AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 11, 2002
REGISTRATION NO. 333-75812
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------
SOLUTIA INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-1781797
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
AND ITS GUARANTOR SUBSIDIARIES
DELAWARE CPFILMS INC. 06-0385340
DELAWARE MONCHEM, INC. 43-1788418
DELAWARE MONCHEM INTERNATIONAL, INC. 43-1788416
DELAWARE SOLUTIA SYSTEMS, INC. 43-1834280
(STATE OR OTHER (EXACT NAME OF
JURISDICTION OF REGISTRANT AS (I.R.S. EMPLOYER
INCORPORATION OR SPECIFIED IN IDENTIFICATION NO.)
ORGANIZATION) ITS CHARTER)
575 MARYVILLE CENTRE DRIVE
P.O. BOX 66760
ST. LOUIS, MISSOURI 63166-6760
(314) 674-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------------
KARL R. BARNICKOL, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
575 MARYVILLE CENTRE DRIVE
P.O. BOX 66760
ST. LOUIS, MISSOURI 63166-6760
(314) 674-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
--------------------
WITH COPIES TO:
R. CABELL MORRIS, JR.
WINSTON & STRAWN
35 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 558-5600
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE
FOLLOWING BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED
ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES
ACT OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND
OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. /X/
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. / /
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES
ACT REGISTRATION STATEMENT NUMBER OF EARLIER EFFECTIVE REGISTRATION
STATEMENT FOR THE SAME OFFERING. / /
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE
434, PLEASE CHECK THE FOLLOWING BOX. / /
--------------------
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
PROPOSED
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO PROPOSED MAXIMUM PRICE MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED (1) PER SECURITY (2) OFFERING PRICE (1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
Debt Securities, Guarantees of Debt
Securities, Common Stock, par value
$.01 per share (3), Preferred Stock, par
value $.01 per share, Depositary Shares
representing Preferred Stock, Warrants,
Stock Purchase Contracts and Stock
Purchase Units (4) $800,000,000 $800,000,000 $191,200 (5)
==============================================================================================================================
<FN>
(1) In no event will the aggregate initial offering price of the Debt
Securities, Guarantees of Debt Securities, Common Stock, Preferred
Stock, Depositary Shares representing Preferred Stock, Warrants, Stock
Purchase Contracts and Stock Purchase Units issued under this Registration
Statement exceed $800,000,000, or, if any securities are in any foreign
currency units, the U.S. dollar equivalent of $800,000,000 and if any
securities are issued at original issue discount, such greater amount as
shall result in an aggregate offering price not to exceed $800,000,000.
(2) Not applicable pursuant to General Instruction II (D) to Form S-3.
(3) Each share of Common Stock includes one Preferred Share Purchase Right
("Right"). Prior to the occurrence of certain events, the Rights will not be
exercisable or evidenced separately from the Common Stock.
(4) In addition to any Preferred Stock or Common Stock or Depositary Shares
that may be issued directly under this Registration Statement, there are
being registered hereunder an indeterminate number of shares of Preferred
Stock or Common Stock or Depositary Shares as may be issued upon conversion
or exchange of Debt Securities or Preferred Stock or exercise of Stock
Purchase Contracts, as the case may be. Separate consideration may not be
received for any shares of Preferred Stock or Common Stock or Depositary
Shares so issued upon conversion, exchange or exercise.
(5) Filing fee previously paid with the initial filing of this Registration
Statement filed by Solutia Inc. on December 21, 2001.
--------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
==============================================================================
Explanatory Note:
This Post-Effective Amendment No. 1 to Form S-3 is being filed
for the sole purpose of registering guarantees of debt securities by one
or more wholly-owned, domestic subsidiaries of Solutia Inc.
The information contained in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange commission is effective. This
prospectus is not an offer to sell these securities and it is not the
solicitation of an offer to buy these securities in any state where the
offer or sale is not permitted.
Prospectus, Subject to Completion, Dated March 11, 2002.
$800,000,000
SOLUTIA INC.
575 Maryville Centre Drive
St. Louis, Missouri 63166-6760
(314) 674-1000
Debt Securities, Common Stock, Preferred Stock, Depositary Shares,
Warrants to Purchase Debt Securities, Warrants to Purchase Common Stock,
Warrants to Purchase Preferred Stock, Warrants to Purchase Depositary Shares,
Stock Purchase Contracts and Stock Purchase Units
--------------------
This prospectus describes debt and equity securities that we may
issue and sell at various times:
o Our prospectus supplements will be filed at later dates and will
contain specific terms of each issuance of debt or equity securities.
o We can issue debt and equity securities with a total offering price
of up to $800,000,000 under this prospectus.
o We may sell the debt and equity securities to or through
underwriters, and also to other purchasers or through agents. The
names of the underwriters will be stated in the prospectus supplements.
We may also sell debt and equity securities directly to investors.
Our common stock is listed on the New York Stock Exchange under the
trading symbol "SOI." Any common stock sold by a prospectus supplement will
be listed on the New York Stock Exchange, upon official notice of issuance.
You should read this prospectus and any prospectus supplement
carefully before you decide to invest. We will not sell any of the
securities being offered without delivery of the applicable prospectus
supplement describing the method and terms of the offering of the series of
securities being offered.
--------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER
REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------
Prospectus dated ______ __, ____.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS.................................................................1
WHERE YOU CAN FIND MORE INFORMATION...................................................1
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS.................................2
ABOUT SOLUTIA.........................................................................4
USE OF PROCEEDS.......................................................................5
RATIO OF EARNINGS TO FIXED CHARGES....................................................6
DESCRIPTION OF THE SECURITIES WE MAY OFFER............................................6
DESCRIPTION OF DEBT SECURITIES........................................................7
DESCRIPTION OF COMMON STOCK..........................................................26
DESCRIPTION OF PREFERRED STOCK.......................................................30
DESCRIPTION OF DEPOSITARY SHARES.....................................................31
DESCRIPTION OF WARRANTS..............................................................34
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS.....................35
PLAN OF DISTRIBUTION.................................................................36
VALIDITY OF THE OFFERED SECURITIES...................................................37
EXPERTS..............................................................................37
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we
filed with the SEC. By using a shelf registration statement, we may sell,
from time to time, in one or more offerings, any combination of the
securities described in this prospectus. The total dollar amount of the
securities we will sell through these offerings will not exceed
$800,000,000.
This prospectus and any accompanying prospectus supplement do not
contain all of the information included in the registration statement. We
have omitted parts of the registration statement as permitted by the rules
and regulations of the SEC. For further information, we refer you to the
registration statement on Form S-3, including its exhibits. Statements
contained in this prospectus and any accompanying prospectus supplement
about the provisions or contents of any agreement or other document are only
summaries. If SEC rules require that any agreement or document be filed as
an exhibit to the registration statement, you should refer to that agreement
or document for its complete contents. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as
of any date other than the date on the front of each document.
This prospectus provides you with only a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that contains specific information about the terms of
those securities. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the additional
information described under the heading "Where You Can Find More
Information" below.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. The registration statement and our other
filings are available over the Internet at http://www.sec.gov. You may also
read and copy any document we file, including the registration statement, at
the SEC public reference room at:
450 Fifth Street, N.W.
Washington, D.C. 20549
You may call the SEC at 1-800-SEC-0330 for further information
about the operation of the public reference room.
Our common stock is quoted on the New York Stock Exchange under the
symbol "SOI," and our SEC filings can also be read at:
New York Stock Exchange
20 Broad Street
New York, New York 10005
The SEC allows us to "incorporate by reference" the information we
file with them. This means that we can disclose important information to you
by referring you to the documents containing that information. The
information incorporated by reference is considered part of this prospectus.
Any information we file with the SEC later will automatically update and, to
the extent inconsistent, supersede the information in this prospectus. We
incorporate by reference the documents listed below:
o Our annual report on Form 10-K for the year ended December
31, 2001; and
o Our Form 10 filed on August 7, 1997, and amended on August
19, 1997, for a description of our common stock.
We also incorporate by reference any future filings we make with
the SEC, including any filings we make before the registration statement
becomes effective, under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we have sold all the offered
securities to which this prospectus relates or the offering is otherwise
terminated.
You may request a copy of these filings, at no cost, by writing to
us at the following address or telephoning us at (314) 674-4520:
Solutia Inc.
Investor Relations
P.O. Box 66760
St. Louis, Missouri 63166-6760
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
We make statements in this prospectus and the documents
incorporated by reference that are considered forward-looking statements
under the federal securities laws. We consider all statements regarding
anticipated or future matters, including the following, to be
forward-looking statements:
o our expected future financial position, liquidity, results
of operations, profitability and cash flows;
o dividends;
o financing plans;
o business strategy;
o budgets;
- 2 -
o projected cost reductions;
o effect of changes in accounting due to recently issued
accounting standards;
o plans and objectives of management for future operations;
o competitive position;
o growth opportunities for existing products;
o price increases;
o benefits from new technology; and
o share repurchases.
These statements are not guarantees of our future performance. They
represent our estimates and assumptions only on the date we made them. There
are risks, uncertainties and other important factors that could cause our
actual performance or achievements to be materially different from those we
may project. These risks, uncertainties and factors include:
o general economic, business and market conditions, which
affect us because some of our customers are in cyclical
businesses;
o lower prices for our products or a decline in our market
share due to competition or price pressure by customers;
o ability to implement cost reduction initiatives in a
timely manner;
o customer acceptance of new products;
o efficacy of new technology and facilities;
o shortages or pricing of raw materials and energy;
o currency fluctuations;
o ability to acquire and integrate new businesses or divest
existing businesses;
o changes in U.S. and foreign laws and regulations; and
o exposure to product liability and other litigation and
cost of environmental remediation.
These forward-looking statements represent our estimates and assumptions
only on the date they were made. Many of the factors that will determine
these items are beyond our ability to
- 3 -
control or predict. For these statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. We caution you not to place undue
reliance on our forward-looking statements, which speak only as of the date
of this prospectus or the date of any document incorporated by reference.
All subsequent written and oral forward-looking statements attributable
to us or any person acting on our behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to in this
section. We do not undertake any obligation to release publicly any
revisions to our forward-looking statements to reflect the occurrence of
unanticipated events or circumstances after the date of this prospectus. For
more information on the uncertainty of forward-looking statements, see our
annual report on Form 10-K for the year ended December 31, 2001.
ABOUT SOLUTIA
Solutia Inc. and its subsidiaries make and sell a variety of high
performance chemical-based materials. Using our world-class skills, we
create solutions for industrial and individual consumers in household goods,
construction, vehicles, industrial products, and pharmaceuticals. Our
materials and services include:
o SAFLEX(R) plastic interlayer, which is
- used to make laminated glass for windshields;
- marketed under the product category Enhanced Protective
Glass or EPG to the automotive industry for side and
rear windows; and
- branded as KEEPSAFE(R) and KEEPSAFE MAXIMUM(R) for
architectural applications;
o LLUMAR(R) and VISTA(R) custom coated window films for
after-market automotive and architectural applications; and
industrial films for use in high-tech electronic display
applications;
o A variety of branded resins and additives used to produce
high-performance coatings for various materials such as metal,
wood and plastic; and adhesives;
o Process research, process development and scale-up services
for the pharmaceutical industry;
o Specialty chemicals such as DEQUEST(R) water treatment
chemicals, THERMINOL(R) heat transfer fluids and SKYDROL(R)
aviation hydraulic fluids; and
- 4 -
o An integrated family of nylon products, including VYDYNE(R)
and ASCEND(TM) nylon polymers; nylon fibers such as
WEAR-DATED(R) and ULTRON VIP(R) used in carpet; ACRILAN(R)
acrylic fibers; and chemical intermediates.
