Document:

Exhibit 10.15

 

SCHWEITZER-MAUDUIT
INTERNATIONAL, INC.

DEFERRED COMPENSATION PLAN NO. 2

FOR NON-EMPLOYEE DIRECTORS
 Effective as
of January 1, 2005

Amended and Restated as of January 1,
2005

 

Further Amended and Restated as of December 4, 2008

 

Article I – Purpose and
Participation

 

The purpose of the Schweitzer-Mauduit
International, Inc. Deferred Compensation Plan No. 2 for Non-Employee
Directors (“Plan”) is to enhance the ability of Schweitzer-Mauduit
International, Inc. (“SWM”) to attract and retain as members of its Board
of Directors (“Board”) individuals of outstanding competence.

 

Article II –
Definitions

 

As used within this document, the following
words and phrases have the meanings described in this Article II unless a
different meaning is required by the context. 
Some of the words and phrases used in the Plan are not defined in this Article II,
but for convenience, are defined as they are introduced into the text.  Words in the masculine gender shall be deemed
to include the feminine gender.  Any headings
used are included for ease of reference only, and are not to be construed so as
to alter any of the terms of the Plan.

 

Section 2.1             Annual
Deferral.  The amount of the annual
retainer or meeting fees which the Director elects to defer in each Deferral
Period pursuant to Article 3.2 of the Plan.

 

Section 2.2             Beneficiary.  An individual or entity designated by a
Participant in accordance with Section 8.11.

 

Section 2.3             Board
or Board of Directors.  The Board of
Directors of the Corporation.

 

Section 2.4             Change
of Control.  For the purposes of this
Plan, a Change of Control shall mean the condition that exists if at any time any of the following events shall
have occurred with respect to the Corporation: 
(a) “change in the ownership” of the Corporation; (b) a “change
in the effective control” of the Corporation; or (c) a “change of the
ownership of a substantial portion of

 

 

the assets” of the Corporation,
all as defined in Treasury Regulations § 1.409A-3(i)(5).  Notwithstanding any other provision herein, a change in the ownership, a
change in the effective control, or a change in the ownership of a substantial
portion of the assets, of the Corporation or another Employer shall not
constitute a “Change in Control,” for purposes of this Plan, unless such
transaction also represents a
change in the ownership, a change in the effective control, or a change in the
ownership of a substantial portion of the assets, of Schweitzer-Mauduit
International, Inc.

 

Notwithstanding
the foregoing, in the event that the regulations of the Secretary of the
Treasury defining a “change in the ownership or effective control of the
corporation, or in the ownership of a substantial portion of the assets of the
corporation” for purposes of Section 409A of the Code are more restrictive
than the foregoing definition, then the definition in the Treasury Regulations
shall be substituted for the foregoing definition of Change of Control.

 

Section 2.5             Code.  The Internal Revenue Code of 1986.  Reference to a section of the Code shall
include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section.

 

Section 2.6             Committee.  The Compensation Committee of the Corporation’s
Board of Directors.

 

Section 2.7             Corporation.  Schweitzer-Mauduit International, Inc.

 

Section 2.8             Deferral
Accounts.  The Stock Unit Account and
the Investment Account established for each Director participating in this Plan
pursuant to Sections 4.2 and 4.3, respectively, of the Plan.

 

Section 2.9             Deferral
Election.  The election made by the
Director pursuant to Section 3.2
of the Plan.

 

Section 2.10           Deferral
Period.  The Plan Year, or in the
case of a new Director elected during a Plan Year, the remaining portion of the
Plan Year.  In the case of the first Plan
Year, the Deferral Period commences January 1, 2005 and ends December 31,
2005.

 

 

Section 2.11           Disability.  A Director shall be considered to have
experienced a “Disability” or to be disabled, for purposes of this Plan, if the
Director (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than 3
months under an accident and health plan covering employees of the Corporation.

 

Section 2.12           Effective
Date.  January 1, 2005.

 

Section 2.13           Fair
Market Value.  Shall have the meaning
given to such term in Section 4.2.

 

Section 2.14           IRS.  The Internal Revenue Service.

 

Section 2.15           Plan.  The Schweitzer-Mauduit International, Inc.
Deferred Compensation Plan No. 2 for Non-Employee Directors.

 

Section 2.16           Plan
Administrator.  The Corporation’s
Board of Directors or a committee thereof as appointed by the Board from time
to time.

 

Section 2.17           Plan
Year.  “Plan Year” means the 12-month
period beginning each January 1 and ending on the following December 31.

 

Section 2.18           Rabbi
Trust.  The trust which the
Corporation, as grantor, may establish, in its discretion, as a trust intended
to qualify under subpart E, part I, Subchapter J, chapter 1, Subtitle A of the
Code as a grantor trust for the Plan.

 

Section 2.19           Separation from Service.  Shall have the meaning assigned to such term
in Code Section 409A, Treasury Regulations Section 1.409 A-1(h), as
amended, and other applicable regulatory guidance of the IRS.

 

 

Section 2.20           Valuation
Date.  Shall have the meanings, as
applicable, given to such term in Sections 5.1, 5.2, 5.3 and 5.4.

 

Article III
– Eligibility and Participation

 

Section 3.1             Non-employee
members of the Board (“Directors”) may elect to defer receipt of all or any
portion of earned Director’s annual retainer fees paid in SWM common stock
pursuant to the Schweitzer-Mauduit International, Inc. Outside Director
Stock Plan into a stock unit account (the “Stock Unit Account”) and Board and
committee meeting fees, established by resolution of the Board from time to
time and other amounts paid to Directors in cash by the Corporation, into an
Investment Account (the “Investment Account”)(collectively, the retainer fees,
Board and committee meeting fees and other sums are called “Director’s
Compensation” herein).  One-quarter of a
Director’s annual retainer fee shall be deemed earned on the first business day
of each calendar quarter and all Board and committee meeting fees shall be
deemed earned on the last business day of the calendar month in which the
meeting is attended by the Director.

 

Section 3.2             A
Director must submit a Deferral Election Form to SWM’s Vice
President-Administration by December 15  of each year indicating deferrals
elected for the following Plan Year in the form attached hereto.

 

Section 3.3             If
any individual initially becomes a Director during a Plan Year, he or she may
elect to defer Director’s Compensation to be earned during that Plan Year
before attendance at the first Board or committee meeting following election to
the Board (and in all events no later than 30 days after election to the
Board).

 

Article IV
– Deferred Compensation Accounts

 

Section 4.1             For record-keeping purposes only,
SWM shall maintain a Stock Unit Account and an Investment Account.

 

Section 4.2             Stock Unit Account.  The Stock Unit Account shall consist of
fictional shares (“Stock Units”) of SWM par value $0.10 common stock (“Common
Stock”) accumulated and accounted for the sole purpose of determining the pay
out in shares of Common Stock or the

 

 

cash equivalent upon any distribution of benefits
under this portion of a Director’s deferred compensation.

 

Section 4.2.1          One quarter of the Director’s deferred
annual retainer fee will be credited to the Stock Unit Account on the first
trading day on the New York Stock Exchange (“Trading Day”) of each calendar
quarter during the Plan Year to the hypothetical purchase of whole or
fractional shares of Common Stock on that day.

 

Section 4.2.2          For purposes of determining the number
of whole or fractional shares of Common Stock which shall be credited to the
Stock Unit Account, the hypothetical purchase shall be deemed to be made at
Fair Market Value on the date of the hypothetical purchase.  For purposes of Section 4.2,
effective as of February 22, 2007, Fair Market Value means the
closing price of the Common Stock, as reported on the New York Stock Exchange
composite tape, on the day immediately preceding the distribution date, or if
no such trading in the Common Stock shall have taken place on that day, on the
last preceding day on which there was such trading in the Common Stock.

 

Section 4.2.3          The equivalent of any cash dividends
paid with respect to the shares of Common Stock shall be applied on the last
business day of the month in which such dividends are paid, based on the
hypothetical number of shares of Common Stock in the Stock Unit Account as of
the record date for such dividend, to the hypothetical purchase of additional whole or fractional shares
of Common Stock at Fair Market Value.  The appropriate number of whole or fractional
shares shall be credited to the Stock Unit Account.

 

Section 4.2.4          In the event SWM pays a stock dividend
or reclassifies or divides or combines its outstanding Common Stock, then an appropriate adjustment shall be
made in the hypothetical number of shares of Common Stock held in the Stock
Unit Account.

 

Section 4.3             Investment Account – As of
the end of each calendar month in which a Director would be entitled to payment
of Board or committee meeting fees, SWM shall credit to the Investment Account
the amount of such meeting fees that were deferred by the Director in the
Deferral Election Form submitted for the applicable Plan Year.

