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.


 





















 


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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