Solutia Inc. was incorporated in April 1997 as a holding company
for most of the chemical businesses of the former Monsanto Company, now
known as Pharmacia Corporation. On September 1, 1997, Monsanto distributed
our shares as a dividend to Monsanto's stockholders, and we became an
independent publicly held company listed on the New York Stock Exchange.
Solutia Inc. is a Delaware corporation, and our principal executive
office is located at 575 Maryville Centre Drive, St. Louis, Missouri
63166-6760. Our telephone number at that address is (314) 674-1000. All
references to "we," "us," or "Solutia" in this prospectus mean, unless the
context indicates otherwise or unless otherwise specified, Solutia Inc. and
its consolidated subsidiaries.
For additional information about Solutia, refer to the documents we
have incorporated by reference. See "Where You Can Find More Information"
beginning on page 1 to learn how to obtain copies of these documents.
USE OF PROCEEDS
We expect that the net proceeds from some of the securities under
this registration statement will be used to reduce borrowings under our bank
credit facility and that affiliates of some of the lenders under that
facility will participate in offerings of the securities as underwriters.
Unless we indicate otherwise in the prospectus supplement, we expect to use
the remaining net proceeds we receive from any offering of these securities
for some or all of the following purposes:
o repayment of a portion of our existing short-term and
long-term debt;
o capital expenditures;
o additional working capital;
o acquisitions; and
o general corporate purposes.
Before we apply the proceeds to the intended use, we may temporarily invest
the proceeds in short-term, interest-bearing instruments or other
investment-grade debt securities.
- 5 -
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our consolidated ratio of earnings to
fixed charges for the four-month period ended December 31, 1997, the fiscal
years ended December 31, 1998, 1999, 2000 and 2001.
Four Months Ended Years Ended December 31,
December 31, 1997 1998 1999 2000 2001
----------------- ---- ---- ---- ----
Ratio of Earnings
to Fixed Charges 3.23 7.69 6.18 1.35 0.72
We have calculated the ratio of earnings to fixed charges according
to a formula the SEC requires us to use. This formula defines earnings
generally as our pre-tax earnings from operations before equity earnings
from affiliates, less interest expense and defines fixed charges generally
as all interest and interest-related payments and accruals. Earnings include
restructuring and other items of $58 million for the year ended December 31,
2001, $107 million for the year ended December 31, 2000, $61 million for the
year ended December 31, 1999, and $72 million for the four months ended
December 31, 1997. Earnings for the year ended December 31, 2001 would have
to be $29 million higher in order to achieve a one-to-one ratio. If you
would like to see how we have calculated these ratios, you should
review Exhibit 99 to our annual report on Form 10-K for the year ended
December 31, 2001, incorporated by reference in the registration statement.
We have not calculated the ratio of earnings to fixed charges for
periods before September 1, 1997. Computation of the ratio of earnings to
fixed charges is not meaningful before that date because we were not an
independent company and the former Monsanto Company did not allocate debt to
us.
Because we have not issued any preferred stock to date, the ratio of
earnings to fixed charges and preferred stock dividend requirements is
identical to the ratio shown above.
DESCRIPTION OF THE SECURITIES WE MAY OFFER
We may issue, from time to time, in one or more offerings the
following securities:
o debt securities, which may be senior or subordinated and which
may be guaranteed by one or more of our subsidiaries;
o shares of common stock;
o shares of preferred stock or depositary shares representing
fractions of shares of preferred stock;
o warrants exercisable for debt securities, common stock,
preferred stock or depositary shares;
o stock purchase contracts; and
o stock purchase units.
- 6 -
The aggregate initial offering price of these offered securities
that we may issue will not exceed $800,000,000. If we issue debt securities
at a discount from their principal amount, then, for purposes of calculating
the aggregate initial offering price of the offered securities issued under
this prospectus, we will include only the initial offering price of the debt
securities and not the principal amount of the debt securities.
This prospectus contains a summary of the material general terms of
the various securities that we may offer. The prospectus supplement relating
to any particular securities offered will describe the specific terms of the
securities, which may be in addition to or different from the general terms
summarized in this prospectus. Because the summary in this prospectus and in
any prospectus supplements does not contain all of the information that you
may find useful, you should read the documents relating to the securities
that are described in this prospectus or in the prospectus supplement. See
"Where You Can Find More Information" beginning on page 1 to find out how
you can obtain a copy of those documents.
The prospectus supplement will also contain the terms of the
offering, the initial public offering price and the net proceeds to Solutia.
Where applicable, the prospectus supplement will also describe any material
United States federal income tax considerations relating to the securities
offered and indicate whether the securities offered are or will be listed on
any securities exchange.
DESCRIPTION OF DEBT SECURITIES
This section summarizes the terms that will generally apply to the
debt securities we may offer. The prospectus supplement relating to any
particular debt securities will contain most of the financial terms and
other specific terms applicable to those securities. Those terms may vary
from the terms described here. The prospectus supplement may also describe
material federal income tax consequences of the particular securities. As
used in this section, "we," "us," "our" and "Solutia" refer to Solutia Inc.
and not to any of our subsidiaries.
The debt securities that we may issue will be unsecured, direct,
general obligations of Solutia. The debt securities may be fully and
unconditionally guaranteed on a senior or subordinated basis, jointly
and severally by one or more of our subsidiaries. We may issue either
senior debt securities or subordinated debt securities. Our senior debt
securities will rank equally with all other unsecured and unsubordinated
indebtedness of Solutia. Our subordinated debt securities will be subordinated
in right of payment to the prior payment in full of the "senior debt" of
Solutia, as described below under "Subordination of Subordinated Debt
Securities" beginning on page 10 and in the prospectus supplement applicable
to any subordinated debt securities that we may offer.
As required by federal law for all bonds and notes publicly offered
by companies, the debt securities will be issued under a document called an
"indenture." An indenture is a contract between us and a corporate trustee.
The trustee has two main roles. First, the trustee can enforce your rights
against us if we default. There are some limitations on the extent to which
the trustee acts on your behalf described under "Remedies If an Event of
Default Occurs" beginning on page 15. Second, the trustee performs
administrative duties for us, such as sending your interest payments,
transferring your securities to a new buyer if you sell and sending you
notices.
- 7 -
We will issue any senior debt securities under a "senior debt
indenture," and any subordinated debt securities under a separate
"subordinated debt indenture." Each indenture will be between Solutia and a
trustee that meets the requirements of the Trust Indenture Act of 1939. For
purposes of the descriptions in this section, we may refer to the senior
debt indenture and the subordinated debt indenture as an "indenture" or,
collectively, as the "indentures."
The indentures do not limit the amount of debt securities that may
be issued under them. We may issue the debt securities from time to time in
one or more series. We are not required to issue all of the debt securities
of one series at the same time and, unless otherwise provided in the
applicable indenture or prospectus supplement, we may reopen a series and
issue additional debt securities of that series without the consent of the
holders of the outstanding debt securities of that series.
The prospectus supplement for any particular debt securities will
indicate whether the debt securities are senior debt securities or
subordinated debt securities and describe the specific terms of the debt
securities. Because this summary and the summary in any prospectus
supplement do not contain all of the information you might find useful, you
should read the applicable indenture for provisions that may be important to
you. In the summaries we include in parentheses references to sections of
the indentures so that you can easily locate these provisions. The
indentures are substantially identical, except that our covenants described
in the second paragraph under "Consolidation, Merger or Sale of Assets"
beginning on page 12 and under "Restrictive Covenants in Senior Debt
Indenture" beginning on page 17 are included only in the senior debt
indenture and the provisions relating to subordination described under
"Subordination of Subordinated Debt Securities" beginning on page 10 are
included only in the subordinated debt indenture. The forms of the
indentures are exhibits to the registration statement. See "Where You Can
Find More Information" beginning on page 1 to find out how you can obtain a
copy of the registration statement.
TERMS OF DEBT SECURITIES TO BE INCLUDED IN THE PROSPECTUS SUPPLEMENT
The prospectus supplement for any series of debt securities that we
may offer will state the price or prices at which the debt securities will
be offered and will contain the specific terms of the debt securities of
that series. These terms may include the following:
o the title of the debt securities, whether they are senior
debt securities or subordinated debt securities and, if
subordinated, the terms of subordination;
o the aggregate principal amount of the debt securities and
any limit on that aggregate principal amount;
o the date or dates on which the principal of the debt
securities will be payable;
o the interest rate or rates, if any, and the date or dates
from which the interest accrues;
o the dates on which the interest, if any, is payable and the
regular record dates for the interest payment dates;
- 8 -
o the places where the principal of and any premium and any
interest on the debt securities will be payable;
o whether the offered debt securities are redeemable at our
option and, if so, the redemption price or prices and
other redemption terms and conditions;
o whether we must redeem or purchase the offered debt
securities according to any sinking fund or similar
provision or at the option of the holder of the debt
securities, and the period or periods within which, or the
date and dates on which, the price or prices at which, and
the other terms and conditions upon which the debt
securities will be redeemed or purchased, in whole or in
part, in accordance with that obligation;
o if other than denominations of $1,000 and any integral
multiple of $1,000, the denominations in which debt
securities of the series will be issuable;
o if other than the principal amount, the portion of the
principal amount payable if the maturity of the debt
securities is accelerated;
o whether any index, formula or other method will determine
payments of principal or interest and the manner of
determining the amount of the payments;
o if other than U.S. dollars, the currency, currencies or
currency units in which the principal of, or any premium or
interest on, debt securities of the series will be payable;
o if the principal or any premium or interest is to be
payable, at the election of Solutia or the holder, in a
currency or currencies other than that or those in which
the debt securities are stated to be payable, the currency
or currencies in which the payment may be elected to be
payable and the periods within which, and the terms and
conditions upon which, the election is to be made;
o whether we have the right to defer payments of interest by
extending the interest payment period and the duration of
any permissible extension;
o whether the provisions relating to defeasance and covenant
defeasance described under "Defeasance and Covenant
Defeasance" beginning on page 20 apply;
o if the debt securities will be issued in whole or in part
in the form of a book-entry debt security, as described
under the heading "Book-Entry Securities" beginning on
page 23, the depositary for the debt securities and the
terms and conditions, if any, upon which the book-entry
debt securities may be registered for transfer or exchange
in the name of a person other than the depositary or its
nominee;
o any addition to, or change in, the events of default
described under "Remedies If an Event of Default Occurs"
beginning on page 15;
- 9 -
o any addition to, or change in, the covenants in the
indenture applicable to the debt securities;
o if applicable, the terms of any right to convert or
exchange the debt securities into common or preferred
stock or depositary shares of Solutia;
o whether the debt securities will be sold as part of units
consisting of debt securities and other securities;
o if applicable, the terms of any guarantee of debt securities;
o if the debt securities are to be issued upon the exercise
of warrants, the time, manner and place for the debt
securities to be authenticated and delivered; and
o any other terms consistent with the applicable indenture.
We may issue some of the debt securities at a substantial discount
below their principal amount as "original issue discount securities."
"Original issue discount securities" means that less than the entire
principal amount of the securities will be payable upon declaration of
acceleration of their maturity. The applicable prospectus supplement will
describe any material federal income tax consequences and other
considerations that apply to original issue discount securities.
