EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of July 17, 2001, as amended, is by and
between STILLWATER MINING COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), and XXXXX X. XXXXXX
("Employee").
WHEREAS, the Company desires to employ Employee and Employee desires to
be employed by the Company pursuant to the terms and conditions of this
Agreement; and
WHEREAS, the Company has heretofore determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have the continued dedication of the Employee, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of the Company;
and
WHEREAS, the Company has determined it is imperative to diminish the
inevitable distraction of the Employee by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control, to encourage the
Employee's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control and to provide the Employee
with compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits to be paid to the Employee are at
least as favorable as those in effect at the time of the Change of Control and
which are competitive with those of other corporations.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
ARTICLE 1
EMPLOYMENT
The Company hereby employs Employee, and Employee agrees to serve as
Vice President and Chief Financial Officer for the Company.
ARTICLE 2
TERM
The term of this Agreement shall be for a period commencing on July 17,
2001 and ending December 31, 2001, unless sooner terminated as hereinafter
provided. The Agreement shall thereafter continue in effect for subsequent one
(1) year terms, commencing January 1, unless altered or terminated as
hereinafter provided; provided, however, that following a Change of Control, as
defined in Section 5.6, the Employment Term shall continue for no less than
twenty-four (24) additional months. The period of Employee's employment
hereunder, including any extension or extensions pursuant to the foregoing
sentence, from the date of commencement until the date of expiration or
termination of this Agreement, is referred to hereinafter as the "Employment
Term."
ARTICLE 3
DUTIES AND AUTHORITY
Employee agrees, unless otherwise specifically authorized by the
Company, to devote substantially all of his business time and effort to his
duties for the profit, benefit and advantage of the business of the Company,
except that Employee may serve on the boards of directors of other business
corporations that have no business relationship with the Company and which do
not compete with the Company. In performing his duties hereunder, Employee shall
have the authority customarily held by others holding positions similar to those
assigned to Employee in similar businesses, subject to the general and customary
supervision of the Company's Board of Directors and Chief Executive Officer.
ARTICLE 4
COMPENSATION
4.1 Base Salary. The Company agrees to pay Employee a base salary of
Two Hundred Thousand Dollars ($200,000) per year, payable at the usual times for
the payment of the Company's executive employees, subject to adjustment as
provided herein. Employee's base salary shall be reviewed at least annually and
may be increased, but not decreased, consistent with general salary increases
for the Company's executive employees or as appropriate in light of the
performance of Employee and the Company. Notwithstanding anything herein to the
contrary, Employee's base salary may be reduced in the event of an
across-the-board salary reduction for all executive officers; provided, however,
that the percentage reduction of Employee's base salary shall not exceed the
highest percentage reduction in base salary of any other executive officer.
4.2 Incentive Compensation. Employee shall participate in the Company's
incentive compensation plans for executive officers of the Company, as in effect
from time to time during the Employment Term. The Company shall adopt an annual
incentive program for executive officers of the Company that will provide for a
performance based cash bonus of an amount to be determined by the Board of
Directors of the Company (the "Annual Bonus"). Until changed by the Board of
Directors of the Company, the Annual Bonus shall be set at a target of 35% of
the Employee's base salary ("Target"), with a maximum which shall not exceed 70%
of the Employee's base salary.
4.3 Employee Benefits. Employee shall be eligible to participate in
such other of the Company's employee benefit plans and to receive such benefits
for which his level of employment makes him eligible, in accordance with the
Company's policies as in effect from time to time during the Employment Term;
provided, however, that Employee shall be entitled to four weeks of vacation
during the initial term of this Agreement and during the term of each extension
hereof. Employee acknowledges that he has received a copy of the foregoing
policies.
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ARTICLE 5
TERMINATION
5.1 Termination by the Company Without Cause; Termination by Employee
for Good Reason.
