<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
(SCHWEITZER-MAUDUIT LOGO)
March 14, 2000
Wayne H. Deitrich
Chairman of the Board and
Chief Executive Officer
TO OUR STOCKHOLDERS:
On behalf of the Board of Directors and management of Schweitzer-Mauduit
International, Inc., I cordially invite you to the Annual Meeting of
Stockholders to be held on Thursday, April 27, 2000 at 11:00 a.m. at the
Corporation's corporate headquarters located at 100 North Point Center East,
Alpharetta, Georgia.
At the Annual Meeting, stockholders will be asked to elect three directors
for a three-year term and one director for a two-year term, as more fully
described in the accompanying Notice of Annual Meeting and Proxy Statement.
It is important that your stock be represented at the meeting regardless of
the number of shares you hold. You are encouraged to specify your voting
preferences by so marking and dating the enclosed proxy card. But, if you wish
to vote in accordance with the directors' recommendations, all you need do is
sign and date the card.
Please complete and return the proxy card in the enclosed envelope whether
or not you plan to attend the meeting. If you do attend and wish to vote in
person, you may revoke your proxy at that time.
If you plan to attend the meeting, please check the card in the space
provided. This will assist us with meeting preparations, and will enable us to
expedite your admittance. If your shares are not registered in your own name and
you would like to attend the meeting, please ask the broker, trust, bank or
other nominee which holds the shares to provide you with evidence of your share
ownership, which will enable you to gain admission to the meeting.
Sincerely,
/s/ WAYNE H. DEITRICH
WAYNE H. DEITRICH
100 NORTH POINT CENTER EAST
SUITE 600
ALPHARETTA, GA 30022-8246
<PAGE> 3
PRINTED IN THE U.S.A.
ON PAPER
MANUFACTURED BY SCHWEITZER-MAUDUIT INTERNATIONAL, INC. IN LEE, MASSACHUSETTS
<PAGE> 4
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
100 NORTH POINT CENTER EAST, SUITE 600
ALPHARETTA, GEORGIA 30022-8246
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
---------------------
The Annual Meeting of Stockholders of Schweitzer-Mauduit International,
Inc. will be held at the Corporation's corporate headquarters located at 100
North Point Center East, Alpharetta, Georgia, on Thursday, April 27, 2000 at
11:00 a.m. for the following purposes:
1. To elect three directors for a three-year term to expire at the
2003 Annual Meeting of Stockholders and one director for a
two-year term to expire at the 2002 Annual Meeting of
Stockholders; and
2. To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on March 1, 2000 are
entitled to notice of and to vote at the meeting and any adjournment thereof. It
is important that your shares be represented at the meeting. I urge you to sign,
date and promptly return the enclosed proxy card in the enclosed business reply
envelope. No postage is required if mailed in the United States.
/s/ John W. Rumely, Jr.
JOHN W. RUMELY, JR.
Secretary
March 14, 2000
<PAGE> 5
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
100 NORTH POINT CENTER EAST, SUITE 600
ALPHARETTA, GEORGIA 30022-8246
---------------------
PROXY STATEMENT
---------------------
INTRODUCTION
This Proxy Statement and the accompanying proxy card are furnished to the
stockholders of Schweitzer-Mauduit International, Inc., a Delaware corporation
(the "Corporation"), in connection with the solicitation of proxies by the Board
of Directors of the Corporation for use at the Annual Meeting of Stockholders to
be held on April 27, 2000 ("Annual Meeting") and at any adjournment thereof.
Proxies in the accompanying form, properly signed and received in time for the
meeting, will be voted as instructed. If no instructions are given, proxies will
be voted for the election of the four directors nominated for election. Any
proxy may be revoked by the stockholder granting it at any time before it is
voted by delivering to the Secretary of the Corporation another signed proxy
card, or a signed document revoking the earlier proxy or by attending the
meeting and voting in person. The Corporation intends to mail this Proxy
Statement and proxy card, together with the 1999 Annual Report to Stockholders,
on or about March 14, 2000.
Each stockholder of record at the close of business on March 1, 2000 will
be entitled to one vote for each share registered in such stockholder's name. As
of that date, there were outstanding 15,506,555 shares of the common stock, par
value $0.10 per share (the "Common Stock"), of the Corporation.
The entire cost of the proxy solicitation will be borne by the Corporation.
The Corporation has retained Corporate Investor Communications, Inc. to aid in
the solicitation of proxies. For its services, Corporate Investor
Communications, Inc. will receive a fee estimated at $4,500 plus reimbursement
of reasonable out-of-pocket expenses. The Corporation does not otherwise expect
to pay any compensation for the solicitation of proxies, but will reimburse
brokers, fiduciaries and other nominees for their reasonable expenses in
forwarding proxy materials to beneficial owners. In addition to solicitation by
mail, directors, officers and employees of the Corporation may solicit proxies
in person, by telephone or by other means of communication.
If a stockholder is a participant in the Schweitzer-Mauduit International,
Inc. Retirement Savings Plan, the proxy card represents the number of full
shares of Common Stock held for the benefit of the participant in the plan as
well as any shares of Common Stock registered in the participant's name. Thus, a
proxy card for such a participant grants a proxy for shares registered in the
participant's name and serves as a voting instruction for the trustee of the
plan for the account in the participant's name. Information as to the voting
instructions given by individuals who are participants in the plan will not be
disclosed to the Corporation.
Under Section 216 of the Delaware General Corporation Law and the
Corporation's By-Laws, a majority of the issued and outstanding shares of the
Corporation's Common Stock, present in person or represented by proxy, shall
constitute a quorum for purposes of the Annual Meeting. Directors shall be
elected by a plurality of the votes present in person or represented by proxy at
the Annual Meeting and entitled to vote on the election of directors. Votes may
be cast in favor of or withheld from each nominee; votes that are withheld will
be excluded entirely from the vote and will have no effect. Under applicable
Delaware law, a broker non-vote will have no effect on the outcome of the
election of directors. In all matters other than the election of directors, the
affirmative vote of a majority of shares present in person or represented by
proxy at the Annual Meeting and entitled to vote on the subject matter shall be
the act of the stockholders.
<PAGE> 6
PROPOSAL 1. ELECTION OF DIRECTORS
The Certificate of Incorporation of the Corporation provides that the
number of directors constituting the entire Board of Directors shall be as
authorized from time to time exclusively by the affirmative vote of a majority
of the entire Board of Directors. The By-Laws of the Corporation provide that
the number of directors of the Corporation shall not be less than six nor more
than nine and further provide that the Board shall be divided into three classes
of directors, who are elected for staggered terms. Directors of one class are
elected each year for a term of three years. As of the date of this Proxy
Statement, the Board of Directors consists of nine members, four of whom have
terms which expire at the 2000 Annual Meeting (three Class II Directors and one
unclassified director), three of whom have terms which expire at the 2001 Annual
Meeting (Class III Directors), and two of whom have terms which expire at the
2002 Annual Meeting (Class I Directors). All of the current directors, except
for the nominee for election as a Class I Director, have served on the
Corporation's Board of Directors since November 30, 1995. The nominee for
election as a Class I Director has served on the Corporation's Board of
Directors since May 1, 1999.