Debt securities may bear interest at a fixed rate or a floating
rate. Debt securities bearing no interest or interest at a rate that at the
time of issuance is below the prevailing market rate and debt securities
issued as part of units consisting of debt securities and other securities
may be sold or deemed to be sold at a discount below their stated principal
amount. If Solutia has the right to defer interest with respect to any debt
securities, the holders of these debt securities may be allocated interest
income for federal and state income tax purposes without receiving
equivalent, or any, interest payments. Any material federal income tax
considerations applicable to any discounted debt securities or to debt
securities issued at par that are treated as having been issued at a
discount for federal income tax purposes will be described in the applicable
prospectus supplement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
To the extent provided in the subordinated debt indenture, the
payment of the principal of, and any premium and interest on, any
subordinated debt securities, including amounts payable on any redemption or
repurchase, will be subordinated in right of payment to the prior payment in
full of all our "senior debt," as defined below. This means that in some
circumstances, if we do not make payments on all of our debt obligations as
they come due, the holders of our senior debt will be entitled to receive
payment in full of all amounts that are due or will become due on our senior
debt before the holders of subordinated debt securities will be entitled to
receive any amounts on the subordinated debt securities. These circumstances
include:
o our filing for bankruptcy or the occurrence of other events
in bankruptcy, insolvency or similar proceedings (Section
1302);
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o any liquidation, dissolution or winding up of our company,
or any assignment for the benefit of our creditors or
marshaling of our assets (Section 1302); or
o acceleration of the maturity of the subordinated debt
securities. For example, the entire principal amount of a
series of subordinated debt securities may be declared to
be due and immediately payable or may be automatically
accelerated due to an event of default as described under
"Remedies If an Event of Default Occurs" beginning on page
15. (Section 1303)
In addition, we are not permitted to make payments of principal,
any premium or interest on the subordinated debt securities if we default in
our obligation to make payments on any senior debt beyond any applicable
grace period and do not cure that default, or if an event of default that
permits the holders of any senior debt or a trustee on their behalf to
accelerate the maturity of the senior debt occurs, or if any judicial
proceeding is pending with respect to a payment default or event of default
of this kind with respect to senior debt. (Section 1303)
These subordination provisions mean that if we are insolvent, a
holder of our senior debt may ultimately receive out of our assets more than
a holder of the same amount of our subordinated debt.
"Senior debt" means the principal of, any premium and unpaid
interest on all of our present and future:
o indebtedness for money that we borrow;
o obligations represented by our bonds, debentures, notes or
similar instruments;
o indebtedness incurred, assumed or guaranteed when we
acquire any business, property or assets except
purchase-money indebtedness classified as accounts payable
under generally accepted accounting principles;
o obligations that we owe as a lessee under leases that
generally accepted accounting principles require us to
capitalize on our balance sheet;
o reimbursement obligations under letters of credit relating
to indebtedness or other obligations of the kind referred
to in the four bullets above; and
o obligations under our guarantees of the indebtedness or
obligations of others of the kind referred to in the five
bullets above.
Senior debt does not include any indebtedness that expressly states
in the instrument creating or evidencing it that it is not superior in right
of payment to the subordinated debt securities. Senior debt also does not
include any subordinated debt securities.
The applicable prospectus supplement may further describe the
provisions applicable to the subordination of the subordinated debt
securities of a particular series. The applicable
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prospectus supplement will describe the approximate amount, on a recent
date, of senior debt outstanding to which the subordinated debt securities
of that series will be subordinated. Neither indenture limits the amount of
senior debt we are permitted to have, and we may incur additional senior
debt after the issuance of any subordinated debt securities.
CONVERSION OR EXCHANGE OF DEBT SECURITIES
The applicable prospectus supplement will describe the terms, if
any, on which a series of debt securities may be converted into or exchanged
for Solutia common or preferred stock or depositary shares. These terms will
include whether the conversion or exchange is mandatory, or is at Solutia's
option or the option of the holder. We will also describe in the applicable
prospectus supplement how we will calculate the number of securities that
holders of debt securities would receive if they were to convert or exchange
their debt securities, the conversion price, any other terms related to
conversion and any anti-dilution protections.
CONSOLIDATION, MERGER OR SALE OF ASSETS
The indentures generally permit Solutia to consolidate with or
merge into another company. They also permit us to sell substantially all
our assets to another company. However, we may not take any of these actions
unless the following conditions are met (Section 801):
o If we merge out of existence or sell our assets, the other
company may not be organized under a foreign country's
laws. In other words, the other company must be a
corporation, partnership, limited liability company or
trust organized under U.S. state or federal law or the
laws of the District of Columbia. In addition, the other
company must agree to be legally responsible for the debt
securities; and
o The merger, sale of assets or other transaction must not
cause a default on the debt securities. For purposes of
this no-default test, a default would include any event of
default described below under "Remedies If an Event of
Default Occurs" beginning on page 15 that has occurred and
is continuing. A default for this purpose would also
include any event that would be an event of default if the
requirement for giving us default notice or the
requirement that the default had to exist for a specific
period of time was disregarded.
It is possible that the merger, sale of assets or other transaction
would cause some of our property to become subject to a mortgage or other
legal mechanism giving some lenders rights in that property that are
preferential to the rights of other lenders if we fail to pay back the
lenders who benefit from the mortgage or other legal mechanism. In the
senior debt indenture, we have promised to limit these preferential rights
on our property, called "liens," as discussed below under "Restriction Upon
Liens" beginning on page 17. If a merger or other transaction would create
any liens on our property, we must comply with the covenant on restrictions
upon liens. We would do this either by creating only liens permitted by the
covenant or by granting an equivalent or higher ranking lien on the same
property to the holders of the senior debt securities. (Section 802)
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If we merge out of existence or sell substantially all our assets,
the surviving or acquiring entity will be substituted for Solutia in the
indentures with the same effect as if it had been an original party to the
indentures. After a merger or sale of substantially all our assets, the
surviving or acquiring entity may exercise Solutia's rights and powers under
each indenture, and Solutia will be released from all its liabilities and
obligations under the indenture and under the debt securities. (Section 803
in the senior debt indenture and Section 802 in the subordinated debt
indenture)
MODIFICATION AND WAIVER
MODIFICATION
There are three types of changes we can make to the indentures and
the debt securities.
CHANGES REQUIRING APPROVAL OF ALL HOLDERS. First, there are changes
that cannot be made to either indenture and the debt securities issued under
that indenture without the approval of the holder of each debt security
affected by the changes (Section 902):
o change the stated maturity of the principal of or interest
on any debt security;
o reduce any amounts due on any debt security;
o reduce the amount of principal payable upon acceleration of
the maturity of a debt security following a default;
o change the place or currency of payment on any debt security;
o impair the right of the holders to sue for payment;
o impair any right that a holder of a debt security may have
to exchange or convert the debt security for or into our
common stock, preferred stock or depositary shares;
o reduce the percentage of the securities of any series whose
holders' consent is needed to modify the indenture;
o reduce the percentage of the securities of any series
whose holders' consent is needed to waive compliance with
certain provisions of the indenture or to waive certain
defaults;
o in the case of subordinated debt securities, modify the
ranking or priority of the securities in a way that is
adverse to the holders in any material respect; or
o modify any aspect of the provisions dealing with
modification and waiver of the indenture, except to increase
any required percentage referred to above or to add
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to the provisions that cannot be changed or waived
without consent of the holder of each affected debt
security.
CHANGES REQUIRING CONSENT BY THE HOLDERS OF 66 2/3% OF THE DEBT
SECURITIES OF EACH AFFECTED SERIES. The second type of change to either
indenture and the debt securities issued under that indenture requires a
vote in favor by holders owning 66 2/3% of the principal amount of the debt
securities of each series affected by the change. Most changes fall into
this category, except for clarifying changes and certain other changes that
would not adversely affect holders of the debt securities in any material
respect. (Section 902)
CHANGES NOT REQUIRING APPROVAL. The third type of change does not
require any consent by holders of the debt securities. This type is limited
to clarifications and other changes that would not adversely affect holders
of the debt securities in any material respect and changes that affect only
debt securities to be issued under the indenture after the changes take
effect. (Section 901)
WAIVER
A vote in favor by holders owning a majority of the principal
amount of the debt securities of an affected series would be required for us
to obtain a waiver of all or part of the restrictive covenants described
below under "Restrictive Covenants in Senior Debt Indenture" beginning on
page 17 or a waiver of a past default with respect to the series. However,
we cannot obtain a waiver of a payment default or any other aspect of either
indenture or the debt securities listed above under "Changes Requiring
Approval of All Holders" beginning on page 13 unless we obtain the
individual consent of each holder of securities affected by the change.
(Sections 513 and 1011)
RULES CONCERNING VOTING
When taking a vote, we will use the following rules to decide how
much principal amount to attribute to a debt security (Section 101):
o For original issue discount securities, we will use the
principal amount that would be due and payable on the
voting date if the maturity of these securities were
accelerated to that date because of a default.
o For debt securities whose principal amount is not known,
because, for example, it is based on an index, we will use
a special rule described in the prospectus supplement.
o For debt securities denominated in one or more foreign
currencies or currency units, we will use the U.S. dollar
equivalent.
Debt securities will not be considered outstanding and will,
therefore, not be eligible to vote if we have deposited or set aside in
trust for the holders money for their payment or redemption. In addition,
securities will not be eligible to vote if they have been fully defeased as
described under "Defeasance and Covenant Defeasance -- Full Defeasance"
beginning on page 20.
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Also, securities that we or our affiliates own will not be considered
outstanding. However, securities so owned which have been pledged in good
faith may be regarded as outstanding if the pledgee establishes to the
trustee's satisfaction the pledgee's right to vote with respect to the
securities and that the pledgee is not one of the persons referred to in the
preceding sentence.
In certain circumstances, we or the trustee will be entitled to set
a record date for action by holders. If we or the trustee set a record date
for a vote or other action to be taken by holders of a particular series of
debt securities, that vote or action may be taken only if holders of the
required percentage of outstanding debt securities vote within 90 days of
the record date to approve taking the action.
REMEDIES IF AN EVENT OF DEFAULT OCCURS
If you are the holder of a subordinated debt security, all the
remedies available upon the occurrence of any event of default under the
subordinated debt indenture will be subject to the restrictions on the
subordinated debt securities described above under "Subordination of
Subordinated Debt Securities" beginning on page 10.
Each indenture defines an "event of default" with respect to the
debt securities of any series to mean any of the following (Section 501):
o our failure to pay interest on a debt security of that
series within 30 days after its due date;
o our failure to pay the principal of, or any premium on, a
debt security of that series at its due date, and
continuance of that failure for a period of 30 days if the
security became due by its terms as a result of a sinking
fund provision;
o our failure to deposit any sinking fund payment with
respect to debt securities of that series within 30 days
after it becomes due;
o our failure to perform, or breach of, any other covenant
or warranty of Solutia in the indenture with respect to
debt securities of that series that continues for 90 days
after a written notice to us by the applicable trustee or
to us and the trustee by the holders of at least 25% of
the principal amount of the outstanding debt securities of
that series stating that we are in default;
o our filing for bankruptcy or the occurrence of other specific
events of bankruptcy, insolvency, or reorganization; and
o the occurrence of any other event of default with respect
to any debt securities of that series described in the
prospectus supplement.
