Exhibit 10.2
AGREEMENT
AGREEMENT by and between Solutia Inc., a Delaware corporation (the
"Company"), and Xxxxxxxx X. Xxxxxx (the "Executive"), dated as of the 1st
day of August, 2005 (the "Effective Date").
The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stakeholders to
assure that the Company will have the continued dedication of the Executive
until and for a period of time following the Emergence Date (as defined
below). To induce the Executive to continue to serve the Company through and
beyond the Emergence Date, the Company will provide the Executive with,
among other things, a special emergence bonus. It is the Board's judgment
that such a special emergence bonus arrangement is in the best interest of
the Company and its stakeholders, and is consistent with the desire of the
Board to maximize the value of the Company. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into
this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Special Emergence Bonus.
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At such time, if ever (the "Emergence Date"), at which the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court") shall have confirmed a plan of reorganization of the
Company under Chapter 11 of the United States Bankruptcy Code (the "Chapter
11 Case") and such plan shall have become effective, if the Executive is
employed by the Company on the Emergence Date the Executive shall be
eligible to receive a special emergence bonus as follows:
(a) If the Executive is employed by the Company on the
six-month anniversary of the Emergence Date, or if, on or subsequent to the
Emergence Date but prior to the six-month anniversary thereof, Executive
shall have been terminated by the Company without Cause, shall have resigned
for Good Reason, or shall have died or been terminated for Disability, then
Executive shall be entitled to receive from the Company a special emergence
bonus of up to $1,500,000, being the maximum amount of the bonus pool
established hereunder for the Executive and which bonus shall be determined
pursuant to and in accordance with the performance measures and payment
terms of the Solutia Inc. Emergence Incentive Bonus Program in which the
Company's Chief Executive Officer participates.
(b) If the Executive shall voluntarily terminate his
employment other than for Good Reason or shall be terminated by the Company
for Cause, in either case between the Emergence Date and the six-month
anniversary thereof, then Executive shall forfeit any and all right to
receive a special emergence bonus hereunder.
2. Employment Period. The Company hereby agrees to continue the
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Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period (the "Employment Period") commencing on the Effective Date
and ending on the date that is the six month anniversary of the Emergence
Date. Where the context permits, all references to the Company shall include
an affiliate of the Company by which the Executive is employed. As used in
this Agreement, the term "affiliate"
or "affiliated companies" shall include any company controlled by,
controlling or under common control with the Company. The obligations of the
Company and the Executive under this Agreement including, without
limitation, the obligations under Sections 1, 5, 6 and 7, shall survive the
termination of the Employment Period to the extent necessary to accomplish
the purposes thereof.
3. Terms of Employment.
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(a) Position and Duties.
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(i) During the Employment Period, (A) the
Executive shall serve as Senior Vice President and President
Integrated Nylon reporting directly to the Company's Chief
Executive Officer, with authority, duties and responsibilities
consistent with such position and as may be reasonably assigned to
him from time to time by the Company's Chief Executive Officer and
(B) the Executive's services shall be performed at the location
where the Executive was employed immediately preceding the
Effective Date or at any office or location of the Company not more
than 50 miles from the Company's headquarters in St. Louis,
Missouri.
(ii) During the Employment Period, the Executive
shall serve the Company faithfully, diligently and to the best of
his ability, and shall devote substantially all of his time and
efforts during normal business hours to the business and affairs of
the Company. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) deliver
lectures, fulfill speaking engagements or teach at educational
institutions, and (B) manage personal investments, so long as such
activities described in clauses A and B do not interfere with the
performance of the Executive's responsibilities as an employee of
the Company in accordance with this Agreement, and (C) with the
advance approval of the Board, serve on corporate, civic or
charitable boards or committees.
(b) Compensation.
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(i) Base Salary. During the Employment Period,
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the Executive shall receive an annual base salary ("Annual Base
Salary") of not less than $350,000, which shall be paid in
accordance with the Company's normal payroll practices.
(ii) Annual Bonuses. In addition to Annual Base
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Salary, the Executive shall participate in the Company's Annual
Incentive Program, or any successor annual bonus plan(s), with a
target annual bonus opportunity of 100% of his Annual Base Salary.
In addition, during the Employment Period, the Executive shall be
entitled to participate in all long-term and other incentive plans,
practices, policies and programs generally applicable to senior
executive officers of the Company and its affiliated companies.
