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<SEC-DOCUMENT>/in/edgar/work/0000912057-00-049631/0000912057-00-049631.txt : 20001115
<SEC-HEADER>0000912057-00-049631.hdr.sgml : 20001115
ACCESSION NUMBER:		0000912057-00-049631
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20000930
FILED AS OF DATE:		20001114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AVERY DENNISON CORPORATION
		CENTRAL INDEX KEY:			0000008818
		STANDARD INDUSTRIAL CLASSIFICATION:	 [2670
]		IRS NUMBER:				951492269
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-Q
			SEC ACT:		
			SEC FILE NUMBER:	001-07685
			FILM NUMBER:		764573
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		150 N ORANGE GROVE BLVD
				CITY:			PASADENA
				STATE:			CA
				ZIP:			91103
				BUSINESS PHONE:		6263042000
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		150 N ORANGE GROVE BLVD
					CITY:			PASADENA
					STATE:			CA
					ZIP:			91103
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	AVERY INTERNATIONAL CORP
						DATE OF NAME CHANGE:	19901030
</FORMER-COMPANY>

						FORMER COMPANY:	
							FORMER CONFORMED NAME:	AVERY PRODUCTS CORP
							DATE OF NAME CHANGE:	19760518
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a2029689z10-q.txt
<DESCRIPTION>FORM 10-Q
<TEXT>

<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



                                    FORM 10-Q

(MARK ONE)

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended September 30, 2000

                                                         OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the transition period from ____________ to ____________


                          COMMISSION FILE NUMBER 1-7685

                           AVERY DENNISON CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



         DELAWARE                                                    95-1492269
(State or other jurisdiction                (I.R.S. employer identification no.)
of incorporation or organization)

150 NORTH ORANGE GROVE BOULEVARD, PASADENA, CALIFORNIA                     91103
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                        (ZIP CODE)


        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (626) 304-2000


     Indicate by a check /X/ whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days Yes /X/ No / /

     Number of shares of $1 par value common stock outstanding as of October 27,
2000: 110,358,212


<PAGE>

                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES


                               INDEX TO FORM 10-Q



<TABLE>
<CAPTION>
                                                                                                 PAGE NO.
<S>                                                                                              <C>
Part I.      Financial Information (Unaudited):

Financial Statements:

             Condensed Consolidated Balance Sheet
                  September 30, 2000 and January 1, 2000                                             3

             Consolidated Statement of Income
                  Three and Nine Months Ended September 30, 2000
                  and October 2, 1999                                                                4

             Condensed Consolidated Statement of Cash Flows
                  Nine Months Ended September 30, 2000
                  and October 2, 1999                                                                5

             Notes to Consolidated Financial Statements                                              6

Management's Discussion and Analysis of Results of Operations
 and Financial Condition                                                                            12

Quantitative and Qualitative Disclosures About Market Risk                                          20


Part II.  Other Information:

Exhibits and Reports on Form 8-K                                                                    21

Signatures                                                                                          22

                                               2

<PAGE>

                      PART I. ITEM 1. FINANCIAL INFORMATION
                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                              (Dollars in millions)
                                   (Unaudited)



                                                                          September 30, 2000            January 1, 2000
                                                                          ------------------            ---------------
<S>                                                                        <C>                           <C>
ASSETS
Current assets:
    Cash and cash equivalents                                                $    7.7                    $     6.9
    Trade accounts receivable, net                                              616.4                        542.4
    Inventories, net                                                            291.9                        279.8
    Prepaid expenses                                                             23.4                         23.7
    Deferred tax assets                                                          73.6                         79.4
    Other current assets                                                         25.5                         23.8
                                                                            ---------                    ---------
         Total current assets                                                 1,038.5                        956.0


Property, plant and equipment, at cost                                        1,969.2                      1,934.7
Accumulated depreciation                                                        919.1                        891.2
                                                                            ---------                    ---------
                                                                              1,050.1                      1,043.5


Intangibles resulting from business acquisitions, net                           401.0                        397.0
Other assets                                                                    224.9                        196.0
                                                                            ---------                    ---------
                                                                            $ 2,714.5                    $ 2,592.5
                                                                            =========                    =========


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Short-term debt and current portion of long-term debt                   $    60.4                    $    68.2
    Accounts payable                                                            359.1                        316.8
    Other current liabilities                                                   433.9                        465.4
                                                                            ---------                    ---------
         Total current liabilities                                              853.4                        850.4


Long-term debt                                                                  754.5                        617.5
Deferred taxes and other long-term liabilities                                  240.4                        231.4
Long-term obligation                                                             72.6                         83.3
Shareholders' equity:
    Common stock - $1 par value authorized - 400,000,000
         shares; issued - 124,126,624 shares at September 30, 2000 and
         January 1, 2000                                                        124.1                        124.1
    Capital in excess of par value                                              586.3                        962.3
    Retained earnings                                                         1,413.9                      1,288.5
    Cost of unallocated ESOP shares                                             (16.8)                      (16.8)
    Employee stock benefit trusts, 13,032,619
         at September 30, 2000 and 13,914,515 shares at
         January 1, 2000                                                       (604.3)                   (1,014.0)
    Treasury stock at cost, 13,611,412 shares at
         September 30, 2000 and 11,453,728 shares at January 1, 2000           (602.1)                     (481.3)
    Accumulated other comprehensive loss                                       (107.5)                      (52.9)
                                                                            ---------                    ---------
         Total shareholders' equity                                             793.6                        809.9
                                                                            ---------                    ---------
                                                                            $ 2,714.5                    $ 2,592.5
                                                                            =========                    =========
</TABLE>


                 See Notes to Consolidated Financial Statements

                                                            3

<PAGE>


                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                     (In millions, except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                         Three Months Ended                           Nine Months Ended
                                                         ------------------                           -----------------
                                             September 30, 2000       October 2, 1999       September 30, 2000     October 2, 1999
                                             ------------------       ---------------       ------------------     ---------------
<S>                                                 <C>                     <C>                    <C>                 <C>
Net sales                                           $1,001.7                $961.0                 $2,960.4            $2,823.4
Cost of products sold                                  661.4                 633.5                  1,942.3             1,869.8
                                                    ---------               -------                ---------           ---------
Gross profit                                           340.3                 327.5                  1,018.1               953.6
Marketing, general and
    administrative expense                             215.8                 214.7                    648.7               630.3
Restructuring charge                                       -                     -                        -                65.0
Interest expense                                        14.2                  11.6                     41.1                31.2
                                                    ---------               -------                ---------           ---------
Income before taxes                                    110.3                 101.2                    328.3               227.1
Taxes on income                                         37.3                  35.2                    112.3                79.0
                                                    ---------               -------                ---------           ---------

Net income                                          $   73.0                $ 66.0                 $  216.0            $  148.1
                                                    =========               =======                =========           =========


PER SHARE AMOUNTS:
Net income per common share                         $     .74               $   .66                $    2.19           $    1.49
                                                    =========               =======                =========           =========
Net income per common share,
    assuming dilution                               $     .73               $   .65                $    2.16           $    1.46
                                                    =========               =======                =========           =========
Dividends                                           $     .27               $   .24                $     .81           $     .72
                                                    =========               =======                =========           =========


AVERAGE SHARES OUTSTANDING:
Common shares                                           98.1                  99.3                     98.5                99.4
Common shares, assuming dilution                        99.4                 101.3                    100.2               101.5
</TABLE>


                 See Notes to Consolidated Financial Statements



                                                                  4
<PAGE>


                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (In millions)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                           Nine Months Ended
                                                                                           -----------------
                                                                             September 30, 2000         October 2, 1999
                                                                             ------------------         ---------------
<S>                                                                              <C>                       <C>
OPERATING ACTIVITIES:
Net income                                                                       $216.0                    $148.1
Adjustments to reconcile net income to net cash provided by operating
    activities:
    Restructuring charge                                                             -                       65.0
    Depreciation                                                                   94.6                      94.3
    Amortization                                                                   23.0                      16.0
    Deferred taxes                                                                  7.4                      (9.4)
    Net change in assets and liabilities, net of the effect of
         foreign currency translation, business divestitures, acquisitions
         and restructuring charge                                                 (48.4)                    (37.5)
                                                                                -------                    -------
Net cash provided by operating activities                                         292.6                     276.5
                                                                                -------                    -------


INVESTING ACTIVITIES:
Purchase of property, plant and equipment                                        (120.2)                    (99.4)
Payments for acquisitions, net of divestitures                                    (75.2)                   (167.8)
Other                                                                             (36.0)                      7.7
                                                                                -------                    -------
Net cash used in investing activities                                            (231.4)                   (259.5)
                                                                                -------                    -------


FINANCING ACTIVITIES:
Net increase in short-term debt                                                    96.6                     144.3
Net increase (decrease) in long-term debt                                          38.2                       (.9)
Dividends paid                                                                   (90.6)                     (82.0)
Purchase of treasury stock                                                      (120.8)                    (105.4)
Proceeds from exercise of stock options                                            15.6                      14.2
Other                                                                               1.3                        .4
                                                                                -------                    -------
Net cash used in financing activities                                             (59.7)                    (29.4)
                                                                                -------                    -------
Effect of foreign currency translation on cash balances                             (.7)                      (.3)
                                                                                -------                    -------
Increase (decrease) in cash and cash equivalents                                     .8                     (12.7)
                                                                                -------                    -------
Cash and cash equivalents, beginning of period                                      6.9                      18.5
                                                                                -------                    -------
Cash and cash equivalents, end of period                                        $   7.7                    $  5.8
                                                                                =======                    ======
</TABLE>




                 See Notes to Consolidated Financial Statements



                                       5
<PAGE>


                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

 1.   GENERAL

      The accompanying unaudited consolidated financial statements include
      normal recurring adjustments necessary for a fair presentation of the
      Company's interim results. Certain prior year amounts have been
      reclassified to conform with current year presentation. The condensed
      financial statements and notes in this Form 10-Q are presented as
      permitted by Regulation S-X, and as such, they do not contain certain
      information included in the Company's 1999 annual financial statements and
      notes. This Form 10-Q should be read in conjunction with the Company's
      consolidated financial statements and notes included in the Company's 1999
      Annual Report on Form 10-K.

      The third quarters of 2000 and 1999 consisted of thirteen-week periods
      ending September 30, 2000 and October 2, 1999, respectively. The interim
      results of operations are not necessarily indicative of future financial
      results.

 2.   RESTRUCTURING

      In the first quarter of 1999, the Company announced a major realignment of
      its cost structure designed to increase operating efficiencies and improve
      profitability. The realignment resulted in a pretax restructuring charge
      of $65 million, or $.42 per diluted share on an after-tax basis.

      The restructuring involves the consolidation of manufacturing and
      distribution capacity in both of the Company's operating segments. The $65
      million charge reflects the costs to close manufacturing and distribution
      facilities, the elimination of approximately 1,500 positions (principally
      in manufacturing), and other initiatives to exit activities.