If an event of default applicable to any series of debt securities
then outstanding occurs and continues, the applicable trustee or the holders
of at least 25% of the principal amount of the outstanding debt securities
of that series will have the right to declare the entire principal of all
the debt securities of that series to be due and payable immediately. If the
event of default
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occurs because of specified events in bankruptcy, insolvency or
reorganization relating to Solutia, the entire principal amount of the debt
securities of that series will be automatically accelerated, without any
action by the trustee or any holder. Each of the situations described above
is called a declaration of acceleration of maturity. Under certain
circumstances, the holders of a majority of the principal amount of the
securities of that series may cancel the declaration of acceleration of
maturity and waive the past defaults. (Sections 502 and 513)
For most defaults under either indenture with respect to any series
of debt securities, the trustee will be required to give to the holders of
the securities of the series notice of a default known to it within 90 days
of the occurrence of the default. For these purposes, a default is defined
as the occurrence of any of the events set forth in the events of default in
the indenture, without any grace periods and regardless of notice. For
defaults described in the fourth bullet from the top in this subsection, the
trustee is not to give notice until at least 30 days after the occurrence of
the default. The trustee may withhold notice of any default, except in the
payment of principal or interest or any sinking fund installment, if it
decides in good faith that withholding notice is in the interests of the
holders. (Section 602)
Generally, the trustee is not required to take any action under the
relevant indenture at the request of any holders unless the holders offer
the trustee reasonable protection from expenses and liabilities. This
protection is called an "indemnity." (Section 603) If they provide this
indemnity, the holders of a majority in principal amount of the outstanding
debt securities of the relevant series may direct the time, method and place
of conducting any lawsuit or other formal legal action seeking any remedy
available to the trustee. These majority holders may also direct the trustee
to exercise any other action permitted under the applicable indenture. The
trustee may decline to act if the direction given is contrary to law or the
applicable indenture. (Section 512)
Before you bypass the trustee and bring your own lawsuit or other
formal legal action or take other steps to enforce your rights or protect
your interests relating to the debt securities, the following must occur
(Section 507):
o You must give the trustee written notice that an event of
default has occurred and is continuing;
o The holders of not less than 25% in principal amount of
all outstanding securities of the relevant series must
make a written request that the trustee take action
because of the default and must offer reasonable indemnity
to the trustee against the cost and other liabilities of
taking that action;
o The trustee must not have taken action for 60 days after
receipt of the above notice, request and offer of
indemnity; and
o During those 60 days, the holders of a majority in
principal amount of the debt securities of the relevant
series must not have given the trustee directions that are
inconsistent with the written request of the holders of
not less than 25% in principal amount of the debt
securities of the relevant series.
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However, you are entitled at any time to bring a lawsuit for the
payment of money due on your debt security on or after its due date. (Section
508)
COVENANTS
Under each indenture, we have agreed to:
o pay the principal of and any premium and interest on the
debt securities when due (Section 1001);
o maintain a place of payment (Section 1002);
o deposit sufficient funds with the paying agent on or
before the due date for any principal, interest or premium
payment, or, if Solutia acts as its own paying agent,
segregate the funds and hold them in trust for the benefit
of the holders of the debt securities (Section 1003);
o maintain Solutia's corporate existence, except as
described under "Consolidation, Merger or Sale of Assets"
beginning on page 12 (Section 1007);
o make repairs to our principal manufacturing facilities in
the United States (unless we determine that the facility
is no longer necessary for our business) (Section 1005);
o pay all material taxes and other specified claims (except
those Solutia is contesting in good faith) when due
(Section 1004); and
o deliver a certificate to the trustee each year about
Solutia's compliance with its obligations under the
indenture (Section 1006).
RESTRICTIVE COVENANTS IN SENIOR DEBT INDENTURE
RESTRICTION UPON LIENS. Some of our property and the property of
our subsidiaries may be subject to a mortgage or other legal mechanism that
gives some of our lenders preferential rights in those assets over other
lenders, including the holders of our debt securities, and over our general
creditors if we fail to pay them back. These preferential rights are called
"liens." Under the senior debt indenture, we promise that we and our
Restricted Subsidiaries will not become obligated on any new debt that is
secured by a lien on any Principal Property or on any shares of stock or
debt of any of our Restricted Subsidiaries unless we grant an equivalent or
higher ranking lien on the same property to the holders of our senior debt
securities.
We do not need to comply with this restriction if the amount of all
debt that would be secured by liens on Principal Properties is less than 15%
of our Consolidated Net Tangible Assets. Liens on Principal Properties
include the new debt and all "Attributable Debt," as described under
"Restriction Upon Sales and Leasebacks" beginning on page 18, which results
from a sale and leaseback transaction involving Principal Properties that is
entered into after the date of the senior debt indenture, but excludes sale
and leaseback transactions the proceeds of
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which are applied to purchase a new Principal Property or retire Funded Debt
as described under "Restriction Upon Sales and Leasebacks" beginning below
on this page.
This restriction on liens does not apply to debt secured by certain
types of liens, and we can disregard this debt when we calculate the limits
imposed by this restriction. These types of liens include:
o Liens that existed as of the date of the senior debt
indenture;
o Liens on the property of any of our Restricted Subsidiaries,
or on their shares of stock or debt, if those liens existed
at the time the corporation became our Restricted Subsidiary;
o Liens on property that existed at the time Solutia
acquired the property or that Solutia granted in order to
purchase the property, sometimes called "purchase money
mortgages";
o Liens to secure the cost of exploration, drilling,
development, operation, construction, alteration, repair
or improvement of properties that are not then Principal
Properties;
o Liens in favor of U.S. governmental bodies that we granted
in order to assure our payments to these bodies or that we
owe by law or because of a contract;
o Liens in favor of Solutia or our Restricted Subsidiaries;
o Certain liens in connection with legal proceedings or
arising in the ordinary course of business and not in
connection with the borrowing of money; and
o Liens that extend, renew or replace any of the listed types
of liens.
In addition, production payments and other similar financial
arrangements with regard to oil, gas and mineral properties are not
considered liens securing indebtedness for money borrowed. (Section 1008)
RESTRICTION UPON SALES AND LEASEBACKS. Under the senior debt
indenture, we promise that neither we nor any of our Restricted Subsidiaries
will enter into any sale and leaseback transaction involving a Principal
Property unless we comply with this covenant. A "sale and leaseback
transaction" is generally an arrangement between us or a Restricted
Subsidiary and a lender in which we or the Restricted Subsidiary sell a
property to the lender and then lease it back from the lender more than 120
days after the property has been acquired or constructed and full operation
has begun. Sales and leasebacks of a facility to the extent financed with
Industrial Development Bonds are not included in the definition.
- 18 -
This restriction on sales and leasebacks does not apply to a sale
and leaseback:
o completed within 120 days after the acquisition or completion
of construction of the property and the beginning of its full
operation;
o if we or our Restricted Subsidiary could grant a lien on
the Principal Property in an amount equal to the
Attributable Debt for the sale and leaseback transaction
without being required to grant an equivalent or higher
ranking lien to the holders of the senior debt securities
under the "Restriction Upon Liens" described beginning on
page 17;
o that is between Solutia and one of its Restricted
Subsidiaries or between Restricted Subsidiaries; or
o that involves a lease with a period of three years or less
by the end of which we intend to discontinue use of the
relevant Principal Property.
Solutia can comply with this covenant if it applies, within 120
days of the transaction, an amount that equals the fair market value of the
Principal Property that we lease in the transaction to (a) purchase another
Principal Property or (b) retire Funded Debt, subject to credits for certain
voluntary retirements of debt securities and Funded Debt we may make.
(Section 1009)
DEFINITIONS USED IN RESTRICTION UPON LIENS AND RESTRICTION UPON SALES AND
LEASEBACKS. Following are the meanings of the terms that are important in
understanding the two restrictive covenants described above beginning on
page 17:
"Attributable Debt" means the total net amount of rent (discounted
to present value at an annual rate equal to the discount rate that would
apply to a capital lease obligation with the same term) that is required to
be paid during the remaining term of a lease.
"Consolidated Net Tangible Assets" means the total amount of assets
(less reserves and other permitted deductible items) after subtracting all
current liabilities (other than those which Solutia by their terms may
choose to renew or extend beyond 12 months from the date of determination)
and all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and similar intangible assets, as these amounts appear
on our most recent consolidated balance sheet and computed in accordance
with generally accepted accounting principles.
"Funded Debt" means all debt for borrowed money, or evidenced by a
bond, debenture, note or similar document, that:
o has a maturity of more than 12 months from the date on
which the calculation of Funded Debt is made; or
o has a maturity of less than 12 months from that date but
is by its terms renewable or extendible beyond 12 months
from that date at the option of the borrower.
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It also includes commercial paper that is accounted for as long-term debt on
Solutia's balance sheet.
"Industrial Development Bonds" means obligations issued or
guaranteed by, or supported by the full faith and credit of, a governmental
entity or authority in the United States.
"Principal Property" means any building, structure or other
facility, and the land on which it sits and its associated fixtures, that we
use primarily for manufacturing and that is located in the United States,
which has a book value, before depreciation, of greater than 3% of
Consolidated Net Tangible Assets, other than a building, structure or other
facility that we have determined is not of material importance to the total
business that we and our Restricted Subsidiaries conduct or that is financed
by Industrial Development Bonds.
"Restricted Subsidiary" means any subsidiary of Solutia that owns
any Principal Property. A "subsidiary" is any person in which we and/or one
or more of our other subsidiaries owns more than 50% of the voting power of
the "voting stock." "Voting stock" of any person means capital stock issued
by a corporation, or equivalent interests (including partnership,
membership, trust or other ownership or beneficial interests) in any other
person, having ordinary voting power for the election of directors (or
persons performing similar functions) of that person, whether at all times
or only so long as no other class of securities of that person has voting
power of that kind by reason of the occurrence of any contingency.
DEFEASANCE AND COVENANT DEFEASANCE
The following discussion of defeasance and covenant defeasance will
be applicable to your series of debt securities only if we choose to have
them apply to that series. If we do so choose, we will state that in the
prospectus supplement.
FULL DEFEASANCE
If there is a change in federal tax law, as described below, we can
legally release ourselves from any payment or other obligations on the debt
securities of a series (called "full defeasance") on the 91st day after the
date of the deposit referred to in the first bullet below if we satisfy the
conditions below. (Section 403):
o We must deposit in trust for the benefit of all holders of
the debt securities a combination of money and U.S.
government obligations or U.S. government agency
obligations unconditionally guaranteed by the United
States (or if the debt securities are in a foreign
currency, foreign government securities in the same
foreign currency) that will generate enough cash to pay
principal and any premium and any interest on the debt
securities on their various due dates.
o There must be a change in current federal tax law or an
IRS ruling that lets us make the above deposit without
causing you to be taxed on the debt securities any
differently than if we did not make the deposit and just
repaid the debt securities ourselves. Under current
federal tax law, the deposit and our legal release from
the debt securities would be treated as though we took
back your debt securities
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and gave you your share of the cash and notes or bonds
deposited in trust. In that event, you could recognize gain
or loss on the debt securities you give back to us.
o We must deliver to the trustee a legal opinion of our
counsel confirming the tax law change described above.
o In the case of any subordinated debt securities, at the
time of the deposit referred to above, no payment default
on any senior debt may have occurred and be continuing, no
acceleration of the maturity of any senior debt upon any
event of default may have occurred and be continuing and
no other event of default with respect to any senior debt
may have occurred and be continuing permitting (after
notice or lapse of time or both) the holders of the senior
debt or a trustee on their behalf to accelerate the
maturity of the senior debt.
o We must deliver to the trustee an officers' certificate
and an opinion of counsel, each stating that the above
conditions and all other conditions to defeasance under
the applicable indenture have been complied with.
