<PAGE>
EXHIBIT 10.40
STILLWATER MINING COMPANY
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of MARCH
22,
2004, is made by and between Stillwater
Mining Company, a Delaware corporation
(the "Company"), and GREGORY A. WING
("Executive") (each individually a "Party"
and collectively, the "Parties").
RECITALS
WHEREAS, the Company desires to employ Executive and Executive
desires
to be employed by the Company pursuant to
the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants
contained herein and for other good and
valuable consideration, the Parties
agree as follows:
1.
Employment; Duties and Scope.
(a) Position.
Executive shall serve as the Company's Vice
President and Chief Financial Officer. In
such capacity, the Executive shall
report to the Chairman of the Board of
Directors (the "Board") and the Chief
Executive Officer. Executive shall have and
perform such duties,
responsibilities, and authorities as are
customary for Vice Presidents and Chief
Financial Officers in corporations of
similar size and businesses as the Company
as they may exist from time to time and as
are consistent with such positions
and status.
(b) Duties;
Obligations to the Company. During the
Employment Term, Executive shall devote his
full business efforts and time to
the Company and the Company will be
entitled to all of the benefits and profits
arising from or incident to all such work
services and advice. Executive shall
be responsible for performing the business
and professional services typically
performed by a vice president and chief
financial officer of any company, or as
may reasonably be assigned to him by the
Chairman of the Board and Chief
Executive Officer. Executive agrees not to
render commercial or professional
services of any nature to any person or
organization, whether or not for
compensation, during the Employment Term
without advance written approval of the
Board, and Executive will not directly or
indirectly engage or participate
during the Employment Term in any business
that is competitive in any manner
with the Company's business; provided,
however, that this shall not preclude
Executive from owning up to two percent
(2%) of the outstanding equity
securities of a corporation whose stock is
listed on a national stock exchange
or the Nasdaq.
(c) No
Conflicting Obligations. Executive represents and
warrants to the Company that he is under no
obligation or commitment, whether
contractual or otherwise, that is
inconsistent with his obligations under this
Agreement. Executive represents and
warrants that he will not use or disclose,
in connection with his employment by the
Company, any trade secrets or other
proprietary information or intellectual
property in which Executive or any other
person has any
<PAGE>
right, title, or interest and that his
employment by the Company as contemplated
by this Agreement will not infringe or
violate the rights of any other person or
entity. Executive represents and warrants
to the Company that he has returned
all property and confidential information
belonging to any prior employers.
2.
Employment Term.
(a) The
Initial Period of Executive's employment pursuant
to this Agreement shall begin March 22,
2004 (the "Commencement Date") and shall
end on March 21, 2005 ("Initial Period"),
unless otherwise terminated by either
Party prior to the scheduled termination
date as provided in Sections 8 and 9 of
this Agreement.
(b) The Initial Period
shall automatically be extended
for successive one year periods ("Renewal
Period"), if not already otherwise
terminated as provided in this Agreement,
unless either Party notifies the other
no later than three (3) months prior to the
scheduled termination of such
Initial Period or Renewal Period, in which
case Executive's employment shall
terminate upon the scheduled termination
date of the applicable Initial Period
or Renewal Period.
(c) In the
event that this Agreement is not renewed
because Executive has given the three-month
notice prescribed in Section 2(b) on
or before the expiration of the Initial
Period or any Renewal Period, such
non-renewal shall be treated as a
Termination for Cause and Executive shall have
the same entitlements as provided in
Section 9(b)(i) below.
(d) The entire
term of Executive's employment pursuant to
this Agreement from the Commencement Date
until the date of expiration or
termination of Executive's employment
pursuant to this Agreement shall be
referred to herein as the "Employment
Term."
3. Cash
Compensation.
(a) Base
Salary. During the Employment Term, the Company
shall pay the Executive as compensation for
his services a semi-monthly base
salary at the annualized rate of two
hundred and forty thousand dollars
($240,000), less applicable deductions and
withholdings. Such base salary shall
be paid semi-monthly in accordance with
normal Company payroll practices and
procedures. Executive's base salary shall
be reviewed for increase no less than
every twelve (12) months and shall be
subject to decrease only in the event (and
only to the extent) of an across-the-board
reduction for other senior management
employees of the Company. (The annualized
base salary to be paid to Executive
pursuant to this Section 3(a), together
with any subsequent modifications
thereto, shall be referred to in this
Agreement as the "Base Salary.")
(b) Bonuses.
Executive shall be eligible to earn an
annual target bonus equal to 30% of his
Base Salary (the "Target Bonus") based
upon satisfaction of criteria determined by
the Board and/or its Compensation
Committee for each year during the
Employment Term, starting with the year
commencing January 1, 2004 (except that for
the year 2004, the Target Bonus
amount shall be $56,016 which is a pro rata
portion of the Target Bonus for such
period based on the Commencement Date).
