Stillwater Urges Shareholders to Vote the WHITE Proxy FOR Stillwater’s Director Nominees
Ticker Symbol: U:SWC C:SWC
BILLINGS, Mont. -- (Business Wire) --
Stillwater Mining Company (NYSE:SWC) (TSX:SWC.U) (“Stillwater” or the “Company”) today announced that it has sent a letter to shareholders in connection with the Company's 2013 Annual Shareholders Meeting, which will be held on May 2, 2013.
The letter details Stillwater’s many concerns with the Clinton Group, a 1.3% shareholder, and its attempt to take control of the Company. In particular, the Clinton Group offers no new strategy or detailed operating plan and has shown through its communications that it does not understand the Company’s business. Several of Clinton Group’s misguided demands, the company believes, will be value-destructive for Stillwater’s shareholders.
The letter exposes the fact that Clinton Group’s director nominees are not qualified to oversee a U.S. public company, nor are they qualified to oversee complex, PGM underground mining operations. Certain individuals also have questionable professional backgrounds and educational representations. The letter goes on to detail Clinton Group’s poor investment track record and the significant value they have destroyed at other companies.
All shareholders of record as of March 6, 2013 are entitled to vote at the 2013 Annual Shareholders Meeting. Stillwater encourages all shareholders to carefully review its definitive proxy filing and other materials and vote only their WHITE proxy card. For more
information about Stillwater’s 2013 Annual Shareholders Meeting, please visit www.supportstillwater.com.
The full text of the letter follows:
April 8, 2013
Dear Fellow Shareholder:
ENSURE THE CONTINUED SUCCESS OF STILLWATER –
PLEASE VOTE THE WHITE PROXY CARD TODAY
Since 2001, we have transformed Stillwater from a single low-volume, high-cost mine into an integrated set of highly competitive, industry-leading PGM operations and core growth prospects based in Montana. We have managed to accomplish this despite extreme PGM price volatility, critical auto contract expirations, ever deeper and receding mine operations and an ore body weighted 3.4:1 toward lower-priced palladium. Today, the outlook for Stillwater is better than it has ever been and the Company is well positioned to take advantage of extremely favorable PGM market fundamentals at a time when many of our peers face significant operational and financial challenges.
DO NOT HALT THIS POSITIVE MOMENTUM – CLINTON GROUP IS NOT THE ANSWER
We value the opinions of our investors and welcome feedback on a variety of topics, as we have displayed openly in our meetings with many of you over the years. However, in the case of Clinton Group, a hedge fund that only recently acquired just 1.3% of the Company’s outstanding shares, we believe they have a self-serving agenda, do not understand the Company’s business, and pose a significant threat to the value of your investment in Stillwater. They offer no new strategy or detailed operating plan and have made several misguided demands that will, in our view, be value-destructive for Stillwater’s shareholders.
CLINTON GROUP IS A SHORT-TERM FOCUSED TRADER WITH A POOR TRACK RECORD AND NO RELEVANT
MINING EXPERIENCE
According to public filings, Clinton Group’s investment experience in the mining industry includes only a few limited forays, none of them PGM-focused, with an average holding period that suggests a significant short-term bias. Further, despite Clinton Group’s promises, its record in “unlocking value for shareholders” is abysmal.
- Only holds its investments for nine months on average in all of its threatened or pursued proxy contests
- Failed to create valuein five out of seven situations where it gained board seats
- Averaged a 33% depreciation in value in the seven situations in which they procured board seats
- Had no publicly disclosed PGM investments prior to Stillwater
Indeed, Clinton Group failed to create value for itself or other shareholders in four out of six situations where it gained board seats. At Digital Generation, Clinton Group lost 41% for shareholders; at Dillard’s, Clinton Group lost 77% for shareholders; Lenox Group lost an astounding 99% of shareholder value during Clinton Group’s activism; and Nutrisystem has dropped 26% since Clinton Group’s involvement.1
CLINTON GROUP HAS PUT FORTH A SLATE OF UNQUALIFIED NOMINEES
WITH QUESTIONABLE SKILLS AND BACKGROUNDS
Equally as worrisome as Clinton Group’s poor track record of value creation are the issues associated with their slate of hand-picked nominees. Clinton Group’s slate is not qualified to oversee a U.S. public company, nor are they qualified to oversee complex, PGM underground mining operations.
- Seven of Clinton Group's eight nominees have NO direct PGM experience
- Seven of Clinton Group's eight nominees have NEVER served on a U.S. public company Board
Furthermore, each of their nominees brings to bear significant concerns regarding the adequacy of their qualifications and experience, which in turn raises serious doubts as to the suitability of Clinton’s hand-picked slate.