(iii) Savings and Retirement Plans. During the
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Employment Period, the Executive shall be entitled to participate
in all savings and retirement plans, practices, policies and
programs generally applicable to senior executive officers of the
Company
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and its affiliated companies, subject to the Board's authority to
modify or terminate any such plans, practices, policies or programs
on a Company-wide basis at any time.
(iv) Welfare Benefit Plans. During the Employment
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Period, the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and
programs provided by the Company and its affiliated companies
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs)
to the extent generally applicable to senior executive officers of
the Company and its affiliated companies, subject to the Board's
authority to modify or terminate any such plans, practices,
policies or programs on a Company-wide basis at any time.
(v) Expenses. During the Employment Period, the
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Executive shall be entitled to receive prompt reimbursement, in
accordance with Company policy, for all reasonable expenses
incurred by the Executive in performing his duties hereunder.
(vi) Vacation. During the Employment Period, the
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Executive shall be entitled to paid vacation in accordance with the
plans, policies, programs and practices of the Company and its
affiliated companies as in effect from time to time.
4. Termination of Employment.
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(a) Death or Disability. The Executive's employment shall
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terminate automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 9(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" shall mean
the Executive's long term disability for purposes of any reasonable
occupation as determined under the Company's disability plan that is
applicable to the Executive.
(b) Cause. The Company may terminate the Executive's
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employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the willful and continued failure of the
Executive to perform substantially the Executive's duties with the
Company or one of its affiliates (other than any such failure
resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the
Executive by the Board of the Company which specifically identifies
the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties,
(ii) the willful engaging by the Executive in
illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company;
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(iii) the Executive's conviction of, or plea of
guilty or no contest to, a felony or any other crime involving
moral turpitude, fraud, theft, embezzlement or dishonesty; or
(iv) the Executive's habitual drug or alcohol
abuse.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of
a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel,
in the case of conduct described in subparagraph (i) or (ii) above, to be
heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph
(i),(ii), (iii) or (iv) above, and specifying the particulars thereof in
detail.
(c) Good Reason. The Executive's employment may be
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terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) a material failure by the Company to comply
with any of the provisions of Section 3(b) of this Agreement
relating to compensation, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(ii) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's position as
Senior Vice President and President - Integrated Nylon and the
authority, duties and responsibilities contemplated by Section 3(a)
of this Agreement, or any other action by the Company which results
in a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive; provided, that, a sale by the
Company of subtantially all of its assets shall constitute a
diminution in Executive's position, authority, duties and
responsibilities for purposes of this Section 4(c)(ii);
(iii) the Company's requiring the Executive to be
based at any office or location other than as provided in Section
3(a)(i)(B) hereof or the Company's requiring the Executive to
travel on Company business to a substantially greater extent than
required immediately prior to the Effective Date; provided,
however, that the requirement that Executive undertake such
additional travel away from St. Louis, Missouri as is
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reasonably required to enable him to fulfill his responsibilities
in connection with the Chapter 11 case shall not constitute "Good
Reason"; or
(iv) the failure of the Company and the Executive
to enter into a new employment agreement by the last day of the
Employment Period.
If the Executive terminates his employment for Good Reason pursuant to
subparagraph (ii) above as a result of a sale by the Company of
substantially all of its assets, then the Executive shall make himself
available to the Company as a paid independent consultant for such fee, at
such times, over such period of time and for such number of hours as the
parties shall reasonably agree, taking account of any new employment that
the Executive may undertake.
(d) Notice of Termination. Any termination by the Company
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for Cause, or by the Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with
Section 9(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after
the giving of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i)
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if the Executive's employment is terminated by the Company for Cause, or by
the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if
the Executive's employment is terminated by the Company other than for Cause
or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the
Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.
