Business Context and Reporting Period
This Form 8-K Current Report from Avery Dennison Corporation covers the period ending March 31, 2005, with the report filed on April 1, 2005. The filing addresses a material definitive agreement related to executive compensation and promotion.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on a specific executive retention agreement.
Material Changes
The primary material change reported is the promotion of Daniel R. O'Bryant from Senior Vice President, Finance and Chief Financial Officer to Executive Vice President, Finance and Chief Financial Officer, effective April 1, 2005. Concurrently, the Company entered into a retention agreement with Mr. O'Bryant on March 31, 2005.
Management Commentary and Unusual Items
The retention agreement includes the following specific financial commitments and equity grants:
- Cash Contribution: A $1 million contribution to Mr. O'Bryant's deferred compensation account on April 1, 2005, vesting at age 55.
- Restricted Stock: A grant of 30,000 shares of restricted stock, vesting in two equal installments on April 1, 2009, and August 14, 2012.
- Stock Options: Annual incremental option grants for the period 2005 through 2011. The value of these grants is calculated as $180,000 divided by the Black-Scholes value of the Company's stock at the time of the annual grant.
Investor Verification Checklist
- Verify the vesting schedule and conditions for the 30,000 restricted stock shares.
- Confirm the calculation methodology for the annual incremental stock options based on the Black-Scholes model.
- Review the impact of the $1 million deferred compensation contribution on the Company's cash flow and deferred liability accounts.
- Check subsequent filings for the actual number of options granted annually between 2005 and 2011.