Exhibit 10.11

 

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN

 

Amended and Restated -

As of December 4, 2008

 

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SCHWEITZER-MAUDUIT INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN FOR KEY EMPLOYEES

AMENDED AND RESTATED AS OF DECEMBER 4, 2008

 

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
February 24, 2000.  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

 

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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.

 

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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

 

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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.

 

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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.

 

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 applicable, the French Supplementary Plan, which
termination was initiated by

 

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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                           [Reserved]

 

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.

 

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.

 

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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.

 

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

 

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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, subject to
Section 8.2;

 

(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
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

 

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“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;

 

(iii)                           notwithstanding the foregoing, in the event that
a Participant is or may be liable for Federal income taxes in the United States,
(A) during such three-year period, the benefits provided (or the amounts paid by
the Company with respect to such benefits) in any one calendar year shall not
affect the amount of benefits (or amounts paid with respect to such benefits)
provided in any other calendar year; (B) the reimbursement of an eligible
taxable expense shall be made as soon as practicable but not later than
December 31 of the year following the year in which the expense was incurred;
and (C) the Participant’s rights pursuant to this Section 4.1(c)(2) shall not be
subject to liquidation or exchange for another benefit.

 

(3)                                  for a U.S. Employee, a lump sum payable in
cash on or before the fifth day following the date of termination, subject to
Section 8.2, 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

 

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Actuarial Equivalent (as defined in the Retirement Plan) of the accrued benefit
the Participant would have earned under the Retirement 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 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 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 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, subject to Section 8.2:

 

(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;

 

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(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 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.

 

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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 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.

 

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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 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 (and in no event later than December 31 of the year
after the year in which the related taxes are remitted to the applicable taxing
authorities) 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

 

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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, or another independent accounting firm
selected by the Company.  For purposes of determining the amount of the Gross-Up
Payment, the Participant shall be deemed to pay Federal income taxes at 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

 

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(“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 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

 

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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 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.  Such limitation of payments shall be determined in such a manner as to
maximize the economic present value of the payments actually made to the
Participant, determined by the the accounting firm as of the date of the Change
in Control using the discount rate required by Section 280G(d)(4) of the Code.

 

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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 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.

 

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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.

 

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

 

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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.

 

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.

 

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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 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

 

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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 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

 

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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.

 

ARTICLE 8 — CODE SECTION 409A

 

8.1                                    Separation from Service.  In the event
that a Participant is or may be liable for Federal income taxes in the United
States, for purposes of this Plan a termination of his or her employment shall
be deemed to occur only upon the Participant’s “separation from service,” as
such term is defined in Code Section 409A (without giving effect to any elective
provisions that may be available under such definition).

 

8.2                                    Additional Requirements Regarding
Payments and Benefits.  Notwithstanding anything in this Plan to the contrary,
in the event that a Participant is or may be liable for Federal income taxes in
the United States and if any amount or benefit specified herein as “subject to
Section 8.2” would be payable or distributable under this Plan by reason of the
Participant’s separation from service at a time at which he is a Specified
Employee (as defined below), then, subject to any permissible acceleration of
payment by Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii)

 

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(domestic relations order), (j)(4)(iii) (conflicts of interest), or
(j)(4)(vi) (payment of employment taxes):

 

(a)                                  if the payment or distribution is payable
in a lump sum, the Participant’s right to receive payment or distribution of
such non-exempt deferred compensation will be delayed until the earlier of the
Participant’s death or the first day of the seventh month following the
Participant’s separation from service; and

 

(b)                                 if the payment or distribution is payable
over time, the amount of such non-exempt deferred compensation that would
otherwise be payable during the six-month period immediately following the
Participant’s separation from service will be accumulated and the Participant’s
right to receive payment or distribution of such accumulated amount will be
delayed until the earlier of the Participant’s death or the first day of the
seventh month following the Participant’s separation from service, whereupon the
accumulated amount will be paid or distributed to the Participant and the normal
payment or distribution schedule for any remaining payments or distributions
will resume.

 

8.2                                    Specified Employee.  For purposes of this
Plan, the term “Specified Employee” has the meaning given such term in Code
Section 409A and the final regulations thereunder (“Final 409A Regulations”), in
accordance with rules adopted by the Board of Directors or a committee thereof,
which shall be applied consistently with respect to all nonqualified deferred
compensation arrangements of Employer, including this Plan, as to the
determination of Specified Employees.

 

23

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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

 

 

 

 

 

Chief Executive Officer

 

24

 

Secretary and General Counsel

 

12

 

Chief Operating Officer

 

12

 

Chief Financial Officer and Treasurer

 

12

 

President — European Operations

 

12

 

President — the Americas

 

12

 

Vice President - Administration

 

12

 

Vice President Strategic Planning

 

12

 

Controller

 

6

 

 

24

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