Exhibit
10.21


 


	
   

  	
  Option Number:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date of Option:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Expires: Midnight:

  	
   

  



 


SCHWEITZER-MAUDUIT
INTERNATIONAL, INC.

STOCK OPTION


 


This Option, granted this
       day of                   ,
2005, 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 (i) 
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
(the “Incentive Stock Option Portion”); except as provided in Section 4(c) below,
the Incentive Stock Option Portion 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 (ii) 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
(the “Nonqualified Stock Option Portion” and collectively with the Incentive
Stock Option Portion, the “Option”).  The
Nonqualified Stock Option Portion shall not be an “incentive stock option”
within the meaning of Section 422.


 


2.                                       Qualification
for Receipt of Option Grants.  An
Incentive Stock 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 Incentive Stock Option Grants. 
The aggregate fair market value (determined as of the time the Incentive
Stock Option Portion is granted) of the shares with respect to which the
Incentive Stock Option Portion, 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.  No portion of the
Option shall be exercisable until at least one year has expired after the
granting thereof, 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               of
the shares covered by the Nonqualified Stock Option portion and up to               of
the shares covered by the Incentive Stock Option portion (which, combined,
represents thirty percent of the aggregate shares covered by the Option); after
the end of the second year, up to               of
the shares covered by the Incentive Stock Option portion and up to               of
the shares covered by the Nonqualified Stock Option portion (which, combined,
represents 30 percent of the aggregate number of shares covered by the Option;
and after the end of the third year, up to shares covered by the Incentive
Stock Option portion and up to               of
the shares covered by the Nonqualified Stock Option portion (and which,
combined, represents the remaining 40 percent of the total number of shares
covered by the 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 Incentive Stock
Option Portion 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


 


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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 Incentive Stock Option Portion 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 the Incentive Stock Option Portion, or pursuant to such Incentive
Stock Option Portion and any other incentive stock option have an aggregate
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, which states whether such shares are covered by the Incentive
Stock Option Portion, or the Nonqualified Stock Option Portion 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


 


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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,
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 its 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.


 


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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 his 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 the Incentive
Stock Option Portion 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, 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 the Incentive Stock Option Portion or one year after the
transfer of any share to the Employee pursuant to the exercise of the Incentive
Stock Option Portion, the Employee shall dispose of any 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


 


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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.


 


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

  
	
  ATTEST:

  	
  Title:

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  John W.
  Rumely, Jr.

  	
   

  
	
   

  	
   

  	
   

  
	
  (SEAL)

  	
   

  	
   

  
					



 


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