If we ever fully defeased your debt securities, you would have to
rely solely on the trust deposit for repayment on the debt securities. You
could not look to us for repayment in the unlikely event of any shortfall.
Conversely, the trust deposit would most likely be protected from claims of
our lenders and other creditors if we ever become bankrupt or insolvent. If
the debt securities are subordinated debt securities, their holders would be
released from the subordination provisions described under "Subordination of
Subordinated Debt Securities" beginning on page 10.
COVENANT DEFEASANCE
Under current federal tax law, we can make the same type of deposit
described above and be released from the restriction on liens and
restriction on sales and leaseback described under "Restrictive Covenants in
Senior Debt Indenture" beginning on page 17 and any other restrictive
covenants relating to your debt security that may be described in your
prospectus supplement. The release from these covenants is called "covenant
defeasance." In that event, you would lose the protection of these
covenants, and any omission to comply with them would not constitute an
event of default. You would, however, gain the protection of having money
and securities set aside in trust to repay the debt securities. If the debt
securities are subordinated, their holders would be released from the
subordination provisions described above under "Subordination of
Subordinated Debt Securities" beginning on page 10. In order to achieve
covenant defeasance, we must do the following (Section 1010):
o We must deposit in trust for the benefit of all holders of
the debt securities a combination of money and U.S.
government obligations or U.S. government agency
obligations unconditionally guaranteed by the United
States (or if the debt securities are in a foreign
currency, foreign government securities in the same
foreign currency) that will generate enough cash to pay
principal and any premium and any interest on the debt
securities on their various due dates.
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o We must deliver to the trustee a legal opinion of our
counsel confirming that under current federal income tax
law we may make that deposit without causing you to be
taxed on the debt securities any differently than if we
did not make the deposit and just repaid the debt
securities ourselves.
o In the case of any subordinated debt securities, at the
time of the deposit referred to above, no payment default
on any senior debt may have occurred and be continuing, no
acceleration of the maturity of any senior debt upon any
event of default may have occurred and be continuing and
no other event of default with respect to any senior debt
may have occurred and be continuing permitting (after
notice or lapse of time or both) the holders of the senior
debt or a trustee on their behalf to accelerate the
maturity of the senior debt.
o We must deliver to the trustee an officers' certificate
and an opinion of counsel, each stating that the above
conditions and all other conditions to defeasance under
the applicable indenture have been complied with.
If we accomplish covenant defeasance with regard to your debt
securities, the following provisions of the applicable indenture and the
debt securities would no longer apply:
o If your debt securities are senior debt securities, our
promises about restriction of liens and restriction
against sales and leasebacks described under "Restrictive
Covenants in Senior Debt Indenture" beginning on page 17.
o Any other covenants applicable to the series of debt
securities described in the prospectus supplement.
o The condition regarding the treatment of liens when we
merge or engage in similar transactions as described above
under "Consolidation, Merger or Sale of Assets" beginning
on page 12.
o The events of default relating to breach of covenants
described above under "Remedies If an Event of Default
Occurs" beginning on page 15.
o If the securities are subordinated, the subordination
provisions of the debt securities described above under
"Subordination of Subordinated Debt Securities" beginning
on page 10.
If we accomplish covenant defeasance, the holders of the debt
securities could still look to us for repayment of those securities if there
were a shortfall in the trust deposits. If a remaining event of default
occurred and the debt securities became immediately due and payable, there
could be a shortfall. Depending on the event causing the default, you may
not be able to obtain payment of the shortfall.
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LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT OWNERS
Investors who hold securities in accounts at banks or brokers will
generally not be recognized by us as legal holders of securities. This is
called holding in "street name." Instead, we would recognize only the bank
or broker, or the financial institution the bank or broker uses to hold its
securities. These intermediary banks, brokers and other financial
institutions pass along principal, interest and other payments on the
securities, either because they agree to do so in their customer agreements
or because they are legally required to. If you hold securities in street
name, you should check with your own institution to find out:
o How it handles securities payments and notices.
o Whether it imposes fees or charges.
o How it would handle voting if ever required.
o Whether and how you can instruct it to send you securities
registered in your own name so you can be a holder as
described below.
o How it would pursue rights under the securities if there
were a default or other event triggering the need for
holders to act to protect their interests.
REGISTERED HOLDERS
Our obligations, as well as the obligations of the trustee and
those of any third parties employed by us or the trustee, run only to
persons who are registered as holders of securities. As noted above, we do
not have obligations to you if you hold securities in street name or by
other indirect means, either because you choose to hold securities in that
manner or because the securities are issued in the form of book-entry
securities as described below. For example, once we make payment to the
registered holder, we have no further responsibility for the payment even if
that holder is legally required to pass the payment along to you as a street
name customer but does not do so.
BOOK-ENTRY SECURITIES
WHAT IS A BOOK-ENTRY SECURITY? A book-entry security is a special
type of indirectly held security, as described above under "Street Name and
Other Indirect Owners". If we choose to issue securities in the form of
book-entry securities, the ultimate beneficial owners can only be indirect
owners. We do this by requiring that the book-entry security be registered
in the name of a financial institution we select and by requiring that the
securities included in the book-entry security not be transferred to the
name of any other holder unless the special circumstances described below
occur. The financial institution that acts as the sole holder of the
book-entry security is called the "depositary." Any person wishing to own a
security must do so indirectly by means of an account with a broker, bank or
other financial institution that in turn has an
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account with the depositary. The prospectus supplement indicates whether your
series of securities will be issued only in the form of book-entry
securities.
SPECIAL INVESTOR CONSIDERATIONS FOR BOOK-ENTRY SECURITIES. As an
indirect owner, an investor's rights relating to a book-entry security will
be governed by the account rules of the investor's financial institution and
of the depositary, as well as general laws relating to securities transfers.
We do not recognize this type of investor as a holder of securities and
instead deal only with the depositary that holds the book-entry security.
An investor should be aware that if securities are issued only in
the form of book-entry securities:
o The investor cannot get securities registered in his or
her own name and cannot receive physical certificates for
his or her interest in the securities, except in the
special situations we describe below.
o The investor will be a street name owner and must look to
his or her own bank or broker for payments on the
securities and protection of his or her legal rights
relating to the securities. See "Street Name and Other
Indirect Owners" beginning on page 23 for information
about these procedures.
o The investor may not be able to sell interests in the
securities to some insurance companies and other
institutions that are required by law to own their
securities in the form of physical certificates.
o The investor may not be able to pledge his or her interest
in the securities in circumstances where certificates
representing the securities must be delivered to the
lender or other beneficiary of the pledge in order for the
pledge to be effective.
o The depositary's policies will govern payments, transfers,
exchanges and other matters relating to the investor's
interest in the book-entry security. We and the trustee
have no responsibility for any aspect of the depositary's
actions or for its records of ownership interests in the
book-entry security. We and the trustee also do not
supervise the depositary in any way.
o The depositary will require that interests in a book-entry
security be purchased or sold within its system using
same-day funds and your broker or bank may require you to
do so as well.
SPECIAL SITUATIONS WHEN A BOOK-ENTRY SECURITY WILL BE TERMINATED.
In a few special situations described below, a book-entry security will
terminate and interests in it will be exchanged for physical certificates
representing the securities it represented. After that exchange, the choice
of whether to hold securities directly or in street name will be up to the
investor. Investors must consult their own bank or brokers to find out how
to have their interests in securities transferred to their own name, so that
they will be holders. The rights of street name
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investors and holders in the securities are described under "Street Name and
Other Indirect Owners" beginning on page 23 and "Registered Holders" on page
23.
The special situations for termination of a book-entry security are
(Section 305):
o If the depositary notifies us that it is unwilling or
unable to continue as depositary, or ceases to be a
clearing agency registered under applicable law, and we
have not appointed a successor depositary within 90 days.
o If we notify the trustee that we wish to terminate the
book-entry security.
o If an event of default on the securities has occurred and
is continuing. Defaults are discussed above under "Remedies
If an Event of Default Occurs" beginning on page 15.
The prospectus supplement may also list additional situations for
terminating a book-entry security that would apply only to the particular
series of securities covered by the prospectus supplement.
If a book-entry security is terminated, only the depositary, and
not we or the trustee, is responsible for deciding the names of the
institutions in whose names the debt securities represented by the
book-entry security will be registered and, therefore, who will be the
holders of those securities.
CERTIFICATED DEBT SECURITIES
If we issue certificated debt securities, they will be registered
in the name of the holder of the debt security. Holders may transfer or
exchange these certificated debt securities without the payment of any
service charge, other than any tax or other governmental charge, by
contacting the trustee. (Section 305)
We will pay principal of, and any premium and interest on,
certificated debt securities at designated places, or we may choose to make
these payments by check mailed to the persons in whose names the debt
securities are registered or by wire transfer to their accounts, on days
specified in the prospectus supplement. (Section 202)
GOVERNING LAW
The indentures and the debt securities will be governed by, and
construed in accordance with, the laws of the State of New York.
(Section 112)
ABOUT THE TRUSTEE AND PAYING AGENT
The JPMorgan Chase Bank will be the trustee under both the senior
debt indenture and the subordinated debt indenture.
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We maintain banking relationships in the ordinary course of
business with JPMorgan Chase. JPMorgan Chase is a lending bank under a
revolving credit agreement with Solutia and acts as the issuing and paying
agent for our commercial paper programs. JPMorgan Chase is also the trustee
under an indenture relating to other senior indebtedness of Solutia. An
affiliate of JPMorgan Chase is one of the investment banks that advise us on
merger and acquisition activities.
If an event of default, or an event that would be an event of
default if the requirements for giving us default notice or our default
having to exist for a specific period of time were disregarded, occurs, the
trustee may be considered to have a conflicting interest with respect to the
securities offered by this prospectus and any accompanying prospectus
supplement, or with respect to the securities outstanding under that other
indenture, for purposes of the Trust Indenture Act of 1939. In that case,
the trustee may be required to resign as trustee under the indenture under
which the securities offered by this prospectus and any accompanying
prospectus supplement will be issued, and we would be required to appoint a
successor trustee.
At any time, the trustee under either indenture may resign or be
removed by the holders of at least a majority in principal amount of any
series of the outstanding debt securities of that indenture. If the trustee
resigns, is removed or becomes incapable of acting as trustee, or if a
vacancy occurs in the office of the trustee for any reason, a successor
trustee will be appointed in accordance with the provisions of the
indenture.
The trustee will act as paying agent for the debt securities unless
a different paying agent is identified in any prospectus supplement.
DESCRIPTION OF COMMON STOCK
The following description summarizes the terms of the common stock
that we may issue. Because the description below and in any prospectus
supplement does not contain all of the information that you may find useful,
you should read our Restated Certificate of Incorporation, our by-laws and
our Rights Agreement for all of the terms of our common stock. See "Where
You Can Find More Information" beginning on page 1 to find out how you can
obtain a copy of these documents.
Our Restated Certificate of Incorporation provides that we have
authority to issue 600,000,000 shares of our common stock, par value $0.01
per share. We also have authority to issue 10,000,000 shares of our
preferred stock, par value $0.01 per share. We describe the preferred stock
under the heading "Description of Preferred Stock" beginning on page 30.
TERMS OF THE COMMON STOCK
On February 25, 2002, there were 104,604,349 shares of common stock
issued and outstanding, 13,796,286 shares held as treasury shares, and
28,751,746 shares reserved for issuance under Solutia's stock option plans.