(a) The Company shall have the right to terminate this
Agreement without Cause (as defined below) upon ninety (90) days'
notice to Employee. If Employee's employment hereunder is terminated by
the Company without Cause or by Employee for "Good Reason" (as defined
below) (other than a termination involving a Change of Control or by
reason of death or disability), the Company shall pay Employee:
(i) base salary through the Termination Date;
(ii) a pro rata portion of Employee's Target Annual
Bonus, less applicable withholdings and deductions, which pro
rata portion shall be determined by multiplying the Target
Annual Bonus by a fraction, the numerator of which is the
number of days elapsed in the calendar year of the date of
termination and the denominator of which is 365 payable within
10 days of the Termination Date;
(iii) an amount equal to the sum of (A) Employee's
annual Base Salary, plus (B) Employee's Target Annual Bonus,
each as in effect immediately preceding such termination,
divided by 12 ("Monthly Severance Amount"). The Monthly
Severance Amount shall be paid to Executive in 24 monthly
installments, commencing no later than 30 days after the
Termination Date, and continuing until all installments due
Employee have been paid.
(iv) continuation of Employee's medical, health, and
life insurance (as in effect immediately prior to the date of
termination) for a period of twenty-four (24) months, or if
not permissible or commercially reasonable to continue the
same coverage of Employee under one or more of the insurance
policies or plans, continued payment for a period of
twenty-four (24) months of the after-tax cost to the Company
of providing such coverage to Executive (as measured
immediately prior to the date of termination); provided
however, that such benefits or payments shall cease upon the
date on which Employee is eligible for similar aggregate
coverage from a subsequent employer.
(b) For purposes of this Agreement, "Good Reason" shall mean:
(i) A material reduction in Employee's
responsibilities, authorities, or duties;
(ii) Employee's job is eliminated other than by
reason of promotion or termination for Cause;
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(iii) The Company fails to pay Employee any amount
otherwise vested and due hereunder or under any plan or policy
of the Company, which failure is not cured within five (5)
business days of receipt by the Company of written notice from
Employee which describes in reasonable detail the amount which
is due;
(iv) A material reduction in Employee's base salary
except in the event of an across-the-board salary reduction on
a percentage basis for all executive officers;
(v) A material reduction in Employee's aggregate
level of benefits under the Company's pension, life insurance,
medical, health and accident, disability, deferred
compensation or savings or similar plans, except in the event
of an across-the-board reduction in such benefits on a
percentage basis for all executive officers;
(vi) A material reduction in Employee's reasonable
opportunity to earn incentive compensation under any plan in
which Employee is a participant, except in the event of an
across-the-board reduction on a percentage basis in such
benefits for all executive officers;
(vii) The Company and its successor(s) (as described
in subparagraph (ix) below) shall discontinue the business of
the Company;
(viii) The failure of the Company to obtain an
agreement to expressly assume this Agreement from any
successor to the Company (whether such succession is direct or
indirect by purchase, merger, consolidation or otherwise, to
substantially all of the business and/or assets of the Company
or a controlling portion of the Company's stock); or
(ix) Solely after a Change in Control has occurred,
upon the relocation of Employee, without Employee's consent,
to a location outside of a 35-mile radius of the Employee's
then-current location, provided, however, that a relocation to
the Company's corporate headquarters in the State of Montana
shall not constitute "Good Reason".
(x) Solely for the purposes of Section 5.6, any good
faith determination of Good Reason made by the Employee shall
be conclusive.
5.2 Termination by the Company for Cause; Voluntary Termination by
Employee.
(a) Employee's employment hereunder may be terminated by the
Company for "Cause." For purposes of Section 5.1, "Cause" shall mean
(i) misfeasance or nonfeasance of duty by Employee that which was
intended to or does injure the reputation of Company or its business or
relationships; (ii) conviction of, or plea of guilty or nolo contendere
by Employee to, any felony or crime involving moral turpitude; (iii)
Employee's willful and continued failure to substantially perform his
duties under this
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Agreement (except by reason of physical or mental incapacity) after
written notice from the Board and 15 days to cure such failure; (iv)
dishonesty by Employee in performance of his duties under this
Agreement; or (v) willful and material breach of the restrictive
covenants contained in this Agreement; provided however, that
definitions (iii) through (v) shall not provide Cause for termination
if such termination occurs within two (2) years following a Change in
Control. A termination of Employee's employment by the Company for any
other reason will be a termination without "Cause."
(b) Employee shall have the right to voluntarily terminate
this Agreement upon thirty (30) days' notice to the Company.