 

 

Section 4.3.1          Any distribution of benefits from an
Investment Account shall be charged to that account as of the date such payment
is made by SWM or by the trustee of any Rabbi Trust established by the Corporation
for the Plan.

 

Section 4.4             Earnings and Losses on the
Investment Account – The Investment Account balance shall be credited or
debited, as the case may be, with deemed net income, gain and loss, including
the deemed net unrealized gain and loss based on hypothetical investment
directions made by the Participant with respect to the Investment Account on
the Deferral Election Form, in accordance with investment options and
procedures adopted by the Plan Administrator in its sole discretion, from time
to time.

 

Section 4.5             Hypothetical Nature of Accounts
– With respect to each participating
Director, the Plan constitutes an unsecured promise by SWM to make the
benefit distributions in the future in the amount of the cash account balance
in the Investment Account, after adjustment for gains or losses, and for the
number of whole or fractional shares of Common Stock in the Stock Unit
Account.  Any Deferral Account
established for a Director under this Plan shall be hypothetical in nature and
shall be maintained solely for the Corporation’s record-keeping purposes so
that any contributions can be credited and deemed investment earnings and
losses on such amounts can be credited (or debited, as the case may be).  Neither the Plan, the Investment Accounts (or
subaccounts) nor the Stock Unit Account shall hold any actual funds or assets.

 

Section 4.5.1          The right of any individual or entity
to receive one or more payments or distributions of shares of Common Stock
under the Plan shall be an unsecured claim against the general assets of the
Corporation.  Any liability of the
Corporation to any Director, former Director, or Beneficiary with respect to a
right to payment or distribution shall be based solely upon contractual obligations
created by the Plan.  The Corporation,
the Board of Directors, the Committee, the Plan Administrator and any
individual or entity shall not be deemed to be a trustee of any amounts to be
paid or shares of Common Stock to be distributed under the Plan.  Nothing contained in the Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a
trust of any kind, or a fiduciary relationship, between the Corporation and a
Director, former Director, Beneficiary, or any other individual or entity.

 

 

Section 4.5.2          The Corporation may, in its sole
discretion, establish a Rabbi Trust as a vehicle in which to place funds or
shares of Common Stock with respect to this Plan.  If established, all benefits payable under
this Plan to a Director shall be paid directly by the Corporation from the
Rabbi Trust.  To the extent that such
benefits are not paid from the Rabbi Trust, the benefits shall be paid from the
general assets of the Corporation and shall be reimbursed to the Corporation by
the Rabbi Trust at the Corporation’s request upon presentation of reasonable
proof that the Corporation made such payment. 
The assets of the Rabbi Trust shall be 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
Rabbi Trust, the Company shall not be obligated to set aside, earmark or place in escrow any funds or other
assets to satisfy its obligations under this Plan, and the Directors shall not
have any property interest in any specific assets of the Corporation other than
the unsecured right to receive payments from the Corporation, as provided in
this Plan.

 

Section 4.5.3          The Corporation does not in any way
guarantee any Director’s Investment Account against loss or depreciation,
whether caused by poor investment performance, insolvency of a deemed
investment or by any other event or occurrence. 
In no event shall any employee, officer, director, or stockholder of the
Corporation be liable to any individual or entity on account of any claim
arising by reason of the Plan provisions or any instrument or instruments
implementing its provisions, or for the failure of any Director, Beneficiary or
other individual or entity to be entitled to any particular tax consequences
with respect to the Plan or any credit or payment of benefits thereunder.

 

Article V
– Benefits

 

Section 5.1             Disability.  If a Director suffers a Disability while
serving as a Director of the Corporation and before he is entitled to benefits
under this Plan, he shall receive the number of shares of Common Stock and the
cash amount credited to his Deferral Accounts as of the Valuation Date, which
for purposes of this Article 5.1 shall be the date on which the Director
is determined by the Committee to have suffered a Disability.  No further investment gains or losses shall
be credited or debited against the Investment Account as of and after the
Valuation Date.  Dividend equivalent amounts shall continue to be earned on shares of Common Stock in the
Stock Unit Account and credited to that account in whole or fractional shares
of Common Stock in

 

 

accordance with the Plan terms.  Distribution of benefits from the Deferral
Accounts under this Article shall commence within thirty (30) days after
the date on which the Committee determines the existence of the Director’s
Disability and in accordance with the payment method elected by the Director on
his Deferral Election Form; provided, however, that in all cases the
Director shall not have the right to designate the year of payment.

 

Section 5.2             Pre-Termination Survivor Benefit.  If a Director dies before becoming entitled
to benefits under this Article, the Beneficiary or Beneficiaries designated
pursuant to Section 8.11
shall receive the cash amount and a distribution of the number of shares of
Common Stock credited to the Director’s Deferral Accounts as of the Valuation
Date, which for purposes of this Section 5.2
shall be the date the Director died or the first business day thereafter if
such date falls on a holiday or a weekend. No further investment gains or
losses shall be credited or debited against the Investment Account as of and
after the Valuation Date.  Dividend equivalent amounts shall
continue to be earned on shares
of Common Stock in the Stock Unit Account and credited to that account in whole
or fractional shares of Common Stock in accordance with the Plan terms.
Distribution of any benefits under this Article shall be made within
thirty (30) days after the date of
the Director’s death, or if later, within thirty (30) days after the date on
which the Plan Administrator receives notification of or otherwise confirms the
Director’s death; provided, however, that in all cases the Beneficiary
or Beneficiaries shall not have the right to designate the year of payment.

 

Section 5.3             Post-Termination Survivor
Benefit.  If a Director dies after
benefits have commenced, but prior to receiving complete payment of benefits
under this Plan, the Beneficiary or Beneficiaries designated under Section 8.11, shall receive in a
single lump sum the cash amount and a distribution of the number of shares of
Common Stock credited to the Director’s Deferral Accounts as of the Valuation
Date determined in accordance with Section 5.2.  No further investment gains or losses shall
be credited or debited against the Investment Account as of and after the
Valuation Date.  Dividend equivalent amounts shall continue to be earned on shares of Common Stock in
the Stock Unit Account and credited to that account in whole or fractional
shares of Common Stock in accordance with the Plan terms.  Distribution of any benefits under this Article shall
be made within thirty (30) days after
the date of the Director’s death, or if later, within thirty (30) days
after the date on which the Plan Administrator receives notification of or

 

 

otherwise confirms the Director’s death; provided,
however, that in all cases the Beneficiary or Beneficiaries shall not have
the right to designate the year of payment.

 

Section 5.4             Change of Control.  If a Change of Control occurs before a
Director becomes entitled to receive benefits by reason of any of the above
Articles or before the Director has received complete payment of his benefits
under this Plan, he shall receive a lump sum payment of the cash amount and a
distribution of the shares of Common Stock credited to his Deferral Accounts as
of the Valuation Date which for purposes of this Section 5.4 shall mean the business day immediately preceding
the date on which the Company receives notice of facts indicating that a Change
of Control occurred.  No further
investment gains or losses shall be credited or debited against the Investment
Account as of and after the Valuation Date. 
Dividend equivalent amounts
shall continue to be earned on
shares of Common Stock in the Stock Unit Account and credited to that account
in whole or fractional shares of Common Stock in accordance with the Plan
terms. Distribution of any benefits under this Article shall commence
within thirty (30) days after the Valuation Date;  provided, however, that in all cases the
Director shall not have the right to designate the year of payment.

 

Article VI
– Benefit Distributions

 

Section 6.1             Distributions from either the Stock
Unit Account or the Investment Account or transfers between the two accounts
shall not be allowed while the individual remains a Director of SWM.

 

Section 6.2             At the time of filing a Deferral
Election Form, a Director must indicate an election to receive distribution of:
(1) the entire amount in the Investment Account and a distribution of all
shares of Common Stock in the Stock Unit Account immediately following the end
of the month in which the participant experiences a Separation from Service
with the Corporation, (2) the entire balance in the Investment Account and
the Stock Unit Account in three (3), five (5) or ten (10) annual
installments with the initial distribution made in the following January.  If no distribution election is made by the
Director or no election form is in effect at the time a participant experiences
a Separation from Service,  the balance of
cash and shares of Common Stock in such Director’s Deferral Accounts will be
distributed in installments over five years. 
Annual installments shall be calculated each year by dividing the
remaining Investment

 

 

Account balance and the number of shares of Common
Stock remaining in the Stock Unit Account as of January 1 of that year by
the remaining number of installments. 
Any Deferral Election may be amended provided that all of the following
requirements are met:

 

(i)                                     the
amendment of the Deferral Election shall not take effect until at least 12
months after the date on which such amendment is made;

 

(ii)                                  in the case of an amendment of a Deferral Election related to a payment not
made on account of the Participant’s death or Disability, the first payment
with respect to which the amendment is made shall in all cases be deferred for
a period of not less then 5 years from the date on which such payment otherwise
would have been made;

 

(iii)                               in the case of an amendment of an election related to a payment that is to
be made at a specified time or pursuant to a fixed schedule, such an amendment
of the election must be made at least 12 months prior to the date of the first
scheduled payment.

