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Exhibit 10(bb)
RETENTION AGREEMENT
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This Retention Agreement ("Agreement") is
entered into by and between
Solutia Inc., a Delaware corporation
("Solutia") and _______________
("Employee"), as of the date indicated on
the signature page attached
hereto.
WHEREAS, Employee and Solutia had
previously entered into a retention
agreement prior to Solutia's commencement
of its Chapter 11 Bankruptcy
filing ("Prior Agreement"); and
WHEREAS, as a result of the Chapter 11
Bankruptcy filing, the Prior
Agreement became subject to the United
States Bankruptcy Court's approval;
and
WHEREAS, the Bankruptcy Court ruled that
the Prior Agreement was null and
void from the beginning; and
WHEREAS, the Bankruptcy Court granted
approval of this revised Retention
Agreement; and
WHEREAS, Solutia believes that establishing
an incentive arrangement for
Employee will increase the likelihood that
Solutia will continue to have
Employee's advice, counsel, leadership and
dedication.
NOW, THEREFORE, for good and valuable
consideration, Solutia and Employee,
intending to be bound, agree as set forth
in this Agreement.
1) EMPLOYMENT
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a) Employee's employment
with Solutia during the Employment Period
will be
under the same terms and conditions as those that applied
immediately prior to the date of this Agreement (or as
subsequently
amended
from time to time). The "Employment Period" for purposes of
this
Agreement shall mean the period beginning on the date of this
Agreement
and ending six months after the Emergence Date (as
defined
below).
b) Nothing in this Agreement
is intended, and nothing herein will be
construed
as limiting the ability of Employee or Solutia to
terminate
such employment. Moreover, Employee understands that
their
employment will remain as an "at will" relationship.
c) During the Employment
Period, Employee will:
i)
Devote all
business time to the duties of employment with Solutia;
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ii)
perform all duties of
employment with Solutia faithfully and
effectively and to the best of Employee's ability;
iii) act
in the best interests of Solutia and its shareholders and
engage in no conflict of interest with Solutia.
2) COMPENSATION; SPECIAL AWARD
---------------------------
a) During the Employment Period, Solutia
will compensate Employee in
accordance with the terms
and conditions in effect immediately
prior to the date of this
Agreement (as amended from time to time),
including eligibility for an
award under the terms of the Solutia
Inc. Annual Incentive Plan
("AIP"). Nothing in this Agreement shall
be construed to provide
Employee with the right to participate in
the AIP or any other
incentive or benefit plan if Solutia
determines to change or
terminate such plan and the change or
termination is generally
applicable to employees who are similarly
situated to Employee.
b) In addition to the foregoing, subject to
Section 2(c) below,
Employee shall receive a
special incentive award (the "Special
Award"). The amount of the
Special Award will be ____% of
Employee's base salary as of
the date of the Special Award payment.
c) The Special Award will be paid in four
(4) equal installments, less
applicable taxes and
withholdings, on the following dates and,
provided that the Employee
has fulfilled the obligations set forth
in Section 1 of this
Agreement, in the judgment of the CEO of
Solutia or his designee:
i)
On or about June
30, 2004, Solutia will pay to Employee 25% of the
Special Award, less applicable taxes and withholdings, provided
that Employee is employed by Solutia on such date.
ii)
On or about December
31, 2004, Solutia will pay to Employee 25% of
the Special Award, less applicable taxes and withholdings,
provided
that Employee is employed by Solutia on such date.
iii) As
soon as practicable following the time, if ever, at which both
(x) the United States Bankruptcy Court for the Southern District
of
New York shall have confirmed a plan of reorganization of
Solutia
under Chapter 11 of the United States Bankruptcy Code and (y)
such
confirmation shall have become non-appealable (the "Emergence
Date"), Solutia will pay to Employee 25% of the Special Award,
less
applicable taxes and withholdings, provided that Employee is
employed by Solutia on such date.
iv)
On the six (6) month
anniversary of the Emergence Date, Solutia
will pay to Employee 25% of the Special Award, less appl
