10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2008.

OR

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ___ to ___

Commission file number 1-13053

STILLWATER MINING COMPANY

(Exact name of registrant as specified in its charter)

Delaware	81-0480654
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1321 Discovery Drive Billings, Montana	59102
(Address of principal executive offices)	(Zip Code)

(406) 373-8700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o  Accelerated filer þ  Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES o NO þ

At August 7, 2008 the Company had outstanding 93,139,891 shares of common stock, par value $0.01 per share.

STILLWATER MINING COMPANY

FORM 10-Q

QUARTER ENDED JUNE 30, 2008

INDEX

PART I – FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosure About Market Risk	42
Item 4. Controls and Procedures	44
PART II – OTHER INFORMATION	44
Item 1. Legal Proceedings	44
Item 1A. Risk Factors	44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3. Defaults Upon Senior Securities	45
Item 4. Submission of Matters to a Vote of Security Holders	45
Item 5. Other Information	45
Item 6. Exhibits	45
SIGNATURES	46
CERTIFICATION
Contract between Stillwater Mining Company and United Steel Workers
2004 Equity Incentive Plan as Amended and Restated
409A Nonqualified Deferred Compensation Plan as Amended and Restated
2005 Non-employee Directors' Deferral Plan as Amended and Restated
Rule 13a-14(a)/15d-14(a) Certification - CEO
Rule 13a-14(a)/15d-14(a) Certification - VP and CFO
Section 1350 Certification
Section 1350 Certification

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Stillwater Mining Company
Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(in thousands, except per share data)

	Three months ended						Six months ended
	June 30,						June 30,
	2008			2007			2008			2007
Revenues
Mine production	$	103,743		$	74,893		$	185,032		$	147,264
PGM recycling		108,214			83,914			194,630			153,902
Other		6,874			2,156			12,215			6,247
Total revenues		218,831			160,963			391,877			307,413
Costs and expenses
Costs of metals sold
Mine production		61,915			54,718			114,554			103,029
PGM recycling		101,491			77,871			183,574			144,046
Other		6,882			2,184			12,185			6,205
Total costs of metals sold		170,288			134,773			310,313			253,280
Depreciation and amortization
Mine production		21,747			21,628			42,394			42,020
PGM recycling		48			28			96			52
Total depreciation and amortization		21,795			21,656			42,490			42,072
Total costs of revenues		192,083			156,429			352,803			295,352
Exploration		500			1			500			62
Marketing		2,404			1,112			3,735			3,213
General and administrative		7,483			6,289			13,825			12,963
(Gain)/loss on disposal of property, plant and equipment		154			(95	)		152			(210	)
Total costs and expenses		202,624			163,736			371,015			311,380
Operating income (loss)		16,207			(2,773	)		20,862			(3,967	)
Other income (expense)
Other		92			(16	)		145			(18	)
Interest income		2,924			3,023			6,011			5,986
Interest expense		(1,728	)		(2,750	)		(6,258	)		(5,576	)
Income (loss) before income tax provision		17,495			(2,516	)		20,760			(3,575	)
Income tax provision		(322	)		—			(375	)		—
Net income (loss)	$	17,173		$	(2,516	)	$	20,385		$	(3,575	)
Other comprehensive income, net of tax		5,904			5,446			5,992			271
Comprehensive income (loss)	$	23,077		$	2,930		$	26,377		$	(3,304	)
Weighted average common shares outstanding
Basic		92,926			91,927			92,740			91,759
Diluted		100,952			91,927			93,166			91,759
Basic earnings (loss) per share
Net income (loss)	$	0.18		$	(0.03	)	$	0.22		$	(0.04	)
Diluted earnings (loss) per share
Net income (loss)	$	0.18		$	(0.03	)	$	0.22		$	(0.04	)

See accompanying notes to the financial statements

3

Stillwater Mining Company
Balance Sheets
(Unaudited)
(in thousands, except share and per share data)

	June 30,			December 31,
	2008			2007
ASSETS
Current assets
Cash and cash equivalents	$	100,761		$	61,436
Restricted cash		26,580			5,885
Investments, at fair market value		1,990			27,603
Inventories		182,763			118,663
Advances on inventory purchases		53,798			28,396
Trades receivables		15,397			12,144
Deferred income taxes		7,474			4,597
Other current assets		7,216			6,092
Total current assets	$	395,979		$	264,816
Property, plant and equipment (net of $339,883 and $301,212 accumulated depreciation and amortization)		465,777			465,054
Long-term investments		3,903			3,556
Other noncurrent assets		10,858			8,981
Total assets	$	876,517		$	742,407
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	23,959		$	17,937
Accrued payroll and benefits		24,032			20,944
Property, production and franchise taxes payable		11,544			10,528
Current portion of long-term debt		195			1,209
Fair value of derivative instruments		—			6,424
Unearned income		847			788
Other current liabilities		20,669			11,144
Total current liabilities		81,246			68,974
Long-term debt		210,933			126,841
Deferred income taxes		7,474			4,597
Accrued workers compensation		9,166			9,982
Asset retirement obligation		10,939			10,506
Other noncurrent liabilities		4,663			4,103
Total liabilities	$	324,421		$	225,003
Stockholders’ equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued		—			—
Common stock, $0.01 par value, 200,000,000 shares authorized; 93,032,522 and 92,405,111 shares issued and outstanding		930			924
Paid-in capital		634,934			626,625
Accumulated deficit		(83,735	)		(104,120	)
Accumulated other comprehensive loss		(33	)		(6,025	)
Total stockholders’ equity		552,096			517,404
Total liabilities and stockholders’ equity	$	876,517		$	742,407

See accompanying notes to the financial statements

4

Stillwater Mining Company
Statements of Cash Flows
(Unaudited)
(in thousands)

	Three months ended						Six months ended
	June 30,						June 30,
	2008			2007			2008			2007
Cash flows from operating activities
Net income (loss)	$	17,173		$	(2,516	)	$	20,385		$	(3,575	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		21,795			21,656			42,490			42,072
Lower of cost or market inventory adjustment		—			1,430			—			1,430
(Gain)/loss on disposal of property, plant and equipment		154			(95	)		152			(210	)
Asset retirement obligation		219			182			433			360
Stock issued under employee benefit plans		1,538			1,484			2,941			2,930
Amortization of debt issuance costs		263			206			2,686			410
Share based compensation		1,355			1,345			2,381			2,513
Changes in operating assets and liabilities:
Inventories		(61,846	)		(15,688	)		(66,218	)		(20,658	)
Advances on inventory purchases		(14,908	)		(7,014	)		(25,402	)		(6,301	)
Trade receivables		1,397			(1,615	)		(3,253	)		3,754
Employee compensation and benefits		1,467			631			3,091			327
Accounts payable		7,604			(1,096	)		6,022			(9,633	)
Property, production and franchise taxes payable		353			136			1,576			546
Workers compensation		(342	)		(199	)		(816	)		554
Unearned income		105			4,081			59			2,159
Restricted cash		—			(600	)		—			(600	)
Other		6,239			(2,214	)		9,103			(803	)
Net cash (used in) provided by operating activities		(17,434	)		114			(4,370	)		15,275
Cash flows from investing activities
Capital expenditures		(20,778	)		(18,812	)		(41,603	)		(40,408	)
Purchases of long-term investments		—			(668	)		(347	)		(668	)
Proceeds from disposal of property, plant and equipment		197			126			215			328
Purchases of investments		(1,887	)		(25,148	)		(11,392	)		(48,140	)
Proceeds from maturities of investments		14,350			27,181			36,521			44,178
Net cash used in investing activities		(8,118	)		(17,321	)		(16,606	)		(44,710	)
Cash flows from financing activities
Payments on long-term debt and capital lease obligations		(86	)		(1,081	)		(98,422	)		(1,964	)
Payments for debt issuance costs		(77	)		—			(5,072	)		—
Proceeds from issuance of convertible debentures		—			—			181,500			—
Restricted cash		—			—			(20,695	)		—
Issuance of common stock		23			219			2,990			239
Net cash (used in) provided by financing activities		(140	)		(862	)		60,301			(1,725	)
Cash and cash equivalents
Net (decrease) increase		(25,692	)		(18,069	)		39,325			(31,160	)
Balance at beginning of period		126,453			75,269			61,436			88,360
Balance at end of period	$	100,761		$	57,200		$	100,761		$	57,200

See accompanying notes to the financial statements

5

Stillwater Mining Company
Notes to Financial Statements
(Unaudited)

Note 1 — General

     In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of Stillwater Mining Company (the “Company”) as of June 30, 2008, and the results of its operations and its cash flows for the three- and six- month periods ended June 30, 2008 and 2007. The results of operations for the three- and six- month periods are not necessarily indicative of the results to be expected for the full year. The accompanying financial statements in this quarterly report should be read in conjunction with the financial statements and notes thereto included in the Company’s March 31, 2008 Quarterly Report on Form 10-Q and in the Company’s 2007 Annual Report on Form 10-K.

     The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management’s estimates relate to mineral reserves, reclamation and environmental obligations, valuation allowance for deferred tax assets, useful lives utilized for depreciation, amortization and accretion calculations, future cash flows from long-lived assets, and fair value of derivative instruments. Actual results could differ from these estimates.

Note 2 — Sales

Mine Production

     Palladium, platinum, rhodium, gold and silver are sold to a number of consumers and dealers with whom the Company has established trading relationships. Refined platinum group metals (PGMs) of 99.95% purity (rhodium of 99.9%) in sponge form are transferred upon sale from the Company’s account at third party refineries to the account of the purchaser. By-product metals are normally sold at market prices to customers, brokers or outside refiners. Copper and nickel by-products, however, are produced at less than commercial grade, so prices for these metals typically reflect a quality discount. By-product sales are reflected as a reduction to costs of metals sold. During the three- month periods ended June 30, 2008 and 2007, total by-product (copper, nickel, gold, silver and mined rhodium) sales were approximately $14.3 million and $14.5 million, respectively. Total by-product sales for the six- month periods ended June 30, 2008 and 2007 were approximately $27.6 million and $28.4 million, respectively.

     The Company has entered into long-term sales contracts with Ford Motor Company and General Motors Corporation, covering production from the mines, that contain guaranteed floor and, in some cases, ceiling prices for metal delivered. Metal sales under these contracts, when not affected by the guaranteed floor or ceiling prices, are priced at a slight discount to market. Under these sales contracts, the Company currently has committed 100% of its palladium production and 70% of its platinum production from mining through 2010. After 2010, approximately 35% of the Company’s total mine production of palladium is committed for sale in 2011 and 2012 under these contracts. None of the Company’s platinum production after 2010 is committed for sale under these contracts.

     The following table summarizes the floor and ceiling price structures for the long-term sales contracts with Ford Motor Company and General Motors Corporation related to mine production. The first two columns for each commodity represent the percent of total mine production that is subject to floor prices and the weighted average floor price per ounce. The second two columns for each commodity represent the percent of total mine production that is subject to ceiling prices and the weighted average ceiling price per ounce.

6

	PALLADIUM										PLATINUM
	Subject to					Subject to					Subject to					Subject to
	Floor Prices					Ceiling Prices					Floor Prices					Ceiling Prices
	% of Mine			Avg. Floor		% of Mine			Avg. Ceiling		% of Mine			Avg. Floor		% of Mine			Avg. Ceiling
Year	Production			Price		Production			Price		Production			Price		Production			Price
2008		100	%	$	359		20	%	$	975		70	%	$	425		14	%	$	850
2009		100	%	$	364		20	%	$	975		70	%	$	425		14	%	$	850
2010		100	%	$	360		20	%	$	975		70	%	$	425		14	%	$	850
2011		20	%	$	300		—			—		—			—		—			—
2012		20	%	$	300		—			—		—			—		—			—

     The long-term contracts contain termination provisions that allow the purchasers to terminate in the event the Company breaches certain provisions of the contract and the Company does not cure the breach within specified periods ranging from 10 to 30 days of notice. The contracts are not subject to the requirements of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138 Accounting for Derivative Instruments and Certain Hedging Activities and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, because the contracts qualify for the normal sales exception since they will not settle net and will result in physical delivery. The floors and ceilings embedded within the long-term sales contracts are treated as part of the host contract, not a separate derivative instrument and therefore also are not subject to the accounting requirements of SFAS No. 133, SFAS No. 138, or SFAS No. 149.

PGM Recycling

     The Company purchases spent catalyst materials from third parties and processes these materials in its facilities in Columbus, Montana to recover palladium, platinum and rhodium to sell to various third parties. The Company’s recycling business is currently highly dependent on the performance of one supplier. The Company also has various spot purchase and tolling agreements with other suppliers of spent catalytic materials, but the volumes from them are less significant.

     The Company advances cash for purchase and collection of these spent catalyst materials to its suppliers. These advances are reflected as Advances on inventory purchases on the Company’s balance sheet until the Company physically receives the material and title has transferred to the Company. Once the material is received, the associated advance is reclassified into Inventories. Finance charges on these advances collected in advance of being earned are reflected as unearned income on the Company’s balance sheet.

     The Company holds a security interest in materials procured by suppliers but not yet received by the Company. However, until the suppliers have actually procured the promised material, a portion of the Advances on inventory purchases on the Company’s balance sheet remains unsecured. This unsecured portion is fully at risk should the suppliers fail to deliver the promised material or experience other financial difficulties. Any determination that a supplier is unable to deliver the promised material or otherwise repay these advances would likely result in a significant charge against earnings.

     At the same time the Company purchases material for recycling, it enters into a contract for future delivery of the PGMs contained in the material at a price consistent with the purchase cost. The contract commits the Company to deliver finished metal on a specified date that corresponds to the expected out-turn date for the metal from the final refiner. This arrangement largely eliminates the Company’s exposure to fluctuations in market prices during processing, but it also creates an obligation to deliver metal in the future that could be subject to operational risks. If the Company were unable to complete the processing of the recycled material by the contractual delivery date, it could be required to purchase substitute finished metal in the open market to cover its commitments, and then would bear the cost (or benefit) of any change in market price relative to the price stipulated in the delivery contract.

7

Other activities

     The Company makes open market purchases of PGMs from time to time for resale to third parties. The Company recognized revenue of $6.9 million and $2.2 million on approximately 15,200 and 6,000 ounces of PGMs that were purchased in the open market and re-sold for the three- month periods ended June 30, 2008 and 2007, respectively. For the six- month periods ended June 30, 2008 and 2007, approximately 27,400 and 18,000 ounces of PGMs were purchased in the open market and re-sold for approximately $12.2 million and $6.2 million, respectively.