The three nominees as Class II Directors, Mr. K.C. Caldabaugh, Mr.
Jean-Pierre Le Hetet and Mr. Richard D. Jackson, and the one nominee as a Class
I Director, Mr. Alan R. Batkin, are proposed to be elected at the 2000 Annual
Meeting to serve for terms to expire at the 2003 and 2002 Annual Meetings of
Stockholders, respectively, and until their successors are elected and have
qualified. Should any such nominee become unable to serve, proxies may be voted
for another person designated by management. The nominees have advised the
Corporation that they will serve if elected. The remaining five directors will
continue to serve as directors for the terms set forth on the following pages.
CERTAIN INFORMATION REGARDING DIRECTORS AND NOMINEES
The names of the directors continuing in office and nominees, their ages as
of the date of the Annual Meeting, their principal occupations during at least
the past five years, other directorships held by each as of the date hereof and
certain other biographical information are as set forth on the following pages
by class, in the order of the next class to stand for election.
2
<PAGE> 7
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING AT THE
2003 ANNUAL MEETING OF STOCKHOLDERS
(CLASS II DIRECTORS)
Mr. K.C. Caldabaugh, age 53, has been Chairman and Chief Executive Officer
of Spinnaker Coating, Inc., a manufacturer of adhesive coated papers, since
1994. Prior to that time, Mr. Caldabaugh served in management positions,
including Senior Vice President and Chief Financial Officer of the LTV
Corporation, from 1987 to 1993. From 1979 through 1987, he was employed by The
Charter Company in executive positions, including Executive Vice President and
Chief Financial Officer. Mr. Caldabaugh is also a member of the Board of
Trustees of West Virginia Wesleyan College.
Mr. Jean-Pierre Le Hetet, age 56, has served as Chief Operating Officer of
the Corporation since April 1, 1998 and as President - French Operations of the
Corporation since August 1995. From 1991 through August 1995, Mr. Le Hetet was
the President of Specialty Products, France, a business unit of Kimberly-Clark
Corporation. Prior to that time, Mr. Le Hetet served as General Manager of
Specialty Products, France.
Mr. Richard D. Jackson, age 63, currently Director and Co-Chairman of the
Board of Anacomp, Inc. and Director and Chairman of the Board of Asset
Management Outsourcing, Inc., was Vice-Chairman of First Financial Management
Corporation until July 1995. Prior to that time, Mr. Jackson was Chief
Operations Officer in 1993 and 1994. From 1986 to 1993, he was President and
Chief Executive Officer of Georgia Federal Bank, and from 1974 to 1986, he was
President and Chief Executive Officer of First Georgia Bank in Atlanta, Georgia.
FOR A TWO-YEAR TERM EXPIRING AT THE
2002 ANNUAL MEETING OF STOCKHOLDERS
(CLASS I DIRECTOR)
Mr. Alan R. Batkin, age 55, has been Vice-Chairman of Kissinger Associates,
Inc., a geopolitical consulting firm since May 1990. From 1972 to 1990, he was
an investment banker at Lehman Brothers, Inc. where he was a Managing Director
from 1976 to 1990. Mr. Batkin is a Director of Hasbro, Inc., Overseas
Shipholding Group, Inc. and Diamond Offshore Drilling, Inc. He serves on the
Advisory Board of Trident Global Investors, L.P. and is a Trustee of the
Brookings Institute and the University of Rochester.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE
2001 ANNUAL MEETING OF STOCKHOLDERS
(CLASS III DIRECTORS)
Mr. Wayne H. Deitrich, age 56, has served as Chief Executive Officer of the
Corporation since August 1995. From June 1995 to August 1995, Mr. Deitrich
served as President - Specialty Products Sector of Kimberly-Clark Corporation.
From 1993 through May 1995, Mr. Deitrich was President - Paper and Specialty
Products Sector of Kimberly-Clark Corporation, and from 1992 to 1993, he was
President - Paper Sector of Kimberly-Clark Corporation. From 1988 through 1992,
Mr. Deitrich served as the President of Neenah Paper, a business unit of
Kimberly-Clark Corporation. Mr. Deitrich has served as Chairman of the Board
since November 30, 1995.
3
<PAGE> 8
Mr. Leonard J. Kujawa, age 67, was a partner in Arthur Andersen LLP for
twenty-seven years until his retirement in 1995. He was Worldwide Director of
Energy and Telecommunications from 1985 until his retirement. In that capacity,
he directed the firm's expansion of its practice internationally. This included
working directly with his firm's major clients in their strategy of global
expansion. Mr. Kujawa continues as an international consultant to his former
firm and to global companies. He is also a member of the Board of Directors of
American Electric Power Company.
Mr. Larry B. Stillman, age 58, has been employed by xpedx, formerly Dixon
Paper Company, since 1969. Mr. Stillman has been Vice President, Northwest
Group, xpedx since 1988. He was Vice President, Executive Vice President, and
President and Chief Operating Officer prior to 1988. He has been a member of
advisory councils for Scott Paper Company, 3M and James River Corporation. He
has been Managing General Partner for HEXAD Investment Company since 1983 and
serves on the Board of Directors of Ryall Electric Supply Company.
TERM EXPIRING AT THE
2002 ANNUAL MEETING OF STOCKHOLDERS
(CLASS I DIRECTORS)
Ms. Claire L. Arnold, age 53, currently Chief Executive Officer of Leapfrog
Services, Inc. a computer support company, was Chief Executive Officer of NCC
L.P., a major distributor of tobacco, grocery, candy, health and beauty, and
allied products to retail stores, from August 1978 to April 1994. She also is a
member of the Boards of Directors of Ruby Tuesday, Inc., Morrison Health Care,
Inc. and International Multifoods, Inc. and serves as a Trustee of Mary Baldwin
College.
Mr. Laurent G. Chambaz, age 52, is a partner in the law firm of Chambaz, in
association with UGGC et Associes. Previously, he was a partner in the law firm
of Lafarge Flecheux Chambaz and from 1971 to 1998 a partner in Chambaz &
Suermondt, which firm specialized, over the last 50 years, in the area of
assisting U.S. and other multinational corporations in France and Europe. Mr.