 

Section 6.3             If the Director or former Director
dies before all payments have been made, distribution(s) shall be made to
the beneficiary designated by the Director in the Deferral Election Form.  The designated beneficiary may be changed
from time to time by delivering a new Beneficiary designation in writing to SWM’s
Vice President - Administration.  If no
designation is made, or if the named beneficiary predeceases the Director,
distributions of benefits shall be made to the Director’s estate.

 

Section 6.4             Notwithstanding any other provision herein, if a
distribution becomes payable to a Director or former Director due to his
Separation from Service and the individual is a “specified employee” (as
detailed in Code Section 409A and Treasury Regulations Section 1.409A-1(i)),
then the distribution of the amount due to the Director or the former Director,
or the first annual installment (if the distribution is to be made in
installments) shall be postponed until the first day of the seventh month after
the month in which the Separation from Service occurs.

 

Section 6.5 Special Distribution
Election With respect to the Plan Years 2005 through 2008 only, the Plan
Administrator is authorized to prescribe rules and procedures under which

 

 

eligible Participants may
amend elections as to the time and form of distribution in accordance with
Internal Revenue Service Notice 2001-1; Section XI of the Preamble to the
Proposed Regulations under Section 409A, 70 Fed. Reg. 57930; Internal
Revenue Service Notice 2006-79; and Internal Revenue Service Notice 2007-86.

 

Article VII
– Establishment of Trust

 

Section 7.1             Establishment of Trust.  The Corporation may establish a Rabbi Trust (“Trust”)
for the Plan.  If established, all
benefits payable under this Plan to a Director shall be paid directly by the
Corporation 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 Corporation and shall be reimbursed to the
Corporation by the Trust at the Corporation’s request upon presentation of
reasonable proof that the Corporation made such payment.  Any Trust shall be an irrevocable grantor
trust which is intended to qualify as such under subpart E, part I, Subchapter
J, chapter 1, Subtitle A of the Code. The assets of the Rabbi Trust are subject
to the claims of the Corporation’s creditors in the event of its
insolvency.  Except as to any amounts
paid or payable to a Trust, the Corporation shall not be obligated to set
aside, earmark or escrow any funds or other assets to satisfy its obligations
under this Plan, and the Director and/or his designated Beneficiaries shall not
have any property interest in any specific assets of the Corporation other than
the unsecured right to receive payments from the Corporation,  as provided in this Plan.

 

Section 7.2             Distribution of Benefits from
the Trust.  In the event a Trust is
established and benefit distributions are not made by the Corporation in
accordance with the terms of the Plan, a Director may petition the trustee of
the Trust directly for distribution of benefits and the trustee may make such
distributions directly to the Director upon the trustee’s good faith
determination that the benefit distribution was in fact owed to the Director under the terms of the Plan,
was not timely made by the Corporation and that there are sufficient assets in
the Trust to make the distribution.

 

Article VIII
– Miscellaneous

 

Section 8.1             Benefits provided under this Plan
are unfunded obligations of the Corporation. 
Nothing contained in this Plan shall require the Corporation to
segregate any monies

 

 

or other assets from its general funds or assets with
respect to such obligations.  This Plan
is not an “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended, and is not intended for the benefit of any common law
employee of the Corporation.

 

Section 8.2             The Board shall be the plan
administrator of this Plan and shall be solely responsible for its general
administration and interpretation and for carrying out the provisions hereof,
and shall have all such powers as may be necessary to do so.  The Board shall have the right to delegate
from time to time the administration of the Plan, in whole or in part, to any
committee of the Board.  The decisions
made, and the actions taken, by the Board or any committee thereof in the
administration of the Plan shall be final and conclusive on all persons, and no
member of the Board or any committee thereof shall be subject to individual
liability with respect to the Plan.

 

Section 8.3             Neither the Director nor any
beneficiary nor any next-of-kin shall have the right to assign or otherwise
alienate the right to receive payments hereunder, in whole or in part, which
payments are expressly non-assignable and non-transferable, whether voluntarily
or involuntarily.  Any attempt to
alienate, sell, transfer, assign, pledge or otherwise encumber any such amount,
whether presently or thereafter payable, shall be void.  Except as required by law, no benefit payable
under this Plan shall in any manner be subject to garnishment, attachment,
execution or other legal process, or be liable for or subject to the debts or
liability of any Director.

 

Section 8.4             The Corporation shall withhold from
amounts paid under this Plan any taxes or other amounts required to be withheld
by any applicable federal, state, local
or foreign income tax law.  The
Corporation shall comply with all governmental reporting requirements
applicable to the Plan or any payment pursuant to the Plan.

 

Section 8.5             The Board may, at any time, amend
the Plan for whatever reasons it may deem appropriate.  No amendment shall (a) impair the rights
of a participant with respect to amounts then in the participant’s account of (b) be
effective without the written consent of the Directors.  All references to action by the Directors
shall mean a vote of a majority of the total number of Directors authorized by
the Board unless such action may potentially result in the loss of deferred tax
treatment of the plan benefits, in which case the unanimous vote of the Board
shall be required.

 

 

Section 8.6             Each Director in the Plan will
receive a quarterly statement indicating the dollar amount credited to the
participant’s Investment Account and the number of shares of Common Stock in
the Unit Stock Account as of the end of the preceding calendar quarter.

 

Section 8.7             This Plan shall become effective
with respect to annual retainer and meeting fees earned on and after January 1,
2005 with all elections and designations filed by the Directors prior to January 1,
2005 pursuant to this Plan becoming effective as of such date.

 

Section 8.8             Good
Faith Distribution of Benefits.  Any distribution of benefits made in good
faith in accordance with provisions of the Plan shall be a complete discharge
of any liability for the making of such payment under the provisions of this
Plan.

 

Section 8.9             Binding Effect.  The provisions of this Plan shall
be binding upon the Corporation and its successors and assigns and upon every
Director and his heirs, Beneficiaries, estates and legal representatives. Director
Change of Address.  Each Director
entitled to benefits shall file with the Corporation’s Vice President -
Administration, in writing, notification
of any change of address.  Any
check representing payment and any communication addressed to a Director or a
former Director at this last address filed with the Corporation’s Vice
President - Administration, or if no such address has been filed, then at his
last address as indicated on the Corporation’s records, shall be binding on
such Director for all purposes of the Plan, and neither the Plan Administrator,
the Corporation, any trustee, nor any other payor shall be obliged to search
for or ascertain the location of any such Director.  If the Corporation and the Plan Administrator
are unable to locate a Participant or another person or entity to whom payment
is due under this Plan, in order to make a distribution to such person or
entity, the amount of the Participant’s benefits under the Plan that would
otherwise be considered as nonforfeitable shall be forfeited effective four
years after (i) the last date a payment of said benefit was made, if at
least on such payment was made, or (ii) the first date a payment of said
benefit was directed to be made by the Plan Administrator pursuant to the terms
of the Plan, if no payments have been made. If such person is located after the
date of such forfeiture, the benefits for such Participant or Beneficiary shall
not be reinstated hereunder.

 

 

Section 8.10           Designation
of Beneficiary. 
Each Director shall designate, by name, on the Deferral Election Form,
the Beneficiary(ies) who shall receive any benefits which might be payable
after such Director’s death.  A
Beneficiary designation may be changed or revoked in writing by the Director
making the designation without such Beneficiary’s consent at any time or from
time to time in the manner as provided by the Plan Administrator, and the Plan
Administrator shall have no duty to notify any individual or entity designated
as a Beneficiary of any change in such designation which might affect such
individual or entity’s present or future rights.  If the designated Beneficiary does not
survive the Director, all amounts that would have been paid to such deceased
Beneficiary shall be paid to the Director or to his estate.

 

Section 8.7.1          No Director shall designate more than
three (3) simultaneous Beneficiaries, and if more than one (1) Beneficiary
is named, Director shall designate the share to be received by each
Beneficiary.  Despite the limitation of
three (3) Beneficiaries, a Director may designate more than three (3) Beneficiaries
provided such beneficiaries are the surviving spouse and children of the
Director.  If a Director designates
alternative, successor, or contingent Beneficiaries, such Director shall specify
the shares, terms and conditions upon which amounts shall be paid or shares of
Common Stock distributed to such multiple, alternative, successor or contingent
beneficiaries.  Any payment made under
this Plan or distribution of shares of Common Stock after the death of a
Participant shall be made only to the Beneficiary or Beneficiaries designated
pursuant to this Section.

