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                 Solutia Inc. Deferred Compensation Plan
                   
  SECTION 1.  PURPOSE
  
       The Solutia Inc. Deferred Compensation Plan is an unfunded,
  deferred compensation plan which is intended to provide eligible
  employees of Solutia Inc. and certain of its Subsidiaries with an
  opportunity to defer the receipt of all or part of their cash
  incentive awards.
                   
  SECTION 2.  DEFINITIONS
  
       As used in the Plan, the following terms shall have the meanings
  set forth below:
  
       "Account" shall mean, for each Participant, such Participant's
  Deferred Cash Equivalent Account and Predecessor Plan Account.
  
       "Beneficiary Election" shall mean written instructions, on a form
  provided by the Company, relating to elections under Section 6.
  
       "Board" shall mean the Board of Directors of the Company.
  
       "Business Combination" shall have the meaning set forth in
  subparagraph (c) of the definition of "Change of Control."
  
       "Change of Control" shall mean any of the following events:
  
        (a) The acquisition by any person, entity or "group," within
            the meaning of Section 13(d)(3) or 14(d)(2) of the
            Securities Exchange Act of 1934 (the "Exchange Act")
            (a "Person"), of beneficial ownership (within the
            meaning of Rule 13d-3 promulgated under the Exchange
            Act) of 20% or more of either (i) the then
            outstanding shares of Common Stock of the Company
            (the "Outstanding Company Common Stock") or (ii) the
            combined voting power of the then outstanding voting
            securities of the Company entitled to vote generally
            in the election of directors (the "Outstanding
            Company Voting Securities"); provided, however, that,
            for purposes of this subsection (a), the following
            acquisitions shall  not constitute a Change of
            Control:  (i) any acquisition directly from the
            Company, (ii) any acquisition by the Company, (iii)
            any acquisition by any employee benefit plan (or
            related trust) sponsored or maintained by the Company
            or (iv) any acquisition by any corporation pursuant
            to a transaction which complies with clauses (i),
            (ii) and (iii) of subsection (c) of this definition;
            or

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        (b) Individuals who, as of the date hereof, constitute the
            Board (the "Incumbent Board") cease for any reason to
            constitute at least a majority of the Board;
            provided, however, that any individual becoming a
            director subsequent to the date hereof whose
            election, or nomination for election by the Company's
            shareholders, was approved by a vote of at least a
            majority of the directors then comprising the
            Incumbent Board shall be considered as though such
            individual were a member of the Incumbent Board, but
            excluding, for this purpose, any such individual
            whose initial assumption of office occurs as a result
            of an actual or threatened election contest with
            respect to the election or removal of directors or
            other actual or threatened solicitation of proxies or
            consents by or on behalf of a Person other than the
            Board; or
  
        (c) Approval by the shareholders of the Company of a
            reorganization, merger or consolidation or sale or
            other disposition of all or substantially all of the
            assets of the Company or the acquisition of assets or
            stock of another corporation (a "Business
            Combination"), in each case unless, following such
            Business Combination, (i) all or substantially all of
            the individuals and entities who were the beneficial
            owners, respectively, of the Outstanding Company
            Common Stock and Outstanding Company Voting
            Securities immediately prior to such Business
            Combination beneficially own, directly or indirectly,
            more than 60% of, respectively, the then outstanding
            shares of common stock and the combined voting power
            of the then outstanding voting securities entitled to
            vote generally in the election of directors, as the
            case may be, of the corporation resulting from such
            Business Combination (including, without limitation,
            a corporation which as a result of such transaction
            owns the Company or all or substantially all of the
            Company's assets either directly or through one or
            more subsidiaries) in substantially the same
            proportions as their ownership, immediately prior to
            such Business Combination of the Outstanding Company
            Common Stock and Outstanding Company Voting
            Securities, as the case may be; (ii) no Person
            (excluding any corporation resulting from such
            Business Combination or any employee benefit plan (or
            related trust) of the Company or such corporation
            resulting from such Business Combination)
            beneficially owns, directly or indirectly, 20% or
            more of, respectively, the then outstanding shares of
            common stock of the corporation resulting from such
            Business Combination or the combined voting power of
            the then outstanding voting securities of such
            corporation except to the extent that such ownership
            existed prior to the Business Combination; and (iii)
            at least a majority of the members of the board of
            directors of the corporation resulting from such
            Business Combination were members of the Incumbent
            Board at the time of the execution of the initial
            agreement, or of the action of the Board, providing
            for such Business Combination; or

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       (d)  Approval by the shareholders of the Company of a complete
            liquidation or dissolution of the Company.
  
