SCHWEITZER MAUDUIT INTERNATIONAL INC, 10-Q, 2000-05-05

SCHWEITZER MAUDUIT INTERNATIONAL INC
10-Q, 2000-05-05
PAPER MILLS

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<PAGE> 1
FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended MARCH 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from.............to.....................

Commission file number 1-13948

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 62-1612879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>

100 NORTH POINT CENTER EAST
SUITE 600
ALPHARETTA, GEORGIA
30022-8246
(Address of principal executive offices)
(Zip Code)

1-800-514-0186
(Registrant's telephone number, including area code)

NO CHANGE
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [ ]

As of March 31, 2000, 15,462,455 shares of the Corporation's common stock, par
value $.10 per share, together with preferred stock purchase rights associated
therewith, were outstanding.

<PAGE> 2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
U.S. $ IN MILLIONS, EXCEPT PER SHARE AMOUNTS
(UNAUDITED)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
---------------------
2000 1999
---- ----
<S> <C> <C>
Net Sales .................................................. $ 118.0 $ 128.6
Cost of products sold ................................. 96.0 99.2
------- -------
Gross Profit ............................................... 22.0 29.4
Selling expense ....................................... 4.4 4.7
Research expense ...................................... 1.7 1.8
General expense ....................................... 4.5 4.9
------- -------
Operating Profit .......................................... 11.4 18.0
Interest expense ...................................... (1.5) (1.5)
Other income, net ..................................... 1.6 1.0
------- -------
Income Before Income Taxes and Minority Interest ........... 11.5 17.5
Provision for income taxes ............................ 3.9 6.8
------- -------
Income Before Minority Interest ............................ 7.6 10.7
Minority interest in earnings of subsidiaries ......... 0.8 1.6
------- -------
Net Income ................................................. $ 6.8 $ 9.1
======= =======

Net Income per Common Share:
Basic ................................................. $ .44 $ .57
======= =======
Diluted ............................................... $ .44 $ .57
======= =======

Cash Dividends Declared per Common Share ................... $ .15 $ .15
======= =======
</TABLE>

See Notes to Unaudited Consolidated Financial Statements

2
<PAGE> 3

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
U.S. $ IN MILLIONS, EXCEPT PER SHARE AMOUNTS
(UNAUDITED)

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
- ----------------------------------------------------------------------------------------------------------------------------

<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents ........................................................... $ 9.3 $ 15.1
Accounts receivable ................................................................. 69.9 72.1
Inventories ......................................................................... 64.2 62.9
Current income tax refunds receivable ............................................... 3.3 2.2
Deferred income tax benefits ........................................................ 4.2 4.1
Prepaid expenses .................................................................... 3.4 2.8
------ ------
Total Current Assets ............................................................ 154.3 159.2
------ ------

Gross Property .......................................................................... 443.7 451.9
Less accumulated depreciation ....................................................... 200.1 199.8
------ ------
Net Property .................................................................... 243.6 252.1
------ ------

Noncurrent Deferred Income Tax Benefits .................................................. 4.5 6.9
------ ------

Deferred Charges and Other Assets ........................................................ 17.8 18.4
------ ------

Total Assets ............................................................................. $420.2 $436.6
====== ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt ................................................... $ 3.0 $ 3.2
Other short-term debt ............................................................... 2.6 8.8
Accounts payable .................................................................... 39.0 46.3
Accrued expenses .................................................................... 50.5 49.1
------ ------
Total Current Liabilities ....................................................... 95.1 107.4
------ ------

Long-Term Debt ........................................................................... 98.0 100.9
------ ------
Deferred Income Taxes .................................................................... 13.7 13.1
------ ------
Other Noncurrent Liabilities ............................................................. 23.9 23.9
------ ------
Minority Interest ........................................................................ 7.5 7.1
------ ------
Contingencies (See Notes 5 and 6)
Stockholders' Equity
Preferred Stock -$.10 par value - 10,000,000 shares authorized, none issued ......... -- --
Common Stock -$.10 par value - 100,000,000 shares authorized,
16,078,733 shares issued at both March 31, 2000 and December 31, 1999 ........... l.6 1.6
Additional paid-in capital .......................................................... 60.5 60.7
Common stock in treasury, at cost - 616,278 and 441,845 shares at March 31, 2000
and December 31, 1999, respectively ............................................. (10.3) (8.0)
Retained earnings ................................................................... 161.2 156.7
Unearned compensation ............................................................... (0.4) --
Accumulated other comprehensive income (loss) -
Unrealized foreign currency translation adjustments ............................... (30.6) (26.8)
------ ------
Total Stockholders' Equity ...................................................... 182.0 184.2
------ ------

Total Liabilities and Stockholders' Equity ............................................... $420.2 $436.6
====== ======
</TABLE>

See Notes to Unaudited Consolidated Financial Statements

3
<PAGE> 4

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
U.S. $ IN MILLIONS
(UNAUDITED)

ACCUMULATED
COMMON STOCK ISSUED TREASURY STOCK ADDITIONAL OTHER
------------------- --------------- PAID-IN RETAINED UNEARNED COMPREHENSIVE
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS COMPENSATION INCOME (LOSS) TOTAL
------ ------ ------ ------ ------- -------- ------------ ------------- -----

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1998........... 16,078,733 $1.6 154,668 $ (3.8) $ 60.7 $ 134.8 $ 3.7 $197.0

Net income for the three months
ended March 31, 1999............... 9.1 9.1
Adjustments to unrealized foreign
currency translation............... (23.2) (23.2)
------
Comprehensive loss................... (14.1)

Dividends declared ($0.15 per share) (2.4) (2.4)
Stock issued to directors as
compensation....................... -- -- (1,476) -- -- -- -- --
---------- ----- ------- ------ ------ ------- ----- ------ ------
BALANCE, MARCH 31, 1999.............. 16,078,733 1.6 153,192 (3.8) 60.7 141.5 (19.5) 180.5

Net income for the nine months
ended December 31, 1999............ 22.3 22.3
Adjustments to unrealized foreign
currency translation............... (7.3) (7.3)
------
Comprehensive income................. 15.0

Dividends declared ($0.45 per share) (7.1) (7.1)
Purchases of treasury stock.......... 294,350 (4.3) (4.3)
Stock issued to directors as
compensation....................... -- -- (5,697) 0.1 -- -- -- 0.1
---------- ----- ------- ------ ------ ------- ----- ------ ------
BALANCE, DECEMBER 31, 1999........... 16,078,733 1.6 441,845 (8.0) 60.7 156.7 (26.8) 184.2

Net income for the three months
ended March 31, 2000............... 6.8 6.8
Adjustments to unrealized foreign
currency translation.............. (3.8) (3.8)
------
Comprehensive income................. 3.0

Dividends declared ($0.15 per share) (2.3) (2.3)
Purchases of treasury stock.......... 206,400 (2.9) (2.9)
Restricted stock issuances........... (30,000) 0.6 (0.2) $(0.4) --
Stock issued to directors as
compensation....................... -- -- (1,967) -- -- -- -- -- --
---------- ----- ------- ------ ------ ------- ----- ------ ------
BALANCE, MARCH 31, 2000.............. 16,078,733 $ 1.6 616,278 $(10.3) $ 60.5 $ 161.2 $(0.4) $(30.6) $182.0
========== ===== ======= ====== ====== ======= ===== ====== ======

</TABLE>

See Notes to Unaudited Consolidated Financial Statements.

4
<PAGE> 5

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
U.S. $ in millions
(Unaudited)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
---------------
2000 1999
---- ----
<S> <C> <C>
Operations
Net income ............................................ $ 6.8 $ 9.1
Depreciation and amortization ......................... 5.7 5.6
Deferred income tax provision ......................... 2.4 1.7
Minority interest in earnings of subsidiaries ......... 0.8 1.6
Other ................................................. 0.1 0.7
Changes in operating working capital .................. (6.7) (15.4)
----- ------
Cash Provided by Operations .................. 9.1 3.3
----- ------
Investing
Capital spending ...................................... (3.3) (5.3)
Capitalized software costs ............................ (0.4) (1.0)
Other ................................................. 0.3 (0.3)
----- ------
Cash Used for Investing ...................... (3.4) (6.6)
----- ------
Financing
Cash dividends paid to SWM stockholders ............... (2.3) (2.4)
Purchases of treasury stock ........................... (2.9) --
Changes in short-term debt ............................ (6.2) 5.2
Proceeds from issuances of long-term debt ............. 0.2 0.7
Payments on long-term debt ............................ (0.3) (0.3)
----- ------
Cash Provided by (Used for) Financing ........ (11.5) 3.2
----- ------
Decrease in Cash and Cash Equivalents ...................... (5.8) (0.1)

Cash and Cash Equivalents at Beginning of Period ........... 15.1 6.7
----- ------
Cash and Cash Equivalents at End of Period ................. $ 9.3 $ 6.6
===== ======
</TABLE>

See Notes to Unaudited Consolidated Financial Statements

5
<PAGE> 6

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
U.S. $ in millions, except per share amounts

NOTE 1. NATURE OF THE BUSINESS

Schweitzer-Mauduit International, Inc., including its subsidiaries, ("SWM"
or the "Company") is a diversified producer of premium specialty papers and the
world's largest supplier of fine papers to the tobacco industry. The Company was
formed as a spin-off from Kimberly-Clark Corporation ("Kimberly-Clark") at the
close of business on November 30, 1995.

NOTE 2. BASIS OF PRESENTATION

The consolidated financial statements include the accounts of SWM and all
of its majority-owned subsidiaries. All material intercompany and
interdivisional amounts and transactions have been eliminated.

The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission and on the same basis as the audited financial
statements included in the Company's 1999 Annual Report on Form 10-K. All
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results of operations for the interim periods have been made
and are generally of a normal recurring nature. Operating results for any
quarter are not necessarily indicative of the results for any other quarter or
for the full year. These financial statements should be read in connection with
the financial statements and notes thereto included in the Company's 1999 Annual
Report on Form 10-K.

Basic net income per common share is computed based on net income divided
by the weighted average number of common shares outstanding. The average numbers
of common shares used in the calculations of basic net income per common share
for the three month periods ended March 31, 2000 and 1999 were approximately
15,551,400 and 15,925,500, respectively. Diluted net income per common share is
computed based on net income divided by the weighted average number of common
and potential common shares outstanding. The average numbers of common and
potential common shares used in the calculations of diluted net income per
common share for the three month periods ended March 31, 2000 and 1999 were
approximately 15,587,000 and 15,925,500, respectively. Potential common shares
are those related to stock options and restricted stock outstanding during the
respective periods.