Total Sales

     Total sales to significant customers as a percentage of total revenues for the three- and six- month periods ended June 30, 2008 and 2007 were as follows:

	Three months ended						Six months ended
	June 30,						June 30,
	2008			2007			2008			2007
Customer A		37	%		36	%		37	%		36	%
Customer B		18	%		28	%		19	%		24	%
Customer C		12	%		*			13	%		*
Customer D		11	%		*			*			*
Customer E		*			*			*			14	%
		78	%		64	%		69	%		74	%

* Represents less than 10% of total revenues.

Note 3 — Derivative Instruments

     The Company uses various derivative financial instruments to manage the Company’s exposure to changes in interest rates and PGM market commodity prices. Some of these derivative transactions are designated as hedges. Because the Company hedges only with instruments that have a high correlation with the value of the underlying exposures, changes in the derivatives’ fair value are expected to be offset by changes in the value of the hedged transaction.

Commodity Derivatives

     The Company regularly enters into fixed forward contracts and financially settled forward contracts to offset the price risk in its PGM recycling activity. From time to time it also uses them on portions of its mine production. In fixed forward transactions, the Company agrees to deliver a stated quantity of metal on a specific future date at a price stipulated in advance. The Company uses fixed forward transactions primarily to price in advance the metals acquired for processing in its recycling business. Under financially settled forward transactions, at each settlement date the Company receives the difference between the forward price and the market price if the market price is below the forward price and the Company pays the difference between the forward price and the market price if the market price is above the forward price. These financially settled forward contracts are settled in cash at maturity and do not require physical delivery of metal at settlement. The Company normally uses financially settled forward contracts with third parties to reduce its exposure to price risk on metal it is obligated to deliver under the long-term sales agreements.

Mine Production

     On June 30, 2008, the Company settled its last remaining financially settled forward agreements covering future anticipated platinum sales out of mine production. Consequently, after June 30, 2008, the Company is no longer party to any further hedges on its mined platinum production. Losses on hedges of mined platinum

8

during the second quarter and first six months of 2008 totaled $5.8 million on 6,000 ounces hedged and $12.8 million on 15,000 ounces hedged, respectively.

     As of June 30, 2007, the Company was party to financially-settled forward sales agreements covering approximately 39% of its expected sales out of mine production for the period from July 2007 through June 2008. Losses on these hedges for the three- and six- month periods ending June 30, 2007 totaled $8.1 million and $15.4 million, respectively.

PGM Recycling

     The Company enters into fixed forward sales relating to PGM recycling of catalyst materials. The Company accounts for these fixed forward sales under the normal sales provisions of SFAS No. 133, as amended by SFAS No. 138 and SFAS No. 149. The metals from PGM recycled materials are sold forward at the time of purchase and delivered against the fixed forward contracts when the ounces are recovered. All of these transactions open as of June 30, 2008, will settle at various periods through December 2008. The Company has credit agreements with its major trading partners that provide for margin deposits in the event that forward prices for metals exceed the Company’s hedged prices by a predetermined margin limit. No margin deposits were required or outstanding during the second quarters of 2008 or 2007.

     From time to time the Company also enters into financially settled forward contracts on recycling material for which it has not entered into a fixed forward sale. Such contracts are utilized when the Company wishes to establish a firm forward price for recycled metal as of a specific future date. The Company entered into several such financially settled forward contracts during the second quarter and first six months of 2008, although none were outstanding as of June 30, 2008. The Company generally has not elected to use hedge accounting for these transactions, so they are marked to market at the end of each accounting period with the change in the fair value of the derivatives being reflected in the income statement. The corresponding net realized gain on these derivatives during the second quarter of 2008 was approximately $0.3 million and the net realized loss on these derivatives during the first half of 2008 was approximately $0.2 million and has been recorded as a component of recycling revenue.

     The following is a summary of the Company’s commodity derivatives as of June 30, 2008:

PGM Recycling:      
Fixed Forwards

	Platinum				Palladium				Rhodium
Settlement Period	Ounces		Avg. Price		Ounces		Avg. Price		Ounces		Avg. Price
Third Quarter 2008		35,780	$	2,067		25,787	$	469		4,963	$	9,679
Fourth Quarter 2008		2,399	$	2,066		1,938	$	471		1,169	$	9,554

Interest Rate Derivatives

     At June 30, 2007, the Company had in place an interest rate swap agreement that had the effect of fixing the interest rate on $50 million of the Company’s outstanding term loan debt. The effective fixed rate of the interest rate swap was 7.628%. The Company elected not to account for this as a cash flow hedge, and accordingly, marked this transaction to market by recording a credit to interest expense of approximately $44,000 and $47,500 during the three- month and six- month periods ended June 30, 2007, respectively. The interest rate swap terminated on December 31, 2007.

Note 4 — Share-Based Payments

Stock Plans

     The Company sponsors stock option plans (the “Plans”) that enable the Company to grant stock options or nonvested shares to employees and non-employee directors. The Company has options outstanding under

9

three separate plans: the 1994 Incentive Plan, the General Plan and the 2004 Equity Incentive Plan. During 2004, the 1994 Incentive Plan was terminated and in early 2008, the General Plan was terminated. Shares of common stock that have been authorized for issuance under the 1994 Incentive Plan and the General Plan were 1,400,000 and 1,151,000, respectively. While no additional options may be issued under these two plans, options issued prior to the termination dates under the 1994 Incentive Plan and the General Plan remain outstanding. A total of 5,250,000 shares of common stock have been authorized for issuance under the 2004 Equity Incentive Plan, of which approximately 3,716,000 shares remain reserved and available for grant as of June 30, 2008.

     The Compensation Committee of the Company’s Board of Directors administers the Plans and determines the exercise price, exercise period, vesting period and all other terms of instruments issued under the Plans. Directors’ options vest over a six month period after date of grant. Officers’ and employees’ options vest ratably over a three year period after date of grant. Officers’ and directors’ options expire ten years after the date of grant. All other options expire five to ten years after the date of grant, depending upon the original grant date. The Company received approximately $22,500 and $219,000 in cash from the exercise of stock options in the three- month periods ended June 30, 2008 and 2007, respectively, and approximately $3.0 million and $239,000 for the six- month periods ended June 30, 2008 and 2007, respectively.

Non-vested Shares

     Nonvested shares granted to non-management directors, certain members of management and other employees as of June 30, 2008 and 2007 along with the related compensation expense (recorded in general and administrative expense) are detailed in the following table:

								Compensation Expense
		Nonvested		Market		Three months ended				Six months ended
		Shares		Value on		June 30,				June 30,
Grant Date	Vesting Date	Granted		Grant Date		2008		2007		2008		2007
May 7, 2004	May 7, 2007		348,170	$	4,460,058	$	—	$	123,890	$	—	$	495,562
May 3, 2005	May 3, 2008		225,346	$	1,654,040	$	36,861	$	137,837	$	147,446	$	275,673
April 27, 2006	April 27, 2009		288,331	$	4,731,512	$	316,143	$	394,293	$	632,285	$	788,585
February 22, 2007	February 22, 2010		426,514	$	5,433,788	$	346,372	$	447,966	$	708,427	$	636,365
May 3, 2007	November 3, 2007		17,654	$	280,000	$	—	$	93,331	$	—	$	93,331
February 4, 2008	February 4, 2011		16,741	$	225,000	$	18,828	$	—	$	30,442	$	—
March 6, 2008	March 6, 2011		287,592	$	5,283,065	$	438,800	$	—	$	564,243	$	—
May 8, 2008	November 8, 2008		19,719	$	280,010	$	93,337	$	—	$	93,337	$	—
Total compensation expense of nonvested shares						$	1,250,341	$	1,197,317	$	2,176,180	$	2,289,516

     Total compensation cost related to nonvested shares, noted in the table above, not yet recognized is approximately $1.8 million, $3.3 million, $2.1 million and $0.3 million, for the remaining six months of 2008 and for years 2009, 2010 and 2011, respectively, assuming no nonvested shares are forfeited.

Non-Employee Directors’ Deferral Plan

     Compensation expense deferred in common stock related to the Non-Employee Directors’ Deferral Plan was approximately $9,800 and $14,000 during the three- month periods ended June 30, 2008 and 2007, respectively, and approximately $20,600 and $24,000 for the six- month periods ended June 30, 2008 and 2007, respectively. The company match was made in Company common stock and resulted in compensation expense of approximately $2,000 and $2,800 during the three- month periods ended June 30, 2008 and 2007, respectively, and approximately $4,100 and $4,800 for the six- month periods ended June 30, 2008 and 2007, respectively.

10

Nonqualified Deferred Company Plan

     Compensation expense deferred in cash under the Nonqualified Deferred Compensation Plan was approximately $41,000 and $61,000 for the second quarters of 2008 and 2007, respectively, and $78,000 and $212,000 for the six- month periods ended June 30, 2008 and 2007, respectively.

Stock Options

     The Company recognizes compensation expense associated with its stock option grants based on their fair market value on the date of grant using a Black-Scholes option pricing model. Stock option grants to employees generally vest in annual installments over a three year period. The Company recognizes stock option expense ratably over the vesting period of the options. If options are canceled or forfeited prior to vesting, the Company stops recognizing the related expense effective with the date of forfeiture, but does not recapture expense taken previously. The compensation expense, recorded in general and administrative expense, related to the fair value of stock options during the three- month periods ended June 30, 2008 and 2007 was approximately $93,300 and $132,000, respectively, and approximately $180,400 and $200,000 during the six- month periods ended June 30, 2008 and 2007, respectively. Total compensation cost related to nonvested stock options not yet recognized is approximately $169,800, $175,300, $55,100, and $7,500 for the remaining six months of 2008 and for years 2009, 2010 and 2011, respectively.

Note 5 — Income Taxes

     The Company computes income taxes using the asset and liability approach as defined in SFAS No. 109, Accounting for Income Taxes, which results in the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of those assets and liabilities, as well as operating loss and tax credit carryforwards, using enacted tax rates in effect in the years in which the differences are expected to reverse. At June 30, 2008, the Company has net operating loss carryforwards (NOLs), which expire in 2009 through 2027. The Company has reviewed its net deferred tax assets and has provided a valuation allowance to reflect the estimated amount of net deferred tax assets which management considers, more likely than not, will not be realized. The Company has recognized an income tax provision for the quarters ended June 30, 2008 and 2007 related to Federal alternative minimum tax and statutory minimum payments required under certain state and local tax laws. Changes in the Company’s net deferred tax assets and liabilities have been offset by a corresponding change in the valuation allowance.

     As of June 30, 2008 and 2007, the Company had no unrecognized tax uncertainties. The Company’s policy is to recognize interest and penalties on unrecognized tax uncertainties in the Income tax provision within the Statements of Operations and Comprehensive Income (Loss). There were no interest or penalties assessed or paid for the three- month and six- month periods ended June 30, 2008. The Company’s tax years that remain subject to examination by the taxing authorities are those ending December 31, 2007, 2006, 2005 and 2004.

     As of June 30, 2008, the Company has accrued approximately $322,000 and $375,000 for its estimated alternative minimum tax obligations associated with earnings for the second quarter and first half of 2008, respectively. The Company has substantial alternative minimum tax loss carryforwards available, but under the alternative minimum tax structure, such loss carryforwards can only be utilized to offset 90% of the alternative minimum tax obligation in any period.

Note 6 — Comprehensive Income (Loss)

     Comprehensive income (loss) consists of earnings items and other gains and losses affecting stockholders’ equity that are excluded from current net income (loss). As of June 30, 2008 and 2007, such items consist of

11

unrealized gains and losses on derivative financial instruments related to commodity price hedging activities and available-for-sale marketable securities.

     The following summary sets forth the changes in accumulated other comprehensive income (loss) in stockholders’ equity for the first six months of 2008 and 2007:

							Accumulated Other
(in thousands)	Available for Sale			Commodity			Comprehensive Income
As of June 30, 2008	Securities			Instruments			(Loss)
Balance at December 31, 2007	$	508		$	(6,533	)	$	(6,025	)
Reclassification to earnings		—			6,957			6,957
Change in value		(508	)		(6,361	)		(6,869	)
Comprehensive income (loss)	$	(508	)	$	596		$	88
Balance at March 31, 2008	$	—		$	(5,937	)	$	(5,937	)
Reclassification to earnings		—			5,837			5,837
Change in value		(33	)		100			67
Comprehensive income (loss)	$	(33	)	$	5,937		$	5,904
Balance at June 30, 2008	$	(33	)	$	—		$	(33	)

						Accumulated Other
(in thousands)	Available for Sale		Commodity			Comprehensive Income
As of June 30, 2007	Securities		Instruments			(Loss)
Balance at December 31, 2006	$	177	$	(15,780	)	$	(15,603	)
Reclassification to earnings		—		7,275			7,275
Change in value		137		(12,587	)		(12,450	)
Comprehensive income (loss)	$	137	$	(5,312	)	$	(5,175	)
Balance at March 31, 2007	$	314	$	(21,092	)	$	(20,778	)
Reclassification to earnings		—		8,093			8,093
Change in value		90		(2,737	)		(2,647	)
Comprehensive income (loss)	$	90	$	5,356		$	5,446
Balance at June 30, 2007	$	404	$	(15,736	)	$	(15,332	)

Note 7 — Long-Term Debt

Convertible Debentures

     On March 12, 2008, the Company issued and sold $181.5 million aggregate principal amount of senior convertible debentures due 2028 (“debentures”). The debentures pay interest at 1.875% per annum, payable semi-annually on March 15 and September 15 of each year, commencing September 15, 2008. The debentures will mature on March 15, 2028, subject to earlier repurchase or conversion. Each $1,000 principal amount of debentures is initially convertible, at the option of the holders, into approximately 42.5351 shares of the Company’s common stock, at any time prior to the maturity date. The conversion rate is subject to certain adjustments, but will not be adjusted for accrued interest or any unpaid interest. The conversion rate initially represents a conversion price of $23.51 per share. Holders of the debentures may require the Company to repurchase all or a portion of their debentures on March 15, 2013, March 15, 2018 and March 15, 2023, or upon the occurrence of certain events including a change in control. The Company may redeem the debentures for cash beginning on or after March 22, 2013.

     The debentures were sold to an “accredited investor” within the meaning of Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the private placement exemption afforded by Section 4(2) of the Securities Act. The initial investor offered and resold the debentures to “qualified institutional buyers” under Rule 144A of the Securities Act. MMC Norilsk Nickel, or one of its affiliates, with

12

the approval of the Company’s public directors, purchased $80 million of the debentures, thereby maintaining their majority ownership position in the Company.

