Exhibit 10(y)
FORM OF AGREEMENT
AGREEMENT by and among Solutia, Inc., a Delaware corporation
("Solutia"), CPFilms, Inc., a Delaware corporation and wholly owned
subsidiary of Solutia ("CPF"; and together with Solutia collectively, the
"Company"), and Xxxx X. Xxxxxx (the "Executive"), dated as of ____________,
2006 (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). 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. Emergence Date. The Emergence Date means at such time, if ever,
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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.
2. Employment Period. The Company hereby agrees to employ the
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Executive, 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 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, the Executive
shall serve as Senior Vice President, Solutia Inc. and President,
CPFilms 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.
(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 $300,000, 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 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.
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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;
(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
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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, Solutia Inc. and President, CPFilms 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); or
(iii) 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 30 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.
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(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 the aggregate of the following amounts:
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").
(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 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 (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 basic life insurance plans and programs, for a period of four
months commencing with the Date of Termination; and
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(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:
(i) Accrued Obligations, and
(ii) Other Benefits.
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") 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, and
(ii) Other Benefits.
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 Sections 5(c)(ii), other than TQ Plans 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, Competitive Activity and
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Nonsolicitation.
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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.
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(b) Covenant Not to Compete.
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(i) Definitions. For purposes of this Section, in addition
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to terms defined elsewhere herein, the following capitalized terms have the
following meanings.
(A) "Affiliate" means: (i) any Person which, directly
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or indirectly, is in control of, is controlled by
or is under common control with the party for
whom an affiliate is being determined; (ii) any
Person who is a director or officer of any Person
described in clause (i) above or of the party for
whom an affiliate is being determined; or (iii)
any partner (general or limited), trustee,
beneficiary, spouse, child or sibling of any
Person described in clause (i) above or of the
party for whom an affiliate is being determined.
For purposes hereof, control of a Person means
the power, direct or indirect, to: (x) vote 5% or
more of the securities having ordinary voting
power for the election of directors (or
comparable positions) of such Person; or (y)
direct or cause the direction of the management
and policies of such Person, whether by contract
or otherwise and either alone or in conjunction
with others.
(B) "Business" means any business in which CPF is
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currently engaged, including, but not limited to,
the business of designing, manufacturing and
selling window film, precision coated films, tint
or shading products and related services and any
other businesses which CPF may engage in or
substantially contemplate engaging in through
formal evaluation or study during the Employment
Period.
(C) "Person" means any natural person, corporation,
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limited partnership, general partnership, joint
venture, association, company, trust, joint stock
company, bank, trust company, land trust, vehicle
trust, business trust, real estate investment
trust, estate, limited liability company, limited
liability partnership or other organization
irrespective of whether it is a legal entity, and
any governmental authority.
(D) "Non-Compete Term" means the Employment Period
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for so long as it is in effect and regardless of
the reason it ends and the two (2) year period
thereafter.
(ii) Restrictions on Competition. Except on behalf of or
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as directed by the Company, Executive shall not, during the Non-Compete
Term, directly or indirectly, anywhere in the world: (i) engage in the
Business; (ii) engage in any business which is in competition with CPF;
(iii) invest in any Person which is engaged in the Business or is engaged in
any business which is in competition with CPF; (iv) be employed by or
provide consulting services to any Person engaged in the Business or engaged
in any business which is in competition with CPF; or (v) solicit, attempt to
solicit, call upon, or otherwise accept for his own benefit or for the
benefit of any other Person, any client or customer of CPF or in any way
attempt to divert business from CPF (or its respective Affiliates, successors
and assigns); or (vi) attempt to interfere with CPF's relationship with any
of its customers.
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(c) Non-Solicitation of Employees. Executive agrees that,
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so long as he is employed by the Company and for a period of two (2) years
after the termination of his employment for any reason whatsoever
(regardless of which party terminates the employment relationship), he shall
not, without the prior written approval of the Company (which approval may
be granted or withheld in the Company's sole discretion), either
individually or through an Affiliate, anywhere in the world, solicit,
recruit, hire, attempt to hire, interfere with or otherwise accept services
from any employee or independent contractor engaged by CPF within the
preceding twelve (12) months or induce any employee or independent
contractor engaged by CPF within the preceding twelve (12) months to
terminate their relationship with CPF. This restriction is intended to
protect CPF confidential business information, trade secrets, customer
relationships, supply relationships, goodwill and loyalty.
(d) Permitted Investments. Anything herein to the contrary
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notwithstanding, an investment by Executive in publicly traded stock of a
Person which is engaged in the Business or is engaged in any business which
is in competition with CPF shall not violate Section 7(b)(ii) hereof
provided that Executive and all Affiliates of Executive own, in the
aggregate, less than 2% of all the issued and outstanding stock of such
Person.