NOTE 3. INVENTORIES

The following schedule details inventories by major class:
<TABLE>
<CAPTION>

March 31, December 31,
2000 1999
--------- ------------
<S> <C> <C>
At the lower of cost on the First-In, First-Out (FIFO)
and weighted average methods or market:
Raw materials ......................................... $27.1 $29.0
Work in process ....................................... 6.5 5.6
Finished goods ........................................ 23.1 21.1
Supplies and other .................................... 12.3 12.0
----- -----
69.0 67.7
Excess of FIFO cost over Last-In, First-Out (LIFO) cost .... (4.8) (4.8)
----- -----
Total ............................................... $64.2 $62.9
===== =====

</TABLE>

6
<PAGE> 7

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
U.S. $ in millions, except per share amounts

NOTE 4. INCOME TAXES

The effective income tax rate for the three month period ended March 31,
2000 was 33.9 percent compared with 38.9 percent for the corresponding period of
1999. The lower effective income tax rate for the three month period of 2000 was
in part due to a decrease in the French corporate income tax rate from 40.0
percent for 1999 to 37.7 percent for 2000 and favorable tax treatment of a
settlement related to a prior period claim.

NOTE 5. ENVIRONMENTAL MATTERS

The Company's operations are subject to federal, state and local laws,
regulations and ordinances relating to various environmental matters. The nature
of the Company's operations expose it to the risk of claims with respect to
environmental matters and there can be no assurance that material costs or
liabilities will not be incurred in connection with such claims. Based on the
Company's experience to date, the Company believes that its future cost of
compliance with environmental laws, regulations and ordinances, its exposure to
liability for environmental claims and its obligation to participate in the
remediation of certain hazardous waste disposal sites will not have a material
adverse effect on the Company's financial condition or results of operations.
However, future events, such as changes in existing laws and regulations, or
unknown contamination of sites owned, operated or used for waste disposal by the
Company (including contamination caused by prior owners and operators of such
sites or other waste generators) may give rise to additional costs which could
have a material adverse effect on the Company's financial condition or results
of operations.

The Company has continuing responsibility to administer a consent order
between Kimberly-Clark and the Massachusetts Department of Environmental
Protection ("MDEP") governing the post-closure care of the Willow Hill Landfill
in Lee, Massachusetts. Results of tests conducted in February 2000 showed that
the Company had achieved compliance with the consent order and reduced the
concentration of landfill gases to the levels specified in the consent order at
30 feet below ground level in all of the gas monitoring wells. However, more
recent tests again showed gas levels in a few of the monitoring wells were above
the consent order limits. The Company is undertaking additional steps to address
this issue and will continue its remediation activities on a reduced monitoring
schedule approved by MDEP for this landfill, the remaining cost of which was
previously accrued and is not material.

The Company does not believe that these proceedings will result in the
imposition of monetary sanctions or will have a material adverse effect on the
Company's business or financial condition.

The Company incurs spending necessary to meet legal requirements and
otherwise relating to the protection of the environment at the Company's
facilities in the United States, France, Brazil and Canada. For these purposes,
the Company anticipates that it will incur capital expenditures of approximately
$2 to $4 annually in 2000 and 2001. The major projects included in these
estimates include upgrading wastewater treatment facilities at various locations
and installation of ink solvent treatment equipment in France. The foregoing
capital expenditures are not expected to reduce the Company's ability to invest
in capacity expansion, quality improvements, capital replacements, productivity
improvements or cost containment projects, and are not expected to have a
material adverse effect on the Company's financial condition or results of
operations.

7
<PAGE> 8

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
U.S. $ in millions, except per share amounts

NOTE 6. LEGAL PROCEEDINGS

The Company is involved in certain legal actions and claims arising in the
ordinary course of business. Management believes that such litigation and claims
will be resolved without a material adverse effect on the Company's consolidated
financial statements.

NOTE 7. BUSINESS SEGMENT REPORTING

The Company is operated and managed based on the geographical location of
its manufacturing operations: the United States, France and Brazil. These
business segments manufacture and sell cigarette, plug wrap and tipping papers
used to wrap various parts of a cigarette, reconstituted tobacco products and
paper products used in cigarette packaging. While the products are comparable in
each segment, they vary based on the technological capabilities of each of the
manufacturing operations and the respective markets and customers served. Sales
by a segment into markets primarily served by a different segment occur where
specific product needs cannot be cost-effectively met by the manufacturing
operations domiciled in that segment.

Tobacco industry products comprised approximately 90 percent of the
Company's consolidated net sales in the periods presented. The Company's
non-tobacco industry products are a diverse mix of products, certain of which
represent commodity paper grades produced to maximize machine operations.

For purposes of the segment disclosure in the following tables, the term
"United States" includes operations in the United States and Canada. The
Canadian operations only produce flax fiber used as raw material in the U.S.
operations.

Intercompany sales of products between segments are made at market prices
and are referred to as intersegment sales. Expense amounts not associated with
segments are referred to as unallocated expenses. Assets reported by segment
represent assets which are directly used and an allocated portion of jointly
used assets. These assets include receivables from other segments and are
included in eliminations.

8
<PAGE> 9

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
U.S. $ in millions, except per share amounts

FOR THE THREE MONTHS ENDED
-------------------------- % OF CONSOLIDATED
MARCH 31, MARCH 31, % CHANGE -----------------
NET SALES 2000 1999 VS. 1999 2000 1999
- --------- ---- ---- -------- ---- ----
<S> <C> <C> <C> <C> <C>
United States ...................... $ 38.1 $ 45.5 -16.3% 32.3% 35.4%
France.............................. 64.0 71.5 -10.5 54.2 55.6
Brazil.............................. 15.9 11.7 +35.9 13.5 9.1
------- --------
Subtotal................... 118.0 128.7
Intersegment sales by:
United States.................. -- -- -- --
France......................... -- (0.1) -- (0.1)
Brazil......................... -- -- -- --
------- -------- ----- ----- -----
Consolidated .............. $ 118.0 $ 128.6 - 8.2% 100.0% 100.0%
======= ======== ===== ===== =====
</TABLE>

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
-------------------------- % OF CONSOLIDATED % RETURN ON SALES
MARCH 31, MARCH 31, % CHANGE ----------------- -----------------
OPERATING PROFIT 2000 1999 vs. 1999 2000 1999 2000 1999
- ---------------- ---- ---- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
United States.............. $ 1.7 $ 4.1 - 58.5% 14.9% 22.8% 4.5% 9.0%
France..................... 9.7 13.6 - 28.7 85.1 75.6 15.2 19.0
Brazil..................... 1.3 2.0 - 35.0 11.4 11.1 8.2 17.1
Unallocated expenses....... (1.3) (1.7) (11.4) (9.5)
------- ------ ----- ----- ----
Consolidated...... $ 11.4 $ 18.0 - 36.7% 100.0% 100.0% 9.7% 14.0%
======= ====== ===== ===== ====
</TABLE>

% OF CONSOLIDATED
MARCH 31, DECEMBER 31, -----------------
TOTAL ASSETS 2000 1999 2000 1999
- ------------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
United States......................... $ 147.4 $ 147.6 35.1% 33.8%
France................................ 220.3 237.7 52.4 54.4
Brazil................................ 53.7 53.0 12.8 12.1
Intersegment eliminations............. (1.2) (1.7) (0.3) (0.3)
-------- -------- ----- -----
Consolidated................. $ 420.2 $ 436.6 100.0% 100.0%
======== ======== ===== =====
</TABLE>

Approximately 65 percent of the Company's assets and liabilities are
outside of the United States, substantially all of which are in France or
Brazil. The balance sheets of the Company's foreign subsidiaries are translated
at period-end currency exchange rates, and the differences from historical
exchange rates are reflected in accumulated other comprehensive income (loss) as
unrealized foreign currency translation adjustments. Negative unrealized foreign
currency translation adjustments, as well as the total asset reductions shown
above, for the three month period ended March 31, 2000 are primarily due to a
stronger U.S. dollar against the French franc at March 31, 2000 versus December
31, 1999.

NOTE 8. NEW ACCOUNTING STANDARD

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which will require that all
derivative financial instruments be recognized as either assets or liabilities
on the balance sheet. In July 1999, the FASB issued SFAS No. 137, which delays
the effective date for the new requirements of SFAS No. 133 by one year. As a
result, SFAS No. 133 will be effective no later than for the Company's first
quarter of 2001. The Company is evaluating the effects of this new statement.

9
<PAGE> 10

ITEM 2. SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Management believes that the following commentary and the tables presented
in Note 7 to the Notes to Unaudited Consolidated Financial Statements
appropriately discuss and analyze the comparative results of operations and the
financial condition of the Company for the periods covered.

RESULTS OF OPERATIONS

Net Sales

Net sales decreased by $10.6 million in the three month period ended March
31, 2000 compared with the corresponding period of the preceding year. This
decrease was a result of unfavorable currency exchange rates, lower average
selling prices and a decline in sales volumes. Changes in currency exchange
rates had an unfavorable impact of $6.9 million on the net sales comparison,
primarily as a result of a weaker French franc versus the U.S. dollar compared
with the same quarter of the prior year. Lower average selling prices reduced
net sales by $2.3 million as a result of an unfavorable mix of products sold and
the effects of certain price reductions that occurred in the first half of 1999.
Net sales decreased by $1.4 million in the quarter due to changes in sales
volumes which declined in total by two percent compared with the same quarter of
the prior year. Sales volumes for the quarter decreased at the U.S. business
unit by 18 percent primarily due to lower domestic cigarette shipments and a
decline in the export of cigarettes by U.S. cigarette manufacturers. In France,
sales volumes declined by three percent with a decline in reconstituted tobacco
leaf sales volumes largely offset by increased sales volumes of tobacco-related
papers. The decline in French reconstituted tobacco leaf products was caused by
the timing of certain customers' purchases and inventory adjustments taken by
certain customers. In Brazil, sales volumes improved by 21 percent, with
improvements in non-tobacco related papers and sales of tobacco-related papers
to Latin American countries other than Brazil more than offsetting weakness in
tobacco-related paper sales within the Brazilian market. Sales volumes of all
three business segments were unfavorably impacted in the first quarter of 2000
by a shift of sales volumes related to Year 2000 concerns of certain customers
which increased their year-end 1999 inventories.

Operating Profit

Operating profit decreased by $6.6 million in the three month period ended
March 31, 2000 compared with the corresponding period of the preceding year,
with declines in each of the three business segments. Operating profit was
unfavorably impacted in all three business segments by higher per ton wood pulp
costs and increased energy prices, as well as by lower sales and production
volumes in the United States and for French reconstituted tobacco leaf products.
Changes in per ton wood pulp costs and increased energy prices compared with the
same period of the prior year unfavorably impacted operating expenses by $4.7
million and $1.8 million, respectively. The Year 2000 sales volume shift
unfavorably impacted first quarter 2000 operating profit by approximately $1.8
million. Operating profit for the French business unit decreased by $3.9 million
as a result of the changes in sales and production volumes, unfavorable sales
mix, lower average selling prices and higher wood pulp and energy prices,
partially offset by improved mill operations and reduced manufacturing costs.
Operating profit in the U.S. declined by $2.4 million, with the benefits of cost
savings programs and improved mill operations partially offsetting the effect of
lower production and sales volumes and higher wood pulp and energy prices.
Operating profit in Brazil decreased by $0.7 million, with the benefits of
increased sales volumes, improved mill operations and cost reduction programs
more than offset by higher wood pulp and energy prices. Non-manufacturing
expenses decreased by $0.8 million during the quarter as a result of lower
selling, research and general expenses, in part due to cost reduction efforts
and changes in currency exchange rates.

