UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

March 13, 2008

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 24, 2008 at 11:00 a.m. at the Company's corporate headquarters located at 100 North Point Center East, Suite 600, Alpharetta, Georgia.

        At the Annual Meeting, stockholders will be asked to elect 2 directors for a 3-year term and to approve the Company's Restricted Stock Plan. The Company's Board of Directors recommends unanimously that you vote in favor of these proposals, which are 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 recommendation, 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,
		WAYNE H. DEITRICH

SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
100 North Point Center East, Suite 600
Alpharetta, Georgia 30022-8246

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

April 24, 2008

        The Annual Meeting of Stockholders of Schweitzer-Mauduit International, Inc. will be held at the Company's corporate headquarters located at 100 North Point Center East, Suite 600, Alpharetta, Georgia, on Thursday, April 24, 2008 at 11:00 a.m. for the following purposes:

1.

To elect 2 directors for a 3-year term to expire at the 2011 Annual Meeting of Stockholders;



2.

To approve the Schweitzer-Mauduit International, Inc. Restricted Stock Plan; and



3.

To transact such other business as may properly be brought before the meeting or any adjournment thereof.

        You may vote all shares that you owned as of February 28, 2008, which is the record date for the Annual 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.

		JOHN W. RUMELY, Jr. Secretary and General Counsel

March 13, 2008

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, referred to as either the Company or SWM, in connection with the solicitation of proxies by the Board of Directors of the Company for use at the Annual Meeting of Stockholders to be held on April 24, 2008 ("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 2 directors nominated for election and for approval of the Company's Restricted Stock Plan. Any proxy may be revoked by the stockholder granting it at any time before it is voted by delivering to the Secretary of the Company another signed proxy card, or a signed document revoking the earlier proxy or by attending the meeting and voting in person. The Company intends to mail this Proxy Statement and proxy card, together with the 2007 Annual Report to Stockholders, on or about March 13, 2008.

        Each stockholder of record at the close of business on February 28, 2008 will be entitled to 1 vote for each share registered in such stockholder's name. Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement. As of February 28, 2008, there were 15,493,609 shares outstanding of the Company's common stock, par value $0.10 per share (the "Common Stock").

        The Company will pay the entire cost of the proxy solicitation. The Company has retained American Stock Transfer & Trust Company, the Company's transfer agent, to aid in the solicitation of proxies. Proxy solicitation services on routine proxy matters are included in the fees paid to American Stock Transfer & Trust Company to act as the Company's stock transfer agent and registrar. Only reasonable out-of-pocket expenses on proxy solicitation services are charged separately. The Company 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 Company 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 ("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 Company.

        Pursuant to Section 216 of the Delaware General Corporation Law and the Company's By-Laws, a quorum for the Annual Meeting will be a majority of the issued and outstanding shares of the Company's Common Stock, present in person or represented by proxy. Directors shall be elected by a plurality of the votes present in person or represented by proxy 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

1

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 that are presented for action at the Annual Meeting, the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the subject matter shall be the act of the stockholders.

NOMINATION OF DIRECTORS

        Directors may be nominated by the Board of Directors or by stockholders in accordance with the By-Laws of the Company. The Nominating & Governance Committee, which is composed of 3 independent directors, identifies potential candidates and reviews all proposed nominees for the Board of Directors, including those proposed by stockholders. The candidate review process includes an assessment of the person's judgment, experience, independence, understanding of the Company's business or other related industries, commitment and availability to prepare for and attend Board and Board Standing Committee meetings and such other factors as the Nominating & Governance Committee determines are relevant in light of the needs of the Board of Directors and the Company. The Nominating & Governance Committee selects qualified candidates and presents them to the full Board of Directors, which body decides whether to invite the candidate to be a nominee for election to the Board of Directors. The Nominating & Governance Committee Charter authorizes the Nominating & Governance Committee to retain such outside experts as it deems necessary and appropriate to assist it in the execution of its duties.

        Any stockholder of record entitled to vote generally in the election of directors may submit a candidate for consideration by the Nominating & Governance Committee by notifying the Secretary and General Counsel in writing at the address noted on the face page of this Proxy Statement. The notice of intent to nominate a candidate for the Board of Directors must satisfy the requirements described below and must be delivered, either by personal delivery or by United States mail, postage prepaid, to the Secretary and General Counsel of the Company and received by the Company, not less than 120 calendar days before the anniversary date of the Company's proxy statement released to stockholders in connection with the previous year's annual meeting; provided, however, if and only if the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends 30 days after such anniversary date (an annual meeting date outside such period being referred to herein as an "Other Meeting Date"), such stockholder notice shall be given in the manner provided herein by the later of the close of business on (i) the date 90 days prior to such Other Meeting date or (ii) the 10th day following the date such Other Meeting Date is first publicly announced or disclosed.

        The stockholder's notice of intent to nominate a candidate for the Board of Directors shall state the following:

•

the name and address of record of the stockholder who intends to make the nomination;



•

a representation that the stockholder is a holder of record of shares of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;



•

the name, age, business and residence addresses, and principal occupation or employment of each nominee;



•

a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder;

2

•

such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission; and



•

the consent of each nominee to serve as a director of the Company if so elected.

        The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as a director of the Company.

        In the event that the number of directors to be elected to the Board of Directors of the Company is increased and either all of the nominees for Director or the size of the increased Board of Directors is not publicly announced or disclosed by the Company at least 100 days prior to the first anniversary of the preceding year's annual meeting, a stockholder notice shall also be considered timely hereunder, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Company at the principal executive office of the Company not later than the close of business on the 10^th day following the first date all of such nominees or the size of the increased Board of Directors shall have been publicly announced or disclosed.

PROPOSAL ONE

ELECTION OF DIRECTORS

        The Board of Directors presently has 8 members, 5 of whom are independent. The Board of Directors is divided into 3 classes that are elected on a staggered basis with 1 class elected each year for a 3-year term. All of the current directors, excepting Mr. McCullough and Mr. Villoutreix have served on the Company's Board of Directors since November 30, 1995. Mr. McCullough was first elected to serve as a director effective October 1, 2006 and Mr. Villoutreix was first elected to serve as a director effective June 1, 2007.

        The incumbent Class I directors are Mrs. Claire L. Arnold, Mr. Robert F. McCullough and Mr. Laurent G. Chambaz. Mr. Chambaz has informed the Board that he intends to retire at the end of his current term that expires on April 24, 2008. Mrs. Arnold and Mr. McCullough are nominated for re-election at the 2008 Annual Meeting to serve for a term to expire at the 2011 Annual Meeting of Stockholders, and until their successors are elected and have qualified. The Board of Directors has determined that Mrs. Arnold and Mr. McCullough are independent. Should the nominees become unable to serve, proxies may be voted for another person designated by the Board of Directors. The nominees have advised the Company that they will serve if elected. The remaining directors will continue to serve as directors for the terms set forth on page 5.

