Exhibit 10.11

 

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN

 

Amended and Restated -

As of November 3, 2005

 

--------------------------------------------------------------------------------

 

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN FOR KEY EMPLOYEES

AMENDED AND RESTATED AS OF NOVEMBER 3, 2005

 

ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN

 

1.1                                 Adoption of Plan.  Schweitzer-Mauduit
International, Inc. (“Company”) hereby amends and restates the
Schweitzer-Mauduit International, Inc. Executive Severance Plan as of November
3, 2005.  The Company intends that this Plan qualify as and come within the
various exceptions and exemptions under the Employee Retirement Income Security
Act of 1974 (“ERISA”), as amended, for an unfunded plan maintained primarily for
a select group of management or highly compensated employees, and any
ambiguities in this Plan shall be construed to effect that intent.  The benefits
of this Plan for U.S. Employees (as hereinafter defined) shall be paid solely
from the general assets of the Company.  The benefits of this Plan for French
Employees (as hereinafter defined) shall be paid by the French Employer (as
hereinafter defined) but, if as a result of applicable French laws, a French
Employer would be prohibited from paying the benefits of this Plan to a French
Employee, any such benefits shall be paid by the Company to such French
Employee.

 

1.2                                 Purpose.  The Plan is primarily designed to
provide benefits to certain Key Employees (as hereinafter defined) upon
termination of employment as a result of a Change of Control or otherwise.

 

1.3                                 Effect on Other Plans Sponsored by the
Company or by a French Employer.  The benefits payable under the Plan are in
addition to the coverage and benefits generally afforded by Other Plans (as
hereinafter defined) to Key Employees terminating from the

 

1

--------------------------------------------------------------------------------

 

service of the Company or, as the case may be, from the service of a French
Employer and any other programs sponsored by the Company or provided to
Participants who are French Employees including, but not limited to, vested
benefits under any qualified employee benefit plans.  However, nothing herein is
intended to or shall be construed to require the Company or a French Employer to
institute or continue in effect any particular plan or benefit sponsored by the
Company or such French Employer, and the Company and each French Employer hereby
reserve the right to amend or terminate any of their Other Plans or benefit
programs at any time in accordance with the procedures set forth in each such
plan or program and any applicable law.

 

The masculine pronoun shall be construed to include the feminine pronoun and
singular shall include the plural where the context so requires.

 

ARTICLE 2 - DEFINITIONS

 

2.1                                 “Administrator” shall mean the Compensation
Committee of the Board.  Following a Change of Control, the Administrator shall
be the Trustee of a grantor trust established by the Company that includes this
Plan.

 

2.2                                 “Agreement” shall mean the participation
agreement provided to a Key Employee by the Administrator as provided in
Section 3.2.

 

2.3                                 “Annual Compensation” shall mean:

 

a)                                      For U.S. Employees, a Participant’s rate
of base salary paid or payable for a calendar year by the Company and any
incentive award paid or payable to such Participant pursuant to the
Schweitzer-Mauduit International, Inc.  Annual Incentive Plan (the “SMI Annual
Incentive Plan”) or any replacement or successor to such plan for such calendar
year.

 

2

--------------------------------------------------------------------------------

 

b)                                     For French Employees, a Participant’s
rate of base salary paid or payable for a calendar year by his French Employer,
plus any incentive award paid or payable to such Participant pursuant to the SMI
Annual Incentive Plan or any replacement or successor to such plan for such
calendar year, plus any profit-sharing paid or payable by his French Employer
attributable to such calendar year minus the aggregate amount of (i) any
Convention Collective payments, (ii) Assedic Payments, or (iii) private
insurance payments paid or payable to such Participant as a result of a Change
of Control Termination.

 

2.4                                 “Basic Plan” shall mean the Securite Sociale
retirement benefit plan sponsored by the French Government.

 

2.5                                 “Board” shall mean the Board of Directors of
Schweitzer-Mauduit International, Inc.

 

2.6                                 “Cause” shall mean the termination of the
Participant’s employment by the Company or by his French Employer, as the case
may be, on the basis of criminal or civil fraud on the part of the Participant.

