RESTRICTED STOCK AWARD AGREEMENT pursuant to the SOLUTIA INC. 2007 MANAGEMENT LONG-TERM INCENTIVE PLAN
EXHIBIT
4.2
pursuant
to the
SOLUTIA
INC. 2007 MANAGEMENT LONG-TERM INCENTIVE PLAN
Participant:
Grant
Date: February 28, 2008
Number
of Shares of Restricted Stock Granted:
THIS
RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”), dated as
of the Grant Date specified above, is entered into by and between Solutia Inc.,
a company organized in the State of Delaware (the “Company”), and the
Participant specified above, pursuant to the Solutia Inc. 2007 Management
Long-Term Incentive Plan, as in effect and as amended from time to time (the
“Plan”).
WHEREAS,
it has been determined under the Plan the Company will grant the shares of
Restricted Stock provided herein to the Participant;
NOW,
THEREFORE, in consideration of the mutual covenants and promises hereinafter set
forth and for other good and valuable consideration, the parties hereto hereby
mutually covenant and agree as follows:
1. Incorporation
By Reference; Plan Document Receipt. This Agreement is
subject in all respects to the terms and provisions of the Plan (including,
without limitation, any amendments thereto adopted at any time and from time to
time unless such amendments are expressly intended not to apply to the award
provided hereunder), all of which terms and provisions are made a part of and
incorporated in this Agreement as if they were expressly set forth
herein. Any capitalized term not defined in this Agreement shall have
the same meaning as is ascribed thereto in the Plan. The Participant
hereby acknowledges receipt of a true copy of the Plan and that the Participant
has read the Plan carefully and fully understands its content. In the
event of a conflict between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall control.
2. Grant of
Restricted Stock Award. The Company
hereby grants to the Participant, as of the Grant Date specified above, the
number of shares of Restricted Stock specified above. Except as
otherwise provided by Section 11.12 of the Plan, the Participant agrees and
understands that nothing contained in this Agreement provides, or is intended to
provide, the Participant with any protection against potential future dilution
of the Participant’s stockholder interest in the Company for any
reason.
3. Vesting.
3.1 Except as
otherwise provided in this Section 3, the Restricted Stock subject to this grant
shall become unrestricted and vested pro rata on each of the first three
anniversaries of the Grant Date specified above (one-third of the total grant
per year), provided the Participant is then employed by the Company and/or one
of its Subsidiaries or Affiliates.
3.2 Except
as otherwise provided in this Section 3, if the Participant’s employment with
the Company and/or its Subsidiaries or Affiliates terminates for any reason
prior to the vesting of all or any portion of the Restricted Stock awarded under
this Agreement, such unvested portion of the Restricted Stock shall immediately
be cancelled and the Participant (and the Participant’s estate, designated
beneficiary or other legal representative) shall forfeit any rights or interests
in and with respect to any such shares of Restricted Stock.
3.3
If the
Participant’s employment with the Company and/or its Subsidiaries or Affiliates
terminates due to the Participant’s Disability the Restricted Stock shall
continue to vest on a regular schedule during the period of Disability
regardless of a termination event. For purposes of this Agreement,
“Disability,” if the Participant is a party to an employment agreement, shall
have the same meaning as in such employment agreement, otherwise, “Disability”
shall mean any physical or mental disability which is determined to be total and
permanent by a doctor selected in good faith by the Company or the relevant
Subsidiary or Affiliate.
3.4
If the
Participant’s employment with the Company and/or its Subsidiaries or Affiliates
terminates due to the Participant’s death, the Restricted Stock shall become
vested as of the date of any such termination.
3.5
If the
Participant’s employment is terminated by the Company and/or its Subsidiaries or
Affiliates at a time when such Participant is entitled to a severance payment
over a period specified in such Participant’s employment agreement (if any) (the
“Severance
Period”) all Restricted Stock which would have vested had the Participant
continued his or her employment during the Severance Period shall become
immediately vested.
3.6
If the Participant's employer ceases to be an Affiliate or Subsidiary of the
Company, that event shall be deemed to constitute a termination of employment
under Section 3.2 above.
4. Period of
Restriction; Delivery of Unrestricted Shares. During the
Period of Restriction, the Restricted Stock shall bear a legend as described in
Section 6.4.2 of the Plan (if certificated) and the Company shall hold the
Restricted Stock as escrow agent as set forth in Section 6.3 of the
Plan. When shares of Restricted Stock awarded by this Agreement
become vested, the Participant shall be entitled to receive unrestricted Shares
and if the Participant’s stock is certificated and contain legends restricting
the transfer of such Shares, the Participant shall be entitled to receive new
stock certificates free of such legends (except any legends requiring compliance
with securities laws). In connection with the delivery of the
unrestricted Shares pursuant to this Agreement, the Participant agrees to
execute any documents reasonably requested by the Company.