5. Obligations of the Company upon Termination.
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(a) Good Reason; Other Than for Cause. If, during the
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Employment Period, the Company shall terminate the Executive's employment
other than for Cause or the Executive shall terminate employment for Good
Reason:
(i) the Company shall pay to the Executive in a
lump sum in cash within ten days of the Date of
Termination (or, solely with respect to any payment to be
made pursuant to Section 5(a)(i)(C) below, such other time
as specified therein), the aggregate of the following
amounts:
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A. the sum of (1) the Executive's
accrued Annual Base Salary through the Date of
Termination, (2) any annual bonus earned by the Executive
with respect to the previous year, and (3) any accrued
vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1), (2)
and (3) shall be hereinafter referred to as the "Accrued
Obligations"); and
B. an amount equal to 200% of the
Executive's Annual Base Salary immediately prior to the
Date of Termination (the "Severance Payment"), provided
that if the Executive's Date of Termination occurs prior
to the date that any amount is paid or becomes payable to
the Executive under the Solutia Inc. Emergence Incentive
Bonus Program (whether pursuant to Section 1 or Section
5(a)(i)(C) hereof or otherwise), the amount of the
Severance Payment shall be credited against any amounts
subsequently paid to (or due to be paid to) the Executive
under the Solutia Inc. Emergence Incentive Bonus Program;
and
C. if the Date of Termination is on or
subsequent to the Emergence Date, subject to the
provisions of Section 5(a)(i)(B) hereof, the Executive
shall receive the amount, if any, to which he is entitled
under the Solutia Inc. Emergence Incentive Bonus Program
at such time as amounts are payable.
(ii) subject to the provisions of Section 9(f)
hereof, to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or
benefits, excluding any severance or separation pay or benefits,
required to be paid or provided or which the Executive is eligible
to receive under any plan, program, policy, practice, contract or
agreement of the Company and its affiliated companies, including,
without limitation, the vested benefit, if any, of the Executive
under any qualified defined benefit or defined contribution
retirement plan of the Company and its affiliated companies in
which the Executive participates, in accordance with the terms of
such plan (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits");
(iii) the Company shall continue to provide at
its expense (on the same basis as at the Executive's Date of
Termination) for the continued participation of the Executive and,
to the extent applicable, his family, in the Company's medical,
dental, vision and life insurance plans and programs, for a period
of four months commencing with the Date of Termination; and
(iv) the Company shall provide the Executive with
outplacement services during the twelve month period commencing
with the Date of Termination up to an aggregate cost of $25,000.
(b) Death. If the Executive's employment is terminated by
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reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for timely payment or
provision of the following:
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(i) Accrued Obligations;
(ii) Other Benefits; and
(iii) if such termination occurs on or after the Emergence
Date but not later than the six-month anniversary thereof, the amount, if
any, to which Executive is entitled under the Solutia Inc. Emergence
Incentive Bonus Program.
Accrued Obligations shall be paid to the Executive's estate or beneficiary,
as applicable, in a lump sum in cash within 30 days of the Date of
Termination.
Amounts to be paid under Section 5(b)(ii), other than benefits due from
retirement plans tax qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended ("Code")("TQ Plans"), and 5(b)(iii) shall be paid
no later than 2 1/2 months after the end of the year in which the Executive
dies.
(c) Disability. If the Executive's employment is
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terminated by reason of the Executive's Disability during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive, other than for timely payment or provision of the following:
(i) Accrued Obligations;
(ii) Other Benefits; and
(iii) if such termination occurs on or after the Emergence
Date but not later than the six-month anniversary thereof, the amount, if
any, to which Executive is entitled under the Solutia Inc. Emergence
Incentive Bonus Program.
Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination.
Amounts to be paid under Sections5(c)(ii), other than TQ Plans, and
5(c)(iii) shall be paid no later than 2 1/2 months after the year in which
the Executive's employment terminates by reason of Disability.
(d) Cause; Other than for Good Reason. If the Executive's
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employment shall be terminated for Cause during the Employment Period, or if
the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall
terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits.
In such case, all Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination.
6. Full Settlement; Legal Fees. The Company's obligation to make
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the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts
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payable to the Executive under any of the provisions of this Agreement, and
such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay, to the full extent permitted by law,
all legal fees and expenses which the Executive may reasonably incur as a
result of any contest, in which the Executive is the prevailing party, by
the Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (whether such contest is between the Company and the
Executive or between either of them and any third party, and including as a
result of any contest by the Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any payment from
the time at which the liability for the applicable legal fees and expenses
was incurred by Executive, at the applicable Federal rate provided for in
Section 7872(f) (2)(A) of the Internal Revenue Code of 1986, as amended (the
"Code").
7. Confidential Information and Competitive Activity.
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(a) Confidential Information. As used herein,
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"Confidential Information" means all technical and business information of
the Company and its affiliated companies, whether patentable or not, which
is of a confidential, trade secret and/or proprietary character and which is
either developed by the Executive (alone or with others) or to which the
Executive has had access during the Executive's employment. "Confidential
Information" shall also include confidential evaluations of, and the
confidential use or non-use by the Company or any affiliated company of,
technical or business information in the public domain.
