This proxy statement is being furnished to stockholders on behalf of our Board of Directors (our "Board") to solicit proxies for our Annual Meeting of Stockholders (the "Annual Meeting") to be held on Thursday, April 24, 2014, at 1:30 p.m. Pacific Time at the Hilton Hotel, 100 Glenoaks Boulevard, Glendale, California 91202 and at any adjournment or postponement thereof. The matters to be acted upon at the meeting are set forth in the Notice of Annual Meeting of Stockholders, which appears at the beginning of this document.

HOUSEHOLDING

        We have adopted a procedure approved by the Securities and Exchange Commission (the "SEC") called "householding." Under this procedure, we are permitted to deliver a single copy of our proxy statement and annual report to stockholders sharing the same address. Householding allows us to reduce our printing and postage costs and limits the volume of duplicative information received at your household. Householding affects only the delivery of proxy materials; it has no impact on the delivery of dividend checks.

        For certain holders who share a single address, we are sending only one annual report and proxy statement to that address unless we received instructions to the contrary from any stockholder at that address. If you wish to receive an additional copy of our annual report or proxy statement, or if you received multiple copies of our annual report or proxy statement and wish to receive a single copy in the future, you may make such request by writing to our Corporate Secretary at Avery Dennison Corporation, 207 Goode Avenue, Glendale, California 91203.

        If you are a street name holder and wish to revoke your consent to householding and receive separate copies of our proxy statement and annual report in future years, you may call Broadridge Investor Communications Services toll-free at 800.542.1061 or write to them c/o Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

SHARES ENTITLED TO VOTE

        Stockholders of record as of the close of business on February 24, 2014 are entitled to notice of, and to vote at, the Annual Meeting. Our only class of shares outstanding is common stock and there were 95,974,669 shares of our common stock outstanding on February 24, 2014. A list of stockholders entitled to vote will be available for inspection at the Annual Meeting. Each stockholder of record is entitled to one vote for each share of common stock held on the record date.

VOTING YOUR SHARES

        You may vote by attending the Annual Meeting and voting in person or you may vote by submitting a proxy. If you hold your shares in street name, you may only vote in person

at the meeting if you properly request and receive a legal proxy in your name from the nominee that holds your shares.

        The method of voting by proxy differs depending on whether you are viewing this proxy statement on the Internet or reviewing a paper copy, as follows:

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if you are viewing this proxy statement on the Internet, you may vote your shares by (i) submitting a proxy on the Internet by following the instructions on the website or (ii) requesting a paper copy of the proxy materials and following one of the methods described below; and

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if you are reviewing a paper copy of this proxy statement, you may vote your shares by (i) submitting a proxy on the Internet or by telephone by following the instructions on the proxy card or (ii) completing, dating and signing the proxy card included with the proxy statement and promptly returning it in the preaddressed, postage paid envelope provided.

        We encourage you to vote by telephone or on the Internet since these methods immediately record your votes and allow you to confirm that your votes have been properly recorded. Telephone and Internet voting facilities will close at midnight Eastern Time the night before the Annual Meeting.

Shares Held in Our Direct Share
Purchase and Sale Program

        If you are a participant in our Direct Share Purchase and Sale Program, your shares acquired through the program may be voted by following the procedures described above.

Shares Held in Our Employee Savings Plan or
Our Stock Holding and Retirement Enhancement Plan

        If you are a participant in our Employee Savings (401(k)) Plan or our Stock Holding and Retirement Enhancement (SHARE) Plan, your vote will serve as a voting instruction to Evercore Trust Company, N.A., the trustee of these plans, on how to vote the shares you hold through the plans. Your voting instructions must be received by the trustee by 11:59 p.m. Eastern Time on April 21, 2014 for them to be followed as instructed.

        If your instructions are not timely received, the trustee will vote your shares in the same proportion as shares are

voted by participants in the applicable plan who timely furnish instructions. Shares of our common stock that have not been allocated to participant accounts will also be voted by the trustee in the same proportion as shares are voted by participants in the applicable plan who timely furnish instructions.

REVOKING YOUR PROXY OR CHANGING YOUR VOTE

        A stockholder giving a proxy pursuant to this solicitation may revoke it at any time before it is acted upon at the Annual Meeting by (i) submitting another proxy by telephone or on the Internet (your latest telephone or Internet voting instructions will be followed); (ii) sending a later dated paper proxy; (iii) delivering to our Corporate Secretary a written notice of revocation prior to the voting of the proxy at the Annual Meeting; or (iv) voting in person at the Annual Meeting. Simply attending the Annual Meeting will not revoke your proxy.

        If your shares are held in street name, you may change your vote by submitting new voting instructions to your nominee. You must contact your nominee to find out how you can change your vote. Shares held in the Employee Savings Plan or SHARE Plan cannot be changed or revoked after 11:59 p.m. Eastern Time on April 21, 2014, nor can they be voted in person at the Annual Meeting.

CONFIDENTIALITY OF YOUR VOTE

        Except in contested proxy solicitations, when required by law or as expressly authorized by you (such as by making a written comment on your proxy card, in which case the comment, but not your vote, will be shared with our company), your vote or voting instruction, irrespective of method of submission, is confidential and will not be disclosed to any other person other than the broker, trustee, agent or other person tabulating your vote. None of our directors, officers or employees will be able to access individual stockholder votes.

QUORUM AND VOTES REQUIRED

        Votes cast by proxy or in person at the Annual Meeting will be tabulated by Broadridge Financial Solutions, Inc., the independent agent appointed as inspector of election by our Board. The inspector of election will also determine whether or not a quorum is present. At the Annual Meeting,

determination of the existence of a quorum and tabulation of votes will occur as follows:

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shares represented by proxies that reflect abstentions or "broker non-votes" (which are shares held by a nominee that are represented at the meeting, but with respect to which the nominee is not empowered to vote on a particular proposal) will be counted as shares that are present and entitled to vote at the Annual Meeting for purposes of determining the presence of a quorum. All of the matters scheduled to be considered at the Annual Meeting are "non-routine" under the rules of the New York Stock Exchange ("NYSE") except for Proposal 4, ratification of the appointment of our independent registered public accounting firm. Nominees are prohibited from voting on non-routine items in the absence of instructions from the beneficial owners of the shares; as a result, if you hold your shares in street name and do not submit voting instructions to your nominee, your shares will not be voted on Proposal 1, election of directors; Proposal 2, approval, on an advisory basis, of our executive compensation; or Proposal 3, approval of our Amended and Restated Senior Executive Annual Incentive Plan. We urge you to promptly provide voting instructions to your nominee so that your vote is counted.

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because there is no cumulative voting and this is an uncontested election, each of the director nominees receiving a majority of the votes cast will be elected (for these purposes, "a majority of the votes cast" means that the number of shares voted for a director's election exceeds the number of votes against that director, with abstentions not counted as votes cast). Abstentions and broker non-votes will not count as a vote for or against a nominee's election and therefore will have no effect in determining whether a director nominee has received a majority of the votes cast.

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for Proposal 2, approval, on an advisory basis, of our executive compensation; Proposal 3, approval of our Amended and Restated Senior Executive Annual Incentive Plan; and Proposal 4, ratification of the appointment of our independent registered public accounting firm, the affirmative vote of the majority of the shares represented at the Annual Meeting and entitled to vote on the matter will be the act of the stockholders. Abstentions as to a

particular proposal will have the same effect as a vote against that proposal. Broker non-votes will have no effect on the vote for Proposals 2 or 3. Ratifying the appointment of our independent registered public accounting firm is considered a routine matter on which brokers may vote in their discretion on behalf of beneficial owners. Accordingly, broker non-votes should not be applicable for Proposal 4.