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 the past 5 years, other directorships currently held by each as of the date hereof and certain other biographical information are set forth on the following pages.

3

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS

For a 3-Year Term Expiring at the 2011 Annual Meeting of Stockholders

The Board of Directors unanimously recommends a vote FOR the election of
the nominees as Class I Directors.

4

MEMBERS OF THE BOARD OF DIRECTORS OTHER THAN THOSE
UP FOR ELECTION

5

PROPOSAL TWO

APPROVAL OF THE SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
RESTRICTED STOCK PLAN

Restricted Stock Plan's Purpose

        The Restricted Stock Plan performance share component provides an equity award opportunity to its participants based on the accomplishment of performance objectives that are related to the business unit in which the participant is most directly involved over a multi-year performance cycle. The purpose of the Restricted Stock Plan is to further unite the interests of the stockholders of the Company and its key executives through:

(a)

the establishment of corporate and operating unit objectives which are deemed by the Board of Directors to be in the best long-term interests of the Company and its stockholders; and



(b)

the delivery of the Company's stock as an incentive award at the end of an award cycle to each plan participant thereby increasing the participant's equity stake in the Company provided his or her performance has meaningfully contributed to the attainment of the Company's objectives.

        The Restricted Stock Plan may also be used to grant restricted shares with vesting after a specific period of time for the purposes of recruitment, retention or special recognition.

        The full text of the Restricted Stock Plan has been filed electronically with the Securities and Exchange Commission ("SEC") as Exhibit 10.9 to the Form 10-K.

        The following points summarize the material terms of the Restricted Stock Plan.

Administration of the Plan

        The Restricted Stock Plan is administered by the Compensation Committee of the Board of Directors ("Compensation Committee"), which is composed of 3 independent directors in accordance with New York Stock Exchange Corporate Governance standards and listing rules. The members of the Compensation Committee also qualify under the "outside director" requirement for purposes of Section 162(m) of the Internal Revenue Code ("Code"). The Compensation Committee determines which officers, including the Chief Executive Officer, shall participate in the plan, establishes the corporate, operating unit and other performance objectives at the beginning of each performance cycle, typically a 2 to 3-year period, and evaluates the progress toward accomplishment of the established performance objectives at the end of the performance cycle.

Objective Areas, Performance Levels and Measurement of Performance Achieved

        For each objective (corporate, unit and other), performance levels are established which, whenever possible, shall consist of successively higher standards or ranges. These performance levels are defined as Threshold, Target, Outstanding and Maximum. Performance below the Threshold level will not result in the payment of an award. A percentage weighting is assigned to each objective area for a total percentage weighting of 100%. Certain conditions called Control Measures may be established, but are not required. Failure to achieve a Control Measure may deprive the participants to whom it applies of their right to receive part or all of an award notwithstanding the level of performance attained on any or all other applicable objectives. An example of such a Control Measure used in the past is a year over year increase in earnings per share. The level of performance achieved against the objectives is determined by the Compensation Committee based upon the Company's and its subsidiaries' audited results.

6

        Performance objectives have included such measures as growth in profitability for individual business units, growth in earnings per share for the corporate objective unit and more highly targeted strategic initiatives such as the 13 objectives established for the 2007-2008 award cycle. These objectives are described in further detail in the Comprehensive Compensation Discussion and Analysis at pages 19 - 22 herein.

Determining the Amount of an Incentive Award

        Generally, the incentive award a participant is eligible to receive is the sum of the values attributable to performance actually attained for each objective or objective area in which the participant has been assigned objectives or the unit to which he or she belongs. The value of an incentive award is established based on a competitive compensation market survey that is performed by an independent consultant. The nature of the survey and how it is used to set the incentive compensation value for awards granted under the Restricted Stock Plan is discussed in further detail in the Comprehensive Compensation Discussion and Analysis at pages 10 - 11 herein. The amount of any award a participant is eligible to receive depends upon:

(a)

the participant's base salary;



(b)

the target incentive award percentage established for the participant;



(c)

the percentage weighting applicable to the objective or objective area; and



(d)

the performance percentage which applies as a consequence of the performance level attained in that area.

        The number of shares to be awarded each year shall be determined by application of the following formula:

        Base Salary (adjusted for exchange rate if applicable) × Opportunity Award % × Award Level Achieved % ÷ Average Base Share Price = Base Shares

        Target incentive equity opportunities under the Restricted Stock Plan for executive officers, including the Chief Executive Officer, can range from 35% to 177% of a participant's base salary with a maximum payout of up to 200% of the participant's target incentive award percentage, subject, in the case of the 2007-2008 award opportunity, to a stock price multiplier that is based upon the ratio of the current year average share price versus the prior year average share price. In a multi-year plan, earned awards of Restricted Stock are banked at the end of each measurement period in the cycle (typically a fiscal year), but do not vest in the participant until the entire award cycle is completed; provided further, that the participant is still actively employed at the time of vesting excepting only death, retirement or permanent or total disability.

        The Restricted Stock Plan may also be used to make targeted grants of Restricted Stock to individual participants for purposes of retention, recruitment or for special recognition of achievement. Such grants are typically for a limited number of shares and have a cliff vesting requirement, which means the recipient must be actively employed by the Company at some point in the future to receive unrestricted shares of stock under the award or they are forfeited. The right to vote both performance share and the target share grants and to receive dividends thereon, attaches at the date of grant. As with performance shares, targeted grants of Restricted Stock must be approved by the Compensation Committee.

Amendment of Objectives, Objective Areas and the Plan Terms

        The Compensation Committee or the Board of Directors may, in their discretion, adjust performance measurements, objectives or objective areas during the year. However, this is typically not done except in the case of an extraordinary event that has a material impact on an objective, the

7

occurrence of which could not reasonably have been foreseen or anticipated in the exercise of reasonable and good management. An example would be an objective that was based on an element of a business plan that was subsequently revised such that the objective no longer made business sense or was no longer capable of being accomplished under the new business plan. Such an instance occurred in the 2007-2008 award cycle where an objective related to the operational survival of the Lee mills was established at the beginning of the award cycle, but due to a subsequent change in the business plan a decision was made to close the Lee mills.

        The Board of Directors has the power to amend the plan at any time, order the temporary suspension of its application or terminate it in its entirety; provided, however, that no such action shall adversely affect the rights or interests of participants theretofore vested.

Tax Treatment of the Restricted Stock Plan

        Stockholder approval of the material terms of the Restricted Stock Plan is required in order for the Company to comply with the performance-based compensation exception set forth in Code Section 162(m) and the regulations thereunder, so that, to the extent possible, compensation paid under the Restricted Stock Plan will be fully deductible by the Company as to any performance share grants. Target grants of Restricted Stock for purposes of retention, recruitment or special recognition would not likely be deductible as they do not typically satisfy the requirement of performance-based compensation.

The Board of Directors unanimously recommends a vote FOR approval of the material terms of the Restricted Stock Plan.