      The significant components of the restructuring charge and the remaining
      balance as of September 30, 2000 (included within "Other current
      liabilities") were as follows:

<TABLE>
<CAPTION>
(In millions)                                      Charge            Amounts Utilized           Balance
                                                   ------            ----------------           -------
<S>                                                <C>                   <C>                    <C>
Severance and related costs                        $35.1                 $29.6                  $5.5
Asset write-downs                                   29.9                  29.1                    .8
                                                   -----                 -----                  ----
                                                   $65.0                 $58.7                  $6.3
                                                   =====                 =====                  ====
</TABLE>

      Severance and related costs represent cash paid or to be paid to employees
      being terminated under the program. Asset write-downs identified as part
      of the restructuring program, principally related to equipment, represent
      non-cash charges required to reduce the carrying value of the assets to be
      disposed of to net realizable value as of the planned date of disposal.


                                       6
<PAGE>


                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

 2.   RESTRUCTURING (CONTINUED)

      Seven plant closures had been initiated, six of which had been completed,
      by the end of the third quarter 2000 and approximately 1,210 employees had
      left the Company. The Company expects to complete the restructuring
      program in 2000.

 3.   NET INCOME PER SHARE

      Net income per common share amounts were computed as follows:

      (In millions, except per share amounts)

<TABLE>
<CAPTION>
                                                   Three Months Ended                Nine Months Ended
                                                   ------------------                -----------------
                                              September 30,    October 2,    September 30,     October 2,
                                                  2000           1999            2000             1999
                                                  ----           ----            ----             ----
<S>                                              <C>              <C>             <C>             <C>
(A)        Net income available to common
           shareholders                         $73.0            $66.0           $216.0          $148.1
                                                ======           ======          =======         =======
(B)        Weighted average number of
           common shares outstanding             98.1             99.3             98.5            99.4

           Additional common shares
           issuable under employee stock
           options using the treasury
           stock method                           1.3              2.0              1.7             2.1
                                                ------           ------          -------         -------
(C)        Weighted average number of
           common shares outstanding
           assuming the exercise of
           stock options                         99.4            101.3            100.2           101.5
                                                ======           ======          =======         =======

Net income per common share (A)/(B)             $  .74           $  .66          $  2.19         $  1.49
                                                ======           ======          =======         =======
Net income per common share, assuming
dilution (A)/(C)                                $  .73           $  .65            $2.16         $  1.46
                                                ======           ======          =======         =======
</TABLE>


 4.   COMPREHENSIVE INCOME

      Comprehensive income includes net income and foreign currency translation
      adjustments that are currently presented as a component of shareholders'
      equity. The Company's total comprehensive income for the three and nine
      months ended September 30, 2000 was $46.4 million and $161.4 million,
      respectively. For the three and nine months ended October 2, 1999 total
      comprehensive income was $68.2 million and $115.4 million, respectively.



                                       7
<PAGE>


                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

 5.   FOREIGN CURRENCY TRANSLATION

      Transactions in foreign currencies and translation of financial statements
      of subsidiaries operating in hyperinflationary economies during 2000
      resulted in losses of $.3 million and $1.5 million, respectively, during
      the three and nine months ended September 30, 2000. For the three and nine
      months ended October 2, 1999, the Company recorded a gain of $.1 million
      and a loss of $1 million, respectively. Operations in hyperinflationary
      economies consist of the Company's operations in Turkey.

 6.   FINANCIAL INSTRUMENTS

      The Company enters into foreign exchange forward, option and swap
      contracts and interest rate contracts to manage exposure to fluctuations
      in foreign currency exchange and interest rates. The Company does not hold
      or purchase any foreign currency or interest rate contracts for trading
      purposes.

      Foreign exchange forward, option and swap contracts that hedge existing
      assets, liabilities or firm commitments are measured at fair value and the
      related gains and losses on these contracts are recognized in net income
      currently. Foreign exchange forward and option contracts that hedge
      forecasted transactions are measured at fair value, and the related gains
      and losses on these contracts are deferred and subsequently recognized in
      net income in the period in which the underlying transaction is
      consummated. In the event that an anticipated transaction is no longer
      likely to occur, the Company recognizes the change in fair value of the
      instrument in net income currently.

      Gains and losses resulting from foreign exchange forward, option and swap
      contracts are recorded in the same category as the related item being
      hedged. Cash flows from the use of financial instruments are reported in
      the same category as the hedged item in the Condensed Consolidated
      Statement of Cash Flows. Gains and losses on contracts used to hedge the
      value of investments in certain foreign subsidiaries are included in a
      component of other comprehensive income.

      The net amounts paid or received on interest rate agreements are
      recognized as adjustments to interest expense over the terms of the
      agreements. Contract premiums paid, if any, are amortized to interest
      expense over the terms of the underlying instruments.



                                       8
<PAGE>


                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

 7.   INVENTORIES

      Inventories consisted of (in millions):
<TABLE>
<CAPTION>
                                                          September 30, 2000             January 1, 2000
                                                          ------------------             ---------------
<S>                                                            <C>                           <C>
Raw materials                                                  $  89.0                       $  86.2
Work-in-progress                                                  71.6                          77.0
Finished goods                                                   157.5                         144.0
LIFO adjustment                                                  (26.2)                        (27.4)
                                                               -------                       -------
                                                               $ 291.9                       $ 279.8
                                                               =======                       =======
</TABLE>

 8.   INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS

      During the first half of 2000, the Company acquired two companies for
      approximately $80 million. The acquisitions represent additions to the
      Company's materials and converting operations and were accounted for using
      the purchase method of accounting. Operating results have been included in
      the consolidated financial statements since acquisition, and the assets
      and liabilities of the entities have been recorded using a preliminary
      estimate of fair value. The excess of the purchase price over the fair
      value of the net assets acquired is approximately $32 million and is being
      amortized over its expected useful life. These businesses are not
      significant in relation to the consolidated financial position and results
      of operations.

      Accumulated amortization of intangible assets at September 30, 2000 and
      January 1, 2000 was $77.9 million and $67 million, respectively.

 9.   RESEARCH AND DEVELOPMENT

      Research and development expense for the three and nine months ended
      September 30, 2000 was $17.7 million and $51.7 million, respectively. For
      the three and nine months ended October 2, 1999, research and development
      expense was $15.4 million and $45.9 million, respectively.

10.   CONTINGENCIES

      The Company has been designated by the U.S. Environmental Protection
      Agency (EPA) and/or other responsible state agencies as a potentially
      responsible party (PRP) at 11 waste disposal or waste recycling sites
      which are the subject of separate investigations or proceedings concerning
      alleged soil and/or groundwater contamination and for which no settlement
      of the Company's liability has been agreed upon. Litigation has been
      initiated by a governmental authority with respect to two of these sites,
      but the Company does not believe that any such proceedings will result in
      the imposition of monetary sanctions. The Company is participating with
      other PRPs at all such sites, and anticipates that its share of cleanup
      costs will be determined pursuant to remedial agreements entered into in
      the normal course of negotiations with the EPA or other governmental
      authorities.


                                       9
<PAGE>

                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

10.   CONTINGENCIES (CONTINUED)

      The Company has accrued liabilities for all sites, including sites in
      which governmental agencies have designated the Company as a PRP, where it
      is probable that a loss will be incurred and the minimum cost or amount of
      loss can be reasonably estimated. However, because of the uncertainties
      associated with environmental assessment and remediation activities,
      future expense to remediate the currently identified sites, and sites
      which could be identified in the future for cleanup, could be higher than
      the liability currently accrued. Based on current site assessments,
      management believes that the potential liability over the amounts
      currently accrued would not materially affect the Company.

      The Company and its subsidiaries are involved in various other lawsuits,
      claims and inquiries, most of which are routine to the nature of the
      business. In the opinion of management, the resolution of these matters
      will not materially affect the Company.

11.   SEGMENT INFORMATION

      Financial information by reportable operating segment is set forth below:
<TABLE>
<CAPTION>

                                                          Three Months Ended             Nine Months Ended
                                                          ------------------             -----------------
                                                     September 30,   October 2,     September 30,   October 2,
(In millions)                                            2000           1999             2000         1999
- -------------                                            ----           ----             ----         ----
<S>                                                   <C>            <C>              <C>             <C>
NET SALES:
Pressure-sensitive Adhesives and Materials            $  544.6       $ 523.4          $1,631.8        $1,516.4
Consumer and Converted Products                          492.3         474.4           1,433.0         1,410.7
Intersegment                                             (35.2)        (37.6)           (104.4)         (108.0)
Divested operations                                          -            .8                 -             4.3
                                                      --------       -------          --------        --------
Net sales                                             $1,001.7       $ 961.0          $2,960.4        $2,823.4
                                                      ========       =======          ========        ========
INCOME (LOSS) FROM OPERATIONS BEFORE
INTEREST AND TAXES:

Pressure-sensitive Adhesives and Materials            $   52.1       $  53.5          $  170.1        $  131.4
Consumer and Converted Products                           79.4          65.9             219.6           153.2
Corporate administrative and research and
development expenses                                      (7.0)         (6.3)            (20.3)          (24.9)
Divested operations                                         -            (.3)               -             (1.4)
                                                      --------       -------          --------        --------
                                                      $  124.5       $ 112.8          $  369.4        $  258.3
Interest expense                                         (14.2)        (11.6)            (41.1)          (31.2)
                                                      --------       -------          --------        --------
Income before taxes                                   $  110.3       $ 101.2          $  328.3        $  227.1
                                                      ========       =======          ========        ========
</TABLE>



                                                                 10
<PAGE>


                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

11.   SEGMENT INFORMATION (CONTINUED)

      Results for the nine months ended October 2, 1999 include a pretax
      restructuring charge of $65 million. The charge was allocated as follows:
      $25.1 million to the Pressure-sensitive Adhesives and Materials segment,
      $37.6 million to the Consumer and Converted Products segment, and $2.3
      million to Corporate. See Note 2 for additional information regarding the
      Company's first quarter 1999 restructuring charge.


12.   FUTURE ACCOUNTING REQUIREMENTS

      In December 1999, the Securities and Exchange Commission issued Staff
      Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
      Statements." SAB No. 101 provides guidance on applying generally accepted
      accounting principles to revenue recognition issues in financial
      statements and is effective the fourth quarter of 2000. The Company is in
      the process of determining the impact of this standard and anticipates
      that it will not have a material impact on the Company's financial
      results.

      In June 1998, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 133, "Accounting for Derivative
      Instruments and Hedging Activities." This Statement requires that all
      derivative instruments be recorded on the balance sheet at their fair
      value. Changes in the fair value of derivatives will be recorded each
      period in current earnings or other comprehensive income. The new rules
      will be effective the first quarter of 2001. The Company is in the process
      of determining the impact of this new standard and, based on current
      market conditions, anticipates that the new rules will not have a material
      impact on the Company's financial results when effective.




                                       11
<PAGE>

                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS: FOR THE QUARTER

Quarterly sales increased to $1,001.7 million, a 4.2 percent increase over third
quarter 1999 sales of $961 million. Excluding the impact of currency, sales grew
7.7 percent. Acquisitions contributed 2 percentage points of sales growth.

Gross profit margin was 34 percent for the quarter compared to 34.1 percent
for the third quarter of 1999. Recent acquisitions and a heavier weighting of
international results offset benefits generated from manufacturing cost
reductions related to the 1999 restructuring and other productivity
improvement programs.

Marketing, general and administrative expense, as a percent of sales, improved
to 21.5 percent compared to 22.3 percent for the third quarter of 1999 due to
increased sales and spending controls.

Interest expense increased to $14.2 million for the quarter, compared to $11.6
million a year ago, primarily reflecting increased debt to fund acquisitions,
share repurchases and capital expenditures.