     In connection with the issuance of the debentures, the Company agreed to file a shelf registration statement with the Securities and Exchange Commission (SEC) for the resale of the debentures and the common stock issuable upon conversion of the debentures and to use reasonable best efforts to cause it to become effective, within an agreed-upon period. The Company also agreed to periodically update the shelf registration and to keep it effective until the earlier of (1) the date the debentures or the common stock issuable upon conversion of the debentures is eligible to be sold to the public pursuant to Rule 144 of the Securities Act or (2) the date on which there are no outstanding registrable securities. Management has evaluated the terms of the debentures, which include the call feature, redemption feature, and the conversion feature, under applicable accounting literature, including SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” and concluded that none of these features should be separately accounted for as derivatives.

     In connection with the issuance of the debentures, the Company incurred approximately $5.1 million of issuance costs, which primarily consisted of investment banking fees and legal and other professional fees. These costs are classified within Other Assets and are being amortized as interest expense using the effective interest method over the term from issuance through the first date that the holders can require repurchase of the debentures, which is March 15, 2013. Amortization expense related to the issuance costs of the debentures was approximately $0.3 million for the three- and six- month periods ended June 30, 2008, respectively, and the interest expense on the debentures was $0.9 million and $1.0 million for the three- and six- month periods ended June 30, 2008, respectively. The Company made no cash payments for interest on the debentures during the first six months of 2008.

     The Company used a portion of the proceeds of the debenture offering to retire $98.3 million of term debt and terminate a $40 million revolving credit line under its previous credit facility. Interest expense for the first six months of 2008 includes approximately $2.2 million for the non-cash write-off of unamortized issuance costs on the prior facility. In conjunction with terminating the revolving credit line, the Company posted $20.7 million of restricted cash to collateralize stand-by letters of credit that remained outstanding under that facility.

Note 8 — Segment Information

     The Company operates two reportable business segments: Mine Production and PGM Recycling. These segments are managed separately based on fundamental differences in their operations.

     The Mine Production segment consists of two business components: the Stillwater Mine and the East Boulder Mine. The Mine Production segment is engaged in the development, extraction, processing and refining of PGMs. The Company sells PGMs from mine production under long-term sales contracts, through derivative financial instruments and in open PGM markets. The financial results of the Stillwater Mine and East Boulder Mine have been aggregated, as both have similar products, processes, customers, distribution methods and economic characteristics.

     The PGM Recycling segment is engaged in the recycling of spent automobile and petroleum catalysts to recover the PGMs contained in those materials. The Company allocates costs of the Smelter and Refinery to both the Mine Production segment and to the PGM Recycling segment for internal and segment reporting purposes because the Company’s smelting and refining facilities support the PGM extraction of both business segments.

     The All Other group consists of assets, revenues and expenses of various corporate and support functions.

13

     The Company evaluates performance and allocates resources based on income or loss before income taxes. The following financial information relates to the Company’s business segments:

(in thousands)	Mine		PGM		All
Three months ended June 30, 2008	Production		Recycling		Other			Total
Revenues	$	103,743	$	108,214	$	6,874		$	218,831
Depreciation and amortization	$	21,747	$	48	$	—		$	21,795
Interest income	$	—	$	2,005	$	919		$	2,924
Interest expense	$	—	$	—	$	1,728		$	1,728
Income (loss) before income taxes	$	19,933	$	8,674	$	(11,112	)	$	17,495
Capital expenditures	$	20,460	$	135	$	183		$	20,778
Total assets	$	514,928	$	179,014	$	182,575		$	876,517

(in thousands)	Mine			PGM		All
Three months ended June 30, 2007	Production			Recycling		Other			Total
Revenues	$	74,893		$	83,914	$	2,156		$	160,963
Depreciation and amortization	$	21,628		$	28	$	—		$	21,656
Interest income	$	—		$	1,799	$	1,224		$	3,023
Interest expense	$	—		$	—	$	2,750		$	2,750
Income (loss) before income taxes	$	(1,358	)	$	7,814	$	(8,972	)	$	(2,516	)
Capital expenditures	$	18,574		$	99	$	139		$	18,812
Total assets	$	502,207		$	97,877	$	148,026		$	748,110

(in thousands)	Mine		PGM		All
Six months ended June 30, 2008	Production		Recycling		Other			Total
Revenues	$	185,032	$	194,630	$	12,215		$	391,877
Depreciation and amortization	$	42,394	$	96	$	—		$	42,490
Interest income	$	—	$	3,631	$	2,380		$	6,011
Interest expense	$	—	$	—	$	6,258		$	6,258
Income (loss) before income taxes	$	27,939	$	14,585	$	(21,764	)	$	20,760
Capital expenditures	$	41,143	$	212	$	248		$	41,603
Total assets	$	514,928	$	179,014	$	182,575		$	876,517

(in thousands)	Mine		PGM		All
Six months ended June 30, 2007	Production		Recycling		Other			Total
Revenues	$	147,264	$	153,902	$	6,247		$	307,413
Depreciation and amortization	$	42,020	$	52	$	—		$	42,072
Interest income	$	—	$	3,360	$	2,626		$	5,986
Interest expense	$	—	$	—	$	5,576		$	5,576
Income (loss) before income taxes	$	2,425	$	13,164	$	(19,164	)	$	(3,575	)
Capital expenditures	$	40,117	$	136	$	155		$	40,408
Total assets	$	502,207	$	97,877	$	148,026		$	748,110

14

Note 9 — Investments

     The cost, gross unrealized gains and losses, and fair value of available-for-sale investment securities by major security type and class of security at June 30, 2008 are as follows:

			Gross		Gross
			unrealized		unrealized		Fair
(in thousands)	Cost		gains		losses		market value
At June 30, 2008
Commercial paper	$	1,991	$	—	$	1	$	1,990
Mutual funds		596		—		32		564
Total	$	2,587	$	—	$	33	$	2,554

     The mutual funds included in the investment table above represent long-term investments which are classified as non-current assets on the balance sheet.

Note 10 — Inventories

     For purposes of inventory accounting, the market value of inventory is generally deemed equal to the Company’s current cost of replacing the inventory, provided that: (1) the market value of the inventory may not exceed the estimated selling price of such inventory in the ordinary course of business less reasonably predictable costs of completion and disposal, and (2) the market value may not be less than net realizable value reduced by an allowance for a normal profit margin. In order to reflect costs in excess of market values, the Company, during the three- and six- month periods ended June 30, 2007, reduced the aggregate inventory carrying value of certain components of its in-process and finished good inventories by $1.4 million. No reduction of the aggregate inventory carrying value was recorded for the three- or six- month periods ended June 30, 2008.

     The costs of PGM inventories as of any date are determined based on combined production costs per ounce and include all inventoriable production costs, including direct labor, direct materials, depreciation and amortization and other overhead costs relating to mining and processing activities incurred as of such date.

     Inventories reflected in the accompanying balance sheet consisted of the following:

	June 30,		December 31,
(in thousands)	2008		2007
Metals inventory
Raw ore	$	1,964	$	1,061
Concentrate and in-process		59,534		36,933
Finished goods		102,139		62,933
		163,637		100,927
Materials and supplies		19,126		17,736
Total inventory	$	182,763	$	118,663

Note 11 — Earnings (Loss) per Common Share

     Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share, reflects the potential dilution that could occur if the Company’s dilutive outstanding stock options or nonvested shares were exercised and the Company’s convertible debt was converted. Reported net income was adjusted for the interest expense (including amortization expense of deferred debt fees) and the related income tax effect for the convertible debentures for the three- and six- month periods ended June 30, 2008. No adjustments were made to reported net income (loss) in the computation of basic

15

earnings (loss) per share or diluted earnings (loss) per share for the three- and six- month periods ended June 30, 2007. The Company currently has only one class of equity shares outstanding.

     A reconciliation of the numerators and denominators of the basic and diluted per-share computations for income for the three- and six- month periods ended June 30, 2008 is shown in the following table:

	Three Months Ended						Six Months Ended
(in thousands, except per share amounts)	June 30, 2008						June 30, 2008
			Weighted						Weighted
			Average						Average
	Income		Shares		Per Share		Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Income	$	17,173					$	20,385
Basic EPS
Income available to
common stockholders		17,173		92,926	$	0.18		20,385		92,740	$	0.22
Effect of Dilutive Securities
Stock options		—		54				—		66
Nonvested shares		—		252				—		360
1.875% Convertible debentures		1,082		7,720				—		—
Diluted EPS
Income available to common stockholders + assumed conversions	$	18,255		100,952	$	0.18	$	20,385		93,166	$	0.22

     Outstanding options to purchase 831,690 and 820,715 of weighted shares of common stock were excluded from the computation of diluted earnings per share for the three- month and six- month periods ended June 30, 2008, respectively, because the market price was lower than the exercise price, and therefore the effect would have been antidilutive. Outstanding options for the three- month and six- month periods ended June 30, 2007 excluded from the computation of diluted earnings (loss) per share were 75,630 and 74,158, respectively, because the effect would have been antidilutive and inclusion of these options would have reduced the net loss per share.

     Outstanding nonvested shares of 279,810 and 337,741 were excluded from the computation of diluted earnings (loss) per share for the three- month and six- month periods ended June 30, 2007, respectively, because the Company reported a net loss and inclusion of any of these nonvested shares would have reduced the net loss per share amounts.

     All 7.72 million shares of common stock applicable to the outstanding convertible debentures were included in the computation of diluted weighted average shares for the second quarter of 2008. The shares of common stock applicable to the debentures were excluded from the computation of diluted weighted average shares for the six month period ended June 30, 2008.

Note 12 — Regulations and Compliance

     On May 20, 2006, new federal regulations went into effect that as of May 20, 2008, tightened the maximum permissible diesel particulate matter (DPM) exposure limit for underground miners from the prior level of 308 mg/m3 of elemental carbon to the new limit of 160 mg/m3 of total carbon. The Company utilizes a significant number of diesel-powered vehicles in its mining operations. It is not yet clear if appropriate measurement methods and emission control standards exist that will ensure compliance with this new standard in the Company’s mining environment. The Company is aggressively utilizing existing and exploring alternative technologies to reduce DPM exposures to the lowest levels currently achievable and is actively working with Mine Safety and Health Administration (MSHA), National Institute for Occupational Safety and Health (NIOSH) and various other companies in the mining industry to share best practices and consider compliance alternatives. The Company’s compliance efforts in this area include using catalytic converters and

16

DPM filters, cleaner-burning biodiesel fuel blends, replacing a portion of its underground equipment fleet with battery-powered units, and experimenting with other emerging emission control technologies. While the initial results in each case are promising and the Company believes that MSHA will continue to support these efforts, in the absence of full compliance there can be no assurance that the Company will not be held in violation of the standard and be subject to an MSHA enforcement action.

     MSHA has the statutory authority to issue citations for non-compliance and, in situations where it determines the health and safety of miners is at significant risk, to order cessation of mining operations until the risk is alleviated. The Company was granted a special one-year extension of time to comply with the new DPM standards in certain areas of its Stillwater Mine, subject to specified conditions; this extension is scheduled to expire on November 28, 2008. The East Boulder Mine has obtained a similar extension applicable to certain areas of the mine, also for a period of one year commencing on May 21, 2008, subject to specified conditions being met during the period of the special extension.

Note 13 — Fair Value Measurements

     The Company adopted SFAS No. 157, Fair Value Measurements, effective January 1, 2008 for all financial assets and liabilities and any other assets and liabilities that are recognized or disclosed at fair value on a recurring basis. The adoption of SFAS No. 157 had no material effect on the Company’s financial condition, results of operations or cash flows.

     SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer the liability (an exit price) in an orderly transaction between market participants and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy within SFAS No. 157 distinguishes among three levels of inputs that may be utilized when measuring fair value: Level 1 inputs (using quoted prices in active markets for identical assets or liabilities), Level 2 inputs (using inputs other than level 1 prices such as quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability) and Level 3 inputs (unobservable inputs supported by little or no market activity and based on internal assumptions used to measure assets and liabilities). The classification of each financial asset or liability within the above hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

     Financial assets and liabilities measured at fair value on a recurring basis as at June 30, 2008, consisted of the following:

(in thousands)			Fair Value Measurements
	Total		Level I		Level 2		Level 3
Mutual funds	$	564		—	$	564		—
Investments		1,990		—		1,990		—

     The fair value of mutual funds and investments, consisting of commercial paper, is based on market prices which are readily available. Unrealized gains or losses on mutual funds and investments are recorded in accumulated other comprehensive income (loss).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following commentary provides management’s perspective and analysis regarding the financial and operating performance of Stillwater Mining Company (the “Company”) for the three- and six- month periods ended June 30, 2008. It should be read in conjunction with the financial statements included in this quarterly report, in the Company’s March 31, 2008 Quarterly Report on Form 10-Q and in the Company’s 2007 Annual Report on Form 10-K.

17

Overview

     Stillwater Mining Company extracts, processes, refines and markets palladium, platinum and minor amounts of other metals from the J-M Reef, an extensive trend of Platinum Group Metal (PGM) mineralization located in Stillwater and Sweet Grass Counties in south central Montana. The Company operates two mines, Stillwater and East Boulder, within the J-M Reef, each with substantial underground operations and a supporting surface mill and concentrator. The Company also operates smelting and base-metal refining facilities at Columbus, Montana. Concentrates produced at the two mines are transported to the smelter and refinery where they are further processed into a PGM filter cake that is sent to third-party refiners for final processing. Substantially all finished palladium and about 70% of the platinum produced from mining is sold under contracts with two major automotive manufacturers for use in automotive catalytic converters. These contracts include floor and, in some cases, ceiling prices on palladium and platinum.

     The Company also recycles spent catalyst materials through its processing facilities in Columbus, Montana, recovering palladium, platinum and rhodium from these materials. The Company has in place agreements to purchase spent automotive catalyst from third-party collectors, and also processes material owned by others under toll processing arrangements. Recycling volumes fed into the Company’s processing facilities during the second quarter of 2008 increased significantly from the volumes processed in the second quarter of 2007, totaling 115,000 ounces compared to 93,000 ounces of processed PGMs, a 23.7% increase. For the first six months of 2008, recycling volumes totaled 193,000 ounces as compared to 180,000 ounces in 2007, a 7.2% increase. While the higher volumes processed and increased market prices for PGMs during the first six months of 2008 benefited recycling earnings, it has also resulted in a substantial increase in the Company’s marketable inventories and other working capital. The working capital requirement for recycling, comprised of working inventories and associated advances, was approximately $172.8 million at June 30, 2008, compared to approximately $93.7 million at March 31, 2008 and $83.7 million at the end of 2007.