Chambaz has served as a Member of the Board of the Paris Bar, the French
Delegation to the Council of the Bars and Law Societies of the European
Community and as Country Representative for France of the International Bar
Association. He is currently acting as a Member of the Board of Directors of the
Paris Bar Law School (EFB) and of the Board of Directors of the National Council
of the Bars of France.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
THREE NOMINEES AS CLASS II DIRECTORS AND THE ONE NOMINEE AS A CLASS I DIRECTOR.
4
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 31, 1999
regarding the number of shares of the Common Stock of the Corporation
beneficially owned by all directors and nominees, each of the Corporation's
Named Executive Officers (see "Executive Compensation"), and by all directors
and executive officers as a group. Unless otherwise indicated in a footnote,
each person listed below possesses sole voting and investment power with respect
to the shares indicated as beneficially owned by that person.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR AMOUNT AND NATURE
IDENTITY OF GROUP TITLE OF CLASS OF BENEFICIAL OWNERSHIP PERCENT OF CLASS(9)
- --------------------- -------------- ----------------------- -------------------
<S> <C> <C> <C>
Claire L. Arnold.......................... Common Stock 4,210(1) 0.03%
Alan R. Batkin............................ Common Stock 1,956(1) 0.01%
K.C. Caldabaugh........................... Common Stock 4,210(1) 0.03%
Laurent G. Chambaz........................ Common Stock 3,210(1) 0.02%
Wayne H. Deitrich......................... Common Stock 351,350(2) 2.18%
Richard D. Jackson........................ Common Stock 5,810(1)(3) 0.04%
Leonard J. Kujawa......................... Common Stock 4,010(1) 0.02%
Jean-Pierre Le Hetet...................... Common Stock 122,135(4) 0.76%
Paul C. Roberts........................... Common Stock 85,873(5) 0.53%
William J. Sharkey........................ Common Stock 73,636(6) 0.46%
Larry B. Stillman......................... Common Stock 5,262(1) 0.03%
Peter J. Thompson......................... Common Stock 24,443(7) 0.15%
All Directors, Named Executive Officers
and executive officers as a group (14
Persons)................................ Common Stock 718,510(8) 4.46%
</TABLE>
- ---------------
(1) Includes 281 shares of stock received by each director pursuant to the
Outside Directors Stock Plan on January 3, 2000.
(2) Includes 100 shares held by a Charitable Remainder Unitrust, of which Mr.
Deitrich is the Trustee, 234,470 shares which Mr. Deitrich has the right to
acquire upon the exercise of vested stock options as of December 31, 1999,
options to purchase 64,980 shares exercisable within 60 days and 15,000
shares of restricted stock granted on January 1, 2000 that include the power
to vote such shares.
(3) Includes 1,600 shares held by Mr. Jackson's wife, Elaine M. Jackson.
(4) Includes 91,260 shares which Mr. Le Hetet has the right to acquire upon the
exercise of vested stock options as of December 31, 1999 and options to
purchase 26,850 shares exercisable within 60 days.
(5) Includes 48,460 shares which Mr. Roberts has the right to acquire upon the
exercise of vested stock options as of December 31, 1999, options to
purchase 17,600 shares exercisable within 60 days, 7,500 shares of
restricted stock granted on January 1, 2000 that include the power to vote
such shares, 600 shares held by custodial accounts with Mr. Roberts's wife,
Jane H. Roberts, as trustee, 200 shares held by Jane H. Roberts
individually, and 4,332 shares in which Mr. Roberts has shared voting and
investment power with his wife.
(6) Includes 69,400 shares which Mr. Sharkey has the right to acquire upon the
exercise of vested stock options.
(7) Includes 1,950 shares which Mr. Thompson has the right to acquire upon the
exercise of vested stock options as of December 31, 1999, options to
purchase 13,720 shares exercisable within 60 days and 7,500 shares of
restricted stock granted on January 1, 2000 that include the power to vote
such shares.
(8) Includes options to purchase 5,470 shares exercisable within 60 days by one
executive officer.
(9) Percent of Class is calculated as a percentage of the shares of Common Stock
outstanding as of March 1, 2000, plus unexercised options vested as of
February 29, 2000, for a total of 16,103,685 shares deemed outstanding.
5
<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
The following table sets forth certain information as of December 31, 1999
regarding the number of shares of the Common Stock of the Corporation
beneficially owned by each person who is known to the Corporation to own,
directly or indirectly, more than five percent of the outstanding shares of the
Corporation's Common Stock, and reflects the information presented in each such
person's Schedule 13G (and amendments, if any, thereto) as filed with the
Securities and Exchange Commission (the "SEC") and provided to the Corporation.
Unless otherwise indicated in a footnote, each person listed below possesses
sole voting and investment power with respect to the shares indicated as
beneficially owned by that person.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------- -------------------- ----------------
<S> <C> <C>
Sanford C. Bernstein & Co., Inc.(1)......................... 1,166,210 7.46%
767 Fifth Avenue
New York, NY 10153-0185
Thomas A. Russo(2).......................................... 940,440 6.01%
Gardner Investments(2)...................................... 670,740 4.30%
223 East Chestnut Street
Lancaster, PA 17602-2783
The Prudential Insurance Company of America(3).............. 796,679 5.07%
751 Broad Street
Newark, NJ 07102-37777
Dimensional Fund Advisors, Inc.(4).......................... 790,800 5.04%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401-1005
</TABLE>
- ---------------
(1) Based on a Schedule 13G/A filed on February 8, 2000, Sanford C. Bernstein &
Co., Inc. ("Bernstein"), reported that it has 946,200 shares with sole power
to vote; 26,610 shares with shared power to vote for clients who have
appointed an independent voting agent with instruction to vote shares in the
same manner as Bernstein and 1,166,210 shares with the sole power to direct
the disposition of such shares.
(2) Based on Schedule 13G, Amendment number 2, filed on February 24, 2000,
Thomas Russo reported that he has 670,740 shares with shared power to vote
or to direct the vote; 269,700 shares with sole power to vote or direct the
vote; 670,740 shares with shared power to dispose or to direct the
disposition of such shares; 269,700 shares with the sole power to direct the
disposition of or to dispose of such shares. Gardner Investments reported
that it has 670,740 shares with shared power to vote or to direct the vote;
670,740 shares with shared power to direct the disposition of or to dispose
of such shares.
(3) Based on a Schedule 13G, Amendment No. 1, filed on January 31, 2000, The
Prudential Insurance Company of America ("Prudential") presently holds 3,000
shares of common stock for the benefit of its general account; 201,000
shares with sole power to vote or to direct the vote; 595,679 shares with
shared power to vote or direct the vote; 201,000 shares with sole power to
dispose or direct the disposition of such shares and 595,679 shares with
shared power to dispose of such shares. Prudential is reporting the combined
holdings of these entities for the purpose of administrative convenience.