(c) If Employee is terminated for Cause, or if Employee
voluntarily terminates employment hereunder other than for Good Reason,
he shall be entitled to receive his base salary through the date of
termination. All other benefits, if any, payable to Employee following
such termination of Employee's employment shall be determined in
accordance with the plans, policies and practices of the Company.
5.3 Notice of Termination. Any termination by the Company or by the
Employee shall be communicated by Notice of Termination to the other party
hereto given in accordance with Article 18 of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Termination Date
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 30 days after the giving
of such notice). The failure by the Employee or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Employee or the Company,
respectively, hereunder or preclude the Employee or the Company, respectively,
from asserting such fact or circumstance in enforcing the Employee's or the
Company's rights hereunder.
5.4 Termination Date. "Termination Date" means the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be.
5.5 Termination by Death or Disability.
(a) Death. Upon termination of Employee's employment due to
death of Employee, Employee shall be entitled to
(i) his base salary at the rate in effect at the time
of Employee's death through the 90th day following his death;
(ii) a pro rata portion of the Target Annual Bonus
for the year in which Employee's employment terminates, less
applicable deductions and withholdings, calculated by
multiplying the Target Annual Bonus by a fraction, the
numerator of which is the number of days elapsed in the year
of termination plus 90, and the denominator of which is 365,
payable within 10 days of the Termination Date.
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(b) Disability. Employee's employment hereunder may be
terminated by the Company if Employee becomes physically or mentally
incapacitated and is therefore unable for a period of one hundred
eighty (180) consecutive days to perform his duties (such incapacity is
hereinafter referred to as "Disability"). Upon any such termination for
Disability, Employee shall be entitled to receive the following:
(i) his base salary at the rate in effect at the time
of Employee's disability, through the Termination Date;
(ii) a pro rata portion of the Target Annual Bonus
for the year in which Employee's employment terminates, less
applicable withholdings and deductions, calculated by
multiplying the Target Annual Bonus by a fraction, the
numerator of which is the number of days elapsed in the year
as of the date of termination, and the denominator of which is
365, payable within 10 days of the Termination Date; and
(iii) disability benefits in accordance with the
Company's long-term disability plan.
5.6 Termination Following a Change of Control; Benefits.
(a) In the event there is a Termination Following a Change of
Control, the Agreement shall terminate and Employee shall be entitled
to the following severance benefits:
(i) 200 percent of Employee's annual base salary at
the rate in effect immediately prior to the Change of Control
or on the Termination Date, whichever is higher, payable in a
lump sum within thirty (30) days after the Termination Date;
(ii) 200 percent of the Employee's Target Annual
Bonus in effect immediately prior to the Change of Control (or
on the Termination Date, whichever is higher).
(iii) The Company shall timely pay or provide to
Employee any other amounts or benefits required to be paid or
provided or which Employee is eligible to receive under any
plan, program, policy, practice, contract or agreement of the
Company (other than customary severance pay, office facilities
and equity incentive program participation) to the same extent
that Employee would be eligible therefor if he were employed
on a full-time basis by the Company in the capacity provided
for herein for a period of 24 months after the Termination
Date, including receiving the full benefit of 24 months of
employment at the income levels provided for herein for
purposes of any retirement plan utilizing years of service as
a criteria in the provision of benefits (such other amounts
and benefits shall be hereinafter referred to as the "Other
Benefits"); provided, however, that (i) for the purposes of
the Company's equity incentive programs, Employee's employment
shall be deemed terminated as of the Termination Date
hereunder;
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and (ii) to the extent Employee, following the Termination
Date, becomes employed by another employer and becomes
entitled to receive health insurance benefits from such
employer, the Company's obligation to provide such health
insurance benefits hereunder shall be decreased;
(iv) All accrued compensation (including base salary
and Target Annual Bonus, each prorated through the Termination
Date) and unreimbursed expenses through the Termination Date.
Such amounts shall be paid to Employee in a lump sum in cash
within thirty (30) days after the Termination Date.
(v) The Employee shall be free to accept other
employment following such termination, and, except as provided
herein, there shall be no offset of any employment
compensation earned by the Employee in such other employment
during such period against payments due Employee hereunder,
and there shall be no offset in any compensation received from
such other employment against the continued salary set forth
above.