VOTING RIGHTS. Each holder of shares of our common stock is
entitled to attend all special and annual meetings of our stockholders.
Except for any special voting rights of any series of preferred stock that
we may issue in the future, the holders of our common stock have
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one vote for each share held on all matters voted upon by our stockholders,
including the election of our directors. Holders of common stock may not
cumulate their votes in elections of directors.
DIVIDEND RIGHTS. Except for any preferential rights of holders of
any preferred stock that may then be issued and outstanding, holders of our
common stock are entitled to receive dividends when declared by our board of
directors from legally available funds.
LIQUIDATION RIGHTS. In the event of a liquidation, whether
voluntary or involuntary, of Solutia, the holders of our common stock will
be entitled to receive, proportionally according to the number of shares
held by each, all assets of Solutia remaining for distribution after payment
to creditors and the holders of any issued and outstanding preferred stock
of the full preferential amounts to which they are entitled.
NO PREEMPTIVE RIGHTS OR RIGHT OF REDEMPTION. Other than the rights
discussed under "Shareholder Rights Plan" below, holders of our common stock
do not have preemptive rights to subscribe for and purchase any new or
additional issue of common stock or securities convertible into common
stock. Shares of our common stock are not subject to redemption.
STOCK EXCHANGE LISTING AND TRANSFER AGENT. The outstanding shares
of our common stock are listed on the New York Stock Exchange. The transfer
agent and registrar of our common stock is EquiServe Trust Company, N.A.
SHAREHOLDER RIGHTS PLAN
We have had a shareholder rights plan in effect since we became an
independent, publicly held company. Before September 1, 1997, the date upon
which Monsanto distributed all of the outstanding shares of Solutia stock as
a dividend to Monsanto's stockholders, our board of directors declared a
dividend of one preferred share purchase right on each share of our common
stock issued in the distribution and authorized the issuance of one right
for each share of common stock issued after September 1, 1997, until the
earliest of the date the rights become exercisable, the date Solutia redeems
the rights and the termination date of the rights plan.
The rights become exercisable on the earlier of (a) ten days after
a public announcement that a person or group has acquired beneficial
ownership of 20% or more of Solutia's outstanding common stock, or (b) ten
business days (or such later date as determined by Solutia's board of
directors) after the commencement of a tender or exchange offer, or the
announcement of an intention to commence a tender or exchange offer, that
would result in beneficial ownership of 20% or more of Solutia's outstanding
common stock. Before the rights become exercisable, the board of directors
is generally authorized to reduce the 20% thresholds to not less than the
greater of (x) the sum of .001% and the largest percentage of the
outstanding common stock then known by Solutia to be beneficially owned by
any person and (y) 10%.
If the rights become exercisable, each right entitles the
registered holder to purchase from Solutia one one-hundredth of a share of
Series A Junior Participating Preferred Stock at a price of $125 per one
one-hundredth of a share, subject to adjustment. In addition, upon the
occurrence of certain events, and upon payment of the then current purchase
price, the rights may "flip in" and entitle holders to buy Solutia common
stock, or "flip over" and entitle holders
- 27 -
to buy common stock in an acquiring entity, in such amount that the market
value of the purchased stock of Solutia or the acquiring entity is equal to
twice the then current purchase price of that stock under the rights . In
addition, under certain conditions, Solutia's board of directors may, at its
option, exchange part or all of the rights for shares of Solutia common
stock at an exchange ratio of one share for every right, subject to
adjustment.
The rights are nonvoting and may be redeemed by Solutia for one
cent per right, subject to adjustment, at any time before any person or
group acquires beneficial ownership of 20% or more of Solutia's outstanding
common stock. The rights expire September 1, 2007.
Because this summary of the rights does not contain all of the
information that you may find useful, you should read the Rights Agreement
for all the terms applicable to the rights. See "Where You Can Find More
Information" beginning on page 1 to find out how you can obtain a copy of
the Rights Agreement.
PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECTS
Various provisions of the Delaware General Corporation Law and
Solutia's Restated Certificate of Incorporation and by-laws, as well as the
shareholder rights plan described beginning on page 27, may make more
difficult the acquisition of control of Solutia by means of a tender offer,
open market purchases, a proxy fight or other means that are not approved by
Solutia's board of directors. See "Where You Can Find More Information"
beginning on page 1 to find out how you can obtain a copy of Solutia's
Restated Certificate of Incorporation and by-laws.
SHAREHOLDER RIGHTS PLAN AND BUSINESS COMBINATIONS UNDER DELAWARE LAW
As described under "Shareholder Rights Plan" beginning on page 27,
we have adopted a shareholder rights plan that has the effect of providing
our stockholders with the right to purchase shares of our common stock, or
securities of an acquiring company, at half the market price under certain
circumstances involving a potential change in control of Solutia that has
not been approved by our board of directors. In addition, the Delaware
General Corporation Law provides that any beneficial owner of 15% or more of
Solutia's voting stock is prohibited, without the prior approval of the
board of directors, from entering into any business combination with Solutia
for three years from the date that 15% ownership interest is acquired unless
the combination otherwise satisfies Section 203 of the Delaware General
Corporation Law.
CHARTER AND BY-LAW PROVISIONS
The following provisions of our Restated Certificate of
Incorporation and by-laws could have an antitakeover effect:
CLASSIFIED BOARD OF DIRECTORS; VACANCIES; AND LIMITATIONS ON
REMOVAL OF DIRECTORS. Our Restated Certificate of Incorporation classifies
our board of directors into three classes and provides that, subject to any
rights of the holders of preferred stock, only a majority of the board of
directors then in office has the authority to fill any vacancies on our
board of directors. Directors may be removed from office only with cause and
only by the affirmative vote of the
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holders of at least 80% of the voting power of the then outstanding shares
of Solutia stock entitled to vote generally in the election of directors.
NO WRITTEN CONSENT OR CALLING OF SPECIAL MEETINGS BY STOCKHOLDERS.
Our Restated Certificate of Incorporation provides that any action required
or permitted to be taken by our stockholders must be taken at a duly called
annual or special meeting of our stockholders and explicitly prohibits
stockholder action by written consent instead of a meeting. A vote of the
holders of 80% of the voting power of the then outstanding shares of Solutia
stock entitled to vote generally in the election of directors is required to
amend these provisions. In addition, our by-laws provide that, subject to
the rights of holders of preferred stock, only our chairman of the board,
our president or our board of directors can call a special meeting.
ADVANCE NOTICE PROVISION. Our by-laws provide for an advance notice
procedure for the nomination, other than by our board of directors, of
candidates for election as directors at an annual meeting of stockholders.
Our by-laws also provide for an advance notice procedure for business,
except for items of business included in our proxy statement, to be brought
before an annual or special meeting of stockholders. Under these provisions,
a stockholder must give us written notice that complies with the
specifications of our by-laws of an intention to nominate a director for
election at an annual meeting or bring other business before an annual or
special meeting. To be timely, we must generally receive this notice not
less than 90 days nor more than 120 days before the meeting.
ABILITY TO ISSUE PREFERRED AND COMMON STOCK. Our Restated
Certificate of Incorporation authorizes our board of directors to establish
series of preferred stock and to determine for each series the designation,
powers, preferences and special rights of the shares of the series and the
qualifications, limitations and restrictions on these powers, preferences
and special rights. In addition, we have available for issuance authorized
but unissued shares of common stock. The authorized shares of preferred and
common stock could be issued without action by our stockholders unless their
action was required by law or the rules of any stock exchange on which
Solutia may be listed. Our board of directors could issue preferred stock in
one or more transactions with terms that might make the acquisition of a
controlling interest in Solutia more difficult or costly. Our board could
also issue additional authorized shares of common stock to defend Solutia
against a hostile takeover bid by diluting the stock ownership of a
potential acquiror, or our board could use the authorized but unissued
shares in a private placement with purchasers who might side with our board
of directors in opposing a specific change of control.
AMENDMENT OF CHARTER PROVISIONS AND BY-LAWS. The affirmative vote
of the holders of at least 80% of the voting power of the then outstanding
shares of Solutia stock entitled to vote generally in the election of
directors would be required to amend the provisions of our Restated
Certificate of Incorporation pertaining to classification of the board of
directors, the number of directors, filling vacancies in the board of
directors, removal of directors, and the requirement that stockholders can
act only at annual or special meetings and not by written consent. In
addition, the affirmative vote of at least 80% of the voting power of the
then outstanding shares of Solutia stock entitled to vote generally in the
election of directors would be required for our stockholders to adopt, amend
or repeal any provision of our by-laws.
- 29 -
DESCRIPTION OF PREFERRED STOCK
The following description summarizes the terms of the preferred
stock that we may issue. The prospectus supplement for a particular series
of preferred stock will describe the specific terms of that series. Because
the description below and in any prospectus supplement does not contain all
of the information you may find useful, you should read our Restated
Certificate of Incorporation, the Certificate of Designations for the
applicable series of preferred stock and our by-laws for all of the terms of
the preferred stock. See "Where You Can Find More Information" beginning on
page 1 to find out how you can obtain a copy of these documents.
AUTHORITY OF THE BOARD TO ISSUE PREFERRED STOCK
Our Restated Certificate of Incorporation authorizes our board of
directors, from time to time and without further stockholder action, to
provide for the issuance of up to 10,000,000 shares of preferred stock, par
value $0.01 per share, in one or more series and for such consideration as
the board may fix from time to time. The board has the authority to fix,
before the issuance of any shares of preferred stock of a particular series,
the designation, powers, preferences and special rights of the shares of the
series and the qualifications, limitations and restrictions on those powers,
preferences and special rights. On the date of this prospectus, no shares of
preferred stock were outstanding, but 1,600,000 shares of Series A Junior
Participating Preferred Stock were authorized and reserved for issuance
under the shareholder rights plan described beginning on page 28.
You should refer to the prospectus supplement relating to the
series of preferred stock being offered for the specific terms of that
series, including:
o the title of the series and the number of shares in the
series;
o the price at which the preferred stock will be offered;
o the dividend rate or rates or method of calculating the
rates, the dates on which the dividends will be payable,
whether or not dividends will be cumulative or
noncumulative and, if cumulative, the dates from which
dividends on the preferred stock being offered will
cumulate;
o the voting rights, if any, of the holders of shares of the
preferred stock being offered;
o the provisions for a sinking fund, if any, and the provisions
for redemption, if applicable, of the preferred stock being
offered;
o the liquidation preference per share;
o the terms and conditions, if applicable, upon which the
preferred stock being offered will be convertible into our
common stock, including the conversion price, or the
manner of calculating the conversion price, and the
conversion period;
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o the terms and conditions, if applicable, upon which the
preferred stock being offered will be exchangeable for
debt securities, including the exchange price, or the
manner of calculating the exchange price, and the exchange
period;
o any listing of the preferred stock being offered on any
securities exchange;
o whether interests in the shares of the series will be
represented by depositary shares;
o a discussion of any material federal income tax
considerations applicable to the preferred stock being
offered;
o the relative ranking and preferences of the preferred
stock being offered as to dividend rights and rights upon
liquidation, dissolution or winding up of Solutia's
affairs;
o any limitations on the issuance of any class or series of
preferred stock ranking senior or equal to the series of
preferred stock being offered as to dividend rights and
rights upon liquidation, dissolution or winding up of
Solutia's affairs; and
o any additional rights, preferences, qualifications,
limitations and restrictions of the series.