 

2.7                                 “Change of Control” shall mean the date as
of which: (a) a third person, including a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, acquires actual or
beneficial ownership of shares of the Company having 15% or more of the total
number of votes that may be cast for the election of Directors of the Company;
or (b) as the result of any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any combination
of the foregoing transactions (a “Transaction”), the persons who

 

3

--------------------------------------------------------------------------------

 

were directors of the Company before the Transaction shall cease to constitute a
majority of the Board of Directors of the Company or any successor to the
Company.

 

2.8                                 “Change of Control Termination” shall mean
the termination of a Participant’s employment by the Company or his French
Employer, as the case may be, within two years of a Change of Control for any
reason other than for Cause, Retirement, Disability or the Participant’s death.

 

2.9                                 “Code” shall mean the Internal Revenue Code
of 1986, as amended.

 

2.10                           “Company” shall mean Schweitzer-Mauduit
International, Inc. and each of its successors and assigns.

 

2.11                           “Complementary Plan” shall mean the national
pension plans for French Employees and workers sponsored by the Association des
Régimes de Retraite Complémentaires (“ARRCO”) and the Association Généralé des
Institutions de Retraite des Cadres (“AGIRC”), respectively.

 

2.12                           “Disability” shall mean Totally and Permanently
Disabled, within the meaning of the Retirement Plan, provided that the
Administrator shall make any such determination with respect to a Participant
hereunder.

 

2.13                           “French Employee” shall mean an individual
employed by one of the French Employers.

 

2.14                           “French Employer(s)” mean Schweitzer-Mauduit
France, S.A.R.L. or LTR Industries, S.A., and their respective successors and
subsidiaries.

 

2.15                           “French Supplementary Plans” shall mean the
supplementary pension benefit plans provided, respectively, by Papeteries de
Mauduit, S.A. and LTR Industries, S.A. to their employees.

 

4

--------------------------------------------------------------------------------

 

2.16                           “Key Employee” shall mean an individual who is a
member of a select group of management or highly compensated French Employees
and/or U.S. Employees, as determined from time to time by the Administrator.

 

2.17                           “Other Plans” shall mean other plans of the
Company or of the French Employer, including but not limited to the
Schweitzer-Mauduit International, Inc. Annual Incentive Plan, the
Schweitzer-Mauduit International, Inc. Equity Participation Plan, the
Schweitzer-Mauduit International, Inc. Long-Term Incentive Plan,
Schweitzer-Mauduit International, Inc. Restricted Stock Plan, 
Schweitzer-Mauduit International, Inc. Deferred Compensation Plan and the
Supplemental Plan.

 

2.18                           “Participant” shall mean a Key Employee who has
entered into an Agreement with the Administrator in accordance with Section 3.2.

 

2.19                           “Plan” shall mean this Schweitzer-Mauduit
International, Inc. Executive Severance Plan.

 

2.20                           “Retirement” shall mean

 

a)                                      For U.S. Employees, the voluntary
termination of the Participant’s employment by the Company pursuant to the terms
of the qualified defined benefit pension plan of the Company, which termination
was initiated by such Participant in writing pursuant to the procedures of such
qualified defined benefit pension plan prior to a Change of Control
notwithstanding the Participant’s actual retirement date occurs after a Change
of Control.

 

b)                                     For French Employees, the voluntary
termination of the Participant’s employment by his French Employer as a result
of such Participant’s retirement pursuant to the terms of the Basic Plan, the
Complementary Plan and, if

 

5

--------------------------------------------------------------------------------

 

applicable, the French Supplementary Plan, which termination was initiated by
such Participant in writing pursuant to the procedures of such Basic Plan,
Complementary Plan and, if applicable, French Supplementary Plan prior Change of
Control, notwithstanding that the Participant’s actual retirement date occurs
after a Change of Control.

 

2.21                           “Retirement Plan” shall mean the
Schweitzer-Mauduit International, Inc. Retirement Plan, as amended and restated
as of July 1, 2000 and including amendments 2001-1, 2001-2, 2002-2 and 2003-1. 
For clarity and to avoid confusion, the term Retirement Plan for the purposes of
this Plan shall not refer to or include the terms of any amendment of the
Retirement Plan impacting the benefits of a participant therein made subsequent
to July 1, 2000 other than those specifically identified hereinabove.