10
<PAGE> 11

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)

NON-OPERATING EXPENSES

Interest expense was the same for the three month period ended March 31,
2000 compared with the corresponding period of the preceding year. The
unfavorable effect of higher average interest rates in 2000 was offset by lower
average debt outstanding and the effects of currency exchange rates. Other
income, net consisted primarily of interest income, royalty income and foreign
currency transaction gains and losses in each of the periods presented, a
favorable settlement in the 2000 period related to a prior period claim and
recovery in the 1999 period of prior period business taxes.

INCOME TAXES

LIQUIDITY AND CAPITAL RESOURCES

Three Months Ended March 31,
----------------------------
(U.S. $ in millions)
Cash Provided by (Used for): 2000 1999
- ---------------------------- ---- ----
<S> <C> <C>
Changes in operating working capital.............................................. $ (6.7) $ (15.4)
Operations........................................................................ 9.1 3.3
Capital spending.................................................................. (3.3) (5.3)
Capitalized software costs........................................................ (0.4) (1.0)
Purchases of treasury stock....................................................... (2.9) --
</TABLE>

The Company's primary source of liquidity is cash flow from operations,
which is principally obtained through operating earnings. The Company's net cash
provided by operations increased from $3.3 million to $9.1 million for the three
months ended March 31, 1999 and March 31, 2000, respectively, primarily due to
less cash used for operating working capital. Changes in operating working
capital contributed unfavorably to cash flow by $6.7 million and $15.4 million
in the three month periods ended March 31, 2000 and 1999, respectively. The 2000
increase in working capital was primarily due to a decrease in accounts payable
associated with 2000 payments for capital expenditures and purchases of
inventory and maintenance services included in accounts payable at December 31,
1999. The 1999 increase in working capital was primarily due to a decrease in
accounts payable associated with 1999 payments for capital expenditures and
inventory purchases included in accounts payable at December 31, 1998.

Capital spending for the three months ended March 31, 2000 included $1.2
million toward two projects at the Spotswood, New Jersey mill, one of which is a
new high-speed slitter and the other is a project for mill effluent solids
removal. During the first three months of 1999, capital spending included $1.3
million toward the speed-up of two machines in the French mills and $1.1 million
toward the expansion of the Malaucene, France mill.

In addition to capital spending, in the three month period ended March 31,
2000, the Company incurred and deferred on the balance sheet software
development costs of $0.4 million toward additional software modules of new
integrated computer systems, primarily in France. Additional modules of the
software development project in France are scheduled to be placed in operation
during the remainder of 2000, although a large portion of the installation of
the new French systems has been completed.

11
<PAGE> 12

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)

In December 1998, the Company announced that the Board of Directors had
authorized the repurchase of shares of the Company's common stock during the
period January 1, 1999 through December 31, 2000 in an amount not to exceed $20
million. Through March 31, 2000, the Company has repurchased a total of 500,750
shares of its common stock for $7.2 million under this program, of which 206,400
shares have been purchased thus far in 2000 for $2.9 million. The Company
anticipates repurchasing additional common stock under this program during the
remainder of 2000.

On April 27, 2000, the Company announced that the Board of Directors had
declared a quarterly cash dividend of fifteen cents per share of common stock.
The dividend will be payable on June 12, 2000 to stockholders of record on May
8, 2000.

The Company's ongoing requirements for cash are expected to consist
principally of amounts required for capital expenditures, purchases of treasury
stock, stockholder dividends and working capital. Other than expenditures
associated with capital projects, the Company had no material outstanding
commitments as of March 31, 2000. The principal sources of cash are expected to
be cash flow from operations and borrowings from commercial banks.

The Company believes its cash flow from operations, together with
borrowings available under its revolving credit and overdraft facilities, will
be sufficient to fund its ongoing cash requirements.

NEW ACCOUNTING STANDARD

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which will require that all derivative
financial instruments be recognized as either assets or liabilities on the
balance sheet. In July 1999, the FASB issued SFAS No. 137, which delays the
effective date for the new requirements of SFAS No. 133 by one year. As a
result, SFAS No. 133 will be effective no later than for the Company's first
quarter of 2001. The Company is evaluating the effects of this new statement.

OUTLOOK

Cigarette production in the United States was lower in the first quarter of
2000 compared with the comparable period of the prior year as a result of
declines in domestic cigarette consumption and exports of cigarettes
manufactured in the United States. These trends are expected to continue.
Improvements in the Company's sales volumes to several key markets, including
Eastern and Western Europe, Russia and Asia, excluding China, are expected to
continue. Full year French reconstituted tobacco leaf sales volumes are expected
to exceed the 1999 level. The Company's Brazilian business also expects to
continue to increase its non-tobacco paper sales and sales to Latin American
countries outside of Brazil, offsetting weakness in the sale of tobacco-related
papers within the Brazilian market.

There continues to be excess worldwide manufacturing capacity for
tobacco-related papers, however, the amount of excess capacity is decreasing as
paper manufacturers, including the Company, are shutting down unneeded and less
efficient capacity. Selling prices appear to have stabilized in most key markets
and there may be opportunities for selling price increases as pulp prices rise.

12
<PAGE> 13

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)

Some production downtime continues to be experienced on certain machines in
the Company's U.S. and French paper operations because of reduced demand.
Additional paper production downtime is likely to be taken in 2000 in each of
the Company's three business segments but to a lesser extent than in 1999. The
Company's customers in the U.S. traditionally reduce their operating schedules
around holidays during the third and fourth quarters, which softens demand for
the Company's products and allows for additional maintenance and capital work.
Also, in Brazil, customer orders are typically lower in December due to a
January and February holiday season.

Cost savings are expected to continue from recently implemented capital
projects and from various cost savings programs, including the Company's
headcount reductions in the United States during 1999. With current market
conditions, cost reduction continues to be a priority in each of the Company's
business segments.

The per ton cost of wood pulp has steadily increased during the latter half
of 1999 and first quarter of 2000. The Company expects further increases in the
per ton cost of wood pulp during 2000. Additionally, higher energy prices were
experienced in the first quarter of 2000 in each of the Company's business
segments. The Company is experiencing a lag in its ability to offset these cost
increases with higher selling prices. Although selling price increases are
anticipated, the higher costs will not be fully offset by increased selling
prices until the per ton cost of wood pulp stabilizes.

The French corporate income tax rate declined from 40.0 percent for 1999 to
37.7 percent effective beginning January 1, 2000. The Brazilian corporate income
tax rate declined from 37.0 percent to 34.0 percent effective beginning February
1, 2000.

The company expects to control its capital spending for 2000 and 2001 to
approximately $20 to $25 million, focused primarily on product quality
improvements and cost reduction opportunities. Capitalized software costs in
2000 are expected to total approximately $2 million and diminish to less than $1
million in 2001.

During the first quarter of 2000, the Company repurchased 206,400 shares of
its common stock for $2.9 million. For full year 2000, the Company anticipates
repurchasing common stock totaling $10 to $15 million, although future purchases
will be dependent upon various factors including the stock price and cash
availability.

The Company's current expectation is that earnings per share for the full
year 2000 will exceed those of 1999.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Many factors outside the control of the Company could impact the Company's
results. The following important factors, among others, in some cases have
affected, and in the future could affect, the Company's actual results and could
cause the Company's actual results for 2000 and beyond, to differ materially
from those expressed in any forward-looking statements made by, or on behalf of,
the Company.

13
<PAGE> 14

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)

Year 2000 Compliance

The Company did not experience any business disruptions related to the Year
2000 issue. The Company is also not aware of any such issues with respect to its
information systems, mill process controls or operating systems. Furthermore,
the Company is not aware of any such issues at its customers, vendors or service
providers.

Euro Currency Conversion

On January 1, 1999, 11 of the 15 member countries of the European Union
established fixed conversion rates between their existing currencies ("legal
currencies") and one common currency -- the euro. The euro now trades on
currency exchanges and may be used in business transactions. Beginning in
January 2002, new euro-denominated bills and coins will be issued, and legal
currencies will be withdrawn from circulation by no later than June 2002. The
Company established a committee to identify and implement changes necessary to
address the systems and business issues raised by the euro currency conversion.
These issues include, among others, the need to adapt computer and other
business systems and equipment to accommodate euro-denominated transactions,
competitive implications of increased price transparency within European Union
countries, changes in currency exchange costs and rate exposures, continuity of
contracts that require payment in a legal currency and tax implications of the
conversion.

The Company's French subsidiaries currently utilize multi-currency software
that was capable of euro-denominated sales and purchase transactions on January
1, 1999. Consideration has also been given to other potential issues in
connection with the conversion, including those mentioned above. The Company's
French subsidiaries are in the process of implementing already-purchased
software capable of translating current and historical data into euro currency
data, which implementation will be fully completed no later than January 1,
2002, at which time the euro will become the functional currency of the French
subsidiaries. The Company does not anticipate any significant negative
consequences of these issues and does not anticipate that the euro conversion
will have a material adverse impact on its financial condition or results of
operations.

FORWARD-LOOKING STATEMENTS

Certain sections of this report, particularly the foregoing discussion
regarding the "Outlook" of the Company and "Factors That May Affect Future
Results", contain certain forward-looking statements, generally identified by
phrases such as "the Company expects" or words of similar effect.
Forward-looking statements are made based upon management's expectations and
beliefs concerning future events impacting the Company. There can be no
assurances that such events will occur or that the results of the Company will
be as estimated. Many factors outside the control of the Company also could
impact the realization of such estimates. The above-mentioned important factors,
among others, in some cases have affected, and in the future could affect, the
Company's actual results and could cause the Company's actual results for 2000
and beyond, to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company. Certain factors that could
cause the Company's future results to differ materially from those expressed in
any such forward-looking statements are discussed in the Company's 1999 Annual
Report on Form 10-K, Part II, Item 7, under the heading "Factors That May Affect
Future Results".

14
<PAGE> 15

PART II - OTHER INFORMATION

ITEM 5. OTHER INFORMATION

On February 23, 2000, the Company reached agreement with Souza Cruz S.A. to
extend by three years, to February 2, 2004, the initial terms of the supply
agreements under which Schweitzer-Mauduit do Brasil S.A. supplies
tobacco-related and coated papers to Souza Cruz in Brazil.