The preferred stock of each series will rank senior to the common
stock and the Series A Junior Participating Preferred Stock in priority of
payment of dividends, and in the distribution of assets in the event of any
liquidation, dissolution or winding up of Solutia, to the extent of the
preferential amounts to which the preferred stock of the respective series
will be entitled.
Upon issuance, the shares of preferred stock will be fully paid and
nonassessable, which means that its holders will have paid their purchase
price in full and we may not require them to pay additional funds. Holders
of preferred stock will not have any preemptive rights.
The transfer agent and registrar for the preferred stock will be
identified in the applicable prospectus supplement.
DESCRIPTION OF DEPOSITARY SHARES
We may elect to offer fractional interests in shares of preferred
stock, rather than offer whole shares of preferred stock. If we choose to do
this, we will provide for the issuance by a depositary to the public of
receipts for depositary shares. Each depositary share will represent
fractional interests of a particular series of preferred stock.
The shares of any series of preferred stock underlying the
depositary shares will be deposited under a separate deposit agreement
between us and a bank or trust company, which we will select. The bank or
trust company must have its principal office in the United States and a
combined capital and surplus of at least $500,000,000. The prospectus
supplement relating to a series of depositary shares will state the name and
address of the depositary. Unless otherwise
- 31 -
provided by the deposit agreement, each owner of depositary shares will be
entitled, in proportion to the applicable fractional interests in shares of
preferred stock underlying the depositary shares, to all the rights and
preferences of the preferred stock underlying the depositary shares
including dividend, voting, redemption, conversion and liquidation rights.
The depositary shares will be evidenced by depositary receipts
issued under the deposit agreement. Depositary receipts will be distributed
to those persons purchasing the fractional interests in shares of the
related series of preferred stock in accordance with the terms of the
offering described in the related prospectus supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received in respect of preferred stock to the record holders
of depositary shares relating to the preferred stock in proportion to the
numbers of the depositary shares owned by the holders on the relevant record
date. The depositary will distribute only an amount, however, that can be
distributed without attributing to any holder of depositary shares a
fraction of one cent, and any balance not so distributed will be added to
and treated as part of the next sum received by the depositary for
distribution to record holders of depositary shares.
If there is a non-cash distribution, the depositary will distribute
property received by it to the record holders of depositary shares entitled
to it, unless the depositary determines that it is not feasible to make the
distribution. If this happens, the depositary may, with our approval, sell
the property and distribute the net sale proceeds to the holders. The
deposit agreement will also contain provisions relating to the manner in
which any subscription or similar rights that we offer to holders of the
preferred stock will be made available to the holders of depositary shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the preferred stock underlying the depositary shares
is redeemed in whole or in part, the depositary shares will be redeemed from
the redemption proceeds received by the depositary. The depositary will mail
notice of redemption not less than 30, and not more than 60, days before the
date fixed for redemption to the record holders of the depositary shares to
be redeemed at their addresses appearing in the depositary's books. The
redemption price for each depositary share will be equal to the applicable
fraction of the redemption price for each share payable with respect to the
series of the preferred stock. Whenever we redeem shares of preferred stock
held by the depositary, the depositary will redeem on the same redemption
date the number of depositary shares relating to the shares of preferred
stock so redeemed. If less than all of the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot or
proportionally as may be determined by the depositary.
After the date fixed for redemption, the depositary shares called
for redemption will no longer be considered outstanding and all rights of
the holders of the depositary shares will cease, except the right to receive
the money, securities or other property payable upon the redemption and any
money, securities or other property to which the holders of the redeemed
depositary shares were entitled upon surrender to the depositary of the
depositary receipts evidencing the depositary shares.
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VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
preferred stock are entitled to vote, the depositary will mail the
information contained in the notice of meeting to the record holders of the
depositary shares relating to the preferred stock. Each record holder of
depositary shares on the record date, which will be the same date as the
record date for the preferred stock, will be entitled to instruct the
depositary how to exercise the voting rights pertaining to the number of
shares of preferred stock underlying the holder's depositary shares. The
depositary will endeavor, to the extent practicable, to vote the number of
shares of preferred stock underlying the depositary shares in accordance
with these instructions, and we will agree to take all action which the
depositary may consider necessary in order to enable the depositary to vote
the shares.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
We may enter into an agreement with the depositary at any time to
amend the form of depositary receipt evidencing the depositary shares and
any provision of the deposit agreement. However, the holders of a majority
of the depositary shares must approve any amendment which materially and
adversely alters the rights of the existing holders of depositary shares. We
or the depositary may terminate the deposit agreement only if (a) all
outstanding depositary shares issued under the agreement have been redeemed
or (b) a final distribution in connection with any liquidation, dissolution
or winding up has been made to the holders of the depositary shares.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. We will
also pay charges of the depositary in connection with the initial deposit of
the preferred stock and any redemption of the preferred stock. Holders of
depositary shares will pay transfer and other taxes and governmental charges
and such other charges as are expressly provided in the deposit agreement to
be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to us notice of
its election to resign, and we may at any time remove the depositary. Any
resignation or removal will take effect when a successor depositary has been
appointed and has accepted the appointment. Appointment must occur within 60
days after delivery of the notice of resignation or removal. The successor
depositary must be a bank or trust company having its principal office in
the United States and having a combined capital and surplus of at least
$500,000,000.
MISCELLANEOUS
The depositary will forward to the holders of depositary shares all
reports and communications that we deliver to the depositary and that we are
required to furnish to the holders of the preferred stock. Neither the
depositary nor Solutia will be liable if it is prevented or delayed by law
or any circumstance beyond its control in performing its obligations under
the deposit agreement. The obligations of Solutia and the depositary under
the deposit agreement
- 33 -
will be limited to performance in good faith of their duties under the
agreement and they will not be obligated to prosecute or defend any legal
proceeding in respect of any depositary shares or preferred stock unless the
holders provide them with satisfactory indemnity. They may rely upon written
advice of counsel or accountants, or information provided by persons
presenting preferred stock for deposit, holders of depositary shares or
other persons believed to be competent and on documents they believe to be
genuine.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt or equity securities. We may
issue warrants independently or together with any offered securities. The
warrants may be attached to or separate from those offered securities. We
will issue the warrants under warrant agreements to be entered into between
us and a bank or trust company, as warrant agent, all as described in the
applicable prospectus supplement. The warrant agent will act solely as our
agent in connection with the warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners
of warrants.
The prospectus supplement relating to any warrants that we may
offer will contain the specific terms of the warrants. These terms may
include the following:
o the title of the warrants;
o the designation, amount and terms of the securities for
which the warrants are exercisable;
o the designation and terms of the other securities, if any,
with which the warrants are to be issued and the number of
warrants issued with each other security;
o the price or prices at which the warrants will be issued;
o the aggregate number of warrants;
o any provisions for adjustment of the number or amount of
securities receivable upon exercise of the warrants or the
exercise price of the warrants;
o the price or prices at which the securities purchasable upon
exercise of the warrants may be purchased;
o if applicable, the date on and after which the warrants
and the securities purchasable upon exercise of the
warrants will be separately transferable;
o if applicable, a discussion of the material United States
federal income tax considerations applicable to the exercise
of the warrants;
o any other terms of the warrants, including terms, procedures
and limitations relating to the exchange and exercise of the
warrants;
- 34 -
o the date on which the right to exercise the warrants will
commence, and the date on which the right will expire;
o the maximum or minimum number of warrants which may be
exercised at any time; and
o information with respect to book-entry procedures, if any.
EXERCISE OF WARRANTS
Each warrant will entitle the holder of warrants to purchase for
cash the amount of debt or equity securities, at the exercise price stated
or determinable in the prospectus supplement for the warrants. Warrants may
be exercised at any time up to the close of business on the expiration date
shown in the prospectus supplement relating to the warrants, unless
otherwise specified in the applicable prospectus supplement. After the close
of business on the expiration date, unexercised warrants will become void.
Warrants may be exercised as described in the prospectus supplement relating
to the warrants. When the warrant holder makes the payment and properly
completes and signs the warrant certificate at the corporate trust office of
the warrant agent or any other office indicated in the prospectus
supplement, we will, as soon as possible, forward the debt or equity
securities that the warrant holder has purchased. If the warrant holder
exercises the warrant for less than all of the warrants represented by the
warrant certificate, we will issue a new warrant certificate for the
remaining warrants.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND
STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts
obligating holders to purchase from us, and us to sell to the holders, a
specified number of shares of common stock at a future date or dates. The
price per share of common stock and the number of shares of common stock may
be fixed at the time the stock purchase contracts are issued or may be
determined by reference to a specific formula stated in the stock purchase
contracts.
The stock purchase contracts may be issued separately or as part of
units that we call "stock purchase units." Stock purchase units consist of a
stock purchase contract and either our debt securities or debt obligations
of third parties, including U.S. treasury securities, securing the holders'
obligations to purchase the common stock under the stock purchase contracts.
The stock purchase contracts may require us to make periodic
payments to the holders of the stock purchase units or vice versa, and these
payments may be unsecured or refunded on some basis. The stock purchase
contracts may require holders to secure their obligations in a specified
manner.
The applicable prospectus supplement will describe the terms of the
stock purchase contracts or stock purchase units. The description in the
prospectus supplement will only be a summary, and you should read the stock
purchase contracts, and, if applicable, collateral or depositary
arrangements, relating to the stock purchase contracts or stock purchase
units.
- 35 -
Material United States federal income tax considerations applicable
to the stock purchase units and the stock purchase contracts will also be
discussed in the applicable prospectus supplement.
PLAN OF DISTRIBUTION
We may sell the securities through agents, underwriters or dealers,
or directly to one or more purchasers.
We may designate agents who agree to use their reasonable efforts
to solicit purchases for the period of their appointment or to sell
securities on a continuing basis.
If we use underwriters for a sale of securities, the underwriters
will acquire the securities for their own account. The underwriters may
resell the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The obligations of the underwriters to
purchase the securities will be subject to the conditions stated in the
applicable underwriting agreement. The underwriters will be obligated to
purchase all the securities of the series offered if any of the securities
of that series are purchased. Any initial public offering price and any
discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.
We may also sell securities directly to one or more purchasers
without using underwriters or agents.
Underwriters, dealers and agents that participate in the
distribution of the securities may be underwriters as defined in the
Securities Act, and any discounts or commissions they receive from us and
any profit on their resale of the securities may be treated as underwriting
discounts and commissions under the Securities Act. The applicable
prospectus supplement will identify any underwriters, dealers or agents and
will describe their compensation. We may have agreements with the
underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act. Underwriters,
dealers and agents may engage in transactions with or perform services for
us or our subsidiaries in the ordinary course of their business.
Unless otherwise specified in the applicable prospectus supplement,
each class or series of securities will be a new issue with no established
trading market, other than the common stock, which is listed on the New York
Stock Exchange. We may elect to list any other class or series of securities
on any exchange, but we are not obligated to do so. It is possible that one
or more underwriters may make a market in a class or series of securities,
but the underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. We cannot give any assurance as to
the liquidity of the trading market for any of the securities.
Any underwriter may engage in over-allotment, stabilizing
transactions, short-covering transactions and penalty bids in accordance
with Regulation M under the Securities Exchange Act. Over-allotment involves
sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum.
Short-covering transactions involve purchases of the securities in the open
market after the distribution is completed to cover short positions. Penalty
bids permit the underwriters to reclaim a selling concession from a dealer
when the securities
- 36 -
originally sold by the dealer are purchased in a covering transaction to
cover short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. If commenced, the
underwriters may discontinue any of the activities at any time.