(4) Based on a Schedule 13G filed on February 3, 2000, Dimensional Fund Advisors
Inc. ("Dimensional") reported that as an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940, it furnished investment
advice to four investment companies registered under the Investment Company
Act of 1940, and serves as investment manager to certain other investment
vehicles, including commingled group trusts. These investment companies and
investment vehicles are the "Funds". In its role as investment advisor and
investment manager, Dimensional possesses both voting and investment power
over 790,800 shares. All securities reported in this schedule are owned by
the Funds. Dimensional disclaims beneficial ownership of such securities.
6
<PAGE> 11
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
In 1999, the Corporation and certain of its subsidiaries retained the legal
services of Lafarge Flecheux Chambaz, Paris, France. Laurent G. Chambaz, a
director of the Corporation, served as a partner with that firm. The cost of
such services during 1999 was $84,816.
In 1999, the Corporation paid The Blackstone Group a $250,000 fee for
financial advisory services. Prior to being retained by the Corporation it was
disclosed to management and the Board that, pursuant to a joint venture
agreement among Kissinger Associates, Inc., The Blackstone Group and American
International Group, Inc., twenty percent of the fee ($50,000) was paid to
Kissinger Associates, Inc. by The Blackstone Group. Alan R. Batkin, a director
of the Corporation, is an officer of Kissinger Associates, Inc.
Management believes that the cost of services rendered by Lafarge Flecheux
Chambaz and The Blackstone Group during 1999 was reasonable compared with the
cost of obtaining similar services from unaffiliated third parties.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors currently consists of nine members, eight of whom
have served on the Board of Directors since November 30, 1995. One director was
selected to fill a newly created ninth position on the Corporation's Board of
Directors effective May 1, 1999, to serve until the next Annual Meeting of
Stockholders, by the affirmative vote of a majority of the Board of Directors
pursuant to Article 20 of the Corporation's By-Laws. From January 1, 1999
through December 31, 1999, the Board of Directors met on six occasions and acted
by unanimous written consent in lieu of meeting pursuant to Section 141(f) of
the Delaware General Corporation Law on one occasion.
The standing committees of the Board of Directors include the Audit
Committee, the Compensation Committee and the Nominating Committee.
The Audit Committee, currently composed of Leonard J. Kujawa, Chairman,
Claire L. Arnold and K.C. Caldabaugh, met on three occasions in 1999. The Audit
Committee recommends to the Board of Directors appointment of the independent
auditors to audit the books, records and accounts of the Corporation, reviews
the scope of such audits, provides oversight in connection with internal control
programs of the Corporation and performs such other duties as the Board of
Directors may from time to time prescribe.
The Compensation Committee, currently composed of Richard D. Jackson,
Chairman, Claire L. Arnold and Larry B. Stillman, acted by unanimous written
consent on two occasions and met on three occasions in 1999. The nature and
scope of the Committee's responsibilities are set forth below under "Executive
Compensation - Compensation Committee Report on Executive Compensation."
The Nominating Committee, currently composed of Larry B. Stillman,
Chairman, K.C. Caldabaugh and Laurent G. Chambaz, met on one occasion and acted
by unanimous written consent on two occasions in 1999. The Nominating Committee
proposes and considers suggestions for candidates for membership on the Board
and recommends candidates to fill vacancies on the Board of Directors. The
Nominating Committee will consider nominees recommended by stockholders as
candidates for election to the Board of Directors at the Annual Meeting of
Stockholders. A stockholder wishing to nominate a candidate for election to the
Board at the Annual Meeting of Stockholders is required to follow the procedures
set forth in the Corporation's By-Laws, which procedures are hereinafter
discussed under the caption "Other Matters - Stockholder Proposals."
7
<PAGE> 12
COMPENSATION OF DIRECTORS
Each director who is not an officer or employee of the Corporation or any
of its subsidiaries or affiliates (a "non-employee director") receives an annual
retainer fee of $15,000, payable pro rata quarterly in advance, which retainer
fee is payable in Common Stock of the Corporation pursuant to the Outside
Directors' Stock Plan (the "Directors' Plan"). In 1999, each non-employee
director who served for the entire year received 1,083 shares of Common Stock
under the Directors' Plan. Mr. Batkin began service as a director on May 1, 1999
and received 675 shares of Common Stock under the Directors' Plan. Each
non-employee director also receives a meeting fee of $3,000 for each meeting
attended and a committee fee of $750 for each committee meeting attended. In
addition, the Corporation reimburses the non-employee directors for expenses
incurred as a result of attending such meetings. A director who is an officer or
an employee of the Corporation or any of its subsidiaries or affiliates does not
receive any fees for services as a member of the Board of Directors or any
committee thereof, but is reimbursed for expenses incurred as a result of such
service.
8
<PAGE> 13
EXECUTIVE COMPENSATION
For the 1997, 1998 and 1999 calendar years, compensation paid to, earned by
or awarded to the Corporation's Chief Executive Officer and the next four
highest paid executive officers of the Corporation identified below
(collectively, the "Named Executive Officers") for services rendered to the
Corporation and its subsidiaries is set forth below, in accordance with the
rules and regulations of the SEC.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
----------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1) ($)
- --------------------------- ---- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Wayne H. Deitrich............... 1999 $450,200 $279,602 157,300 $ 4,800(2)
Chairman of the Board and 1998 451,067(3) 0 28,100 4,800(2)
Chief Executive Officer 1997 435,000 382,626 23,400 4,750(2)
Jean-Pierre Le Hetet............ 1999 $295,577 $127,911 78,300 $12,985(4)
Chief Operating Officer 1998 299,955 21,258 30,200(5) 30,940(4)
President - French Operations 1997 193,065 134,682 4,500 29,211(4)
Paul C. Roberts................. 1999 $238,846(3) $104,420 42,800 $ 5,501(2)(6)
Chief Financial Officer and 1998 216,235(3) 37,620 7,200 6,664(2)(6)
Treasurer 1997 206,457(3) 128,506 6,500 6,612(2)(6)
William J. Sharkey.............. 1999 $195,000 $ 78,488 27,000 $27,925(2)(7)
General Counsel and 1998 179,894(3) 27,798 4,500 4,800(2)
Secretary 1997 171,231(3) 91,846 4,000 7,522(2)(6)
Peter J. Thompson(8)............ 1999 $193,750 $ 65,120 40,900 $ 4,858(2)(6)
President - U.S. Operations 1998 109,107 21,432 1,500 10,000(9)
</TABLE>
- ---------------
(1) Awarded January 2, 1997, January 2, 1998 and January 4, 1999, respectively.
(2) Includes contributions by the Corporation of $4,800 for 1999, $4,800 for
1998 and $4,750 for 1997 to the Schweitzer-Mauduit International, Inc.
Retirement Savings Plan.