New labor agreements were signed in France with the hourly employees at the
Company's mills in Quimperle, Malaucene and Spay. The agreements in Quimperle
and Spay are two-year agreements expiring December 31, 2001 and February 28,
2002, respectively, while the agreement in Malaucene is for a one-year term
expiring December 31, 2000. Each of these agreements awards annual base salary
increases between 1.5 and 2 percent and total annual compensation increases
ranging from approximately 2 to 4 percent. Negotiations for a new contract are
expected to take place at the Company's other French mill in Saint-Girons in May
2000 when the current contract is due to expire.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

10.8.1 Deferred Compensation Plan, Amended and Restated as of April
21, 2000.

10.8.2 Deferred Compensation Plan for Non-Employee Directors,
effective April 1, 2000.

10.11 Executive Severance Plan, Amended and Restated as of February
24, 2000.

10.13.1 Amendment No. 1, dated February 23, 2000, to the Supply
Agreement between Schweitzer-Mauduit do Brasil, S.A. (formerly
known as Companhia Industrial de Papel Pirahy) and Souza Cruz
S.A.

10.13.2 Amendment No. 1, dated February 23, 2000, to the Art-Coated
Supply Agreement between Schweitzer-Mauduit do Brasil, S.A.
(formerly known as Companhia Industrial de Papel Pirahy) and
Souza Cruz S.A.

15. Independent Accountants' Report, dated April 19, 2000 from
Deloitte & Touche LLP to Schweitzer-Mauduit International,
Inc.

23. Independent Accountants' Consent.

27. Financial Data Schedule (for SEC use only).
</TABLE>

(b) Reports on Form 8-K:

The registrant did not file any reports on Form 8-K during the quarter
for which this report is filed.

15
<PAGE> 16

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Schweitzer-Mauduit International, Inc.
(Registrant)

By: /s/ PAUL C. ROBERTS By: /s/ WAYNE L. GRUNEWALD
---------------------------- ------------------------------
Paul C. Roberts Wayne L. Grunewald
Chief Financial Officer and Controller
Treasurer (principal accounting officer)
(duly authorized officer and
principal financial officer)

May 5, 2000 May 5, 2000

16
<PAGE> 17

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
Quarterly Report on Form 10-Q
for the Quarterly Period Ended March 31, 2000

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

<S> <C> <C>
10.8.1 -- Deferred Compensation Plan, Amended and Restated as of April
21, 2000.

10.8.2 -- Deferred Compensation Plan for Non-Employee Directors,
effective April 1, 2000.

10.11 -- Executive Severance Plan, Amended and Restated as of February 24,
2000.

10.13.1 -- Amendment No. 1, dated February 23, 2000, to the Supply
Agreement between Schweitzer-Mauduit do Brasil, S.A. (formerly
known as Companhia Industrial de Papel Pirahy) and Souza Cruz
S.A.

10.13.2 -- Amendment No. 1, dated February 23, 2000, to the Art-Coated
Supply Agreement between Schweitzer-Mauduit do Brasil, S.A.
(formerly known as Companhia Industrial de Papel Pirahy) and
Souza Cruz S.A.

15. -- Independent Accountants' Report, dated April 19, 2000 from
Deloitte & Touche LLP to Schweitzer-Mauduit International,
Inc.

23. -- Independent Accountants' Consent.

27. -- Financial Data Schedule (for SEC use only).
</TABLE>

<PAGE> 1

EXHIBIT 10.8.1

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
DEFERRED COMPENSATION PLAN
Amended and Restated as of April 21, 2000

Article I
Establishment of Plan

1.1 Purpose. The Schweitzer-Mauduit International, Inc. Deferred
Compensation Plan 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, 2000 to be
known as the Schweitzer-Mauduit International, Inc. Deferred Compensation Plan,
hereinafter referred to as the "Plan." This amended and restated Plan shall be
effective as of the Effective Date.

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.

<PAGE> 2

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

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 15.6.

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 a the date as of which: (a) a third person, including a "group" as
defined in Section 13(d)(3) of the Securities Act of 1934, acquires actual or
beneficial ownership of shares of the Corporation having 15% or more of the
total number of votes that may be cast for the election of Directors of the
Corporation; or (b) as the result of any cash tender or exchange offer, merger
or other business combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction"), the persons who
were Directors of the Company before the Transaction shall cease to constitute a
majority of the Board of Directors of the Company or any successor to the
Company.

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.

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

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, 2000 and ends December 31, 2000.

2.13 Disability. Totally and Permanently Disabled, as defined in the
Corporation's Retirement Plan; provided that the Committee shall make a
determination of Disability for any Participant in the Plan.

2
<PAGE> 3

2.14 Effective Date. January 1, 2000

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

2.17 IRS. The Internal Revenue Service.

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

2.19 Participant Agreement. The written agreement, including a Deferral
Election Form, to defer Salary and/or AIP Awards made by the Participant. Such
written agreement and Deferral Election Form shall be in a format designated by
the Corporation.

2.20 Plan. The Schweitzer-Mauduit International, Inc. Deferred Compensation
Plan.

2.21 Plan Administrator. The Corporation's Human Resources Committee.

2.22 Plan Year. "Plan Year" means the 12-month period beginning each January
1 and ending on the following December 31.

2.23 Rabbi Trust. The Rabbi Trust, which the Corporation may, in its
discretion, establish for the Schweitzer-Mauduit International, Inc. Deferred
Compensation Plan, as amended from time to time.

2.24 Specified Age. Upon retirement at 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 benefits have commenced to pay-out
earlier as provided in Article VII of the Plan.

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

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

3
<PAGE> 4

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, 2000 through December 31, 2000 ("Initial
Period") if he submits a properly completed Participation Agreement and Deferral
Election Form to the Plan Administrator prior to December 31, 1999. 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 for the current
Deferral Period commencing on or after he becomes an Eligible Employee if he
submits a properly completed Participation Agreement and Deferral Election Form
within thirty (30) days after becoming eligible for participation.

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 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, 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 participation in the Plan
as of the date of such determination. Should the Plan Administrator determine,
in its sole discretion, that a distribution of benefits must be made to the
former participant for the Plan to remain qualified for the ERISA exemption, the
Plan benefit to which he is entitled will be distributed to him as soon as
administratively possible in a single lump-sum payment, notwithstanding any
other provision of the Plan.

4
<PAGE> 5

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
Salary and/or AIP Award Deferrals 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 except that it shall terminate upon Termination of
Employment and upon not less than thirty (30) days prior written notice from the
Participant to cease further deferrals during such Plan Year in such form as the
Plan Administrator shall specify.

4.2 Maximum Deferral Election. A Participant may elect to defer up to 25%
of Base Salary. A Participant may also elect to defer up to 50% of AIP Awards
that are earned or paid during the first Plan Year, which includes the period
from January 1, 2000 through December 31, 2000. Thereafter, a Participant may
elect to defer up to 25% of Base Salary and/or up to 50% of AIP Awards earned
during the corresponding Deferral Period. The amount of deferral may be stated
as a flat dollar amount or as a percent rounded to the nearest $100. 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, or a combination of Base Salary
and AIP 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.

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.

5
<PAGE> 6

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.

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
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. Any distribution
with respect to a Deferral Account shall be charged to that Account as of the
date such payment is made by the Corporation or the trustee of any Rabbi Trust
established for the Plan.

5.3 Earning Credits or Losses. Amounts credited to a Deferral Account shall
be credited 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 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. 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.

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,

6
<PAGE> 7

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. The Corporation's 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 or nonforfeitable when the Participant has completed four (4) Years of
Service with the Corporation following the date the Corporate Contribution is
awarded by action of the Committee, irrespective of when the Corporate
Contribution is credited to the Participant's Deferral Account. Prior to the
time a Participant has four (4) Years of Service with the Corporation following
the date the Corporate Contribution is awarded by the Committee, the
Corporation's contributions to his account shall be zero percent (0%) vested. In
addition, 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. 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 chosen according to his
Participation Agreement and Deferral Election Form. Payment of any amount under
this Section shall commence within thirty (30) days of the Participant's
Specified Age 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

7
<PAGE> 8

commence within thirty (30) days of when 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. Upon the Participant's written request and subject to approval of the Plan
Administrator, exercised in its sole discretion, an alternative payment method,
including a lump sum or shorter period of distribution, may be used.

7.3 Pre-Retirement Survivor Benefit. If a Participant dies before becoming
entitled to benefits under this Article, the Beneficiary or Beneficiaries
designated pursuant to Section 15.6, 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 of the Participant's death, or if later, within
thirty (30) days of when the Plan Administrator receives notification of or
otherwise confirms the Participant's death.

7.4 Post-Retirement Survivor Benefit. 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 15.6, 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 of the Participant's death, or if later, within thirty
(30) days of when the Plan Administrator receives notification of or otherwise
confirms the Participant's death.

7.5 Termination. If a Participant's employment terminates with the
Corporation before he becomes entitled to receive benefits by reason of any of
the above Sections, he shall receive in a single lump sum or in five (5) annual
installments, at the Participant's election, the vested amount credited to his
Deferral Account as of the Valuation Date coinciding with the date on which the
Participant's employment terminates. Payment of the first annual installment or
any lump sum amount under this Section shall be made within thirty (30) days of
when the Participant terminates his employment with the Corporation. Upon the
Participant's written request and subject to approval of the Plan Administrator,
exercised in its sole discretion, an alternative payment method including, but
not limited to, a lump sum or shorter period of distribution, may be used.

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 of when the Change of Control occurs.

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 in a single lump sum or in 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. Any

8
<PAGE> 9

installment payments shall be paid annually on the first practicable day after
the distributions are scheduled to commence. 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. Notwithstanding anything hereinbefore to the
contrary, a Participant may modify the original payment election made in the
Participation Agreement and Deferral Election Form to one of the other permitted
payment forms not less than one year before the first distribution of the
deferred amount for the corresponding Plan Year is scheduled to commence. A
Participant change in the form of payment shall be in writing on such form and
in accordance with such procedures as shall be established by the Plan
Administrator.

Article VIII
In- Service Distributions

8.1 Election of In-Service Distributions. A Participant may elect in each
Deferral Period, for that particular Deferral Election, to receive in the future
a distribution from his Deferral Account while still an active employee of the
Corporation ("In-Service Distribution"). Such Deferral Election shall state the
percentage or flat dollar amount and date on which such In-Service Distribution
is to be paid. Each election shall state the date on which such In-Service
Distribution is to be paid; provided that such date is not earlier than five (5)
years after the end of the Plan Year in which the amount subject to an
In-Service Distribution is deferred. For example: The earliest distribution date
for the initial Plan Year ending December 31, 2000 would be January 1, 2005.
This is calculated using 2000 as the "Plan Year" plus five (5).

8.2 Payment of In-Service Distributions. All In-Service Distributions shall
be made within thirty (30) days of the date stated on the Election Form.
Distributions shall be in the form of a single lump sum payment.