Executive shall be eligible to earn a
maximum bonus equal to 60% of his Base
Salary. For 2004, the Company shall
provide Executive with written notice of
that period's
- 2 -
<PAGE>
performance goals no later than April 30,
2004; thereafter, written notice of
the performance goals shall be provided by
February 28 of the applicable year.
4.
Employee Benefits.
(a) During the
Employment Term, Executive shall be
eligible to participate in such other of
the Company's employee benefit plans
and to receive such benefits for which his
position makes him eligible, in
accordance with the Company's plans and
policies as in effect from time to time
during the Employment Term, subject in each
case to the generally applicable
terms and conditions of the plan or policy
in question and to the determinations
of any person or committee administering
such plan or policy.
(b) The
Company shall provide the Executive with use of a
Company vehicle during the Employment
Term.
(c) Executive
shall be entitled to four (4) weeks of
vacation per year during the Employment
Term.
5.
Business Expense Reimbursements. During the Employment Term,
Executive shall be authorized to incur
necessary and reasonable travel,
entertainment and other business expenses
in connection with the performance of
his duties hereunder. The Company shall
reimburse Executive for such expenses
upon presentation of an itemized account
and appropriate supporting
documentation, all in accordance with the
Company's generally applicable
policies.
6.
Relocation. The Company will reimburse Executive for costs
related to his relocation to Montana, in
accordance with the Company's standard
relocation policy, provided, however, that
the Company shall also provide the
Executive with the option of having the
Company's relocation firm conduct an
appraisal of Executive's current home and
purchase such home at the appraised
value.
7.
Equity.
(a)
Subject to Board
approval, Executive shall be granted
an option to purchase 30,000 shares of the
Company's Common Stock (the "Option
Shares"), at the aggregate Fair Market
Value of the Option Shares on the date of
grant, pursuant to the Company's 1998
Equity Incentive Plan. "Fair Market Value"
means as of any given date, the closing
sale price per share of the Company's
common stock reported on a consolidated
basis for securities listed on the
principal stock exchange or market on which
the common stock is traded on the
date as of which such value is being
determined or, if there is no sale on that
day, then on the last previous day on which
a sale was reported. The grant and
exercise of the Option Shares shall be
subject to the terms of the notice of
grant of the Option and the Company's
standard form of Non-Qualified Stock
Option Agreement ("Option Agreement"), and
shall be contingent upon Executive
executing such Option Agreement and, for
exercise, the Company's standard form
of stock purchase agreement. The Option
Shares shall have a ten (10) year term
and shall vest in three (3) equal
installments on each of the first three (3)
anniversaries of the date of this
Agreement, as specified in the Option
Agreement. Executive may only exercise the
Option Shares to the extent that they
have vested.
- 3 -
<PAGE>
(b) Executive
also shall be eligible to participate in
annual option grants, if any, by the
Company to its executives. Whether any
option is granted and if so, the number of
shares which Executive may be granted
the option to purchase, shall be entirely
within the discretion of the Board
and/or its Compensation Committee.
8.
Termination of Employment. Notwithstanding the fixed term of
Executive's employment under this
Agreement, the Company and Executive each may
terminate Executive's employment at any
time for any or no reason with or
without Cause (as defined in Section
9(b)(ii)), upon written notice to the other
Party. Executive's employment will
terminate automatically in the event of his
death. Any payments and/or benefits due
Executive from the Company upon and/or
after termination are specified in Section
9.
9.
Termination Payments and Benefits.
(a) Payments
and Reimbursements Upon Any Termination of
Employment. In the event that Executive's
employment terminates for any reason,
the Company shall pay Executive all Base
Salary, any accrued but unpaid bonuses
for the period prior to the year of
termination of employment, and all accrued
but unpaid vacation earned through the date
of termination of employment, each
less applicable withholdings and
deductions, and any reimbursement of expenses
owed pursuant to this Agreement within ten
(10) days of the date of termination
("Termination Date"). Only the amounts
stated in this Section 9(a), and no
severance payments or benefits, shall be
due to Executive upon a termination of
his employment on the scheduled termination
date of the Initial Period or
Renewal Period.
(b) Effect of
Termination for Cause or Termination
without Good Reason.
(i) In the
event that the Company terminates
Executive's employment for Cause or Executive terminates
employment
(including any non-renewal by Executive) without Good Reason
(as
defined below):
(A) Executive
shall receive all
payments provided in Section 9(a) above;
(B)
Executive's outstanding vested
Option Shares shall be exercisable in accordance with the
terms and time limits of the applicable Option Agreement; and
(C) any
unvested Option Shares shall be
forfeited on the Termination Date.
