ex101swmannualincetivepl






                                                                                                                                                                                                        SCHWEITZER-MAUDUIT INTERNATIONAL, INC.                           ANNUAL INCENTIVE PLAN                           Effective as of February 21, 2019                                                1. PURPOSE          The  purpose  of  this  Annual  Incentive  Plan  (the  “Plan”)  of  Schweitzer-Mauduit  International,  Inc.  (the  “Company”)  is  to  further  align  the interests  of  the  stockholders  of  the  Company and its key executives through:          (a) the annual establishment of Company objectives which are deemed by the Committee  (as defined below) to be in the short- and long-range interests of the Company; and          (b) providing Participants (as defined below) with the opportunity to earn cash incentive  awards  based  upon  the  extent  to  which  specified  performance  goals  have  been  achieved  or  exceeded during a performance period.         2. EFFECTIVE DATE          The Plan  is  effective for Measurement  Periods (as  defined  below) commencing  on  or  after January 1, 2019.         3. DEFINITIONS          “Affiliate” means any company in which the Company owns 20% or more of the equity  interest (collectively, the “Affiliates”).          “Board” means the Board of Directors of the Company.          “CEO” means the Chief Executive Officer of the Company.          “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  Exchange  Act,  acquires  actual  or  beneficial  ownership of shares of the Company having 30% 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 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.          “Code” means the Internal Revenue Code of 1986, as amended.                “Committee” means the Compensation Committee of the Board or such other committee  designated by the Board that satisfies, to the extent required by applicable law or regulation, any  then  applicable  requirements  of  the  principal  national  stock  exchange  on  which  the  common  stock of the Company is then traded to constitute a compensation committee.            “Control Measures” shall have the meaning as set forth in Section 8 of this Plan.          “Exchange Act” means the Securities Exchange Act of 1934, as amended.                “Incentive  Award” means  the  cash  award  payable  to  a  Participant  as  determined  in  accordance with Section 10 of this Plan.          “Measurement Period” means the fiscal year of the Company or such shorter or longer  period as determined by the Committee.          “Objective(s)” means the objectives set forth in Section 6 of this Plan.          “Objective Award” shall have the meaning set forth in Section 10 of this Plan.          “Participant” shall have the meaning set forth in Section 5 of this Plan.          “Percentage Weighting” shall have the meaning set forth in Section 7 of this Plan.          “Performance Levels” shall have the meaning set forth in Section 6 of this Plan.           “Performance Percentage” means the respective percentages applicable to achievement of  the following benchmark Performance Levels for a given Objective as follows: Threshold 50%;  Target 100%; Outstanding 150%; and Maximum 200%.  If actual performance of an Objective  falls between any two Performance Levels, the percentage amount applicable to the performance  level actually achieved will be prorated.                “Retirement” means attainment of age 55 and completion of five years of service.                    “Target Incentive Award Percentage” means the target percentage of a Participant’s base  salary designated by the Committee in its sole discretion with respect to a Measurement Period,  which percentage need not be the same for each Participant.         4. ADMINISTRATION         





 