8.3 Termination Prior to In-Service Distribution Date. Notwithstanding a
Participant's election of an In-Service Distribution, in the event a
Participant's employment terminates for any reason pursuant to Section VII of
the Plan Document and prior to such Participant receiving any In-Service
Distribution, the Participant shall receive his Deferral Account according to
the payment method designated in Article VII or as elected on his Participation
Agreement and Deferral Election Form.

Article IX
Hardship Withdrawals

9.1 Hardship Withdrawals. If a Participant incurs an unforeseeable
emergency, the Participant may make a written request to the Plan Administrator
for a hardship withdrawal from his account. An unforeseeable emergency is a
severe financial hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or the Participant's dependent
(as defined in Section 152(e) of the Code), loss of the Participant's property
due to casualty or other similar extraordinary and unforeseen circumstances
beyond the control of the Participant. Withdrawals of amounts because of
unforeseeable emergencies are only permitted to

9
<PAGE> 10

the extent reasonably necessary to satisfy the emergency need. This section
shall be interpreted in a manner consistent with Sections 1.457-2(h)(4) and
1.457-2(h)(5) of the Treasury Regulations. In the event of a Hardship
Withdrawal, 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 X
Automatic Distribution Triggered by Corporate Events

10.1 Definitions Applicable to Article X. Terms capitalized in this Article
X shall have the meaning given to such terms in this Section 10.1 or, if not
defined in this Section, they shall have the meaning given to such terms in
accordance with Article II.

10.1.1 "Applicable Accounting Rules" means the body of
generally accepted accounting principles which are applicable to the
preparation and presentation of the Corporation's financial statements.

10.1.2 "Capital Leases" means any lease of any Property by
the Corporation as lessee which would, in accordance with Applicable
Accounting Rules, be required to be classified and accounted for as a
capital lease on the balance sheet of the Corporation.

10.1.3 "Debt" means without duplication:

(a) indebtedness of the Corporation for borrowed money;

(b) obligations of the Corporation evidenced by bonds,
debentures, notes or other similar instruments;

(c) obligations of the Corporation to pay the deferred
purchase price of property or services (other than accounts
payable);

(d) obligations of the Corporation as lessee under
Capital Leases;

(e) obligations of the Corporation under direct or
indirect guaranties in respect of, and obligations (contingent
or otherwise) of the Corporation to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (d) above;

(f) all obligations of the Corporation under any
Interest Hedge Agreement; and

(g) indebtedness or obligations of others of the kinds
referred to in clauses (a) through (f) secured by any Lien on
or in respect of any Property of the Corporation.

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<PAGE> 11

10.1.4 "EBITDA" means, for any period, (a) Net Income for
such period plus (b) to the extent deducted in determining Net Income,
interest expense, taxes and depreciation and amortization for such
period.

10.1.5 "Fixed Charge Coverage Ratio" means, for the
Corporation at the end of any fiscal quarter, the ratio of the
Company's (a) EBITDA during the four-fiscal quarter period then ended
to (b) its Fixed Charges for the four-fiscal quarter period then ended;
provided that, any such calculation of the Fixed Charge Coverage Ratio
made after the occurrence of a Potential Phaseout Event shall (c) for
the first Phaseout Quarter, be made using EBITDA and Fixed Charges for
such Phaseout Quarter only, (ii) for the second Phaseout Quarter, be
made using EBITDA and Fixed Charges for such Phaseout Quarter and the
preceding Phaseout Quarter, (iii) for the third Phaseout Quarter, be
made using EBITDA and Fixed Charges for such Phaseout Quarter and the
preceding two Phaseout Quarters, and (iv) for each Phaseout Quarter
thereafter, be made using EBITDA and Fixed Charges for the
four-Phaseout Quarter period then ended.

10.1.6 "Fixed Charges" means, for any period, (a) if no
Potential Phaseout Event has occurred, the sum of cash interest
expense, Restricted Payments made by the Company, cash taxes and
depreciation for such period and (b) if a Potential Phaseout Event has
occurred, the sum of cash interest expense, rent expense, Restricted
Payments made by the Company, cash taxes and capital expenditures for
such period.

10.1.7 "Interest Hedge Agreement" means an interest hedge,
rate swap, or cap, or similar arrangement between the Corporation and a
financial institution providing for the exchange of nominal interest
obligations or the cap of the interest rate on the advances made under
any credit agreement entered into by the Corporation.

10.1.8 "Lien" means any mortgage, lien, pledge, assignment,
charge, deed of trust, security interest, hypothecation, preference,
deposit arrangement or encumbrance (or any other arrangement having the
practical effect of the foregoing) to secure or provide for the payment
of any obligation of the Corporation, whether arising by contract,
operation of law of otherwise (including, without limitation, the
interest of a vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement).

10.1.9 "Net Income" means, for any period, the Corporation's
net income for such period after taxes, as determined in accordance
with GAAP, excluding, however, extraordinary items, including (a) any
net gain or loss during such period arising from the sale, exchange or
other disposition of capital assets (such term to include all fixed
assets and all securities) other than in the ordinary course of
business and (b) any write-up or write-down of assets.

10.1.10 "Phaseout Quarter" means, in connection with any
Potential Phaseout Event, (a) any fiscal quarter of the Corporation
ending after the occurrence of such Potential Phaseout Event if such
Potential Phaseout Event occurred during the first 45

11
<PAGE> 12

days of the applicable Test Quarter and (b) any fiscal quarter of the
Corporation commencing after the occurrence of such Potential Phaseout
Event if such Potential Phaseout Event occurred after the first 45 days
of the applicable Test Quarter.

10.1.11 "Potential Phaseout Event" means (a) the receipt or
delivery of any notice which indicates the nonrenewal of the Strategic
Supply Agreement for fine papers between the Corporation and Philip
Morris, as amended, ("Supply Agreement") beyond (i) the initial term of
the Supply Agreement or (ii) any renewal term of the Supply Agreement,
(b) the giving of a notice by either Philip Morris or the Corporation
demanding an early termination under the Supply Agreement, or (c) the
occurrence of any event or condition which causes a phaseout period (as
described in the Supply Agreement) to be initiated.

10.1.12 "Property" means any property or assets (whether
real, personal, or mixed, tangible or intangible) of the Corporation.

10.1.13 "Restricted Payment" means the making by the Company
of any dividends or other distributions (in cash, property, or
otherwise) with respect to its capital stock other than dividends
payable in the Company's stock.

10.1.14 "Test Quarter" means, for any Potential Phaseout
Event, the first fiscal quarter of the Company during which such
Potential Phaseout Event occurred.

10.2 Automatic Distribution of Participant Benefits. The entire vested
Deferral Account of each Participant in the Plan shall automatically be
distributed in a single lump sum if, for a period of four consecutive calendar
quarters:

(a) the Corporation's current assets do not exceed
current liabilities, excluding all Debt, by $15 million or more; and

(b) the Fixed Charge Coverage Ratio is below 1.1

A distribution will only occur if both factors are triggered.

12
<PAGE> 13

Article XI
Establishment of Trust

11.1 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 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.

11.2 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 XII
Plan Administration

12.1 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 XII. 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.

13
<PAGE> 14

Article XIII
Nonalienation of Benefits

13.1 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 XIII.

Article XIV
Amendment and Termination

14.1 Amendment and Termination. The Corporation reserves the right to amend,
alter or discontinue 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 XIV 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.

14
<PAGE> 15

Article XV
General Provisions

15.1 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.

15.2 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.

15.3 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.

15.4 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 Plan Administrator is in doubt as to the address of
any Participant entitled to benefits or as to whether benefit payments are being
received by a Participant, it shall, by registered mail addressed to such
Participant at his last known address, notify such Participant that:

(i) All unmailed and future Plan payments shall be withheld until
Participant provides the Plan Administrator with evidence of such
Participant's continued life and proper mailing address; and

(ii) Participant's right to any Plan payment shall, at the option of the
Committee, be canceled forever, if, at the expiration of five (5) years from
the date of such mailing, such Participant or his Beneficiary shall not have
provided the Committee with evidence of his continued life and proper mailing
address.

15.5 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:

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<PAGE> 16

Schweitzer-Mauduit International, Inc.
100 North Point Center East
Suite 600
Alpharetta, Georgia 30022
Attention: Human Resources Committee

15.6 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.

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.

15.7 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
of 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 within sixty (60)
days to the Plan Administrator. 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 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

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<PAGE> 17

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 15.7
following a Change of Control.

15.8 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.

15.9 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.

15.10 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.

IN WITNESS WHEREOF, Schweitzer-Mauduit International, Inc. has adopted the
foregoing instrument effective as of December 2, 1999.

Schweitzer-Mauduit International, Inc.

By:

Title:

ATTEST:

<PAGE> 1
EXHIBIT 10.8.2

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS

Article I - Purpose and Participation

The purpose of the Schweitzer-Mauduit International, Inc. Deferred
Compensation Plan 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

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.

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

2.3 Board or Board of Directors. The Board of Directors of the
Corporation.
<PAGE> 2

2.4 Change of Control. For the purposes of this Plan, a Change of Control
shall mean the date as of which: (a) a third person, including a "group" as
defined in Section 13(d)(3) of the Securities Act of 1934, acquires actual or
beneficial ownership of shares of the Corporation having 15% or more of the
total number of votes that may be cast for the election of Directors of the
Corporation; or (b) as the result of any cash tender or exchange offer, merger
or other business combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction"), the persons who
were Directors of the Corporation before the Transaction shall cease to
constitute a majority of the Board of Directors of the Corporation or any
successor to the Corporation.

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.

2.6 Committee. The Compensation Committee of the Corporation's Board of
Directors.

2.7 Corporation. Schweitzer-Mauduit International, Inc.

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.

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

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 April 1, 2000 and ends
December 31, 2000.
<PAGE> 3

2.11 Disability. Totally and Permanently Disabled, as defined in the
Corporation's Retirement Plan; provided that the Committee shall make a
determination of Disability for any Director in the Plan.

2.12 Effective Date. April 1, 2000.

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

2.14 IRS. The Internal Revenue Service.

2.15 Plan. The Schweitzer-Mauduit International, Inc. Deferred
Compensation Plan for Non-Employee Directors.

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

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

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.

2.19 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

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
<PAGE> 4

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.

3.2 Each Director must file with SWM's Vice President-Administration by
March 15, 2000 a Deferral Election Form (Exhibit I) indicating deferral amounts
elected during the remainder of calendar year 2000 ("Initial Period").
Following the Initial Period, a Director must submit a Deferral Election Form
to SWM's Vice President-Administration by December 15 indicating deferrals
elected for the following Plan Year.

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 at any time before attendance at the first Board or committee meeting
following election to the Board.

Article IV - Deferred Compensation Accounts

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

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.
<PAGE> 5

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.

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
Article 4.2, Fair Market Value shall be the mean between the high and
low sales prices of the Common Stock, on the relevant date as reported
on the composite list used by the Wall Street Journal for reporting
stock prices, 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.

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 whole
or fractional shares of Common Stock at Fair Market Value and credited
to the Stock Unit Account.

