Exhibit 99
[SOLUTIA Letterhead]
FOR IMMEDIATE RELEASE
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Contacts: Media - Glenn Ruskin - 703-282-7429
Financial - Marleen Judge - 314-674-7777
SOLUTIA REPORTS SETTLEMENT OF ALABAMA PCB LITIGATION
$600 Million Cash Settlement and Community Outreach Programs
ST. LOUIS, Aug. 20, 2003 --- Solutia Inc. (NYSE:SOI) today
announced a settlement resolving the Abernathy and Tolbert PCB litigation
against the Company in Alabama.
The settlement, which includes no admissions of wrongdoing, will be
funded by Solutia, Monsanto Co. and Pharmacia, a wholly-owned subsidiary of
Pfizer and the companies' commercial insurers. It resolves all outstanding
claims including potential punitive damages that might have been sought by
plaintiffs and their lawyers. Solutia's portion of the settlement will be
$50 million paid in equal installments over a period of 10 years.
"We are glad to have this litigation behind us as it removes a
burden for the Company, its employees and stakeholders; and the community of
Anniston, Alabama," said John C. Hunter, chairman and chief executive
officer. "This settlement puts the Company in a better position in the
coming months to refinance its bank facility and to address upcoming bond
maturities, pension funding obligations and other legacy liabilities."
Mr. Hunter added, "While there is substantial scientific evidence
which demonstrates that exposure to PCBs does not cause serious long-term
health impacts to people, continuing to battle these matters in the courts
would have taken many years and would have continued to drain the resources
of the Company and the vibrancy of the Anniston community."
The settlement, which concludes these cases in state and federal
court, respectively, resulted from mediation conducted by The Honorable U.W.
Clemon, Senior Judge, United States District Court for the Northern District
of Alabama, and The Honorable R. Joel Laird, jr., State Circuit Court Judge,
Calhoun County, Alabama. Participants in the mediation included Solutia,
Monsanto, Pharmacia and lawyers for the plaintiffs.
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"We commend the judges for their professionalism and
even-handedness in bringing about a resolution of these cases. We share
their vision that by solving these matters, it will allow the community to
begin a healing process," Mr. Hunter said.
The terms of the agreement were stipulated by all parties in a
court session Wed., Aug. 20, 2003 before the respective judges in the two
cases. The settlement is subject to the parties entering into a final
agreement and approval by the court which are expected by Aug. 26, 2003,
with funds being transferred by Aug. 29, 2003.
The cash settlement totals $600 million, with Solutia's $50 million
portion to be paid over time. Approximately $160 million of the cash
settlement will be provided through the settling Companies' commercial
insurance. The remaining approximately $390 million will be provided by
Monsanto.
In addition, as part of the settlement, Solutia arranged for a
broad array of community health initiatives for low-income residents of
Anniston and Calhoun County to be undertaken by Pfizer Corporation. These
programs are valued at more than $75 million over the next 20 years.
Solutia has also agreed to issue Monsanto warrants to purchase 10
million shares of Solutia common stock. The warrants are exercisable if
Solutia's common stock reaches a certain price target or upon a
change-of-control of Solutia.
"Solutia and Monsanto Company, now known as Pharmacia, have acted
responsibly as producers and employers in the Anniston, Alabama community.
Solutia plans to remain an integral part of the community. Judge Clemon's
recent approval of a Consent Decree between Solutia, the EPA and the
Department of Justice allows the Company to proceed with an expedited
residential cleanup in Anniston, while simultaneously developing a
comprehensive cleanup plan for the community," Mr. Hunter noted.
A news conference will be held on Thurs., Aug. 21, 2003 in
Anniston, Alabama.
For more information on Solutia's cleanup efforts, or its economic
and community activities in Anniston, please visit www.solutia.com/anniston.
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CAUTIONARY STATEMENT
This press release contains forward-looking statements including
statements regarding litigation matters and remediation efforts These
statements are based on current expectations, but results may differ
materially, depending on such important factors as world economic
conditions, competitive pressures, gain or loss of significant customers,
inability to consummate sale of business, labor relations and disruption of
operations, raw material and energy costs, currency fluctuations, success in
implementing pricing actions and managing spending, operating rates,
exposure to product liability and other litigation costs, environmental
remediation, cost of debt, and other factors identified in Solutia's Annual
Report on Form 10-K for the year ended December 31, 2002 and Quarterly
Report on Form 10-Q for the period ended June 30, 2003. These reports are
filed with the U.S. Securities and Exchange Commission and can be accessed
through Solutia's investor Internet site at www.Solutia.com.
CORPORATE PROFILE
Solutia (http://www.Solutia.com) uses world-class skills in applied
chemistry to create value-added solutions for customers, whose products
improve the lives of consumers every day. Solutia is a world leader in
performance films for laminated safety glass and after-market applications;
process development and scale-up services for pharmaceutical fine chemicals;
specialties such as water treatment chemicals, heat transfer fluids and
aviation hydraulic fluid and an integrated family of nylon products
including high-performance polymers and fibers.
Solutia ...Solutions For A Better life.
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Source: Solutia Inc.
ST. LOUIS
Date 8/20/03