      (a)  General.  The  Plan  shall  be  administered  by  the  Committee,  which  in  its  absolute  discretion shall have the power to interpret and construe the Plan, and to resolve all questions  arising hereunder. Any action by the Committee shall be final and conclusive as to all individuals  affected thereby.          (b) Powers and Responsibilities. The Committee shall have the following discretionary  powers, rights and responsibilities in addition to those described in Section 4(a):                (i)    to designate the Participants for a Measurement Period;                       (ii)    to  establish  the  Objectives,  Target Incentive  Award  Percentage  and  other  terms and conditions that are to apply to each Participant’s Incentive Award;                       (iii)    to  certify  in  writing  prior  to  the  payment  with  respect  to  any  Incentive  Award that the Objectives for a Measurement Period and other material terms applicable to the  Incentive Award have been satisfied;                       (iv)    subject to Section 409A of the Code, to determine whether, and under what  circumstances and subject to what terms, an Incentive Award is to be paid on a deferred basis,  including whether such a deferred payment shall be made solely at the Committee’s discretion or  whether a Participant may elect deferred payment; and                       (v)    to  adopt,  revise, suspend, waive or  repeal,  when and as  appropriate, in  its  sole and absolute discretion, such administrative rules, guidelines and procedures for the Plan as  it deems necessary or advisable to implement the terms and conditions of the Plan.          (c)    Delegation  of  Power.  Subject  to  applicable  laws  and  regulations  (including  any  regulation or rule of the principal national stock exchange on which the common stock of the  Company is  then traded), the Committee may delegate some or all of its  power and authority  hereunder  to  the CEO or  other  executive  officer  of  the  Company  as  the  Committee  deems  appropriate.           5. ELIGIBILITY          The  Committee  shall,  in  its  sole  discretion,  specify  in  writing  for  each  Measurement  Period those officers and employees of the Company or any Affiliate who shall be eligible to  participate  in  the  Plan  (the  “Participants”)  for  such  Measurement  Period  based  upon  such  Participants’  opportunity  to  have  a  substantial  impact  on  the  Company’s  operating  results.  Nothing  contained  in  the  Plan  shall  be  construed  as  or  be  evidence  of  any  contract  of  employment with any Participant for a term of any length, or as a limitation on the right of the  Company to discharge any Participant with or without cause. Notwithstanding the foregoing and  without otherwise limiting the Committee’s discretion to designate the officers and employees  eligible  to  participate  in  the  Plan,  if  a  Change  of  Control  or  operational  restructuring  of  the  Company (as determined by the Committee) occurs in a Measurement Period prior to the date       





 






the  Objectives,  Performance  Levels,  Percentage  Weightings,  Control  Measures  and  Target  Incentive Award Percentages are established for such Measurement Period, then the Objectives,  Performance  Levels,  Percentage  Weightings,  Control  Measures  and  Target  Incentive  Award  Percentages  shall  be  established  by  the  Committee  for  such  Measurement  Period  for  those  officers  and  employees  who  were  Participants  in  the  Plan  in  the  immediately  preceding  Measurement Period, and such Objectives, Performance Levels, Percentage Weightings, Target  Incentive Award Percentages and any Control Measures established for such Participants shall be  no less favorable than those established for each such Participant in the immediately preceding  Measurement Period.         6. OBJECTIVES AND PERFORMANCE LEVELS          (a) Objectives. The Committee shall establish for each Measurement Period one or more  performance  goals for  each  Participant  or  for  any  group  of  Participants  (or  both). Such  performance  goals  may be  based  on any corporate-wide  or  subsidiary,  division,  business  operating unit, geographic or individual Objectives, including without limitation: the attainment  by a share of common stock of the Company of a specified fair market value for or at a specified  period of time; increase in stockholder value; earnings per share; net assets; return on net assets;  return on equity; return on investments; return on capital or invested capital; return on sales; debt  to  capital  ratios;  total  stockholder  return;  earnings  or  income  of  the  Company  before  or  after  taxes  and/or  interest;  earnings  before  interest  and/or  taxes;  earnings before  interest,  taxes,  depreciation  and  amortization  (“EBITDA”);  EBITDA  margin;  operating  income;  revenues;  operating expenses, attainment of expense levels or cost reduction goals; market segment share;  cash flow, cash flow per share, cash flow margin or free cash flow; interest expense; economic  value  created;  economic  profit;  gross  profit  or  margin;  operating  profit  or  margin;  net  cash  provided  by  operations;  working  capital  and/or  its  components;  price-to-earnings  growth;  revenues from new product development; percentage of revenues derived from designated lines  of business and strategic business criteria, consisting of one or more objectives based on meeting  specified goals relating to market segment penetration, customer acquisition, business expansion,  cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business,  management  of  employment  practices  and  employee  benefits,  supervision  of  litigation  and  information technology, quality and quality audit scores, compliance, efficiency, and acquisitions  or divestitures, or any other performance goal selected by the Committee whether or not listed  herein.          Each such Objective may be expressed on an absolute or relative basis and may include  comparisons based on current internal targets, the past performance of the Company (including  the performance of one or more subsidiaries, divisions, geographic areas, or business operating  units) or the past or current performance of other companies (or a combination of such past and  current performance). The applicable Objectives may be applied on a pre- or post-tax basis and  may  be  adjusted  to  include  or  exclude  components  of  any  performance  measure,  including,  without limitation, special charges such as restructuring or impairment charges; debt refinancing  costs;  extraordinary  or  noncash  items; unusual,  nonrecurring  or  one-time  events  affecting  the  Company  or  its  financial  statements; changes in  law  or  accounting  principles; or  changes  in       