(3) Includes unused vacation earned by Messers. Deitrich, in the amount of $867
for 1998; Roberts, in the amount of $8,846 for 1999, $7,235 for 1998 and
$4,657 for 1997; and Sharkey, in the amount of $3,394 for 1998 and $3,231
for 1997.
(4) Includes special unemployment insurance for Mr. Le Hetet in the amount of
$16,213 for 1998 and $15,266 for 1997, and the contribution on his behalf to
the Profit Sharing Plan ("Participation") by LTR Industries, S.A., the
Corporation's 72%-owned subsidiary, in the amount of $12,985 for 1999,
$14,727 for 1998 and $13,945 for 1997.
(5) Includes grant of 25,000 option shares awarded on April 1, 1998.
(6) Includes imputed income for group life insurance coverage in excess of
$50,000 for Messers. Roberts, in the amount of $701 for 1999, $1,864 for
1998 and $1,862 for 1997; Sharkey, in the amount $2,772 for 1997 and
Thompson in the amount of $58 for 1999.
(7) Mr. Sharkey retired from the Corporation on December 31, 1999 and received a
special recognition award in the amount of $23,125.
(8) Mr. Thompson was appointed to the position of President - U.S. Operations on
November 23, 1998.
(9) Mr. Thompson received a retention bonus at the time of hire, part of which
was payable in 1998.
9
<PAGE> 14
The following table sets forth information concerning stock options granted
during 1999 to the Named Executive Officers of the Corporation.
1999 OPTION GRANTS
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION GRANT DATE
NAME GRANTED(1) FISCAL YEAR(2) ($/SHARE)(3) DATE(4) PRESENT VALUE(5)
- ---- ---------- -------------- ------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Wayne H. Deitrich...... 157,300 27.97% $15.6875 January 3, 2009 $485,000
Jean-Pierre Le Hetet... 78,300 13.92 15.6875 January 3, 2009 241,500
Paul C. Roberts........ 42,800 7.61 15.6875 January 3, 2009 132,000
William J. Sharkey..... 27,000 4.80 15.6875 December 31, 2004(6) 83,250
Peter J. Thompson...... 40,900 7.27 15.6875 January 3, 2009 126,000
</TABLE>
- ---------------
(1) Represents shares of Common Stock underlying options granted in 1999
pursuant to the Corporation's Equity Participation Plan.
(2) The Corporation granted options during fiscal 1999 to employees to purchase
an aggregate of 562,300 shares of Common Stock.
(3) The exercise price of the options granted in 1999 was based upon the mean of
the high and low sales prices of the Corporation's Common Stock on the date
the options were granted.
(4) The options granted in January 1999 are exercisable in increments of 30%,
30% and 40% on or after January 4, 2000, January 4, 2001 and January 4,
2002, respectively
(5) Calculation is based on the Black-Scholes option pricing model adapted for
use in valuing stock options. The following assumptions were used for the
1999 grants: market value of the stock equal to the exercise price; ten-year
option term; estimated volatility of 29.9%; risk-free rate of return of
5.08% based on the interest rate on 10-year government securities; and a
yield of 1.84%.
(6) All of Mr. Sharkey's options will expire on the earlier of their expiration
date or five years from the date of his retirement, December 31, 1999.
10
<PAGE> 15
The following table sets forth information concerning the value of
unexercised options held by the Corporation's Named Executive Officers as of
December 31, 1999. No options were exercised by the Named Executive Officers in
1999.
1999 YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT DECEMBER 31, 1999(#)(1) DECEMBER 31, 1999($)(2)
------------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C>
Wayne H. Deitrich.................... 234,470 186,330 $0 $0
Jean-Pierre Le Hetet................. 91,260 101,240 $0 $0
Paul C. Roberts...................... 48,460 50,440 $0 $0
William J. Sharkey(3)................ 69,400 0 $0 $0
Peter J. Thompson.................... 1,950 42,950 $0 $0
</TABLE>
- ---------------
(1) All options granted in 1995 have vested, 60% of the options granted in
January 1997 have vested and 30% of the options granted in 1998 have vested.
(2) The fair market value of the Corporation's Common Stock was $13.4375 per
share on December 31, 1999. At that share price, none of the exercisable or
unexercisable stock options were in-the-money.
(3) Mr. Sharkey surrendered, for no value, options granted to him on January 2,
1997 for 4,000 shares and on January 2, 1998 for 4,500 shares and all of Mr.
Sharkey's other options fully vested as of his retirement on December 31,
1999.
DEFINED BENEFIT RETIREMENT PLAN
The Corporation provides certain benefits to its U.S. employees through the
Schweitzer-Mauduit International, Inc. Retirement Plan (the "Retirement Plan"),
a U.S. pension plan covering hourly and salaried employees, that entitles each
vested salaried U.S. employee to an annual pension benefit at normal retirement
equal to 1.50 percent of final average earnings times the employee's years of
service, subject to a deduction for social security benefits or, if greater,
1.125 percent of final average earnings times years of service plus a specific
amount for certain employees. Final average earnings is defined as the highest
average of any five years of salary and bonuses (as defined in the Retirement
Plan) out of the last 15 calendar years of employment, or over the last 60
months of credited service, if greater. The minimum monthly benefit payable in a
single-life annuity to salaried employees is the lesser of $125 or $25 times
years of service (subject to certain increases in the event of a disability or
death).
Retirement benefits for salaried participants who have at least five years
of vesting service may begin on a reduced basis at age 55, or on an unreduced
basis at normal retirement age. Unreduced benefits also are available for
salaried participants with ten years of vesting service at age 62 or as early as
age 60 with 30 years of vesting service. The normal form of benefit for
unmarried salaried participants is a single-life annuity payable monthly.
Benefits will be actuarially adjusted if the employee receives one of the
available forms of joint and survivor or other optional forms of benefit.
The benefits illustrated in the following table are computed on a
single-life annuity basis, without deduction for Social Security or other offset
amounts. Benefits will be adjusted if the employee receives one of the optional
forms of benefit. Benefits under the Retirement Plan will be limited to the
extent required by U.S. tax provisions. Any excess over such limitation for
salaried employees will be paid pursuant to supplemental arrangements.