5. Dividends
and Other Distributions. There is no
guarantee by the Company that dividends will be paid. During the
Period of Restriction, all dividends and other distributions paid with respect
to the Restricted Stock, whether paid in cash, Shares, or other property (the
“Distributions”),
shall be held by the Company and subject to the same vesting requirements and
restrictions on transferability and forfeitability as the Restricted Stock with
respect to which such Distributions were paid. The Distributions
shall be paid at the time the Restricted Stock becomes vested pursuant to
Section 3.
6. Existing
Covenants. If Participant
violates any confidentiality, non-competition, or non-solicitation covenants to
which Participant is subject at the time of Participant’s termination of
employment pursuant to any separate agreement between Participant and the
Company and/or its Subsidiaries or Affiliates, all unvested Restricted Stock
shall be cancelled immediately.
7. Further
Covenants. In the event that
the Participant fails to comply with any of the restrictive covenants set forth
in this Section 7, all unvested Restricted Stock shall be cancelled
immediately.
7.1 Nondisclosure of
Confidential and Proprietary Information.
7.1.1
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The
Participant hereby acknowledges that during the term of his/her employment
with the Company or its Subsidiaries or Affiliates or Related Companies,
as the case may be (collectively, the “Employer”)
he/she will have access to and possession of trade secrets, confidential
information and proprietary information (collectively, and as defined more
extensively below, “Confidential
Information”) of Employer and their respective
clients. The Participant hereby recognizes and acknowledges
that this Confidential Information is valuable, special and unique to the
business of Employer, and that access to and knowledge of such
Confidential Information is essential to the performance of Participant’s
duties to Employer. The Participant hereby agrees that during
his/her employment relationship with Employer and thereafter, the
Participant will keep secret and will not use or disclose any Confidential
Information to any person or entity, in any fashion and for any purpose
whatsoever, except at the request of
Employer.
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7.1.2
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For
purposes of this Agreement, the term “Confidential
Information” includes, but is not limited to, information written,
in digital form, in graphic form, electronically stored, orally
transmitted or memorized, concerning or relating to Employer, all
information about Employer’s business prospects and opportunities, and all
other information about or gained from any customer or client to which
Employer provides services during the Participant’s employment with the
Company or any Related Company. This clause shall not apply to
any Confidential Information which enters the public domain other than
through the Participant’s default.
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7.2 No Inducement or Employment
of Other Participants. During the Participant’s employment
with Employer and for one (1) year thereafter, or, if the participant is subject
to an employment agreement that contains a similar provision, the period set
forth in such employment agreement, the Participant hereby agrees not
to induce, employ, solicit the employment of, attempt to affiliate for profit
with, or otherwise encourage, directly or indirectly, any employee of, or any
independent contractor performing services for, Employer to leave the employ of,
or to cease rendering services to Employer, for the benefit of the Participant,
or any other party, or to assist any enterprise to employ any person employed by
or any independent contractor performing services for Employer.
7.3 Non-Solicitation,
Non-Competition.
7.3.1
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Sections
7.3.2 and 7.3.3 shall be applicable only to those Participants who are not
parties to any other non-competition and/or non-solicitation agreements,
contracts, or covenants with the Employer as of the effective date of this
Agreement. Nothing in Section 7.3 shall be deemed to supersede,
alter, or otherwise limit any non-competition and/or non-solicitation
agreements, contracts or covenants with the Employer to which Participant
is otherwise subject as of the effective date of this
Agreement.
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7.3.2
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Subject
to the conditions set forth in Section 7.3.1, during the Participant’s
employment with Employer and for one (1) year thereafter, or, if the
participant is subject to an employment agreement that contains a similar
provision, the period set forth in such employment agreement, the
Participant hereby agrees to refrain from, directly or indirectly,
accepting business from, doing business with, inducing or soliciting any
customers or vendors of Employer, to or on behalf of whom the Participant
rendered any services during the course of the Participant’s employment
with the Employer, except as authorized in writing by
Employer.
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7.3.3
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Subject
to the conditions set forth in Section 7.3.1, during the Participant’s
employment with Employer and for one (1) year thereafter, or, if the
participant is subject to an employment agreement that contains a similar
provision, the period set forth in such employment
agreement, the Participant will not, directly or indirectly, as
an individual proprietor, partner, stockholder, officer, employee,
director, joint venturer, investor, lender, consultant, or in any other
capacity (other than as the direct or indirect passive holder of not more
than one percent (1%) of the combined voting power of the outstanding
stock of a publicly held company) (a) have any interest in or association
with any business competitive with any business of Employer or (b)
develop, market, sell or render (or assist any other person in developing,
marketing, selling or rendering) products or services competitive with
those developed, marketed, sold or rendered by Employer while the
Participant was employed by
Employer.