 

2.22                           “Supplemental Plan” shall mean the Supplemental
Benefit Plan to the Schweitzer-Mauduit International, Inc. Retirement Plan, as
amended and restated as of November 21, 2003.  For clarity and to avoid
confusion, the term Supplemental Plan for the purposes of this Plan shall not
refer to or include the terms of any amendment of the Supplemental Plan
impacting the benefits of a participant therein made subsequent to November 21,
2003.

 

2.23                           “U.S. Employee” shall mean individuals employed
by the Company.

 

2.24                           “Voluntary Resignation” shall mean termination of
a Participant’s employment with the Company or the French Employer(s) as a
result of a resignation initiated by the Participant which is unrelated to any
act or omission of the Company or the French Employer, as the case may be, which
could not reasonably be construed to be a constructive discharge of such
Participant.

 

6

--------------------------------------------------------------------------------

 

2.25                           “Deferred Compensation Plan” shall mean the
Schweitzer-Mauduit International, Inc. Deferred Compensation Plan, amended and
restated as of February 26, 2004, and the Schweitzer-Mauduit International, Inc.
Deferred Compensation Plan No. 2, effective as of January 1, 2005.

 

ARTICLE 3 - ELIGIBILITY

 

3.1                                 Eligibility to Participate.  The
Administrator shall from time to time determine in writing the Key Employees who
are eligible to participate in this Plan.  A list of current Participants shall
be set forth on Appendix A hereto, as updated by the Committee from time to
time.

 

3.2                                 Agreement.  The Administrator shall enter
into a participation agreement with each Key Employee the Administrator
determines to be eligible for participation in this Plan.  Such Agreement shall
identify the Key Employee as a Participant in this Plan and shall contain such
terms as deemed appropriate by the Administrator, but shall be consistent with
and governed by the terms of this Plan.

 

ARTICLE 4 - SEVERANCE BENEFITS

 

4.1                                 Termination Following Change of Control.  A
Participant shall be entitled to receive benefits under this Plan following a
Change of Control as follows:

 

a)                                      Subject to Section 4.1 (b), a
Participant’s employment with the Company or his French Employer, as the case
may be, shall terminate within two years of a Change of Control for any reason
other than for Cause, Retirement, Disability or the Participant’s death.

 

7

--------------------------------------------------------------------------------

 

b)                                     A Participant that has been requested in
writing by the Company or the French Employer, as the case may be, to continue
in the employment of the Company or the French Employer through a specified
date, which shall not be more than six (6) months from the date of a Change of
Control, under terms and conditions of employment, at the place of employment
and with the same salary and benefits that the Participant was provided prior to
the Change of Control, shall have satisfied such request by remaining in the
employment of the Company or the French Employer for the specified period.

 

c)                                      A Participant entitled to benefits under
this Plan shall receive and the Company or, subject to the provisions of
Section 1.1, the French Employer, as the case may be, shall pay or, with respect
to certain benefits hereinafter described, shall cause to be paid to the
Participant the following benefits:

 

(1)                                     an amount equal to three times the
Participant’s highest Annual Compensation for any calendar year beginning with
or within the three-year period terminating on the date of termination of the
Participant’s employment, which amount shall be paid to the Participant in cash
on or before the fifth day following the date of termination;

 

(2)                                     for a period of three years following
the date of termination of employment, the Participant and anyone entitled to
claim under or through the Participant shall be entitled to benefits as follows:

 

(i)                                     For U.S. Employees, all benefits under
the group health care plan, dental care plan, life or other insurance or death
benefit plan, or other present or future similar group employee benefit plan or

 

8

--------------------------------------------------------------------------------

 

program of the Company for which key executives are eligible at the date of a
Change of Control, to the same extent as if the Participant had continued to be
an employee of the Company during such period and such benefits shall, to the
extent not fully paid under any such plan or program, be paid by the Company;
and

 

(ii)                                  for French Employees, all medical and
dental benefits provided by “Social Securite”, medical, dental and life
insurance or death benefit plans, or other present or future similar medical,
dental, life or other insurance or death benefit plans or programs generally
available to French Employees for which such Participant is eligible at the date
of the Change of Control, to the same extent as if the Participant had continued
to be a French Employee during such period and such benefits shall, to the
extent not fully paid under any such plan or program, be paid by the French
Employer.