8

EXECUTIVE COMPENSATION

COMPREHENSIVE COMPENSATION DISCUSSION & ANALYSIS

Compensation Philosophy

        The Company's compensation philosophy centers on 3 tenets:

•

Pay for performance



•

Alignment with stockholders



•

Total compensation set at market value for like skills and responsibilities

Implementation of Philosophy

        The Company implements its compensation philosophy through a number of methodologies including:

•

Allocating a material portion of total compensation to incentive based, at risk, compensation opportunities



•

Setting incentive plan objectives that directly or indirectly increase earnings



•

Awarding a material portion of total compensation in the form of equity



•

Utilizing an annual competitive compensation study to set total and individual compensation components and values

        The Company's philosophy is reflected in the breakdown of amounts earned under the 2007 compensation package for the Chief Executive Officer, Chief Financial Officer and next 3 highest compensated officers, the Named Executive Officers, between incentive-based and equity-based compensation as a percentage of total compensation.

9

Market Value Determination

        Annually, the Compensation Committee retains an independent compensation consultant to conduct a competitive compensation analysis (Competitive Compensation Analysis). Towers Perrin has been retained for this purpose since 1995 based on its extensive databases and its ability to provide analyses for each of the geographic regions in which the Company's and its subsidiaries' executive officers are based. Towers Perrin presently has no other business dealings with the Company and is considered to be independent of management in handling this assignment.

        The Competitive Compensation Analysis is intended to reflect changes in the scope of an executive's responsibility, experience in their position and labor market conditions. The 2006 Competitive Compensation Analysis used a combination of databases to set 2007 executive compensation for U.S. based executives. Those databases included Towers Perrin's 2006 Executive Compensation Database (825 participating organizations), Watson Wyatt's 2006/2007 Survey Report on Top Management Compensation (2,567 participating organizations) and Mercer's 2006 Executive Benchmark Database (2,150 participating organizations). Data was developed using normative revenue categories that reflect the size and organization level for each SWM position. For 2007, the revenue screen for the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer positions was $711 million and for the President—Americas position, the revenue screen was $289 million. For non-U.S. based executives, manufacturing companies in the Towers Perrin regional databases were used and similarly adjusted using revenue thresholds that reflected the size of the local organization and level of each executive's position. Regression equations and other methodologies were used where applicable to develop data comparisons from the databases employed in the Competitive Compensation Analysis.

        In all cases, Towers Perrin utilizes a large grouping of companies and does not base its conclusions on a limited number of specific companies in the Company's industry segment. The Company is in a very specialized niche in the paper industry, that does not have close comparables from whom compensation information is available. Furthermore, the Company recruits from within and from outside the paper-making industry for executive talent requiring the broader analysis performed by Towers Perrin to establish competitive compensation. For example, among 3 recently hired executives, 1 was recruited out of a large French conglomerate, Saint Gobain, 1 came from Alstrom, a large paper corporation and 1 came from Arjowiggins, the world's leading manufacturer of technical and creation papers (notably for image enhancement and value protection).

        The Competitive Compensation Analysis provides the Compensation Committee with the 25^th, 50^th and 75^th percentile values for total compensation, total cash compensation, base salary, annual incentive opportunity, long-term incentive opportunity and guidance as to the amount of such compensation that is delivered in the form of cash or equity. The data developed from this process is used when a new executive is hired between studies to determine the initial compensation package. Supplementary information from recruiting and tax consultants is used to test the reasonableness of any recruitment incentives that may be offered to attract new talent.

        The Company's philosophy is to compensate its officers at the 50^th percentile of the market for base salary plus or minus 15% and at the 50^th percentile of the market at Target level performance plus or minus 15% for incentive compensation. The 50^th percentile was chosen as the compensation level at which experience indicated quality executive talent could be recruited and retained without overpaying. The variance range is used to account for individual factors such as experience in the position, particular skill sets and performance. To develop competitive references for the executive positions studied, Towers Perrin undertook the following analysis to develop an Executive Peer Group:

•

gathered position information, updated scope and pay information from the Company;



•

matched incumbents to survey benchmarks, generally holding benchmarks consistent from prior year;

10

•

analyzed competitive data in accordance with the Company's target markets; and



•

updated market rates to reflect 2007 mid-year salary rates to aid in salary adjustment decisions—data was aged with a projected annual update factor specific to each country.

        For 2007, the individual components of Named Executive Officer compensation were set at the following levels based on the 2006 Competitive Compensation Analysis:

Components of Compensation

        Our executive compensation program consists of the following components:

11

12

(1)

Based on the Board's judgment, severance benefits reflect the fact that it may be difficult for employees to find comparable employment within a short period of time and the value placed on being able to quickly disentangle the Company from an executive employee in the event of a termination by payment of a lump sum. Change of control benefits are contingent upon providing continued services, as requested, through a change of control thereby increasing the ability of the Company to accomplish that task with an intact management team, while recognizing a degree of security must be provided to retain those officers through a change in control who may well be out of a position following the implementation of such a change in control. Further information concerning the severance benefits are found at pages 35 - 41.

(2)

Retirement Plan benefits for all U.S. salaried employees, including officers, were frozen effective January 1, 2006. Further details concerning the pension plan benefit are provided in the narrative following the Pension Benefits Table found at page 32 hereof.

13

Base Salary—2007

        The base salary established for each Named Executive Officer against the competitive market median base salary is set forth below:

(3)

The Chief Operating Officer's salary of Euro 300,000 was converted into U.S.$ using the September 2007 exchange rate of Euro .7193 for every U.S.$1.

(4)

The Chief Operating Officer's base salary was evaluated on the basis of U.S. and France-based positions.

(5)

The Vice President Strategic Planning and Implementation was the former Chief Financial Officer who agreed to delay his retirement for 1 year to facilitate the transition of the new Chief Financial Officer and to assume enhanced duties relative to various strategic initiatives. As this was a temporary position, no competitive analysis was performed and his 2006 salary was increased by the actual annual increase from 2006 to 2007 for U.S. based executives as determined by the Competitive Compensation Analysis.

14

Incentive Compensation—2007 Objectives and Results Against Objectives

        Based on full-year 2007 financial performance, the following results were achieved under the Company's incentive compensation programs:

Annual Incentive Plan

        A.    2007 Objectives. The objectives for the 2007 incentive award opportunity under the Annual Incentive Plan applicable to the Named Executive Officers are set out below. These objectives were selected because they were deemed to be the primary drivers for delivering increased stockholder value. The amounts established for each performance level relate to actual prior-year earnings, budget which sets an aggressive goal for growing the business and thereafter increasingly more aggressive growth targets. All 2007 corporate and unit objectives exclude the impact of restructuring charges.

        B.    Performance Against Objectives

        Actual 2007 performance against 2007 objectives for each Named Executive Officer under the annual incentive plan were:

15

16

17

(6)

The amount earned by each Named Executive Officer is reflected in the column labeled "Non-Equity Incentive Plan Compensation" in the Summary Compensation Table found on page 26.