     The Company reported net income for the second quarter 2008 of $17.2 million, or $0.18 per diluted share, on revenues of $218.8 million. This compares to a net loss of $2.5 million, or $0.03 per diluted share on revenues of $161.0 million in the second quarter of 2007. The improved financial performance in the second quarter of 2008 was attributable to higher market prices for PGMs and, to a lesser extent, to higher recycling volumes processed for sale. Platinum realizations were somewhat constrained in both periods by a contractual ceiling price of $850 per ounce on 14% of the platinum ounces sold from mine production and by forward sales entered into in the past at prices well below current market. These forward sales affected 6,000 ounces of platinum in the second quarter of 2008 at an average price of $1,054 per ounce and 28,000 ounces in the corresponding quarter of 2007 at an average price of $1,000 per ounce. The Company’s average realized price for mined platinum in the second quarter of 2008, taking these constraints into account, was about $1,687 per ounce, up from about $949 per ounce in the second quarter of 2007. Palladium prices remained above the minimum floor prices in the automotive contracts during the second quarter of 2008, as the average realization on palladium sales from mine production increased to about $448 per ounce from the $386 per ounce reported in last year’s second quarter.

     The last of the forward sales commitments on platinum settled at June 30, 2008. The Company’s Board may consider forward sales commitments on mine production in the future as circumstances warrant. The Board does not have any current intention of continuing such program at this time. During the second quarter of 2008 and 2007, the losses recognized upon settlement of these financially settled forward contracts reduced the Company’s reported revenues by $5.8 million and $8.1 million, respectively.

     Despite the higher market prices for PGMs in the second quarter of 2008 and the associated strong earnings improvement, several factors continued to constrain financial performance. Mine production of about 38,000 ounces at the East Boulder Mine was below expectations while Stillwater Mine production of about 88,000 ounces was in line with expectations. While various factors contributed to the production shortfall in the quarter, manpower shortages of miners with appropriate skill sets and logistical issues continue to limit planned ramp ups. Stillwater Mine is now implementing some process changes that should improve mining efficiency and better coordinate activities within the mine. Similar efforts are planned at East Boulder during the third and fourth

18

quarters of this year. In addition to these operational challenges, during the first six months of 2008 costs for some critical supplies, including diesel fuel and electric power, have risen significantly at both mines.

     The membership of USW Local 11-0001, which represents union employees at the East Boulder Mine, ratified a new four-year labor agreement on July 8, 2008, without experiencing any labor interruption. The new agreement provides for 4% annual wage increases for the represented workforce and modifies some provisions of the bonus structure at the mine.

     Despite the steps being taken to strengthen the Company’s mining operations; management notes that these improvements will take some time to implement fully. In particular, production in the third quarter of 2008 is expected to continue at current levels due to difficulties in securing additional experienced manpower in the existing strained mining industry labor market. Consequently, mine production for the year is now projected between 515,000 and 525,000 ounces, down from the 550,000 to 565,000 ounce guidance provided previously. However, management also believes that growth in the recycling business is likely to offset in part the financial effect of this lower mine production.

     Guidance on projected total cash costs and capital expenditures for the year 2008 also has been reviewed. The Company’s previous guidance projecting 2008 average total cash costs in the range of $355 to $375 per produced ounce has been increased to a range of $380 to $395 per ounce, reflecting the lower production guidance. Capital expenditure guidance of $110 million in 2008 has been revised downward to about $100 million, reflecting a slower start than expected on construction of the second electric smelting furnace and also a slight reduction in some of the year’s planned mine development, consistent with manpower limitations while maintaining the developed state of the mines.

     The Company’s balance of cash and cash equivalents (excluding restricted cash) was $100.8 million at June 30, 2008, down $25.7 million from March 31, 2008, but up $39.4 million from the end of 2007. Including the Company’s available-for-sale investments, the Company’s total available liquidity at June 30, 2008, was $102.8 million, down $38.1 million from $140.9 million at the end of the first quarter of 2008. This decrease in liquidity is more than accounted for by an increase of about $79.0 million during the 2008 second quarter in working capital requirements of the recycling business. Recycling working capital, comprised of product inventories and advances, has increased as a result of growth in recycling throughput volumes as well as from higher PGM prices. Essentially all of the recycling material in inventory is committed for sale at the time it is acquired, subject only to the time required to extract and process the contained PGMs.

     As noted last quarter, in light of the attention to liquidity issues associated with the sub-prime lending crisis, the Company has reviewed its cash and investments in detail and has concluded that the effect of the sub-prime market issues on the Company’s reported assets and overall liquidity is negligible.

Strategic Initiatives

     During the second quarter of 2008, management continued to emphasize three broad strategic areas of focus that have been addressed extensively over the past several years: increasing mining efficiency in the Stillwater and East Boulder Mines, developing and fostering emerging markets for palladium; and growing and diversifying the Company’s business activities. Following is a brief summary of current efforts in each of these areas of focus.

1. Transformation of Mining Methods to Increase Mining Efficiency

     The Company normally defines mining efficiency in terms of total cash costs per ounce of PGMs extracted. Mining efficiency, then, is affected by the total cost of labor and materials incurred in mining and processing ore and by net PGM production. In general, lowering costs or increasing net production will benefit mining efficiency. Labor and materials costs are influenced by the mix of mining methods used, by the type and volume of equipment employed in the mines, by the effectiveness of mine planning and by the state of general economic conditions. Total ore tons mined, the grade of the extracted ore, and metallurgical recovery percentages drive the Company’s net palladium and platinum production.

19

     The Company continued its transition toward more selective mining methods in the second quarter of 2008. At the East Boulder Mine, which prior to 2006 used sublevel extraction almost exclusively, approximately 56% of the material fed to the concentrator during the second quarter of 2008 was mined using selective mining methods. At the Stillwater Mine, which first introduced selective mining methods in the Upper West area of the mine at the beginning of 2007, approximately 86% of the mined tons fed to the mill in the 2008 second quarter were extracted using selective mining methods. As already noted, the Company’s objective in this transition is to tailor the mining method used in each mining area to best fit the economics of that area. However, manpower constraints related to the availability of highly skilled and more seasoned miners have limited the Company’s ability to take full advantage of selective methods to date.

     The anticipated benefits of applying more selective mining methods include improved ore grades and access to previously uneconomic mineralized material, significant reductions in both waste material mined and in overall development requirements, less spending on capital equipment purchases and maintenance, and so lower capital and operating costs per ounce of production.

     The mine transformation effort is also highly interdependent with the Company’s new-miner training program. Efforts to maintain or increase production rates and to utilize more selective mining methods will depend upon the availability and retention of enough trained miners. The Company is developing a portion of the required workforce through its miner training program, which attracts new miner trainees primarily from local communities. In addition, the Company is continuing its efforts to hire more experienced miners, both locally and from other mining districts. Retention of skilled miners continues to be a challenge in a very competitive mining labor market.

     The Company’s highest operating priority is the safety of its employees. Safety reportable incident rates in the second quarter and first half of 2008 remained very favorable compared to national averages for metals and mining; however, efforts continue to drive the incident rates toward zero. The Company undertook an independent audit of its safety practices during the first quarter 2008 and is currently implementing the recommendations developed from that audit process. Additionally, the Company also has empowered special employee teams with the task of developing additional safety improvements.

     The Company has concluded that in order to mine efficiently, at any point in time each mine needs at least 40 months of proven reserves ready to be mined. At current production rates, the Stillwater Mine now is close to that level, while the East Boulder Mine is still short of that goal. Consequently, the Company continues to invest in mine development at a somewhat higher rate than would be necessary just to sustain the existing level of proven reserves, in order to build toward the 40-month objective. However, as mentioned above, slight reductions in capital development are possible while maintaining the developed state of the operations considering the limitations of additional stoping manpower. Capital spending of $20.8 million in the 2008 second quarter included infrastructure and mine development investment of $9.8 million at the Stillwater Mine and $3.9 million at the East Boulder Mine. Year-to-date, such supporting investment totals $21.6 million at Stillwater and $8.7 million at East Boulder.

     For the three- and six- month periods ended June 30, 2008, primary development totaled approximately 7,500 and 17,800 feet, respectively, while definitional drilling for the three- and six- month periods ended June 30, 2008, totaled approximately 131,000 and 286,000 feet respectively. Management believes this investment in mine development, although it has required a substantial commitment of capital and mining resources, is critical to long-term efficient and productive mining operations.

     Mill head grade varies significantly between the Stillwater and East Boulder mines, as well as within different areas of each mine. However, the composite average grade at each mine tends to be fairly stable. The average ore grade realized at the Stillwater Mine was 0.55 ounces and 0.56 ounces per ton during the three- and six- month periods ended June 30, 2008, respectively. For the comparable period of 2007, the average ore grades were about 0.58 ounces per ton. At the East Boulder Mine the average ore grade realized during the three- and six- month periods ended June 30, 2008 was about 0.44 ounces and 0.43 ounces per ton,

20

respectively. During the same three- and six- month periods of 2007, the corresponding ore grade at East Boulder Mine was about 0.37 ounces and 0.38 ounces per ton, respectively.

     Ore production at the Stillwater Mine averaged 1,853 and 1,791 tons of ore per day during the second quarter and the first six months of 2008, respectively; this compares to an average of 1,741 tons and 1,856 tons of ore per day during the second quarter and first six months of 2007, respectively. This level of mine production in both 2007 and 2008 reflects in part the mine’s continuing challenges with hiring additional skilled and experienced miners as well as the time required to bring newer miners up to full productivity. The training effort is continuing satisfactorily, although the full benefits likely will only be realized progressively over time as the newer miners steadily gain experience. Management also continues its efforts to review and strengthen other operating and maintenance training programs within the mines.

     The rate of ore and sub-grade reef production at the East Boulder Mine averaged 1,218 and 1,310 tons per day during the second quarter and the first six months of 2008, respectively, compared to an average of 1,640 and 1,538 tons per day during the second quarter and first six months of 2007. Because East Boulder has excess mill capacity, the mine processes sub-grade material whenever economics justify doing so. Production in the second quarter and the first six months of 2008 included 990 tons and 1,092 tons per day, respectively, of ore at an average grade of 0.44 ounces per ton, along with about 229 tons and 219 tons per day, respectively, of sub-grade material not included in ore reserves at an average grade of about 0.19 and 0.18 ounces per ton, respectively, resulting in a combined effective grade of about 0.39 ounces per ton. For the second quarter of 2007, the combined effective grade at East Boulder was about 0.37 ounces per ton. The lower production tonnages at East Boulder in the second quarter of 2008 as compared to the corresponding quarter of 2007 stemmed from significant manpower constraints and the transition in mining methods.

     During the second quarter and first six months of 2008, the Company’s mining operations produced a total of approximately 97,100 and 196,600 ounces of palladium, respectively, and about 29,200 and 58,600 ounces of platinum, respectively. For the same periods in 2007, the mines produced 102,400 and 213,400 ounces of palladium, respectively, and 30,700 and 63,800 ounces of platinum, respectively.

     During the second quarter, the Company continued its general effort to improve mining efficiency by identifying opportunities to reduce costs or employ assets more efficiently. The initial effort was around the maintenance function at the Stillwater mine and was followed by an in-depth review of the ore and waste handling infrastructures. This process will continue into production and planning areas as well as examining management of materials and supplies inventories and implementing new computer functionality in several areas. By utilizing a cross functional “team based” approach, the process has generated a high level of engagement within the workforce. The Company will continue to use this approach at its other operations to remove operational constraints.

2. Market Development

     The Company has directed most of its efforts to develop and broaden markets for palladium through the Palladium Alliance International (the “Alliance”), a trade organization established for that purpose in early 2006. The Alliance’s principal goals include establishing palladium’s jewelry market presence as a specific elegant brand of precious metal, distinct from platinum and white gold, and instituting a system of standards for use of the palladium brand that will emphasize palladium’s rarity and value. The Alliance is dedicated to nurturing palladium’s jewelry role, and building demand, by sponsoring technical articles in jewelry trade publications illustrating methods of fabricating palladium jewelry, providing a website with information on palladium suppliers and retailers (www.luxurypalladium.com), organizing presentations at industry trade shows and supporting targeted image advertising in critical jewelry markets.

     In March 2008, the industry announced that, following a comprehensive study involving independent consultants and the Palladium Alliance International, under the auspices of the International Platinum Group Metals Association, a decision was made to plan and implement a market development program for palladium jewelry. The initiative will initially focus on China and the U.S., and will be led by Norilsk Nickel, the largest

21

palladium producer, supported by several palladium producers in South Africa and by Stillwater Mining Company. The objective is to establish a clear and specific brand position for palladium in jewelry which, in partnership with jewelry designers, manufacturers and retailers, will achieve a sustainable market with growth opportunities for palladium applications. Efforts have continued in this direction during the second quarter of 2008.

3. Growth and Diversification

     Management is reviewing various opportunities to diversify its current mining and processing operations. This is a multi-faceted effort. The Company’s recycling operations have grown substantially over the past several years, reducing the degree of financial dependence solely on performance of the Company’s mines in each period. The commitment to the recycling business continues as reported in the first quarter of 2008 with construction of a second smelter furnace now in progress within the Columbus processing facilities; the new furnace will accommodate expansion of both mining production and recycling volumes over the next several years, as well as, potentially improving metal recoveries and reducing process risk. Completion of the furnace project is expected in late 2008 or early 2009.

     The Company has invested in two small exploration companies that target PGMs and other precious metals. The first of these, Pacific North West Capital Corp., is a Canadian exploration company with a portfolio of several prospective PGM opportunities; the Company currently is participating financially in an exploration effort at Good News Bay in Alaska led by this company. The other company is Benton Resource Corp., another Canadian exploration company with an attractive resource position in the Goodchild project, a nickel-PGM target north of Marathon, Ontario, Canada, as well as several other interesting holdings.

     These investments in generative exploration projects are inherently long-term and fairly speculative in nature, but they give the Company access to proven exploration teams and are intended to establish a portfolio of attractive opportunities for the future. The Company also is continuously evaluating various later-stage mineral development projects, and in some cases even acquisition of operating properties, when they appear to offer good investment value and mesh with Stillwater’s corporate expertise.

Corporate and Other Matters

Federal Regulations

     As discussed in Note 12 to the Company’s financial statements, new federal regulations went into effect on May 20, 2008 that tightened the maximum permissible diesel particulate matter (DPM) exposure limit for underground miners from 308 µg/m3 of elemental carbon to the new limit of 160 µg/m3 of total carbon. The Company utilizes a significant number of diesel-powered vehicles in its mining operations. It is not clear that appropriate measurement methods and emission control standards exist that will ensure compliance in the Company’s mining environment with this new standard.