 

(3)                                  for a U.S. Employee, a lump sum payable in
cash on or before the fifth day following the date of termination equal to:

 

(i)                                     for a U.S. Employee Participant in the
final average pay benefit formula under the Retirement Plan an amount equal to
the Actuarial Equivalent (as defined in the Retirement Plan) of the accrued
benefit the Participant would have earned under the Retirement Plan and the
Supplemental Plan for the three-year period following the date of termination of
his employment with the Company based on the Participant’s earnings in effect
for

 

9

--------------------------------------------------------------------------------

 

purposes of the Retirement Plan and the Supplemental Plan on the date of such
termination.

 

(ii)                                  for a U.S. Employee Participant in the
cash balance benefit formula under the Retirement Plan an amount equal to the
actual dollar amount of the accrued benefit the Participant would have earned
under the Retirement Plan and the Supplemental Plan for the three-year period
following the date of termination of his employment with the Company based on
the Participant’s earnings in effect for purposes of the Retirement Plan and the
Supplemental Plan on the date of such termination.  Such amounts shall include
any amounts payable in the form of Excess Retirement Benefit contributions into
the Deferred Compensation Plan, as such term is defined in the Deferred
Compensation Plan.

 

(4)                                  for French Employees, a lump sum equal to
the sum of the following amounts which sum shall be payable in cash on or before
the tenth day following the date of termination:

 

(i)                                     the cost of purchasing any pension
credits lost by a Participant under the Basic Plan as a result of a Change of
Control Termination, but in no event shall the pension credits so purchased
exceed 12 quarters of pension credits;

 

(ii)                                  a lump sum equal to (x) the purchase price
of any pension credits lost by a Participant under the Complementary Plan plus
(y) the present value of any portion of lost pension credits which may not

 

10

--------------------------------------------------------------------------------

 

be purchased back from the Complementary Plan, each as a result of a Change of
Control Termination provided, however, that in no event shall such lost
Complementary Plan benefits exceed the present worth of three years of such lost
pension benefits; and

 

(iii)                               for pension benefits lost under the French
Supplementary Plan as a result of a Change of Control Termination, payment of a
lump sum calculated as follows:

 

a)                                      if the Participant is terminated between
ages 62 and 65, a lump sum equal to the present worth of the difference between
the pension benefits the Participant would have received at age 65 absent the
Change of Control Termination and the reduced pension benefit such Participant
will receive at age 65 as a result of such termination;

 

b)                                     if the Participant is terminated between
ages 60 and 62, payment of a lump sum as calculated in (a) above multiplied by
the ratio of A to B where A = three years and B = the number of years between
the Change of Control Termination and attainment of age 65.

 

c)                                      if the Participant is terminated before
age 60 or with less than 20 years service with a French Employer, a lump sum
equal to the present worth of the

 

11

--------------------------------------------------------------------------------

 

pension benefit the Participant would have received at age 65, absent the Change
of Control Termination multiplied by the ratio of A to B where A = three years
and B = the number of years between the Change of Control Termination and the
date on which the Participant would attain age 65 provided, however, that no
such lump sum shall be payable unless such Participant could have earned 20
years service with a French Employer on or before attainment of age 65, absent a
Change of Control Termination.

 

d)                                     If a Participant is or may be liable for
Federal income taxes in the United States, such Participant’s Agreement shall
provide that the parties agree that the payments provided in
Section 4.1(a) hereof are reasonable compensation in light of the Participant’s
services rendered to the Company or the French Employer, as the case may be, and
that neither party shall contest the payment of such benefits as constituting an
“excess parachute payment” within the meaning of Section 280G(b)(1) of the Code.