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.

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
<PAGE> 6

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.

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.

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.

4.5 Hypothetical Nature of Accounts - 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.

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
<PAGE> 7

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.

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 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.

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
<PAGE> 8

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

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. Dividends shall continue to be paid 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 of when 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. Upon the Director's written
request and subject to approval of the Plan Administrator, exercised in its
sole discretion, an alternative benefit distribution method, including a lump
sum or shorter period of distribution, may be used.

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 Article 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 Article
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. Dividends shall continue to be paid on shares of
Common Stock in the Stock Unit Account and credited to that account in whole or
<PAGE> 9

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 of the Director's death, or if later, within thirty (30) days of when
the Plan Administrator receives notification of or otherwise confirms the
Director's death.

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 Article 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 Article 5.2. No further
investment gains or losses shall be credited or debited against the Investment
Account as of and after the Valuation Date. Dividends shall continue to be paid
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 of the Director's death, or if later, within thirty
(30) days of when the Plan Administrator receives notification of or otherwise
confirms the Director's death.

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 Article 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. Dividends shall continue to be paid 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 of the Valuation Date.
<PAGE> 10

Article VI - Benefit Distributions

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.

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 is no longer a Director, (2) the entire balance in the Investment
Account and the Stock Unit Account in 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 is no longer a Director, 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 the Stock Unit Account as of January 1 of that year by the
remaining number of installments.

6.2.1 Not less than twelve months prior to the date a Director
terminates service on the Corporation's Board, a Director may modify a
prior distribution election to a different form of distribution from
among those offered under the Plan.

6.2.2 At least ninety (90) days prior to the Directors first scheduled
distribution date, the Director may make a one-time, irrevocable,
written election to receive the distributions from the Stock Unit
Account in cash in an amount equivalent to the Fair Market Value of
the whole and fractional shares of Common Stock in the Director's
Stock Unit Account on the date such election is made.
<PAGE> 11

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.

Article VII - Establishment of Trust

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, a as provided in this Plan.

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, was not
<PAGE> 12

timely made by the Corporation and that there are sufficient assets in the
Trust to make the distribution.

Article VIII - Miscellaneous

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 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.

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.

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.
<PAGE> 13

8.4 The Corporation shall withhold from amounts paid under this Plan any
taxes or other amounts required to be withheld by law.

8.5 The Board may at any time modify, amend or terminate the Plan for
whatever reasons it may deem appropriate. No amendment or termination 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.

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.

8.7 This Plan shall become effective with respect to annual retainer and
meeting fees earned on and after April 1, 2000 with all elections and
designations filed by the Directors prior to April 1, 2000 becoming effective
as of such date.

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.

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.

8.10 Director Change of Address. Each Director entitled to benefits shall
file with the Corporation's Vice President Administration, in writing, any
change of address. Any check representing payment and any communication
addressed to a Director or a
<PAGE> 14

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 Plan Administrator
is in doubt as to the address of any Director entitled to benefits or as to
whether benefit payments are being received by a Director, it shall, by
registered mail addressed to such Director at his last known address, notify
such Director that:

(i) All unmailed and future Plan payments shall be withheld until
Director provides the Plan Administrator with evidence of
such Director's continued life and proper mailing address;
and

(ii) Director's right to any Plan payment shall, at the option of
the Committee, be canceled forever, if, at the expiration of
five (5) years from the date of such mailing, such Director
or his Beneficiary shall not have provided the Committee with
evidence of his continued life and proper mailing address.

8.11 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.
<PAGE> 15

8.11.1 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.

8.12 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 of the date 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
within sixty (60) days to the Plan Administrator. 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
<PAGE> 16

extension. Any such extension shall not exceed 60 days. No member of the Board,
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.

8.12.1 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 Article 8.12 following a Change of Control.

8.13 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.

8.14 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.

8.15 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.

8.16 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.

Adopted and approved by the Board of Directors the 24th day of February 2000

<PAGE> 1
EXHIBIT 10.11

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
EXECUTIVE SEVERANCE PLAN

Amended and Restated -
As of February 24, 2000

<PAGE> 2

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
EXECUTIVE SEVERANCE PLAN FOR KEY EMPLOYEES
AMENDED AND RESTATED AS OF FEBRUARY 24, 2000

ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN

1.1 Adoption of Plan. Schweitzer-Mauduit International, Inc.
("Company") hereby amends and restates the Schweitzer-Mauduit International,
Inc. Executive Severance Plan as of February 24, 2000. The Company intends that
this Plan qualify as and come within the various exceptions and exemptions
under the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended, for an unfunded plan maintained primarily for a select group of
management or highly compensated employees, and any ambiguities in this Plan
shall be construed to effect that intent. The benefits of this Plan for U.S.
Employees (as hereinafter defined) shall be paid solely from the general assets
of the Company. The benefits of this Plan for French Employees (as hereinafter
defined) shall be paid by the French Employer (as hereinafter defined) but, if
as a result of applicable French laws, a French Employer would be prohibited
from paying the benefits of this Plan to a French Employee, any such benefits
shall be paid by the Company to such French Employee.

1.2 Purpose. The Plan is primarily designed to provide benefits
to certain Key Employees (as hereinafter defined) upon termination of
employment as a result of a Change of Control or otherwise.

1.3 Effect on Other Plans Sponsored by the Company or by a French
Employer. The benefits payable under the Plan are in addition to the coverage
and benefits generally afforded by Other Plans (as hereinafter defined) to Key
Employees terminating from the

1
<PAGE> 3

service of the Company or, as the case may be, from the service of a French
Employer and any other programs sponsored by the Company or provided to
Participants who are French Employees including, but not limited to, vested
benefits under any qualified employee benefit plans. However, nothing herein is
intended to or shall be construed to require the Company or a French Employer
to institute or continue in effect any particular plan or benefit sponsored by
the Company or such French Employer, and the Company and each French Employer
hereby reserve the right to amend or terminate any of their Other Plans or
benefit programs at any time in accordance with the procedures set forth in
each such plan or program and any applicable law.

The masculine pronoun shall be construed to include the feminine
pronoun and singular shall include the plural where the context so requires.

ARTICLE 2 - DEFINITIONS

2.1 "Administrator" shall mean the Compensation Committee of the
Board. Following a Change of Control, the Administrator shall be the Trustee of
a grantor trust established by the Company that includes this Plan.

2.2 "Agreement" shall mean the participation agreement provided to
a Key Employee by the Administrator as provided in Section 3.2.

2.3 "Annual Compensation" shall mean:

a) For U.S. Employees, a Participant's rate of base
salary paid or payable for a calendar year by the
Company and any incentive award paid or payable to
such Participant pursuant to the Schweitzer-Mauduit
International, Inc. Annual Incentive Plan (the "SMI
Annual Incentive Plan") or any replacement or
successor to such plan for such calendar year.

b) For French Employees, a Participant's rate of base
salary paid or payable

2
<PAGE> 4

for a calendar year by his French Employer, plus any
incentive award paid or payable to such Participant
pursuant to the SMI Annual Incentive Plan or any
replacement or successor to such plan for such
calendar year, plus any profit-sharing paid or
payable by his French Employer attributable to such
calendar year minus the aggregate amount of (i) any
Convention Collective payments, (ii) Assedic
Payments, or (iii) private insurance payments paid
or payable to such Participant as a result of a
Change of Control Termination.

2.4 "Basic Plan" shall mean the Securite Sociale retirement
benefit plan sponsored by the French Government.

2.5 "Board" shall mean the Board of Directors of
Schweitzer-Mauduit International, Inc.

2.6 "Cause" shall mean the termination of the Participant's
employment by the Company or by his French Employer, as the case may be, on the
basis of criminal or civil fraud on the part of the Participant.

2.7 "Change of Control" shall mean the date as of which: (a) a
third person, including a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, acquires actual or beneficial ownership of
shares of the Company having 15% or more of the total number of votes that may
be cast for the election of Directors of the Company; or (b) as the result of
any cash tender or exchange offer, merger or other business combination, sale
of assets or contested election, or any combination of the foregoing
transactions (a "Transaction"), the persons who were directors of the Company
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company.

3
<PAGE> 5

2.8 "Change of Control Termination" shall mean the termination of
a Participant's employment by the Company or his French Employer, as the case
may be, within two years of a Change of Control for any reason other than for
Cause, Retirement, Disability or the Participant's death.

2.9 "Code" shall mean the Internal Revenue Code of 1986, as
amended.

2.10 "Company" shall mean Schweitzer-Mauduit International, Inc.
and each of its successors and assigns.

2.11 "Complementary Plan" shall mean the national pension plans
for French Employees and workers sponsored by the Association des Regimes de
Retraite Complementaires ("ARRCO") and the Association Generale des
Institutions de Retraite des Cadres ("AGIRC"), respectively.

2.12 "Disability" shall mean Totally and Permanently Disabled,
within the meaning of the Retirement Plan, provided that the Administrator
shall make any such determination with respect to a Participant hereunder.

2.13 "French Employee" shall mean an individual employed by one of
the French Employers.

2.14 "French Employer(s)" mean Schweitzer-Mauduit France, S.A.R.L.
or LTR Industries, S.A., and their respective successors and subsidiaries.

2.15 "French Supplementary Plans" shall mean the supplementary
pension benefit plans provided, respectively, by Papeteries de Mauduit, S.A.
and LTR Industries, S.A. to their employees.

4
<PAGE> 6

2.16 "Key Employee" shall mean an individual who is a member of a
select group of management or highly compensated French Employees and/or U.S.
Employees, as determined from time to time by the Administrator.

2.17 "Other Plans" shall mean other plans of the Company or of the
French Employer, including but not limited to the Schweitzer-Mauduit
International, Inc. Annual Incentive Plan, the Schweitzer-Mauduit
International, Inc. Equity Participation Plan, the Schweitzer-Mauduit
International, Inc. Long-Term Incentive Plan, Schweitzer-Mauduit International,
Inc. Restricted Stock Plan, Schweitzer-Mauduit International, Inc. Deferred
Compensation Plan and the Supplemental Plan.

2.18 "Participant" shall mean a Key Employee who has entered into
an Agreement with the Administrator in accordance with Section 3.2.

2.19 "Plan" shall mean this Schweitzer-Mauduit International, Inc.
Executive Severance Plan.

2.20 "Retirement" shall mean

a. For U.S. Employees, the voluntary termination of the
Participant's employment by the Company pursuant to
the terms of the qualified defined benefit pension
plan of the Company, which termination was initiated
by such Participant in writing pursuant to the
procedures of such qualified defined benefit pension
plan prior to a Change of Control notwithstanding
the Participant's actual retirement date occurs
after a Change of Control.

b. For French Employees, the voluntary termination of
the Participant's employment by his French Employer
as a result of such Participant's retirement
pursuant to the terms of the Basic Plan, the
Complementary Plan and, if

5
<PAGE> 7

applicable, the French Supplementary Plan, which
termination was initiated by such Participant in
writing pursuant to the procedures of such Basic
Plan, Complementary Plan and, if applicable, French
Supplementary Plan prior Change of Control,
notwithstanding that the Participant's actual
retirement date occurs after a Change of Control.