(b) The following terms shall have the meanings set forth
below:
(i) A "Change in Control" of the Company shall mean
and shall be deemed to have occurred if any of the following
events shall have occurred:
(A) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") becomes
the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such person any
securities acquired directly from the Company or its
affiliates) representing thirty percent (30%) or more
of the combined voting power of the Company's then
outstanding voting securities, excluding any person
who becomes such a beneficial owner in connection
with a transaction described in clause (i) of
subsection (C) below; or
(B) A change in the composition of the Board
occurring within a two-year period, as a result of
which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean
directors who either (i) are directors of the Company
as of the date hereof, or (ii) are elected, or
nominated for election, to the Board with the
affirmative votes of at least two-thirds (2/3) of the
Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose
election or nomination is in connection with an
actual or threatened election or proxy contest,
including but not limited to a consent solicitation
relating to the election of directors to the
Company); or
(C) The consummation of a merger or
consolidation of the Company or any direct or
indirect subsidiary of the Company with any other
corporation, other than (i) a merger or consolidation
which would
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result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
being converted into voting securities of the
surviving entity or any parent thereof) at least
fifty-five percent (55%) of the combined voting power
of the voting securities of the Company or such
surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement
a recapitalization of the Company (or similar
transaction) in which no person is or becomes the
beneficial owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such person any
securities acquired directly from the Company or its
affiliates) representing thirty percent (30%) or more
of the combined voting power of the Company's then
outstanding securities; or
(D) The consummation of a
stockholder-approved sale, transfer, or other
disposition by the Company of all or substantially
all of the Company's assets in complete liquidation
or dissolution of the Company, other than a sale,
transfer, or other disposition by the Company of all
or substantially all of the Company's assets to an
entity, at least sixty percent (60%) of the combined
voting power of the voting securities of which are
owned by stockholders of the Company in substantially
the same proportions as their ownership of the
Company immediately prior to such sale.
(E) Notwithstanding the foregoing
subsections (A) through (D), a Change in Control
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of
integrated transactions immediately following which
the record holders of the common stock of the Company
immediately prior to such transaction or series of
transactions continue to have substantially the same
proportionate ownership in an entity which owns all
or substantially all of the assets of the Company
immediately following such transaction or series of
transactions.
(ii) "Termination Following a Change of Control"
shall mean a termination of the Employee without Cause by the
Company in connection with or within two years following a
Change of Control or a termination by the Employee for Good
Reason of the Employee's employment with the Company within
two years following a Change of Control.
5.7 Certain Additional Payments by the Company.
(a) Subject to Section 11(b) below, if Executive becomes
entitled to one or more payments (with a "payment" including, without
limitation, the vesting of an option or other non-cash benefit or
property), whether pursuant to the terms of this Agreement or any other
plan, arrangement, or agreement with the Company or any affiliated
company (the "Total Payments"), which are or become subject to the tax
imposed by
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Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") (or any similar tax that may hereafter be imposed) (the "Excise
Tax"), the Company shall pay to Executive at the time specified below
an additional amount (the "Gross-up Payment") (which shall include,
without limitation, reimbursement for any penalties and interest that
may accrue in respect of such Excise Tax) such that the net amount
retained by Executive, after reduction for any Excise Tax (including
any penalties or interest thereon) on the Total Payments and any
federal, state and local income or employment tax and Excise Tax on the
Gross-up Payment provided for by this Section 11, but before reduction
for any federal, state, or local income or employment tax on the Total
Payments, shall be equal to the sum of (A) the Total Payments, and (B)
an amount equal to the product of any deductions disallowed for
federal, state, or local income tax purposes because of the inclusion
of the Gross-up Payment in Executive's adjusted gross income multiplied
by the highest applicable marginal rate of federal, state, or local
income taxation, respectively, for the calendar year in which the
Gross-up Payment is to be made. For purposes of determining whether any
of the Total Payments will be subject to the Excise Tax and the amount
of such Excise Tax:
(i) The Total Payments shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject
to the Excise Tax, unless, and except to the extent that, in