 

e)                                      In the event that (i) the Participant
becomes entitled to the compensation and benefits described in
Section 4.1(a) hereof (“Compensation Payments”), (ii) the Company

 

12

--------------------------------------------------------------------------------

 

determines, based upon the advice of tax counsel selected by the Company’s
independent auditors and acceptable to the Participant, that, as a result of
such Compensation Payments and any other benefits or payments required to be
taken into account under Code Section 280G(b)(2) (“Parachute Payments”), any of
such Parachute Payments must be reported by the Company as “excess parachute
payments”, and (iii) such Parachute Payments are 3.5 or more times the “base
amount” as defined in Code Section 280G(b)(3) with respect to such Participant
(“Base Amount”), the Company shall pay to the Participant at the time specified
in Section 4.1(a) above an additional amount (“Gross-Up Payment”) such that the
net amount retained by the Participant, after deduction of any of the tax
imposed on the Participant by Section 4999 of the Code (“Excise Tax”) and any
Federal, state and local income tax and Excise Tax upon the Gross-Up Payment,
shall be equal to the Parachute Payments determined prior to the application of
this paragraph.  The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company’s independent auditors.  For purposes
of determining the amount of the Gross-Up Payment, the Participant shall be
deemed to pay Federal income taxes at

 

13

--------------------------------------------------------------------------------

 

the highest marginal rate of Federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation in the state and locality of the
Participant’s residence on the date of termination of his employment, net of the
maximum reduction in Federal income taxes which could be obtained from deduction
of such state and local taxes.  In the event that the Excise Tax payable by the
Participant is subsequently determined to be less than the amount, if any, taken
into account hereunder at the time of termination of the Participant’s
employment, the Participant shall repay to the Company at the time that the
amount of such reduction in Excise Tax is finally determined the portion of the
Gross-Up Payment attributable to such reduction plus interest on the amount of
such repayment at the rate provided for in Section 1274(b)(2)(B) of the Code
(“Repayment Amount”).  In the event that the Excise Tax payable by the
Participant is determined to exceed the amount, if any, taken into account
hereunder at the time of the termination of the Participant’s employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up

 

14

--------------------------------------------------------------------------------

 

Payment in respect of such excess (plus any interest and penalty payable with
respect to such excess) immediately prior to the time that the amount of such
excess is required to be paid by Participant (regardless of any contest of such
payment pursuant to Section 4.1(e)) (“Additional Gross-up Payment”), such that
the net amount retained by the Participant, after deduction of any Excise Tax on
the Parachute Payments and any Federal, state and local income tax and Excise
Tax upon the Additional Gross-Up Payment, shall be equal to the Parachute
Payments determined prior to the application of this paragraph. In the event
that the Excise Tax payable by the Participant is subsequently determined to be
less than the amount of the Additional Gross-up Payment paid to the participant,
the Participant shall repay to the Company at the time that the amount of such
reduction in the Additional Gross-up Payment is determined the portion of the
Additional Gross-up Payment attributable to such reduction plus interest on the
amount of such repayment at the rate provided for in Section 1274(h)(2)(B) of
the Code (“Additional Repayment Amount”).  The obligation to pay any Repayment
Amount, Additional Gross-up or Additional Repayment Amount shall remain in
effect under

 

15

--------------------------------------------------------------------------------

 

this Agreement for the entire period during which the Participant remains liable
for the Excise Tax, including the period during which any applicable statute of
limitation remains open.

 

f)                                        In the event the Participant’s
Parachute Payments are less than 3.5 times the Base Amount, the Company shall
limit the Compensation Payments provided hereunder to the extent necessary so
that the Participant’s Parachute Payments do not exceed 2.99 times the Base
Amount.

 

g)                                     Unless the Company determines that any
Parachute Payments made hereunder must be reported as “excess parachute
payments” in accordance with Section 4.1(c) above, neither party shall file any
return taking the position that the payment of such benefits constitutes an
“excess parachute payment” within the meaning of Section 280G(b)(1) of the
Code.  If the Internal Revenue Service proposes an assessment of Excise Tax
against the Participant in excess of the amount, if any, taken into account at
the time specified in Section 4.1(c) and the Company notifies the Participant in
writing that the Company elects to contest such assessment at its own expense,
the Participant shall cooperate in good faith with the Company in contesting
such proposed assessment and

 

16

--------------------------------------------------------------------------------

 

agrees not to settle such contest without the written consent of the Company. 
Any such contest shall be controlled by the Company, provided, however, that the
Participant shall have the right to participate in such contest. 
Notwithstanding the Company’s election to contest the assessment of an Excise
Tax, the Participant shall be entitled to an Additional Gross-Up Payment under
Section 4.l(c) at the time set forth therein.