 






capital  structure  of  the  Company  (“Adjustment  Events”). The  Committee  may, in  its  sole  discretion, amend  or  adjust  the  performance  measures  or  other  terms  and  conditions  of  an  outstanding award in recognition of any Adjustment Events. If during a Measurement Period, the  Company, or any of its Affiliates, purchases substantially all of the assets or shares of a business  owned  by  any  other  person  or  entity  (“Business”),  the  earnings  attributable  to  such  Business,  which  are  included  in  the  Company’s  consolidated  income  statement  for  the  Measurement  Period, shall be taken into account in calculating achievement of any earnings Objective for the  Measurement Period unless otherwise determined by the Committee.  Objectives shall be subject  to such other special rules and conditions as the Committee may establish at any time.          (b) Performance Levels. For each Objective, there shall be established performance levels  (“Performance  Levels”)  which  shall  be  defined  as  “Threshold,”  “Target,”  “Outstanding,”  and  “Maximum.”  Performance  below  the  “Threshold”  Performance Level  shall  not  result  in  the  payment of an Incentive Award. From time to time, it may be desirable to establish Objective(s)  in such a manner that specific Performance Levels cannot be defined. In such cases, Performance  Levels will be determined pursuant to Section 9 of this Plan.         7. OBJECTIVE WEIGHTINGS          Coincident with the establishment of Objectives and Performance Levels, the Committee  shall  establish  a percentage weighting  (“Percentage Weighting”) applicable to  each Objective.  For each Measurement Period, the total of all Percentage Weightings for all Objectives for each  Participant shall be 100 percent.         8. CONTROL MEASURES          At the time the Objectives are established, there may also be established certain  conditions known as control measures (“Control Measures”) which are either personal as to one  individual, or general as to a group of individuals. Failure to fulfill a Control Measure may  partially or totally deprive the individual to whom the Control Measure applies of the right to  receive an award, notwithstanding the level of performance attained on any or all Objectives.          9. ASCERTAINMENT OF PERFORMANCE LEVELS          The  Performance  Level  actually  attained  with  respect  to  any  Objective  or  Control  Measure, and the payment with respect thereto, shall be determined and certified in writing by  the Committee prior to or following the end of the Measurement Period.         10. AMOUNT OF INCENTIVE AWARD         





 






      Except as otherwise hereinafter provided, the Incentive Award a Participant is eligible to  receive is the sum of the values attributable to performance actually attained for each Objective  (“Objective Award”), as determined by the following paragraphs.          The amount of Objective Award a Participant is eligible to receive depends upon:                (a)   the Participant’s base salary;                   (b)   the Percentage Weighting applicable to that Objective;             (c)   the Performance Percentage which applies as a consequence of the Performance           Level attained in that area; and             (d)   the Target Incentive Award Percentage established for the Participant.          The  amount  of  the  Objective  Award  for  each  Objective  shall  be  determined  by  multiplying (a) times (b) times (c) times (d).            11. ADJUSTMENT OF INCENTIVE AWARD          The amount of any Incentive Award may be adjusted by the Committee, in its sole and  absolute discretion, to more accurately reflect an individual Participant’s performance during the  Measurement Period.          In  the  event  of  transfers  to,  from  or  between  eligible  positions,  the  amount  of  the  Incentive Award may be reviewed, and may be adjusted or prorated, on such basis as shall be  determined fair and appropriate by the Committee.          Subject to a Participant’s host country regulations and except as otherwise determined by  the Committee, termination of employment for any reason other than Change of Control, death,  Retirement,  or  total  and  permanent  disability  during  the  Measurement  Period  shall  result  in  a  forfeiture of any Incentive Award attributable to performance during the Measurement Period in  which termination occurred. Termination of employment because of a Participant’s death, total  and permanent disability or Retirement during the Measurement Period shall result in the pro rata  or other adjustment to the amount of the Incentive Award on such basis as shall be determined to  be fair and appropriate by the Committee. Termination of employment by the Company without  cause within two years following a Change of Control shall result in the payment of a pro rata  portion  of  the  Incentive  Award  at  the  Target  Performance  Percentage,  without  regard  to  achievement  or preestablished  Objectives;  however,  the  Committee  shall  have  the  right  to  increase the Incentive Award payable upon such termination as the Committee deems fair and  appropriate.          