        C.    Named Executive Officer Award Opportunity at Each Annual Incentive Plan Objective Level

        The Target Incentive Award Percentages (percentage of 2007 base salary) for each Named Executive Officer at the various performance levels were:

        The Target Incentive Award Percentages for each Named Executive Officer were established based on the Competitive Compensation Study data and were generally set at the market median at the Target Level for annual bonus opportunity by position. The difference between each performance level was set based on the Committee's judgment of various factors, including the difficulty of obtaining the objectives, the incentive value to the participant and the net return to stockholders at each performance level.

Restricted Stock Plan—Performance Shares: Year 2007 of 2007-2008 Award Opportunity

        A.    Performance Against 2007 Objectives. In 2007, the Company refocused the business plan to address a number of major restructuring efforts. As a result, the Compensation Committee terminated the 2006-2008 Long-Term Incentive Plan cash award opportunity as its objectives were no longer in line

18

with the Company's strategic goals. In its place, the Compensation Committee instituted a new set of objectives for the remaining 2 years of the award cycle, 2007 and 2008, under the Restricted Stock Plan that covered 13 separate objectives.

(7)

The amount earned by each Named Executive Officer is reflected in the column labeled "Stock Awards" in the Summary Compensation Table found on page 26.

        B.    Performance Objectives. The objectives selected cover a wide range of strategic initiatives, each of which was considered essential to the accomplishment of near-term or longer-term growth in the Company's earnings and hence the Company's ability to deliver increased value to stockholders over the long term. To the maximum extent possible, objectives were framed so as to be capable of objective measurement by the Compensation Committee against audited financial results or other measurable criteria. The specific objectives that applied to each officer were assigned based on the individual's duties and position within the company. Each assigned objective was weighted equally and any subparts within an objective also carried equal weighting. The 13 objectives at the performance level achieved are stated below:

19

20

21

(8)

******** indicates no disclosure due to the confidential and competitively sensitive nature of the information.

(9)

Subsequent to the establishment of this objective a decision was made to permanently close the Lee Mills beginning May 1, 2008.

(10)

Objective was eliminated due to increased demand that resulted in the restart of an idled paper machine, which action rendered the objective no longer applicable.

        C.    SWM Stock Price Multiplier. The 2007 award stock price multiplier (114.4%) was equal to the daily average 2007 SWM closing stock prices ($26.20) divided by the daily average 2006 SWM closing stock prices ($22.91).

        D.    Performance Share Award Opportunity as a % of 2007 Base Salary/Relative to Competitive Long-Term Incentive Market Multiples at Target.

(11)

A competitive analysis of long-term incentive opportunity was not performed for this position as it was temporary for 1 year. The target award opportunity was established by reference to the terminated Long-Term Incentive Plan award opportunity.

        The Performance Share Award Opportunity as a percent of base salary at each level was established for each Named Executive Officer based on competitive market data as approved by the Compensation Committee.

Stockholder Return

        The return to stockholders in 2007 from the actions accomplished under the Annual Incentive Plan and Restricted Stock Plan long-term incentive opportunity are noted below:

(12)

Does not include the ongoing expected return to stockholders from objectives accomplished under the long-term incentive opportunity.

22

        Deferred Compensation Plan—Company Contributions.    Company contributions to the accounts of the Chief Financial Officer and the Chief Operating Officer were made in order to help defray a portion of the tax impact associated with targeted restricted stock grants they each received in 2007 and to provide an additional retention incentive.

        Targeted Restricted Stock Grants.    Grants of restricted shares were made to certain Named Executive Officers and certain other key members of management in 2007. The decision to make these grants was based primarily on retention concerns. The company's performance had been adversely impacted by rapidly changing market conditions in 2005 and 2006 as a result of which no or very small amounts of incentive compensation was earned. At the same time, the senior management team was in a period of transition with changes in the Chief Operating Officer, Chief Financial Officer, President—France, President—U.S., and Financial Director—France positions having recently been made and changes in other senior positions were in process all of which were occurring at the same time a substantial restructuring of the group's operations was underway. The Compensation Committee determined that retention of the incumbent management team for transition purposes and retention of the new members of the management team was critical during this period. An additional basis for a limited number of the shares granted was recognition of exemplary performance during 2006 under difficult business conditions.

Director Compensation

        The compensation paid to directors generally follows the same principles as apply to Named Executive Officer compensation. Director compensation is market based and closely aligned with the interests of stockholders by allocating one-half of the total compensation to equity. Director compensation is established based on the same type of competitive compensation analysis as is used to set executive compensation. Total Director compensation is targeted at the 50^th percentile of the selected peer group, which consisted of the companies noted below in 2007:

•

Buckeye Technologies, Inc.



•

Caraustar Industries, Inc.



•

Chesapeake Corporation



•

Nashua Corporation



•

Neenah Paper, Inc.



•

P.H. Glatfelter Company



•

Pope & Talbot Inc.



•

Potlatch Corporation

23

•

Wausau Paper Corporation

        Director compensation is more heavily weighted toward meeting fees and equity than the peer group, which reflects the value the Company places on meeting attendance and alignment with stockholders.

        The Board of Directors typically adjusts Director compensation every 2 years. In 2007, the Board of Directors approved the following changes in Director compensation that were effective January 1, 2008.

        Corporate Income Tax Treatment    Base salaries and equity grants under the Restricted Stock Plan, which is being presented for approval by stockholders at this annual meeting, are not considered performance-based compensation for purposes of excluding them from the $1 million limit on non-performance based compensation that can be taken as a corporate income tax deduction under Section 162(m) of the Internal Revenue Code. To date, the Company has not lost any income tax deductions for executive compensation. However, with inflation and other factors, that may soon no longer be the case for the 2 or 3 most highly compensated officers—or in years where management performs well against long-term incentive objectives provided under the Restricted Stock Plan. If approved by stockholders, performance share grants under the Restricted Stock Plan would qualify as deductible performance-based compensation. The Compensation Committee and the Board of Directors evaluates the objective of maximizing the Company's income tax deductions, but does not have a firm policy prohibiting payment of compensation that would not qualify for favorable tax treatment.

        Compensation Approval Process    Each year, the Chief Executive Officer meets with the Chairman of the Compensation Committee and the Compensation Committee's independent consultant to

24

develop and review an executive compensation package for the upcoming year. The annual Competitive Compensation Analysis is also reviewed at that time and any questions concerning its conclusions or the process are vetted. At the Compensation Committee Chairman's discretion, he may meet separately with the independent compensation consultant. Based on this pre-meeting and any follow-up work identified at that time, an executive compensation proposal is prepared and provided to the full Compensation Committee for their review. The Compensation Committee typically meets in November to discuss the executive compensation program. At this meeting, the Compensation Committee will take action on the various components of the executive compensation plan and conclude on its recommendations to the full Board of Directors concerning the establishment of the Corporate Unit Objectives under the Annual Incentive Plan for the upcoming award cycle. The Compensation Committee will also provide recommendations for the Chief Executive Officer's base salary and individual performance objectives for the upcoming year and evaluate his performance against the current year objectives.

