Exhibit 10.19

 

 

Option Number:

 

 

 

 

 

Date of Option:

 

 

 

 

 

Expires Midnight:

 

 

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.

INCENTIVE STOCK OPTION

 

This Option, granted this          day of                     , 2004, by
Schweitzer-Mauduit International, Inc., a Delaware corporation (hereinafter
called the “Corporation”),
to                                                               (hereinafter
called the “Employee”).

 

W I T N E S S E T H:

 

WHEREAS, the Corporation has adopted the Schweitzer-Mauduit International, Inc.
Equity Participation Plan (the “Plan”) to encourage those employees who
materially contribute, by managerial, scientific or other innovative means, to
the success of the Corporation or an Affiliate, to acquire an ownership interest
in the Corporation, thereby increasing their motivations for and interest in the
Corporation’s or the Affiliate’s long-term success;

 

NOW, THEREFORE, it is agreed as follows:

 

1.                                       Number of Shares Optioned; Option
Price.  The Corporation grants to the Employee the right and option to purchase
in his own name, and on the terms and conditions hereinafter set forth, all or
any part of an aggregate of          shares of the $0.10 par value common stock
of the Corporation at a purchase price of $                   per share.  Except
as provided in Section 4(c) below, this option is intended to be an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), and the term “option” as used herein shall mean
an “incentive stock option.”

 

2.                                       Qualification for Receipt of Option
Grants.  An option shall be granted only to an individual who, at the time the
option is granted, does not own stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Corporation or an
Affiliate.

 

3.                                       Limitations on Option Grants.  The
aggregate fair market value (determined as of the time the option is granted) of
the shares with respect to which this option, and any other options granted by
the Corporation or one of the Affiliates and subject to Section 422(d) of the
Code, first becomes exercisable by the Employee in any year shall not exceed
$100,000.

 

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4.                                       Exercise of Option.

 

(a)                                  Limitations on Exercise.  This option shall
not be exercisable until at least one year has expired after the granting of
this option, during which time the Employee shall have been in the continuous
employ of the Corporation or an Affiliate.  At any time during the period of
this option after the end of the first year, the Employee may purchase up to 30
percent of the shares covered by this option; after the end of the second year,
an additional 30 percent; and after the end of the third year, the remaining 40
percent of the total number of shares covered by this option, so that, upon the
expiration of the third year, the Employee will have become entitled to purchase
all shares subject to this option.  Notwithstanding the foregoing, in the event
of a Change of Control, the remaining portion of the option shall become
immediately vested and exercisable in full.  To the extent provided by rules of
the Committee referred to in the Plan (hereinafter referred to as the
“Committee”), this option is not exercisable during any period during which the
Employee’s right to make deposits to the Schweitzer-Mauduit International, Inc.
Salaried Employees Retirement Savings Plan is suspended pursuant to a provision
of such plan or rules adopted thereunder to comply with regulations regarding
hardship withdrawals promulgated by the Internal Revenue Service.

 

(b)                                 Exercise Upon Termination of Employment.  If
the Employee’s employment is terminated for any reason other than Death,
Retirement or Total and Permanent Disability, this option shall be exercisable
for only three months following such termination and only for the number of
shares which were exercisable on the date of such termination.  In no event,
however, may this option be exercised after its expiration date.

 

A leave of absence shall not be deemed to be a termination of employment.  A
termination of employment with the Corporation or an Affiliate to accept
immediate reemployment with the Corporation or an Affiliate likewise shall not
be deemed to be a termination of employment.  However, in the event the Employee
transfers to an Affiliate which is not a corporation in which the Corporation
owns at least 50% of the equity interest, the option must be exercised within
three (3) months of such transfer or it shall become a nonqualified stock
option.

 

(c)                                  Exercise after Death, Disability or
Retirement.  If the Employee dies, becomes Totally and Permanently Disabled or
Retires without having exercised this option in full, the remaining portion of
this option, determined without regard to the limitations in subsection 4(a),
may be exercised within the earlier of (i) three years from the date of death or
Total and Permanent Disability or five years from the date of Retirement, as the
case may be, or (ii) the remaining period of this option.  Notwithstanding the
foregoing, the option will not be treated as an incentive stock option if it is
exercised more than three (3) months after the Employee’s Retirement or one (1)
year following his termination of employment as a result of his Total and
Permanent Disability.  In the case of an Employee’s death, this option may be
exercised by the person or persons to whom the Employee’s rights under this
option shall pass by will or by applicable law or, if no such person has such
rights, by his executor or administrator.