       "Code" shall mean the Internal Revenue Code of 1986, as amended.
  
       "Committee" shall mean the ECDC, or its permitted delegate.
  
       "Company" shall mean Solutia Inc.
  
       "Compensation Committee" shall mean one or more committees
  appointed by the ECDC composed of one or more senior managers of the
  Company or a Subsidiary to whom the ECDC may delegate its powers (or a
  portion thereof) to administer this Plan pursuant to Section 8.
  
       "Date Certain Election" shall have the meaning set forth in
  Section 7(a).
  
       "Deferral Election" shall mean a written election, on a form
  provided by the Company, to defer receipt of Incentive Awards
  otherwise payable to a Participant.
  
       "Deferred Cash Equivalent Account" shall mean a book-entry
  account in the name of a Participant maintained in the Company's
  records with entries denominated in dollars.
  
       "ECDC" shall mean the Executive Compensation and Development
  Committee or such other committee of the Board as the Board may from
  time to time designate.
  
       "Effective Date" shall mean the date that this Plan is adopted
  by the Committee.
  
       "Eligible Participant" shall mean an employee of the Company
  or a Participating Subsidiary who (a) is a member of the
  Executive Leadership Team of the Company or is classified in grade 82 or
  83 (or an equivalent salary grade), and (b) is a U.S. citizen
  residing in the United States or a citizen of another country permanently
  assigned to and residing in the United States.
  
       "Fiscal Year" shall mean the period commencing January 1 and
  ending on the next succeeding December 31.
  
       "Incentive Award" shall mean any cash award under an annual
  incentive plan of the Company and any other cash awards designated by
  the Committee.   
  
       "Incumbent Board" shall have the meaning set forth in
  subparagraph (b) of the definition of "Change of Control."
  
       "Outstanding Company Common Stock" shall have the meaning set
  forth in subparagraph (a) of the definition of "Change of
  Control."

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       "Outstanding Company Voting Securities" shall have the meaning
  set forth in subparagraph (a) of the definition of "Change of
  Control."
  
       "Participant" shall mean an Eligible Participant who delivers
  a Deferral Election to the Company.  A person shall not cease being a
  Participant if the person ceases being an Eligible Participant
  if the person has an Account with a positive balance.
  
       "Participating Subsidiary" shall mean a Subsidiary that is
  designated as a Participating Subsidiary by the Committee.
  
       "Payment Election" shall have the meaning set forth in Section
  7(a).
  
       "Plan" shall mean this Solutia Inc. Deferred Compensation Plan.
  
       "Predecessor Plan" shall mean any U.S. plan, other than a
  qualified plan or a supplemental retirement plan, providing for
  deferred compensation for Participants (a) in effect on the Effective
  Date or (b) maintained by Monsanto or a Subsidiary of Monsanto prior
  to September 1, 1997, with respect to which obligations relating to
  Participants were assumed by the Company.
  
       "Predecessor Plan Account" shall mean a book-entry account in the
  name of a Participant maintained in the Company's records with entries
  denominated in dollars representing deferrals and accrued interest
  under a Predecessor Plan.
  
       "Retirement" shall mean a voluntary Termination of Employment by
  a Participant at age 50 or above or an involuntary Termination of
  Employment at age 50 or above other than for cause (as determined by
  the Committee).  
  
       "Retirement Election" shall have the meaning set forth in Section
  7(a).
  