VOTING ON ADDITIONAL BUSINESS

        As of the date of this proxy statement, we know of no other business that will be presented for consideration at the meeting. However, if any other business properly comes before the meeting, votes will be cast in respect of any such other business in accordance with the best judgment of the persons acting pursuant to the proxies.

VOTE RESULTS

        We intend to announce preliminary voting results at the conclusion of the Annual Meeting. We expect to disclose final results in a Current Report on Form 8-K filed with the SEC on or before April 30, 2014.

PROXY SOLICITATION

        We will bear all costs related to this solicitation of proxies. We have retained D. F. King & Co., Inc. to assist in soliciting proxies for a fee of $12,000, plus reimbursement for out-of-pocket expenses incident to the preparation and mailing of our proxy materials. Some of our employees may solicit proxies in person, by telephone or by email; these employees will not receive any additional compensation for their proxy solicitation efforts. We will reimburse banks, brokers and other custodians, nominees and fiduciaries for reasonable out-of-pocket expenses they incur in forwarding our proxy materials to beneficial owners of our common stock. You can help reduce these costs by electing to access proxy materials electronically.

ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT

        This proxy statement and our 2013 Annual Report are available on our website at www.investors.averydennison.com . Information on our website is not and should not be considered part of, nor is it incorporated by reference into, this proxy statement. Instead of receiving paper copies of these documents by mail in the future, you can elect to receive an

email message that will provide a link to these documents on the Internet. By opting to access proxy materials via the Internet, you will be able to access them more quickly; save us the cost of printing and mailing them to you; reduce the amount of mail you receive from us; and help us preserve environmental resources.

        You may enroll to access proxy materials and annual reports electronically for future Annual Meetings by registering online at the following website: https://enroll.icsdelivery.com/avy . If you vote on the Internet, simply follow the prompts on the voting website to link to the electronic enrollment website.

TIME AND LOCATION OF ANNUAL MEETING

        The Annual Meeting will take place at 1:30 p.m. Pacific Time on April 24, 2014 at the Hilton Hotel, 100 Glenoaks Boulevard, Glendale, California 91202.

ANNUAL MEETING PROCEDURES

Admission

        If you attend the Annual Meeting, you will be asked to present personal photo identification. If you are a stockholder of record, you may bring the top half of your proxy card or your Notice to serve as your admission ticket. If you hold your shares in street name, you will be required to present proof of ownership to be admitted into the meeting. Acceptable documentation includes your Notice, a recent brokerage statement or a letter from your nominee evidencing your beneficial ownership of shares of our common stock as of February 24, 2014. If you would like to receive an admission ticket in advance, you may send a written request with proof of ownership to our Corporate Secretary at Avery Dennison Corporation, 207 Goode Avenue, Glendale, California 91203.

        Stockholders will be admitted into the Annual Meeting beginning at 1:00 p.m. Pacific Time and seating will be on a first-come basis. For safety and security reasons, cameras, camera phones, recording equipment, computers, or large bags, briefcases or other packages will not be permitted into the meeting.

Conduct Procedures

        Our Chairman will conduct the Annual Meeting in an orderly and timely manner in accordance with our Amended and Restated Bylaws (our "Bylaws") and Delaware law. To assist the Chairman in fulfilling his responsibilities, we have

established rules for stockholders wishing to address the meeting, copies of which will be made available at the meeting. Only stockholders as of the record date or their properly-appointed proxies may address the meeting, and they may do so only after recognized by our Chairman, who will determine the nature and length of discussion on any particular matter.

        As a result of time constraints and other considerations, we cannot assure you that every stockholder wishing to address the meeting will have the opportunity to do so. However, all stockholders are invited to direct inquiries or comments regarding business matters to our Investor Relations team by email to investorcom@averydennison.com or by mail to Avery Dennison Corporation, 207 Goode Avenue, Glendale, California 91203. In addition, stockholders wishing to address matters to our Board or any of its members may do so as described under Communicating with Our Board of Directors .

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a description of any material relationships between the stockholder (and its associates and affiliates) and the nominee (and its associates and affiliates), as more particularly set forth in our Bylaws;

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as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business, the reasons for conducting the business at the meeting and any material interest the stockholder has in the business being proposed; and

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the name and record address, and class and number of shares owned beneficially and of record, of the stockholder as well as information relating to the stockholder's security ownership in our company as more particularly set forth in our Bylaws.

        We will not permit stockholder proposals that do not comply with the foregoing notice requirements to be brought before the 2015 Annual Meeting.

        ALL STOCKHOLDERS ARE URGED TO VOTE BY TELEPHONE OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE NOTICE OF AVAILABILITY OF PROXY MATERIALS. IF YOU HAVE PROPERLY REQUESTED AND RECEIVED A PAPER COPY OF THIS PROXY STATEMENT, YOU MAY VOTE YOUR SHARES BY (A) SUBMITTING A PROXY BY TELEPHONE OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD OR (B) COMPLETING, DATING AND SIGNING THE PROXY CARD AND PROMPTLY RETURNING IT IN THE PREADDRESSED, POSTAGE PAID ENVELOPE PROVIDED. STOCKHOLDERS OF RECORD MAY OBTAIN A COPY OF THIS PROXY STATEMENT WITHOUT CHARGE BY WRITING TO OUR CORPORATE SECRETARY, AVERY DENNISON CORPORATION, 207 GOODE AVENUE, GLENDALE, CALIFORNIA 91203.

        Under the oversight of our Board, we have designed our corporate governance program not only to ensure continued compliance with laws and regulations, the rules of the SEC and the listing standards of the NYSE, but also to reflect best practices as informed by the policies of other public companies, recommendations of our outside advisors, the voting guidelines of our stockholders and the policies of proxy advisory firms.

        Our website includes information about our corporate governance policies and practices, including our Code of Conduct; Code of Ethics for the Chief Executive Officer and Senior Financial Officers; Corporate Governance Guidelines (our "Governance Guidelines"); Charters for the Audit Committee, the Compensation and Executive Personnel Committee (the "Compensation Committee"), and the Governance and Social Responsibility Committee (the "Governance Committee"); and the Audit Committee Complaint Procedures for Accounting and Auditing Matters. Our website also includes copies of our Amended and Restated Certificate of Incorporation (our "Certificate of Incorporation") and our Bylaws. You can access this information by going to the "Corporate Governance" section of our investor website at www.investors.averydennison.com , but should note that information on our website is not and should not be considered part of, nor is it incorporated by reference into, this proxy statement. In addition, you can receive copies of these documents, without charge, upon written request to our Corporate Secretary at Avery Dennison Corporation, 207 Goode Avenue, Glendale, California 91203.