 

(d)                                 To the extent that shares which first become
eligible for purchase in any year pursuant to this option, or pursuant to this
and any other incentive stock option have an aggregate

 

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fair market value in excess of $100,000 determined as of the time the option
relating to such shares was granted, then a portion of such shares having a fair
market value of $100,000 will be shares subject to an incentive stock option and
the remainder of such shares will be shares subject to a nonqualified stock
option.  Determination of which shares will be subject to an incentive stock
option pursuant to the preceding sentence will be made by deeming options to be
incentive stock options in the order in which they were granted until the
aggregate fair market value of the shares subject to such options equals
$100,000.

 

(e)                                  Method of Exercise.  This option shall be
exercised by delivering to the Corporation, at the office of the Treasurer,
written notice of the number of shares with respect to which option rights are
being exercised and by paying in full the option price of the shares at the time
being acquired.  Payment may be made in cash, a check payable to the
Corporation, or in shares of the Corporation’s common stock transferable to the
Corporation and having a fair market value on the transfer date equal to the
amount payable to the Corporation.  The date of exercise shall be deemed to be
the date the Corporation receives the written notice and payment for the shares
being purchased.  The Employee shall have none of the rights of a stockholder
with respect to shares covered by an option until he becomes the record holder
of such shares.

 

(f)                                    Payment of Withholding Taxes.  No shares
of common stock may be purchased under this option unless prior to or
simultaneously with such purchase, the Employee or, in the event of his death,
the person succeeding to his rights hereunder, shall pay to the Corporation or
an Affiliate, as applicable, such amount as the Corporation or an Affiliate may
advise it is required under applicable federal, state or local laws to withhold
and pay over to governmental taxing authorities by reason of the purchase of
such shares of common stock pursuant to this option.

 

5.                                       Nontransferability.    This option
shall be transferable only by will or by the laws of descent and distribution,
and during the Employee’s lifetime shall be exercisable only by him.

 

6.                                       Compliance with Law.  No shares of
common stock may be purchased under this option, unless prior to the purchase
thereof, the Corporation shall have received an opinion of counsel to the effect
that the issuance and sale of such shares by the Corporation to the Employee
will not constitute a violation of the Securities Act of 1933, as amended.  As a
condition of exercise, the Employee shall, if requested by the Corporation,
submit a written statement in form satisfactory to counsel for the Corporation,
to the extent that any shares of common stock purchased upon exercise of this
option will be purchased for investment and not with a view to the distribution
thereof within the meaning of the Securities Act of 1933, as amended, and the
Corporation shall have the right, in its discretion, to cause the certificates
representing shares of common stock purchased hereunder to be appropriately
legended to refer to such undertaking or to any legal restrictions imposed upon
the transferability thereof by reason of such undertaking.

 

The option granted hereby is subject to the condition that if the listing,
registration or qualification of the shares subject hereto on any securities
exchange or under any state or federal law, or if the consent or approval of any
regulatory body shall be necessary as a condition of, or in connection with, the
granting of the option or the delivery or purchase of shares thereunder, such
option may not be exercised in whole or in part unless and until such listing,
registration,

 

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qualification, consent or approval shall have been effected or obtained.  The
Corporation agrees to use its best efforts to obtain any such requisite listing,
registration, qualification, consent or approval.

 

7.                                       No Right of Continued Employment.  The
granting of this option does not confer upon the Employee any legal right to be
continued in the employ of the Corporation or its Affiliates, and the
Corporation and it Affiliates reserve the right to discharge the Employee
whenever the interest of the Corporation or its affiliates may so require
without liability to the Corporation or its Affiliates, the Board of Directors
of the Corporation or its Affiliates or the Committee, except as to any rights
which may be expressly conferred on the Employee under this option.

 

8.                                       Discretion of the Corporation, Board of
Directors and the Committee.  Any decision made or action taken by the
Corporation or by the Board of Directors of the Corporation or by the Committee
arising out of or in connection with the construction, administration,
interpretation and effect of this option shall be within the absolute discretion
of the Corporation, the Board of Directors of the Corporation or the Committee,
as the case may be, and shall be conclusive and binding upon all persons.

 

9.                                       Inalienability of Benefits and
Interest.  This option and the rights and privileges conferred hereby shall not
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any such attempted action shall
be void and no such benefit or interest shall be in any manner liable for or
subject to debts, contracts, liabilities, engagements, or torts of the Employee.

 

10.                                 Georgia Law to Govern.  All questions
pertaining to the construction, interpretation, regulation, validity and effect
of the provisions of this option shall be determined in accordance with the laws
of the State of Georgia.