 

4.2                                 Termination of Employment.  If a
Participant’s employment with the Company or his French Employer shall terminate
during the term of his Agreement for any reason other than death, Retirement,
Voluntary Resignation or Cause, the Company or (if such payment is not
inconsistent with any relevant French law) his French Employer, shall pay the
Participant or the Participant’s beneficiary, as the case may be, in cash a lump
sum payment in the amount set forth in the Agreement with such Participant under
this Plan within 30 days of his termination of employment.  Such amount shall be
set forth on Appendix A hereto and shall not be more than the Participant’s
monthly base salary multiplied by 24.  No benefits shall be payable pursuant to
this Section 4.2 in the event a Participant is entitled to severance payments
under Section 4.1 hereof.

 

ARTICLE 5 - ADMINISTRATION

 

5.1                                 Administrator.  The Administrator is
responsible for the general administration of the Plan.

 

17

--------------------------------------------------------------------------------

 

5.2                                 Duties of the Administrator.  The
Administrator shall be responsible for the daily administration of the Plan and
may appoint other persons or entities to perform or assist in the performance of
any of its duties, subject to its review and approval.  The Administrator shall
have the right to remove any such appointee from his position without cause upon
notice.

 

5.3                                 Powers.  The Administrator shall administer
the Plan in accordance with its terms and shall have all powers necessary to
carry out the provisions of the Plan as more particularly set forth herein.  The
Administrator shall have discretionary authority to interpret the Plan, and to
determine all questions arising in the administration, interpretation, and
application of the Plan; provided, however, that such discretionary authority
shall be exercised in good faith in order to achieve the principal purposes of
the Plan to provide severance benefits, including enhanced severance benefits
upon a Change of Control, as described in Article 4.  All such determinations
shall be conclusive and binding on all interested persons.  The Administrator
shall adopt such procedures and regulations necessary and/or desirable for the
discharge of its duties hereunder and may appoint such accountants, counsel,
actuaries, specialists, and other agents as it deems necessary and/or desirable
in connection with the administration of this Plan.

 

5.4                                 Compensation of the Administrator.  The
Administrator shall not receive any compensation from the Plan for its services.

 

5.5                                 Indemnification.  The Company shall
indemnify the Administrator against any and all claims, losses, damages,
expenses, and liability arising from its actions or omissions, except when the
same is finally adjudicated to be due to the Administrator’s gross negligence or
willful misconduct.  The Company may purchase at its own expense sufficient
liability insurance for the Administrator to cover any and all claims, losses,
damages, and expenses arising from any action or omission in connection with the
execution of the duties as the Administrator.

 

18

--------------------------------------------------------------------------------

 

ARTICLE 6 - SUCCESSOR TO THE COMPANY

 

6.1                                 The Company will require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, expressly, absolutely and unconditionally to assume this Plan and agree
to perform the obligations of the Company under this Plan and each Participant’s
Agreement in the same manner and to the same extent that the Company would be
required to perform such obligations if no such succession or assignment had
taken place.

 

ARTICLE 7 - MISCELLANEOUS

 

7.1                                 Funding of Benefits.  The benefits payable
to a Participant under the Plan shall not be funded in any manner and shall be
paid by the Company or the French employer, as the case may be, out of its
general assets, which assets are subject to the claims of the Company’s or the
French Employer’s creditors.