the written opinion of independent compensation consultants,
counsel or auditors of nationally recognized standing
("Independent Advisors") selected by the Company and
reasonably acceptable to Executive, the Total Payments (in
whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within
the meaning of Section 280G(b)(4) of the Code in excess of the
base amount within the meaning of Section 280G(b)(3) of the
Code or are otherwise not subject to the Excise Tax;
(ii) The amount of the Total Payments which shall be
treated as subject to the Excise Tax shall be equal to the
lesser of (A) the total amount of the Total Payments or (B)
the total amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying
clause (i) above); and
(iii) The value of any non-cash benefits or any
deferred payment or benefit shall be determined by the
Independent Advisors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-up Payment, Executive
shall be deemed (A) to pay federal income taxes at the highest
marginal rate of federal income taxation for the calendar year
in which the Gross-up Payment is to be made; (B) to pay any
applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the
Gross-up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction
of such state and local taxes if paid in such year (determined
without regard to limitations on deductions based upon the
amount of Executive's adjusted
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gross income); and (C) to have otherwise allowable deductions
for federal, state, and local income tax purposes at least
equal to those disallowed because of the inclusion of the
Gross-up Payment in Executive's adjusted gross income. In the
event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time
the Gross-up Payment is made, Executive shall repay to the
Company at the time that the amount of such reduction in
Excise Tax is finally determined (but, if previously paid to
the taxing authorities, not prior to the time the amount of
such reduction is refunded to Executive or otherwise realized
as a benefit by Executive) the portion of the Gross-up Payment
that would not have been paid if such Excise Tax had been
applied in initially calculating the Gross-up Payment, plus
interest on the amount of such repayment at the rate provided
in Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into
account hereunder at the time the Gross-up Payment is made
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up
Payment in respect of such excess (plus any interest and
penalties payable with respect to such excess) at the time
that the amount of such excess is finally determined.
The Gross-up Payment provided for above shall be paid on the
30th day (or such earlier date as the Excise Tax becomes due
and payable to the taxing authorities) after it has been
determined that the Total Payments (or any portion thereof)
are subject to the Excise Tax; provided, however, that if the
amount of such Gross-up Payment or portion thereof cannot be
finally determined on or before such day, the Company shall
pay to Executive on such day an estimate, as determined by the
Independent Advisors, of the minimum amount of such payments
and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the
Code), as soon as the amount thereof can be determined. In the
event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to Executive, payable
on the fifth day after demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the
Code). If more than one Gross-up Payment is made, the amount
of each Gross-up Payment shall be computed so as not to
duplicate any prior Gross-up Payment. The Company shall have
the right to control all proceedings with the Internal Revenue
Service that may arise in connection with the determination
and assessment of any Excise Tax and, at its sole option, the
Company may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with any
taxing authority in respect of such Excise Tax (including any
interest or penalties thereon); provided, however, that the
Company's control over any such proceedings shall be limited
to issues with respect to which a Gross-up Payment would be
payable hereunder, and Executive shall be entitled to settle
or contest any other issue raised by the Internal Revenue
Service or any other taxing authority. Executive shall
cooperate with the Company in any proceedings relating to the
determination and assessment of any Excise Tax and shall not
take
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any position or action that would materially increase the
amount of any Gross-up Payment hereunder.
(B) MODIFIED CUT-BACK. NOTWITHSTANDING THE
FOREGOING SECTION 11(A), IF IT SHALL BE DETERMINED
THAT THE AMOUNT OF ANY PAYMENT DUE EXECUTIVE
PURSUANT TO SECTION 11(A) ABOVE WOULD RESULT IN LESS
THAN $20,000 IN NET AFTER-TAX VALUE TO EXECUTIVE,
THEN NO GROSS-UP PAYMENT SHALL BE MADE TO EXECUTIVE
AND THE TOTAL PAYMENTS DUE EXECUTIVE PURSUANT TO
SECTION 11(A) SHALL BE REDUCED TO AN AMOUNT THAT
WOULD NOT RESULT IN THE IMPOSITION OF ANY EXCISE
TAX.
ARTICLE 6
INSURANCE
Employee agrees that the Company may, from time to time, apply for and
take out in its own name and at its own expense, life, health, accident, or
other insurance upon Employee that the Company may deem necessary or advisable
to protect its interests hereunder; and Employee agrees to submit to any medical
or other examination necessary for such purposes and to assist and cooperate
with the Company in preparing such insurance; and Employee agrees that he shall
have no right, title, or interest in or to such insurance.