CORPORATE GOVERNANCE HIGHLIGHTS

        As described in further detail in this section, we employ a variety of practices that together ensure that our corporate governance program is aligned with our goals and strategies and reflects best practices, including the following:

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we have Governance Guidelines that provide the overall framework for our corporate governance program;



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each of the standing committees of our Board has a written charter that sets forth the committee's roles and responsibilities;

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our directors are elected annually for a one-year term;



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in uncontested elections, the vote required for the election of directors is a majority of votes cast and incumbent directors not elected must offer to resign;



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our directors must resign on the date of the annual meeting of stockholders that follows their reaching the age of 72;



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except for our Chairman/CEO, all of our directors are independent;



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all members of the Audit, Compensation and Governance Committees of our Board are independent;



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our Chairman is elected, and our Committee Chairmen and members are appointed, annually by our Board and our Lead Independent Director is selected annually by our independent directors;



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our Lead Independent Director provides strong independent leadership of our Board by, among other things, presiding at executive sessions and providing input on Board agendas;



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our Governance Committee oversees an annual performance evaluation of our Board, Committees, Chairman and Lead Independent Director to ensure they are functioning effectively;



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our Board and Committees can engage independent advisors at our company's expense, without obtaining the approval of management;



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our directors have full and complete access to management and other employees of our company;



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our Compensation Committee and/or our full Board reviews succession planning at least annually;



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we have minimum stock ownership guidelines for our directors and officers and, with the exception of our most recently appointed director, all of our directors and NEOs have exceeded their respective guideline level;

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our Governance Committee reviews and monitors our "related person" transactions;



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we do not have supermajority voting provisions in our Certificate of Incorporation or Bylaws;



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we do not have a stockholder rights plan (commonly referred to as a "poison pill") and, although our Board could adopt such a plan without stockholder approval if doing so were in our company's best interests, we would subsequently seek stockholder ratification of the plan;



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we know of no relationship involving our current Compensation Committee members or other directors which requires disclosure in this proxy statement as a "compensation committee interlock"; and



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we annually give our stockholders an advisory vote on our executive compensation.

BOARD OF DIRECTORS

        Our Board currently consists of the following directors:

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Dean A. Scarborough, our Chairman, President and Chief Executive Officer;



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Bradley A. Alford, Retired Chairman and Chief Executive Officer of Nestlé USA, a food and beverage company;



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Anthony K. Anderson, Retired Vice Chair and Managing Partner of Ernst & Young LLP, an assurance, tax, transaction and advisory services firm;



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Peter K. Barker, Retired Chairman of California of JPMorgan Chase & Co., a global financial services firm;



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Rolf L. Börjesson, Retired Chairman of Rexam, PLC, a consumer packaging company;



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John T. Cardis, Retired National Managing Partner of Deloitte & Touche USA LLP, an audit, consulting and financial advisory services firm;



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Ken C. Hicks, Chairman, President and Chief Executive Officer of Foot Locker, Inc., a specialty athletic retailer;

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Charles H. Noski, Retired Vice Chairman of Bank of America Corporation, a global financial services firm;



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David E. I. Pyott, Chairman and Chief Executive Officer of Allergan, Inc., a global health care company;



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Patrick T. Siewert, Managing Director of The Carlyle Group, a global alternative investment firm;



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Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity, Inc., a full-service restaurant company; and



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Martha N. Sullivan, President and Chief Executive Officer of Sensata Technologies Holding N.V., a sensors and controls company.

        As required by the mandatory director retirement policy contained in our Bylaws and Governance Guidelines, Mr. Cardis is scheduled to retire from our Board on the date of the Annual Meeting.

VALUES AND ETHICS

        Our objective is to achieve leadership positions in our global markets by bringing insight, quality and innovation to end-customers who need to elevate their brands at consumer decision points, improve clarity of information and grow their business efficiently. Integrity, service, teamwork, innovation, excellence and community are the values that provide the foundation of everything we do; they are the core beliefs that guide our actions and support our vision to make every brand more inspiring and the world more intelligent. The following leadership principles represent the characteristics and behaviors we expect from our leaders as they pursue our strategies in a manner consistent with our values and ethics:

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Think Big and Act Boldly.   Bring broad and unique perspectives to ideas or situations, challenging old ways of thinking and taking risks.



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Focus on Customers and the Market.   Uncover insights, trends and best practices and translate them into opportunities and competitive advantage.



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Provide Vision and Direction.   Lead, engage and inspire employees to pursue our vision, encouraging growth and improvement that supports business objectives.

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Drive Action and Execution.   Relentlessly focus on actions that drive business forward, creating structures, processes and communication for swift decisions.



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Rally and Empower People.   Create a desire for people to achieve and share a sense of purpose. Match talents to roles and delegate ownership and control.



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Collaborate Across Boundaries.   Develop and use relationships across our company to find mutually beneficial outcomes and opportunities.



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Build Organizational Capability.   Understand and drive the development of our organization. Initiate improvements and deploy talent to position us for success.



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Model Integrity and Social Responsibility.   Act honestly, ethically and honorably. Show beliefs through behaviors and lead by example. Enrich our communities and make responsible, sustainable decisions.

        The values and ethics embodied in these leadership principles provide the foundation for our corporate governance program. We have a Chief Compliance Officer who, with assistance from our General Counsel, Vice President of Internal Audit and members of their respective teams, partners with our business group leaders to ensure that our values and ethics are being maintained globally.

Code of Conduct

        Our Code of Conduct, which applies to all of our directors, officers and employees and is available in the "Corporate Governance" section of our investor website at www.investors.averydennison.com , is built on our leadership principles, and encourages ongoing dialogue about the choices we make every day to help us make legal and ethical decisions. It highlights our core policies and guides the behavior of our team members:

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in relation to their coworkers, including providing equal employment opportunity, a harassment-free workplace and a safe and drug-free work environment;



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in relation to our company, including maintaining accurate business and financial records, complying with laws and our internal controls, protecting and

properly using company assets and intellectual property, appropriately managing information and not engaging in insider trading, and respecting personal privacy and protecting personal data;

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in relation to our business partners, including avoiding conflicts of interest, not exchanging inappropriate gifts, meals or entertainment, and not holding second jobs or appropriating corporate business opportunities;



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in relation to our customers and markets, including conducting sales and marketing honestly, dealing fairly, and competing in compliance with all applicable antitrust laws;



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in relation to the government, including abiding by all legally recognized trade controls, not taking part in international boycotts, never engaging in bribery or corruption and cooperating fully with government inquiries and investigations; and



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in relation to the world, including considering sustainability and environmental impacts and behaving in a socially responsible manner in the communities in which we operate.

        Our Code of Conduct has been translated into 30 languages and our employees receive training on the code and affirm their commitment to comply with it when they first join our company and periodically thereafter.

        Our Business Conduct GuideLine is a telephone and web-based hotline available at all hours for employees or third parties to report potential violations of our Code of Conduct. The GuideLine is operated by an independent third party and accepts reports in several languages to accommodate the needs of our global workforce and customer/supplier base. All reports are investigated under the direction of our Chief Compliance Officer and senior management, with oversight from the Governance Committee. Our policies prohibit retaliation for good-faith reporting.

Code of Ethics for CEO and Senior Financial Officers

        In addition to our Code of Conduct, we have adopted a Code of Ethics that requires our Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Corporate Controller to act professionally and ethically in fulfilling their responsibilities. These individuals are expected to avoid actual or apparent conflicts between their personal and

professional relationships and disclose any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest to the Governance Committee. In addition, they are expected to cause reports and documents filed with the SEC to contain full, fair, accurate and understandable information; respect the confidentiality of information acquired in the course of the performance of their responsibilities; employ corporate assets and resources in a responsible manner; and report violations of our Code of Ethics to the Chairman of either the Audit Committee or the Governance Committee.

        Only the Governance Committee or Audit Committee can amend or waive the provisions of the Code of Ethics, and any such amendments or waivers must be posted promptly on our website and timely filed on Form 8-K with the SEC. Since the inception of the Code of Ethics in February 2004, no amendments have been made and no waivers have been granted.