     The Company is aggressively utilizing existing and exploring alternative technologies to reduce DPM exposures to the lowest levels currently achievable and is actively working with MSHA, NIOSH and various companies in the mining industry to share best practices and consider compliance alternatives. The Company’s compliance efforts in this area include catalytic converters and DPM filters, using cleaner-burning biodiesel fuel blends, replacing a portion of its underground equipment fleet with battery-powered units, and experimenting with other emerging emission control technologies. While the initial results in each case are promising and the Company believes that MSHA will continue to support these efforts, in the absence of full compliance there can be no assurance that the Company will not be held in violation of the standard and be subject to an MSHA enforcement action.

     MSHA has the statutory authority to issue citations for non-compliance and, in situations where it determines the health and safety of miners is at significant risk, to order cessation of mining operations until the risk is alleviated. The Company was granted a special extension for certain areas of its Stillwater Mine, subject to specified conditions; for a period of one-year (expiring on November 28, 2008). The East Boulder

22

Mine has obtained a similar extension applicable to certain areas of the mine for a period of one year (commencing May 21, 2008), subject to specified conditions being met during the period of the special extension.

PGM Recycling

     PGMs (palladium, platinum and rhodium) contained in spent catalytic converter materials are purchased from third-party suppliers or received under tolling agreements and are processed by the Company through its metallurgical complex. A sampling facility crushes and samples the spent catalysts prior to their being blended for smelting in the electric furnace. The spent catalytic material is sourced by third parties, primarily from automobile repair shops and automobile yards that disassemble old cars for the recycling of their parts. The Company also regularly processes spent PGM catalysts from petroleum refineries.

     Recycling activity has expanded significantly in the last five years. During this year’s second quarter, the Company processed recycled materials at a rate of approximately 20.9 tons per day, up from approximately 17.2 tons per day in the second quarter of 2007. During the first six months of this year, the Company processed recycled materials at a rate of approximately 17.1 tons per day, up from approximately 16.8 tons per day in the first six months of 2007.

     Revenues from PGM recycling were $108.2 million and $194.6 million for the three- and six- month periods ended June 30, 2008, respectively, compared to $83.9 million and $153.9 million in revenue for the same periods in 2007. This revenue increase reflects both the higher catalyst volumes processed and higher underlying PGM prices in 2008 compared to 2007.

Other Debt Matters

     As discussed in Note 7 to the Company’s June 30, 2008 financial statements above, on March 12, 2008, the Company issued $181.5 million of 1.875% debentures due March 15, 2028. The initial conversion price on these debentures is $23.51 per share, representing the potential for 7.72 million additional common shares outstanding if fully converted. MMC Norilsk Nickel, or one of its affiliates, with the approval of the Company’s public directors, purchased $80 million of the debentures, thereby maintaining their majority ownership position in the Company. The Company used the proceeds from this offering to retire the remaining $98.3 million outstanding balance on its term loan and to provide $20.7 million of cash collateral for standby letters of credit previously supported by the associated revolving credit facility. During the second quarter 2008, the Company has utilized a portion of the remaining proceeds to fund growth in its recycling business.

     At June 30, 2008, the Company had posted surety bonds with the State of Montana in the amount of $15.2 million and had obtained a $7.5 million letter of credit to satisfy the current $22.7 million of financial guarantees provided to the regulatory agencies. The state is currently in the process of finalizing an updated environmental impact statement and is expected to require a substantial increase in these financial guarantees. The Company has adequate financial resources to meet these increased obligations.

Results of Operations

     The Company reported net income of $17.2 million for the second quarter of 2008 compared to a net loss of $2.5 million for the second quarter of 2007. The second quarter of 2008 benefited from much higher sales realizations, driven both by higher PGM market prices and by lower volumes of platinum hedged forward at prices unfavorable to the current market price.

     Earnings from mining operations strengthened between the 2008 and 2007 second quarters, increasing to a net income of $19.9 million from a loss of $1.4 million in the second quarter of 2007, as the higher PGM prices in 2008 more than offset the quarter’s lower sales volumes and higher operating costs. Earnings from recycling (including financing income) increased modestly quarter-on-quarter, growing to $8.7 million in the 2008 second quarter from about $7.8 million in the same period in 2007, the result of slightly higher metals

23

prices in 2008 more than offsetting a slight decrease in ounces delivered for sale. During this period of increasing prices, the Company continues to experience inventory timing effects that defer a portion of the benefit from higher second-quarter 2008 prices beyond the end of the second quarter. Corporate marketing, general and administrative costs increased to $10.4 million in the 2008 second quarter from $7.4 million in the 2007 second quarter, mostly reflecting the timing of marketing expenditures. Net financing expenses, excluding recycling, were $0.8 million in this year’s second quarter, down from $1.5 million in the same period last year, reflecting the benefit of lower interest rates on the convertible debenture offering.

24

Three- month period ended June 30, 2008 compared to the three- month period ended June 30, 2007.

     Revenues Total revenues increased by 35.9% to $218.8 million for the second quarter of 2008 compared to $161.0 million for the second quarter of 2007. The following analysis covers key factors contributing to the increase in revenues:

SALES AND PRICE DATA

	Three months ended
	June 30,				Increase			Percentage
(in thousands, except for average prices)	2008		2007		(Decrease)			Change
Revenues	$	218,831	$	160,963	$	57,868			36	%
Ounces Sold
Mine Production:
Palladium (oz.)		107		116		(9	)		(8	%)
Platinum (oz.)		33		32		1			3	%
Total		140		148		(8	)		(5	%)
Other PGM Activities: (3)
Palladium (oz.)		41		32		9			28	%
Platinum (oz.)		28		31		(3	)		(10	%)
Rhodium (oz.)		6		6		—			—
Total		75		69		6			9	%
By-products from Mining: (4)
Rhodium (oz.)		1		1		—			—
Gold (oz.)		3		3		—			—
Silver (oz.)		3		2		1			50	%
Copper (lb.)		213		85		128			151	%
Nickel (lb.)		241		261		(20	)		(8	%)
Average realized price per ounce (1)
Mine Production:
Palladium ($/oz.)	$	448	$	386	$	62			16	%
Platinum ($/oz.)	$	1,687	$	949	$	738			78	%
Combined ($/oz.) (2)	$	740	$	506	$	234			46	%
Other PGM Activities: (3)
Palladium ($/oz.)	$	444	$	355	$	89			25	%
Platinum ($/oz.)	$	1,771	$	1,225	$	546			45	%
Rhodium ($/oz.)	$	8,298	$	5,923	$	2,375			40	%
By-products from mining:(4)
Rhodium ($/oz.)	$	9,599	$	6,160	$	3,439			56	%
Gold ($/oz.)	$	898	$	655	$	243			37	%
Silver ($/oz.)	$	17	$	13	$	4			31	%
Copper ($/lb.)	$	3.67	$	3.39	$	0.28			8	%
Nickel ($/lb.)	$	11.76	$	22.74	$	(10.98	)		(48	%)
Average market price per ounce (2)
Palladium ($/oz.)	$	444	$	368	$	76			21	%
Platinum ($/oz.)	$	2,026	$	1,289	$	737			57	%
Combined ($/oz.) (2)	$	816	$	564	$	252			45	%

(1)	The Company’s average realized price represents revenues, which include the effect of contract floor and ceiling prices, hedging gains and losses realized on commodity instruments and contract discounts, divided by ounces sold. The average market price represents the average of the daily London Metals Exchange PM Fix for the actual months of the period.
(2)	The Company reports a combined average realized and market price of palladium and platinum at the same ratio as ounces that are produced from the base metal refinery.
(3)	Ounces sold and average realized price per ounce from other PGM activities relate to ounces produced from processing of catalyst materials and ounces purchased in the open market for resale.
(4)	By-product metals sold reflect contained metal. Realized prices reflect net values (discounted due to product form and transportation and marketing charges) per unit received.

25

     Net revenues from sales of mine production were $103.7 million in the second quarter of 2008, compared to $74.9 million for the same period in 2007, a 38.5% increase. Reported revenues were net of hedging losses on forward sales of platinum of $5.8 million on 6,000 ounces hedged in the second quarter of 2008, and $8.1 million on 28,000 ounces hedged in the second quarter of 2007. The increase in mine production revenues reflects higher average realized prices in 2008, which more than offset the effect of lower sales volumes. The Company’s average combined realized price on sales of palladium and platinum from mining operations was $740 per ounce in the second quarter of 2008, compared to $506 per ounce in the same quarter of 2007. The total quantity of mined metals sold decreased by 5.3% to approximately 140,300 ounces in the second quarter of 2008 compared to 148,100 ounces sold during the same time period in 2007.

     Revenues from PGM recycling grew by 29.0% between the second quarter of 2007 and the second quarter of this year, increasing to $108.2 million in the second quarter of 2008 from $83.9 million for the same period in 2007. The increase in PGM recycling revenues is the result of much higher prices realized for PGM sales thus far in 2008 as compared to 2007, while volumes sold decreased slightly. The Company’s combined average realization on recycling sales (which include palladium, platinum and rhodium) was $1,813 per ounce in the second quarter of 2008, up 37.8% from $1,316 per ounce in the second quarter of last year. Recycled ounces sold decreased to 59,300 ounces in the second quarter of this year from about 63,500 ounces in the second quarter of 2007.

     The Company also purchases PGMs for resale from time to time. During the second quarter of 2008 the Company recognized revenue of about $6.9 million on approximately 15,200 ounces of palladium purchased in the open market and re-sold. In the second quarter of 2007, revenue from such sales totaled approximately $2.2 million on 6,000 ounces of palladium purchased in the open market and re-sold.

     Costs of metals sold The Company’s total costs of metals sold (before depreciation, amortization, and corporate overhead) increased to about $170.3 million in the second quarter of 2008 from approximately $134.8 million in the second quarter of 2007, a 26.3% increase. The higher cost in 2008 was driven primarily by higher acquisition costs for recycling material, based on the higher value of the contained metals, and to a lesser extent by higher costs for fuel and contracted services.

     The costs of metals sold from mine production totaled $61.9 million for the second quarter of 2008, compared to $54.7 million for the second quarter of 2007, a 13.2% increase. Most of the increase in 2008 was attributable to higher fuel costs and to outside contractor expense. In the second quarter of 2007, the Company recognized a $1.4 million lower-of-cost-or-market adjustment to reflect a realizable value of metals lower than cost of inventory. The Company did not recognize a corresponding adjustment in the second quarter of 2008 because the higher net realizable metal values exceeded the cost of metal in inventory.

     Total consolidated cash costs per ounce produced, a non-GAAP measure of extraction efficiency, in the second quarter of 2008 increased substantially to $394 per ounce, compared to $320 per ounce in the second quarter of 2007. More than half of this increase was attributable to higher operating costs, and the remainder to lower mine production in the second quarter of 2008 compared to last year’s second quarter.

     The costs of metals sold from PGM recycling activities were $101.5 million in the second quarter of 2008, compared to $77.9 million in the second quarter of 2007, a 30.3% increase. Most of the increase is attributable to the higher cost per ton to acquire recycling material as the value of the contained metals has increased.

     The costs of metals sold from the 15,200 ounces of palladium purchased for resale was $6.9 million in the second quarter of 2008. In comparison, the cost to acquire 6,000 ounces of palladium in the second quarter of 2007 was $2.2 million. The increased cost was primarily attributable to the increased quantity of palladium ounces purchased in the second quarter of 2008, and secondarily the result of the higher palladium prices in 2008.

     Production During the second quarter of 2008, the Company’s mining operations produced approximately 126,200 ounces of PGMs, including approximately 97,100 and 29,200 ounces of palladium and platinum, respectively. This is significantly less than the approximately 133,100 ounces of PGMs produced in

26

the second quarter of 2007, including approximately 102,400 and 30,700 ounces of palladium and platinum, respectively. The lower production in the 2008 second quarter is mostly attributable to the continuing challenges with hiring additional manpower in a very tight mining industry labor market. Production at the Stillwater Mine increased approximately 4.1% to about 88,000 ounces in the second quarter of 2008 from nearly 84,500 ounces in the second quarter of 2007, while production at East Boulder Mine decreased by 21.8% or about 38,000 ounces from 48,600 ounces over the same period. The East Boulder shortfall was primarily impacted by a shortage of manpower and appropriate skill sets related to the challenge of changing to more selective mining methods.

     Marketing, general and administrative Total marketing, general and administrative expenses in the second quarter of 2008 were $10.4 million, compared to approximately $7.4 million during the second quarter of 2007, a 41.0% increase. During the second quarter of 2008, the Company’s continued its marketing efforts for palladium, largely in support of the Palladium Alliance International, spending approximately $2.4 million on marketing in the second quarter of 2008 compared to $1.1 million in the same period of 2007.

     Interest income and expense Total interest income for the second quarter of 2008 decreased slightly to $2.9 million from $3.0 million in the corresponding quarter of 2007. This interest income included approximately $2.0 million and $1.8 million of earned interest from the Company’s recycling operations in the three month periods ended June 30, 2008 and 2007, respectively. Interest expense in the second quarter of 2008 was approximately $1.7 million, compared to $2.8 million for the same period in 2007, reflecting the lower rate of interest on the convertible debentures issued in 2008.

     Other comprehensive income (loss) For the second quarter of 2008, other comprehensive income (loss) included the total change in the fair value of derivatives of $0.1 million and $5.8 million of hedging loss recognized in current earnings. For the same period of 2007, other comprehensive income (loss) included a change in the fair value of derivatives of $2.7 million reduced by $8.1 million in hedging loss recognized in current earnings.

27

Six- month period ended June 30, 2008, compared to the six- month period ended June 30, 2007.