 

11.                                 Purchase of Common Stock.  The Corporation
and its Affiliates may, but shall not be required to, purchase shares of common
stock of the Corporation to satisfy the requirements of this option.  The
Corporation and its Affiliates shall have no obligation to retain, and shall
have the unlimited right to sell or otherwise deal with for their own account,
any shares of common stock of the Corporation purchased to satisfy the
requirements of this option.

 

12.                                 Notices.  Any notice to be given to the
Corporation under this option shall be addressed to the Corporation in care of
its Treasurer, and any notice to be given to the Employee under the terms of
this option may be addressed to him at this address as it appears on the
Corporation’s records, or at such other address as either party may hereafter
designate in writing to the other.  Any such notice shall be deemed to have been
duly given if and when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, registered and deposited, postage and registry fee
prepaid, in a post office or branch post office regularly maintained by the
United States Government.

 

13.                                 Disqualifying Disposition.  If an Employee
disposes of any shares of common stock acquired pursuant to exercise of this
option prior to the later of two years after the date of grant of this option or
one year after the transfer of any share to the Employee pursuant to the
exercise of

 

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this option, such disposition shall be treated as a disqualifying disposition
under Code Section 421(b) and not a disposition of a share acquired pursuant to
the exercise of an incentive stock option.  The Employee shall notify the
Company in writing in the event that, prior to the later of two years after the
date of grant of this option or one year after the transfer of any share to the
Employee pursuant to the exercise of this option, the Employee shall dispose of
such share.  Such notice shall state the date of disposition, the nature of the
disposition and the price, if any, received for the share.

 

14.                                 Changes in Capitalization.  In the event
there are any changes in the common stock or the capitalization of the
Corporation through a corporate transaction, such as any merger, any acquisition
through the issuance of capital stock of the Corporation, any consolidation, any
separation of the Corporation (including a spin-off or other distribution of
stock of the Corporation), any reorganization of the Corporation (whether or not
such reorganization comes within the definition of such term in Section 368 of
the Code), or any partial or complete liquidation by the Corporation,
recapitalization, stock dividend, stock split or other change in the corporate
structure, appropriate adjustments and changes shall be made by the Committee in
(a) the number of shares and the option price per share of stock subject to this
option, and (b) such other provisions of this option as may be necessary and
equitable to carry out the foregoing purposes, provided, however, that no such
adjustment or change may be made to the extent that such adjustment or change
will result in the disallowance of a deduction to the Corporation under
Section 162(m) of the Code or any successor section.

 

15.                                 Effect on Other Plans.  All benefits under
this option shall constitute special compensation and shall not affect the level
of benefits provided to or received by the Employee (or the Employee’s estate or
beneficiaries) as part of any employee benefit plan of the Corporation or an
Affiliate.  This option shall not be construed to affect in any way the
Employee’s rights and obligations under any other plan maintained by the
Corporation or an Affiliate on behalf of employees.

 

16.                                 Successors.  This option shall be binding
upon and inure to the benefit of any successor or successors of the Corporation.

 

17.                                 Amendments.  The Committee may at any time
alter or amend this option (subject to shareholder approval if required by
applicable law) to the extent (1) permitted by law, (2) permitted by the rules
of any stock exchange on which the common stock or any other security of the
Corporation is listed, (3) permitted under applicable provisions of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended (including rule 16b-3 thereof), and (4) that such action would not
result in the disallowance of a deduction to the Corporation under
Section 162(m) of the Code or any successor section (including the rules and
regulations promulgated thereunder).  Notwithstanding anything to the contrary
contained herein, the Committee may not take any action that (i) would result in
any amount payable under this option qualifying as “applicable employee
remuneration” as so defined for purposes of Section 162(m) of the Code or (ii)
would adversely alter or change any of the rights or obligations under this
option previously granted to the Employee hereunder without the written consent
of the Employee.

 

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18.                                 Defined Terms.  Terms which are capitalized
are defined herein or in the Plan and have the same meaning set forth in the
Plan, unless the context indicates otherwise.

 

IN WITNESS WHEREOF, the Corporation has caused this option to be executed on its
behalf by its Chairman of the Board of Directors, one of its Vice Chairman of
the Board of Directors, its Chief Executive Officer, its President, or one of
its Vice Presidents and to be sealed with its corporate seal and attested by its
Secretary or Assistant Secretary, as of the day and year first above written,
which is the date of this option.

 

 

SCHWEITZER-MAUDUIT

 

INTERNATIONAL, INC.

 

 

 

 

 

By:

 

 

 

 

Wayne H. Deitrich

 

Title:

Chairman and CEO

 

 

ATTEST:

 

 

 

 

 

 

 

 

 

John W. Rumely, Jr.

 

 

 

 

 

(SEAL)

 

 

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