April 15, 2013
/PRNewswire/ -- Clinton Group, Inc. ("
"), a stockholder of Stillwater Mining Company (NYSE: SWC), today sent a letter to its fellow stockholders asking them to vote to replace the Board of Directors of
. The full text of the letter to stockholders is copied below. The letter and other materials Clinton has prepared, including the proxy statement, are available to Stillwater Mining stockholders on the
website free of charge.
annual meeting is scheduled to be held on
May 2, 2013
urges its fellow stockholders to use the GREEN proxy card when voting at this year's annual meeting and to vote for the
About Clinton Group, Inc.
Clinton Group, Inc. is a Registered Investment Advisor based in New York City. The firm has been investing in global markets since its inception in 1991 with expertise that spans a wide range of investment styles and asset classes.
Clinton Group, Inc.601 Lexington Avenue, 51
New York, New York
April 15, 2013
To Our Fellow Stockholders of the Stillwater Mining Company:
Clinton Group and funds it manages are stockholders of Stillwater Mining Company ("
" or the "Company").
I am writing again to encourage you to join us in seeking a better future for
by changing the composition of the Company's Board of Directors. With the Annual Meeting of stockholders approaching quickly, I encourage you to use the enclosed GREEN proxy card to vote for change. More information about our nominees and our views about the Company can be found at
The sitting Board of Directors has made many value destructive mistakes. They decided to "diversify" the Company away from being the only US-based, pure-play platinum group metals ("PGM") company in the world. They did so by buying two companies, each for premiums exceeding 250%: one in
and one in
. Neither acquisition went well. The management team is no longer certain that the Canadian property can be economically developed into a mine and
's CEO recently admitted he would not buy the
mining rights again, if he had the choice. But the
of stockholder capital that was spent is gone, and the damage to
's stock price, reputation and attractiveness as an investment is, sadly, still with us.
, where the crown jewel assets are, costs are exploding in every direction: more CEO pay, more Board pay, more marketing spend, more overhead, more people and more financing costs. Of course, one thing has stayed stubbornly flat: the number of ounces produced by the Company has not budged significantly in the 12 year tenure of the current CEO, despite more than
in capital expenditures.
The Board now claims it is going to focus on the
assets and not be distracted by a desire to build, as the Company called itself, a "mid-cap diversified mining Company." This is a convenient change in heart and one we do not credit. Moreover, we cannot help but note:
- Just five months ago, in its Third Quarter report, the Company said it was still searching "around the world" for acquisitions;
- In November 2012, the Board added a director, George Bee, who was profiled in a Canadian Mining Journal article entitled, "Passionate About South America," in which he extols the virtues of mining in South America and notes his desire to "return to San Juan, Argentina," the precise place where Stillwater purchased mining rights its CEO now supposedly regrets;
- In the last 30 months, fully 71% of the Company's expansion capital (acquisitions and capital expenditures) have been spent outside of Montana ; and
- The Company's CEO resides, according to his voter registration records, in a small town in Nevada, more than 900 miles from the Company's mine and headquarters. 
Color us unconvinced that the Board is "focused" on
. We suspect as soon as this proxy fight is over, if the incumbents are still in the Board room, so too will be two things that should make all
stockholders shudder: a map of the world and a checkbook.
As if this were not enough, the CEO was recently forced to return
of compensation that was granted to him by the Board in violation of the Company's stockholder-approved equity compensation plan in three different years. The return of the improper compensation only happened after a stockholder sued the board members personally for the waste of stockholder assets. Even so, the Board has refused to admit it was wrong in approving grants in excess of the stock plan's explicit limitations and maintains that it indeed has the continuing authority to ignore completely compensation limits approved by stockholders. Brash. It appears with this Board in place, stockholders will need to be forever vigilant or risk even more dissipation of their capital.
Wouldn't it be better to have a Board in place that was dedicated to, and respected, stockholders?