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Clinton Group Believes Stockholders Should Replace The Stillwater Mining Board Of Directors

In fact, nowhere in the Company's proxy statement (or website full of materials) does the Board say that the operational performance has improved, nor that the quintupling of marketing spend has generated sufficient returns, nor that the tripling of overhead expenses was required, nor that the recycling business is strong despite its quickly declining returns on assets, nor that the strategy shift to "diversification" was enlightened, nor that the diligence on Marathon was well conducted, nor that the price paid for Marathon was justified, nor that the delays at Marathon are to be forgotten, nor that the acquisition of Peregrine was brilliant, nor that Argentina is a great place to do business, nor that the $2.5 billion of capital required for Peregrine's development will be easily forthcoming, nor that copper is unavailable for investment in other public companies, nor that exploration and development in Canada and Argentina will not divert management attention from the crown jewel assets in Montana, nor that spending $525 million buying and exploring foreign lands is as good a use of capital as further developing portals and access to the J-M Reef, nor that executive pay has been justified or tied to performance, nor that a convertible bond offering was the appropriate financing choice in 2012 (when the high yield market was wide open), nor that stockholders should have more confidence in the future than the prior performance would otherwise justify.

No, instead, the Board is spending millions of the Company's money – really, of course, stockholders' money – in an ad hominem attack on us and the group of independent professionals whom we have recruited to serve as replacement directors. Without a persuasive defense for their track record, the Board has decided to go on offense. The existing directors apparently believe stockholders will be so distracted as to forget about their investment losses and the stream of strategic, execution and financing blunders that have plagued Stillwater.  

Please do not be distracted. Stillwater is the subject here. And most of these directors have had ten years to exert influence on the Company and the past thirty months to operate without Norilsk watching over them. And stockholders have lost hundreds of millions. That is the point.

While we do not want to distract you (or play into their game plan), we also cannot let the ad hominem attacks go unanswered. First, the Board's letter is full of fallacious assertions. Four of our nominees have public Board experience. No one on the existing Board had any PGM experience when they took office; three of our nominees have such experience. The Board currently has an aircraft industry lobbyist and an elections lawyer on it. We are pleased that our nominees all have relevant experience.

With respect to specific nominees we note: (i) during Mr. Engles' tenure as CEO of Stillwater, the stock increased 51% in a little more than two years (while the basket price of Stillwater's production declined 13%), as Stillwater adopted a growth strategy to double production at the Stillwater mine to current levels and built most of the infrastructure to achieve this growth; [8] (ii) Mr. McMullen has a geology degree and has served as a consultant understanding the operations and financials of nearly every PGM company in South Africa, in addition to serving as an Executive Chairman, Managing Director or Chief Executive Officer of various mining companies around the world, including public mining companies; (iii) Ms. Merrin, a Canadian citizen who has served on three public company boards, has never violated a law in the United States or in her home country (where she has been appointed to a number of prestigious government Boards and panels), though she did serve as an executive officer of Sherritt International, a Canadian-based multinational mining and natural resource company that began working in Cuba again in the 1990s, which earned her (and every other executive and board member of Sherritt) extra-territorial criticism from the U.S. government for dealing with the Cubans during the U.S. embargo, which criticism was withdrawn in 2004 as Ms. Merrin is a regular visitor, sometime lecturer and Board member in the U.S., including as the past Chairman of the Council on Canadian-American Relations; (iv) Mr. McNamara has a decade of mining industry analysis and investing experience, including more than a year's focus on the PGM sector; and (v) Mr. Gardner has extensive capital budgeting, M&A and divestiture experience as a Managing Director of a large private equity firm, board experience on the boards of three very large companies (one of which was public) and an extensive professional network of senior automotive industry relationships that can be very useful to the Company.

The Company also seems particularly agitated with Clinton Group. From the way the Board has attempted to shift the focus to us, we cannot help but think the Board does not much care for stockholders who voice an opinion. We think stockholders should have opinions and we have pursued such an active ownership approach to our equity investing for many years.[9] In that time, we have left scores of companies in better shape for the long term than when we started and, we are proud to note, have generated terrific returns for our investors. If you care, have a look at our activities at Red Robin Gourmet Burgers (our initial purchase of stock was at $16; today it trades at $44), Sabra Health Care ( $10 and $29, respectively), Dillard's ( $18 and $80), Radian ( $4 and $10), Sun Healthcare ( $3 and the company sold for $8), Charming Shoppes ( $3 and the company sold for $7), Collective Brands ( $15 and the company sold for $21), Hot Topic ( $5 and the company sold for $14), Select Comfort ( $8 and $18), or any of the other companies with which we have been involved. As proud of our performance as we are, this campaign has nothing to do with the Clinton Group's performance. The choice stockholders face is between the incumbent directors, who have a track record they cannot bear to discuss, or a new group of directors who we believe can do better.  

We are sorry to report that the Company's reprehensible approach to our nomination of directors has claimed a victim. One of our nominees, John DeMichiei, has asked us to remove his name from nomination. Despite an impressive record as the Special Assistant to the Assistant Secretary of Labor, where Mr. DeMichiei was responsible for writing many of the nation's mine safety regulations, and a business career that has included ten-fold growth in production at Signal Peak Energy while containing costs, operating safely and protecting the environment, Mr. DeMichiei is unwilling to stand by while Stillwater attempts to sully his good name. We have reluctantly agreed to proceed forward without Mr. DeMichiei.

Please join us in supporting a new Board for Stillwater. Return the GREEN proxy card. For more information, and regular updates, on our campaign to improve Stillwater, please visit

If you have any questions or require any assistance in delivering your proxy, please contact Okapi Partners LLC at 437 Madison Avenue, 28th Floor, New York, New York 10022 or (212) 297-0720 or Toll-Free (855) 305-0857.

Thank you for your consideration,

Gregory P. Taxin Managing Director


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