11
<PAGE> 16
The following table illustrates the estimated annual benefits payable upon
retirement at age 65 without regard to IRS limitations under the Retirement Plan
for specified highest five-year average remuneration and years-of-service
classifications:
Retirement Plan. U.S. Salaried Employees -- Retirement at age 65
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF BENEFIT SERVICE
AVERAGE --------------------------------------------------------------------------
ANNUAL 15 20 25 30 35 40 45
EARNINGS YEARS YEARS YEARS YEARS YEARS YEARS YEARS
- ---------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000 $ 67,500
200,000 45,000 60,000 75,000 90,000 105,000 120,000 135,000
300,000 67,500 90,000 112,500 135,000 157,500 180,000 202,500
400,000 90,000 120,000 150,000 180,000 210,000 240,000 270,000
500,000 112,500 150,000 187,500 225,000 262,500 300,000 337,500
600,000 135,000 180,000 225,000 270,000 315,000 360,000 405,000
700,000 157,500 210,000 262,500 315,000 367,500 420,000 472,500
800,000 180,000 240,000 300,000 360,000 420,000 480,000 540,000
900,000 202,500 270,000 337,500 405,000 472,500 540,000 607,500
1,000,000 225,000 300,000 375,000 450,000 525,000 600,000 675,000
</TABLE>
The estimated years of benefit service, which includes years of benefit
service while at Kimberly-Clark Corporation, as of normal retirement at age 65,
for Messrs. Deitrich and Roberts, are 38.5 and 36.6, respectively. The estimated
years of benefit service, as of normal retirement at age 65, for Mr. Thompson is
31.6. Mr. Sharkey attained age 68 during 1999 and had 17 years of benefit
service as of his retirement on December 31, 1999.
Mr. Le Hetet's retirement benefits are provided under a foreign
subsidiary's pension plan that bases benefits on years of service and
compensation. His projected annual benefit at normal retirement age is
1,799,000FRF or $276,326 with 29 years of credited service at age 65.
Supplemental Retirement Plan. The Corporation's supplemental retirement
plan (the "Supplemental Plan") provides a benefit equal to the difference
between (i) the benefit payable to a participant under the Retirement Plan and
(ii) the benefit that would be payable to such participant under such plan,
calculated without regard to the compensation limit under Section 401(a)(17) of
the Internal Revenue Code (the "Code") and the limitations on benefits under
Section 415 of the Code. The Supplemental Plan is unfunded and participation is
limited to salaried employees with earnings in excess of the Code Section
401(a)(17) limits and who are members of a select group of management or
highly-compensated employees.
EXECUTIVE SEVERANCE PLAN
The Corporation's Executive Severance Plan (the "Severance Plan") provides
that in the event of termination of a participant's employment with the
Corporation or one of its French affiliates for any reason other than Death,
Disability or Retirement (as defined in the Severance Plan) within two years
after a change of control of the Corporation, as defined in the Severance Plan,
a participant employed in the United States will be entitled to (i) receive a
cash payment in an amount equal to three times the highest annual compensation
(base salary and bonus) paid or payable within the three-year period ending on
the date of termination, (ii) receive health, dental and life insurance benefits
from the Corporation for a period of three years, and (iii) receive a cash
payment in an amount equal to the actuarial equivalent of the accrued benefits
the participant would have earned under the Retirement Plan and the Supplemental
Plan if he had continued participation for three years following his
termination. A participant employed by one of the Corporation's
12
<PAGE> 17
French affiliates is entitled to essentially the same payments and benefits as a
United States participant, subject to certain adjustments which take into
account the differences between the respective compensation, benefit and pension
plans and programs in the United States and France. Severance payments under the
Severance Plan for participants subject to United States federal income tax will
be limited to the extent necessary to avoid an excise tax on the participant
under Code Section 4999 if the "parachute payments" under Code Section 280G with
respect to such participant are less than 3.5 times the "base amount" for
purposes of Code Section 280G. If such parachute payments equal or exceed 3.5
times such base amount with respect to a participant, the Corporation shall pay
the participant an additional gross-up payment to compensate such participant
for the excise tax liability under Code Section 4999. The Compensation Committee
of the Board of Directors of the Corporation has established the eligibility
criteria for participation and, from time to time, designates key employees as
participants in the Severance Plan. Subject to certain conditions, the Severance
Plan may be amended or terminated by resolution of the Board of Directors but no
such amendment or termination shall be effective during the two-year period
following a change of control of the Corporation without the consent of all of
the participants. The Corporation has agreements under the Severance Plan with
the Named Executive Officers and certain other key employees. The maximum amount
payable upon termination (with respect to base salary and annual incentive
compensation alone) pursuant to the agreements under the Severance Plan to the
Named Executive Officers, assuming that a change of control of the Corporation
and the termination of their employment had occurred on December 31, 1999, would
have been as follows: Mr. Deitrich, $2,452,878, Mr. Le Hetet, $1,270,464, Mr.
Roberts, $1,003,260, Mr. Sharkey, $820,464 and Mr. Thompson $776,610.
If a participant's employment is otherwise terminated for any reason other
than Death, Retirement, Voluntary Resignation or Cause (as defined in the
Severance Plan), the participant will receive a cash payment in an amount of up
to 24 months base salary.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee was established by the Board of Directors on
December 1, 1995, and is composed entirely of directors who are not, and have
never been, officers or employees of the Corporation. The Board of Directors
designates the members and the chairperson of such committee. The Compensation
Committee's duties include establishing and administering the Corporation's
compensation and benefit policies and practices for executive officers and key
managerial employees. The Compensation Committee also administers the Equity
Participation Plan, pursuant to which stock options are granted, the Restricted
Stock Plan and the Long-Term Incentive Plan (see "Long-Term Incentive
Compensation").
The executive compensation information reported in the Summary Compensation
Table of this Proxy Statement is for services rendered to the Corporation and
its subsidiaries commencing on January 1, 1997, and ending on December 31, 1999,
the last day of the Corporation's 1999 fiscal year.
The following report summarizes the Compensation Committee's actions during
1999. This report shall not be deemed to be incorporated by reference by any
general statement incorporating this Proxy Statement by reference into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that the Corporation specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
acts.
EXECUTIVE COMPENSATION POLICIES
The Corporation's executive compensation policies are designed to attract
and retain qualified executives, to appropriately reward individual achievement,
and to enhance the financial performance of the Corporation, and thus
stockholder value, by significantly aligning the financial interests of the
Corporation's executives with
13
<PAGE> 18
those of its stockholders. To accomplish these objectives, the executive
compensation program as administered by the Compensation Committee consists
primarily of (i) annual cash compensation, the components of which are base
salary and an annual variable cash incentive payable pursuant to the
Corporation's Annual Incentive Plan, and (ii) long-term incentive compensation,
consisting of stock options and restricted stock awards pursuant to the
Corporation's Equity Participation Plan and Restricted Stock Plan, respectively,
and a long-term incentive opportunity payable in cash pursuant to the
Corporation's Long-Term Incentive Plan. Base salary and annual bonuses are
designed to recognize individual performance and achievement of business
objectives each year. The value of long-term incentives is directly linked to
the financial performance of the Corporation, including in the case of stock
options and restricted stock, the performance of the Corporation's Common Stock,
and, therefore, total stockholder return. Executive officers also participate in
other benefit plans available to employees generally, including the
Corporation's Retirement Savings Plan and a medical plan.