Income before taxes, as a percent of sales, increased to 11 percent from 10.5
percent a year ago, primarily as a result of the improvement in the marketing,
general and administrative expense ratio. The effective tax rate decreased to
33.8 percent for the quarter compared to 34.8 percent for the third quarter of
1999, primarily due to a more favorable geographic mix of income.

Net income increased 10.6 percent to $73 million compared to $66 million in the
third quarter of 1999. Net income per common share for the quarter was $.74
compared to $.66 in the same period last year, a 12.1 percent increase. Net
income per common share, assuming dilution, was $.73 for the third quarter of
2000 and $.65 for the third quarter of 1999, a 12.3 percent increase year over
year. Excluding the impact of currency exchange rates, net income per common
share, assuming dilution, would have been $.02 higher for the third quarter of
2000.

RESULTS OF OPERATIONS BY REPORTABLE OPERATING SEGMENT

<TABLE>
<CAPTION>
Pressure-sensitive Adhesives and Materials:                                     Three Months Ended
                                                                                ------------------
(In millions)                                                        September 30, 2000        October 2, 1999
- -------------                                                        ------------------        ---------------
<S>                                                                        <C>                   <C>
Net sales                                                                  $544.6                $523.4
Income from operations before interest and taxes                             52.1                  53.5
</TABLE>

The Pressure-sensitive Adhesives and Materials segment reported increased sales
and a slight decrease in income for the third quarter of 2000 compared to the
same period last year. Sales and income in the U.S. operations were negatively
impacted by what the Company believes to be a short-term slowdown in the U.S.
roll materials business. This slowdown is believed to be attributable to
inventory tightening in the retail supply chain. Changes in product life cycles,
new brand strategies and related packaging transitions have led a variety of
retailers and consumer product manufacturers to reduce inventories which, in
turn, has affected packaging companies and label producers. Total international
operations in the segment reported increased sales, driven by volume growth in
Asia, Latin America and Europe as well as the recent acquisition of Adespan in
Europe. Sales growth in Europe was partially offset by changes in foreign
currency rates. Income from the international operations increased primarily due
to increased sales and profitability in the Asian and Latin American businesses.


                                       12
<PAGE>

                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS: FOR THE QUARTER (CONTINUED)

<TABLE>
<CAPTION>

Consumer and Converted Products:                                                 Three Months Ended
                                                                                 ------------------
(In millions)                                                           September 30, 2000     October 2, 1999
- -------------                                                           ------------------     ---------------
<S>                                                                        <C>                      <C>
Net sales                                                                  $492.3                   $474.4
Income from operations before interest and taxes                             79.4                     65.9
</TABLE>

The Consumer and Converted Products segment reported increased sales and income
for the third quarter of 2000 compared to the same period last year. Sales in
the U.S. operations improved primarily due to sales growth for Avery-brand
office products. Income from the U.S. operations increased due to the sales
growth in the office products business and manufacturing cost reductions and
improved productivity related to the prior year's restructuring. Both sales and
income were partially impacted by decreased volume in the Company's consumer
packaging businesses. Solid volume growth in international businesses, including
the worldwide ticketing business in particular, was offset by the negative
impact of foreign currency rate changes. As a result, total sales from
international operations were comparable to the same period last year. Income
from international operations increased due to strong volume growth and improved
profitability in the worldwide ticketing business.


RESULTS OF OPERATIONS: NINE MONTHS YEAR-TO-DATE

Sales for the first nine months of 2000 increased 4.9 percent to $2.96 billion
compared to $2.82 billion in the corresponding period of 1999. Excluding the
impact of currency, sales grew 8.4 percent. Acquisitions contributed 3
percentage points of sales growth.

Gross profit margin for the first nine months increased to 34.4 percent compared
to 33.8 percent for the first nine months of 1999. The improvement was due to
manufacturing cost reductions and improved productivity related primarily to the
1999 restructuring and other productivity improvement programs.

Marketing, general and administrative expense, as a percent of sales, for the
first nine months improved to 21.9 percent compared to 22.3 percent for the
first nine months of 1999 due to increased sales and spending controls.


                                       13
<PAGE>



                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS: NINE MONTHS YEAR-TO-DATE (CONTINUED)

In the first quarter of 1999, the Company announced a major realignment of its
cost structure designed to increase operating efficiencies and improve
profitability. The realignment resulted in a pretax restructuring charge of $65
million, or $.42 per diluted share on an after-tax basis, in the first quarter
of 1999. The restructuring involves the consolidation of manufacturing and
distribution capacity in both of the Company's operating segments. The $65
million charge reflects the costs to close manufacturing and distribution
facilities, the elimination of approximately 1,500 positions (principally in
manufacturing), and other initiatives to exit activities. The restructuring
charge includes severance and related costs for approximately 1,500 positions
($35.1 million), and asset write-downs ($29.9 million). Severance and related
costs represent cash paid or to be paid to employees being terminated under the
program. Asset write-downs identified as part of the restructuring program,
principally related to equipment, represent non-cash charges required to reduce
the carrying value of the assets to be disposed of to net realizable value as of
the planned date of disposal. Seven plant closures had been initiated, six of
which had been completed, by the end of the third quarter 2000 and approximately
1,210 employees had left the Company. In addition, $29.6 million had been paid
for severance and related costs and $29.1 million had been utilized in asset
write-downs. The Company expects to complete the restructuring program in 2000,
and expects cumulative 2000 pretax savings in the range of $38 million to $40
million. When fully implemented, the Company estimates annual savings of
approximately $58 million to $62 million.

Interest expense increased to $41.1 million for the first nine months compared
to $31.2 million for the first nine months of 1999, primarily reflecting
increased debt to fund acquisitions, share repurchases and capital expenditures.

Income before taxes, as a percent of sales, was 11.1 percent compared to 8
percent for 1999, reflecting the $65 million restructuring charge. Excluding the
restructuring charge, income before taxes, as a percent of sales, was 10.3
percent for the first nine months of 1999. The increase reflects the benefits of
manufacturing cost reductions, improved profitability and the improvement in the
marketing, general and administrative expense ratio. The year-to-date effective
tax rate decreased to 34.2 percent for 2000 from 34.8 percent for 1999 primarily
due to a more favorable geographic mix of income. The Company estimates that the
effective tax rate for 2000 will be in the range of 33.5 percent to 34 percent.

Net income totaled $216 million compared to $148.1 million in the first nine
months of 1999. Excluding the restructuring charge in the first quarter of 1999,
net income increased 13.4 percent from $190.5 million. Net income, as a percent
of sales, was 7.3 percent for the first nine months of 2000 and 5.2 percent for
the same period last year. Excluding the restructuring charge, net income, as a
percent of sales, was 6.7 percent for the first nine months of 1999.

Net income per common share for the first nine months was $2.19 compared to
$1.49 for the same period last year. Excluding the restructuring charge, net
income per common share for the first nine months increased 14.1 percent from
$1.92 for the same period last year. Net income per common share, assuming
dilution, was $2.16 for the first nine months of 2000 and $1.46 for the first
nine months of 1999. Excluding the restructuring charge, net income per common
share, assuming dilution, increased 14.9 percent from $1.88 for the same period
last year. Excluding the impact of currency exchange rates, net income per
common share, assuming dilution, would have been $.05 higher for the first nine
months of 2000.


                                       14
<PAGE>


                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS: NINE MONTHS YEAR-TO-DATE (CONTINUED)

RESULTS OF OPERATIONS BY REPORTABLE OPERATING SEGMENT

<TABLE>
<CAPTION>
Pressure-sensitive Adhesives and Materials:                                       Nine Months Ended
                                                                                  ------------------
(In millions)                                                         September 30, 2000        October 2, 1999
- -------------                                                         ------------------        ---------------
<S>                                                                        <C>                      <C>
Net sales                                                                  $1,631.8                 $1,516.4
Income from operations before interest and taxes                              170.1                    131.4
</TABLE>

The Pressure-sensitive Adhesives and Materials segment reported increased
sales and income for the first nine months of 2000 compared to the same
period last year. The segment's income results for the first nine months of
1999 include a pretax restructuring charge of $25.1 million ($15.4 million in
the U.S. operations and $9.7 million in the international operations).
Increased sales in the U.S. operations were primarily driven by the
acquisition of Stimsonite in the third quarter of 1999. Domestic sales growth
was negatively impacted by what the Company believes to be a short-term
slowdown for the U.S. roll materials business. This slowdown in growth began
in the second quarter of 2000 and was driven primarily by three factors:
packaging and graphics changes planned by consumer product companies that buy
labels from the Company's converting customers; some loss of sales in the
second quarter on certain price-competitive, lower margin products; and a
general reduction of inventory levels at some retailers and consumer product
companies that has impacted demand for packaging labels. The Company regained
some sales in the third quarter after several packaging transitions had
occurred and expects sales to improve after customer inventory levels
stabilize. Income from U.S. operations was negatively impacted by the
slowdown in the U.S. roll materials business. Total international operations
in the segment reported increased sales, driven by the strong volume growth
in Asia, Latin America and Europe, as well as the recent acquisition of
Adespan in Europe. Sales growth in Europe was partially offset by changes in
foreign currency rates. Income from international operations increased
compared to the first nine months of 1999, excluding the restructuring
charge, primarily due to volume growth and improved profitability in the
Asian and Latin American businesses. European growth was offset by changes in
foreign currency rates.

<TABLE>
<CAPTION>
Consumer and Converted Products:                                                  Nine Months Ended
                                                                                  -----------------
(In millions)                                                           September 30, 2000     October 2, 1999
                                                                        ------------------     ---------------
<S>                                                                         <C>                     <C>
Net sales                                                                   $1,433.0                $1,410.7
Income from operations before interest and taxes                               219.6                   153.2
</TABLE>


                                       15
<PAGE>

                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS: NINE MONTHS YEAR-TO-DATE (CONTINUED)

The Consumer and Converted Products segment reported increased sales and
income for the first nine months of 2000 compared to the same period last
year. The segment's income results for the first nine months of 1999 include
a pretax restructuring charge of $37.6 million ($24.3 million in the U.S.
operations and $13.3 million in the international operations). Increased
sales in the U.S. operations were primarily led by sales growth for
Avery-brand office products. Income from U.S. operations increased compared
to the first nine months of 1999, excluding the restructuring charge, due to
the sales growth in the office products business and manufacturing cost
reductions and improved productivity related to prior year's restructuring.
Both sales and income were partially impacted by decreased volume and an
unfavorable product mix shift in the Company's consumer packaging businesses.
Strong volume growth in international businesses, including the worldwide
ticketing business in particular, was offset by the negative impact of
foreign currency rate changes. As a result, total sales from international
operations were comparable to the same period last year. Income from
international operations increased compared to the first nine months of 1999,
excluding the restructuring charge, due to growth in the worldwide ticketing
business and improved profitability in the European and Asian office products
businesses.

                                       16
<PAGE>


                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

FINANCIAL CONDITION

Average working capital, excluding short-term debt, as a percentage of sales,
increased to 6.1 percent for the quarter from 5.3 percent a year ago, reflecting
an increase in accounts receivable and inventory and a decrease in current
liabilities related to prior year's restructuring. Average inventory turnover
for the third quarter was 9.1 inventory turns compared to 9.7 inventory turns a
year ago. The decrease in inventory turns was primarily due to higher inventory
levels associated with recently acquired companies, as well as an increase in
certain office products inventories to maintain service levels as production
moves to new manufacturing facilities as a result of the restructuring. The
average number of days of sales outstanding in accounts receivable increased to
56 days compared to 54 days a year ago, reflecting longer payment terms
associated with increased international sales and recent acquisitions.