CORPORATE GOVERNANCE GUIDELINES

        Our Governance Guidelines provide the corporate governance framework for our company, and represent the beliefs of our Board with respect to the following matters, each of which is discussed in further detail in this section:

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Board Composition.   Our Board generally should consist of eight to 12 directors, each of whom should serve on five or fewer other public company boards and retire on the date of our annual stockholder meeting occurring after he or she reaches age 72, with no established term limits on service.



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Director Qualifications.   The Governance Committee should review the skills and characteristics of individual Board members, as well as the composition of the Board as a whole, and recommend nominees for directorship to our Board.



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Director Independence.   A majority of our directors should satisfy the criteria for independence required by NYSE listing standards.



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Board Leadership Structure.   Our Board through the Governance Committee should periodically consider the appropriateness of our Board leadership structure, with our Board retaining the authority to separate or combine the positions of Chairman and CEO as it deems appropriate. If our CEO is also Chairman, our non-management directors should select an independent director to

serve as Lead Independent Director. In addition, our independent directors should regularly, and in any event at least once per year, meet in executive session.

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Board Committees.   Our Board should have an Audit Committee, Compensation Committee and Governance Committee, in each case comprised only of independent directors. Each of these committees should have a charter setting forth its purposes, goals and responsibilities. Our directors should attend all meetings of the Board and the Committees on which they serve, and are strongly encouraged to attend our annual stockholder meetings.



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Board Duties.   Directors should exercise their reasonable business judgment and, in discharging their duties, are entitled to rely on the honesty and integrity of our senior executives, to whom they have full and free access, and any independent legal, financial or other advisors they deem necessary or appropriate, which they may engage at our expense. Our Board should regularly review our long-term strategic plans, including the major risks facing our company, and periodically conduct succession planning through the Compensation Committee.



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Continuous Board Improvement.   All new directors should participate in an orientation program after joining our Board to familiarize themselves with our management team; strategic plans; significant financial, accounting and risk management matters; compliance programs; conflict of interest policies; and internal and independent auditors. Our Board, through the Governance Committee, should conduct an annual performance evaluation to determine whether our Board and Committees are functioning effectively and recommend identified improvements therefrom.

BOARD COMPOSITION

        Our Bylaws provide for our Board to consist of between eight and 13 directors, with the exact number fixed from time to time by Board resolution. Our Board currently has fixed the number of directors at 12, one of whom (Mr. Cardis) is scheduled to retire on the date of the Annual Meeting and 11 of whom are nominated for election at the Annual Meeting. Our Board currently intends to reduce the size of the Board from 12 to 11 upon Mr. Cardis's retirement. As a result, if all

nominees are elected, our Board will consist of 11 directors following the Annual Meeting.

        Excluding Mr. Cardis, the ages of our directors range from 57 to 71, with an average age of 60. Their lengths of service range from one to 14 years, with an average tenure on our Board of approximately eight years. None of our directors serves on more than two other boards of SEC-reporting companies, except for Mr. Anderson, who is retired and serves on three other such boards.

DIRECTOR QUALIFICATIONS

Selection of Director Nominees

        Director nominees are recommended by the Governance Committee for nomination by our Board and election by our stockholders. Director nominees may also be recommended by the Governance Committee for appointment to our Board, with election by stockholders to follow at the next Annual Meeting. Our Board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a mix of complementary experience, knowledge and abilities that will allow our Board to fulfill its responsibilities.

        In considering whether to recommend a candidate as a director nominee, including candidates recommended by stockholders, the Governance Committee applies a number of criteria described in our Governance Guidelines. This assessment includes consideration of a potential nominee's ability to qualify as independent, to ensure that a substantial majority of our Board remains independent; relevant business experience (considering factors such as size, the particular industry, scope, complexity and international operations); time commitments, including other boards on which the nominee serves; potential conflicts of interest; ability to contribute to the oversight and governance of our company; and ability to represent the balanced interests of stockholders as a whole, rather than those of any special interest group in the context of the needs of our Board. For incumbent directors, these factors also include contributions to our Board and Committees; attendance record at Board and Committee meetings; compliance with our director stock ownership policy; and mandatory retirement date to assist with Board succession planning. The Governance Committee does not assign specific weights to the criteria and no particular criterion is necessarily applicable to all nominees.

        The Governance Committee reviews the qualifications of any candidate with those of current directors to determine

coverage and gaps in experience in relevant industries and in diverse functional areas, such as finance, manufacturing, technology, and investing. Sources for identifying potential nominees may include existing Board members, our executive officers, third-party search firms, and stockholders.

Consideration of Diversity

        Although we do not have a formal policy regarding the consideration of diversity in identifying director nominees, the Governance Committee seeks to recommend nominees with a broad diversity of experience, profession, skill, geographic representation and background, which may include consideration of personal characteristics such as race, color, gender and national origin. While diversity is a consideration, nominees are not chosen or excluded solely or primarily based on such basis; rather, the Governance Committee focuses on skills, expertise and background to complement the existing Board in light of the diverse and global nature of our businesses and operations.

Stockholder Submission of Director Nominees

        Stockholders may recommend director candidates by submitting the candidate's name, together with his or her biographical information, professional experience and written consent to nomination, to:

Governance Committee Chairman
c/o Corporate Secretary
Avery Dennison Corporation
207 Goode Avenue
Glendale, California 91203

        To be considered at the 2015 Annual Meeting, stockholder nominations must comply with the requirements described in Submission of Stockholder Proposals for 2015 Annual Meeting . The Governance Committee considers stockholder nominees on the same basis as it considers all other nominees.

Qualifications of Current Directors

        The qualifications, professional experiences and areas of expertise that are particularly desirable for our directors to possess in order to provide oversight and stewardship of our company include the following:

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Senior Leadership Experience.   Senior leadership experience as president, chief executive officer or in similar senior executive positions provides directors with valuable external insights. In addition, this

experience provides us with alternative perspectives with which to assess our operations, execute our strategies and mitigate related risks, and improve our policies and procedures.

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Nine of our directors are current or former presidents, chief executive officers or equivalent business leaders.



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Global Operations Experience.   We are a global enterprise with manufacturing and research and development facilities and corporate, sales and other administrative offices all over the world. Current or former executives in global businesses and firms have specific insights into the geographic markets in which we operate, helping us navigate mature markets, as well as seize opportunities in higher-growth emerging markets.



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All of our directors have significant international experience, having worked in other regions of the world and/or as senior executives of global enterprises or firms.



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Industry Knowledge.   Knowledge and experience in the retail, packaging and consumer goods industries helps us better understand the needs of our customers as a lens for reviewing our business strategies, as well as evaluating acquisition and divestiture opportunities.



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Six of our directors have valuable experience in the industries that are served by our businesses.



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Financial Expertise.   Directors who have developed financial expertise through significant accounting, auditing, tax, banking, insurance, or investment experience help us review our financial statements, formulate our capital structure, manage our stockholder distributions, undertake complex financial transactions, and oversee our accounting, financial reporting and internal control processes.



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Five of our directors have financial expertise through service as chief financial officer of a large enterprise, audit partner at a global independent registered public accounting firm, or managing director or equivalent level experience in banking, investment or insurance.

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Public Company Board and Corporate Governance Experience.   Directors with prior or concurrent service on other SEC-reporting company boards have a solid understanding of the extensive and complex oversight responsibilities of directors in the current environment, particularly with respect to corporate governance and executive compensation matters. In addition, they help reinforce management accountability, increase transparency and ensure focus on maximization of long-term stockholder value.



