SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

Donnelly D Michael

(Last)

(First)

(Middle)

575 MARYVILLE CENTRE DRIVE

(Street)

ST. LOUIS

63141

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
SOLUTIA INC [ SOA ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	Exec VP & COO

3. Date of Earliest Transaction (Month/Day/Year)
07/02/2012

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	07/02/2012		D		37,000	D	⁽¹⁾	0	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Performance Based Restricted Stock	⁽²⁾	07/02/2012		D			6,196	⁽²⁾	⁽²⁾	Common Stock	6,196	⁽²⁾	0	D
Performance Based Restricted Stock	⁽²⁾	07/02/2012		D			7,110	⁽²⁾	⁽²⁾	Common Stock	7,110	⁽²⁾	0	D
Performance Based Restricted Stock	⁽²⁾	07/02/2012		D			4,936	⁽²⁾	⁽²⁾	Common Stock	4,936	⁽²⁾	0	D
Performance Based Restricted Stock	⁽²⁾	07/02/2012		D			6,282	⁽²⁾	⁽²⁾	Common Stock	6,282	⁽²⁾	0	D
Stock Option (Right-to-Buy)	$16.95	07/02/2012		D			19,572	⁽³⁾	04/21/2020	Common Stock	19,572	⁽³⁾	0	D
Stock Option (Right-to-Buy)	$23.13	07/02/2012		D			20,355	⁽³⁾	02/23/2021	Common Stock	20,355	⁽³⁾	0	D
Stock Option (Right-to-Buy)	$14.98	07/02/2012		D			8,360	⁽³⁾	02/23/2021	Common Stock	8,360	⁽³⁾	0	D
Phantom Stock	⁽⁴⁾	07/02/2012		D			25,311	⁽⁴⁾	⁽⁴⁾	Common Stock	25,311	⁽⁴⁾	0	D

Explanation of Responses:

1. Pursuant to the Agreement and Plan of Merger, dated as of January 26, 2012 (the "Merger Agreement"), by and among Solutia Inc. ("Solutia"), Eastman Chemical Company ("Eastman"), and Eagle Merger Sub Corporation ("Merger Sub"), Solutia merged with and into Merger Sub (the "Merger"). Upon the effective time of the Merger, each share of Solutia common stock was cancelled and exchanged for (i) $22.00 in cash, without interest, and (ii) 0.120 shares of Eastman common stock (the "Merger Consideration").

2. Pursuant to the Merger Agreement, the restrictions on each performance based restricted share lapsed based on no greater than the performance results for the applicable performance period pursuant to the restricted stock award agreement, at the effective time of the Merger, entitling the holder to receive, for each such performance based restricted share in which the restrictions lapsed, the Merger Consideration. The performance based restricted shares are measured half against relative total shareholder return and half against relative return on capital, each compared to the peer group at the effective time of the Merger for the applicable performance periods.

3. Pursuant to the Merger Agreement, each option to acquire shares of Solutia common stock, whether or not then vested or exercisable, was cancelled and terminated at the effective time of the Merger in exchange for the right to receive, in cash, the amount by which the cash value of the Merger Consideration (using the five-day average trading price of Eastman common stock ending on (and including) the trading day that is two trading days prior to the Merger) exceeds the exercise price for such option.

4. Each share of phantom stock was the economic equivalent of one share of Solutia common stock at the effective time of the Merger. Each share of phantom stock was converted to a cash amount equal to the final trading price of one share of Solutia common stock immediately prior to the closing of the Merger. The cash amount the Reporting Person will receive will be prorated based on the number of days the Reporting Person was employed by Solutia in 2012.

Remarks:

	/s/Miriam Rogers Singer, Attorney-in-Fact, Solutia Inc.	07/02/2012
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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