The Executive shall use the Executive's best efforts and diligence
both during and after employment by the Company to protect the confidential,
trade secret and/or proprietary character of all Confidential Information.
The Executive shall not, directly or indirectly, use (for the Executive or
another) or disclose any Confidential Information, for so long as it shall
remain proprietary or protectible as confidential or trade secret
information, except as may be necessary for the performance of the
Executive's duties with the Company.
The Executive shall deliver promptly to the Company, at the
termination of the Executive's employment, or at any other time at the
Company's request, without retaining any copies, all documents and other
material in the Executive's possession relating, directly or indirectly, to
any Confidential Information.
Each of the Executive's obligations in this Section shall also
apply to the confidential, trade secret and proprietary information learned
or acquired by the Executive during the Executive's employment from others
with whom the Company or any affiliated company has a business relationship.
The Executive understands that the Executive is not to disclose to
the Company or any affiliated company, or use for its benefit, any of the
confidential, trade secret or proprietary information of others, including
any of the Executive's former employers.
(b) Competitive Activity; Nonsolicitation. In the event
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that, during the Employment Period, Executive shall voluntarily terminate
his employment hereunder, be terminated by the Company without Cause, or
terminate his employment hereunder for Good
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Reason, then the Executive shall not, directly or indirectly (whether as
owner, partner, consultant, employee or otherwise), at any time during the
six months following termination of his employment with the Company or any
affiliate for any reason, engage in or contribute his knowledge to any work
or activity that involves a product, process, apparatus, service or
development which is then competitive with or similar to a product, process,
apparatus, service or development on which he worked or with respect to
which he had access to Confidential Information while employed by the
Company or an affiliate at any time during the period of five years
immediately prior to his Date of Termination ("Competitive Work"). However,
the Executive shall be permitted to engage in such proposed work or
activity, and the Company shall furnish him a written consent to that effect
signed by an officer of the Company, if the Executive shall have furnished
to the Company clear and convincing written evidence, including assurances
from the Executive and his new employer, that the fulfillment of his duties
in such proposed work or activity would not likely cause him to disclose,
base judgment upon, or use any Confidential Information. In addition, during
his employment by the Company or an affiliate and for a period of six months
thereafter, the Executive shall not, directly or indirectly, (i) induce or
attempt to induce a salaried employee of the Company or any of its
affiliates to accept employment or affiliation involving Competitive Work
with another firm or corporation of which the Executive is an employee,
owner, partner or consultant, or (ii) induce or attempt to induce any
customer, supplier, licensee or other person having a business relationship
with the Company to cease doing business with the Company or interfere
materially with the relationship between the Company and any such customer,
supplier, licensee or other person having a business relationship with the
Company.
(c) Injunctive Relief. Executive agrees that the
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restrictions imposed upon him by this Section 7 are fair and reasonable
considering the nature of the Company's business and are reasonably required
for the protection of the Company. Executive also acknowledges that a breach
of any of the provisions of this Section 7 may result in continuing and
irreparable damages to the Company for which there may be no adequate remedy
at law, and that the Company, in addition to all other relief available to
it, shall be entitled to the issuance of a temporary restraining order,
preliminary injunction and permanent injunction restraining the Executive
from committing or continuing to commit any breach of the provisions of this
Section 7.
(d) Blue Pencil. If, at any time, the provisions of this
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Section 7 shall be determined to be invalid or unenforceable under any
applicable law, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Agreement shall be considered divisible
and shall become and be immediately amended to only such area, duration and
scope of activity as shall be determined to be reasonable and enforceable by
the court or other body having jurisdiction over the matter and the
Executive and the Company agree that this Agreement as amended shall be
valid and binding as though any invalid or unenforceable provision had not
been included herein.
8. Successors.
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(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the
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laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
9. Miscellaneous.
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(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Xxxxxxxx X. Xxxxxx
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If to the Company:
Xxxxxxxx X. Xxxxx
Senior Vice President, General Counsel and Corporate Secretary
Solutia Inc.
X.X. Xxx 00000
Xx. Xxxxx, XX 00000-0000
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
(d) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or the failure
to assert any right the Executive or the
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Company may have hereunder shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.
(f) This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements, oral and written, between the parties hereto with
respect to the subject matter hereof. Further, this Agreement also
supersedes, without limitation, and any other prior employment agreement
between the Company and the Executive and the Executive waives all rights
with respect to such agreements, including, without limitation, any claims
for damages related to such agreements; provided, that this Agreement shall
have no effect on the Executive's rights under any plan, program, policy or
practice provided by the Company or any of its affiliated companies except
that the benefits and other payments provided for pursuant to Section 5
hereof shall be in lieu of any severance or separation pay or benefits to
which the Executive might otherwise be entitled under any plan, program,
policy or arrangement of the Company and its affiliates.