        At the December Board of Directors meeting, the Compensation Committee provides a full report on its actions on executive compensation for the upcoming year as well as its estimate of payouts, if any, under the incentive compensation award opportunities for the current year. The Compensation Committee also reports on the equity grants made during the year outside of the incentive compensation plan awards. The Board of Directors will take action on the Corporate Unit Objective for the upcoming year and will address the current and upcoming year compensation for the Chief Executive Officer in the non-management directors meeting. When audited financial results are available or known, the Compensation Committee meets again to confirm performance against objectives and to ratify the final award payments.

Compensation Committee Report

        The Compensation Committee has reviewed and discussed the Comprehensive Compensation Discussion & Analysis with management.

        Based on the review and discussions, the Compensation Committee recommended to the Board of Directors that the Comprehensive Compensation Discussion & Analysis be included in the Company's Proxy Statement and incorporated by reference in the Company's Annual Report in its Form 10-K.

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Summary Compensation

        The executive compensation information reported in the Summary Compensation Table set forth below is for services rendered to the Company and its subsidiaries commencing on January 1, 2007 and ending on December 31, 2007, the last day of the Company's 2007 fiscal year. All compensation earned in the 2007 fiscal year is reported in that year without regard to when actually paid by the Company or deferred by the recipient and therefore not technically received by the recipient in the 2007 fiscal year.

Summary Compensation Table 2007

(1)

Includes unused regular vacation earned in the following amounts: for Mr. Deitrich $6,923 in 2007 and $10,962 in 2006 and for Mr. Roberts $12,700 in 2007 and $12,212 in 2006.

(2)

Other Compensation consisted of $10,125 in matching contributions to the 401(k) savings plan, $4,757 in dividends on restricted stock and $2,500 in matching charitable contributions.

(3)

Restricted stock grants: Mr. Deitrich 100% of the FAS 123R value of an award granted on December 15, 2006 at a share price of $26.96 that vested on December 14, 2007; Mr. Thompson, ¹/2 of the total FAS 123R value of an award granted on December 15, 2006 at a share price of $26.96 that vested on December 14, 2007; Mr. Herbst, approximately ¹/4, ¹/3 and ¹/2 of the total FAS 123R value of awards granted on January 3, 2006, August 1, 2006 and December 15, 2006 at a share prices of $24.59, $19.75 and $26.96, respectively; Mr. Roberts, 100% of the FAS 123R value of awards granted on January 3, 2006 and December 15, 2006 at share prices of $24.59 and $26.96 that vested on December 31, 2006 and December 14, 2007 and Mr. Villoutreix, ¹/4 of the FAS 123 value of an award granted on January 3, 2006 at a share price of $24.59. Dividends are not included in the disclosed stock award value.

(4)

Other Compensation consisted of $9,900 in matching contributions to the 401(k) savings plan and $5,000 for reimbursement of tax preparation fees for years 2001-2005.

(5)

Mr. Thompson became Chief Financial Officer and Treasurer on August 1, 2006. Prior to that time he was President—U.S. Operations.

(6)

Included the following restricted stock grants: Mr. Thompson, ¹/2 of the total FAS 123R value of an award granted on December 15, 2006 at a share price of $26.96, that vested on December 14, 2007 and ¹/3 of the total FAS 123R value of an award granted on January 3, 2007 at a share price of 25.98 that vests on January 3, 2010; Mr. Herbst, approximately ¹/4, ¹/3 and ¹/2 of the total FAS 123R value of awards granted on January 3, 2006, August 1, 2006 and December 15, 2006 at share prices of $24.59, $19.75 and $26.96, respectively that vest on January 1, 2010, August 1, 2010 and December 14, 2007, respectively; Mr. Villoutreix, ¹/4 of the total FAS 123R value of an award granted on January 3, 2006 at a share price of $24.5 and ¹/3 of the total FAS 123R value of an award granted on January 3, 2007 at a share price of $25.98 that vests on January 3, 2010. Dividends are not included in the disclosed stock award value.

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(7)

An increase representing market-based interest on Mr. Thompson's cash balance fund account balance in the Schweitzer-Mauduit International, Inc. Retirement Plan.

(8)

Company contributions to the Deferred Compensation Plan on Mr. Thompson's behalf included $8,579 in 401(k) saving plan contributions that exceeded IRS limitations on qualified plan contributions and $5,000 to partially offset tax liabilities associated with restricted stock grants. The balance of the "Other Compensation" consisted of $13,716 in matching contributions to the 401(k) savings plan, $1,000 reimbursement of tax preparations fees, $1,991 in dividends on restricted stock and $1,200 in company match on charitable donations.

(9)

An increase representing market-based interest on Mr. Thompson's cash balance fund account balance in the Schweitzer-Mauduit International, Inc. Retirement Plan.

(10)

Company contributions to the Deferred Compensation Plan on Mr. Thompson's behalf were $3,670 in 401(k) saving plan contributions that exceeded IRS limitations on qualified plan contributions. The balance of the "Other Compensation" consisted of $12,100 in matching contributions to the 401(k) saving plan, $1,000 in reimbursement of tax preparation fees and $1,064 in spousal travel reimbursement.

(11)

Mr. Herbst was President—Brazilian Operations until August 1, 2006 when he became President—Americas.

(12)

Mr. Herbst's 2006 compensation was paid in Brazilian reais and was converted at the December 31, 2006 exchange rate of 0.46773 reais to the U.S. dollar.

(13)

Company contributions to the Deferred Compensation Plan on Mr. Herbst's behalf included $10,066 in 401(k) saving plan contributions that exceeded IRS limitations on qualified plan contributions and $4,000 to partially offset tax liabilities associated with restricted stock grants. The balance of the "Other Compensation" consisted of $11,366 in matching contributions to the 401(k) savings plan, $6,887 in dividends on restricted stock, relocation expenses of $58,828, estimated tax gross-ups of $34,117 for relocation expenses and $50,000 in estimated income tax gross-ups.

(14)

Includes vacation pay in the amount of $83,215. The vacation amount represents 92 days of accumulated and unused vacation that was payable to Mr. Herbst upon his transfer of employment to the Company under applicable Brazilian law and company vacation policy.

(15)

Company contributions to the Deferred Compensation Plan on Mr. Herbst's behalf were $4,000 to partially offset tax liabilities associated with restricted stock grants. The balance of the "Other Compensation" consisted of $13,985 for a car allowance; $8,172 for gas and maintenance, $5,310 for medical assistance, $3,578 housing allowance and $4,500 in dividends on restricted stock.