Net cash flows provided by operating activities totaled $292.6 million for the
first nine months of 2000 compared to $276.5 million for the same period in
1999. In addition to cash flows from operations, the Company has more than
adequate financing arrangements, at competitive rates, to conduct its
operations.

Capital spending for the quarter was $42.9 million compared to $40.8 million a
year ago. For the first nine months of 2000, capital spending totaled $120.2
million compared to $99.4 million a year ago. These expenditures include
investments in capacity to support volume growth in Asia, expansion of an office
products facility in Mexico and expansion of a coating facility in the U.S.
Total capital spending for 2000 is expected to be in the range of $190 million
to $200 million.

During the first nine months of 2000, total debt increased $129.2 million to
$814.9 million from year end 1999. The increase in debt was primarily due to the
debt issuance to fund acquisitions, capital expenditures and share repurchases.
Total debt to total capital was 50.7 percent as of the end of the third quarter
of 2000 and 45.8 percent at year end 1999. The Company previously registered
with the Securities and Exchange Commission $150 million in principal amount of
uncollateralized medium-term notes, of which $110 million in notes had been
issued as of year end 1999. During the third quarter of 2000, $40 million in
notes were issued. Proceeds from the medium-term notes have been used to
refinance short-term debt and for other general corporate purposes.

On March 31, 2000, the Company acquired the Adespan pressure-sensitive materials
operation of Panini S.p.A., a European printing and publishing company based in
Italy. Adespan had sales of approximately $75 million in 1999. The Adespan
business operates as a division within the Company's Fasson roll materials
business in Europe.

On January 12, 1999, the Company completed a transaction with Steinbeis Holding
GmbH to combine substantially all of the Company's office products businesses in
Europe with Zweckform Buro-Produkte GmbH (Zweckform), a German office products
supplier. The Company's aggregate cost basis in this venture was financed
through available cash resources and the assumption of an obligation as reported
in the "Long-term obligation" line on the Condensed Consolidated Balance Sheet.
The entire obligation is scheduled to be paid in 2004.

Shareholders' equity decreased to $793.6 million from $809.9 million at year
end 1999. During the third quarter of 2000, the Company purchased
approximately 1.3 million shares of the Company's common stock at a cost of
$68.1 million. During the first nine months of 2000, the Company purchased
2.2 million shares of the Company's common stock at a cost of $120.8 million.
The market value of shares held in the employee stock benefit trust, after
the issuance of shares under the Company's stock and incentive plans,
decreased by $409.7 million to $604.3 million from year end 1999. Dividends
paid for the first nine months of 2000 totaled $90.6 million compared to $82
million a year ago.

                                       17

<PAGE>


                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

FUTURE ACCOUNTING REQUIREMENTS

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements." SAB No.
101 provides guidance on applying generally accepted accounting principles to
revenue recognition issues in financial statements and is effective the fourth
quarter of 2000. The Company is in the process of determining the impact of this
standard and anticipates that it will not have a material impact on the
Company's financial results.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." This Statement requires that all derivative instruments
be recorded on the balance sheet at their fair value. Changes in the fair value
of derivatives will be recorded each period in current earnings or other
comprehensive income. The new rules will be effective the first quarter of 2001.
The Company is in the process of determining the impact of this new standard
and, based on current market conditions, anticipates that the new rules will not
have a material impact on the Company's financial results when effective.

FUTURE OUTLOOK

The Company projects that, based on current Euro to U.S. dollar exchange
rates, earnings per share will be negatively impacted in the fourth quarter
of 2000 by approximately $.03. As a result of this currency impact and what
the Company believes to be a short-term slowdown in sales volume growth in
the U.S. roll materials business, the Company expects reported revenue growth
of approximately two to three percent and low-to-mid single-digit earnings
per share growth in the fourth quarter of 2000.

Looking forward to 2001, assuming the continued weakness of the Euro, the
Company expects currency to negatively impact earnings per share by
approximately $.12 to $.15 for the year.

Despite challenging global business conditions and currency fluctuations, the
Company expects continued long-term growth. Sales and earnings growth is
expected from increased volumes, penetration of expanding markets, introduction
of innovative new products, new business and benefits derived from manufacturing
cost reductions and increased productivity.


                                       18
<PAGE>


                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

SAFE HARBOR STATEMENT

Except for historical information contained herein, the matters discussed in
the Management's Discussion and Analysis of Results of Operations and
Financial Condition and other sections of this Form 10-Q contain
"forward-looking statements" within the meaning of the Private Securities
Reform Act of 1995. These statements, which are not statements of historical
fact, may contain estimates, assumptions, projections and/or expectations
regarding future events. Words such as "anticipate," "assume," "believe,"
"estimate," "expect," "plan," "project," "will," and other expressions, which
refer to future events and trends, identify forward-looking statements. Such
forward-looking statements, and financial or other business targets, are
subject to certain risks and uncertainties which could cause actual results
to differ materially from any future results, performance or achievements of
the Company expressed or implied by such forward-looking statements. Certain
of such risks and uncertainties are discussed in more detail in the Company's
Annual Report on Form 10-K for the year ended January 1, 2000 and include,
but are not limited to, risks and uncertainties relating to investment in new
production facilities, timely development and successful marketing of new
products, price and availablity of raw materials, impact of competitive
products and pricing, business mix shift, customer and supplier and
manufacturing concentrations, financial condition of customers, changes in
customer order patterns and inventory levels, increased competition, loss of
significant contract(s) or customer(s), the euro conversion, legal
proceedings, fluctuations in foreign exchange rates and other risks
associated with foreign operations, changes in economic or political
conditions, and other factors.

Any forward looking statements should be considered in light of the factors
detailed in Exhibit 99 in the Company's Annual Report on Form 10-K for the year
ended January 1, 2000.

The Company's forward-looking statements represent its judgment only on the
dates such statements were made. By making any forward-looking statements, the
Company assumes no duty to update them to reflect new, changed or unanticipated
events or circumstances.


                                       19
<PAGE>


                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                      ITEM 3. QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK

ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There are no material changes in the information provided in Item 7A of the
Company's Form 10-K for the fiscal year ended January 1, 2000.




                                       20
<PAGE>


                           PART II. OTHER INFORMATION
                           AVERY DENNISON CORPORATION
                                AND SUBSIDIARIES


ITEMS 1, 2, 3 AND 4.       NOT APPLICABLE

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

a. Exhibits: 3(ii)  Bylaws of Avery Dennison Corporation - amended and
                    restated, September 28, 2000

             12     Computation of Ratio of Earnings to Fixed Charges

b. Reports on Form 8-K: There were no reports on Form 8-K filed for the three
   months ended September 30, 2000.


                                       21
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                                AVERY DENNISON CORPORATION
                                                    (Registrant)






                                             /s/ Robert M. Calderoni
                                            ------------------------------
                                            Robert M. Calderoni
                                            Senior Vice President, Finance, and
                                            Chief Financial Officer
                                            (Principal Financial Officer)




                                             /s/ Thomas E. Miller
                                             ------------------------------
                                             Thomas E. Miller
                                             Vice President and Controller
                                             (Chief Accounting Officer)



                                             November 10, 2000


                                          22

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(II)
<SEQUENCE>2
<FILENAME>a2029689zex-3_ii.txt
<DESCRIPTION>EXHIBIT 3.(II)
<TEXT>

<PAGE>


                                     BYLAWS
                                       OF
                           AVERY DENNISON CORPORATION



                                    ARTICLE I


                                     OFFICES

SECTION 1.   REGISTERED OFFICE.

     The registered office of Avery Dennison Corporation (hereinafter called the
"corporation") in the State of Delaware shall be at 2711 Centerville Road, Suite
400, City of Wilmington, County of New Castle, and the name of the registered
agent at that address shall be United States Corporation Company.

SECTION 2.   PRINCIPAL OFFICE.

     The principal executive office for the transaction of the business of the
corporation is hereby fixed and located in Los Angeles County, California. The
board of directors is hereby granted full power and authority to change said
principal executive office from one location to another within or without the
State of California.

SECTION 3.   OTHER OFFICES.

     The corporation may also have offices at such other places within or
without the State of Delaware as the board of directors may from time to time
determine, or the business of the corporation may require.



                                   ARTICLE II


                                  STOCKHOLDERS

SECTION 1.   PLACE OF MEETINGS.

     Meetings of stockholders shall be held at any place within or outside the
State of Delaware designated by the board of directors. In the absence of any
such designation, stockholders' meetings shall be held at the principal
executive office of the corporation.


SECTION 2.   ANNUAL MEETINGS OF STOCKHOLDERS.

     The annual meeting of stockholders shall be held on the last Thursday in
April of each year at 1:30 p.m. of said day, or on such other day, which shall
not be a legal holiday, as shall be determined by the board of directors. Any
previously scheduled annual meeting of stockholders may be postponed by
resolution of the board of directors upon public notice given prior to the date
previously scheduled for such annual meeting of stockholders.

SECTION 3.   SPECIAL MEETINGS.

     A special meeting of the stockholders may be called at any time by the
board of directors, or by a majority of the directors or by a committee
authorized by the board to do so. Any previously scheduled special meeting of
the stockholders may be postponed by resolution of the board of directors upon
public notice given prior to the date previously scheduled for such special
meeting of the stockholders.

                                  Exhibit 3(ii)

                                  Page 1 of 17

<PAGE>

SECTION 4.   NOTICE OF STOCKHOLDERS' MEETINGS.

     All notices of meetings of stockholders shall be sent or otherwise given in
accordance with Section 5 of this Article II not less than ten (10) nor more
than sixty (60) days before the date of the meeting being noticed. The notice
shall specify the place, date and hour of the meeting and (i) in case of a
special meeting, the general nature of the business to be transacted, or (ii) in
the case of the annual meeting, those matters which the board of directors, at
the time of giving the notice, intends to present for action by the
stockholders. The notice of any meeting at which directors are to be elected
shall include the name of any nominee or nominees who, at the time of the
notice, management intends to present for election.

SECTION 5.   MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.

     Notice of any meeting of stockholders shall be given either personally or
by mail or telegraphic or other written communication, charges prepaid,
addressed to the stockholder at the address of such stockholder appearing on the
books of the corporation or given by the stockholder to the corporation for the
purpose of notice. If no such address appears on the corporation's books or has
been so given, notice shall be deemed to have been given if sent by mail or
telegraphic or other written communication to the corporation's principal
executive office, or if published at least once in a newspaper of general
circulation in the county where such office is located. Notice shall be deemed
to have been given at the time when delivered personally or deposited in the
mail or sent by telegram or other means of written communication.

     An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting shall be executed by the secretary, assistant secretary or
any transfer agent of the corporation giving such notice, and shall be filed and
maintained in the minute book of the corporation.

SECTION 6.   QUORUM.

     The presence in person or by proxy of the holders of a majority of the
shares entitled to vote at any meeting of stockholders shall constitute a quorum
for the transaction of business. The stockholders present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum, if any action taken (other than adjournment) is approved by at
least a majority of the shares required to constitute a quorum.