     Revenues Total revenues were $391.9 million for the first six months of 2008, compared to $307.4 million for the same period of 2007, for an increase of 27.5%. The following table illustrates the key factors affecting revenues in each period:

SALES AND PRICE DATA

	Six months ended
	June 30,				Increase			Percentage
(in thousands except for average prices)	2008		2007		(Decrease)			Change
Revenues	$	391,877	$	307,413	$	84,464			27	%
Ounces Sold
Mine Production:
Palladium		209		225		(16	)		(7	%)
Platinum		61		66		(5	)		(8	%)
Total		270		291		(21	)		(7	%)
Other PGM Activities: (3)
Palladium		79		69		10			14	%
Platinum		58		59		(1	)		(2	%)
Rhodium		10		12		(2	)		(17	%)
Total		147		140		7			5	%
By-products from Mining: (4)
Rhodium (oz.)		2		2		—			—
Gold (oz.)		5		6		(1	)		(17	%)
Silver (oz.)		5		4		1			25	%
Copper (lb.)		514		468		46			10	%
Nickel (lb.)		522		567		(45	)		(8	%)
Average realized price per ounce (1)
Mine Production:
Palladium ($/oz.)	$	431	$	382	$	49			13	%
Platinum ($/oz.)	$	1,547	$	931	$	616			66	%
Combined ($/oz.) (2)	$	685	$	506	$	179			35	%
Other PGM Activities: (3)
Palladium ($/oz.)	$	426	$	345	$	81			23	%
Platinum ($/oz.)	$	1,602	$	1,189	$	413			35	%
Rhodium ($/oz.)	$	7,486	$	5,497	$	1,989			36	%
By-products from mining:(4)
Rhodium ($/oz.)	$	8,919	$	6,039	$	2,880			48	%
Gold ($/oz.)	$	919	$	661	$	258			39	%
Silver ($/oz.)	$	17	$	13	$	4			31	%
Copper ($/lb.)	$	3.38	$	2.89	$	0.49			17	%
Nickel ($/lb.)	$	12.09	$	19.98	$	(7.89	)		(39	%)
Average market price per ounce (2)
Palladium ($/oz.)	$	443	$	355	$	88			25	%
Platinum ($/oz.)	$	1,947	$	1,238	$	709			57	%
Combined ($/oz.) (2)	$	785	$	555	$	230			41	%

(1)	The Company’s average realized price represents revenues, which include the effect of contract floor and ceiling prices, hedging gains and losses realized on commodity instruments and contract discounts, divided by ounces sold. The average market price represents the average of the daily London Metals Exchange PM Fix for the actual months of the period.
(2)	The Company reports a combined average realized and market price of palladium and platinum at the same ratio as ounces that are produced from the base metal refinery.
(3)	Ounces sold and average realized price per ounce from other PGM activities relate to ounces produced from processing of catalyst materials and ounces purchased in the open market for resale.
(4)	By-product metals sold reflect contained metal. Realized prices reflect net values (discounted due to product form and transportation and marketing charges) per unit received.

28

     Net revenues from sales of mine production were $185.0 million in the first six months of 2008, compared to $147.3 million for the same period in 2007, a 25.6% increase. Reported revenues were net of hedging losses on forward sales of platinum of $12.8 million on 15,000 ounces hedged in the first half of 2008, and $8.1 million on 54,500 ounces hedged in the same period in 2007. The increase in mine production revenues reflects higher average realized prices in 2008, which more than offset the effect of lower sales volumes. The Company’s average combined realized price on sales of palladium and platinum from mining operations was $685 per ounce in the first six months of 2008, compared to $506 per ounce in the same period in 2007. The total quantity of mined metals sold decreased by 7.2% to approximately 270,200 ounces in the first half of 2008 compared to 291,100 ounces sold during the same time period in 2007.

     Revenues from PGM recycling grew by 26.4% between the first six months of 2008 and the same period in 2007, increasing to $194.6 million in the first six months of 2008 from $153.9 million for the same period in 2007. This increase in revenues from PGM recycling resulted mostly from much higher prices realized for PGM sales through June in 2008 as compared to 2007. Quantity of recycled PGMs sold declined very slightly to approximately 120,200 ounces in the first six months of 2008 compared to approximately 121,000 ounces in the first six months of 2007. The combined average realized price for these metals (which include palladium, platinum and rhodium) increased significantly to $1,605 per ounce for the first six months of 2008 from $1,271 per ounce for the first half of 2007, an increase of 26.3%.

     During the first half of 2008 the Company recognized revenue of about $12.2 million on approximately 27,400 ounces of palladium purchased in the open market and re-sold. In the first half of 2007, revenue from such sales totaled approximately $6.2 million on 18,000 ounces of palladium purchased in the open market and re-sold.

     Costs of metals sold Total costs of metals sold (before depreciation, amortization, and corporate overhead) increased to about $310.3 million for the first six months of 2008, compared to $253.3 million for the same period of 2007, a 22.5% increase. The higher cost in 2008 was driven primarily by higher acquisition costs for recycling material, based on the higher value of the contained metals, and to a lesser extent by higher costs for fuel and contracted services.

     The costs of metals sold from mine production were $114.6 million for the first six months of 2008, compared to $103.0 million for the same period of 2007, an 11.3% increase. This increase primarily reflects higher mining costs during the first half of 2008. The Company recognized a $1.4 million lower-of-cost-or-market adjustment to reflect a realizable value of metals lower than cost in inventory for the six- month period ended June 30, 2007; no corresponding adjustment was required for the first six months of 2008.

     Total consolidated cash costs per ounce produced, a non-GAAP measure, in the first six months of 2008 increased to $390 per ounce compared to $314 per ounce in the same period of 2007. Analysis of this difference between the two periods indicates that higher operating costs and lower mine production in the first six months of 2008 both contributed to the increase.

     The costs of metals sold from PGM recycling activities were $183.6 million in the first six months of 2008, compared to $144.0 million in the same period of 2007. Most of the increase is attributable to the higher cost per ton to acquire recycling material as the value of the contained metals has increased.

     The costs of metals sold from the 27,400 ounces of palladium purchased for resale was $12.2 million in the first six months of 2008. In comparison, the cost to acquire 18,000 ounces of palladium in the first six months of 2007 was $6.2 million. The increased cost was primarily attributable to the increased higher palladium prices in 2008 and secondarily the quantity of palladium ounces purchased in the first six months of 2008.

     Production During the first six months of 2008, the Company’s mining operations produced approximately 255,200 ounces of PGMs, including approximately 196,600 and 58,600 ounces of palladium and platinum, respectively. This compares with approximately 277,200 ounces of PGMs in the first six

29

months of 2007, including approximately 213,400 and 63,800 ounces of palladium and platinum, respectively, a 7.9% period-on-period decrease in total PGM production. The lower production in the first half of 2008 is attributable to a continuing shortage of miners with the appropriate skill sets, particularly at the East Boulder Mine, and to logistical issues that are currently being addressed.

     The Stillwater Mine produced approximately 173,400 ounces of PGMs in the first six months of 2008, compared with approximately 182,500 ounces of PGMs in the same period of 2007, a 5.0% decrease. Of this shortfall, approximately 3.0% is grade related due to timing of some of the higher impact stopes. The East Boulder Mine produced approximately 81,800 ounces of PGMs in the first six months of 2008, compared with approximately 94,700 ounces of PGMs for the same period of 2007, a 13.6% decrease, predominantly due to staffing issues as mined grades improved over the same period last year.

     Marketing, general and administrative Total marketing, general and administrative expenses in the first six months of 2008 were $18.1 million, compared to $16.2 million during the same period of 2007. The increase resulted from increased professional fees and compensation costs, including amortization of deferred stock awards granted during the first six months of 2008. The Company has continued its marketing program in 2008 spending approximately $3.7 million for marketing purposes in the first six months of 2008 compared to $3.2 million for the comparable period in 2007.

     Interest income and expense Total interest income for the second half of 2008 and 2007 was $6.0 million. This interest income included approximately $3.6 million and $3.4 million of earned interest from the Company’s recycling operations in the six month periods ended June 30, 2008 and 2007, respectively. Interest expense in the first half of 2008 was approximately $6.3 million, compared to $5.6 million for the same period in 2007.

     Other comprehensive income (loss) In the first six months of 2008, other comprehensive loss included a change in the fair value of derivatives of $6.3 million offset by a reclassification to earnings of $12.8 million, for commodity hedging instruments. For the same period of 2007, other comprehensive loss included a change in value of $15.3 million for commodity instruments and a reclassification to earnings of $15.4 million.

Liquidity and Capital Resources

     The Company’s cash and cash equivalents (excluding restricted cash) totaled $100.8 million at June 30, 2008, down $25.7 million from March 31, 2008, but up $39.4 million from December 31, 2007. Cash increased from the end of 2007 mainly due to additional cash raised during the first quarter of 2008 from the net proceeds of the convertible debenture offering. Cash is down from the end of the first quarter of 2008 due to increased working capital required for recycling materials. Including the Company’s available-for-sale investments, the Company’s total available liquidity at June 30, 2008, was $102.8 million, down $38.1 million from $140.9 million at the end of the first quarter of 2008 but up $13.8 million from the end of 2007. Working capital constituting marketable inventories (see Note 10 to the Company’s financial statements) and advances thereon in the Company’s PGM recycling business totaled about $172.8 million at the end of the second quarter of 2008, up significantly from $83.7 million at the beginning of the year, reflecting the effect of higher PGM prices and higher PGM volumes in inventory at June 30, 2008.

     The Company expects to spend a total of between $20 million and $25 million to construct a second smelting furnace at its processing facilities in Columbus, Montana, with anticipated completion of the furnace in late 2008 or early 2009. The addition of the second furnace is intended to accommodate forecasted increases in processing volumes due to future expansion of mine output and to growing volumes of recycled material. The second furnace will also mitigate an operational risk, as virtually all of the Company’s metal production is dependent on the availability of the smelter facility. Once the new smelter furnace is in place, the Company will need to take down the existing smelter furnace for about a month to replace its refractory brick lining. In the past the smelter simply stockpiled material during the rebricking and processed it following the outage; however, total throughput demand at the furnace has now increased to a level where that is no longer feasible. The second furnace may also allow for extending the residence time of matte in the furnace, which is expected to improve PGM furnace recoveries.

30

     Net cash used in operating activities was $17.4 million in the second quarter of 2008 compared to net cash provided from operating activities of $0.1 million in the same period of 2007; the second quarter cash drawdown reflects strong cash generation from earnings, more than offset by growth of about $79.0 million in recycling working capital during the quarter. Capital expenditures were $20.8 million in the second quarter 2008 compared to $18.8 million in the second quarter of 2007. The Company’s planned capital spending for 2008 is now projected to be about $100 million, including the cost of the new smelter furnace.

Outstanding Debt

     Outstanding total debt at June 30, 2008 was $211.1 million. The Company’s total debt includes $181.5 million outstanding in the form of debentures due in 2028, $29.4 million of Exempt Facility Revenue Bonds due in 2020 and $0.2 million of Special Industrial Education Impact Revenue Bonds due in 2009. Besides its balance sheet debt, the Company also had obtained letters of credit in the amount of $25.6 million as partial surety for certain of its long-term reclamation obligations, self-insurance and contract performance guarantees, which are collateralized by $26.6 million of restricted cash.

Contractual Obligations

     The Company is obligated to make future payments under various debt and lease agreements, ad valorem taxes, and workers compensation and final reclamation commitments. The following table represents significant contractual cash obligations and other commercial commitments and the related interest payments as of June 30, 2008:

(in thousands)	2008(1)		2009		2010		2011		2012		Thereafter		Total
Convertible debentures	$	—	$	—	$	—	$	—	$	—	$	181,500	$	181,500
Special Industrial Education Impact Revenue Bonds		98		97		—		—		—		—		195
Exempt Facility Revenue Bonds		—		—		—		—		—		30,000		30,000
Operating leases		154		303		303		303		298		497		1,858
Asset retirement obligations		—		—		—		—		—		73,770		73,770
Payments of interest		2,937		5,811		5,803		5,803		5,803		19,702		45,859
Other noncurrent liabilities		—		13,829		—		—		—		—		13,829
Total	$	3,189	$	20,040	$	6,106	$	6,106	$	6,101	$	305,469	$	347,011

⁽¹⁾ Amounts represent cash obligations for July — December 2008.

     Interest on the convertible debentures noted in the above table is calculated up to March 15, 2013, the date the holders of the debentures can exercise their call option. Interest payments noted in the table above assume no changes in interest rates. Amounts included in other noncurrent liabilities that are anticipated to be paid in 2009 include workers’ compensation costs, property taxes and severance taxes.

Critical Accounting Policies

     Listed below are the accounting policies that the Company believes are critical to its financial statements due to the degree of uncertainty regarding estimates or assumptions involved and the magnitude of the liability, revenue or expense being reported.

Ore Reserve Estimates

     Certain accounting policies of the Company depend on its estimate of proven and probable ore reserves including depreciation and amortization of capitalized development, income tax valuation allowances, post-closure reclamation costs, asset impairment and mine development expenditures. The Company updates its proven and probable ore reserves annually, following the guidelines for ore reserve determination contained in the SEC’s Industry Guide No. 7.

31

Mine Development Expenditures — Capitalization and Amortization

     Mining operations are inherently capital intensive, generally requiring substantial capital investment for the initial and concurrent development and infrastructure of the mine. Many of these expenditures are necessarily incurred well in advance of actual extraction of ore. Underground mining operations such as those conducted by the Company require driving tunnels and sinking shafts that provide access to the underground orebody and construction and development of infrastructure, including electrical and ventilation systems, rail and other forms of transportation, shop facilities, material handling areas and hoisting systems. Ore mining and removal operations require significant underground facilities used to conduct mining operations and to transport the ore out of the mine to processing facilities located above ground.

     Contemporaneously with mining, additional development is undertaken to provide access to ongoing extensions of the orebody, allowing more ore to be produced. In addition to the development costs that have been previously incurred, these ongoing development expenditures are necessary to access and support all future mining activities.

     Mine development expenditures incurred to date to increase existing production, develop new ore bodies or develop mineral property substantially in advance of production are capitalized. Mine development expenditures consist of vertical shafts, multiple surface adits and underground infrastructure development including footwall laterals, ramps, rail and transportation, electrical and ventilation systems, shop facilities, material handling areas, ore handling facilities, dewatering and pumping facilities. Many such facilities are required not only for current operations, but also for all future planned operations.

     Expenditures incurred to sustain existing production and access specific ore reserve blocks or stopes provide benefit to ore reserve production over limited periods of time (secondary development) and are charged to operations as incurred. These costs include ramp and stope access excavations from primary haulage levels (footwall laterals), stope material rehandling/laydown excavations, stope ore and waste pass excavations and chute installations, stope ventilation raise excavations and stope utility and pipe raise excavations.

     The Company calculates amortization of capitalized mine development costs by the application of an amortization rate to current production. The amortization rate is based upon un-amortized capitalized mine development costs and the related ore reserves. Capital expenditures are added to the un-amortized capitalized mine development costs as the related assets are placed into service. In the calculation of the amortization rate, changes in ore reserves are accounted for as a prospective change in estimate. Ore reserves and the further benefit of capitalized mine development costs are based on significant management assumptions. Any changes in these assumptions, such as a change in the mine plan or a change in estimated proven and probable ore reserves could have a material effect on the expected period of benefit resulting in a potentially significant change in the amortization rate and/or the valuations of related assets. The Company’s proven ore reserves are generally expected to be extracted utilizing its existing mine development infrastructure. Additional capital expenditures will be required to access the Company’s estimated probable ore reserves. These anticipated capital expenditures are not included in the current calculation of depreciation and amortization.