 

7.2                                 Establishment of Trust.

 

a)                                      The Company may establish a Grantor
Trust (“Trust”) for the Plan.  If established, all benefits payable under this
Plan to a Participant shall be paid directly by the Company from the Trust.  To
the extent that such benefits are not paid from the Trust, the benefits shall be
paid from the general assets of the Company and shall

 

19

--------------------------------------------------------------------------------

 

be reimbursed to the Company by the Trust at the Company’s request upon
presentation of reasonable proof that the Company made such payment.  Any Trust
shall be an irrevocable grantor trust which conforms the requirements of the
model trust as described in IRS Revenue Procedure 92-64, I.R.B. 1992-33.  The
assets of the Trust are subject to the claims of the Company’s creditors in the
event of its insolvency.  Except as to any amounts paid or payable to a Trust,
the Company shall not be obligated to set aside, earmark or escrow any funds or
other assets to satisfy its obligations under this Plan, and the Participant
shall not have any property interest in any specific assets of the Company other
than the unsecured right to receive payments from the Company, as provided in
this Plan.

 

b)                                     Payment From the Trust.  In the event a
Trust is established and payments are not made by the Company in accordance with
the terms of the Plan, a Participant may petition the trustee of the Trust
directly for payment and the trustee may make such payment directly to the
Participant upon the trustee’s good faith determination that the payment was in
fact owed, was not timely paid by the Company and that there are sufficient
assets in the Trust to make the payment.

 

7.3                                 Settlement of Accounts.  Except as
prohibited by applicable law, there shall be deducted from the payment of any
benefit due under the Plan the amount of any uncontested indebtedness,
obligation, or liability which the Participant has acknowledged in writing as
owing to the Company or the French Employer as the case may be, or any of their
respective subsidiaries and the amount of which has been agreed to by the
Participant.

 

7.4                                 Withholding.  There shall be deducted from
the payment of any benefit due under the Plan the amount of any tax required by
any governmental authority to be withheld and paid

 

20

--------------------------------------------------------------------------------

 

over by the Company or the French Employer, as the case may be, to such
governmental authority for the account of the Participant entitled to such
payment.

 

7.5                                 Assignment by the Participant.  Unless
required by court order, no Participant or beneficiary shall have any rights to
sell, assign, transfer, encumber, or otherwise convey the right to receive the
payment of any benefit due hereunder, which payment and the rights thereto are
expressly declared to be nonassignable and nontransferable.  Any attempt to do
so shall be null and void and of no effect.

 

7.6                                 Amendment and Termination.  The Plan may be
amended or terminated at any time by the Company, by resolution of the Board;
provided that no termination or amendment reducing the severance benefits
provided hereunder shall be effective until the expiration of the two-year
period following the date of the Board resolution providing for such
termination.  Further, no amendment or termination shall be effective during the
two-year period following the date of a Change of Control of the Company without
the consent of all the Participants.  Any termination of this Plan shall cause
the immediate termination of all outstanding Agreements hereunder.  No amendment
or termination shall affect the rights of any Participant who is entitled to
severance benefits pursuant to Article 4 at the time of such amendment or
termination.

 

7.7                                 No Guarantee of Employment.  Participation
hereunder shall not be construed as creating any contract of employment between
the Company or a French Employer and any Key Employee, nor shall it limit the
right of the Company or such French Employer to terminate a Key Employee’s
employment at any time for any reason whatsoever.

 

7.8  Construction.  This Plan shall be construed in accordance with and governed
by the laws of the State of Georgia, to the extent such laws are not otherwise
superseded by the laws of the United States.

 

21

--------------------------------------------------------------------------------

 

APPENDIX A

 

Participants in the

Schweitzer-Mauduit International, Inc.

Executive Severance Plan and Number of

Months of Base Salary Pursuant to

Section 4.2 of the Plan

 

 

 

Number of Months of

 

 

Participant’s Base Salary in the

 

 

Event of Termination, Pursuant to

Name

 

Section 4.2 of the Plan

 

 

 

Wayne H. Deitrich

 

24

Paul C. Roberts

 

12

John W. Rumely

 

12

William R. Foust

 

12

Wayne L. Grunewald

 

6

Jean-Pierre Le Hétêt

 

12

Raymond Nedellec

 

6

Thierry Bellanger

 

12

Peter J. Thompson

 

12

Otto R. Herbst

 

12

Widjaja Jiemy

 

12

 

22

--------------------------------------------------------------------------------