SECTION 7.   ADJOURNED MEETING AND NOTICE THEREOF.

     Any stockholders' meeting, annual or special, whether or not a quorum is
present, may be adjourned from time to time by the Chairman of the meeting, but
in the absence of a quorum, no other business may be transacted at such meeting,
except as provided in Section 6 of this Article II.

     When any meeting of stockholders, either annual or special, is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at a meeting at which the adjournment is
taken, unless a new record date for the adjourned meeting is fixed, or unless
the adjournment is for more than thirty (30) days from the date set for the
original meeting. Notice of any such adjourned meeting, if required, shall be
given to each stockholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 4 and 5 of this Article II. At any
adjourned meeting the corporation may transact any business which might have
been transacted at the original meeting.

SECTION 8.   VOTING.

     The stockholders entitled to vote at any meeting of stockholders shall be
determined in accordance with the provisions of Section 11 of this Article II.
Such vote may be by voice vote or by ballot, at the discretion of the Chairman
of the meeting. Any stockholder entitled to vote on any matter (other than the
election of directors) may vote part of the shares in favor of the proposal and
refrain from voting the remaining shares or vote them against the proposal; but,
if the stockholder fails to specify the number of shares such stockholder is
voting affirmatively, it will be conclusively presumed that the stockholder's
approving vote is with respect to all shares such stockholder is entitled to
vote. If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on any matter shall be the act
of the stockholders, unless the vote of a greater number or voting by classes is
required by the Delaware General Corporation Law or the certificate of
incorporation or the certificate of determination of preferences as to any
preferred stock.

                                  Exhibit 3(ii)

                                  Page 2 of 17
<PAGE>

     At a stockholders' meeting involving the election of directors, no
stockholder shall be entitled to cumulate (i.e., cast for any one or more
candidates a number of votes greater than the number of the stockholder's
shares). The candidates receiving the highest number of votes, up to the number
of directors to be elected, shall be elected.

SECTION 9.   WAIVER OF NOTICE OR CONSENT BY ABSENT STOCKHOLDERS.

     The transactions of any meeting of stockholders, either annual or special,
however called and noticed, and wherever held, shall be as valid as though had
at a meeting duly held after regular call and notice, if a quorum be present
either in person or by proxy, and if, either before or after the meeting, each
person entitled to vote, not present in person or by proxy, signs a written
waiver of notice or a consent to the holding of the meeting, or an approval of
the minutes thereof. The waiver of notice or consent need not specify either the
business to be transacted or the purpose of any annual or special meeting of
stockholders. All such waivers, consents or approvals shall be filed with the
corporate records or made part of the minutes of the meeting.

     Attendance of a person at a meeting shall also constitute a waiver of
notice of such meeting, except when the person objects, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if such objection is expressly made at the meeting.

SECTION 10.  NO STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

     Stockholders may take action only at a regular or special meeting of
stockholders.

SECTION 11.   RECORD DATE FOR STOCKHOLDER NOTICE AND VOTING.

     For purposes of determining the holders entitled to notice of any meeting
or to vote, the board of directors may fix, in advance, a record date, which
shall not be more than sixty (60) days nor less than ten (10) days prior to the
date of any such meeting, and in such case only stockholders of record on the
date so fixed are entitled to notice and to vote, notwithstanding any transfer
of any shares on the books of the corporation after the record date fixed as
aforesaid, except as otherwise provided in the Delaware General Corporation Law.

     If the board of directors does not so fix a record date, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held.

SECTION 12.  PROXIES.

     Every person entitled to vote for directors or on any other matter shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the secretary of the
corporation. A proxy shall be deemed signed if the stockholder's name is placed
on the proxy (whether by manual signature, typewriting, telegraphic transmission
or otherwise) by the stockholder or the stockholder's attorney in fact. A
validly executed proxy which does not state that it is irrevocable shall
continue in full force and effect unless (i) revoked by the person executing it,
prior to the vote pursuant thereto, by a writing delivered to the corporation
stating that the proxy is revoked or by a subsequent proxy executed by, or
attendance at the meeting and voting in person by, the person executing the
proxy, or (ii) written notice of the death or incapacity of the maker of such
proxy is received by the corporation before the vote pursuant thereto is
counted; provided, however, that no such proxy shall be valid after the
expiration of eleven (11) months from the date of such proxy, unless otherwise
provided in the proxy.

                                  Exhibit 3(ii)

                                  Page 3 of 17
<PAGE>

SECTION 13.  INSPECTORS OF ELECTION; OPENING AND CLOSING THE POLLS.

     The board of directors by resolution shall appoint one or more inspectors,
which inspector or inspectors may include individuals who serve the corporation
in other capacities, including, without limitation, as officers, employees,
agents or representatives, to act at the meetings of stockholders and make a
written report thereof. One or more persons may be designated as alternate
inspectors to replace any inspector who fails to act. If no inspector or
alternate has been appointed to act or is able to act at a meeting of
stockholders, the chairman of the meeting shall appoint one or more inspectors
to act at the meeting. Each inspector, before discharging his or her duties,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability. The
inspectors shall have the duties prescribed by law.

     The chairman of the meeting shall fix and announce at the meeting the date
and time of the opening and the closing of the polls for each matter upon which
the stockholders will vote at a meeting.

SECTION 14.  NOMINATION AND STOCKHOLDER BUSINESS BYLAW.

     A.   ANNUAL MEETINGS OF STOCKHOLDERS.

          (1)  Nominations of persons for election to the board of directors of
               the corporation and the proposal of business to be considered by
               the stockholders may be made at an annual meeting of stockholders
               (a) pursuant to the corporation's notice of meeting, (b) by or at
               the direction of the board of directors or (c) by any stockholder
               of the corporation who was a stockholder of record at the time of
               giving of notice provided for in this Bylaw, who is entitled to
               vote at the meeting and who complies with the notice procedures
               set forth in this Bylaw.

          (2)  For nominations or other business to be properly brought before
               an annual meeting by a stockholder pursuant to clause (c) of
               paragraph (A) (1) of this Bylaw, the stockholder must have given
               timely notice thereof in writing to the secretary of the
               corporation and such other business must otherwise be a proper
               matter for stockholder action. To be timely, a stockholder's
               notice shall be delivered to the secretary at the principal
               executive offices of the corporation not later than the close of
               business on the 60th day nor earlier than the close of business
               on the 90th day prior to the first anniversary of the preceding
               year's annual meeting; provided, however, that in the event that
               the date of the annual meeting is more than 30 days before or
               more than 60 days after such anniversary date, notice by the
               stockholder to be timely must be so delivered not earlier than
               the close of business on the 90th day prior to such annual
               meeting and not later than the close of business on the later of
               the 60th day prior to such annual meeting or the 10th day
               following the day on which public announcement of the date of
               such meeting is first made by the corporation. In no event shall
               the public announcement of an adjournment of an annual meeting
               commence a new time period for the giving of a stockholder's
               notice as described above. Such stockholder's notice shall set
               forth (a) as to each person whom the stockholder proposes to
               nominate for election or reelection as a director all information
               relating to such person that is required to be disclosed in
               solicitations of proxies for election of directors in an election
               contest, or is otherwise required, in each case pursuant to
               Regulation 14A under the Securities Exchange Act of 1934, as
               amended (the "Exchange Act") and Rule 14a-11 thereunder
               (including such person's written consent to being named in the
               proxy statement as a nominee and to serving as a director if
               elected); (b) as to any other business that the stockholder
               proposes to bring before the meeting, a brief description of the
               business desired to be brought before the meeting, the reasons
               for conducting such business at the meeting and any material
               interest in such business of such stockholder and the beneficial
               owner, if any, on whose behalf the proposal is made; and (c) as
               to the stockholder giving the notice and the beneficial owner, if
               any, on whose behalf the nomination or proposal is made (i) the
               name and address of such stockholder, as they appear on the
               corporation's books, and of such beneficial owner and (ii) the
               class and number of shares of the corporation which are owned
               beneficially and of record by such stockholder and such
               beneficial owner.

                                  Exhibit 3(ii)

                                  Page 4 of 17
<PAGE>

          (3)  Notwithstanding anything in the second sentence of paragraph
               (A)(2) of this Bylaw to the contrary, in the event that the
               number of directors to be elected to the board of directors of
               the corporation is increased and there is no public announcement
               by the corporation naming all of the nominees for director or
               specifying the size of the increased board of directors at least
               70 days prior to the first anniversary of the preceding year's
               annual meeting, a stockholder's notice required by this Bylaw
               shall also be considered timely, but only with respect to
               nominees for any new positions created by such increase, if it
               shall be delivered to the secretary at the principal executive
               offices of the corporation not later than the close of business
               on the 10th day following the day on which such public
               announcement is first made by the corporation.

     B.   SPECIAL MEETINGS OF STOCKHOLDERS. Only such business shall be
          conducted at a special meeting of STOCKHOLDERS as shall have been
          brought before the meeting pursuant to the corporation's notice of
          meeting. Nominations of persons for election to the board of
          directors may be made at a special meeting of stockholders at which
          directors are to be elected pursuant to the corporation's notice of
          meeting (a) by or at the direction of the board of directors or (b)
          provided that the board of directors has determined that directors
          shall be elected at such meeting, by any stockholder of the
          corporation who is a stockholder of record at the time of giving of
          notice provided for in this Bylaw, who shall be entitled to vote at
          the meeting and who complies with the notice procedures set forth
          in this Bylaw. In the event the corporation calls a special meeting
          of stockholders for the purpose of electing one or more directors
          to the board of directors, any such stockholder may nominate a
          person or persons (as the case may be), for election to such
          position(s) as specified in the corporation's notice of meeting, if
          the stockholder's notice required by paragraph (A) (2) of this
          Bylaw shall be delivered to the secretary at the principal
          executive offices of the corporation not earlier than the close of
          business on the 90th day prior to such special meeting and not
          later than the close of business on the later of the 60th day prior
          to such special meeting or the 10th day following the day on which
          public announcement is first made of the date of the special
          meeting and of the nominees proposed by the board of directors to
          be elected at such meeting. In no event shall the public
          announcement of an adjournment of a special meeting commence a new
          time period for the giving of a stockholder's notice as described
          above.

     C.   GENERAL.

          (1)  Only such persons who are nominated in accordance with the
               procedures set forth in this Bylaw shall be eligible to serve as
               directors and only such business shall be conducted at a meeting
               of stockholders as shall have been brought before the meeting in
               accordance with the procedures set forth in this Bylaw. Except as
               otherwise provided by law, the Certificate of Incorporation or
               these Bylaws, the chairman of the meeting shall have the power
               and duty to determine whether a nomination or any business
               proposed to be brought before the meeting was made or proposed,
               as the case may be, in accordance with the procedures set forth
               in this Bylaw and, if any proposed nomination or business is not
               in compliance with this Bylaw, to declare that such defective
               proposal or nomination shall be disregarded.

          (2)  For purposes of this Bylaw, "public announcement" shall mean
               disclosure in a press release reported by the Dow Jones News
               Service, Associated Press or comparable national news service or
               in a document publicly filed by the corporation with the
               Securities and Exchange Commission pursuant to Section 13, 14 or
               15(d) of the Exchange Act.

