Exhibit 10(p)
SOLUTIA INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
ARTICLE I: INTRODUCTION
1.1 Purpose. Solutia Inc. has established this Solutia Inc. Non-Employee
Director Deferred Compensation Plan (the Plan) to provide directors with
opportunities to defer compensation, restricted stock units and any other types
of remuneration.
1.2 Legal status. The Plan is a deferred compensation plan for the non-employee
directors of Solutia Inc. and is intended to comply with the rules of the
Internal Revenue Code. The Employer intends the Plan to be unfunded for purposes
of the Internal Revenue Code of 1986, as amended (the Code), and to satisfy the
requirements of Code Section 409A. Plan provisions will be interpreted
consistent with this intent.
1.3 Effective date. The Plan is effective on January 1, 2009.
ARTICLE II: DEFINITIONS
2.1 Key terms and construction. When used in the Plan, the following terms will
have the meanings set forth below. Several other terms are not defined here,
but, for convenience, are defined as they are introduced into the text.
References to specific Code Sections, such as Section 409A, include any
amendments thereto, final regulations, Revenue Rulings, and guidance of general
applicability thereunder.
Compensation means any and all cash retainers to be paid to a director for
service in any year.
Employer means Solutia Inc. or its successor.
Participant means a director who elects to participate in the Plan.
Plan Year means the calendar year.
Restricted Stock Units (RSUs) means a director’s restricted stock units awarded
under the Solutia Inc. 2007 Non-Employee Director Stock Compensation Plan or any
other equity compensation plan of the Employer.
Separation from Service occurs (or a Participant Separates from Service) when
the Participant ceases to be a director of the Employer as a result of the
Participant’s death, resignation, or official termination of service to the
board for any other reason. Whether a Separation from Service occurs is based on
all the relevant facts and circumstances and will be determined in accordance
with Code Section 409A.

 

 

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ARTICLE III: ADMINISTRATION
3.1 Plan administrator. The Executive Compensation and Development Committee
(ECDC) shall designate an individual or committee to administer the Plan
(Administrator). The Administrator may appoint one or more delegates to
discharge any or all of the Administrator’s responsibilities under the Plan. The
Administrator and delegates have all of the discretionary authority, rights, and
duties that are necessary or appropriate for the proper administration of the
Plan and may rely upon financial, legal, and accounting advisors, as they see
fit. The decisions of the Administrator and delegates, including interpretations
of the Plan and determinations of amounts due under the Plan, are final and
binding on all parties.
ARTICLE IV: ELIGIBILITY
4.1 Plan participation. A director must be a US resident on the first day of a
Plan Year to elect to defer amounts in that Plan Year. A US resident who is a
member of the Board of Directors on the Plan’s effective date will be eligible
to participate in the Plan on that date. Other US resident directors will become
eligible to participate in the Plan upon appointment or election to the Board.
ARTICLE V: ACCOUNTS
5.1 Establishment of accounts. The Administrator will establish a bookkeeping
account for each Participant to which the contributions described in Article VI
are credited. The Administrator may establish sub-accounts for Participants, as
the Administrator deems appropriate. The accounts and sub-accounts will be
adjusted to reflect income, gains, losses, and distributions.
5.2 Investment Credits. The participant’s bookkeeping account will be credited
with interest annually at the end of the Plan Year in an amount equal to the
Prime Rate as reported in the Wall Street Journal as of the last business day of
the year or in an amount equal to the percentage increase or decrease in the
Employer’s stock price during the year, giving credit for dividends and share
adjustments as appropriate. Any election to have earnings or losses measured by
an investment in Employer stock shall be irrevocable. Participants will elect
their investment choice between these two investment indices when they make an
election to defer. All deferrals of restricted stock units or other equity-based
amounts shall be credited with earnings and losses based on the performance of
Employer stock.

 