•

Eleven of our directors currently serve or have served on boards of other SEC-reporting companies.

Director Updates Since 2013 Annual Meeting

        Our Governance Guidelines require that directors who change the principal occupation, position or responsibility they held when they were elected to our Board volunteer to resign from the Board. A director who changes his or her position or retires should not necessarily leave our Board, rather the Governance Committee should review the continued appropriateness of Board membership in light of the relevant circumstances. None of our directors experienced any such change since the 2013 Annual Meeting.

        Our Governance Guidelines also require that directors advise our Chairman and the Governance Committee Chairman before accepting an invitation to serve on another public company board and that the Governance Committee review a director's continued ability to fulfill his or her responsibilities as a Board member if he or she serves on more than five other public company boards. None of our directors either serves on more than five other public company boards or accepted an invitation to serve on another public company board since the 2013 Annual Meeting.

DIRECTOR INDEPENDENCE

Director Independence Standards

        Our Governance Guidelines require that our Board be comprised of a majority of directors who satisfy the criteria for independence under NYSE listing standards. These standards also require that our audit, compensation and nominating committees be comprised entirely of independent directors. An independent director is one who meets the independence requirements of the NYSE and who our Board

affirmatively determines has no material relationship with our company, directly or indirectly as a partner, stockholder or officer of an entity with which we have a relationship.

Director Independence Analysis in 2014

        Each year, our directors and director nominees complete a questionnaire designed to solicit disclosures that may have a bearing on the annual independence determination, including all relevant relationships they have with our company, directly or indirectly through our company's sale or purchase of products or services to or from the companies or firms with which they are affiliated. Our Board, through the Governance Committee, reviews with our General Counsel and Corporate Secretary any relevant disclosures made in the questionnaires, as well as transactions our company has with director-affiliated entities. In February 2014, the Governance Committee reviewed the following director relationships:

•

Mr. Hicks.   Our Retail Branding and Information Solutions division sells products to Foot Locker, Inc., for which Mr. Hicks serves as chairman, president and chief executive officer. The payments we received from Foot Locker were on competitive terms, in the ordinary course of business, and under $1 million in each of the last three fiscal years, which is below the threshold set forth in the NYSE's independence standards. Mr. Hicks did not have a direct or indirect material interest in these transactions.



•

Mr. Scarborough.   Mr. Scarborough serves as our Chairman, President and Chief Executive Officer.

Director Independence Determination in 2014

        After review and discussion of the relevant facts and circumstances, including the amounts involved and the director's interest therein, the Governance Committee concluded that only Mr. Scarborough had a relationship that was disqualifying under NYSE listing standards, otherwise material or impairing of director independence. As a result, upon recommendation of the Governance Committee, our Board affirmatively determined the directors in the following table to be independent.

        These 11 directors constitute 92% of our current 12-member Board. After Mr. Cardis retires in April 2014, assuming all of the individuals nominated for election are elected at the Annual Meeting, 10 directors of our 11-member Board, or 91%, will be independent.

BOARD LEADERSHIP STRUCTURE

        Our CEO currently serves as Chairman and we have a Lead Independent Director with broad authority and responsibility. We believe that this structure is appropriate because it allows for one individual to speak as our leader with a cohesive vision for our company, the ability to execute that vision, and the understanding of the significant enterprise risks that need to be mitigated or overcome to achieve that vision. Combined leadership at the top provides the necessary flexibility for us to respond to the changing needs of our diverse businesses in today's globally interdependent economic environment. Balancing our combined Chairman and CEO is our Lead Independent Director, who has critical duties in the boardroom to ensure effective and independent oversight, and our Committee Chairmen, all of whom are independent. Our independent directors have robust and candid discussions at regular executive sessions presided over by the Lead Independent Director during which they discuss the performance of our company, CEO and management. With the independent members of the Compensation Committee conducting a rigorous annual evaluation of the CEO's performance that is discussed by all independent directors during executive session and the independent members of the Governance Committee overseeing an annual performance evaluation of our Chairman and Lead Independent Director, we believe our Board leadership structure provides independent oversight of our company.

        Our Board believes that, in part because assigning the responsibilities of the roles of Chairman and CEO can be a useful component of succession planning, our Board leadership structure should be reevaluated periodically by our Board through the Governance Committee. The Governance Committee generally performs this evaluation annually and last did so in February 2014.

Chairman & Chief Executive Officer Dean Scarborough

        Mr. Scarborough currently serves as our Chairman. He joined the Board in May 2000 when he was elected by our Board as our President and Chief Operating Officer. Mr. Scarborough was elected by our Board as President and CEO in May 2005 and in that capacity is responsible for the general supervision, direction and control of our businesses and affairs. In February 2010, our non-management directors first elected Mr. Scarborough to the additional role of Chairman, effective April 2010. Mr. Scarborough serves in these capacities at the pleasure of our independent directors because he does not have an employment agreement, is elected as Chairman only for a one-year term, and his service in that capacity could be immediately terminated upon the election and qualification of a successor.

        The Governance Committee evaluated our Board leadership structure in February 2014 and recommended to our Board that Mr. Scarborough continue serving as Chairman, noting that his leadership generated strong financial performance in 2013 and his service on the board of Mattel, Inc. continues to provide him with additional insights into board processes and decision-making. In addition, he remains best positioned to identify matters of operating and strategic importance for our Board, including the risks to which our businesses and strategies are subject. The Governance Committee recognized that Mr. Scarborough has served as an effective bridge between management and our Board since his election as Chairman, noting that feedback from our independent directors regarding his performance continued to be favorable during the 2013 Board evaluation process.

        Our independent directors determined to continue Mr. Scarborough's service as Chairman based on their continued belief that the combined leadership structure enhances our ability to execute our strategic priorities. Mr. Scarborough was re-elected by our independent directors as Chairman in February 2014 to serve, subject to his election by our stockholders, a one-year term beginning immediately after the Annual Meeting.

Lead Independent Director David Pyott

        With the combined roles of Chairman and CEO, we believe that it is important to have a Lead Independent Director to ensure independent oversight of Board decision-making. Our Governance Guidelines describe the duties of the Lead Independent Director, which give him substantial authority and delineate clear responsibilities to ensure independent stewardship of our Board. These duties include the following:

•

presiding over executive sessions of our Board and meetings of our Board at which the Chairman is not present;



•

serving as liaison between the Chairman and our independent directors;



•

approving certain information sent to our Board;



•

approving meeting agendas and meeting schedules to ensure that appropriate items are discussed and there is sufficient time for discussion of all agenda items;



•

having the authority to call meetings of our independent directors; and



•

if requested by major stockholders, ensuring he is available for consultation and direct communication.

        In connection with its review of our Board leadership structure in February 2014, the Governance Committee determined that Mr. Pyott should remain as Lead Independent Director, noting his strong performance in providing independent stewardship of our Board and that his chairmanship of the Compensation Committee and membership on the Governance Committee continue to provide him with valuable insights on executive compensation and corporate governance matters that are of significant concern to stockholders.

        Upon the Governance Committee's recommendation (with Mr. Pyott abstaining from the vote), our independent directors (with Mr. Pyott abstaining from the vote) selected Mr. Pyott as Lead Independent Director in February 2014 to serve, subject to his election by our stockholders, for a one-year term beginning immediately after the Annual Meeting.