                                  Exhibit 3(ii)

                                  Page 5 of 17
<PAGE>

          (3)  Notwithstanding the foregoing provisions of this Bylaw, a
               stockholder shall also comply with all applicable requirements of
               the Exchange Act and the rules and regulations thereunder with
               respect to the matters set forth in this Bylaw. Nothing in this
               Bylaw shall be deemed to affect any rights (i) of stockholders to
               request inclusion of proposals in the corporation's proxy
               statement pursuant to Rule 14a-8 under the Exchange Act or (ii)
               of the holders of any series of Preferred Stock, if any, to elect
               directors under certain circumstances.

                                   ARTICLE III

                                    DIRECTORS

SECTION 1.   POWERS.

     Subject to the provisions of the Delaware General Corporation Law and any
limitations in the certificate of incorporation and these bylaws relating to
action required to be approved by the stockholders or by the outstanding shares,
the business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the board of directors.

     Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the directors shall have the
power and authority to:

     (a)  Select and remove all officers, agents and employees of the
     corporation, prescribe such powers and duties for them as may not be
     inconsistent with law, the certificate of incorporation or these bylaws,
     fix their compensation, and require from them security for faithful
     service.

     (b)  Change the principal executive office or the principal business office
     in the State of California from one location to another; cause the
     corporation to be qualified to do business in any other state, territory,
     dependency, or foreign country and conduct business within or outside the
     State of California; designate any place within or without the State of
     California for the holding of any stockholders' meeting or meetings,
     including annual meetings; adopt, make and use a corporate seal, and
     prescribe the forms of certificates of stock, and alter the form of such
     seal and of such certificates from time to time as in their judgment they
     may deem best, provided that such forms shall at all times comply with the
     provisions of law.

     (c)  Authorize the issuance of shares of stock of the corporation from time
     to time, upon such terms as may be lawful, in consideration of money paid,
     labor done or services actually rendered, debts or securities canceled or
     tangible or intangible property actually received.

     (d)  Borrow money and incur indebtedness for the purpose of the
     corporation, and cause to be executed and delivered therefor, in the
     corporate name, promissory notes, bonds, debentures, deeds of trust,
     mortgages, pledges, hypothecations, or other evidences of debt and
     securities therefor.

SECTION 2.   NUMBER AND QUALIFICATION OF DIRECTORS.

     The number of directors of the corporation shall be twelve (12) until
changed by a bylaw amending this Section 2, duly adopted by the board of
directors or by the stockholders.

SECTION 3.   ELECTION AND TERM OF OFFICE OF DIRECTORS.

     Subject to Section 15 below, one class of the directors shall be elected at
each annual meeting of the stockholders, but if any such annual meeting is not
held or the directors are not elected thereat, the directors may be elected at
any special meeting of stockholders held for that purpose. All directors shall
hold office until their respective successors are elected. Irrespective of the
provisions of Section 15 of this Article III and of the preceding sentence, a
director shall automatically be retired on the date of the expiration of the
first annual meeting following his 72nd birthday.

                                  Exhibit 3(ii)

                                  Page 6 of 17
<PAGE>

SECTION 4.   VACANCIES.

     Vacancies in the board of directors may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole remaining director.
Each director elected to fill a vacancy shall hold office for the remainder of
the term of the person whom he or she succeeds, unless otherwise determined by
the board of directors, and until a successor has been elected and qualified.

     A vacancy or vacancies in the board of directors shall be deemed to exist
in the case of the death, retirement, resignation or removal of any director, or
if the board of directors by resolution declares vacant the office of a director
who has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of directors be increased, or if the
stockholders fail at any meeting of stockholders at which any director or
directors are elected, to elect the full authorized number of directors to be
voted for at that meeting.

     Any director may resign or voluntarily retire upon giving written notice to
the chairman of the board, the president, the secretary or the board of
directors. Such retirement or resignation shall be effective upon the giving of
the notice, unless the notice specifies a later time for its effectiveness. If
such retirement or resignation is effective at a future time, the board of
directors may elect a successor to take office when the retirement or
resignation becomes effective.

     No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of his term of office. No director
may be removed during his term except for cause.

SECTION 5.   PLACE OF MEETINGS AND TELEPHONIC MEETINGS.

     Regular meetings of the board of directors may be held at any place within
or without the State of Delaware that has been designated from time to time by
resolution of the board. In the absence of such designation, regular meetings
shall be held at the principal executive office of the corporation. Special
meetings of the board shall be held at any place within or without the State of
Delaware that has been designated in the notice of the meeting or, if not stated
in the notice or there is no notice, at the principal executive office of the
corporation. Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, so long as all directors
participating in such meeting can hear one another, and all such directors shall
be deemed to be present in person at such meeting.

SECTION 6.   ANNUAL MEETINGS.

     Immediately following each annual meeting of stockholders, the board of
directors shall hold a regular meeting for the purpose of organization, any
desired election of officers and transaction of other business. Notice of this
meeting shall not be required.

SECTION 7.   OTHER REGULAR MEETINGS.

     Other regular meetings of the board of directors shall be held at such time
as shall from time to time be determined by the board of directors. Such regular
meetings may be held without notice provided that notice of any change in the
determination of time of such meeting shall be sent to all of the directors.
Notice of a change in the determination of the time shall be given to each
director in the same manner as for special meetings of the board of directors.

SECTION 8.   SPECIAL MEETINGS.

     Special meetings of the board of directors for any purpose or purposes may
be called at any time by the chairman of the board or the president or any vice
president or the secretary or any two directors.

     Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at his or her address as
it is shown upon the records of the corporation. In case such notice is mailed,
it shall be deposited in the United States mail at least four (4) days prior to
the time of the holding of the meeting. In case such notice is delivered
personally, or by telephone or telegram, it shall be delivered personally, or by
telephone or to the telegraph company at least forty-eight (48) hours prior to
the time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated to either the director or to a person at the
office of the director who the person giving the notice has reason to believe
will promptly communicate it to the director. The notice need not specify the
purpose of the meeting nor the place if the meeting is to be held at the
principal executive office of the corporation.

                                  Exhibit 3(ii)

                                  Page 7 of 17
<PAGE>

SECTION 9.   QUORUM.

     A majority of the authorized number of directors shall constitute a quorum
for the transaction of business, except to adjourn as hereinafter provided.
Every act or decision done or made by a majority of the directors present at a
meeting duly held at which a quorum is present shall be regarded as the act of
the board of directors. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

SECTION 10.  WAIVER OF NOTICE.

     The transactions of any meeting of the board of directors, however called
and noticed or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice if a quorum be present and if, either before
or after the meeting, each of the directors not present signs a written waiver
of notice, a consent to holding the meeting or an approval of the minutes
thereof. The waiver of notice or consent need not specify the purpose of the
meeting. All such waivers, consents and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting. Notice of a
meeting shall also be deemed given to any director who attends the meeting
without protesting, prior thereto or at its commencement, the lack of notice to
such director.

SECTION 11.  ADJOURNMENT.

     A majority of the directors present, whether or not constituting a quorum,
may adjourn any meeting to another time and place.

SECTION 12.  NOTICE OF ADJOURNMENT.

     Notice of the time and place of an adjourned meeting need not be given,
unless the meeting is adjourned for more than twenty-four (24) hours, in which
case notice of such time and place shall be given prior to the time of the
adjourned meeting, in the manner specified in Section 8 of this Article III, to
the directors who were not present at the time of the adjournment.

SECTION 13.  ACTION WITHOUT MEETING.

     Any action required or permitted to be taken by the board of directors may
be taken without a meeting, if all members of the board shall individually or
collectively consent in writing to such action. Such action by written consent
shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent or consents shall be filed with the minutes of
the proceedings of the board.

SECTION 14.  FEES AND COMPENSATION OF DIRECTORS.

     Directors and members of committees may receive such compensation, if any,
for their services and such reimbursement of expenses, as may be fixed or
determined by resolution of the board of directors. Nothing herein contained
shall be construed to preclude any director from serving the corporation in any
other capacity as an officer, agent, employee, or otherwise, and receiving
compensation for such services.

SECTION 15.  CLASSIFICATION OF DIRECTORS.

     The board of directors shall be and is divided into three classes, Class I,
Class II and Class III. The number of directors in each class shall be the whole
number contained in the quotient arrived at by dividing the authorized number of
directors by three, and if a fraction is also contained in such quotient then if
such fraction is one-third (1/3) the extra director shall be a member of Class
III and if the fraction is two-thirds (2/3) one of the extra directors shall be
a member of Class III and the other shall be a member of Class II. Each director
shall serve for a term ending on the date of the third annual meeting following
the annual meeting at which such director was elected.

     In the event of any increase or decrease in the authorized number of
directors, (a) each director then serving as such shall nevertheless continue as
a director of the class of which he is a member until the expiration of his
current term, or his prior death, resignation or removal, and (b) the newly
created or eliminated directorships resulting from such increase or decrease
shall be apportioned by the board of directors to such class or classes as
shall, so far as possible, bring the number of directors in the respective
classes into conformity with the formula in this Section 15, as applied to the
new authorized number of directors.

                                  Exhibit 3(ii)

                                  Page 8 of 17
<PAGE>

                                   ARTICLE IV

                                   COMMITTEES

SECTION 1.   COMMITTEES OF DIRECTORS.

     The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, including an
executive committee, each consisting of two or more directors, to serve at the
pleasure of the board. The board may designate one or more directors as
alternate members of any committee, who may replace any absent member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution of the board, shall have all the authority of the board, except with
respect to:

     (a)  the approval of any action which, under the General Corporation Law of
     Delaware, also requires stockholders' approval or approval of the
     outstanding shares;

     (b)  the filling of vacancies on the board of directors or in any
     committee;

     (c)  the fixing of compensation of the directors for serving on the board
     or on any committee;

     (d)  the amendment or repeal of bylaws or the adoption of new bylaws;

     (e)  the amendment or repeal of any resolution of the board of directors
     which by its express terms is not so amendable or repealable;

     (f)  a distribution to the stockholders of the corporation, except at a
     rate or in a periodic amount or within a price range determined by the
     board of directors; or

     (g)  the appointment of any other committees of the board of directors or
     the members thereof.

SECTION 2.   MEETINGS AND ACTION OF COMMITTEES.

     Meetings and action of committees shall be governed by, and held and taken
in accordance with, the provisions of Article III of these bylaws, Sections 5
(place of meetings), 7 (regular meetings), 8 (special meetings and notice), 9
(quorum), 10 (waiver of notice), 11 (adjournment), 12 (notice of adjournment)
and 13 (action without meetings), with such changes in the context of those
bylaws as are necessary to substitute the committee and its members for the
board of directors and its members, except that the time of regular meetings of
committees may be determined by resolution of the board of directors as well as
the committee, special meetings of committees may also be called by resolution
of the board of directors, and notice of special meetings of committees shall
also be given to all alternate members, who shall have the right to attend all
meetings of the committee. The board of directors may adopt rules for the
government of any committee not inconsistent with the provisions of these
bylaws.

                                    ARTICLE V

                                    OFFICERS

SECTION 1.   OFFICERS.

     The officers of the corporation shall be the chairman of the board, the
president, a vice president, a secretary and a treasurer. The corporation may
also have, at the discretion of the board of directors, one or more additional
vice presidents, one or more assistant secretaries, one or more assistant
treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article V. Any number of offices may be held by
the same person.

SECTION 2.   ELECTION OF OFFICERS.