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8. Non-transferability. Restricted Stock,
and any rights and interests with respect thereto, issued under this Agreement
and the Plan shall not, prior to vesting, be sold, exchanged, transferred,
assigned or otherwise disposed of in any way by the Participant (or any
beneficiary(ies) of the Participant), other than by testamentary disposition by
the Participant or the laws of descent and distribution. Any such
Restricted Stock, and any rights and interests with respect thereto, shall not,
prior to vesting, be pledged or encumbered in any way by the Participant (or any
beneficiary(ies) of the Participant) and shall not, prior to vesting, be subject
to execution, attachment or similar legal process. Any attempt to
sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of in
any way any of the Restricted Stock, or the levy of any execution, attachment or
similar legal process upon the Restricted Stock, contrary to the terms and
provisions of this Agreement and/or the Plan shall be null and void and without
legal force or effect.
9. Entire
Agreement; Amendment. This Agreement,
together with the Plan contains the entire agreement between the parties hereto
with respect to the subject matter contained herein, and supersedes all prior
agreements or prior understandings, whether written or oral, between the parties
relating to such subject matter. The Executive Compensation and
Development Committee (the “Committee”) shall
have the right, in its sole discretion, to modify or amend this Agreement from
time to time in accordance with and as provided in the Plan. This
Agreement may also be modified or amended by a writing signed by both the
Company and the Participant. The Company shall give written notice to
the Participant of any such modification or amendment of this Agreement as soon
as practicable after the adoption thereof.
10.
Acknowledgment of
Employee. The award of this Restricted Stock does not entitle Participant
to any benefit other than that granted under this Agreement. Any
benefits granted under this Agreement are not part of the Participant’s ordinary
salary, and shall not be considered as part of such salary in the event of
severance, redundancy or resignation. Participant understands and
accepts that the benefits granted under this Agreement are entirely at the
discretion of the Company and that the Company retains the right to amend or
terminate this Agreement and the Plan at any time, at its sole discretion and
without notice.
11.
Governing
Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without reference to the principles of conflict of laws
thereof.
12.
Withholding of
Tax. The Company shall have the power and the right to deduct
or withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy any federal, state and local taxes of any kind (including,
but not limited to, the Participant’s FICA and SDI obligations) which the
Committee, in its sole discretion, deems necessary to be withheld or remitted to
comply with any tax law and/or any other applicable law, rule or regulation with
respect to the Restricted Stock (or vesting thereof) and, if the Participant
fails to do so, the Company may otherwise refuse to issue or transfer any
Restricted Stock otherwise required to be issued pursuant to this
Agreement.
13.
No Right to
Employment. Any questions as to whether and when there has
been a termination of employment and the cause of such termination shall be
determined in the sole discretion of the Committee. Nothing in this
Agreement shall interfere with or limit in any way the right of Employer to
terminate the Participant’s employment or service at any time, for any reason
and with or without cause.
14.
Notices. Any notice which
may be required or permitted under this Agreement shall be in writing and shall
be delivered in person, or via facsimile transmission, email, overnight courier
service or certified mail, return receipt requested, postage prepaid, properly
addressed as follows:
14.1 If such
notice is to the Company, to the attention of the General Counsel of the Company
or at such other address as the Company, by notice to the Participant, shall
designate in writing from time to time.
14.2 If such
notice is to the Participant, at his or her email or home address as shown on
the Company’s records, or at such other address as the Participant, by notice to
the Company, shall designate in writing from time to time.
15. Compliance
with Laws. The issuance of
the Restricted Stock or unrestricted Shares pursuant to this Agreement shall be
subject to, and shall comply with, any applicable requirements of any federal
and state securities laws, rules and regulations (including, without limitation,
the provisions of the Securities Act of 1933, as amended, the 1934 Act and any
respective rules and regulations promulgated thereunder), and any other law or
regulation applicable thereto. The Company shall not be obligated to
issue any of the Restricted Stock or unrestricted Shares pursuant to this
Agreement if such issuance would violate any such requirements.
16. Binding
Agreement; Assignment. This Agreement
shall inure to the benefit of, be binding upon, and be enforceable by the
Company and its successors and assigns. The Participant shall not
assign any part of this Agreement without the prior express written consent of
the Company.
17. Headings. The titles and
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be a part of this
Agreement.
18. Further
Assurances. Each party hereto
shall do and perform (or shall cause to be done and performed) all such further
acts and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party hereto reasonably may request in
order to carry out the intent and accomplish the purposes of this Agreement and
the Plan and the consummation of the transactions contemplated
thereunder.
19. Severability. The invalidity or
unenforceability of any provisions of this Agreement in any jurisdiction shall
not affect the validity, legality or enforceability of the remainder of this
Agreement in such jurisdiction or the validity, legality or enforceability of
any provision of this Agreement in any other jurisdiction, it being intended
that all rights and obligations of the parties hereunder shall be enforceable to
the fullest extent permitted by law.
__________________________
Participant
Name
__________________________
Participant
Signature
_________________________
Date