     The Company’s mine development costs include the initial costs incurred to gain primary access to the ore reserves, plus the ongoing development costs of footwall laterals and ramps driven parallel to the reef that are used to access and provide support for the mining stopes in the reef.

     The Company accounts for mine development costs as follows:

Unamortized costs of the shaft at the Stillwater Mine and the initial development at the East Boulder Mine are treated as life-of-mine infrastructure costs, to be amortized over total proven and probable reserves at each location; and

32

All ongoing development costs of footwall laterals and ramps, including similar development costs will be amortized over the ore reserves in the immediate and relevant vicinity of the development.

     The calculation of the amortization rate, and therefore the annual amortization charge to operations, could be materially affected to the extent that actual production in the future is different from current forecasts of production based on proven and probable ore reserves. This would generally occur to the extent that there were significant changes in any of the factors or assumptions used in determining ore reserves. These factors could include: (1) an expansion of proven and probable ore reserves through development activities, (2) differences between estimated and actual costs of mining due to differences in grade or metal recovery rates, and (3) differences between actual commodity prices and commodity price assumptions used in the estimation of ore reserves.

Derivative Instruments

     From time to time, the Company enters into arrangements using derivative financial instruments, including fixed forwards and financially settled forwards, to manage the effect of changes in the prices of palladium and platinum on the Company’s revenue. The Company accounts for its derivatives in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which requires that derivatives be reported on the balance sheet at fair value, and, if the derivative is not designated as a hedging instrument, changes in fair value must be recognized in earnings in the period of change. SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, provides an exception for certain derivative transactions that meet the criteria for “normal purchases and normal sales” transactions. If the derivative transaction is designated as a hedge, and to the extent such hedge is determined to be highly effective, changes in fair value are either (a) offset by the change in fair value of the hedged asset or liability (if applicable) or (b) reported as a component of other comprehensive income (loss) in the period of change, and subsequently recognized in the determination of net income (loss) in the period the offsetting hedged transaction settles. The Company has in the past primarily used derivatives to hedge metal prices and interest rates. All of the Company’s remaining financially settled forwards associated with platinum sales from mined production have now been settled and therefore no unrealized gains or losses on outstanding derivatives associated with commodity instruments are reported as a component of accumulated other comprehensive income (loss) at June 30, 2008 (see Note 3 to the Company’s financial statements).

Income Taxes

     Income taxes are determined using the asset and liability approach in accordance with the provisions of SFAS No. 109, Accounting for Income Taxes. This method gives consideration to the future tax consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on currently enacted tax rates. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

     In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Each quarter, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. A valuation allowance has been provided at June 30, 2008, for the portion of the Company’s net deferred tax assets, which, more likely than not, will not be realized (see Note 5 to the Company’s financial statements).

Post-closure Reclamation Costs

     The Company recognizes the fair value of a liability for an asset retirement obligation, in accordance with the provisions of SFAS No. 143, Accounting for Asset Retirement Obligations, in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the

33

carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. The liability is accreted at the end of each period through charges to operating expense. If the obligation ultimately is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss at the time of settlement.

     Accounting for reclamation obligations requires management to make estimates for each mining operation of the future costs the Company will incur to complete final reclamation work required to comply with existing laws and regulations. Actual costs incurred in future periods could differ from amounts estimated. Additionally, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required to be performed by the Company. Any such increases in future costs could materially impact the amounts charged to operations for reclamation and remediation.

Asset Impairment

     In accordance with the methodology prescribed by SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews and evaluates its long-lived assets for impairment when events and changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment is considered to exist if total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. Future cash flows include estimates of recoverable ounces, PGM prices (considering current and historical prices, long-term sales contract prices, price trends and related factors), production levels and capital and reclamation expenditures, all based on life-of-mine plans and projections. If the assets are impaired, a calculation of fair market value is performed, and if fair market value is lower than the carrying value of the assets, the assets are reduced to their fair market value.

34

Stillwater Mining Company
Key Factors
(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
	2008		2007		2008		2007
OPERATING AND COST DATA FOR MINE PRODUCTION
Consolidated:
Ounces produced (000)
Palladium		97		102		197		213
Platinum		29		31		58		64
Total		126		133		255		277
Tons milled (000)		257		309		523		614
Mill head grade (ounce per ton)		0.51		0.48		0.51		0.49
Sub-grade tons milled (000) (1)		46		16		84		37
Sub-grade tons mill head grade (ounce per ton)		0.17		0.12		0.16		0.12
Total tons milled (000) (1)		303		325		607		651
Combined mill head grade (ounce per ton)		0.46		0.46		0.47		0.47
Total mill recovery (%)		91		90		91		91
Total operating costs per ounce (Non-GAAP) (2)	$	300	$	260	$	307	$	252
Total cash costs per ounce (Non-GAAP) (2)	$	394	$	320	$	390	$	314
Total production costs per ounce (Non-GAAP) (2)	$	557	$	476	$	549	$	466
Total operating costs per ton milled (Non-GAAP) (2)	$	125	$	106	$	129	$	107
Total cash costs per ton milled (Non-GAAP) (2)	$	164	$	131	$	164	$	134
Total production costs per ton milled (Non-GAAP) (2)	$	232	$	195	$	231	$	198
Stillwater Mine:
Ounces produced (000)
Palladium		68		64		134		140
Platinum		20		20		40		43
Total		88		84		174		183
Tons milled (000)		168		158		326		336
Mill head grade (ounce per ton)		0.55		0.58		0.56		0.58
Sub-grade tons milled (000) (1)		25		16		45		37
Sub-grade tons mill head grade (ounce per ton)		0.16		0.12		0.15		0.12
Total tons milled (000) (1)		193		174		371		373
Combined mill head grade (ounce per ton)		0.50		0.54		0.51		0.54
Total mill recovery (%)		91		91		92		92
Total operating costs per ounce (Non-GAAP) (2)	$	267	$	229	$	281	$	228
Total cash costs per ounce (Non-GAAP) (2)	$	357	$	291	$	361	$	291
Total production costs per ounce (Non-GAAP) (2)	$	492	$	425	$	494	$	421
Total operating costs per ton milled (Non-GAAP) (2)	$	122	$	111	$	132	$	111
Total cash costs per ton milled (Non-GAAP) (2)	$	163	$	141	$	169	$	142
Total production costs per ton milled (Non-GAAP) (2)	$	224	$	205	$	231	$	206

35

Stillwater Mining Company
Key Factors (continued)
(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
	2008		2007		2008		2007
OPERATING AND COST DATA FOR MINE PRODUCTION
(Continued)
East Boulder Mine:
Ounces produced (000)
Palladium		29		38		63		73
Platinum		9		11		18		21
Total		38		49		81		94
Tons milled (000)		89		151		197		278
Mill head grade (ounce per ton)		0.44		0.37		0.43		0.38
Sub-grade tons milled (000) (1)		21		—		40		—
Sub-grade tons mill head grade (ounce per ton)		0.19		—		0.18		—
Total tons milled (000) (1)		110		151		237		278
Combined mill head grade (ounce per ton)		0.39		0.37		0.39		0.38
Total mill recovery (%)		90		89		90		89
Total operating costs per ounce (Non-GAAP) (2)	$	377	$	313	$	361	$	298
Total cash costs per ounce (Non-GAAP) (2)	$	482	$	371	$	450	$	359
Total production costs per ounce (Non-GAAP) (2)	$	709	$	566	$	666	$	552
Total operating costs per ton milled (Non-GAAP) (2)	$	131	$	101	$	125	$	101
Total cash costs per ton milled (Non-GAAP) (2)	$	167	$	120	$	155	$	122
Total production costs per ton milled (Non-GAAP) (2)	$	246	$	183	$	230	$	188

36

Stillwater Mining Company
Key Factors (continued)
(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
(in thousands, where noted)	2008		2007		2008		2007
SALES AND PRICE DATA
Ounces sold (000)
Mine production:
Palladium (oz.)		107		116		209		225
Platinum (oz.)		33		32		61		66
Total		140		148		270		291
Other PGM activities: (5)
Palladium (oz.)		41		32		79		69
Platinum (oz.)		28		31		58		59
Rhodium (oz.)		6		6		10		12
Total		75		69		147		140
By-products from mining: (6)
Rhodium (oz.)		1		1		2		2
Gold (oz.)		3		3		5		6
Silver (oz.)		3		2		5		4
Copper (lb.)		213		85		514		468
Nickel (lb.)		241		261		522		567
Average realized price per ounce (3)
Mine production:
Palladium ($/oz.)	$	448	$	386	$	431	$	382
Platinum ($/oz.)	$	1,687	$	949	$	1,547	$	931
Combined ($/oz.) (4)	$	740	$	506	$	685	$	506
Other PGM activities: (5)
Palladium ($/oz.)	$	444	$	355	$	426	$	345
Platinum ($/oz.)	$	1,771	$	1,225	$	1,602	$	1,189
Rhodium ($/oz.)	$	8,298	$	5,923	$	7,486	$	5,497
By-products from mining: (6)
Rhodium ($/oz.)	$	9,599	$	6,160	$	8,919	$	6,039
Gold ($/oz.)	$	898	$	655	$	919	$	661
Silver ($/oz.)	$	17	$	13	$	17	$	13
Copper ($/lb.)	$	3.67	$	3.39	$	3.38	$	2.89
Nickel ($/lb.)	$	11.76	$	22.74	$	12.09	$	19.98
Average market price per ounce (4)
Palladium ($/oz.)	$	444	$	368	$	443	$	355
Platinum ($/oz.)	$	2,026	$	1,289	$	1,947	$	1,238
Combined ($/oz.) (4)	$	816	$	564	$	785	$	555

37

(1)	Sub-grade tons milled includes reef waste material only. Total tons milled includes ore tons and sub-grade tons only.
(2)	Total operating costs include costs of mining, processing and administrative expenses at the mine site (including mine site overhead and credits for metals produced other than palladium and platinum from mine production). Total cash costs include total operating costs plus royalties, insurance and taxes other than income taxes. Total production costs include total cash costs plus asset retirement costs and depreciation and amortization. Income taxes, corporate general and administrative expenses, asset impairment writedowns, gain or loss on disposal of property, plant and equipment, restructuring costs and interest income and expense are not included in total operating costs, total cash costs or total production costs. Operating costs per ton, operating costs per ounce, cash costs per ton, cash costs per ounce, production costs per ton and production costs per ounce are non-GAAP measurements that management uses to monitor and evaluate the efficiency of its mining operations. These measures of cost are not defined under U.S. Generally Accepted Accounting Principles (GAAP). Please see “Reconciliation of Non-GAAP Measures to Costs of Revenues” and the accompanying discussion for additional detail.
(3)	The Company’s average realized price represents revenues, which include the effect of contract floor and ceiling prices, hedging gains and losses realized on commodity instruments and contract discounts, divided by ounces sold. The average market price represents the average London PM Fix for the actual months of the period.
(4)	The Company reports a combined average realized and market price of palladium and platinum at the same ratio as ounces that are produced from the base metal refinery.
(5)	Ounces sold and average realized price per ounce from other PGM activities relate to ounces produced from processing of catalyst materials, ounces purchased in the open market for resale.
(6)	By-product metals sold reflect contained metal. Realized prices reflect net values (discounted due to product form and transportation and marketing charges) per unit received.

Reconciliation of Non-GAAP Measures to Costs of Revenues

     The Company utilizes certain non-GAAP measures as indicators in assessing the performance of its mining and processing operations during any period. Because of the processing time required to complete the extraction of finished PGM products, there are typically lags of one to three months between ore production and sale of the finished product. Sales in any period include some portion of material mined and processed from prior periods as the revenue recognition process is completed. Consequently, while costs of revenues (a GAAP measure included in the Company’s Statement of Operations and Comprehensive Income (Loss)) appropriately reflects the expense associated with the materials sold in any period, the Company has developed certain non-GAAP measures to assess the costs associated with its producing and processing activities in a particular period and to compare those costs between periods.

     While the Company believes that these non-GAAP measures may also be of value to outside readers, both as general indicators of the Company’s mining efficiency from period to period and as insight into how the Company internally measures its operating performance, these non-GAAP measures are not standardized across the mining industry and in most cases will not be directly comparable to similar measures that may be provided by other companies. These non-GAAP measures are only useful as indicators of relative operational performance in any period, and because they do not take into account the inventory timing differences that are included in costs of revenues, they cannot meaningfully be used to develop measures of earnings or profitability. A reconciliation of these measures to costs of revenues for each period shown is provided as part of the following tables, and a description of each non-GAAP measure is provided below.

     Total Costs of Revenues: For the Company as a whole, this measure is equal to total costs of revenues, as reported in the Statement of Operations and Comprehensive Income (Loss). For the Stillwater Mine, East Boulder Mine, and other PGM activities, the Company segregates the expenses within total costs of revenues that are directly associated with each of these activities and then allocates the remaining facility costs included in total cost of revenues in proportion to the monthly volumes from each activity. The resulting total costs of revenues measures for Stillwater Mine, East Boulder Mine and other PGM activities are equal in total to total costs of revenues as reported in the Company’s Statement of Operations and Comprehensive Income (Loss).

     Total Production Costs (Non-GAAP): Calculated as total costs of revenues (for each mine or combined) adjusted to exclude gains or losses on asset dispositions, costs and profit from recycling activities, and timing differences resulting from changes in product inventories. This non-GAAP measure provides a comparative measure of the total costs incurred in association with production and processing activities in a period, and may be compared to prior periods or between the Company’s mines.

38

     When divided by the total tons milled in the respective period, Total Production Cost per Ton Milled (Non-GAAP) - measured for each mine or combined — provides an indication of the cost per ton milled in that period. Because of variability of ore grade in the Company’s mining operations, production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. Because ore tons are first actually weighed as they are fed into the mill, mill feed is the first point at which production tons are measured precisely. Consequently, Total Production Cost per Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Production Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

     When divided by the total recoverable PGM ounces from production in the respective period, Total Production Cost per Ounce (Non-GAAP) - measured for each mine or combined — provides an indication of the cost per ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because extracting PGM material is ultimately the objective of mining, the cost per ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company’s mines. Consequently, Total Production Cost per Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Production Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

     Total Cash Costs (Non-GAAP): This non-GAAP measure is calculated by excluding the depreciation and amortization and asset retirement costs from Total Production Costs (Non-GAAP) for each mine or combined. The Company uses this measure as a comparative indication of the cash costs related to production and processing in any period.