     The officers of the corporation, except such officers as may be appointed
in accordance with the provisions of Section 3 or Section 5 of this Article V,
shall be chosen annually by the board of directors, and each shall hold his
office until he shall resign or be removed or otherwise disqualified to serve or
his

                                  Exhibit 3(ii)

                                  Page 9 of 17
<PAGE>

successor shall be elected and qualified.

SECTION 3.   SUBORDINATE OFFICERS, ETC.

     The board of directors may appoint, and may empower the chairman of the
BOARD to appoint, such other officers as the business of the corporation may
require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in the bylaws or as the board of directors
may from time to time determine.

SECTION 4.   REMOVAL AND RESIGNATION OF OFFICERS.

     Any officer may be removed, either with or without cause, by the board of
directors, at any regular or special meeting thereof, or, except in case of an
officer chosen by the board of directors, by any officer upon whom such power of
removal may be conferred by the board of directors.

     Any officer may resign at any time by giving written notice to the
corporation. Any such resignation shall take effect at the date of the receipt
of such notice or at any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

SECTION 5.   VACANCIES IN OFFICE.

     A vacancy in any office because of death, resignation, removal,
disqualification, or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to such office.

SECTION 6.   CHAIRMAN OF THE BOARD.

     The chairman of the board shall be the chief executive officer of the
corporation and shall, subject to the control of the board of directors, have
general supervision, direction and control of the business and affairs of the
corporation.

SECTION 7.   PRESIDENT.

     The president shall be the chief operating officer of the corporation and
shall exercise and perform such powers and duties with respect to the
administration of the business and affairs of the corporation as may from time
to time be assigned to him by the chairman of the board or by the board of
directors, or as may be prescribed by the bylaws.

SECTION 8.   VICE PRESIDENTS.

     In the absence or disability of the president, a vice president designated
by the board of directors shall perform all the duties of the president, and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the president. The vice presidents shall have such other
powers and perform such other duties as from time to time may be prescribed for
them respectively by the board of directors or the bylaws.

SECTION 9.   SECRETARY.

     The secretary shall keep or cause to be kept, at the principal executive
office or such other place as the board of directors may order, a book of
minutes of all meetings and actions of directors, committees of directors and
stockholders, with the time and place of holding, whether regular or special,
and, if special, how authorized, the notice thereof given, the names of those
present at directors' and committee meetings, the number of shares present or
represented at stockholders' meetings, and the proceedings thereof.

     The secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, as determined by resolution of the board of directors, a stock
register, or a duplicate register, showing the names of all stockholders and
their addresses, the number and classes of shares held by each, the number and
date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.

     The secretary shall give, or cause to be given, notice of all meetings of
the stockholders and of the board of directors required by the bylaws or by law
to be given, and he shall keep the seal of the corporation in safe custody, and
shall have such other powers and perform such other duties as may be prescribed
by the board of directors or by the bylaws.

                                  Exhibit 3(ii)

                                  Page 10 of 17
<PAGE>

SECTION 10.  TREASURER.

     The treasurer shall keep and maintain, or cause to be kept and maintained,
adequate and correct books and records of accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings
and shares. The books of account shall be open at all reasonable times to
inspection by any director.

     The treasurer shall deposit all monies and other valuables in the name and
to the credit of the corporation with such depositories as may be designated by
the board of directors. He shall disburse the funds of the corporation as may be
ordered by the board of directors, shall render to the chairman of the board and
directors, whenever they request it, an account of all of his transactions as
treasurer and of the financial condition of the corporation, and shall have
other powers and perform such other duties as may be prescribed by the board of
directors or the bylaws.

SECTION 11.  ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.

     Any assistant secretary may perform any act within the power of the
secretary, and any assistant treasurer may perform any act within the power of
the treasurer, subject to any limitations which may be imposed in these bylaws
or in board resolutions.

                                   ARTICLE VI

                     INDEMNIFICATION OF DIRECTORS, OFFICERS,

                           EMPLOYEES AND OTHER AGENTS

SECTION 1.   INDEMNIFICATION AND INSURANCE.

     (A)  Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she or a person of whom he or she is the legal
representative is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans maintained
or sponsored by the Corporation, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee of agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expenses, liability and loss (including
attorneys' fees, judgements, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of his or her heirs, executors and administrators; provided,
however, that except as provided in paragraph (C) of this Bylaw, the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors. The right to
indemnification conferred in this Bylaw shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition, such advances
to be paid by the Corporation within 20 days after the receipt by the
Corporation of a statement or statements from the claimant requesting such
advance or advances from time to time; provided, however, that if the General
Corporation Law of the State of Delaware requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation of an
undertaking by or on behalf of such director or officer, to repay all amounts so
advanced if it shall ultimately be determined that such director or officer is
not entitled to be indemnified under this Bylaw or otherwise.

                                  Exhibit 3(ii)

                                  Page 11 of 17
<PAGE>

     (B)  To obtain indemnification under this Bylaw, a claimant shall submit to
the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to the claimant and
reasonably necessary to determine whether and to what extent the claimant is
entitled to indemnification. Upon written request by a claimant for
indemnification pursuant to the first sentence of this paragraph (B), a
determination, if required by applicable law, with respect to the claimant's
entitlement thereto shall be made as follows: (1) if requested by the claimant,
by Independent Counsel (as hereinafter defined), or (2) if no request is made by
the claimant for a determination by Independent Counsel, (i) by the Board of
Directors by a majority vote of a quorum consisting of Disinterested Directors
(as hereinafter defined), or (ii) if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtained or even if obtainable,
such quorum of Disinterested Directors so directs, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be delivered to
the claimant, or (iii) if a quorum of Disinterested Directors so directs, by the
stockholders of the Corporation. In the event the determination of entitlement
to indemnification is to be made by Independent Counsel at the request of the
claimant, the Independent Counsel shall be selected by the Board of Directors
unless there shall have occurred within two years prior to the date of the
commencement of the action, suit or proceeding for which indemnification is
claimed a "Change of Control" as defined in the 1996 Stock Incentive Plan, in
which case the Independent Counsel shall be selected by the claimant unless the
claimant shall request that such selection be made by the Board of Directors. If
it is so determined that the claimant is entitled to indemnification, payment to
the claimant shall be made within 10 days after such determination.

     (C)  If a claim under paragraph (A) of this Bylaw is not paid in full by
the Corporation within 30 days after a written claim pursuant to paragraph (B)
of this Bylaw has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim, including attorney's
fees. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required undertaking, if any is required, has
been tendered to the Corporation) that the claimant has not met the standard of
conduct which makes it permissible under the General Corporation Law of the
State of Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors,
Independent Counsel or stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the Corporation (including its Board of Directors, Independent
Counsel or stockholders) that the claimant has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

     (D)  If a determination shall have been made pursuant to paragraph (B) of
this Bylaw that the claimant is entitled to indemnification, the Corporation
shall be bound by such determination in any judicial proceeding commenced
pursuant to paragraph (C) of this Bylaw.

     (E)  The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to paragraph (C) of this Bylaw that the procedures
and presumptions of this Bylaw are not valid, binding and enforceable and shall
stipulate in such proceeding that the Corporation is bound by all the provisions
of this Bylaw.

     (F)  The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Bylaw shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or Disinterested
Directors or otherwise. No repeal or modification of this Bylaw shall in any way
diminish or adversely affect the rights of any director, officer, employee or
agent of the Corporation hereunder in respect of any occurrence or matter
arising prior to any such repeal or modification.

                                  Exhibit 3(ii)

                                  Page 12 of 17
<PAGE>

     (G)  The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the General Corporation Law of the State of Delaware. To the extent that
the Corporation maintains any policy or policies providing such insurance, each
such director or officer, and each such agent or employee to which rights to
indemnification have been granted as provided in paragraph (H) of this Bylaw,
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage thereunder for any such director,
officer, employee or agent.

     (H)  The Corporation may, to the extent authorized from time to time by the
Board of Directors or the Chief Executive Officer, grant rights to
indemnification, and rights to be paid by the Corporation the expenses incurred
in defending any proceeding in advance of its final disposition, to any employee
or agent of the Corporation to the fullest extent of the provisions of this
Bylaw with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.

     (I)  If any provision or provisions of this Bylaw shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (1) the validity,
legality and enforceability of the remaining provisions of this Bylaw
(including, without limitation, each portion of any paragraph of this Bylaw
containing any such provisions held to be invalid, illegal or unenforceable,
that is not itself held to be invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (2) to the fullest extent possible,
the provisions of this Bylaw (including, without limitation, each such portion
of any paragraph of this Bylaw containing any such provision held to be invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.

     (J)  For purposes of this Bylaw:

          (1)  "Disinterested Director" means a director of the Corporation who
is not and was not a party to the matter in respect of which indemnification is
sought by the claimant.

          (2)  "Independent Counsel" means a law firm, a member of a law firm,
or an independent practitioner, that is experienced in matters of corporation
law and shall include any person who, under the applicable standards of
professional conduct then prevailing, would not have a conflict of interest in
representing either the Corporation or the claimant in an action to determine
the claimant's rights under this Bylaw.

     (K)  Any notice, request or other communication required or permitted to be
given to the Corporation under this Bylaw shall be in writing and either
delivered in person or sent by telecopy, telex, telegram, overnight mail or
courier service, or certified or registered mail, postage prepaid, return
receipt requested, to the Secretary of the Corporation and shall be effective
only upon receipt by the Secretary.

SECTION 2.   FIDUCIARIES OF CORPORATE EMPLOYEE BENEFIT PLAN.

     This Article VI does not apply to any proceeding against any trustee,
investment manager or other fiduciary of an employee benefit plan in such
person's capacity as such, even though such person may also be an agent of the
corporation as defined in Section 1 of this Article VI. Nothing contained in
this Article VI shall limit any right to indemnification to which such a
trustee, investment manager or other fiduciary may be entitled by contract or
otherwise, which shall be enforceable to the extent permitted by Section 410 of
the Employee Retirement Income Security Act of 1974, as amended, other than this
Article VI.

                                  Exhibit 3(ii)

                                  Page 13 of 17
<PAGE>

                                   ARTICLE VII

                               RECORDS AND REPORTS

SECTION 1.   MAINTENANCE AND INSPECTION OF STOCK REGISTER.

     The corporation shall keep at its principal executive office, or at the
office of its transfer agent or registrar, if either be appointed, and as
determined by resolution of the board of directors, a record of its
stockholders, giving the names and addresses of all stockholders and the number
and class of shares held by each stockholder.

     A stockholder or stockholders of the corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
corporation may (i) inspect and copy the records of stockholders' names and
addresses and stockholders during usual business hours upon five days prior
written demand upon the corporation, and/or (ii) obtain from the transfer agent
of the corporation, upon written demand and upon the tender of such transfer
agent's usual charges for such list, a list of the stockholders' names and
addresses, who are entitled to vote for the election of directors, and their
shareholdings as of the most recent record date for which such list has been
compiled or as of a date specified by the stockholder subsequent to the date of
demand. Such list shall be made available to such stockholder or stockholders by
the transfer agent on or before the later of five (5) days after the demand is
received or the date specified therein as the date as of which the list is to be
compiled.