2.21 "Retirement Plan" shall mean the Schweitzer-Mauduit
International, Inc. Retirement Plan.

2.22 "Supplemental Plan" shall mean the Supplemental Benefit Plan
to the Schweitzer-Mauduit International, Inc. Retirement Plan.

2.23 "U.S. Employee" shall mean individuals employed by the
Company.

2.24 "Voluntary Resignation" shall mean termination of a
Participant's employment with the Company or the French Employer(s) as a result
of a resignation initiated by the Participant which is unrelated to any act or
omission of the Company or the French Employer, as the case may be, which could
not reasonably be construed to be a constructive discharge of such Participant.

ARTICLE 3 - ELIGIBILITY

3.1 Eligibility to Participate. The Administrator shall from time
to time determine in writing the Key Employees who are eligible to participate
in this Plan. A list of current Participants shall be set forth on Appendix A
hereto, as updated by the Committee from time to time.

3.2 Agreement. The Administrator shall enter into a participation
agreement with each Key Employee the Administrator determines to be eligible
for participation in this Plan.

6
<PAGE> 8

Such Agreement shall identify the Key Employee as a Participant in this Plan
and shall contain such terms as deemed appropriate by the Administrator, but
shall be consistent with and governed by the terms of this Plan.

ARTICLE 4 - SEVERANCE BENEFITS

4.1 Termination Following Change of Control. A Participant shall
be entitled to receive benefits under this Plan following a Change of Control
as follows:

(a) Subject to Section 4.1 (b), a Participant's employment with
the Company or his French Employer, as the case may be, shall terminate within
two years of a Change of Control for any reason other than for Cause,
Retirement, Disability or the Participant's death.

(b) A Participant that has been requested in writing by the
Company or the French Employer, as the case may be, to continue in the
employment of the Company or the French Employer through a specified date,
which shall not be more than six (6) months from the date of a Change of
Control, under terms and conditions of employment, at the place of employment
and with the same salary and benefits that the Participant was provided prior
to the Change of Control, shall have satisfied such request by remaining in the
employment of the Company or the French Employer for the specified period.

(c) A Participant entitled to benefits under this Plan shall
receive and the Company or, subject to the provisions of Section 1.1, the
French Employer, as the case may be, shall pay or, with respect to certain
benefits hereinafter described, shall cause to be paid to the Participant the
following benefits:

(1) an amount equal to three times the Participant's
highest Annual

7
<PAGE> 9

Compensation for any calendar year beginning with or
within the three-year period terminating on the date
of termination of the Participant's employment,
which amount shall be paid to the Participant in
cash on or before the fifth day following the date
of termination;

(2) for a period of three years following the date of
termination of employment, the Participant and
anyone entitled to claim under or through the
Participant shall be entitled to benefits as
follows:

i) For U.S. Employees, all benefits under the
group health care plan, dental care plan,
life or other insurance or death benefit
plan, or other present or future similar
group employee benefit plan or program of
the Company for which key executives are
eligible at the date of a Change of
Control, to the same extent as if the
Participant had continued to be an employee
of the Company during such period and such
benefits shall, to the extent not fully
paid under any such plan or program, be
paid by the Company; and

ii) for French Employees, all medical and
dental benefits provided by "Social
Securite", medical, dental and life
insurance or death benefit plans, or other
present or future similar medical, dental,
life or other insurance or death benefit
plans or programs generally available to
French Employees for which such Participant
is eligible at the date of the Change of
Control, to the same extent as if the
Participant had continued to be a French
Employee during such period and such
benefits shall, to the extent not fully
paid

8
<PAGE> 10

under any such plan or program, be paid by the
French Employer.

(3) for U.S. Employees, an amount equal to the Actuarial
Equivalent (as defined in the Retirement Plan) of
the accrued benefit the Participant would have
earned under the Retirement Plan and the
Supplemental Plan for the three-year period
following the date of the termination of his
employment with the Company based on the
Participant's earnings in effect for purposes of the
Retirement Plan and the Supplemental Plan on the
date of such termination, which amount shall be paid
to the Participant in cash on or before the fifth
day following the date of termination; and

(4) for French Employees, a lump sum equal to the sum of
the following amounts which sum shall be payable in
cash on or before the tenth day following the date
of termination:

(i) the cost of purchasing any pension credits
lost by a Participant under the Basic Plan
as a result of a Change of Control
Termination, but in no event shall the
pension credits so purchased exceed 12
quarters of pension credits;

(ii) a lump sum equal to (x) the purchase price
of any pension credits lost by a
Participant under the Complementary Plan
plus (y) the present value of any portion
of lost pension credits which may not be
purchased back from the Complementary Plan,
each as a result of a Change of Control
Termination provided, however, that in no
event shall such lost Complementary Plan
benefits exceed the present worth of three
years of such lost pension benefits; and

9
<PAGE> 11

(iii) for pension benefits lost under the French
Supplementary Plan as a result of a Change
of Control Termination, payment of a lump
sum calculated as follows:

a) if the Participant is terminated
between ages 62 and 65, a lump sum
equal to the present worth of the
difference between the pension
benefits the Participant would
have received at age 65 absent the
Change of Control Termination and
the reduced pension benefit such
Participant will receive at age 65
as a result of such termination;

b) if the Participant is terminated
between ages 60 and 62, payment of
a lump sum as calculated in (a)
above multiplied by the ratio of A
to B where A = three years and B =
the number of years between the
Change of Control Termination and
attainment of age 65.

c) if the Participant is terminated
before age 60 or with less than 20
years service with a French
Employer, a lump sum equal to the
present worth of the pension
benefit the Participant would have
received at age 65, absent the
Change of Control Termination
multiplied by the ratio of A to B
where A = three years and B = the
number of years between the

10
<PAGE> 12

Change of Control Termination and
the date on which the Participant
would attain age 65 provided,
however, that no such lump sum
shall be payable unless such
Participant could have earned 20
years service with a French
Employer on or before attainment
of age 65, absent a Change of
Control Termination.

(b) If a Participant is or may be liable for Federal income taxes
in the United States, such Participant's Agreement shall provide that the
parties agree that the payments provided in Section 4.1(a) hereof are
reasonable compensation in light of the Participant's services rendered to the
Company or the French Employer, as the case may be, and that neither party
shall contest the payment of such benefits as constituting an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code.

(c) In the event that (i) the Participant becomes entitled to the
compensation and benefits described in Section 4.1(a) hereof ("Compensation
Payments"), (ii) the Company determines, based upon the advice of tax counsel
selected by the Company's independent auditors and acceptable to the
Participant, that, as a result of such Compensation Payments and any other
benefits or payments required to be taken into account under Code Section
280G(b)(2) ("Parachute Payments"), any of such Parachute Payments must be
reported by the Company as "excess parachute payments", and (iii) such
Parachute Payments are 3.5 or more times the "base amount" as defined in Code
Section 280G(b)(3) with respect to such Participant ("Base Amount"), the
Company shall pay to the Participant at the time specified in Section 4.1(a)
above an additional amount ("Gross-Up Payment") such that the net amount
retained by the Participant,

11
<PAGE> 13

after deduction of any of the tax imposed on the Participant by Section 4999 of
the Code ("Excise Tax") and any Federal, state and local income tax and Excise
Tax upon the Gross-Up Payment, shall be equal to the Parachute Payments
determined prior to the application of this paragraph. The value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Company's independent auditors. For purposes of determining the amount of the
Gross-Up Payment, the Participant shall be deemed to pay Federal income taxes
at the highest marginal rate of Federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rates of taxation in the state and locality of the
Participant's residence on the date of termination of his employment, net of
the maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax
payable by the Participant is subsequently determined to be less than the
amount, if any, taken into account hereunder at the time of termination of the
Participant's employment, the Participant shall repay to the Company at the
time that the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction plus interest on
the amount of such repayment at the rate provided for in Section 1274(b)(2)(B)
of the Code ("Repayment Amount"). In the event that the Excise Tax payable by
the Participant is determined to exceed the amount, if any, taken into account
hereunder at the time of the termination of the Participant's employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest and
penalty payable with respect to such excess) immediately prior to the time that
the amount of such excess is required to be paid by Participant (regardless of
any contest of such payment pursuant to Section 4.1(e))

12
<PAGE> 14

("Additional Gross-up Payment"), such that the net amount retained by the
Participant, after deduction of any Excise Tax on the Parachute Payments and
any Federal, state and local income tax and Excise Tax upon the Additional
Gross-Up Payment, shall be equal to the Parachute Payments determined prior to
the application of this paragraph. In the event that the Excise Tax payable by
the Participant is subsequently determined to be less than the amount of the
Additional Gross-up Payment paid to the participant, the Participant shall
repay to the Company at the time that the amount of such reduction in the
Additional Gross-up Payment is determined the portion of the Additional
Gross-up Payment attributable to such reduction plus interest on the amount of
such repayment at the rate provided for in Section 1274(h)(2)(B) of the Code
("Additional Repayment Amount"). The obligation to pay any Repayment Amount,
Additional Gross-up or Additional Repayment Amount shall remain in effect under
this Agreement for the entire period during which the Participant remains
liable for the Excise Tax, including the period during which any applicable
statute of limitation remains open.

(d) In the event the Participant's Parachute Payments are less
than 3.5 times the Base Amount, the Company shall limit the Compensation
Payments provided hereunder to the extent necessary so that the Participant's
Parachute Payments do not exceed 2.99 times the Base Amount.

(e) Unless the Company determines that any Parachute Payments
made hereunder must be reported as "excess parachute payments" in accordance
with Section 4.1(c) above, neither party shall file any return taking the
position that the payment of such benefits constitutes an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code. If the Internal
Revenue Service proposes an assessment of Excise Tax against the Participant in
excess of the amount, if any, taken into account at the time specified in
Section 4.1(c) and the Company

13
<PAGE> 15

notifies the Participant in writing that the Company elects to contest such
assessment at its own expense, the Participant shall cooperate in good faith
with the Company in contesting such proposed assessment and agrees not to
settle such contest without the written consent of the Company. Any such
contest shall be controlled by the Company, provided, however, that the
Participant shall have the right to participate in such contest.
Notwithstanding the Company's election to contest the assessment of an Excise
Tax, the Participant shall be entitled to an Additional Gross-Up Payment under
Section 4.l(c) at the time set forth therein.