Brian Schweitzer – It is peculiar that Dr. Schweitzer was a staunch supporter of Stillwater while he was in office, but then only weeks after he stepped down, aligned himself with the Clinton Group seeking to disrupt our progress and growth in Montana.Furthermore, we find it unconscionable that he can repeatedly make inaccurate and inflammatory statements regarding Stillwater’s focus in, and commitment to, its Montana operations and still purport to be a viable nominee for Stillwater’s shareholders. Dr. Schweitzer would have you believe we have taken our eye off Montana. Nothing could be further from the truth. (1) 98% of our workforce is based in Montana, (2) in conjunction with our expanding operations, we have grown our Montana-based workforce 21% in the past two years and plan to increase it another 9% by the end of 2013, and (3) we continue to allocate the overwhelming majority of our capital expenditures to our Montana operations and growth projects (i.e., 87% of our 2013 capital spending budget).
Charles R. Engles – Dr. Engles abruptlytendered his resignation as Chairman and CEO of Stillwater in 1997 at a time when the Company struggled as a low-volume, high-cost producer with no clear strategy for future growth or development in Montana. We believe our shareholders should question Dr. Engles regarding his track record at Stillwater and ask him to publicly discuss the reasons for his abrupt resignation. Since then, Dr. Engles has been involved in a number of failed ventures with questionable oversight, including Sundance Homes, Catalytic Solutions and Cutanix Corporation. Furthermore, Dr Engles has been out of the mining industry in any meaningful capacity for 15-plus years.
John DeMichiei – Mr. DeMichiei may be a coal mining professional, but he has no PGM or related hard-rock mining experience and his track record at coal producer Signal Peak Energy raises serious questions and concerns. Under his leadership, Signal Peak has had significant labor, safety and environmental issues. For example, Mr. DeMichiei took coercive action and threatened employees with loss of wages and benefits when they joined a union. Signal Peak’s Bull Mountain mine reported seven roof falls between 2009 and 2012, compared to just one between 2003 and 2008, before Signal Peak took over the mine. Furthermore, members of the Montana Board of Environmental Review have recently cited “revisiting violations by Signal Peak on a repeated basis” and Signal Peak’s “historic” environmental issues. Separately, there appear to be material inconsistencies in Mr. DeMichiei’s academic and employment record. He claims to have a Bachelor of Science in Mining Engineering from the University of Pittsburgh. The University of Pittsburgh could only confirm attendance for one year, with no record of a degree. Mr. DeMichiei also claims to have a Masters of Business Administration from American University. American University was only able to confirm a Masters of Public Administration.
Michael McMullen – Mr. McMullen’s primary experience appears to be limited to early-stage, non-producing and highly-speculative exploration and development companies. He has no leadership experience at a sizeable producing precious metals mining company like Stillwater. Furthermore, for some reason, he has excluded in his bio his involvement in West African Resources, which is an early stage gold explorer in Burkina Faso.
Patrice E. Merrin – Ms. Merrin was previously banned from the U.S. for a period of time as a result of violations of the Helms-Burton Act. Ms. Merrin engaged in the violations while an executive at the Sherritt Corporation. The Sherritt Corporation jointly owns a zinc mine in Cuba with the Cuban government, which had seized the mine from Freeport McMoRan, a U.S. company, after Fidel Castro came to power.
Michael McNamara – Mr. McNamara has less than 10 years of work experience as a financial analyst, has been unemployed for the last three years, and has had no mining, corporate management or public company board experience whatsoever. Mr. McNamara is extremely unqualified to serve on any public company Board.
Seth E. Gardner – Mr. Gardner is another board nominee with extremely limited experience. He does not appear to have any corporate management experience of any kind and his board experience is limited to Cerberus portfolio companies.
Gregory P. Taxin – Mr. Taxin has no prior investment experience in the PGM industry and little experience in mining. Furthermore, his track record and qualifications as an investor are poor, aside from taking aim at a wide variety of companies in various industries and very publicly announcing change is needed. We believe this is reflective of his short-term focus on investing and lack of understanding the fundamental drivers of businesses he invests in. Ultimately, his poor track record in other activist situations – where in many cases he caused significant value erosion due to ineffective and misguided recommendations – speaks for itself.
CLINTON GROUP CONTINUES TO SHOW A LACK OF UNDERSTANDING OF
STILLWATER’S HISTORY AND BUSINESS