     The record of stockholders shall be open to inspection upon the written
demand of any stockholder or holder of a voting trust certificate, at any time
during usual business hours, for a purpose reasonably related to such holder's
interests as a stockholder or as the holder of a voting trust certificate. Any
inspection and copying under this Section 1 may be made in person or by an agent
or attorney of the stockholder or holder of a voting trust certificate making
such demand.

SECTION 2.   MAINTENANCE AND INSPECTION OF BYLAWS.

     The corporation shall keep at its principal executive office the original
or a copy of the bylaws as amended to date, which shall be open to inspection by
the stockholders at all reasonable times during office hours.

SECTION 3.   MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS.

     The accounting books and records and minutes of proceedings of the
stockholders and the board of directors and any committee or committees of the
board of directors shall be kept at such place or places designated by the board
of directors, or, in the absence of such designation, at the principal executive
office of the corporation. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form. Such minutes and
accounting books and records shall be open to inspection upon the written demand
of any stockholder or holder of a voting trust certificate, at any reasonable
time during usual business hours, for a purpose reasonably related to such
holder's interests as a stockholder or as a holder of a voting trust
certificate. Such inspection may be made in person or by an agent or attorney,
and shall include the right to copy and make extracts. The foregoing rights of
inspection shall extend to the records of each subsidiary corporation of the
corporation.

SECTION 4.   INSPECTION BY DIRECTORS.

     Every director shall have the absolute right at any reasonable time to
inspect all books, records and documents of every kind and the physical
properties of the corporation and each of its subsidiary corporations. Such
inspection by a director may be made in person or by agent or attorney and the
right of inspection includes the right to copy and make extracts.

                                  Exhibit 3(ii)

                                  Page 14 of 17
<PAGE>

SECTION 5.   ANNUAL REPORT TO STOCKHOLDERS.

     The board of directors shall cause an annual report to be sent to the
stockholders not later than one hundred twenty (120) days after the close of the
fiscal year adopted by the corporation. Such report shall be sent at least
fifteen (15) days prior to the annual meeting of stockholders to be held during
the next fiscal year and in the manner specified in Section 5 of Article II of
these bylaws for giving notice to stockholders of the corporation. The annual
report shall contain a balance sheet and statement of changes in financial
position for such fiscal year, accompanied by any report thereon of independent
accountants.

SECTION 6.   FINANCIAL STATEMENTS.

     A copy of any annual financial statement and any income statement of the
corporation for each quarterly period of each fiscal year, and any accompanying
balance sheet for the corporation as of the end of each such period, that has
been prepared by the corporation shall be kept on file in the principal
executive office of the corporation for twelve (12) months and each such
statement shall be exhibited at all reasonable times to any stockholder
demanding an examination of any such statement or a copy shall be mailed to any
such stockholder.

     If a stockholder or stockholders holding at least five percent (5%) of the
outstanding shares of any class of stock of the corporation make a written
request to the corporation for an income statement of the corporation for the
three-month, six-month or nine-month period of the current fiscal year ended
more than thirty (30) days prior to the date of the request, and a balance sheet
of the corporation as of the end of such period, the treasurer shall cause such
statement to be prepared, if not already prepared, and shall deliver personally
or mail such statement or statements to the person making the request within
thirty (30) days after the receipt of such request. If the corporation has not
sent to the stockholders its annual report for the last fiscal year, this report
shall likewise be delivered or mailed to such stockholder or stockholders within
thirty (30) days after such request.

     The corporation also shall, upon the written request of any stockholder,
mail to the stockholder a copy of the last annual, semi-annual or quarterly
income statement which it has prepared and a balance sheet as of the end of such
period.

     The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any independent
accountants engaged by the corporation, or the certificate of an authorized
officer of the corporation that such financial statements were prepared without
audit from the books and records of the corporation.

                                  ARTICLE VIII

                            GENERAL CORPORATE MATTERS

SECTION 1.   RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.

     For purposes of determining the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action, the board of
directors may fix, in advance, a record date, which shall not be more than sixty
(60) days prior to any such action, and in such case only stockholders of record
on the date so fixed are entitled to receive the dividend, distribution or
allotment of rights or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
the record date fixed as aforesaid, except as otherwise provided in the Delaware
General Corporation Law.

     If the board of directors does not so fix a record date, the record date
for determining stockholders for any such purpose shall be at the close of
business on the day on which the board adopts the resolution relating thereto,
or the sixtieth (60th) day prior to the date of such action, whichever is later.

SECTION 2.   CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS.

     All checks, drafts or other orders for payment of money, notes or other
evidences of indebtedness, issued in the name of or payable to the corporation
shall be signed or endorsed by such person or persons and in such manner as,
from time to time, shall be determined by resolution of the board of directors.

                                  Exhibit 3(ii)

                                  Page 15 of 17
<PAGE>

SECTION 3.   CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED.

     The board of directors, except as otherwise provided in these bylaws, may
authorize any officer or officers, agent or agents, to enter into any contract
or execute any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances; and, unless so
authorized or ratified by the board of directors or within the agency power of
an officer, no officer, agent or employee shall have any power or authority to
bind the corporation by any contract or engagement or to pledge its credit or to
render it liable for any purpose or to any amount.

SECTION 4.   STOCK CERTIFICATES.

     A certificate or certificates for shares of the capital stock of the
corporation shall be issued to each stockholder when any such shares are fully
paid. All certificates shall be signed in the name of the corporation by the
chairman of the board or the president or vice president and by the treasurer or
an assistant treasurer or the secretary or any assistant secretary, certifying
the number of shares and the class or series of shares owned by the stockholder.
Any or all of the signatures on the certificate may be facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if such person were an officer,
transfer agent or registrar at the date of issue.

SECTION 5.   LOST CERTIFICATES.

     Except as hereinafter in this Section 5 provided, no new stock certificate
shall be issued in lieu of an old certificate unless the latter is surrendered
to the corporation and canceled at the same time. The board of directors may in
case any stock certificate or certificate for any other security is lost, stolen
or destroyed, authorize the issuance of a new certificate in lieu thereof, upon
such terms and conditions as the board of directors may require, including
provision for indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against any claim that
may be made against it, including any expense or liability, on account of the
alleged loss, theft or destruction of such certificate or the issuance of such
new certificate.

SECTION 6.   REPRESENTATION OF STOCK OF OTHER CORPORATIONS.

     The chairman of the board, the president, or any vice president, or any
other person authorized by resolution of the board of directors by any of the
foregoing designated officers, is authorized to vote on behalf of the
corporation any and all stock of any other corporation or corporations, foreign
or domestic, standing in the name of the corporation. The authority herein
granted to said officers to vote or represent on behalf of the corporation any
and all stock by the corporation in any other corporation or corporations may be
exercised by any such officer in person or by any person authorized to do so by
proxy duly executed by said officer.

SECTION 7.   CONSTRUCTION AND DEFINITIONS.

     Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of the bylaws. Without limiting the generality of the
foregoing, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a corporation and a natural
person.

SECTION 8.   FISCAL YEAR.

     The fiscal year of the corporation shall commence the first day of the
calendar year.

SECTION 9.   SEAL.

     The seal of the corporation shall be round and shall bear the name of the
corporation and words and figures denoting its organization under the laws of
the State of Delaware and year thereof, and otherwise shall be in such form as
shall be approved from time to time by the board of directors.

                                  Exhibit 3(ii)

                                  Page 16 of 17
<PAGE>

                                   ARTICLE IX

                                   AMENDMENTS

SECTION 1.   AMENDMENT BY STOCKHOLDERS.

     New bylaws may be adopted or these bylaws may be amended or repealed by the
vote of not less than 80% of the total voting power of all shares of stock of
the corporation entitled to vote in the election of directors, considered for
purposes of this Section 1 as one class.

SECTION 2.   AMENDMENT BY DIRECTORS.

     Subject to the rights of the stockholders as provided in Section 1 of this
Article IX, to adopt, amend or repeal bylaws, bylaws may be adopted, amended or
repealed by the board of directors.





     Amended : 09/28/00




                                  Exhibit 3(ii)

                                  Page 17 of 17
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>3
<FILENAME>a2029689zex-12.txt
<DESCRIPTION>EXHIBIT 12
<TEXT>

<PAGE>
                                                                      EXHIBIT 12

                   AVERY DENNISON CORPORATION AND SUBSIDIARIES
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                              (Dollars in Millions)


<TABLE>
<CAPTION>
                                                          Three Months Ended                   Nine Months Ended
                                                 -----------------------------------  -----------------------------------
                                                 September 30, 2000  October 2, 1999  September 30, 2000  October 2, 1999
                                                 ------------------  ---------------  ------------------  ---------------
<S>                                              <C>                 <C>              <C>                  <C>
Earnings:
     Income before taxes                             $  110.3           $  101.2           $  328.3           $  227.1
     Add:  Fixed charges*                                19.6               15.8               56.3               43.8
           Amortization of capitalized interest            .5                 .4                1.3                1.2
     Less: Capitalized interest                          (1.2)               (.5)              (2.3)              (1.3)
                                                     ---------          ---------          ---------          ---------
                                                     $  129.2           $  116.9           $  383.6           $  270.8
                                                     =========          =========          =========          =========

*Fixed charges:
           Interest expense                          $   14.2           $   11.6           $   41.1           $   31.2
           Capitalized interest                           1.2                 .5                2.3                1.3
           Amortization of debt issuance costs            --                 --                   .2                 .2
           Interest portion of leases                     4.2                3.7               12.7               11.1
                                                     ---------          ---------          ---------          ---------
                                                     $   19.6           $   15.8           $   56.3           $   43.8
                                                     =========          =========          =========          =========
Ratio of Earnings to Fixed Charges                        6.6                7.4                6.8                6.2
                                                     =========          =========          =========          =========

</TABLE>


The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, "earnings" consist of income before taxes plus
fixed charges (excluding capitalized interest), and "fixed charges" consist of
interest expense, capitalized interest, amortization of debt issuance costs and
the portion of rent expense (estimated to be 35%) on operating leases deemed
representative of interest.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>4
<FILENAME>a2029689zex-27.txt
<DESCRIPTION>EXHIBIT 27
<TEXT>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-30-2000
<PERIOD-START>                             JAN-02-2000
<PERIOD-END>                               SEP-30-2000
<CASH>                                           7,700
<SECURITIES>                                         0
<RECEIVABLES>                                  616,400<F1>
<ALLOWANCES>                                         0<F1>
<INVENTORY>                                    291,900
<CURRENT-ASSETS>                             1,038,500
<PP&E>                                       1,969,200
<DEPRECIATION>                                 919,100
<TOTAL-ASSETS>                               2,714,500
<CURRENT-LIABILITIES>                          853,400
<BONDS>                                        754,500
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                       124,100
<OTHER-SE>                                     669,500
<TOTAL-LIABILITY-AND-EQUITY>                 2,714,500
<SALES>                                      2,960,400
<TOTAL-REVENUES>                             2,960,400
<CGS>                                        1,942,300
<TOTAL-COSTS>                                1,942,300
<OTHER-EXPENSES>                               648,700
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              41,100
<INCOME-PRETAX>                                328,300
<INCOME-TAX>                                   112,300
<INCOME-CONTINUING>                            216,000
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   216,000
<EPS-BASIC>                                       2.19
<EPS-DILUTED>                                     2.16
<FN>
<F1>ACCOUNTS RECEIVABLE ARE SHOWN NET OF ANY ALLOWANCES.
</FN>


</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