 

Section 8.8             Claims.  Any claim for benefits must initially be
submitted in writing to the Corporation’s Vice President - Administration.  If such claim is denied (in whole or in
part), the claimant shall receive notice from the Plan Administrator, in
writing, setting forth the specific reasons for denial, with specific reference
to applicable provisions of this Plan. 
Such notice shall be provided within ninety (90) days after the date on
which the claim for benefits is received by the Corporation’s Vice President -
Administration, unless special circumstances require an extension of time for
processing the claim, in which event notification of the extension shall be
provided to the claimant prior to the expiration of the initial 90-day
period.  The extension notification shall
indicate the special circumstances requiring the extension of time and the date
by which the Plan Administrator expects to render its decision.  Any such extension shall not exceed 90
days.  Any disagreements about such
interpretations and construction may be appealed in writing by the

 

 

claimant to the Plan Administrator within sixty (60)
days after the date on which the claimant receives the notice with respect to
the claim denial.  The Plan Administrator
shall respond to such appeal within sixty (60) days, with a notice in writing
fully disclosing its decision and its reasons, unless special circumstances require
an extension of time for reviewing the claim, in which event notification of
the extension shall be provided to the claimant prior to the expiration of the
initial sixty (60) day period.  Any such
extension shall be provided to the claimant prior to the commencement of the
extension.  Any such extension shall not
exceed 60 days.  No member of the Board,
or any committee thereof, and no officer, employee or agent of the Corporation
shall be liable to any individual or entity for any action taken hereunder,
except those actions undertaken with lack of good faith.

 

Section 8.8.1          Provided that the Corporation has
established a Rabbi Trust for the Plan pursuant to which the trustee has agreed
to act in a capacity other than as a directed trustee in the event of a Change
in Control, the trustee of the Trust shall perform the duties of the Plan
Administrator under this Section 8.12
following a Change of Control.

 

Section 8.9             Nothing contained in the Plan shall
be construed as a commitment by the Board to nominate any person for election
or re-election to the Board.  Nothing
contained in this Plan shall be construed to create a right in any person to be
elected or to continue to serve as a Director.

 

Section 8.10           The adoption of this Plan shall have
no effect on the existing Schweitzer-Mauduit International, Inc. Outside
Directors Stock Plan.  Nothing contained
in this Plan shall prevent SWM from adopting other or additional compensation
plans or arrangements for its non-employee Directors.

 

Section 8.11           Governing Law.  To the extent not superseded by the laws of
the United States, the laws of the State of Georgia (except for the provisions
of Georgia law relating to conflicts of laws) shall be controlling in all
matters relating to this Plan.

 

Section 8.12           Severability.  In the event any provision of this Plan shall
be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining provisions of the

 

 

Plan, and the Plan shall be interpreted and enforced
as if such illegal and invalid provisions had never been set forth.

 

Section 8.13           Code Section 409A.  It is the
intention of the Company that this Plan shall meet the requirements of section
409A of the Code and applicable Treasury Regulations that must be met in order
for amounts of Compensation deferred under this Plan to be taxable, for
purposes of federal income taxation, in the year of actual receipt by the
Participant or Beneficiary.  If any
provision of this Plan is susceptible of two interpretations, one of which
results in the compliance of the Plan with section 409A of the Code and the
applicable Treasury Regulations, and one of which does not, then the provision
shall be given the interpretation that results in compliance with section 409A
and the applicable Treasury Regulation.

 

IN WITNESS WHEREOF,
Schweitzer-Mauduit International, Inc. has adopted the foregoing
instrument effective as of December 4, 2008.

 

 

	
   

  	
  SCHWEITZER-MAUDUIT
  INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:Exhibit 10.16

 

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.

DEFERRED COMPENSATION PLAN NO. 2

EFFECTIVE AS OF JANUARY 1, 2005

AMENDED
AND RESTATED AS OF DECEMBER 4, 2008

 

PLAN HISTORY

 

The Plan was established to provide a mechanism under which qualified
participants could elect to defer a limited portion of their annual base salary
and incentive compensation in a manner intended to comply with the requirements
of Internal Revenue Code Section 409 A.

 

The Plan was first amended and restated effective as of December 31,
2008 in order to comply with the final regulations issued by the United States
Treasury Department in 2008 implementing the requirements of Internal Revenue
Code Section 409A and requiring full compliance by year-end 2008.

 

ARTICLE I

ESTABLISHMENT OF PLAN

 

1.1           Purpose.  The Schweitzer-Mauduit International, Inc.
Deferred Compensation Plan No. 2 is intended to enhance the Corporation’s
ability to attract to and retain for the Corporation outstanding executive
talent by providing a deferred compensation benefit to selected executives of
the Corporation as more fully provided herein. 
The benefits provided under the Plan are in addition to other employee
benefit plans and programs offered by the Corporation, including but not
limited to tax-qualified employee benefit plans.

 

1.2           Effective Date and Term.  Schweitzer-Mauduit International, Inc.
adopts this unfunded deferred compensation plan effective as of January 1,
2005 to be known as the Schweitzer-Mauduit International, Inc. Deferred
Compensation Plan No. 2, hereinafter referred to as the “Plan.”  The Plan is herein amended and restated,
effective as of January 1, 2005; provided, however, that certain
provisions herein have a later effective date, as specifically provided in
those provisions.

 

1.3           Applicability of ERISA.  This Plan is an unfunded plan maintained
primarily for the purpose of providing deferred compensation to a select group
of management and other highly compensated employees within the meaning of
ERISA. It is the intent of the Corporation that the Plan be exempt from Parts
2, 3 and 4 of Subtitle B of Title I of ERISA as an unfunded Plan that is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
(the “ERISA exemption”).  Notwithstanding
anything to the contrary in any other provision of the Plan, the Plan
Administrator may, in its sole discretion, exclude any one or more employees
from eligibility to participate or from participation in the Plan, and may take
any further action the Plan

 

 

Administrator considers
necessary or appropriate if the Plan Administrator reasonably determines in
good faith that such exclusion or further action is necessary in order for the
Plan to qualify for, or to continue to qualify for, the ERISA exemption.

 

ARTICLE II

DEFINITIONS

 

As used within this
document, the following words and phrases have the meanings described in this Article II
unless a different meaning is required by the context.  Some of the words and phrases used in the
Plan are not defined in this Article II, but for convenience, are defined
as they are introduced into the text. 
Words in the masculine gender shall be deemed to include the feminine
gender.  Any headings used are included
for ease of reference only, and are not to be construed so as to alter any of
the terms of the Plan.

 

2.1           AIP Awards.  The cash awards, if any, that may be earned
by participants in the Corporation’s Annual Incentive Plan.

 

2.2           Annual Deferral.  The amount of Base Salary, AIP Awards and/or
LTIP Awards which the Participant elects to defer in each Deferral Period
pursuant to Section 4.1 of the Plan Document.

 

2.3           Base Salary.  A Participant’s base annual salary for the
applicable Plan Year.

 

2.4           Beneficiary.  An individual or entity designated by a
Participant in accordance with Section 13.6.

 

2.5           Board or Board of Directors.  The Board of Directors of the Corporation.

 

2.6           Change of Control.  For the purposes of this Plan, a Change of
Control shall mean the condition that exists if at any time any of the
following events shall have occurred with respect to the Corporation:  (a) “change in the ownership” of the
Corporation; (b) a “change in the effective control” of the Corporation;
or (c) a “change of the ownership of a substantial portion of the assets”
of the Corporation, all as defined in Treasury Regulations §
1.409A-3(i)(5).  Notwithstanding any
other provision herein, a change in the ownership, a change in the effective
control, or a change in the ownership of a substantial portion of the assets,
of the Corporation or another Employer shall not constitute a “Change in
Control,” for purposes of this Plan, unless such transaction also represents a change in the ownership, a change in the
effective control, or a change in the ownership of a substantial portion of the
assets, of Schweitzer-Mauduit International, Inc.

 

2.7           Code.  The Internal Revenue Code of 1986.  Reference to a section of the Code shall
include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section.

 

2.8           Committee.  The Compensation Committee of the Corporation’s
Board of Directors.

 

2.9           Corporation.  Schweitzer-Mauduit International, Inc.

 

2.10         Deferral Account.  The account established for a Participant
pursuant to Section 5.1 of the Plan Document.

 

 

2.11         Deferral Election.  The election made by the Participant pursuant
to Section 4.1 of the Plan Document.

 

2.12         Deferral Period.  The Plan Year, or in the case of a newly
hired or promoted employee who becomes an Eligible Employee during a Plan Year,
the remaining portion of the Plan Year. 
In the case of the first Plan Year, the Deferral Period commences January 1,
2005 and ends December 31, 2005.