Executive Sessions

        Our Board believes it is important to have executive sessions without our CEO present, which are scheduled during every regular meeting of the Board and may also occur during special meetings of the Board. During 2013, Mr. Pyott presided as Lead Independent Director at two executive sessions of non-management directors (which excluded Mr. Scarborough and included former non-independent director Peter W. Mullin, who retired from the Board on the date of the 2013 Annual Meeting) and three executive sessions of independent directors only (following Mr. Mullin's retirement, which excluded Mr. Scarborough).

BOARD COMMITTEES

        Each of our Board committees has a written charter which describes the purposes, goals and responsibilities of the committee. These charters, which may be found in the "Corporate Governance" section of our investor website at www.investors.averydennison.com , are reviewed by the respective committee on an annual basis, with any recommended changes adopted upon approval by our Board and updated charters promptly posted on our website. During 2013, executive sessions during which members of management were not present were scheduled for each regular meeting of the Audit, Compensation and Governance Committees.

        In February 2014, in connection with its annual appointment of committee chairmen and members, our Board, on the recommendation of the Governance Committee, determined to combine the Audit and Finance Committees, effective immediately after the Annual Meeting. As a result, thereafter our Board anticipates having the following three standing committees: the Audit and Finance Committee, the Compensation Committee and the Governance Committee.

Board/Committee Membership, Meetings & Attendance

        The following table shows the membership of, and number of meetings held by, our Board and Committees, and the percentage of applicable meetings attended by each director, during 2013.

        There were seven meetings of our Board and 18 meetings of Committees of our Board in 2013. Each of our directors attended at least 77% of the aggregate number of meetings of our Board and Committees of which he or she was a member held during 2013, or if shorter, the period of time he or she served during the year; the average attendance of all directors in 2013 was 97%. Directors are strongly encouraged to attend our annual stockholder meetings; with the exception of Mr. Börjesson who was unable to attend due to illness, all of our directors attended the 2013 Annual Meeting.

M = Member        C = Chairman        LID = Lead Independent Director

(1)

Due to illness, Mr. Börjesson was unable to attend the meetings held in April, resulting in his missing the one Finance Committee meeting held during the year, as well as a Governance Committee meeting, a Board meeting and our 2013 Annual Meeting.

(2)

Mr. Cardis is scheduled to retire from our Board on the date of the Annual Meeting.

(3)

Ms. Sullivan was appointed to the Board on February 27, 2013.

Audit Committee

Responsibilities

        The Audit Committee is appointed to assist our Board with the following:

•

overseeing financial statement and disclosure matters, including:



•

reviewing and discussing with management and the independent auditor our quarterly and annual financial results, earnings release documentation and the related reports we file with the SEC;



•

reviewing and discussing with management, the senior internal auditor and the independent auditor

our internal controls report and the independent auditor's attestation thereof;

•

discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements, our critical accounting policies and practices, and material written communications between the independent auditor and management; and



•

discussing with management our major financial risk exposures and the steps taken by us to monitor and control these exposures, including our risk assessment and risk management policies.

•

appointing our independent registered public accounting firm and overseeing our relationship with the firm, including:



•

meeting with the independent auditor to discuss the scope, staffing and fees for the audit;



•

reviewing and evaluating the lead partner of the independent audit team and ensuring the rotation of audit partners as required by law;



•

reviewing the independent auditor's annual report on its internal quality-control procedures and material issues raised by the most recent internal, peer or professional quality-control review of the firm;



•

evaluating the qualifications, performance and independence of the independent auditor, including considering whether the auditor's quality controls are adequate and whether the provision of permitted non-audit services is compatible with maintaining the auditor's independence; and



•

discussing with the engagement partner any significant issues on which the audit team consulted with their national office.



•

overseeing our internal audit function, including:



•

reviewing and approving the appointment, reassignment or dismissal of our senior internal auditor;



•

directly supervising our senior internal auditor in the conduct of his operational responsibilities, while ensuring that he reports administratively to the CFO;



•

reviewing the significant issues reported to management and management's responses thereto; and



•

discussing with our senior internal auditor, independent auditor and management the internal audit department's responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit plan.

•

performing compliance oversight responsibilities, including:



•

reviewing and discussing the independent auditor's findings related to any illegal act that has come to its attention during the course of its audit;



•

establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters;



•

discussing with management and the independent auditor significant correspondence with regulators or governmental agencies that raises material issues regarding our financial statements or accounting policies; and



•

discussing with our General Counsel legal matters that may have a material impact on our financial statements or compliance policies.

        All members of the Audit Committee satisfy the enhanced independence standards for audit committee members set forth in SEC rules and NYSE listing standards. Our Board has designated each of Messrs. Anderson, Barker, Cardis and Noski as an "audit committee financial expert" under applicable SEC regulations.

Complaint Procedures for Accounting and Auditing Matters

        The Audit Committee is responsible for ensuring that complaints related to accounting, accounting standards, internal accounting controls and audit practices are treated appropriately and has adopted procedures for the confidential, anonymous submission of complaints regarding these matters. These procedures relate to complaints for fraud or deliberate error in the preparation, evaluation, review or audit of any of our financial statements or other financial reports; fraud or deliberate error in the recording and maintaining of our financial records; deficiencies in or noncompliance with our internal accounting controls; misrepresentation or false statement to or by a senior officer or accountant regarding a matter contained in our financial records, financial statements, or other financial reports; or deviation from full and fair reporting of our financial condition.

Any person, including third parties, may submit a good faith complaint regarding accounting and auditing matters; employees may do so without fear of dismissal or other retaliation. The Audit Committee oversees these procedures, and investigations are conducted under the direction of our internal audit department in consultation with counsel and other members of senior management to the extent appropriate under the circumstances.

        Stockholders and other interested parties interested in communicating regarding the Audit Committee Complaint Procedures for Accounting and Auditing Matters may (i) make an anonymous, confidential call to our Business Conduct GuideLine at 888.567.4387 toll-free in the United States or at 704.731.0166 collect from outside the United States or (ii) write to:

Audit Committee Chairman
c/o Corporate Secretary
Avery Dennison Corporation
207 Goode Avenue
Glendale, California 91203

•

making recommendations to our Board on our compensation strategy, incentive plans and employee benefit programs;



•

reviewing and discussing with management the Compensation Discussion and Analysis (CD&A) and recommending that the CD&A, as well as the Compensation and Executive Personnel Committee Report, be included in our annual proxy statement;



•

overseeing our stockholders' approval of certain executive compensation matters, including advisory votes on executive compensation and the frequency of such votes;



•

periodically discussing with management and evaluating the extent to which our company's compensation policies and programs may create incentives that encourage excessive risk-taking;



•

recommending to our Board appropriate compensation programs and levels for our non-employee directors; and



•

conducting and periodically reporting to our Board on succession planning for our CEO and other senior executives.

        All members of the Compensation Committee satisfy the enhanced independence standards for compensation committee members set forth in SEC rules and NYSE listing standards. In addition, all Compensation Committee members qualify as "non-employee directors" for purposes of Rule 16b-3 under the Exchange Act, and as "outside directors" for purposes of Section 162(m) of the Internal Revenue Code (as amended, the "Code").

        The Compensation Committee may delegate authority to subcommittees or the CEO when appropriate. For information on the processes and procedures followed by the Compensation Committee in considering and determining executive compensation and the roles of its compensation consultant and our CEO in those processes and procedures, see Compensation Discussion and Analysis .