(ii)
Definition of Termination for Cause. For the
purposes of this Agreement, a termination of Executive's employment
for
"Cause" means a termination of Executive's employment by the
Company
based upon a determination that any one or more of the following
has
occurred: (A) misfeasance or nonfeasance of duty by Executive
that
which was intended to or does injure the reputation of Company or
its
business or relationships; (B) conviction of, or plea of guilty or
nolo
contendere by Executive to, any
- 4 -
<PAGE>
felony or crime involving moral turpitude; (C) Executive's willful
and
continued failure to substantially perform his duties under
this
Agreement (except by reason of physical or mental incapacity)
after
written notice from the Board and 15 days to cure such failure;
(D)
dishonesty by Executive in performance of his duties under this
Agreement; or (E) willful and material breach of the
restrictive
covenants contained in this Agreement; provided however, that
definitions (C) through (E) shall not provide Cause for termination
if
such termination occurs within two (2) years following a Change
in
Control. A termination of Executive's employment by the Company for
any
other reason will be a termination without "Cause."
(c) Effect of
Termination Without Cause or Resignation
for Good Reason Other Than Within Two Years
Following A Change in Control.
(i) In the
event that, at any time other than
within two (2) years following a Change in Control, the Company
terminates Executive's employment without Cause or Executive
resigns
his employment for Good Reason and is not breaching the provisions
of
Sections 14 and
15 hereof, the Company shall provide Executive with the
following:
(A) all
payments stated in Section 9(a)
above;
(B) a pro rata
portion of Executive's
Target Bonus, less applicable withholdings and deductions,
which pro rata portion shall be determined by multiplying the
Target 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 (except for
2003, when the numerator equals the number of days elapsed
since March 22, 2004 and the denominator is 284) payable
within 10 days of the Termination Date;
(C) continued
semi-monthly payments at
Executive's Base Salary rate, less applicable withholdings and
deductions, for a period of twelve (12) months;
(D)
continuation of Executive's
medical, health, and life insurance (as in effect immediately
prior to the date of termination) for a period of twelve (12)
months, or if not permissible or commercially reasonable to
continue the same coverage of Executive under one or more of
the insurance policies or plans, continued payment for a
period of twelve (12) 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 Executive is eligible for similar aggregate
coverage from a subsequent employer; and
(E)
the
applicable accelerated vesting
(if any) of the Option Shares, pursuant to the applicable
Option Agreement.
(ii)
Relevant Definitions.
- 5 -
<PAGE>
(A) Change in
Control. For the purposes
of this Agreement, a "Change in Control" shall mean and shall
be deemed to have occurred if any of the following events
shall have occurred:
(1) 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 (3) below; or
(2) 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
(3) 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 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
(4) 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
- 6 -
<PAGE>
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.
(5)
Notwithstanding the
foregoing
subsections (1) through (4), 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.
(B)
Resignation for Good Reason. For
the purposes of this Agreement, a resignation for "Good
Reason" means a termination of Executive's employment at his
initiative following the occurrence, without Executive's
written consent, of one or more of the following events
(except as a result of a prior termination):
(1) a material
diminution or
change, adverse to Executive, in Executive's
positions, titles, duties or offices as set forth in
Section 1, status, or nature of responsibilities
within the Company;
(2) a decrease
in Executive's
annual Base Salary or Target Bonus award opportunity
below 30% of Base Salary (other than an
across-the-board percentage reduction for senior
management executives);
(3) a material
reduction in
the aggregate benefits for which Executive is
eligible under the Company's benefit plans (other
than an across-the-board reduction in the aggregate
benefits for senior management executives);
(4) any other
failure by the
Company to perform any material obligation under, or
breach by the Company of any material provision of,
this Agreement that is not cured within 10 business
days of receipt of written notice from Executive;
(5) a
relocation of the
Company's corporate offices outside of the State of
Montana; or
(6) any
failure to secure the
agreement of any successor corporation or other
entity to the Company to fully assume the Company's
obligations under this Agreement.
Any termination by the Executive for any reason other
than those provided in subsections (1) -
(6), above, or death or Disability,
shall be termination "without Good
Reason."
- 7 -
<PAGE>
(d) Effect of
Termination Without Cause or Resignation
for Good Reason Within Two (2) Years
Following A Change in Control. If, upon or
within two (2) years following a Change in
Control, Executive resigns his
employment with the Company for Good Reason
or the Company terminates
Executive's employment without Cause, then,
in lieu of the severance payments
and benefits stated in Section 9(c) above,
not materially breaching the
provisions of Sections 14 and 15 hereof,
the Company shall provide Executive
with the following:
(i) all
payments stated in Section 9(a) above
plus settlement of any amounts due under
any Company plan, policy or practice;
(ii)
a pro rata portion of Executive's Target
Bonus, less applicable withholdings and
deductions, which pro rata portion shall
be determined by multiplying the Target
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