 

2.13         Disability.  A Participant shall be considered to have
experienced a “Disability” or to be disabled, for purposes of this Plan, if the
Participant (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reasons of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than 3
months under an accident and health plan covering employees of the Corporation.

 

2.14         Effective Date.  January 1, 2005.

 

2.15         Eligible Employee.  An employee of the Corporation who is
designated by the Plan Administrator as being eligible to participate in the
Plan or who is a member of a class of employees that the Plan Administrator has
designated as being eligible to participate in the Plan. The employee shall
remain eligible to participate in the Plan for such period as is designated by
the Plan Administrator.

 

2.16         Employer.  The
Corporation and any related entity that becomes a participating employer in the
Plan, in accordance with Section 12.2.

 

2.17         ERISA.  The Employee Retirement Income Security Act
of 1974, as amended.

 

2.18         IRS.  The Internal Revenue Service.

 

2.19         Internal Revenue Service. Limits
means any of the limitations on the amounts of contributions to or benefits
under a qualified retirement plan required by Code sections 401(a)(4),
401(a)(17), 410(b), or 415.

 

2.20         LTIP Awards.  The cash awards, if any, that may be earned
by participants in the Corporation’s Long-Term Incentive Plan.

 

2.21         Participant.  Any Eligible Employee who is designated by
the Plan Administrator to participate in the Plan pursuant to Article III
of the Plan Document commencing as of such time and for such period as is
designated by the Plan Administrator. The list of Participants is set forth in Appendix
A hereto, as amended from time to time.

 

2.22         Participant Agreement.  The written agreement, including a Deferral
and Investment Election Form, to defer Base Salary, AIP Awards and/or LTIP
Awards made by the Participant and investment directions as to any
discretionary corporate contributions made on the Participant’s

 

 

behalf.  Such written agreement and Deferral and
Investment Election Form shall be in the format designated by the
Corporation, attached hereto.

 

2.23         Plan.  The Schweitzer-Mauduit International, Inc.
Deferred Compensation Plan No. 2.

 

2.24         Plan Administrator.  The Corporation’s Human Resources Committee.

 

2.25         Plan Year.  “Plan Year” means the 12-month period
beginning each January 1 and ending on the following December 31.

 

2.26         Rabbi Trust.  The Rabbi Trust, which the Corporation may,
in its discretion, establish for the Schweitzer-Mauduit International, Inc.
Deferred Compensation Plan No. 2, as amended from time to time.

 

2.27         Specified Age.  Age 55 or a later age chosen by the
Participant on his Participation Agreement and Deferral Election Form at
which time the vested credits in the Participant’s Deferral Account shall be
paid out as benefits in accordance with the payment method selected by the
Participant in accordance with the Plan terms, unless the Plan Administrator
has begun to pay-out benefits at an earlier date, as provided in Article VII
of this Plan.

 

2.28         A Specified Employee.  Shall have the meaning given to such term in
Code Section 409A.

 

2.29         Unforeseeable Emergency.  A severe financial hardship to the
Participant resulting from an illness or accident of the Participant, the
Participant’s spouse, or a dependent (as defined in Code section 152(a) without
regard to section 152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of
the Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant (e.g., the imminent foreclosure of
the mortgage on the Participant’s primary residence or eviction from the
Participant’s primary residence, the need to pay for medical expenses,
including non-refundable deductibles and the costs of prescription drug
medication, and funeral expenses of a spouse, a Beneficiary, or a dependent (as
defined above).  A withdrawal on account
of an Unforeseeable Emergency may be paid to the Participant only if the amounts
distributed with respect to an emergency do not exceed the amounts necessary to
satisfy such emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship) or (effective as of January 1, 2008) by
cessation of deferrals under this Plan. 
This section shall be interpreted in a manner consistent with Code
section 409A and applicable provisions of the Treasury Regulations.

 

2.30         Separation from Service.  Shall have the meaning assigned to such term
in Code Section 409 A, Treasury Regulations Section 1.409A-1(h), as
amended, and other applicable regulatory guidance of the IRS.

 

2.31         Valuation Date.  Each business day of the Plan Year.

 

2.32         Year of Service.  Each consecutive twelve (12) month period
during which a Participant is continuously and actively employed by the
Corporation.

 

 

ARTICLE
III

ELIGIBILITY AND PARTICIPATION

 

3.1           Participation –Eligibility and Initial Period.  Participation in the Plan is open
only to Eligible Employees of the Corporation. 
Each Eligible Employee of the Corporation, as of the Effective Date, may
become a Participant for the Deferral Period from January 1, 2005 through December 31,
2005 (“Initial Period”) if he submits a properly completed Participation
Agreement and Deferral Election Form to the Plan Administrator prior to December 31,
2004.  Following the Initial Period, a
Participant must submit a Deferral Election Form by December 15 of
the year preceding the Plan Year for which the Deferral Election was made. Any
employee becoming an Eligible Employee after the Effective Date, e.g., new
hires or promoted employees, may become a Participant with respect to services
performed subsequent to the filing of the Deferral Election Form for the
current Deferral Period if he submits a properly completed Participation
Agreement and Deferral Election Form within thirty (30) days after
becoming eligible for participation; provided, however, that in this case the
election shall apply only to compensation (Base Salary, AIP Awards and/or LTIP
Awards) paid for services to be performed after the election; provided,
further, that, with respect to compensation for services performed on and after
January 1, 2008, in the case of compensation that is based upon a
specified performance period (e.g., an AIP
Award) where a deferral election is made in the first year of eligibility but
after the beginning of the performance period, the election shall apply to no
more than an amount equal to (i) total amount of the compensation for the
performance period multiplied by (ii) a fraction the numerator of which is
the number of days remaining in the performance period after the election and
the denominator of which is the total number of days in the performance period.

 

3.2           Participation –Subsequent Entry into Plan.  An Eligible Employee who does not elect to
participate at the time of initial eligibility as set forth in Section 3.1
shall remain eligible to become a Participant in subsequent Plan Years as long
as he continues his status as an Eligible Employee.  In such event, the Eligible Employee may
become a Participant by submitting a properly executed Participation Agreement
and Deferral Election Form on or prior to December 15 of the year
preceding the Plan Year for which it is to be effective.

 

3.3           Determination of Non-Eligibility to Participate.  If, at any time, an Eligible
Employee or Participant is determined or reasonably believed, based on a
judicial or administrative determination or opinion of counsel, or based
(effective as of January 1, 2008) on a determination by the Plan
Administrator, not to qualify as “management” or a “highly compensated employee”
under ERISA Sections 201(2), 301 (a) (3), and 401 (a) (1), the
employee shall cease active participation in the Plan as of the last day of the
Plan Year in which such determination is made.

 

ARTICLE
IV

CONTRIBUTIONS

 

4.1           Deferral Election.  On or before the 15th day of December preceding
the first day of each Plan Year, a Participant may file with the Plan
Administrator, a Participation Agreement and Deferral Election Form indicating
the amount of Base Salary, AIP Award and/or LTIP Award to be deferred for that
Plan Year.  A Participant shall not be
obligated to make a Deferral Election in

 

 

each Plan
Year to remain a participant in the Plan. 
After a Plan Year commences, such Deferral Election shall continue for
the entire Plan Year.

 

4.2           Maximum Deferral Election.  A Participant may elect to defer up to 25% of
Base Salary and/or up to 50% of AIP Awards and/or LTIP Awards earned during the
corresponding Deferral Period.  The
amount of deferral may be stated as a flat dollar amount or as a percent. A
Deferral Election may be automatically reduced if the Plan Administrator
determines that such action is necessary to meet Federal or State tax
withholding obligations.

 

4.3           Minimum Deferral Election.  A Participant who wishes to defer a portion
of his qualifying compensation must elect to defer at least $1,200 during the
Deferral Period from Base Salary, AIP Awards, LTIP Awards or a combination of
Base Salary, AIP Awards and LTIP Awards. 
The Participant may also elect not to make any deferral for a Plan Year.

 

4.4           Employer Contributions.  The Corporation, with the Committee’s prior
approval, may, in its sole discretion, make a contribution to any one or more
of the Participants’ Deferral Accounts. 
Employer Contributions may also be mandated by the terms of the AIP
and/or LTIP if a participant in one or more of those plans is also a “Covered
Employee,” as such term is defined in Code Section 162(m) and the
total amount of non-exempt compensation payable to such participant in any tax
year exceeds the Code Section 162(m) limits.  Also, the amount by which any cash balance
benefit formula amount under the Schweitzer-Mauduit International, Inc.
Retirement Plan exceeds applicable Internal Revenue Service Limits (hereinafter
an “Excess Retirement Benefit”) shall be made as an Employer Contribution to
the Deferred Compensation Plan for the account of such participant.