(16)

Mr. Roberts was Chief Financial Officer and Treasurer until August 1, 2006.

(17)

Includes an increase of $24,678 in the Schweitzer-Mauduit International, Inc. Retirement Plan and an increase of $3,654 in the Schweitzer-Mauduit International, Inc. Supplemental Pension Plan resulting from an additional year of service that lessens the amount of benefit reduction upon early retirement.

(18)

Company contributions to the Deferred Compensation Plan on Mr. Roberts' behalf were $10,227 in 401(k) savings plan contributions that exceeded IRS limitations on qualified plan contributions. The "Other Compensation" consisted of $10,835 in matching contributions to the 401(k) savings plan, $1,590 in dividends on restricted stock, $1,000 in reimbursement of tax preparation fees and $1,800 in matching charitable gift contributions.

(19)

An increase of $39,481 in the Schweitzer-Mauduit International, Inc. Retirement Plan and an increase of $6,109 in the Schweitzer-Mauduit International, Inc. Supplemental Pension Plan resulting from an additional year of service that lessens the amount of benefit reduction upon early retirement.

(20)

Company contributions to the Deferred Compensation Plan on Mr. Roberts' behalf included the following: $8,279 in 401(k) savings plan contributions that exceeded IRS limitations on qualified plan contributions and $20,000 to partially offset tax liabilities associated with restricted stock grants. The balance of the "Other Compensation" consisted of $1,500 in dividends on restricted stock, $12,021 in matching contributions to the 401(k) savings plan and $1,000 in reimbursement of tax preparation fees.

(21)

Company contributions to the Deferred Compensation Plan on Mr. Villoutreix's behalf included $18,803 in 401(k) savings plan contributions that exceeded IRS limitations on qualified plan contributions and $10,000 to partially offset tax liabilities associated with restricted stock grants. The balance of the "Other Compensation" consisted of $9,000 in dividends on restricted stock; $13,500 in matching contributions to the 401(k) savings plan; $38,156 educational allowance; $107,068 foreign service premium; $50,000 estimated income tax gross-up, $2,137 Medicare gross-up, $9,739 in tax preparation fees. In addition, Mr. Villoutreix received certain benefits directly in France which are reimbursed in euros and were converted at the December 31, 2007 exchange rate of 1.4647 euros to the U.S. dollar. These benefits include: $19,413 car rental; $7,476 apartment rental and $770 for utilities.

(22)

Includes a completion bonus of $33,002 and a guaranteed minimum payment of $132,000 under the Company's Annual Incentive Plan in 2006. Mr. Villoutreix's guaranteed Annual Incentive Plan bonus was converted at the December 31, 2006 exchange rate of 1.32 euros to the U.S. dollar.

(23)

Company contributions to the Deferred Compensation Plan on Mr. Villoutreix's behalf included the following: $7,762 in 401(k) savings plan contributions that exceeded IRS limitations on qualified plan contributions. The balance of the "Other Compensation" consisted of $6,000 in dividends on restricted stock; $13,200 in matching contributions to the 401(k) savings plan; $36,266 educational allowance; $97,937 foreign service premium and $1,974 Medicare gross-up. In addition, Mr. Villoutreix received certain benefits directly in France which are reimbursed in euros and were converted at the December 31. 2006 exchange rate of 1.32 euros to the U.S. dollar. These benefits include: $11,669 car rental; $6,129 apartment rental; $5,659 furniture allowance and $404 for utilities.

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        Mr. Villoutreix is compensated as an expatriate. Mr. Villoutreix, who became the Company's Chief Operating Officer in February 2006, is a U.S. executive based in France. He receives certain income and Medicare tax gross-ups, educational allowances and foreign service payments as a result of this arrangement. In order to induce Mr. Villoutreix to join the Company, his employment offer included a signing bonus, a guaranteed Annual Incentive Plan payout in 2006, a grant of 10,000 shares of restricted stock and a completion bonus of 25,000 euros per year for a 4-year period.

        The expatriate package for Mr. Villoutreix was developed in consultation with KPMG and Towers Perrin, internationally recognized tax and compensation consultants, respectively. The compensation package was reviewed with and approved by the Company's Compensation Committee.

GRANTS OF PLAN-BASED AWARDS

(1)

Grants of restricted stock under the Restricted Stock Plan. Dividends are paid on unvested restricted stock at a rate of 60 cents per year per share from the date of grant.

(2)

For the stock awards with a grant date of 1/3/07 the value is the total FAS 123R value using the January 3, 2007 share price of $25.98. For the stock awards with a grant date of 3/1/07 the value is the total FAS 123R value using the February 28, 2007 share price $23.86. These amounts are not the same as the portion of the award expensed in 2007 under FAS 123R.

(3)

The award is denominated in euros and was converted at the December 31, 2007 exchange rate of 1.4647 euros to the U.S. dollar.

(4)

The award is denominated in euros and was converted at the January 2, 2008 exchange rate of 1.4729 euros to the U.S. dollar

(5)

The award is denominated in euros and was converted at the January 3, 2007 exchange rate of 1.3161 euros to the U.S. dollar.

        In December 2007, a non-equity incentive plan award opportunity was established under the Annual Incentive Plan for the 2008 performance period. The Annual Incentive Plan provides a cash-based award opportunity that may be earned if performance objectives are achieved over a fiscal year period. Objectives are established for unit and individual performance with the individual award component not exceeding 30% of the total award opportunity. Incentive cash opportunities can range from 17.5% to 150% of a participant's 2008 base salary depending on the position held by the participant. The threshold and maximum award opportunities for the Chief Executive Officer and Chief Financial Officer range from 37.5% to 150% and from 22.5% to 90%, respectively, of their 2008 base salary. Unit Objectives, excepting the corporate unit and the Chief Executive Officer's individual objectives, are approved by the Compensation Committee. The full Board of Directors approves the corporate unit objective and the Chief Executive Officer's individual objectives and the Chief Executive Officer approves all other officer's individual objectives.

        The Corporate unit objective established for the 2008 Annual Incentive Plan is increased diluted earnings per share, excluding restructuring charges. The operating unit objectives are increased operating profit, excluding restructuring charges. The threshold level objective for each unit, is typically

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set at the prior year actual for the metric being measured. There is no payout for performance below threshold for any objective and performance against objectives is measured after deducting the compensation expense associated with any payout. The Compensation Committee or the Board of Directors, as applicable, approves the performance objectives and the award opportunity at the beginning of the year and the Compensation Committee approves the measurement of performance against objectives at the end of the year based on the Company's audited financial statements.