 






      Notwithstanding  any  provision  of  this  Plan,  no  Incentive  Award  shall  be  paid to  any  Participant who, in any Measurement Period, has discharged the principal responsibilities of his  or her position in an unsatisfactory manner.         12. PAYMENT OF INCENTIVE AWARDS          At  the  time  the  Committee  determines  an  award  opportunity  for  a  Participant,  the  Committee  shall  also  establish  the  payment  terms  applicable  to  such  Incentive  Award.  Such  terms  shall  include  when  such  payments  will  be  made;  provided,  however,  that  the  timing  of  such payments shall in all instances either (a) satisfy the conditions of an exception from Section  409A  of  the  Code  (e.g.,  the  short-term  deferrals  exception  described  in  Treasury  Regulation  Section 1.409A-1(b)(4)), or (b) comply with  Section 409A of the Code and provided, further,  that in the absence of such terms regarding the timing of payments, such payments shall occur no  later than the 15th  day  of the third month of the calendar  year following the calendar  year in  which the Participant’s right to payment ceased being subject to a substantial risk of forfeiture.  Notwithstanding  the  above  and  to the  extent  permitted  by  Section 409A  of  the  Code,  the  Committee may make payments at such earlier times as it may, in its sole discretion, determine,  and the Committee will make such determinations as to performance, and establish procedures  (including  repayment  of  any  overpayment  which  is  determined  after  the  completion  of  the  Measurement Period) implementing such early payment. The Company shall have the right to  deduct from the payment any taxes required by law to be withheld thereon.         13. MISCELLANEOUS          (a) Except  as  provided  in  this  Plan,  no  right  of  any  Participant  shall  be  subject  in  any  manner  to  anticipation,  alienation,  sale,  transfer,  assignment,  pledge,  encumbrance,  charge,  attachment,  garnishment,  execution,  levy,  bankruptcy,  or  any  other  disposition  of  any  kind,  whether voluntary or involuntary, prior to actual payment of an Incentive Award. No Participant  or any other person shall have any interest in any fund, or in any specific asset or assets of the  Company, by  reason  of  an  Incentive  Award  that  has  been  made  but  has  not  been  paid  or  distributed.          (b) The Board or the Committee may, at any time, amend this Plan, order the temporary  suspension  of  its  application,  or  terminate  it  in  its  entirety,  provided,  however,  that  no  such  action shall adversely affect the rights or interests of Participants theretofore vested hereunder.  Notwithstanding the foregoing, this Plan may not be amended, suspended or terminated within  the two-year period following a Change of Control.          (c) The terms of the Plan shall be governed, construed, administered, and regulated by the  laws of the State of Georgia and applicable Federal law. In the event that any provision of the  Plan  shall  be  determined  to  be  illegal  or  invalid  for  any  reason, the  other  provisions  shall  continue in full force and effect as if such illegal or invalid provision had never been included  herein.        





 






      (d) The  Incentive  Awards  and  any  cash  payment  delivered  pursuant  to  an  Incentive  Award  are  subject  to  forfeiture,  recovery  by  the  Company  or  other  action  pursuant  to  any  clawback  or  recoupment  policy  which  the  Company  may  adopt  from  time  to  time,  including  without  limitation  any  such  policy  which  the  Company  may  be  required  to  adopt  under  the  Dodd-Frank  Wall  Street  Reform  and  Consumer  Protection  Act  and  implementing  rules  and  regulations thereunder, or as otherwise required by law.