 

4.5           Insurance. 
The Corporation may insure the lives of Participants.  A Participant whose deferral is approved
shall, as a condition of his deferral, cooperate in providing any information
or submitting to any necessary examinations that may be requested by the
Corporation in connection with its application for such insurance
policies.  The Corporation shall be the
applicant, owner and beneficiary of such policies.  The Participant shall have no interest in any
policies nor will the Participant be able to look to an insurance carrier for
benefits under any such policies.

 

ARTICLE
V

ACCOUNTS

 

5.1           Deferral Accounts.  Solely for recordkeeping purposes, The Plan
Administrator shall establish a Deferral Account for each Participant.  A Participant’s Deferral Account shall be
credited with the contributions made by him or on his behalf by the Corporation
under Section 4.4 and shall be credited (or charged, as the case may be)
with the hypothetical or deemed investment earnings and losses determined
pursuant to Section 5.3, and charged with distributions made to or with
respect to him on deferrals of Base Salary, AIP Award and/or LTIP Award,
dividends on stock units, and Corporate
Contributions.

 

5.2           Crediting of Deferral Accounts.  Salary contributions under Section 4.1
shall be credited to a Participant’s Deferral Account as of the date on which
such contributions were withheld from his Base Annual Salary.  AIP Award and LTIP Award contributions under Section 4.1
shall be credited to a Participant’s Deferral Account as of the date on which
the contribution would have

 

 

otherwise
been paid in cash.  Contributions under Section 4.4
shall be credited to the Participant’s Deferral Account as of the date declared
by the Corporation or in accordance with the AIP Award and/or LTIP Award
provisions hereinabove, if applicable. 
Dividends deemed to be earned on the stock units shall be credited as of
the dividend payment date on the Corporation’s common stock.  Excess Retirement Benefit contributions shall
be credited in accordance with the crediting provisions of the Retirement
Plan.  Any distribution with respect to a
Deferral Account shall be charged to that Account as of the date the
Corporation or the trustee of any Rabbi Trust established for the Plan makes
such payment.

 

5.3           Earning Credits or Losses.  Amounts credited to a Deferral Account shall
be credited with deemed net income, gain and loss on Deferred Base Salary, AIP
Awards, LTIP Awards and deemed dividends on stock units, including the deemed
net unrealized gain and loss based on hypothetical investment directions made
by the Participant with respect to this Deferral Account on a form designated
by the Plan Administrator, in accordance with investment options and procedures
adopted by the Plan Administrator in its sole discretion, from time to
time.  Excess Retirement Benefit
contributions shall be credited with deemed net income, gain and loss on such
amounts as though invested in thirty-year Treasury Securities (tracking
instrument substituted for the thirty-year T-Bill).  Such earnings will continue to accrue during
any period in which installments of vested benefits are paid to a Participant
or his beneficiary pursuant to Article VII.  Earnings or losses in the market value of
stock units shall have no effect on the number of stock units that are
reflected in the Participant’s account. 
The number of stock units held in the Deferred Compensation Plan for a
Participant shall be tracked and the Participant shall recognize the bargain
element associated with the number of stock units held in his account as
ordinary income or loss when the stock units are converted into shares of the
Corporation’s common stock and issued in the form of clean stock certificates
out of the Deferred Compensation Plan as permitted for a mandatory deferral.

 

5.4           Hypothetical Nature of Accounts.  The Plan constitutes a mere promise by the
Corporation to make the benefit payments in the future.  Any Deferral Account established for a
Participant under this Article V shall be hypothetical in nature and shall
be maintained for the Corporation’s recordkeeping purposes only, so that any
contributions can be credited and so that deemed investment earnings and losses
on such amounts can be credited (or charged, as the case may be).  Neither the Plan nor any of the Accounts (or
subaccounts) shall hold any actual funds or assets.  The right of any individual or entity to
receive one or more payments under the Plan shall be an unsecured claim against
the general assets of the Corporation. 
Any liability of the Corporation to any Participant, former Participant,
or Beneficiary with respect to a right to payment shall be based solely upon
contractual obligations created by the Plan. 
The Corporation, the Board of Directors, the Committee, the Plan
Administrator and any individual or entity shall not be deemed to be a trustee
of any amounts to be paid under the Plan. 
Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Corporation and a Participant, former
Participant, Beneficiary, or any other individual or entity.  The Corporation may, in its sole discretion,
establish a Rabbi Trust as a vehicle in which to place funds with respect to
this Plan.  The Corporation does not in
any way guarantee any Participant’s Deferral Account against loss or
depreciation, whether caused by poor investment performance, insolvency of a
deemed investment or by any other event or occurrence.  In no event shall the employee, officer,
director, or stockholder of the Corporation be liable to any individual or
entity on account of any claim arising by reason of the Plan provisions or

 

 

any
instrument or instruments implementing its provisions, or for the failure of
any Participant, Beneficiary or other individual or entity to be entitled to
any particular tax consequences with respect to the Plan or any credit or
payment thereunder.

 

5.5           Statement of Deferral Accounts.  The Plan Administrator shall provide to each
Participant quarterly statements setting forth the value of the Deferral
Account maintained for such Participant.

 

ARTICLE
VI

VESTING

 

6.1           Vesting of Corporate Elective and Mandated Contributions.  The Corporation’s contributions
(excluding AIP Awards, LTIP Awards and Excess Retirement Benefit
contributions), if any, credited to a Participant’s Deferral Account under Plan
Section 4.4 and any deemed investment earnings attributable to these
contributions shall be one hundred percent (100%) vested and nonforfeitable
when the Participant has satisfied any vesting restrictions contained in the
Board or Compensation Committee approval of the award, irrespective of when the
Corporation’s contribution is credited to the Participant’s Deferral
Account.   A Participant shall be one
hundred percent (100%) vested in the Corporation’s contributions, including any
deemed investment earnings attributable to these contributions, upon his death
or Disability while he is actively employed by the Corporation or in the event
of a Change of Control.    The vesting of
mandated LTIP Awards and AIP Awards and Excess Retirement Benefit contributions
shall occur as set forth in the respective plans governing those awards and
payments.  All other amounts credited to
a Participant’s Deferral Account shall be one hundred percent (100%) vested at
all times.

 

ARTICLE
VII

BENEFITS

 

7.1           Attainment of Specified Age.  Unless benefits have already commenced
pursuant to another section in this Article VII, a Participant shall be
entitled to begin receipt of the vested amount credited to his Deferral Account
as of the Valuation Date coinciding with the Specified Age or date chosen by
the Participant in his or her Participation Agreement and Deferral Election
Form.  A Participant may make a separate
choice with respect to the timing of the commencement of distribution of the
amounts credited to the Deferral Account with respect to each Deferral
Period.  In addition, a Participant may
elect, with respect to a particular Deferral Election, to (i) receive
payment on a specified date of a flat dollar amount or a percentage of the
amount deferred for the Deferral Period and (ii) to have the remainder of
the amount deferred for that Deferral Period paid at a Specified Age; provided,
however, that the specified date shall not be earlier than January 1 of
the fifth Plan Year following the Plan Year with respect to which the amount
was deferred.  Payment of any amount
under this Section shall commence within thirty (30) days after the
Participant’s Specified Age or date and in accordance with the payment method
elected by the Participant on his Participation Agreement and Deferral Election
Form.  Payments shall commence on or
after that age even if the Participant is still then employed.

 

7.2           Disability. 
If a Participant suffers a Disability while employed with the
Corporation and before he is entitled to benefits under this Article, he shall
receive the amount credited to his Deferral Account as of the Valuation Date
coinciding with the Date on which the Participant is

 

 

determined
to have suffered a Disability.  Payment
of any amount under this Section shall commence within thirty (30) days
after the date on which the Committee determines the existence of the
Participant’s Disability and in accordance with the payment method elected by
the Participant on his Participation Agreement and Deferral Election Form; provided,
however, that in all cases the Participant shall not have the right to
designate the year of payment.

 

7.3           Death Pre- Benefit Commencement.  If a Participant dies before becoming
entitled to benefits under this Article, the Beneficiary or Beneficiaries
designated pursuant to Section 13.6, shall receive the vested amount
credited to the Participant’s Deferral Account as of the Valuation Date
coinciding with the date of the Participant’s death.  Payment of any amount under this Section shall
be made within thirty (30) days after the Participant’s death, or if later,
within thirty (30) days after the date on which the Plan Administrator receives
notification of or otherwise confirms the Participant’s death; provided,
however, that in all cases the Beneficiary or Beneficiaries shall not have
the right to designate the year of payment.