       "Subsidiary" shall mean a corporation (or partnership, joint
  venture, or other enterprise) of which the Company owns or controls,
  directly or indirectly, 50% or more of the outstanding shares of stock
  normally entitled to vote for the election of directors (or comparable
  equity participation and voting power).
  
       "Termination of Employment" shall mean the termination of the
  Participant's employment with the Company and any Subsidiary.  A
  Participant employed by a Subsidiary shall also be deemed to incur a
  Termination of Employment if the Subsidiary ceases to be such a
  Subsidiary and the Participant does not immediately thereafter become
  an employee of the Company or another Subsidiary.  Transfers among the
  Company and its Subsidiaries shall not be considered Terminations of
  Employment.

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  SECTION 3.  DEFERRAL ELECTIONS
  
       (a)     Delivery and Effectiveness of Deferral Elections.  A
  Participant may elect to defer receipt of an Incentive Award otherwise
  payable to the Participant in a future Fiscal Year by delivering a
  Deferral Election to the Company not later than June 30 preceding the
  Fiscal Year in which the Deferral Election is to become effective or
  such other time as the Committee shall determine.  A separate Deferral
  Election will be required for each Incentive Award.  A Deferral
  Election shall become irrevocable for a Fiscal Year on June 30 of the
  immediately preceding Fiscal Year or at such other time as the
  Committee shall determine. During the period in which a Deferral
  Election is effective, the Participant shall not be entitled to
  receive currently payments covered by such Deferral Election.  The
  Company shall instead make credits to the Participant's Account in
  accordance with Section 4.
  
       (b)     Contents of Deferral Elections.  A Deferral Election may
  relate to all or any portion of an Incentive Award otherwise payable
  to a Participant.  Each Deferral Election shall specify the type of
  Incentive Award and the percentage or dollar amount of the Incentive
  Award which shall be subject to such Deferral Election and shall
  contain the Participant's Payment Election.  If the amount of the
  portion of any Incentive Award subject to a Deferral Election is
  less than $1,000 (based on a valuation at the time the Incentive Award
  would otherwise be paid), that Incentive Award will be paid currently
  and no credit relating to such Incentive Award will be made under the Plan.  
  
       (c)     Compliance with Regulations and Section 162(m) of the
  Internal Revenue Code.  The term of deferral may be changed by the
  Committee to enable the Company to comply with wage controls,
  guidelines, or other governmental requirements.  Notwithstanding any
  other provision of this Plan to the contrary, no portion of the
  balance in a Participant's Account shall be paid to any Participant
  before the earliest date on which the Company's federal income tax
  deduction for such payment is not precluded by Section 162(m) of the
  Internal Revenue Code.  In the event any payment is delayed solely as
  a result of the preceding restriction, such payment shall be made as
  soon as administratively practicable following the first date as of
  which Section 162(m) of the Internal Revenue Code no longer precludes
  the deduction by the Company of such payment.  Amounts deferred
  because of the Section 162(m) deduction limitation shall continue to
  accrue interest at the rate applicable to the Participant's Deferred
  Cash Equivalent Account or Predecessor Plan Account, as applicable. 
  
  SECTION 4.  PARTICIPANT ACCOUNTS
  
       (a)     Amounts Credited.  There shall be credited to a
  Participant's Deferred Cash Equivalent Account amounts related
  to Incentive Awards with respect to which a Deferral Election is
  made after the Effective Date of this Plan and which would
  otherwise have been paid in cash by the Company together with an
  amount equal to the matching contribution, if any, that the Company
  would have made under the Solutia Inc. Savings and Investment Plan
  and/or the Solutia Inc. ERISA Parity Savings and Investment Plan,

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  as applicable, had the Deferral Election not been made
  ("Match").  There shall be credited to a Participant's
  Predecessor Plan Account any amounts deferred and unpaid under a
  Predecessor Plan together with interest accrued thereon as of the
  Effective Date of this Plan.  Amounts deferred pursuant to each
  Deferral Election, together with any related Match and accrued
  interest, shall be accounted for separately within the Participant's
  Account.  
  