In developing the Corporation's executive compensation programs and to
assist in determining appropriate compensation levels for executives, the
Compensation Committee retained a national compensation consulting firm to
provide information and advice regarding plan design and industry pay practices
for executives holding specified positions. Comparative compensation information
was drawn from a broader range of companies than those included in the industry
index used in the performance graph on page 17 of this Proxy Statement, and not
all of the companies included in the performance graph were included in the
surveys utilized. The Compensation Committee's objective is to provide
opportunities to an executive officer for compensation, both on an overall basis
and on the basis of each respective component, which is targeted in each case at
the 50th percentile of the market groups studied within the country of their
employment.
Annual Salary and Incentive Bonuses
In determining the base salaries of executive officers effective as of
January 1, 1999, the Compensation Committee reviewed salaries paid to similarly
situated executives of the companies as reflected in the above-described
compensation study. In establishing base salary levels, the Compensation
Committee considers such factors as job complexity, level of responsibility, the
relationship of the position to the Corporation's long-term strategic goals, and
the particular individual's skills, experience and background. While no
pre-established weightings are given to these factors, particular emphasis is
being placed on attracting and retaining quality individuals in order to develop
an effective executive team for the Corporation.
The purpose of the Corporation's Annual Incentive Plan (the "Incentive
Plan") is to further unite the interests of the stockholders of the Corporation
and its key employees through (i) the annual establishment of corporate
objectives and (ii) the annual payment of cash incentive awards to key employees
based on individual performance and the attainment of the Corporation's
objectives. Target incentive cash opportunities under the Incentive Plan for
executive officers including the Chief Executive Officer can range from 25 to 60
percent of a participant's base salary with a maximum payout of up to 200
percent of the participant's target incentive award percentage. Actual annual
cash bonuses are determined by measuring performance against specific goals
established at the beginning of each year. The goals take into account,
depending on the responsibility of the individual, one or more of the following:
the individual's performance; the performance of the functional group or unit
with which the individual is associated (primarily based upon the operating
profit of such unit); and the overall performance of the Corporation (primarily
based upon diluted earnings per share). Such goals may or may not be equally
weighted and may vary from one executive officer to another.
As an adjunct to the annual salary and bonuses that may be earned under the
Incentive Plan by the Named Executive Officers and other key employees, the
Corporation adopted the Schweitzer-Mauduit International, Inc. Deferred
Compensation Plan ("DCP") on December 2, 1999 that permits eligible employees
who elect to participate to defer receipt and taxation of a portion of their
annual salary and annual
14
<PAGE> 19
incentive bonus. The amount of annual salary and annual incentive bonus that may
be deferred is limited to 25 percent and 50 percent, respectively. Eligibility
to participate in the DCP is limited to "management" and "highly compensated
employees" as defined in the Employee Retirement Income Security Act of 1974, as
amended. The Corporation may, with Compensation Committee approval, make
contributions to a participant's account in the DCP.
Long-Term Incentive Compensation
The Corporation's long-term incentive compensation for its key executives
consists of (i) grants of stock options pursuant to the Corporation's Equity
Participation Plan (the "EPP"), (ii) grants of restricted stock pursuant to the
Corporation's Restricted Stock Plan (the "RSP") and (iii) a cash opportunity
payable on a three-year cycle basis pursuant to the Corporation's Long-Term
Incentive Plan (the "LTIP").
The EPP is intended to provide a means of encouraging an ownership interest
in the Corporation by those employees who have contributed or are determined to
be in a position to contribute materially to the success of the Corporation,
thereby increasing their motivation for and interest in the achievement of the
Corporation's long-term success. Because the value of a stock option bears a
direct relationship to the price of shares of the Corporation's Common Stock,
stock options are viewed as a means of encouraging executives and other key
management employees to increase long-term stockholder value. In determining
awards of stock options under the EPP, the Compensation Committee makes grants
based on such factors as the competitive target long-term incentive opportunity
for executives with comparable responsibilities in similarly sized corporations,
individual contributions to corporate performance and management
recommendations.
The Corporation's LTIP is designed to enable the Corporation to attract and
retain key executives by providing a competitive and diversified total
compensation package and to help focus executives' attention on the long-term
performance of the Corporation. The Compensation Committee selects participants
and determines awards under the LTIP on a three-year cycle basis. The LTIP's
award opportunities are based on a competitive market analysis of long-term
incentive opportunities for executive management positions in other companies.
Under the LTIP, a target cash award is established for each participant, which,
taken together with a participant's stock option grants, is structured to
provide the participant with a total long-term incentive award commensurate with
the participant's responsibilities. No LTIP awards were established for the
1998-2000 or the 1999-2001 performance cycles. In lieu of establishing an LTIP
cash award opportunity for the 1998-2000 performance cycle, the Compensation
Committee increased the number of stock options granted to executives in an
amount equal to the value of what an LTIP award for the 1998-2000 performance
cycle would have been.
The RSP was adopted by the Corporation on December 2, 1999 and is intended
to promote the long-term financial success of the Corporation by attracting to
and retaining for the Corporation and its Affiliates outstanding executive
personnel and to motivate such personnel by means of restricted stock grants to
contribute to the Corporation's success. The Compensation Committee selects
participants and establishes the terms on which grants of restricted stock are
made. Awards of restricted stock will be made from the Corporation's treasury
stock and constitute an immediate transfer of ownership to the participant of
shares of the Corporation's Common Stock, including the right to vote the shares
and to receive dividends thereon, at a share price established by the
Compensation Committee in its discretion. The Participant's continued ownership
of and right to freely transfer the restricted stock is subject to such
conditions on transferability and to such risks of forfeiture as are established
by the Compensation Committee at the time of the grant, which may include
continued employment with the Corporation for a defined period, achievement of
specified management performance objectives or other conditions established by
the Compensation Committee. As with stock options, a portion of the value of
restricted stock bears a direct relationship to the value of the Corporation's
Common Stock and, therefore, total shareholder return.
15
<PAGE> 20
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Compensation Committee used the same compensation policy described
above for all executive officers to determine the compensation for Wayne H.
Deitrich, the Chief Executive Officer of the Corporation. In setting both the
cash-based and equity-based elements of Mr. Deitrich's compensation, the
Committee attempted to target the 50th percentile of such compensation as paid
to chief executive officers of the companies analyzed in the outside
consultant's study.
CORPORATE TAX DEDUCTION FOR EXECUTIVE COMPENSATION
Pursuant to the Omnibus Budget Reconciliation Act of 1993 ("OBRA"), annual
compensation payable to the chief executive officer and each of the four highest
paid executive officers of a public company will not be deductible by the
company for federal income tax purposes to the extent any such officer's overall
compensation exceeds $1,000,000. Certain types of compensation, however,
including qualifying performance-based incentive compensation, are both
deductible and excluded for purposes of calculating the $1,000,000 base. OBRA
recognizes stock option plans as performance-based if such plans meet certain
requirements.