ARTICLE 7
FACILITIES AND EXPENSES
The Company shall make available to Employee such office space,
secretarial services, office equipment and furnishings as are suitable and
appropriate to Employee's title and duties. The Company shall promptly reimburse
Employee for all reasonable expenses incurred in the performance of his duties
hereunder, including without limitation, expenses for entertainment, travel,
management seminars and use of the telephone, subject to the Company's
reasonable requirements with respect to the reporting and documentation of such
expenses.
ARTICLE 8
NONCOMPETITION
8.1 Necessity of Covenant. The Company and Employee acknowledge that:
(a) The Company's business is highly competitive;
(b) The Company maintains confidential information and trade
secrets as described in Article 9, all of which are zealously protected
and kept secret by the Company;
(c) In the course of his employment, Employee will acquire
certain of the information described in Article 9 and the Company would
be adversely affected if such
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information subsequently, and in the event of the termination of
Employee's employment, is used for the purposes of competing with the
Company;
(d) The Company transacts business throughout the world; and
(e) For these reasons, both the Company and Employee further
acknowledge and agree that the restrictions contained herein are
reasonable and necessary for the protection of their respective
legitimate interests and that any violation of these restrictions would
cause substantial injury to the Company.
8.2 Covenant Not to Compete. Employee agrees that from and after the
date hereof during the Employment Term and for a period of one (1) year after
the end of the Employment Term, he will not, without the express written
permission of the Company, which may be given or withheld in the Company's sole
discretion, directly or indirectly own, manage, operate, control, lend money to,
endorse the obligations of, or participate or be connected as an officer,
director, 5% or more stockholder of a publicly-held company, stockholder of a
closely-held company, employee, partner, or otherwise, with any enterprise or
individual engaged in a business which is competitive with the Platinum Group
Metals business conducted by the Company. It is understood and acknowledged by
both parties that, inasmuch as the Company transacts business worldwide, this
covenant not to compete shall be enforced throughout the United States and in
any other country in which the Company is doing business as of the date of
Employee's termination of employment.
8.3 Disclosure of Outside Activities. Employee, during the term of his
employment by the Company, shall at all times keep the Company informed of any
outside business activity and employment, and shall not engage in any outside
business activity or employment which may be in conflict with the Company's
interests.
8.4 Survival. The terms of this Article 8 shall survive the expiration
or termination of this Agreement for any reason.
ARTICLE 9
CONFIDENTIAL INFORMATION AND TRADE SECRETS
9.1 Nondisclosure of Confidential Information. Employee has acquired
and will acquire certain "Confidential Information" of the Company.
"Confidential Information" shall mean any information that is not generally
known, including trade secrets, outside the Company and that is proprietary to
the Company, relating to any phase of the Company's existing or reasonably
foreseeable business which is disclosed to Employee by the Company including
information conceived, discovered or developed by Employee. Confidential
Information includes, but shall not be limited to, business plans, financial
statements and projections, operating forms (including contracts) and
procedures, payroll and personnel records, marketing materials and plans,
proposals, software codes and computer programs, project lists, project files,
price information and cost information and any other document or information
that is designated by the Company as "Confidential." The term "trade secret"
shall be defined as follows:
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A trade secret may consist of any formula, pattern, device or
compilation of information which is used in one's business, and which
provides to the holder an opportunity to obtain an advantage over
competitors who do not know or use it.
Accordingly, employee agrees that he shall not, during the Employment Term and
for three (3) years thereafter, use for his own benefit such Confidential
Information or trade secrets acquired during the term of his employment by the
Company. Further, during the Employment Term and for three (3) years thereafter,
Employee shall not, without the written consent of the Board of Directors of the
Company or a person duly authorized thereby, which consent may be given or
withheld in the Company's sole discretion, disclose to any person, other than an
employee of the Company or a person to whom disclosure is reasonably necessary
or appropriate in connection with the performance by Employee of his duties, any
Confidential Information or trade secrets obtained by him while in the employ of
the Company.
9.2 Return of Confidential Information. Upon termination of employment,
Employee agrees to deliver to the Company all materials that include
Confidential Information or trade secrets, and all other materials of a
confidential nature which belong to or relate to the business of the Company.