 

7.4           Death Post- Benefit Commencement.  If a Participant dies after benefits have
commenced, but prior to receiving complete payment of benefits under this
Article, the Beneficiary or Beneficiaries designated under Section 13.6,
shall receive in a single lump sum the vested amount credited to the
Participant’s Deferral Account as of the Valuation Date coinciding with the
date of the Participant’s death.  Payment
of any amount under this Section shall be made within thirty (30) days
after the Participant’s death, or if later, within thirty (30) days after the
date on which the Plan Administrator receives notification of or otherwise
confirms the Participant’s death; provided, however, that in all cases the
Beneficiary or Beneficiaries shall not have the right to designate the year of
payment.

 

7.5           Termination. 
If a Participant experiences a “separation from service” with the
Corporation (determined in accordance with the standards of Code Section 409A)  the Participant’s benefits shall be paid out
in accordance with his deferral election. If the Participant failed to make a
deferral election with respect to any deferred amount, the Participant shall
receive in a single lump sum the vested amount credited to his Deferral Account
for which no deferral election was made as of the Valuation Date coinciding
with the date on which the Participant experiences the Separation from
Service.   Payment of the first annual
installment or any lump sum amount under this Section shall be made within
thirty (30) days after the date on which the Participant separates from service
with the Corporation; provided, however, that in the case of a
Participant who is a “specified employee” (within the meaning of Code section
409A and the Treasury Regulations issued pursuant to that section), such
payment shall be made on the first day of the seventh month after the month in
which occurs the Participant’s separation from service with the Corporation; provided
further that in all cases the Participant shall not have the right to
designate the year of payment. The Corporation shall be entitled to distribute
in a single lump sum amount any account balance that is $15,000 or less
notwithstanding any payment election to the contrary specified by the
Participant.

 

7.6           Change of Control.  If a Change of Control occurs before a
Participant becomes entitled to receive benefits by reason of any of the above
Sections or before the Participant has received complete payment of his
benefits under this Article, he shall receive a lump sum payment of the amount
credited to his Account as of the Valuation Date immediately preceding the date
on which the Change of Control occurs. 
Payment of any amount under this section shall commence within

 

 

thirty (30)
days after the date on which the Change of Control occurs; provided,
however, that in all cases the Participant shall not have the right to
designate the year of payment.

 

7.7           Payment Methods. 
Unless otherwise provided in this Article VII, a Participant may
elect to receive payment of the vested amount credited to his Deferral Account
based on a Participant deferral in a single lump sum or in three (3), five (5),
or ten (10) annual installments. 
This election must be made in the Participation Agreement and Deferral
Election Form for the corresponding Plan Year (at the time when the
Participant makes his or her initial election to defer compensation).  Any installment payments shall be paid
annually no later than thirty (30) days after the distributions are scheduled
to commence and on each following anniversary of that date until the total
number of installments has been paid; provided, however, that that in
the case of a Participant who is a “specified employee” (within the meaning of
Code section 409A and the Treasury Regulations issued pursuant to that
section), the first such payment shall be made on the first day of the seventh
month after the month in which occurs the Participant’s separation from service
with the Corporation.  Each installment
payment shall be determined by multiplying the Deferral Account Balance by a
fraction, the numerator of which is one and the denominator of which is the
number of remaining installment payments. 
The Corporation shall be entitled to distribute in a single lump sum
amount any account balance that is $15,000 (or such higher amount as may be in
effect for such Plan Year under Code Section 402(g)(1)(B) and
Treasury Regulations Section 1.409A-3(j)(4)(v)) or less notwithstanding
any payment election to the contrary specified by the Participant.

 

7.8           The schedule of payments pursuant to a Deferral Election may be amended
provided that all of the following requirements are met:

 

(i)                                     the amendment of the Deferral Election shall not take effect until at least
12 months after the date on which such amendment is made;

 

(ii)                                  in the case of an amendment of a Deferral Election related to a payment not
made on account of the Participant’s death or Disability or an Unforeseeable
Emergency, the first payment with respect to which the amendment is made shall
in all cases be deferred for a period of not less then 5 years from the date on
which such payment otherwise would have been made;

 

(iii)                               in the case of an amendment of an election related to a payment that is to
be made at a specified time or pursuant to a fixed schedule, such an amendment
of the election must be made at least 12 months prior to the date of the first
scheduled payment.

 

7.9           Special Distribution Election
Change Opportunity.  With respect to
Plan Years 2005 through 2008 only, the Plan Administrator is authorized to
prescribe rules and procedures under which eligible Participants may amend
elections as to the time and form of distribution in accordance with Internal
Revenue Service Notice 2005-1; Section XI of the Preamble to the Proposed
Regulations under IRC Section 409A, , 70 Fed. Reg. 57930; Internal Revenue
Service Notice 2006-79; and Internal Revenue Service Notice 2007-86.

 

 

ARTICLE
VIII

UNFORESEEABLE EMERGENCY WITHDRAWALS

 

8.1           Unforeseeable Emergency Withdrawals.  If a Participant incurs an Unforeseeable
Emergency, the Participant may make a written request to the Plan Administrator
for a withdrawal from his account.  In
the event of a withdrawal on account of an Unforeseeable Emergency, the
Participant’s deferrals for the remainder of the Plan Year shall be
suspended.  Deferrals may commence with
the next following Plan Year provided the Participant completes the appropriate
Participation Agreement and Deferral Election Form prior to January 1
of the corresponding Plan Year.

 

ARTICLE
IX

ESTABLISHMENT OF TRUST

 

9.1           Establishment of Trust.  The Corporation may establish a Rabbi Trust (“Trust”)
for the Plan.  If established, all
benefits payable under this Plan to a Participant shall be paid directly by the
Corporation 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 Corporation and shall be reimbursed to the
Corporation by the Trust at the Corporation’s request upon presentation of
reasonable proof that the Corporation made such payment.  Any Trust shall be an irrevocable grantor
trust which conforms to the terms 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 Corporation’s
creditors in the event of its insolvency. 
Except as to any amounts paid or payable to a Trust, the Corporation
shall not be obligated to set aside, earmark or place in escrow any funds or
other assets to satisfy its obligations under this Plan, and the Participant
and/or his designated Beneficiaries shall not have any property interest in any
specific assets of the Corporation other than the unsecured right to receive
payments from the Corporation, as provided in this Plan.

 

9.2           Payment From the Trust.  In the event a Trust is established and
payments are not made by the Corporation 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 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 Corporation and that there are sufficient assets in the
Trust to make the payment.

 

ARTICLE
X

PLAN ADMINISTRATION

 

10.1         Plan Administration.  The Plan shall be administered by the
Committee, and such Committee may designate an agent to perform the
recordkeeping duties and delegate to the Plan Administrator any of the
Committee’s functions specified in this Article X.  The Committee shall construe and interpret
the Plan, including disputed and doubtful terms and provisions and, in its sole
discretion, decide all questions of eligibility and determine the amount,
manner and time of payment of benefits under the Plan.  The determinations and interpretations of the
Committee shall be consistently and uniformly applied to all similarly situated
Participants and Beneficiaries, including but not limited to interpretations
and determinations of amounts due under this Plan, and shall be final and
binding on all parties.  The Plan at all
times shall be interpreted and administered as an unfunded deferred
compensation plan, and no provision of the Plan shall be interpreted so as

 

 

to give
any Participant or Beneficiary any right in any asset of the Corporation which
is a right greater than the right of a general unsecured creditor of the
Corporation.

 

ARTICLE
XI

NONALIENATION OF BENEFITS

 

11.1         Nonalienation of Benefits.  The interests of Participants and their
Beneficiaries under this Plan are not subject to the claims of their creditors
and may not be voluntarily or involuntarily sold, transferred, alienated,
assigned, pledged, anticipated, encumbered, attached or garnished.  Any attempt by a Participant, his
Beneficiary, or any other individual or entity to sell, transfer, alienate,
assign, pledge, anticipate, encumber, attach, garnish, charge or otherwise
dispose of any right to benefits payable shall be void.  The Corporation may cancel and refuse to pay
any portion of a benefit which is sold, transferred, alienated, assigned,
pledged, anticipated, encumbered, attached or garnished.  The benefits which a Participant may accrue
under this Plan are not subject to the terms of any Qualified Domestic
Relations Order (as that term is defined in Section 414(p) of the
Code) with respect to any Participant, and the Plan Administrator, Board of
Directors, Committee and Corporation shall not be required to comply with the
terms of such order in connection with this Plan.  The withholding of taxes from Plan payments,
the recovery of Plan overpayments of benefits made to a Participant or
Beneficiary, the transfer of Plan benefit rights from the Plan to another plan,
or the direct deposit of Plan Payments to an account in a financial institution
(if not actually a part of an arrangement constituting an assignment or
alienation) shall not be construed as assignment or alienation under this Article XI.