       (b)     Interest.  Amounts credited to the Participant's Deferred
  Cash Equivalent Account shall bear interest as provided in Section
  5(a).  Interest will begin to accrue with respect to an Incentive
  Award beginning with the April 1 immediately following the date the
  Incentive Award would otherwise have been paid to the Participant. 
  Interest shall be credited to Deferred Cash Equivalent Accounts at the
  end of each month.  Amounts credited to the Participant's Prior Plan
  Account shall continue to bear interest as provided in Section 5(b).
  
  SECTION 5.  INTEREST RATE
  
       (a)     The interest rate to be accrued on a Participant's
  Deferred Cash Equivalent Account shall be such rate as is determined,
  from time to time, by the ECDC.  The determination by the ECDC
  pursuant to this Section 5(a) shall be within its sole discretion and
  its decision shall be conclusive, final and binding upon all parties
  concerned.  Participants will be given notice of any change in rate.
  
       (b)     The interest rate to be accrued on a Participant's
  Predecessor Plan Account during a Fiscal Year shall be equal to the
  average yield during the preceding Fiscal Year for the Moody's Baa
  bond index composed of investment grade securities rated Baa1, Baa2,
  and Baa3 with a twenty-year maturity.  
  
  SECTION 6.  PAYMENTS FOLLOWING DEATH
  
       (a)     Form of Payment.  A Participant may deliver a Beneficiary
  Election to the Company electing that, in the event the Participant
  should die before full payments of all amounts credited to the
  Participant's Account, the balance of the Account shall be distributed
  in one payment to the person(s) designated in the Beneficiary
  Election.  In the event that a Participant fails to designate such a
  beneficiary, or the beneficiary(ies) predecease(s) the Participant,
  payment following the death of the Participant shall be made to the
  Participant's estate.  An existing beneficiary designation made in
  connection with deferrals under a Predecessor Plan will be deemed to
  be a Beneficiary Election under this Plan.  Payment shall be made as
  soon as administratively practicable after the Participant's death.  
  
       (b)     Change of Beneficiary Designation.  The elections
  referred to in Section 6(a), may be changed by a Participant at any
  time by delivering a new Beneficiary Election to the Company.  In the
  case of multiple Beneficiary Elections by a Participant,            
 


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  the most recent valid Beneficiary Designation in effect as of the date
  of the Participant's death shall be controlling.  
  
  SECTION 7.  PAYMENTS
  
       (a)  Commencement of Benefits.  A Participant's Deferral
  Election made pursuant to Section 3 shall include an election with
  respect to the distribution of the amounts to be credited to such
  Participant's Account (each such election, a "Payment Election").  Any
  similar election related to the distribution of deferred amounts under
  the Predecessor Plans shall be deemed a Payment Election under this
  Plan with respect to such deferred amounts.  Each Payment Election
  shall specify (i) subject to any minimum deferral period established
  by the Committee, the month and year when the Participant will receive
  the amount deferred together with interest accrued thereon ("Date
  Certain Election") or (ii) payment after Retirement in one lump sum or
  in monthly installments over a specified number of years as set forth
  in Section 7(b)(ii) ("Retirement Election"). 
  
       (b)  Payment Period. 
  
            (i)     Date Certain Election.  Payment will be made in one
  lump sum in the month and year specified, subject to the provisions of
  Section 3(c), Section 7(d), Section 9, and Section 10(b)(ii).
  
            (ii)     Retirement Election.  A Participant may elect to
  receive the amounts deferred pursuant to a Payment Election in one
  lump sum payment in January of the year following Retirement or in
  January of any subsequent year up to five (5) years following the date
  of the Participant's Retirement, or a Participant may elect to receive
  the amounts deferred together with the interest accrued thereon in
  approximately equal monthly installments beginning a specified number
  of months (not exceeding sixty (60) months) after Retirement and
  extending over a specified number of years (not exceeding ten (10)
  years from the date of the first monthly installment). 
  
