Recent media reports in China have written about the U.S Securities and Exchange Commission’s (SEC) completion on 28 July of a review of questionable actions that took place at Avery Dennison’s China Reflectives division years ago, and which the Company voluntarily reported to the SEC and to the U.S. Department of Justice (DOJ). The SEC began its review in 2005 and four years later concluded with a settlement between the SEC and Avery Dennison.

On August 10, Avery Dennison was advised by the DOJ that it has declined to take action against the Company in connection with the China Reflective matters.

Here are the key points about the SEC settlement.

• The questionable activities, by a handful of employees at one small division of Avery Dennison China, took place years ago.
• It is important to note that Avery Dennison learned of the employees’ activities and in some cases stopped them before they were completed. In all cases, the Company investigated, determined that the actions plainly violated the Company's Code of Business Conduct, and disciplined those involved. Avery Dennison acted as a responsible corporate citizen in reporting the employee activity to the authorities.
• Avery Dennison voluntarily reported the questionable actions to the SEC and the DOJ. The Company also disclosed the activities to its investors in its annual U.S. regulatory filings starting in 2005.
• The SEC has recognized the Company's efforts to investigate and correct issues on its own, and that was a positive factor in the settlement. Under the settlement, the Company agreed to pay a penalty for a failure to keep accurate record.
• With the settlement, the SEC and DOJ reviews of the China Reflective matters are complete.
• Avery Dennison is committed to serving customers honestly and ethically worldwide. We continue to emphasize to our employees, through a rigorous, continuous training and reporting process, that ethical conduct is critical to our reputation and our success.

Background for Reporters:

The SEC’s procedure for announcing the settlement included posting two documents in separate parts of its website (www.sec.gov). The settlement is described in an Order listed under Administrative Proceedings http://sec.gov/litigation/admin/2009/34-60393.pdf. The second document http://sec.gov/litigation/complaints/2009/comp21156.pdf spells out the allegations that were settled in the first document.

The U.S. Department of Justice is responsible for investigating potential violations of U.S. law, including the U.S. Foreign Corrupt Practices Act (FCPA). The U.S. Securities and Exchange Commission regulates publicly owned companies in the United States and is also responsible for enforcing U.S. securities laws, including the FCPA.