9.3 Exceptions. The restrictions and obligations in Section 9.1 shall
not apply with respect to any Confidential Information which: (i) is or becomes
generally available to the public through any means other than a breach by
Employee of his obligations under this Agreement; (ii) is disclosed to Employee
without obligation of confidentiality by a third party who has the right to make
such disclosure; (iii) is developed independently by Employee without use of or
benefit from the Confidential Information; (iv) was in possession of Employee
without obligations of confidentiality prior to receipt under this Agreement; or
(v) is required to be disclosed to enforce rights under this Agreement.
9.4 Survival. The terms of this Article 9 shall survive the expiration
or termination of this Agreement for any reason.
ARTICLE 10
JUDICIAL CONSTRUCTION
Employee believes and acknowledges that the provisions contained in
this Agreement, including the covenants contained in Articles 8 and 9 of this
Agreement, are fair and reasonable. Nonetheless, it is agreed that if a court
finds any of these provisions to be invalid in whole or in part under the laws
of any state, such finding shall not invalidate the covenants, nor the Agreement
in its entirety, but rather the covenants shall be construed and/or blue-lined,
reformed or rewritten by the court as if the most restrictive covenants
permissible under applicable law were contained herein.
ARTICLE 11
RIGHT TO INJUNCTIVE RELIEF
Employee acknowledges that a breach by Employee of any of the terms of
Articles 8 or 9 of this Agreement will render irreparable harm to the Company,
and that in the event of such
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breach the Company shall therefore be entitled to any and all equitable relief,
including, but not limited to, injunctive relief, and to any other remedy that
may be available under any applicable law or agreement between the parties.
ARTICLE 12
CESSATION OF CORPORATE BUSINESS
This Agreement shall cease and terminate if the Company shall
discontinue its business, and all rights and liabilities hereunder shall cease,
except as provided in Section 5.6 and Article 13.
ARTICLE 13
ASSIGNMENT
13.1 Permitted Assignment. Subject to the provisions of Section 5.6,
the Company shall have the right to assign this contract to its successors or
assigns, and all covenants or agreements hereunder shall inure to the benefit of
and be enforceable by or against its successors or assigns.
13.2 Successors and Assigns. The terms "successors" and "assigns" shall
mean any person or entity which buys all or substantially all of the Company's
assets, or a controlling portion of its stock, or with which it merges or
consolidates.
ARTICLE 14
FAILURE TO DEMAND, PERFORMANCE AND WAIVER
The failure by either party to demand strict performance and compliance
with any part of this Agreement during the Employment Term shall not be deemed
to be a waiver of the rights of such party under this Agreement or by operation
of law. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any subsequent
breach thereof.
ARTICLE 15
ENTIRE AGREEMENT
The Company and Employee acknowledge that this Agreement contains the
full and complete agreement between and among the parties, that there are no
oral or implied agreements or other modifications not specifically set forth
herein, and that this Agreement supersedes any prior agreements or
understandings, if any, between the Company and Employee, whether written or
oral. The parties further agree that no modifications of this Agreement may be
made except by means of a written agreement or memorandum signed by the parties.
ARTICLE 16
GOVERNING LAW
The parties hereby agree that this Agreement shall be construed in
accordance with the laws of the State of Montana, without giving effect to any
choice of law or conflict of law
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provision or rule (whether of the State of Montana or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Montana.
ARTICLE 17
ATTORNEYS' FEES
If either party shall commence any action or proceeding against the
other that arises out of the provisions hereof, or to recover damages as the
result of the alleged breach of any of the provisions hereof, the prevailing
party therein shall be entitled to recover all reasonable costs incurred in
connection therewith, including reasonable attorneys' fees.
ARTICLE 18
NOTICE
All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:
Xxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
-------------------------------------
If to the Company:
Vice President, Human Resources
Stillwater Mining Company
XX Xxx 0000
Xxxxxxxx, Xxxxxxx 00000
ARTICLE 19
COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the Company has hereunto signed its name and
Employee hereunder has signed his name, all as of July 23, 2001.
STILLWATER MINING COMPANY
By: /s/ XXXXXXX XXXXXXXXXX
-----------------------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Chief Executive Officer
EMPLOYEE
/s/ XXXXX X. XXXXXX
--------------------------------------
Xxxxx X. Xxxxxx
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