(g) No amounts shall be payable pursuant to Section
5(a)(i)(B), 5(a)(i)(C) or 5(d) of this Agreement unless and until the
Executive shall have executed and delivered a waiver and release of claims
against the Company substantially in the form attached hereto as Exhibit A.
(h) Except as otherwise provided by Section 7(c), in the
event of any dispute, controversy or claim arising out of or relating to
this Agreement or Executive's employment or termination thereof, the parties
hereby agree to settle such dispute, controversy or claim in a binding
arbitration by a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, which arbitration
shall be conducted in St. Louis, Missouri. The parties agree that the
arbitral award shall be final and non-appealable and, except as otherwise
provided by Section 7(c), shall be the sole and exclusive remedy between the
parties hereunder. The parties agree that judgment on the arbitral award may
be entered in any court having competent jurisdiction over the parties or
their assets.
10. Code Section 409A. Compliance. The arrangements under this
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Agreement are not intended to create "deferred compensation" within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code") and any rulings or regulations thereunder, including IRS Notice
2005-1, and all provisions of this Agreement shall be interpreted
consistently with such intent. Further, in the event that (a) the Company
determines that there is an ambiguity with respect to any provision of this
Agreement that could cause such provision to result in an obligation to pay
deferred compensation subject to Section 409A of the Code, such ambiguity
shall be interpreted and resolved in the manner that the Company deems
necessary to either avoid the obligation to pay deferred compensation within
the meaning of Section 409A of the Code or to comply with timing and payment
provisions of Section 409A of the Code, and (b) the Company determines, in
good faith, that any amendment to this Agreement is necessary or appropriate
in order to comply with timing and payment provisions of Section 409A of the
Code or to avoid the obligation to pay deferred compensation within the
meaning of Section 409A of the Code, the Company shall have the right to
make such amendment, on a prospective or retroactive basis, in its sole
discretion.
11. Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same
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agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party in original
or facsimile form.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ Xxxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxxx X. Xxxxxx
SOLUTIA INC.
By /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
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Exhibit A
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WAIVER AND RELEASE
Reference is made to that Agreement (the "Agreement"), dated as of
August 1, 2005, by and between Solutia, Inc., a Delaware Corporation (the
"Company"), and Xxxxxxxx X. Xxxxxx (the "Executive"). This Waiver and
Release (this "Waiver") is made as of the __ day of ____________, 200_, by
the Executive pursuant to Section 9(g) of the Agreement.
Release and Waiver of Claims Against the Company
------------------------------------------------
(a) The Executive, on behalf of himself, his agents, heirs,
successors, assigns, executors and administrators, in consideration for the
payments and other consideration provided for under the Agreement, hereby
forever releases and discharges the Company and its successors, their
affiliated entities, and their past and present directors, employees,
agents, attorneys, accountants, representatives, plan fiduciaries,
successors and assigns from any and all known and unknown causes of action,
actions, judgments, liens, indebtedness, damages, losses, claims,
liabilities, and demands of whatsoever kind and character in any manner
whatsoever arising on or prior to the date of this Waiver, including but not
limited to (i) any claim for breach of contract, breach of implied covenant,
breach of oral or written promise, wrongful termination, intentional
infliction of emotional distress, defamation, interference with contract
relations or prospective economic advantage, negligence, misrepresentation
or employment discrimination, and including without limitation alleged
violations of Title VII of the Civil Rights Act of 1964, as amended,
prohibiting discrimination based on race, color, religion, sex or national
origin; the Family and Medical Leave Act; the Americans With Disabilities
Act; the Age Discrimination in Employment Act; other federal, state and
local laws, ordinances and regulations; and any unemployment or workers'
compensation law, excepting only those obligations of the Company expressly
recited in the Agreement or this Waiver and any claims to benefits under the
Company's employee benefit plans as defined exclusively in written plan
documents; (ii) any and all liability that was or may have been alleged
against or imputed to the Company by the Executive or by anyone acting on
his behalf; (iii) all claims for wages, monetary or equitable relief,
employment or reemployment with the Company in any position, and any
punitive, compensatory or liquidated damages; and (iv) all rights to and
claims for attorneys' fees and costs except as otherwise provided herein or
in the Agreement.