       (c)  Acceleration of Payment for Severe Financial Hardship. 
  In the event a Participant incurs a severe financial hardship, the
  Committee may, in its sole discretion, upon the written request of a
  Participant or the Participant's legal representative, accelerate or
  otherwise revise the payment schedule for the Participant's Account to
  the extent reasonably deemed necessary to eliminate or alleviate the
  severe financial hardship.  For the purpose of this Section 7(c), a
  severe financial hardship must have been caused by an accident,
  illness, or other event beyond the control of the Participant. 
  
       (d)  Termination of Employment.  In the event of Termination
  of Employment with the Company for any reason (other than Retirement
  while the Participant has a Retirement Election in effect), the
  Participant or the Participant's beneficiary(ies) will receive a lump
  sum as soon as administratively practicable following the
  Participant's termination date.  Notwithstanding the above, in the
  event of Termination of Employment of a Participant in connection with
  the sale of a business by the Company where the

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  Participant continues working for such business as an employee of the
  buyer, the amounts credited to the Participant's Account shall be paid
  to the Participant as soon as administratively practicable after the
  first anniversary of the Termination of Employment of the Participant. 
  
  
       (e)  Immediate Distribution.  A Participant may at any time
  elect to receive a distribution of all or any portion of the balance
  in the Participant's Account.  Requests for distributions shall be
  submitted in writing (on a form prescribed by the Committee for such
  purpose) to the Company.  Distributions from the Participant's Account
  pursuant to this Section 7(e) will at all times be subject to (i)
  reduction for applicable tax withholdings pursuant to Section 9(f),
  and (ii) a percentage reduction in the amount requested equal to ten
  percent (10%) of the amount requested, which will be forfeited. 
  Distributions pursuant to this Section 7(e) shall be payable in a
  single lump sum, in cash, within thirty (30) days of submission of the
  completed form.
  
  SECTION 8.  ADMINISTRATION
  
       (a)  Administration.  The ECDC shall have the authority to
  administer the Plan.  Without limiting the generality of the preceding
  sentence, the ECDC shall have the exclusive right to interpret the
  Plan, determine the interest rate to be accrued on Deferred Cash
  Equivalent Accounts, determine eligibility for participation in the
  Plan, construe any ambiguous provisions of the Plan, correct any
  defects, supply omissions, and reconcile inconsistencies to the extent
  necessary to effectuate the Plan, and determine the amount of benefits
  payable to Participants under the Plan, except to the extent the ECDC
  delegates administration pursuant to Section 8(b). 
  
       (b)  Delegation of Authority.  The ECDC may delegate some or
  all of its authority under the Plan to one or more Compensation
  Committees and authorize further delegation by the Compensation
  Committees to senior management of the Company or a Subsidiary;
  provided that determinations regarding the interest rate to be accrued
  shall be made, and any actions pursuant to Section 9 or Section 10(b)
  shall be taken, only by the ECDC.
  
       (c)  Actions of the Committee.  In carrying out the
  responsibilities set forth in Section 8(a):
  
            (i)     The Committee may adopt rules and regulations
  necessary for the administration of the Plan which are consistent with
  the provisions hereof.
  
            (ii)    All acts and decisions of the Committee shall apply
  uniformly to all Participants in like circumstances.  Written records
  shall be kept of all acts and decisions
  
            (iii)   The Committee shall cause to be kept records
  relating to Participants and such other records as are necessary for
  proper operation of the Plan.

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       (d)  Any interpretation or determination made by the Committee
  pursuant to its discretionary authority shall be final and binding on
  the Company, any Participant, and any other affected party.
  
       (e)  The Committee shall have the right to hire, at the
  expense of the Company, such professional assistants and consultants
  as the Committee, in its sole discretion, deems necessary or
  advisable, including but not limited to accountants, actuaries,
  consultants, counsel and such clerical assistance as is
  necessary for proper discharge of its duties hereunder.
  