Committee Compensation Advisors

        Committee Authority

        Under its charter, the Compensation Committee has the authority, in its sole discretion, to obtain advice and

assistance from internal or external advisors. The Compensation Committee may retain and terminate any compensation consultant or other external advisor and has sole authority to approve any such advisor's fees and other terms and conditions of the retention and receives appropriate funding from our company for the retention. In retaining its advisors, the Committee must consider each advisor's independence from management, in accordance with SEC rules and NYSE listing standards.

        Advisor Independence

        The Compensation Committee considered the independence of its advisors in December 2013 in accordance with SEC rules and NYSE listing standards, evaluating, among other things, any business or personal relationships with the members of the advisory team. At that time, the Compensation Committee affirmatively determined its compensation consultant, Towers Watson, to be independent.

        Towers Watson and the Compensation Committee have had the following protocols in place since the commencement of the engagement to establish and maintain Towers Watson's independence from management:

•

the Compensation Committee has the sole authority to select, retain and terminate Towers Watson, as well as authorize the firm's fees and determine the other terms and conditions that govern the engagement;



•

the Compensation Committee directs Towers Watson on the process for delivery and communication of its work product, including its analyses, findings, conclusions and recommendations;



•

in the performance and evaluation of its duties, Towers Watson is accountable, and reports directly, to the Compensation Committee; and



•

the Compensation Committee may meet with Towers Watson at any time, with or without members of management present, at the committee's sole discretion.

        In December 2013, the Compensation Committee conducted a review of potential conflicts of interest of Towers

Watson and the members of the engagement team advising the Committee, including the firm's policies and procedures designed to prevent conflicts of interest, in connection with its annual assessment of the consultant's performance and determined that there were no such conflicts.

        2013 Compensation Consultant Services,
Fees and Performance

        During 2013, the Compensation Committee directly retained Towers Watson as its compensation consultant. Towers Watson assists the Compensation Committee by providing competitive market compensation data for senior executives; conducting periodic reviews of elements of our non-employee director, officer and employee compensation programs; identifying best practices in annual and long-term incentive compensation design, including performance objectives and weightings thereof; and sharing executive and non-employee director compensation trends, issues and regulatory developments.

        Representatives of Towers Watson were present at every Compensation Committee meeting held in 2013, and may be consulted in between meetings at the Compensation Committee's discretion. Towers Watson performed no services for our company in 2013 other than its work undertaken for or at the request of the Compensation Committee, except for assistance calculating the amounts contained in the table included in the "Potential Payments Upon Termination or Change of Control" section of our 2013 proxy statement and assessing the potential impacts thereon of Section 280G of the Code. In 2013, Towers Watson received $248,183 in compensation, excluding reimbursement for reasonable expenses, from our company, over 90% of which was for professional services directly performed for or at the request of the Compensation Committee.

        The Compensation Committee conducted its annual assessment of Towers Watson's performance in December 2013, which included a review of various performance measures and evaluation criteria as well as the fees paid for the firm's services. The Compensation Committee determined that it remained satisfied with the performance of Towers Watson and the individual members of the firm serving the committee.

Governance and Social Responsibility Committee

        Pursuant to its charter, the Governance Committee is appointed by our Board to:

•

assist our Board in identifying individuals qualified to become Board members consistent with criteria approved by our Board and recommend to our Board director nominees for election at annual meetings of stockholders or appointment between annual meetings;



•

recommend to our Board the structure, membership and chairmanship of our Board committees;



•

recommend to our Board the directors that satisfy the independence requirements of the NYSE and SEC;



•

review and report to our Board regarding our company's "related person" transactions;



•

oversee and conduct an annual performance evaluation of our Board and its Committees;



•

review and reassess the adequacy of our Governance Guidelines and recommend any necessary or desirable changes to our Board;



•

review our social responsibility initiatives;



•

review the impact of our business operations and business practices on matters of sustainability and corporate citizenship;



•

oversee the effectiveness of our values and ethics program and Code of Conduct; and



•

report, and make recommendations to our Board regarding, instances where a significant conflict of interest could exist or when significant questions arise related to the interpretation or enforcement of our legal and ethical conduct policy.

Finance Committee

        In addition to the above committees required by applicable SEC rules and NYSE listing standards, we also had a Finance Committee during 2013. The Finance Committee was appointed by our Board to oversee matters relating to our financial affairs and capital requirements and

in that capacity performs the following activities on behalf of our Board:

•

oversees our financial planning policies and practices;



•

reviews our capital structure strategies, including stockholder distributions, financing requirements and pension contributions; and



•

carries out special assignments requested by our Board.

        In February 2014, in connection with its annual appointment of committee chairmen and members, our Board, on the recommendation of the Governance Committee, determined to combine the Audit and Finance Committees, effective immediately after the Annual Meeting. As a result, going forward, our Board will no longer have a separate standing Finance Committee.

BOARD DUTIES

Oversight of Risks Confronting Our Businesses

        Management is responsible for the day-to-day management of risks confronting our businesses, but our Board has broad oversight responsibility for our risk management programs, including enterprise risk management (ERM) oversight. We have a Chief Compliance Officer who, with assistance from our Vice President of Internal Audit and members of their respective teams, provides support and drives ERM accountability into our businesses, ensures that our business groups semiannually complete a risk profile, and semiannually prepares a corporate risk profile based on identified business-specific risks as well as enterprise-wide risks. In addition, we have robust global processes that together support a strong internal control environment to promote the early identification and continued management of risks by our company's leadership. Our legal and compliance functions report into our General Counsel to provide independent oversight over our businesses.

        Our Board as a whole oversees risks related to our corporate and business strategies and operations and exercises this responsibility by considering the relevant risks in connection with all of its deliberations and decisions. In performing its oversight role, our Board is responsible for ensuring that the risk management processes designed and implemented by management are functioning, and that

necessary steps are taken to foster a culture of risk-adjusted decision-making within our company. Each year, the full Board receives reports on the strategic plans and risks facing our company as a whole from our CEO and CFO, as well as our individual businesses from our business group Presidents and their management teams. These risks may include financial risks, political and regulatory risks, legal risks, supply chain risks, competitive risks, information technology risks, and risks inherent in the ways in which we do business. Employees who supervise various day-to-day risks, such as environmental, tax and sustainability matters, provide reports periodically to Board Committees, as well as occasionally to our full Board.

        Our Board has delegated to its Committees certain elements of its risk oversight function to better coordinate with management and serve the long-term interests of our stockholders. In this context, the Audit Committee regularly discusses our risk assessment and mitigation processes to ensure that our risk management programs are effective and periodically meets in executive session with each of our CFO, General Counsel, Vice President of Internal Audit, Chief Compliance Officer, and our independent registered public accounting firm. In addition, the Audit Committee oversees our internal control environment and evaluates the effectiveness of our internal controls at least annually.

        Our Board receives reports from Committee Chairmen regarding topics discussed at every Committee meeting, which may include the following areas of risk overseen primarily by its Committees:

•

Audit Committee.   Risks related to accounting; financial reporting processes or statements; internal controls; environmental, health and safety; and legal, compliance and regulatory matters.



•

Compensation Committee.   Risks related to compensation planning and setting; performance objectives for our incentive plans; and succession planning.



•

Governance Committee.   Risks related to corporate governance; board and committee membership and structure; values and ethics; conflicts of interest; related person transactions; corporate citizenship and sustainability; and legal, compliance and regulatory matters.

•

Finance Committee.   Risks related to our capital structure; financing, including borrowing, liquidity and capital allocation; pension plan funding; and stockholder distributions (dividends and stock repurchases).