        2008 is the last year in the 2007-2008 award cycle of the long-term incentive award opportunity provided under the Restricted Stock Plan. Thirteen performance metrics have been approved for this award opportunity that are directed toward measuring the successful completion of various restructuring activities in each of the Company's areas of operations that are described in further detail in the Comprehensive Compensation Discussion and Analysis found at pages 19-22 herein. These metrics include improvements in operating profit, gross profit, sales volume, employment reductions, product grade costs per standard unit, raw material costs, new product qualifications, maintaining capital project budgets and schedules, maintaining debt to capital ratios and completing transactions on various potential strategic opportunities. The metrics are tailored to each participant's primary responsibilities. Participants at the corporate staff level have all 13 metrics. Each metric and subcomponent within a metric is weighted equally. There is no incremental award earned for performance that falls between metric performance levels. Final performance evaluations that fall between the performance levels will be prorated. Awards earned in 2007, year one of the award cycle, were banked in the form of restricted stock that is granted in 2008, but which does not vest until the final award is determined and all shares earned during the award cycle are vested in 2009. The monetary value of the earned award banked in 2007 is reflected in the column captioned "Stock Awards" in the Summary Compensation Table found at page 26 herein and the 2008 opportunity is reflected in the column captioned "Estimated Future Payouts Under Equity Incentive Plan Awards", in the Grants of Plan Based Awards Table found at page 28 herein. These are estimates based on 2008 base salary and 100% of the recommended multiple for the long-term incentive award opportunity as reflected in the October 2007 Competitive Compensation Analysis conducted by Towers Perrin. The terms of the 2007-2008 award opportunity provide that the annual opportunity for each year is to be adjusted to reflect:

(i)

the base salaries approved by the Compensation Committee for such year;



(ii)

the long-term incentive opportunity multiple developed from the Competitive Compensation Analysis and approved by the Compensation Committee for such year; and



(iii)

the average daily closing share price of the prior year as reported on the New York Stock Exchange composite and the applicable foreign currency exchange rate.

        Participants may earn awards that range from 0% up to 200% of the target performance award opportunity allocated by the Compensation Committee, subject to a stock price multiplier. The Committee sets the target award opportunity at the 50^th percentile of the competitive long-term incentive market multiple (LTI Market Multiple) established by the Competitive Compensation Analysis. The LTI Market Multiple as a percentage of 2008 base salary for the Chief Executive Officer and Chief Financial Officer is 177% and 90%, respectively, and ranges from 130% to 35% for all other participants.

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        The number of shares of restricted stock earned in each year of the 2007-2008 performance award cycle are determined annually following the close of the audited financial accounts based on the following formula:

Base Salary (adjusted for exchange rate if applicable) × Opportunity Award % × Award
        Level Achieved % ÷ Average Base Share Price = Base Shares

Base Shares × Average Current Share Price/Average Base Share Price = Number of Shares Earned in
        Performance Year

Where:

Base Salary—is the salary in effect in January of the year for which performance is being
        measured.

Award Level Opportunity—is the threshold, target, outstanding or maximum award
        opportunity % established by the Compensation Committee for the long-term
        incentive opportunity for the year in which performance is being measured.

Average Base Share Price—is the average of the daily closing share prices reported on the
        New York Stock Exchange's daily composite report for the Company's common
        stock for the prior year period 1/1/2008-12/31/2008 and resets for each year of the award
        cycle, but in no event is the average base share price less than the Average Base
        Share Price for 2006.

Average Current Share Price—is the average of the daily closing share prices reported on the New
        York Stock Exchange's daily composite report for the Company's common stock
        for the full calendar year for which performance is being measured.

Provided that the result of the ratio of the Average Current Share Price/the Average Base Share
        Price shall not be less than 50% nor more than 200% of the Average Current Share Price.

        At the end of each plan year, each participant's goal achievement is evaluated. Threshold performance provides a 25% payout, target a 100% payout, outstanding a 150% payout and maximum a 200% payout. Awards and the associated payout are mathematically determined based on the sum of the performance on all assigned metrics. No awards are earned for performance below threshold.

        The earned number of shares of restricted stock are banked in year one and vest at the point the award for year 2008 is finally determined in March 2009. Banked shares of restricted stock have voting rights and receive dividends.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

(1)

Grants of restricted stock under the Restricted Stock Plan. Dividends are paid on unvested restricted stock at a rate of 60 cents per year per share from the date of grant. Value calculated using December 31, 2007 share price of $25.91 per share.

(2)

The restricted stock vests on January 3, 2010.

(3)

The restricted stock vests 5,000 shares each on January 1, 2010 and August 1, 2010.

(4)

The restricted stock vests 10,000 shares on January 1, 2010 and 5,000 shares on January 3, 2010.

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OPTION EXERCISES AND STOCK VESTED

(1)

All shares vested on December 14, 2007 and are valued at the closing price that day of $24.54 per share.

PENSION BENEFITS

        Messrs. Deitrich, Thompson and Roberts participate in the Company's Retirement Plan, a qualified defined benefit plan. The Retirement Plan had 2 benefit formulas, a final average pay benefit formula applicable to Messrs. Deitrich and Roberts and a cash balance benefit formula applicable to Mr. Thompson. The accrual of additional benefits under the Retirement Plan for both benefit formulas was frozen for all salaried employees, including the Named Executive Officers, effective as of January 1, 2006. Consequently, salaried participants in the final average pay formula benefit accrue no further benefits under the Retirement Plan and salaried participants in the Cash Balance Formula Benefit continue to accrue only annual interest on their account balances after December 31, 2005. The reported benefits are based on the frozen final average earnings accrued benefit for Messrs. Deitrich and Roberts as of December 31, 2005 and the frozen final cash balance account for Mr. Thompson as of December 31, 2005.

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Final Average Pay Formula Benefit

        The final average pay formula benefit entitles each vested salaried U.S. employee participating in that benefit formula to an annual pension benefit at normal retirement equal to 1.50% of final average earnings times the employee's years of service, subject to a deduction for social security benefits or, if greater, 1.125% 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 5 years of Earnings (as defined in the Retirement Plan) out of the last 15 calendar years of covered employment, or over the last 60 months of credited benefit 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.

        Retirement benefits for salaried participants who have at least 5 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 10 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.

Cash Balance Benefit Formula

        Mr. Thompson's cash balance account is credited with an annual interest credit based on the average yield on the 30-year Treasury bill for the November immediately preceding the current Retirement Plan year. The interest credit will continue to be accrued on the account balance after December 31, 2005. Participants have the option to receive their vested account balance as either a lump-sum payment, an immediate single life annuity or a 50% joint and survivor annuity if married when they terminate employment with the Company or become disabled.

Supplemental Retirement Arrangements

        The Company's supplemental retirement arrangements provide 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 Code Section 401(a)(17) and the limitations on benefits under Code Section 415 ("excess benefits").

        All terms and conditions of the Retirement Plan apply equally to the Supplemental Retirement Plan, excepting the Internal Revenue Code Section 401(a)(17) and Internal Revenue Code Section 415 limitations. Effective December 31, 2005, as a result of the freeze in the further accrual of retirement plan benefits for salaried employees, no further benefits will accrue under the supplemental retirement arrangements. The supplemental benefit that was payable to cash balance formula participants was paid in the form of a corporate contribution to the Company's Deferred Compensation Plan and not to the Supplemental Retirement Plan. In general, the Company does not grant extra service or special provisions under its supplemental arrangements.