We expect that the net proceeds from the sale of some of the
securities under this registration statement will be used to reduce
borrowings under our bank credit facility and that affiliates of some of the
lenders under that facility will participate in offerings of the securities
as underwriters. Rule 2710(c)(8) of the Conduct Rules of the National
Association of Securities Dealers, Inc. will apply to any offering whose net
proceeds will be used to reduce borrowings under the credit facility owed to
affiliates of underwriters participating in the offering.
VALIDITY OF THE OFFERED SECURITIES
The validity of the offered securities will be passed upon for us
by Karl R. Barnickol, who is our Senior Vice President, General Counsel and
Secretary. As of March 6, 2002, Mr. Barnickol owned 156,356 shares of our
common stock and options to purchase an additional 294,116 shares.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this prospectus by reference from the
Annual Report on Form 10-K of Solutia Inc. for the year ended December 31,
2001 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report (which report expresses an unqualified opinion and
includes an explanatory paragraph referring to a change in accounting
principle), which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
- 37 -
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table shows the costs and expenses we expect to pay,
except for any underwriters' fees and expenses, in connection with the
offered securities. All of the amounts are estimated except the SEC
registration fee.
SEC Registration Fee.................................................... $191,200
Blue Sky Fees........................................................... 10,000
Printing Expenses....................................................... 100,000
Legal Fees and Expenses................................................. 90,000
Accounting Fees and Expenses............................................ 50,000
Transfer Agent and Registrar, Trustee and Depositary Fees............... 50,000
New York Stock Exchange Listing Fees.................................... 90,000
Rating Agency Fees...................................................... 613,000
Miscellaneous Expenses.................................................. 5,800
------------
Total................................................................... 1,200,000
============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
permits indemnification of directors, officers, employees and agents of
corporations under specified conditions and subject to specified
limitations.
Solutia's articles of incorporation and by-laws and the by-laws
of its Guarantor Subsidiaries provide for indemnification of any director
or officer to the fullest extent permitted by the General Corporation Law
of the State of Delaware.
In addition, Solutia maintains directors' and officers' liability
insurance for the benefit of its directors and officers and for the benefit
of the directors and officers of Solutia's subsidiaries.
The form of Underwriting Agreement included as an exhibit to this
registration statement provides for indemnification of directors and
officers of Solutia against certain liabilities.
ITEM 16. EXHIBITS.
A list of exhibits is set forth in the Exhibit Index appearing
elsewhere in this Registration Statement and is incorporated by reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
II - 1
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action,
II - 2
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) pursuant to the Securities Act shall be deemed to
be part of this registration statement as of the time it was declared
effective.
(2) For purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II - 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Solutia Inc. certifies that it has grounds to believe that it meets all of
the requirements for filing this Post-Effective Amendment No. 1 to Form S-3
and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the County of St. Louis
and State of Missouri on the 11th day of March, 2002.
SOLUTIA INC.
By: /s/ Robert A. Clausen
---------------------
Robert A. Clausen
Senior Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman, President, Chief Executive Officer
- ------------------------------------ and Director (Principal Executive Officer) March 11, 2002
John C. Hunter III
/s/Robert A. Clausen Senior Vice President and Chief Financial
- ------------------------------------ Officer (Principal Financial Officer) March 11, 2002
Robert A. Clausen
/s/ J.M. Sullivan Vice President and Controller (Principal
- ------------------------------------ Accounting Officer) March 11, 2002
James M. Sullivan
* Director March 11, 2002
- ------------------------------------
Paul Donovan
* Director March 11, 2002
- ------------------------------------
Paul H. Hatfield
* Director March 11, 2002
- ------------------------------------
Robert H. Jenkins
* Director March 11, 2002
- ------------------------------------
Frank A. Metz, Jr.
II - 4
* Director March 11, 2002
- ------------------------------------
J. Patrick Mulcahy
* Director March 11, 2002
- ------------------------------------
Sally G. Narodick
* Director March 11, 2002
- ------------------------------------
William D. Ruckelshaus
* Director March 11, 2002
- ------------------------------------
John B. Slaughter
<FN>
*Karl R. Barnickol, by signing his name hereto, does sign this
document on behalf of the above noted individuals, pursuant to powers of
attorney duly executed by such individuals which have been filed as an
Exhibit to this Registration Statement.
/s/ Karl R. Barnickol
- ---------------------
Karl R. Barnickol
(Attorney-in-Fact)
II - 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
CPFilms Inc. certifies that it has grounds to believe that it meets all of the
requirements for filing this Post-Effective Amendment No. 1 to Form S-3 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the County of St. Louis and the
State of Missouri on the 11th day of March, 2002.
CPFILMS INC.
By: *
-------------------------
Ken Vickers
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* President and Director (Principal Executive
- ------------------------------------ Officer) March 11, 2002
Ken Vickers
* Vice President, Treasurer, Assistant Secretary
- ------------------------------------ and Director (Principal Accounting and
Philip Solomon Financial Officer) March 11, 2002
* Director March 11, 2002
- ------------------------------------
G. Bruce Greer, Jr.
* Director March 11, 2002
- ------------------------------------
Victoria M. Holt
* Director March 11, 2002
- ------------------------------------
Jeff F. Quinn
<FN>
*Karl R. Barnickol, by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an exhibit to this
Registration Statement.
/s/ Karl R. Barnickol
- ---------------------
Karl R. Barnickol
(Attorney-in-Fact)
II - 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Monchem, Inc. certifies that it has grounds to believe that it meets all of
the requirements for filing this Post-Effective Amendment No. 1 to Form S-3
and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the County of St. Louis
and State of Missouri on the 11th day of March, 2002.
MONCHEM, INC.
By: *
-------------------------
C. Kevin Wilson
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* President and Director (Principal
- ------------------------------------ Executive Officer) March 11, 2002
C. Kevin Wilson
* Vice President, Treasurer and Director
- ------------------------------------ (Principal Financial and Accounting Officer) March 11, 2002
Jeff F. Quinn
* Director March 11, 2002
- ------------------------------------
James M. Sullivan
<FN>
*Karl R. Barnickol, by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an exhibit to this
Registration Statement.
/s/ Karl R. Barnickol
- ---------------------
Karl R. Barnickol
(Attorney-in-Fact)
II - 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Monchem
International, Inc. certifies that it has grounds to believe that it meets
all of the requirements for filing this Post-Effective Amendment No. 1 to
Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of
St. Louis and State of Missouri on the 11th day of March, 2002.
MONCHEM INTERNATIONAL, INC.
By: *
-------------------------
C. Kevin Wilson
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* President and Director (Principal Executive
- ------------------------------------ Officer) March 11, 2002
C. Kevin Wilson
* Vice President, Treasurer and Director
- ------------------------------------ (Principal Financial and Accounting Officer) March 11, 2002
James M. Sullivan
* Director March 11, 2002
- ------------------------------------
Jeff F. Quinn
<FN>
*Karl R. Barnickol, by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an exhibit to this
Registration Statement.
/s/ Karl R. Barnickol
- ---------------------
Karl R. Barnickol
(Attorney-in-Fact)
II - 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Solutia
Systems, Inc. certifies that it has grounds to believe that it meets all of
the requirements for filing this Post-Effective Amendment No. 1 to Form S-3
and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the County of St. Louis
and State of Missouri on the 11th day of March, 2002.
SOLUTIA SYSTEMS, INC.
By: *
-------------------------
C. Kevin Wilson
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* President and Director (Principal Executive
- ------------------------------------ Officer) March 11, 2002
C. Kevin Wilson
* Treasurer and Director (Principal Financial
- ------------------------------------ and Accounting Officer) March 11, 2002
Jeff F. Quinn
* Director March 11, 2002
- ------------------------------------
Frank Riddick, Jr.
<FN>
*Karl R. Barnickol, by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an exhibit to this
Registration Statement.
/s/ Karl R. Barnickol
- ---------------------
Karl R. Barnickol
(Attorney-in-Fact)
II - 9
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
1 Form of Underwriting Agreement (for debt securities)
(incorporated by reference from Solutia's Form S-3 Registration
Statement (No. 333-46070) filed on September 19, 2000)
3.1(i) Restated Certificate of Incorporation of Solutia Inc.
as of October 28, 1997 (incorporated by reference to
Exhibit 3(a) of Solutia Inc.'s Form S-1 Registration
Statement (No. 333-36355), filed on September 25, 1997)
3.1(ii) By-Laws of Solutia Inc. (incorporated by reference to
Exhibit 3(b) of Solutia Inc.'s Form 10-K for the year
ended December 31, 2001 (File No. 011-13255))
3.2(i) Restated Certificate of Incorporation of CPFilms Inc.,
as amended
3.2(ii) By-Laws of CPFilms Inc., as amended and restated
3.3(i) Certificate of Incorporation of MonChem, Inc.
3.3(ii) By-Laws of MonChem, Inc., as amended and restated
3.4(i) Certificate of Incorporation of MonChem International, Inc.,
as amended
3.4(ii) By-Laws of MonChem International, Inc., as amended and restated
3.5(i) Certificate of Incorporation of Solutia Systems, Inc.
3.5(ii) By-Laws of Solutia Systems, Inc.
4.1 Rights Agreement (incorporated by reference to Exhibit 4
of Solutia Inc.'s Registration Statement on Form 10
(File No. 001-13255) filed on August 7, 1997)
4.2+ Amendment to Rights Agreement, dated as of November 1, 2001
and Certificate regarding Change of Rights Agent (previously
filed as Exhibit 4.4)
4.3 Form of Indenture between Solutia Inc. and JPMorgan Chase
Bank as Trustee, providing for Issuance of Senior Debt
Securities in Series (incorporated by reference from
Solutia's Form S-3 Registration Statement (No. 333-46070)
filed on September 19, 2000)
4.4 Form of Indenture between Solutia Inc. and [________] as
Trustee, providing for Issuance of Subordinated Debt
Securities in Series (incorporated by reference from
Solutia's Form S-3 Registration Statement (No. 333-46070)
filed on September 19, 2000)
4.5* Form of Deposit Agreement between Solutia Inc., [__________]
and the Holders from Time to Time of the Depositary Shares
Described Therein
4.6* Form of Certificate of Designations of the [___]% Series
[___] [Convertible] Preferred Stock (Par Value $.01 Per
Share) of Solutia Inc.
4.7* Form of Warrant Agreement between Solutia Inc. and
[__________], as Warrant Agent
5 Opinion of Karl R. Barnickol, Esq.
12 Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 99 of Solutia Inc.'s
Form 10-K for the year ended December 31, 2001
(File No. 001-13255))
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Karl R. Barnickol, Esq. (included in Exhibit 5)
24.1+ Powers of Attorney for Solutia Inc.
24.2 Powers of Attorney for CPFilms Inc.
24.3 Powers of Attorney for Monchem, Inc.
24.4 Powers of Attorney for Monchem International, Inc.
24.5 Powers of Attorney for Solutia Systems, Inc.
25+ Statement of Eligibility on Form T-1 of JPMorgan Chase Bank,
as trustee under the Indenture providing for the issuance of
the senior debt securities and the Indenture providing for
the issuance of the subordinated debt securities
<FN>
- ----------------------------
* To be filed, if necessary, after the effectiveness of this
registration statement by an amendment to the registration
statement or incorporated by reference pursuant to a Current Report
on Form 8-K in connection with the offering of securities.
+ Filed previously.