(b) The Executive shall not file or cause to be filed any action,
suit, claim, charge or proceeding with any federal, state or local court or
agency relating to any claim within the scope of this Waiver. In the event
there is presently pending any action, suit, claim, charge or proceeding
within the scope of this Waiver, or if such a proceeding is commenced in the
future, the Executive shall promptly withdraw it, with prejudice, to the
extent he has the power to do so. The Executive represents and warrants that
he has not assigned any claim released herein, or authorized any other
person to assert any claim on his behalf.
(c) In the event any action, suit, claim, charge or proceeding
within the scope of this Waiver is brought by any government agency,
putative class representative or other third party to vindicate any alleged
rights of the Executive, (i) the Executive shall, except to the extent
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required or compelled by law, legal process or subpoena, refrain from
participating, testifying or producing documents therein, and (ii) all
damages, inclusive of attorneys' fees, if any, required to be paid to the
Executive by the Company as a consequence of such action, suit, claim,
charge or proceeding shall be repaid to the Company by the Executive within
ten (10) days of his receipt thereof.
(d) In the event of a breach of this Waiver by the Executive, the
Company's obligations pursuant to the Agreement shall cease as of the date
of such breach. Furthermore, the Executive understands that his breach of
the provisions of this Waiver will cause monetary damages to the Company.
Thus, should the Executive breach the provisions of this Waiver, he shall be
required to pay the Company, as liquidated damages, the amount of the
consideration paid by the Company to the Executive pursuant to the Agreement
plus all costs and expenses, including all attorneys' fees and expenses,
that the Company incurs in enforcing this Waiver. The Executive agrees that
the foregoing amount of liquidated damages is reasonable and necessary, and
does not constitute a penalty.
Voluntary Execution of Waiver.
------------------------------
BY HIS SIGNATURE BELOW, THE EXECUTIVE ACKNOWLEDGES THAT:
(A) I HAVE RECEIVED A COPY OF THIS WAIVER AND WAS OFFERED A PERIOD
OF TWENTY-ONE (21) DAYS TO REVIEW AND CONSIDER IT;
(B) IF I SIGN THIS WAIVER PRIOR TO THE EXPIRATION OF TWENTY-ONE
(21) DAYS, I KNOWINGLY AND VOLUNTARILY WAIVE AND GIVE UP THIS RIGHT OF
REVIEW;
(C) I HAVE THE RIGHT TO REVOKE THIS WAIVER FOR A PERIOD OF SEVEN
(7) DAYS AFTER I SIGN IT BY MAILING OR DELIVERING A WRITTEN NOTICE OF
REVOCATION TO THE COMPANY'S GENERAL COUNSEL, NO LATER THAN THE CLOSE OF
BUSINESS ON THE SEVENTH DAY AFTER THE DAY ON WHICH I SIGNED THIS WAIVER;
(D) THIS WAIVER SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
SEVEN DAY REVOCATION PERIOD HAS EXPIRED WITHOUT THE WAIVER HAVING BEEN
REVOKED;
(E) THIS WAIVER WILL BE FINAL AND BINDING AFTER THE EXPIRATION OF
THE REVOCATION PERIOD REFERRED TO IN (C). I AGREE NOT TO CHALLENGE ITS
ENFORCEABILITY;
(F) I AM AWARE OF MY RIGHT TO CONSULT AN ATTORNEY, HAVE BEEN
ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY, AND HAVE HAD THE OPPORTUNITY
TO CONSULT WITH AN ATTORNEY, IF DESIRED, PRIOR TO SIGNING THIS WAIVER;
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(G) NO PROMISE OR INDUCEMENT FOR THIS WAIVER HAS BEEN MADE EXCEPT
AS SET FORTH IN THIS WAIVER;
(H) I AM LEGALLY COMPETENT TO EXECUTE THIS WAIVER AND ACCEPT FULL
RESPONSIBILITY FOR IT; AND
(I) I HAVE CAREFULLY READ THIS WAIVER, ACKNOWLEDGE THAT I HAVE NOT
RELIED ON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN
THIS DOCUMENT OR THE AGREEMENT, AND WARRANT AND REPRESENT THAT I AM SIGNING
THIS WAIVER KNOWINGLY AND VOLUNTARILY.
Intending to be legally bound, I have signed this Waiver as of the
date first set forth above.
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Xxxxxxxx X. Xxxxxx
15
