Exhibit 99.2
AGREEMENT
AGREEMENT by and between Solutia Inc., a Delaware corporation (the
"Company"), and Xxxxxxxx X. Xxxxx (the "Executive"), dated as of the 21st
day of April, 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, an emergence bonus. It is the Board's judgment that such
an 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. Emergence Bonus Payments. At such time, if ever (the "Emergence
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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 and such plan shall have become effective, and if the
Executive is employed by the Company on the Emergence Date, then Executive
shall be eligible to receive from the Company an emergence bonus of $500,000
("Emergence Bonus"). The Emergence Bonus shall be paid in two equal
installments, the first installment to be paid within 10 days of the Emergence
Date and the second installment to be paid on the six-month anniversary of the
Emergence Date; provided, however, if Executive voluntarily terminates her
employment other than for Good Reason or is terminated by the Company for
Cause, then Executive shall forfeit any and all right to receive any unpaid
portion of the Emergence Bonus.
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 sixth-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
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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, General Counsel and Corporate
Secretary 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 her 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
her ability, and shall devote substantially all of her 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 $250,000, which shall be retroactive to
December 1, 2004 and 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 75% of her 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.
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(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 her 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 or the Chief Executive Officer of the
Company which specifically identifies the manner in which the Board
or Chief Executive Officer 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 upon the instructions of the Chief Executive
Officer or a senior officer of the Company 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, General Counsel and Corporate Secretary of the
Company reporting to the Company's Chief Executive Officer 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, title, 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 substantially all of its assets shall constitute a
diminution in Executive's position, title, 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
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the Executive to travel on Company business to a substantially
greater extent than required prior to the Effective Date; 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 her 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 herself
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 or after the
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expiration of the 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");
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B. an amount equal to 100% of Executive's Annual
Base Salary immediately prior to the Date of Termination
(the "Severance Payment"); and
C. if the Date of Termination is on or subsequent
to the Emergence Date, Executive shall receive the amount,
if any, of the unpaid portion of the Emergence Bonus.
(ii) subject to the provisions of Sections (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, her 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 on
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;
(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, of the unpaid portion of the Emergence Bonus.
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 Sections 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")
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("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, of the unpaid portion of the Emergence Bonus.
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, 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 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"). The amounts to be
paid by the Company to the Executive under this Section 6 shall be paid
within 30 days of the date on which the obligation to make such payments
arise.
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7. Confidential Information and Competitive Activity.
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(a) Confidential Information. As used herein, "Confidential
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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
her employment hereunder, be terminated by the Company without Cause, or
terminate her employment hereunder for Good 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
her employment with the Company or any affiliate for any reason, engage in
or contribute her 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
she worked or with respect to which she 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 her Date of Termination
("Competitive Work"). However, the Executive shall be permitted to engage in
such proposed work or activity, and the Company shall furnish her 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 her new employer, that the
fulfillment of her duties in such proposed work or activity would not likely
cause her to disclose, base judgment upon, or use any
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Confidential Information. In addition, during her 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 her 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 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.
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(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. Xxxxx
[Home address]
If to the Company:
Xxxxxx X. Xxxxx, Esq.
President and Chief Executive Officer
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 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) With the exception of the agreement dated as of June 17,
2004, between the Company and the Executive (the "Retention Agreement"),
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 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. In consideration of the promises set forth in
the Agreement, and of the mutual releases set forth in this paragraph, each
party hereto relinquishes all rights,
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and releases the other from all promises, liabilities and commitments that
may have existed and any other employment agreements, which shall be null
and void and of no further effect.
(g) No amounts shall be payable pursuant to Section 5(a)
or 5(c) 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.
(i) The Executive and the Company agree to 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.
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. Xxxxx
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Xxxxxxxx X. Xxxxx
SOLUTIA INC.
By /s/ Xxxxxx X. Xxxxx
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Xxxxxx 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
April 21, 2005, by and between Solutia, Inc., a Delaware Corporation (the
"Company"), and Xxxxxxxx X. Xxxxx (the "Executive"). This Waiver and Release
(this "Waiver") is made as of the day of , 200 , by the
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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 herself, her 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
her 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 she has the power to do so. The Executive represents and warrants
that she has not assigned any claim released herein, or authorized any other
person to assert any claim on her 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 her 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 her breach of
the provisions of this Waiver will cause monetary damages to the Company.
Thus, should the Executive breach the provisions of this Waiver, she 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 HER 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 CHIEF EXECUTIVE OFFICER 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.
------------------------------
Xxxxxxxx X. Xxxxx
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