(e) Restrictions, Reasonable Review. Executive hereby
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agrees that the restrictions set forth in this Section 7 are an integral
aspect of this Agreement and are reasonable and necessary and, accordingly,
that the Company (and their respective Affiliates, successors and assigns)
shall be entitled to injunctive relief, from a court having jurisdiction
with respect to the matter, for the purpose of restraining Executive and any
Person in which Executive has an interest (as described in Section 7(b)(ii)
hereof) from any actual or threatened breach of the restrictions set forth
in this Section 7 and to any other appropriate relief. If any court of
competent jurisdiction or arbitrator determines that the time period,
activities covered or the geographical scope referenced in this Section 7 is
unreasonable or otherwise in contravention of the law, such restrictions
shall not be determined to be null and void and of no effect, but shall be
reformed by the court or arbitrator to impose a reasonable time period,
activities covered or geographical scope, as the case may be.
(f) Specific Performance and Injunctive Relief. Executive
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recognizes that, if he shall fail to perform, observe or discharge any of
his obligations under this Section 7, no remedy at law will provide adequate
relief to the Company. Therefore, the Company is hereby authorized to demand
specific performance of this Section 7, and shall be entitled to temporary
and permanent injunctive relief, in a court of competent jurisdiction at any
time when Executive shall fail to comply with any of the provisions of this
Section 7 applicable to him.
(g) Acknowledgments. Executive hereby acknowledges and
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agrees that CPF's Business is worldwide in scope and activity and that the
Company has a protectable business interest in its customer relationships
and stock in trade throughout the world.
(h) 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
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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 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:
Xxxx X. Xxxxxx
[home address]
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.
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(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 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; 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) 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(f), 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(f), 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.
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(a) General Compliance. This Agreement is intended to meet
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the requirements of Section 409A of the Internal Revenue Code of 1986 (the
"Code") and any and all rulings or regulations thereunder and may be
administered in a manner that is intended to meet those requirements and
shall be construed and interpreted in accordance with such intent. To the
extent that any payment to be made hereunder is subject to Section 409A of
the Code, such payment shall be made in a manner that will meet the
requirements of Section 409A of the Code, such that the payment shall not be
subject to the excise tax applicable under Section 409A of the Code. Any
provision of this Agreement that would cause any payment hereunder to fail
to satisfy Section 409A of the Code shall be amended (in a manner that as
closely as practicable achieves the original intent of this Agreement) to
comply with Section 409A of the Code on a timely basis, which may be made on
a retroactive basis, in accordance with regulations and other guidance
issued under Section 409A of the Code.
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(b) Distributions to Specified Employees. Notwithstanding
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anything herein to the contrary, to the extent any distribution provided for
under this Agreement is to be made on account of the Executive's "separation
from service" under Code Section 409(A)(a)(2)(A)(i) and the Executive is
classified as a "specified employee" under Code Section 409(A)(a)(2)(B)(i),
such distribution shall not be made until six months and one day after the
date of the Executive's separation from service (or date of death of the
Executive, if earlier) if such distribution would otherwise, but for this
section, have been distributed earlier. If additional regulations or other
guidance is issued under Section 409A of the Code or a court of competent
jurisdiction provides additional authority concerning the application of
Section 409A with respect to the payments described in Section 5 of the
Agreement, then the provisions of such Section shall be amended to permit
such payments to be made at the earliest time permitted under such
additional regulations, guidance or authority that is practicable and
achieves the original intent of this Agreement.
(c) Cooperation. The Executive and the Company agree to
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cooperate to make such amendments to the terms of this Agreement as may be
necessary to avoid the imposition of penalties and additional taxes under
Section 409A of the Code.
11. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same 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.
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Xxxx X. Xxxxxx
SOLUTIA INC.
By
-----------------------------------------
Xxxxxxxx X. Xxxxx
12
Exhibit A
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WAIVER AND RELEASE
Reference is made to that Agreement (the "Agreement"), dated as of
______________, 2006, by and among Solutia, Inc., a Delaware corporation
("Solutia"), CPFilms, Inc., a Delaware corporation and wholly owned
subsidiary of Solutia ("CPF"; and together with Solutia collectively, the
"Company"), and Xxxx 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
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(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.
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(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
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 Severance Payment
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
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OPPORTUNITY TO CONSULT WITH AN ATTORNEY, IF DESIRED, PRIOR TO SIGNING THIS
WAIVER;
(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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Xxxx X. Xxxxxx
15