        Mr. Deitrich is eligible for early retirement with an unreduced benefit. Mr. Roberts is eligible for early retirement with a reduced benefit and he in fact retired effective as of 1/1/08. Mr. Thompson is immediately entitled to his cash account balance upon termination for any reason.

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        Present Values in the Pension Benefits Table are based on the following assumptions:

NONQUALIFIED DEFERRED COMPENSATION PLANS

(1)

All contributions in 2007 relating to 2007 compensation were reported as compensation in the 2007 Summary Compensation Table. Contributions expensed in a prior year are not included.

        The Deferred Compensation Plan permits eligible employees who elect to participate to defer receipt and taxation of a portion of their annual salary and incentive bonuses. The amount of annual salary and incentive bonus awards that may be deferred is limited to 25% and 50%, respectively. Eligibility to participate in the Deferred Compensation Plan is limited to "management" and "highly compensated employees" as defined in the Employee Retirement Income Security Act of 1974, as amended. The Company may, with Compensation Committee approval, make cash contributions to a participant's account in the Deferred Compensation Plan. In connection with the recent changes to the regulations governing deferred compensation plans imposed by the American Jobs Creation Act of 2004, contributions and deferrals into the Deferred Compensation Plan have been frozen to stop the accrual of additional unvested benefits in that plan as of December 31, 2004. Participants will not accrue any additional benefits other than market-based investment earnings or losses on their individual accounts in that plan. Post December 31, 2004 deferrals and corporate contributions go into the Deferred Compensation Plan No. 2. This plan is also a non-qualified, deferred compensation plan. This plan is intended to operate in a manner substantially similar to the Deferred Compensation Plan,

34

subject to those new requirements and changes mandated under Section 409A of the Internal Revenue Code of 1986, as amended.

        Amounts deferred into the Deferred Compensation Plan by a participating officer, or contributed on the officer's behalf by the Company, can be invested at the officer's election in an account that tracks, but does not actually invest in, some of the fund elections available under the Company's 401(k) savings plan. The participating officer bears the investment risk. The Company makes no guaranty as to the return of the principal amount of any funds deferred or of any income thereon. The funds remain subject to the Company's creditors while in the Deferred Compensation Plan.

        Certain amounts paid as retirement benefits have also been contributed to the accounts of certain officers in the Deferred Compensation Plan that received a retirement benefit under the Cash Balance Formula. These contributions earn annual interest equal to the 30-year Treasury bill rate. These contributions are discussed in further detail under the caption Supplemental Retirement Arrangements at page 33.

        A Participant may elect to receive payment of the vested amount credited to his Deferral Account based on a Participant deferral in a single lump sum or in 5, or 10 annual installments. No payments may commence in less than 5 years following the date of the deferral election, except in the case of retirement. Alternative distributions may occur in certain defined circumstances including disability, death of participant, separation from service, change of control and unforeseeable emergency; as such terms are defined in the plan.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

        The Company's Executive Severance Plan (the "Severance Plan") provides that in the event of termination of a participant's employment with the Company or one of its French affiliates for any reason other than death, disability or retirement within 2 years after a change of control of the Company, a participant will be entitled to salary and benefit continuation. A change of control is defined as 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.

        In the event of termination as a result of a change of control, participants employed in the United States will be entitled to:

(i)

receive a cash payment in an amount equal to 3 times the highest annual compensation (base salary and annual incentive awards) paid or payable within the 3 year period ending on the date of termination;



(ii)

receive health and dental benefits from the Company for a period of 3 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 the participant had continued participation in those plans for 3 years following termination. The Executive Severance Plan was amended in November 2005 to provide that the calculation of the actuarial equivalent of the accrued benefit would be based on the terms of the Retirement Plan prior to the effective date of the freeze of the accrual of further Retirement Plan benefits for salaried employees that was effective December 31, 2005.

35

        A participant employed by one of the Company's French subsidiaries 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.

        Upon a change of control, all restricted stock, stock options and corporate deferred compensation plan contributions that have been granted, but not yet vested, vest automatically. Under the Annual Incentive Plan, the participant is entitled to payment of a pro rata portion of the incentive award at the target performance percentage, without regard to achievement of pre-established objectives. Under the Long-Term Incentive Plan, the participant will receive a pro rata portion of the performance awards allotted to the participant also based upon target performance. The Long-Term Incentive Plan also contains a provision for such an award in the event of a constructive discharge following a change of control or potential change of control. Constructive discharge is deemed to have occurred upon any of the following actions taken by the Company or an Affiliate without the participant's written consent following a potential change of control: (a) the assignment of duties inconsistent with, or the reduction of the powers, duties, responsibilities, and prerogatives associated with, the participant's position, office, and status with the Company or an Affiliate; (b) a demotion of the participant or any removal of the participant from or failure to re-elect or reappoint the participant to any title or office; (c) a reduction in the participant's base salary or bonus potential or the Company's or an Affiliate's failure to increase the participant's base salary (within 12 months of the participant's last increase in base salary); and (d) any other similar actions or inactions by the Company or an Affiliate.

        A potential change of control is defined as the date as of which: (a) the Company enters into an agreement the consummation of which, or the approval by stockholders of which, would constitute a Change of Control; (b) proxies for the election of Directors of the Company are solicited by anyone other than the Company; (c) any person (including, but not limited to, any individual, partnership, joint venture, corporation, association or trust) publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change of Control; or (d) any other event occurs which is deemed to be a Potential Change of Control by the Board and the Board adopts a resolution to the effect that a Potential Change of Control has occurred.

        The Company 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 Company establishes 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 2-year period following a change of control of the Company without the consent of all of the participants. The Company has agreements under the Severance Plan with the Named Executive Officers and certain other key employees.

        The maximum amounts payable upon termination pursuant to the Executive Severance Plan with the Named Executive Officers, assuming that a change of control of the Company and the termination of their employment on a basis that triggers plan benefits had occurred on December 31, 2007, are set forth in the following tables.

36

Potential Payments to Wayne H. Deitrich Upon Retirement,
Termination or Change in Control as of December 31, 2007

(1)

24 months base salary.

(2)

24 months 2007 salary for disability only.

37

Potential Payments to Peter J. Thompson Upon Retirement,
Termination or Change in Control as of December 31, 2007

(1)

12 months base salary.

(2)

Disability only.

38

Potential Payments to Otto R. Herbst Upon Retirement,
Termination or Change in Control as of December 31, 2007

(1)

Prorated for 1/1 and 8/1/2006 grants of 5,000 shares each at the share price of $25.91.

(2)

Based on 12/31/07 closing price of $25.91.

39

Potential Payments to Paul C. Roberts Upon Retirement,
Termination or Change in Control as of December 31, 2007