SENIOR EXECUTIVE LEADERSHIP COMPENSATION PLAN

EXHIBIT 10.30.2

SENIOR EXECUTIVE LEADERSHIP COMPENSATION PLAN

The purposes of the Senior Executive Leadership Compensation Plan, as amended and restated, (“SELCP” or the “Plan”) for Avery Dennison Corporation (the “Company”) are as follows:

The Plan is also intended to enable the Company to provide that bonuses paid under the Plan quality for the exemption for certain performance-based compensation from the limits on deductibility of executive compensation under Section 162(m) of the Internal Revenue Code of 1986.

1

2

Participation in the Plan is limited to key executives of the Company who have been designated as Participants by the Committee. Current Participants in the Plan are the Chairman and Chief Executive Officer and the President and Chief Operating Officer. The Committee may designate other officers in the future.

Participants will have the opportunity to earn an annual variable bonus.

The Target Bonus for each Participant is 150% of Base Salary.

i. A Participant’s annual bonus payout is based on the Company’s achievement versus pre-established Performance Objectives; provided that such Performance Objectives may be adjusted by the Committee within the first 90 days of the beginning of each Plan Year. The definitions of the terms used to determine the Performance Objectives for a Plan Year shall be based upon the definitions of such terms as set forth in Section 2 and as such terms may be used in preparing the Company’s annual reports (including financial statements or reports) or other management reports or as such definitions may be adjusted by the Committee for the purpose of this Plan, all as the Committee shall determine within the first 90 days of such Plan Year.

ii. Within the first 90 days of the beginning of each Plan Year, the Committee will establish Performance Objectives for the Participants (or for each Participant, as determined by the Committee). Specific Performance Objectives will be based upon one or more of the following:

iii. Bonus payouts will be determined based upon a schedule as approved by the Committee within 90 days of the beginning of each Plan Year.

iv. Bonus payouts will be determined based on the formula used to measure the Company’s or the respective business unit(s) (as applicable) results for each Participant, and calculated in accordance with the Performance Objectives as approved by the Committee. The highest annual bonus payout is 225% of the Participant’s base salary in effect at the end of the Plan Year for which the bonus is being paid.

v. The Committee may, in its sole discretion, decrease bonus amounts that would otherwise be payable under the Plan.

vi. No bonus payment will exceed the Bonus Maximum for any Plan Year.

3

Participants who are eligible to receive a bonus under the ELCP during part of the Plan Year and are later designated as Participants under the Plan may, in the Committee’s discretion, receive a bonus under the Plan on a prorated basis.

If a Participant is on an approved leave of absence (including, without limitation, leaves caused by short-term disability) for more than one month during the Plan Year, then the employee will continue to participate for that Plan Year; provided that the Committee may, in its sole discretion, decrease the bonus that would otherwise be payable under the Plan on a prorated basis.

Participants, who terminate prior to payment of the annual bonus for any reason other than death, disability, or retirement, are not eligible to receive bonus payments under this Plan.

No Participant may participate in any other annual Company bonus plan.

The bonus determined by the Committee for each Participant will be paid in cash and in full as soon as conveniently possible after such determination and certification by the Committee of the Company’s achievement of the pre-established Performance Objectives, but in any event not later than three months from the last day of the Plan Year to which such bonus relates; provided that participants may have elected to defer the receipt of all or part of such bonus in accordance with established deferred compensation plans offered by the Company.

The Committee will administer and interpret the provisions of the Plan, which interpretations will be conclusive and binding. The Committee’s authority will include, but is not limited to:

i. Selecting Participants;

ii. Establishing and adjusting the Performance Objectives (including the definitions therefor), and weighting the Performance Objectives, and

iii. Determining and certifying performance results and bonus payments based on achievement of Performance Objectives, subject to the Committee’s discretion to decrease the bonus payments pursuant to Section 4.b.v.

4

The Committee may amend, suspend or terminate the Plan, in whole or in part, at any time, if, in the sole judgment of the Committee, such action is in the best interests of the Company. Notwithstanding the above, any such amendment, suspension or termination must be prospective in that it may not deprive Participants of that which they otherwise would have received under the Plan for the current Plan Year had the Plan not been amended, suspended or terminated.

The effective date of the Plan is January 1, 2004.

Section and Article titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan.

Nothing contained in the Plan nor any action taken in the administration of the Plan will be construed as a contract of employment or as giving a Participant any right to be retained in the service of the Company.

In the event that any provision of the Plan is held to be invalid, void or unenforceable, the same will not effect, in any respect whatsoever, the validity of any other provision of the Plan.

The Company will withhold from all payments to be made under the Plan an amount sufficient to satisfy all federal, state and local tax withholding requirements.

The Plan will be governed in accordance with the laws of the State of California.

5