 

ARTICLE
XII

AMENDMENT AND TERMINATION; ADOPTION BY RELATED EMPLOYERS

 

12.1         Amendment and Termination.  The Corporation reserves the right to amend
this Plan at any time.  Such action may
be taken in writing by the Plan Administrator. 
However, no such amendment shall deprive any Participant or Beneficiary
of any portion of any benefit which would have been payable had the Participant’s
employment with the Corporation terminated on the effective date of such
amendment or termination. 
Notwithstanding the provisions of this Article XII to the contrary,
the Corporation may amend the Plan at any time, in any manner, if the
Corporation determines any such amendment is required to ensure that the Plan
is characterized as providing deferred compensation for a select group of
management or highly compensated employees and as described in ERISA Sections
201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to
the provisions of any applicable law including, but not limited to, ERISA and
the Code (including without limitation section 409A of the Code).

 

12.2         Adoption by Other Employers.  Effective as of January 1, 2008, any
business entity that is a member of the same group of related business entities
as the Corporation (determined in accordance with the standards of Code
Sections 414(b), (c) and (m)) may adopt this Plan and become an Employer, with
the written consent of the Plan Administrator or the Chief Executive Officer of
the Corporation, by executing a written instrument evidencing its adoption of
the Plan and filing the instrument with the Plan Administrator.  Such adoption shall be subject to such terms
and conditions as the Plan Administrator requires.

 

 

ARTICLE
XIII

GENERAL PROVISIONS

 

13.1         Good Faith Payment.  Any payment made in good faith in accordance
with provisions of the Plan shall be a complete discharge of any liability for
the making of such payment under the provisions of this Plan.

 

13.2         No Right to Employment.  This Plan does not constitute a contract of
employment, and participation in the Plan shall not give any Participant the
right to be retained in the employment of the Corporation.

 

13.3         Binding Effect. 
The provisions of this Plan shall be binding upon the Corporation and
its successors and assigns and upon every Participant and his heirs,
Beneficiaries, estates and legal representatives.

 

13.4         Participant Change of Address.  Each Participant entitled to benefits shall
file with the Plan Administrator, in writing, any change of post office
address.  Any check representing payment
and any communication addressed to a Participant or a former Participant at
this last address filed with the Plan Administrator, or if no such address has
been filed, then at his last address as indicated on the Corporation’s records,
shall be binding on such Participant for all purposes of the Plan, and neither
the Plan Administrator, the Corporation nor any other payer shall be obliged to
search for or ascertain the location of any such Participant.  If the Corporation and the Plan Administrator
are unable to locate a Participant or another person or entity to whom payment
is due under this Plan, in order to make a distribution to such person or
entity, the amount of the Participant’s benefits under the Plan that would
otherwise be considered as nonforfeitable shall be forfeited effective four (4) years
after (i) the last date a payment of said benefit was made, if at least
one such payment was made, or (ii) the first date a payment of said
benefit was directed to be made by the Plan Administrator pursuant to the terms
of the Plan, if no payments have been made. 
If such person is located after the date of such forfeiture, the
benefits for such Participant or Beneficiary shall not be reinstated hereunder.

 

13.5         Notices.  Each Participant shall furnish to the Plan
Administrator any information the Plan Administrator deems necessary for
purposes of administering the Plan, and the payment provisions of the Plan are
conditional upon the Participant furnishing promptly such true and complete
information as the Plan Administrator may request.  Each Participant shall submit proof of his
age when required by the Plan Administrator. 
The Plan Administrator shall, if such proof of age is not submitted as
required, use such information as is deemed by it to be reliable, regardless of
the lack of proof, or the misstatement of the age of individuals entitled to
benefits.  Any notice or information
which, according to the terms of the Plan or requirements of the Plan
Administrator, must be filed with the Plan Administrator, shall be deemed so
filed if addressed and either delivered in person or mailed to and received by
the Plan Administrator, in care of the Corporation at:

 

Schweitzer-Mauduit
International, Inc.

100 North Point Center East

 

 

Suite 600

Alpharetta, Georgia 30022

Attention: Human Resources
Committee

 

13.6         Designation of Beneficiary.  Each Participant shall designate, by name, on
Beneficiary designation forms provided by the Plan Administrator, the
Beneficiary(ies) who shall receive any benefits which might be payable after
such Participant’s death.  A Beneficiary
designation may be changed or revoked without such Beneficiary’s consent at any
time or from time to time in the manner as provided by the Plan Administrator,
and the Plan Administrator shall have no duty to notify any individual or
entity designated as a Beneficiary of any change in such designation which
might affect such individual or entity’s present or future rights.  If the designated Beneficiary does not
survive the Participant, all amounts that would have been paid to such deceased
Beneficiary shall be paid to the Participant or to his estate.

 

13.6.1    No
Participant shall designate more than five (5) simultaneous Beneficiaries,
and if more than one (1) Beneficiary is named, Participant shall designate
the share to be received by each Beneficiary. 
Despite the limitation on five (5) Beneficiaries, a Participant may
designate more than five (5) Beneficiaries provided such beneficiaries are
the surviving spouse and children of the Participant.  If a Participant designates alternative,
successor, or contingent Beneficiaries, such Participant shall specify the
shares, terms and conditions upon which amounts shall be paid to such multiple,
alternative, successor or contingent beneficiaries.  Any payment made under this Plan after the
death of a Participant shall be made only to the Beneficiary or Beneficiaries
designated pursuant to this Section.

 

13.7         Claims.  Any claim for benefits must initially be
submitted in writing to the Plan Administrator. 
If such claim is denied (in whole or in part), the claimant shall
receive notice from the Plan Administrator, in writing, setting forth the
specific reasons for denial, with specific reference to applicable provisions
of this Plan.  Such notice shall be
provided within ninety (90) days after the date the claim for benefits is
received by the Plan Administrator, unless special circumstances require an
extension of time for processing the claim, in which event notification of the
extension shall be provided to the claimant prior to the expiration of the
initial 90-day period.  The extension
notification shall indicate the special circumstances requiring the extension
of time and the date by which the Plan Administrator expects to render its
decision.  Any such extension shall not
exceed 90 days.  Any disagreements about
such interpretations and construction may be appealed in writing by the
claimant to the Plan Administrator, within 60 days after the claimant receives
the notice from the Plan Administrator of the initial denial of the claim.  The Plan Administrator shall respond to such
appeal of the initial denial of a claim within sixty (60) days, with a notice
in writing fully disclosing its decision and its reasons, unless special
circumstances require an extension of time for reviewing the claim, in which
event notification of the extension shall be provided to the claimant prior to
the expiration of the initial sixty (60) day period.  Notice of any such extension shall be
provided to the claimant prior to the commencement of the extension.  Any such extension shall not exceed 60
days.  No member of the Board of
Directors, or any committee thereof, and no officer, employee or agents of the
Corporation shall be liable to any individual or entity for any action taken
hereunder, except those actions undertaken with lack of good faith.  Provided that the Corporation has established
a Trust for the Plan pursuant to which the trustee has agreed to act in a
capacity other than as a directed trustee in the event of a Change of

 

 

Control,
the trustee of the Trust shall perform the duties of the Plan Administrator
under this Section 13.7 following a Change of Control.

 

13.8         Action by Board of Directors.  Any action required to be taken by the Board
of Directors of the Corporation pursuant to the Plan provisions may be
performed by the Compensation Committee of the Board.

 

13.9         Governing Law.  To the extent not superseded by the laws of
the United States, the laws of the State of Georgia shall be controlling in all
matters relating to this Plan.

 

13.10       Severability.  In the event any provision of this Plan shall
be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining provisions of the Plan, and the Plan shall be
interpreted and enforced as if such illegal and invalid provisions had never
been set forth.

 

13.11       Code Section 409A.  It is the intention of the Corporation that
this Plan shall meet the requirements of Section 409A of the Code and
applicable Treasury Regulations that must be met in order for amounts of
compensation deferred under this Plan to be taxable, for purposes of federal
income taxation, in the year of actual receipt by the Participant or
Beneficiary.  If any provision of this
Plan is susceptible of two interpretations, one of which results in the
compliance of the Plan with Section 409A of the Code and the applicable
Treasury Regulations, and one of which does not, then the provision shall be
given the interpretation that results in compliance with Section 409A and
the applicable Treasury Regulations.

 

IN WITNESS
WHEREOF, Schweitzer-Mauduit International, Inc. has adopted the foregoing
instrument effective as of December 4, 2008.

 

	
   

  	
  SCHWEITZER-MAUDUIT INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

APPENDIX A

 

LIST OF PARTICIPANTS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]