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
Richard D. Jackson (Chairman)
Claire L. Arnold
Larry B. Stillman
16
<PAGE> 21
PERFORMANCE GRAPH
The following graph compares the total cumulative stockholder return on the
Corporation's Common Stock during the period from December 1, 1995 (the date on
which shares of the Common Stock began trading on the New York Stock Exchange)
through December 31, 1999, with the comparable cumulative total returns of the
Dow Jones Paper Products Index ("Peer Group") and the Wilshire 5000 Index. The
graph assumes that the value of the investment in the Common Stock and each
index was $100 on December 1, 1995 and that all dividends were reinvested.
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
<TABLE>
<CAPTION>
01-Dec-95 31-Dec-95 31-Dec-96 31-Dec-97 31-Dec-98 31-Dec-99
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Schweitzer-Mauduit Intl Inc. $100 $106 $148 $177 $75 $68
Wilshire 5000 Composite Index $100 $102 $123 $162 $200 $247
Peer Group $100 $96 $101 $110 $114 $152
</TABLE>
OTHER MATTERS
The management of the Corporation knows of no other matters to be presented
at the 2000 Annual Meeting. Should any other matter requiring a vote of the
stockholders arise at the meeting, the persons named in the proxy will vote the
proxies in accordance with their best judgment.
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Corporation has selected Deloitte & Touche LLP as the principal independent
auditors for the Corporation for the current year. Deloitte & Touche LLP has
been the independent auditor for the Corporation since its incorporation.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions from stockholders.
17
<PAGE> 22
STOCKHOLDER PROPOSALS
To be considered for inclusion in the Corporation's proxy statement and
form of proxy for the 2001 Annual Meeting of Stockholders, stockholder proposals
must be received by the Secretary of the Corporation at the Corporation's
principal executive offices no later than November 13, 2000. The Corporation
reserves the right to decline to include in the Corporation's proxy statement
any stockholder's proposal which does not comply with the rules of the SEC for
inclusion therein.
The By-Laws of the Corporation include requirements applicable to
stockholder proposals other than those included in the proxy materials pursuant
to the regulations of the SEC. Pursuant to the By-Laws, a stockholder proposing
to nominate persons for election to the Board of Directors or to introduce other
business at the Annual Meeting of Stockholders must give timely written notice
to the Corporation's Secretary. To be timely, a stockholder's notice must be
delivered and received at the Corporation's principal executive offices not less
than 50 days nor more than 75 days prior to the Annual Meeting of Stockholders;
provided that if less than 60 days notice or prior public disclosure of the date
of the Annual Meeting of Stockholders is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the Annual
Meeting of Stockholders date was mailed or such public disclosure of the date
was made, whichever first occurs.
The Corporation's By-Laws further provide that a stockholder's notice
proposing to nominate persons for election to the Board of Directors must
contain certain information about both the nominee and the stockholder making
the nomination. A stockholder's notice proposing to bring other business before
the Annual Meeting of Stockholders must contain (1) a brief description of the
business desired to be brought before the Annual Meeting of Stockholders and the
reasons for conducting such business at the Annual Meeting of Stockholders; (2)
the stockholder's name and address; (3) the class and number of shares of the
Corporation's capital stock beneficially owned by the stockholder; (4) any
material interest of the stockholder in such business; and (5) a representation
that such stockholder intends to appear in person or by proxy at the annual
meeting to bring such business before the Annual Meeting of Stockholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers and persons who own more than ten
percent of a registered class of the Corporation's equity securities to file
reports with the SEC regarding beneficial ownership of Common Stock and other
equity securities of the Corporation. Officers, directors and greater than ten
percent stockholders are required by SEC regulations to furnish the Corporation
with copies of all forms they file pursuant to Section 16(a).
To the Corporation's knowledge, based solely on a review of copies of such
reports furnished to the Corporation and written representations that no other
reports were required, during the fiscal year ended December 31, 1999, all
officers, directors and greater than ten percent beneficial owners complied with
the Section 16(a) filing requirements of the Act.
FORM 10-K
The Company's Annual Report to the SEC on Form 10-K for the fiscal year
ended December 31, 1999 (including the consolidated financial statements and
schedules thereto but excluding exhibits) has been included with the mailing of
this Proxy Statement to stockholders of record and beneficial holders as of
March 1, 2000. Additional copies of the Company's Annual Report to the SEC on
Form 10-K for the fiscal year ended December 31, 1999 (excluding exhibits) will
be provided without charge to each stockholder so requesting in writing. Each
request must set forth a good faith representation that, as of March 1, 2000,
the
18
<PAGE> 23
record date for the Annual Meeting, the person making the request beneficially
owned shares of the Corporation's Common Stock. The written request should be
directed to: Paul C. Roberts, Chief Financial Officer and Treasurer.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by marking the
appropriate boxes on the enclosed proxy card.
19
<PAGE> 24
(SCHWEITZER-MAUDUIT LOGO)
INVITATION TO STOCKHOLDERS
NOTICE OF 2000 ANNUAL MEETING
PROXY STATEMENT
SKU# 3990-PS-2000
<PAGE> 25
PROXY
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
100 North Point Center East
Suite 600
Alpharetta, Georgia 30022-8246
COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Stockholders, April 27, 2000
The undersigned hereby appoints JOHN W. RUMELY, JR., PAUL C. ROBERTS and
WAYNE L. GRUNEWALD, and each of them, proxies with full power of substitution,
to represent and to vote as set forth herein all the shares of Common Stock of
Schweitzer-Mauduit International, Inc. (the "Company") held of record by the
undersigned on March 1, 2000, at the Annual Meeting of Stockholders of the
Company, to be held at the Corporation's headquarters, 100 North Point Center
East, Alpharetta, GA 30022 at 11:00 a.m. local time, on Thursday, April 27,
2000, and any adjournment thereof.
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|SEE REVERSE| CONTINUED AND TO BE SIGNED ON REVERSE SIDE |SEE REVERSE|
| SIDE | | SIDE |
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Please mark
[X] votes as in
this example.
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Management recommends a vote FOR Item 1.
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1. Election of Class I Director Election of Class II Directors
(01) Alan R. Batkin (02) K.C. Caldabaugh
(03) Jean-Pierre LeHetet
(04) Richard D. Jackson
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ]______________________________________
For the nominees except as noted above
2. In their discretion, the proxies are authorized to vote as described
in the Proxy Statement and upon such other business as may properly
come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" ITEM 1.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears on Stock Certificate. If stock is held in
the name of two or more persons, all must sign. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as such.
If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Signature: Date:
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Signature: Date:
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