  SECTION 9.  CHANGE OF CONTROL
  
       (a)  In the event of a Change of Control as defined in
  subparagraph (a) of the definition of Change of Control or a
  "proposed change of control" as defined below, the ECDC shall have
  complete authority and discretion, but no obligation, to accelerate
  payments of Account balances to Participants.  A "proposed change of
  control" shall mean the submission to the Company's shareholders of (i)
  nominees for directors or (ii) a transaction, which, if
  elected or approved would result in a Change of Control as described in
  subparagraph (b), (c) or (d) of the definition of Change of
  Control herein.
  
       (b)  The ECDC may also ask the Board to negotiate, as part
  of any agreement involving the sale or merger of the Company, or a
  sale of substantially all of the Company's assets or a similar
  transaction, provisions for the protection of Participants.
  
  SECTION 10.  MISCELLANEOUS
  
       (a)  Benefits Unfunded.  All benefits payable under this
  Plan constitute an unfunded obligation of the Company.  Payments shall
  be made, as due, from the general funds of the Company.  The
  Company may, at its option, maintain one or more bookkeeping reserve
  accounts to reflect its obligations under the Plan and may make such
  investments as it may deem desirable to assist it in meeting
  its obligations under the Plan.  Any such investments shall be
  assets of the Company subject to the claims of its general creditors. 
  No person eligible for a benefit under this Plan shall have any right,
  title to, or interest in any such investments.  Participants are
  general, unsecured creditors of the Company.  This Plan constitutes a
  mere promise to pay benefits in the future.
  
       (b)  Amendment or Termination.  
  
            (i)     The ECDC may amend or terminate the Plan at
   any time, but such amendment or termination shall not adversely
   affect the rights of any Participant, without his or her consent, to
   any benefit under the Plan to which such Participant
   may have previously become entitled prior to the effective
   date of such amendment or termination.  Any amendment to the Plan
   shall be made in writing, with or without a meeting. 

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            (ii)    If the Plan is terminated, a valuation shall
   be made of each Participant's Account balance as of the Plan
   termination date.  The amount of such Account balance shall be
   payable to the Participant at the time it would have been payable
   under Section 6 and Section 7 had the Plan not been terminated;
   provided, however, that the ECDC may elect instead to immediately
   distribute all Participants' Account balances in lump sums upon
   termination of the Plan. 
  
       (c)  Statement of Account.  Statements will be sent no less
  frequently than annually to each Participant showing the value of the
  Participant's Account.
  
       (d)  Payments to Incompetents.  If a Participant entitled to
  receive any benefits hereunder is adjudged to be legally incapable of
  giving valid receipt and discharge for such benefits, they will be
  paid to the duly appointed guardian of such Participant or to such
  other legally appointed person as the Committee may designate.  Such
  payment shall, to the extent made, be deemed a complete discharge of
  any liability for such payment under the Plan.
  
       (e)  Benefits Not Transferable.  The right of any person to
  any benefit or payment under the Plan shall not be subject to
  voluntary or involuntary transfer, alienation, or assignment and, to
  the fullest extent permitted by law, shall not be subject to
  attachment, execution, garnishment, sequestration or other legal or
  equitable process.  In the event a person who is receiving or is
  entitled to receive benefits under the Plan attempts to assign,
  transfer or dispose of such right, or if an attempt is made to subject
  said right to such process, such assignment, transfer, or disposition
  shall be null and void.
  
       (f)  Tax Withholding.  The Company, or any Subsidiary, as
  appropriate, is authorized to withhold from any Account or payment due
  under the Plan the amount of applicable withholding taxes in respect
  of such payment or Account and to take such other action as may be
  necessary in the opinion of the Company to satisfy all obligations for
  the payment of such federal, state or other governmental entity tax
  obligation.
  
       (g)  Employment Status.  Nothing in the Plan, nor any action
  by the Company or any Subsidiary pursuant to the Plan, shall be deemed
  to give any Participant any right to remain in the employ of the
  Company or any Subsidiary or affect the right of the Company or any
  Subsidiary to terminate a Participant's employment with or without
  cause.
  
       (h)  Governing Law.  The provisions of the Plan shall be
  construed in accordance with the laws of the State of Delaware.

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