates for succession to CEO and Senior Executives.
The Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company's annual proxy statement.
The Committee shall consist of no fewer than three members. The members of the Compensation Committee shall meet the independence requirements of the New York Stock Exchange.
The members of the Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee. Committee members may be replaced by the Board.
Committee Authority and Responsibilities
1. The Committee shall annually review
and approve corporate goals and objectives relevant to CEO compensation,
evaluate the CEO's performance in light of those goals and objectives, and
determine and approve the CEO's overall compensation level based on this
evaluation. In determining the incentive components of CEO compensation, the
Compensation Committee shall consider the Company's performance and relative shareholder
return, the value of similar incentive awards to CEOs at comparable companies,
and the awards given to the CEO in past years. Notwithstanding the foregoing,
if any grant or award to the CEO is intended to qualify for the
performance-based compensation exemption from the limitation on deductibility
of executive compensation imposed by Section 162(m) of the Internal Revenue
Code or any successor thereto, the Compensation Committee, rather than the
Board, shall approve such award, but it may refer such award to the Board for
2. The Committee shall annually review and approve the annual base salaries and annual incentive opportunities of the CEO and Senior Executives. In addition and when appropriate, the Committee shall review and approve the following as they affect the CEO and Senior Executives: (a) other incentive awards and opportunities, including both cash-based and equity-based awards and opportunities; (b) employment agreements and severance agreements; (c) change-in-control agreements and change-in-control provisions affecting compensation and benefits. In addition, the Committee shall receive periodic reports and make recommendations to the Board on the Company's non-CEO compensation, incentive-plans and equity-based plans. The Committee shall also review and approve any special or supplemental compensation and benefits for the CEO and the Senior Executives and persons who formerly served as the CEO and/or as Senior Executives, including supplemental retirement benefits and perquisites provided to them during and after employment.
3. The Compensation Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of Director, CEO or Senior Executive compensation and shall have sole authority to approve the consultant's fees and other terms and conditions of the retention of the consultant. The Compensation Committee shall also have authority to obtain advice and assistance from internal or external advisors.
4. The Committee will conduct an annual review of the CEO's performance and will periodically report to the Board on succession planning, including CEO and Senior Executive succession.
5. The Committee may form and delegate authority to subcommittees when appropriate.
6. The Committee shall make regular reports to the Board.
7. The Committee shall review this Charter annually and recommend any proposed changes to the Board for approval. The Compensation Committee shall annually review its own performance.