        The material risks related to our businesses are described under Part I, Item 1A, "Risk Factors," in our 2013 Annual Report on Form 10-K, filed with the SEC on February 26, 2014.

Oversight of Risks Associated with Compensation Policies and Practices

        As described in Compensation Discussion and Analysis , we maintain best practices in compensation and corporate governance that collectively encourage ongoing risk assessment and mitigation. The Compensation Committee has designed our executive compensation program to provide incentives that do not encourage our executives to take excessive risks in managing their businesses or functional areas.

        The Compensation Committee's independent compensation consultant, Towers Watson, last conducted a risk assessment of our executive compensation program and reported to the Compensation Committee regarding its findings in February 2013. Towers Watson evaluated our executive compensation program as a whole, noting the following:

•

the program appropriately balances executive retention with rewarding stockholder value creation;



•

the substantial majority of executive compensation is variable, with a mix that is consistent year to year and with market practices;



•

the incentive mix is well-balanced, with short- and long-term performance metrics that do not overlap, cover different time periods and are balanced among annual financial objectives and long-term economic and stockholder value creation, as well as between growth and efficient use of capital;



•

our Annual Incentive Program (AIP) and long-term incentives (LTIs) (i) appropriately balance profitable growth in the short term and sustainable long-term financial success; (ii) have metrics and weightings that are well-balanced, don't overlap and cover different times; (iii) use multiple performance metrics and measure performance at multiple levels (corporate, business unit and individual); and

(iv) utilize targets established by the Compensation Committee, with awards determined based on our actual performance and a qualitative assessment of the circumstances under which the goals were achieved, with appropriate adjustments to payouts;

•

the Compensation Committee may exercise limited upward and complete downward discretion to adjust AIP and LTI awards based on individual performance;



•

AIP awards are not guaranteed, with below-threshold performance yielding zero payout, and payments subject to caps;



•

the majority of our executive compensation is equity-based to promote long-term performance and sustainable growth;



•

our equity award vehicles (i) are performance-based; (ii) use multiple performance metrics; (iii) are subject to threshold and maximum payout opportunities to encourage appropriate performance focus and limit potential risk-taking; (iv) cliff vest at the end of three years or vest ratably over four years; and (v) are granted annually, with overlapping, multi-year cycles to mitigate short-term risky behavior;



•

our clawback policy is consistent with market practices;



•

our change-in-control and general severance plans are reasonable and appropriate, with change-of-control benefits offered on a double-trigger basis and not grossed up for excise taxes;



•

benefits under our senior executive retirement plan have been frozen and earnings under our only active deferred compensation plan are based on fixed rates and/or the performance of funds selected by the participant, with no investment options that provide above-market interest rates; and



•

our stock ownership guidelines are meaningful and consistent with market practices.

        Based on the above factors and the advice of Towers Watson, the Compensation Committee concluded that our executive compensation program strikes an appropriate

compensation-risk balance and does not encourage excessive risk-taking.

        In addition to these compensation program elements, we have a robust ethics and compliance program to educate executives and employees on risk-mitigating behavior, with adverse employment consequences for any actions determined to have been inappropriate. We encourage employees and third parties to report potential violations of our Code of Conduct and actual or perceived conflicts of interest through multiple reporting channels and with no risk of retaliation. See Values and Ethics .

        Based on the foregoing, the Compensation Committee concluded that our compensation policies and practices do not as a whole create risks that are reasonably likely to have a material adverse effect on our company.

Succession Planning

        Our Board is actively engaged and involved in talent management to identify and cultivate our future leaders. We maintain a robust mid-year and annual performance review process for our employees, as well as a leadership development program that cultivates our leadership principles in our future leaders. Management develops leadership at lower levels of our organization by identifying core talent, cultivating the skills and capabilities that will allow identified individuals to become future leaders, assessing their development in embodying our leadership principles and identifying gaps and developmental needs in skills and experience.

        The Compensation Committee conducts executive succession planning at least annually during our Board's mid-year review of our business strategies. In July 2013 and February 2014, the Compensation Committee reviewed individuals identified as possible CEO succession candidates, including progress in current job position and career development in terms of strategy, leadership and execution. In addition, in July 2013, the Compensation Committee discussed leadership below the executive officer level, identifying the talent that is currently ready – or with continued development on their current trajectory with mentorship and coaching from our current leaders will be ready – to fill executive officer positions in the event of a vacancy.

        Through regular reports to the Board from senior management, our Board has the opportunity to meet with leaders of our company, including executive officers,

business group leaders and functional leaders in areas such as legal, finance, information technology, risk, and human resources. In addition, Board members have freedom of access to all employees, and are encouraged to make site visits to meet local management and attend company events.

CONTINUOUS BOARD IMPROVEMENT

Director Orientation and Continuing Education

        Our director education program consists of periodic visits to our facilities and management presentations regarding our business operations, strategies and risks and our values and ethics, including the policies and practices that guide how we do business. We sponsor in-house orientation and continuing education programs for our Board and provide updates on relevant topics of interest to our Board throughout the meeting calendar. We also reimburse directors who attend accredited director education programs and institutes for program fees and related expenses.

        Our new director orientation generally includes discussion of our corporate vision, strategy and leadership team; investor messaging; the business and strategy of our business groups and divisions; finance matters, including our financial reporting policies and practices, internal control environment, internal audit deployment, tax planning and compliance and capital structure; legal matters, including corporate governance policies and procedures, values and ethics, compliance, and ERM; human resources matters, including executive compensation, succession planning and non-employee director compensation; and our information technology strategy.

Board and Committee Evaluations

        The Governance Committees oversees and conducts an annual performance evaluation of our Board, Chairman and Lead Independent Director, and Board Committees, including the Committee Chairmen. Many of the improvements in our corporate governance practices and Board processes have resulted from the annual evaluation process. Our Board views the annual evaluation process as an integral part of its commitment to cultivating excellence and best practices in its performance.

COMMUNICATING WITH OUR BOARD OF DIRECTORS

Outreach and Engagement

        We value your opinions about our business, and we actively solicit stockholder input through our investor relations program. In this regard, we maintain a robust investor relations calendar that balances direct marketing through investor roadshows, with meetings semi-annually in primary markets such as New York and London and annually in secondary markets such as Chicago and Los Angeles, participating in eight to twelve conferences per year and occasionally meeting one-on-one with institutional investors. In addition, we communicate with analysts covering our company during our quarterly earnings teleconferences.

        You can contact our investor relations department by phone at 626.304.2000 or by email at investorcom@averydennison.com. It is our customary practice promptly to respond to inquiries from our stockholders – whether they be individuals or institutions – and we welcome the feedback on our company, including our corporate governance and executive compensation programs, that this active and ongoing engagement provides.

Contacting our Board

        Stockholders may write to our Board, Chairman, Lead Independent Director, any Committee or Committee Chairman, or any other individual director concerning business-related matters by writing to the group or individual as follows:

Board of Directors
(or a particular subgroup or individual director)
c/o Corporate Secretary
Avery Dennison Corporation
207 Goode Avenue
Glendale, California 91203

        Our Corporate Secretary reviews all communications received and forwards them as addressed. However, unsolicited advertisements, business solicitations, surveys, product-related inquiries, junk mail or mass mailings, resumes or other job-related inquiries – or offensive, illegal or otherwise inappropriate communications that do not substantively relate to the duties and responsibilities of our Board – may not be forwarded.