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ARTICLE VI: CONTRIBUTIONS
6.1 Elective compensation and restricted stock deferrals. For each Plan Year, an
eligible director may elect to reduce his or her compensation by up to 100% and
have the amounts credited to his or her account. The election to defer
compensation must be made no later than December 31 of the Plan Year immediately
preceding the Plan Year in which the services giving rise to the compensation
are performed. Such election shall be irrevocable as of the December 31
preceding the Plan Year to which it relates.
An eligible director may elect to defer 100% of his or her restricted stock
units granted in that Plan Year. Upon the lapse of the forfeiture conditions
applicable to the restricted stock units, his or her account shall be credited
with the applicable number of shares of Employer stock. The election to defer
restricted stock units must be made no later than December 31 of the Plan Year
immediately preceding the Plan Year in which the restricted stock units are
awarded.
Provided, however, that in a director’s first year of eligibility, an election
to defer compensation and/or restricted stock units may be made no later than
the 30th day after he or she becomes eligible and will apply only to the portion
of the director’s compensation paid for services performed after the election.
6.2 Election forms. To be valid, elections must be made on forms provided by the
Administrator and received by the Administrator on or before the specified
deadline. An election must state the percentage in whole numbers by which the
Participant desires to reduce his or her compensation, restricted stock units or
other remuneration. The Administrator may provide that an election will remain
in effect for subsequent Plan Years unless changed no later than the December 31
preceding the Plan Year to which the change relates.
ARTICLE VII: VESTING
7.1 Vesting. A Participant is at all times 100% vested in his or her account
balance. Notwithstanding, account balances attributed to restricted stock unit
deferrals remain subject to the vesting requirements of the original grant.
ARTICLE VIII: BENEFIT PAYMENTS
8.1 Form and time of payment. A Participant’s account balance will be paid in a
single lump sum. The Participant’s lump sum will be paid on the date as soon as
administratively possible, but not later than 90 days, after the Participant
ceases to be a director. A Participant may not, directly or indirectly, elect
the taxable year of payment. The portion of a Participant’s account balance
credited with interest at the Prime Rate will be paid in cash, and the portion
of a Participant’s account balance credited with returns on Employer stock will
be paid in stock.
8.2 Death benefits. The Participant’s beneficiary or beneficiaries will be paid
the Participant’s then-current account balance in a single lump sum as soon as
practicable, but not later than 90 days, after the Participant’s death. Neither
a Participant nor a beneficiary may, directly or indirectly, designate the
taxable year of payment. A Participant may designate the beneficiary or
beneficiaries who will receive benefits payable upon his or her death and change
or revoke the designation without the consent of any beneficiary. A designation
must be in writing on a form provided by the Administrator. If a Participant
fails to properly designate a beneficiary, or survives his or her beneficiaries,
payment will be made to the Participant’s estate. The portion of a Participant’s
account balance credited with interest at the Prime Rate will be paid in cash,
and the portion of a Participant’s account balance credited with returns on
Employer stock will be paid in stock.

 

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ARTICLE IX: SOURCE OF PAYMENTS
9.1 Rabbi trust. The Employer may establish a rabbi trust and contribute funds
or other assets at such times and in such amounts as it deems appropriate to
help satisfy its obligations under the Plan. The trustee will be a bank or other
independent financial institution and will be authorized to invest the trust
assets, subject to investment guidelines set by the Administrator and applicable
law. The rabbi trust will be an employer grantor trust under Code Sections 671
through 679, the assets of which are available to pay the claims of the
Employer’s creditors in the event of its insolvency.
9.2 Benefits and expenses. Plan benefits will be paid directly from the rabbi
trust or, if the Employer does not maintain a rabbi trust or trust assets are
insufficient, from the Employer’s general assets. Expenses of administering the
Plan will be paid from the Employer’s general assets. The Employer is not
required to set aside, earmark, or escrow any funds or other assets to satisfy
its obligations under the Plan, except as provided in Section 9.1. Participants
and beneficiaries have no interest in any specific assets of the Employer or the
rabbi trust, other than the unsecured right to receive benefits pursuant to the
terms of the Plan. In this regard, Participants acknowledge that the accounts
referred to in Article V are merely bookkeeping entries used to track their
benefits.
ARTICLE X: MISCELLANEOUS PROVISIONS
10.1 Plan amendment and termination. The Employer reserves the right to amend,
discontinue, or terminate the Plan at any time by action of the ECDC. However,
no amendment, discontinuance, or termination will diminish the benefits of a
Participant that are earned and vested prior to the date the ECDC approves the
amendment, discontinuance, or termination. The Employer may not accelerate the
timing of benefit payments, except to the extent Code Section 409A permits.
10.2 Non-alienation of benefits. The interest of a Participant or beneficiary in
his or her Plan benefits are not subject to the claims of the Participant’s or
beneficiary’s creditors and may not be voluntarily or involuntarily sold,
transferred, pledged, alienated, assigned, anticipated, or encumbered. Any
attempt by a Participant or beneficiary to do so will be null and void.

 

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10.3 Indemnification. To the extent the law allows, the Employer will indemnify
and hold harmless the Administrator, any of the Administrator’s delegates, and
any director who may act on behalf of the Employer in the administration of the
Plan from and against any liability, loss, cost, or expense (including
reasonable attorneys’ fees) incurred at any time as a result of or in connection
with any claims, demands, actions, or causes of action of any Participant, any
person claiming through any Participant, or any other person, party, or
authority claiming to have an interest in the Plan or standing to act for any
person or groups having an interest in the Plan, for or on account of any of the
acts or omissions (or alleged acts or omissions) of the Administrator, any
delegate, or any director, except to the extent resulting from that person’s
willful misconduct.
10.4 Successors. The Plan is binding on the Employer and its successors and
assigns and on each Participant and beneficiary.
10.5 Severability. In case any provision of the Plan is held illegal or invalid
for any reason, the illegality or invalidity will not affect the remaining
provisions of the Plan and the Plan will be construed and enforced as if the
illegal or invalid provision had never been set forth.
10.6 Controlling law. To the extent not superseded by the laws of the United
States, the laws of Delaware are controlling in all matters relating to the
Plan, without regard to that state’s choice of laws provisions.

 

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