4.2 Termination of Employment. If a Participant's employment with
the Company or his French Employer shall terminate during the term of his
Agreement for any reason other than death, Retirement, Voluntary Resignation or
Cause, the Company or (if such payment is not inconsistent with any relevant
French law) his French Employer, shall pay the Participant or the Participant's
beneficiary, as the case may be, in cash a lump sum payment in the amount set
forth in the Agreement with such Participant under this Plan within 30 days of
his termination of employment. Such amount shall be set forth on Appendix A
hereto and shall not be more than the Participant's monthly base salary
multiplied by 24. No benefits shall be payable pursuant to this Section 4.2 in
the event a Participant is entitled to severance payments under Section 4.1
hereof.

ARTICLE 5 - ADMINISTRATION

5.1 Administrator. The Administrator is responsible for the
general administration of the Plan.

5.2 Duties of the Administrator. The Administrator shall be
responsible for the daily administration of the Plan and may appoint other
persons or entities to perform or assist in the

14
<PAGE> 16

performance of any of its duties, subject to its review and approval. The
Administrator shall have the right to remove any such appointee from his
position without cause upon notice.

5.3 Powers. The Administrator shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan as more particularly set forth herein. The Administrator
shall have discretionary authority to interpret the Plan, and to determine all
questions arising in the administration, interpretation, and application of the
Plan; provided, however, that such discretionary authority shall be exercised
in good faith in order to achieve the principal purposes of the Plan to provide
severance benefits, including enhanced severance benefits upon a Change of
Control, as described in Article 4. All such determinations shall be conclusive
and binding on all interested persons. The Administrator shall adopt such
procedures and regulations necessary and/or desirable for the discharge of its
duties hereunder and may appoint such accountants, counsel, actuaries,
specialists, and other agents as it deems necessary and/or desirable in
connection with the administration of this Plan.

5.4 Compensation of the Administrator. The Administrator shall
not receive any compensation from the Plan for its services.

5.5 Indemnification. The Company shall indemnify the
Administrator against any and all claims, losses, damages, expenses, and
liability arising from its actions or omissions, except when the same is
finally adjudicated to be due to the Administrator's gross negligence or
willful misconduct. The Company may purchase at its own expense sufficient
liability insurance for the Administrator to cover any and all claims, losses,
damages, and expenses arising from any action or omission in connection with
the execution of the duties as the Administrator.

15
<PAGE> 17

ARTICLE 6 - SUCCESSOR TO THE COMPANY

6.1 The Company will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, expressly,
absolutely and unconditionally to assume this Plan and agree to perform the
obligations of the Company under this Plan and each Participant's Agreement in
the same manner and to the same extent that the Company would be required to
perform such obligations if no such succession or assignment had taken place.

ARTICLE 7 - MISCELLANEOUS

7.1 Funding of Benefits. The benefits payable to a Participant
under the Plan shall not be funded in any manner and shall be paid by the
Company or the French employer, as the case may be, out of its general assets,
which assets are subject to the claims of the Company's or the French
Employer's creditors.

7.2 Establishment of Trust.

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

(b) Payment From the Trust. In the event a Trust is established
and payments are not made by the Company in accordance with the terms of the
Plan, a Participant may petition the

16
<PAGE> 18

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 Company and that there
are sufficient assets in the Trust to make the payment.

7.3 Settlement of Accounts. Except as prohibited by applicable
law, there shall be deducted from the payment of any benefit due under the Plan
the amount of any uncontested indebtedness, obligation, or liability which the
Participant has acknowledged in writing as owing to the Company or the French
Employer as the case may be, or any of their respective subsidiaries and the
amount of which has been agreed to by the Participant.

7.4 Withholding. There shall be deducted from the payment of any
benefit due under the Plan the amount of any tax required by any governmental
authority to be withheld and paid over by the Company or the French Employer,
as the case may be, to such governmental authority for the account of the
Participant entitled to such payment.

7.5 Assignment by the Participant. Unless required by court
order, no Participant or beneficiary shall have any rights to sell, assign,
transfer, encumber, or otherwise convey the right to receive the payment of any
benefit due hereunder, which payment and the rights thereto are expressly
declared to be nonassignable and nontransferable. Any attempt to do so shall be
null and void and of no effect.

7.6 Amendment and Termination. The Plan may be amended or
terminated at any time by the Company, by resolution of the Board; provided
that no termination or amendment reducing the severance benefits provided
hereunder shall be effective until the expiration of the two-year period
following the date of the Board resolution providing for such termination.
Further, no amendment or termination shall be effective during the two-year
period following the date of a Change of Control of the Company without the
consent of all the Participants. Any

17
<PAGE> 19

termination of this Plan shall cause the immediate termination of all
outstanding Agreements hereunder. No amendment or termination shall affect the
rights of any Participant who is entitled to severance benefits pursuant to
Article 4 at the time of such amendment or termination.

7.7 No Guarantee of Employment. Participation hereunder shall not
be construed as creating any contract of employment between the Company or a
French Employer and any Key Employee, nor shall it limit the right of the
Company or such French Employer to terminate a Key Employee's employment at any
time for any reason whatsoever.

7.8 Construction. This Plan shall be construed in accordance with
and governed by the laws of the State of Georgia, to the extent such laws are
not otherwise superseded by the laws of the United States.

18
<PAGE> 20

APPENDIX A

Participants in the
Schweitzer-Mauduit International, Inc.
Executive Severance Plan and Number of
Months of Base Salary Pursuant to
Section 4.2 of the Plan

Number of Months of
Participant's Base Salary in the
Event of Termination, Pursuant to
Name Section 4.2 of the Plan
---- -----------------------

<S> <C>
Wayne H. Deitrich 24
Paul C. Roberts 12
John W. Rumely 12
William R. Foust 12
Wayne L. Grunewald 6
Jean-Pierre Le Hetet 12
Raymond Nedellec 6
Thierry Bellanger 6
Peter J. Thompson 12
</TABLE>

<PAGE> 1
EXHIBIT 10.13.1

FIRST AMENDMENT TO SUPPLY AGREEMENT
BY AND BETWEEN
SOUZA CRUZ S.A. AND COMPANHIA INDUSTRIAL DE PAPEL PIRAHY
DATED AS OF FEBRUARY 2, 1998

This First Amendment to Supply Agreement is entered into by and
between Schweitzer-Mauduit do Brasil, S.A., successor in interest to Companhia
Industrial de Papel Pirahy, and Souza Cruz S.A. this 23rd day of February 2000.

The parties hereto agree to amend the Supply Agreement as follows:

1. The first sentence of Article VIII, Term, subsection (a),
shall be deleted in its entirety and replaced with the following new sentence:

"This Agreement will remain in force for an initial period of
six (6) years from the date of its execution."

2. Except as expressly amended herein, the terms and conditions
of the Supply Agreement shall remain in full force and effect.

Schweitzer-Mauduit do Brasil, S.A. Souza Cruz S.A.

By: By:
-------------------------------- ------------------------------

Title: Title:
----------------------------- ---------------------------

Witnessed by: Witnessed by:

- ---------------------------------- ---------------------------------
Signature Signature

- ---------------------------------- ---------------------------------
Print Name Print name

- ---------------------------------- ---------------------------------
Identification Number Identification Number

<PAGE> 1

EXHIBIT 10.13.2

FIRST AMENDMENT TO ART COATED SUPPLY AGREEMENT
BY AND BETWEEN
SOUZA CRUZ S.A. AND COMPANHIA INDUSTRIAL DE PAPEL PIRAHY
DATED AS OF FEBRUARY 2, 1998

This First Amendment to Art Coated Supply Agreement is entered into by and
between Schweitzer-Mauduit do Brasil, S.A., successor in interest to Companhia
Industrial de Papel Pirahy, and Souza Cruz S.A. this 23rd day of February,
2000.

The parties hereto agree to amend the Art Coated Supply Agreement as follows:

1. The first two sentences of Article VIII, Term, subsection
(a), shall be deleted in their entirety and replaced with the following new
sentences:

"This Agreement will remain in force for an initial period of
six (6) years from the date of its execution. The Parties
agree that, prior to the expiry of the initial six year term,
they will negotiate in good faith for a further extension of
the Agreement on such terms as they deem suitable."

2. Except as expressly amended herein, the terms and conditions
of the Supply Agreement shall remain in full force and effect.

Schweitzer-Mauduit do Brasil, S.A. Souza Cruz S.A.

By: By:
-------------------------------- ------------------------------

Title: Title:
----------------------------- ---------------------------

Witnessed by: Witnessed by:

- ---------------------------------- ---------------------------------
Signature Signature

- ---------------------------------- ---------------------------------
Print Name Print name

- ---------------------------------- ---------------------------------
Identification Number Identification Number

<PAGE> 1
EXHIBIT 15

INDEPENDENT ACCOUNTANTS' REPORT

Schweitzer-Mauduit International, Inc.:

We have reviewed the accompanying consolidated balance sheet of
Schweitzer-Mauduit International, Inc. and subsidiaries as of March 31, 2000,
the related consolidated statements of income for the three month periods ended
March 31, 2000 and 1999, and the related statements of changes in stockholders'
equity and cash flows for the three month periods ended March 31, 2000 and 1999.
These financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data, and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Schweitzer-Mauduit International, Inc. as of December 31, 1999 and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the year then ended (not presented herein); and in our report dated
January 21, 2000, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of December 31, 1999 is fairly stated
in all material respects in relation to the balance sheet from which it has been
derived.

Deloitte & Touche LLP

Atlanta, Georgia
April 19, 2000

<PAGE> 1
EXHIBIT 23

May 5, 2000

Schweitzer-Mauduit International, Inc.
100 North Point Center East, Suite 600
Alpharetta, Georgia 30022-8246

We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Schweitzer-Mauduit International, Inc. and subsidiaries for the
periods ended March 31, 2000 and 1999 as indicated in our report dated April 19,
2000; because we did not perform an audit, we expressed no opinion on that
information.

We are aware that our report referred to above, which was included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, is
incorporated by reference in Registration Statements No. 33-99812, No. 33-99814,
No. 33-99816, and No. 33-99848 on Form S-8.

We are also aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.

Deloitte & Touche LLP

Atlanta, Georgia

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SCHWEITZER-MAUDUIT FOR THE THREE MONTHS ENDED MARCH 31,
2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 9,300
<SECURITIES> 0
<RECEIVABLES> 69,900
<ALLOWANCES> 0
<INVENTORY> 64,200
<CURRENT-ASSETS> 154,300
<PP&E> 443,700
<DEPRECIATION> 200,100
<TOTAL-ASSETS> 420,200
<CURRENT-LIABILITIES> 95,100
<BONDS> 98,000
0
0
<COMMON> 1,600
<OTHER-SE> 180,400
<TOTAL-LIABILITY-AND-EQUITY> 420,200
<SALES> 118,000
<TOTAL-REVENUES> 118,000
<CGS> 96,000
<TOTAL-COSTS> 96,000
<OTHER-EXPENSES> 10,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,500
<INCOME-PRETAX> 11,500
<INCOME-TAX> 3,900
<INCOME-CONTINUING> 6,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,800
<EPS-BASIC> .44
<EPS-DILUTED> .44

</TABLE>