     When divided by the total tons milled in the respective period, Total Cash Cost per Ton Milled (Non-GAAP) - measured for each mine or combined — provides an indication of the level of cash costs incurred per ton milled in that period. Because of variability of ore grade in the Company’s mining operations, production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. Because ore tons are first weighed as they are fed into the mill, mill feed is the first point at which production tons are measured precisely. Consequently, Total Cash Cost per Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Cash Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

     When divided by the total recoverable PGM ounces from production in the respective period, Total Cash Cost per Ounce (Non-GAAP) - measured for each mine or combined — provides an indication of the level of cash costs incurred per PGM ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because ultimately extracting PGM material is the objective of mining, the cost per ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company’s mines. Consequently, Total Cash Cost per Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Cash Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

     Total Operating Costs (Non-GAAP): This non-GAAP measure is derived from Total Cash Costs (Non-GAAP) for each mine or combined by excluding royalty, tax and insurance expenses from Total Cash Costs (Non-GAAP). Royalties, taxes and insurance costs are contractual or governmental obligations outside of the control of the Company’s mining operations, and in the case of royalties and most taxes, are driven more by the level of sales realizations rather than by operating efficiency. Consequently, Total Operating Costs (Non-GAAP) is a useful indicator of the level of production and processing costs incurred in a period that are under the control of mining operations.

     When divided by the total tons milled in the respective period, Total Operating Cost per Ton Milled (Non-GAAP) - measured for each mine or combined — provides an indication of the level of controllable cash costs incurred per ton milled in that period. Because of variability of ore grade in the Company’s mining operations, production efficiency underground is frequently measured against ore tons produced rather than

39

contained PGM ounces. Because ore tons are first actually weighed as they are fed into the mill, mill feed is the first point at which production tons are measured precisely. Consequently, Total Operating Cost per Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Operating Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

     When divided by the total recoverable PGM ounces from production in the respective period, Total Operating Cost per Ounce (Non-GAAP) - measured for each mine or combined — provides an indication of the level of controllable cash costs incurred per PGM ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because ultimately extracting PGM material is the objective of mining, the cost per ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company’s mines. Consequently, Total Operating Cost per Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Operating Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

40

Reconciliation of Non-GAAP Measures to Costs of Revenues

	Three months ended						Six months ended
	June 30,						June 30,
(in thousands)	2008			2007			2008			2007
Consolidated:
Reconciliation to consolidated costs of revenues:
Total operating costs (Non-GAAP)	$	37,909		$	34,597		$	78,382		$	69,807
Royalties, taxes and other		11,861			8,022			21,059			17,305
Total cash costs (Non-GAAP)	$	49,770		$	42,619		$	99,441		$	87,112
Asset retirement costs		219			182			433			360
Depreciation and amortization		21,747			21,628			42,394			42,020
Depreciation and amortization (in inventory)		(1,392	)		(1,031	)		(2,118	)		(371	)
Total production costs (Non-GAAP)	$	70,344		$	63,398		$	140,150		$	129,121
Change in product inventories		11,526			7,317			14,398			8,969
Costs of recycling activities		101,491			77,871			183,574			144,046
Recycling activities — depreciation		48			28			96			52
Add: Profit from recycling activities		8,674			7,815			14,585			13,164
Total consolidated costs of revenues	$	192,083		$	156,429		$	352,803		$	295,352
Stillwater Mine:
Reconciliation to costs of revenues:
Total operating costs (Non-GAAP)	$	23,571		$	19,383		$	48,821		$	41,620
Royalties, taxes and other		7,861			5,230			13,829			11,449
Total cash costs (Non-GAAP)	$	31,432		$	24,613		$	62,650		$	53,069
Asset retirement costs		160			127			316			250
Depreciation and amortization		12,404			12,400			23,799			24,563
Depreciation and amortization (in inventory)		(667	)		(1,255	)		(1,134	)		(1,076	)
Total production costs (Non-GAAP)	$	43,329		$	35,885		$	85,631		$	76,806
Change in product inventories		3,162			3,465			4,200			3,380
Add: Profit from recycling activities		5,960			4,944			9,853			8,573
Total costs of revenues	$	52,451		$	44,294		$	99,684		$	88,759
East Boulder Mine:
Reconciliation to costs of revenues:
Total operating costs (Non-GAAP)	$	14,338		$	15,214		$	29,561		$	28,187
Royalties, taxes and other		4,000			2,792			7,230			5,856
Total cash costs (Non-GAAP)	$	18,338		$	18,006		$	36,791		$	34,043
Asset retirement costs		59			55			117			109
Depreciation and amortization		9,343			9,228			18,595			17,457
Depreciation and amortization (in inventory)		(725	)		225			(984	)		706
Total production costs (Non-GAAP)	$	27,015		$	27,514		$	54,519		$	52,315
Change in product inventories		1,482			1,668			(1,987	)		(616	)
Add: Profit from recycling activities		2,714			2,870			4,732			4,591
Total costs of revenues	$	31,211		$	32,052		$	57,264		$	56,290
Other PGM activities: (1)
Reconciliation to costs of revenues:
Change in product inventories	$	6,882		$	2,184		$	12,185		$	6,205
Recycling activities — depreciation		48			28			96			52
Costs of recycling activities		101,491			77,871			183,574			144,046
Total costs of revenues	$	108,421		$	80,083		$	195,855		$	150,303

⁽¹⁾ Other PGM activities include recycling and other.

41

FORWARD LOOKING STATEMENTS: FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION

     Some statements contained in this report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially. These statements may contain words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates” or similar expressions. These statements are not guarantees of the Company’s future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Such statements include, but are not limited to, comments regarding expansion plans, costs, grade, production and recovery rates, permitting, labor matters, financing needs, the terms of future credit facilities and capital expenditures, increases in processing capacity, cost reduction measures, safety, timing for engineering studies, and environmental permitting and compliance, litigation and the palladium and platinum market. Additional information regarding factors that could cause results to differ materially from management’s expectations is found in the section entitled “Risk Factors” in the Company’s 2007 Annual Report on Form 10-K.

     The Company intends that the forward-looking statements contained herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The Company disclaims any obligation to update forward-looking statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

     The Company is exposed to market risk, including the effects of adverse changes in metal prices and interest rates as discussed below.

Commodity Price Risk

     The Company produces and sells palladium, platinum and associated by-product metals directly to its customers and also through third parties. As a result, financial performance can be materially affected when prices for these commodities fluctuate. In order to manage commodity price risk and to reduce the impact of fluctuation in prices, the Company enters into long-term contracts and from time to time uses various derivative financial instruments. Some of these derivative transactions have been designated as cash flow hedges against future metal prices. Because the Company hedges only with instruments that have a high correlation with the value of the hedged transactions, changes in the fair value of the derivatives are expected to be offset by changes in the value of the hedged transactions. Derivative transactions that are not designated as hedges are marked to market in each reporting period.

     The Company has entered into long-term sales contracts with Ford Motor Company and General Motors Corporation. The contracts together cover 100% of the Company’s mined palladium production and 70% of mined platinum production through December 2010. After 2010, approximately 35% of the Company’s mine production of palladium is committed for sale in 2011 and 2012. Pricing under these sales contracts is generally market based, less a small discount in each case, but is subject to minimum selling prices (“floors”) on all metal delivered and to a maximum selling price (“ceiling”) on part of the metal sold. Please see Note 2 to the Company’s June 30, 2008 financial statements for additional detail on these floor and ceiling prices.

     Since the third quarter of 2005, the major U.S. bond rating agencies have significantly downgraded the corporate ratings of Ford Motor Company and General Motors Corporation, both key customers. As a result, the debt of these companies no longer qualifies as investment grade. The Company’s business is substantially dependent on its contracts with Ford and General Motors, particularly when the floor prices in these contracts are significantly greater than the market price of palladium. Under applicable law, these contracts may be void or voidable if Ford or General Motors becomes insolvent or files for bankruptcy. The loss of either of these contracts could require the Company to sell at prevailing market prices, which might expose it to lower metal prices as compared to the floor prices under the contracts. In such an event, the Company’s operating plans

42

could be threatened. Thus, particularly in periods of relatively low PGM prices, termination of these contracts could have a material adverse impact on the Company’s operations and viability. The Company’s credit ratings from Moody’s Investor Services and Standard & Poor’s have been downgraded in the past, in part as a result of concerns with the creditworthiness of these major customers.

     The Company has entered into fixed forwards and financially settled forwards to offset the price risk in its PGM recycling and mine production activities. In the fixed forward transactions, metals contained in the recycled materials are normally sold forward and are subsequently delivered against the fixed forward contracts when the finished ounces are recovered. Financially settled forwards may be used as a mechanism to hedge against fluctuations in metal prices associated with future production. Under financially settled forwards at each settlement date, the Company receives the difference between the forward price and the market price if the market price is below the forward price and the Company pays the difference between the forward price and the market price if the market price is above the forward price. The Company’s financially settled forwards are settled in cash at maturity.

     The Company also enters into fixed forward sales relating to processing of spent PGM catalysts. These transactions require physical delivery of metal and cannot settle net. Consequently, the Company accounts for these forward sales commitments related to purchases of recycled material under the “normal purchase and sale” exception in SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. Sales of metals from PGM recycling are sold forward on the pricing date and subsequently are physically delivered against the forward sales commitments when the ounces are recovered. These forward sales commitments typically have terms ranging from a few days to four months; all of these transactions open at June 30, 2008, will settle at various periods through December 2008. (See Note 3 to the Company’s financial statements.) Because fixed forward sales of metal require the Company to deliver physical metal on a specified date, in the event of an operational interruption the Company might be required to purchase PGMs in the open market to cover its delivery commitments; if so, it would be exposed to any loss (or gain) attributable to pricing differences.

     Beginning in the third quarter of 2007, the Company entered into certain financially settled forward sales agreements pertaining to a portion of its palladium production from recycled materials. Because they settle net, these derivative instruments do not qualify under the “normal purchase and sale” exception in SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. The Company has elected not to designate these derivative transactions as accounting hedges, and so has marked them to market at June 30, 2008. The corresponding net realized gain on these derivatives during the second quarter of 2008 was approximately $0.3 million and the net realized loss on these derivatives during the first half of 2008 was approximately $0.2 million and has been recorded as a component of recycling revenue.

     The Company purchases catalyst materials from third parties for recycling activities to recover PGMs. At June 30, 2008, working capital comprised of marketable inventories and advances thereon in the Company’s PGM recycling business totaled about $172.8 million, up significantly from $83.7 million at the beginning of the year. The Company advances cash for purchase and collection of spent catalyst materials. These advances are reflected as Advances on inventory purchases on the balance sheet until such time as the material has been received and title has transferred to the Company. The Company has a security interest in the materials that have been procured but not yet received by the Company, however, until such time as the material has been procured, a portion of the Advances on inventory purchases on the balance sheet remains unsecured and the unsecured portion is fully at risk should the supplier fail to deliver the promised material or experience other financial difficulties. Any determination that a supplier is unable to deliver the promised material or otherwise repay these advances would result in a significant charge against earnings. The Company’s recycling business is currently highly dependent on the performance of one supplier and a significant portion of the Advances on inventory purchases on the balance sheet have been made to this one supplier.

     The Company also has various spot purchase and tolling agreements with other suppliers of spent catalytic materials, but the volumes from them are less significant.

43

Interest Rate Risk

     As of June 30, 2008, all of the Company’s outstanding long-term debt obligations were at fixed rates of interest. However, the Company does assess financing charges on a portion of its recycling working capital at rates tied to short-term market rates of interest. Based on the working capital balances outstanding at June 30, 2008, a decrease in short-term market interest rates of one percentage point would reduce the Company’s annual income by about $1.7 million.

Item 4. Controls and Procedures

     (a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the end of such period, the Company’s disclosure controls and procedures are not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

     Management believes, to the best of its knowledge, that (i) this report does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements complete, accurate and not misleading, and (ii) the financial statements, and other financial information included in this report, fairly present in all material respects the Company’s financial condition, results of operations and cash flows as of, and for, the periods represented in this report.

     (b) Internal Control Over Financial Reporting. In reviewing internal control over financial reporting at June 30, 2008, management determined that during the second quarter of 2008 there were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

     During the second quarter 2008, the Company implemented a software programming change in one of its accounting programs that contained a programming error which affected the accuracy of certain commercial payments during the quarter. The Company discovered and corrected the programming error internally in early July, prior to issuing second quarter 2008 financial statements. In reviewing the associated internal controls over financial reporting, the Company has determined that a control procedure intended to ensure data integrity in the affected system was not operating effectively and was deemed to be a material weakness. Subsequent to discovering the error, the Company has updated its internal controls over changes in computer software to remedy the ineffective control and has introduced a new set of specific detective controls intended to monitor and verify data integrity regularly in the affected computer program.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

     The Company is involved in various claims and legal actions arising in the ordinary course of business, including employee injury claims. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity, and the likelihood that a loss contingency will occur in connection with these claims is remote.

Item 1A. Risk Factors

     The Company filed its Annual Report on Form 10-K for the year ended December 31, 2007 with the Securities and Exchange Commission on February 26, 2008, which sets forth its risk factors in Item 1A therein. The Company has not experienced any material changes from the risk factors previously described therein.

44

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

Exhibits: See attached exhibit index

45

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STILLWATER MINING COMPANY                      (Registrant)
Date: August 11, 2008	By:	/s/ Francis R. McAllister
		Francis R. McAllister
		Chairman and Chief Executive Officer (Principal Executive Officer)
Date: August 11, 2008	By:	/s/ Gregory A. Wing
		Gregory A. Wing
		Vice President and Chief Financial Officer (Principal Financial Officer)

46

EXHIBITS

Number	Description
10.1	Contract between Stillwater Mining Company and United Steel Workers (USW) Local 11-0001, East Boulder Unit, ratified July 8, 2008 (filed herewith).
10.2	2004 Equity Incentive Plan as Amended and Restated dated February 21, 2008 (filed herewith).
10.3	409A Nonqualified Deferred Compensation Plan As Amended and Restated dated February 15, 2008 (filed herewith).
10.4	2005 Non-employee Directors’ Deferral Plan As Amended and Restated dated February 15, 2008 (filed herewith)
31.1	Rule 13a-14(a)/15d-14(a) Certification — Chief Executive Officer, dated, August 11, 2008
31.2	Rule 13a-14(a)/15d-14(a) Certification — Vice President and Chief Financial Officer, dated, August 11, 2008
32.1	Section 1350 Certification, dated, August 11, 2008
32.2	Section 1350 Certification, dated, August 11, 2008

EX-10.1

Exhibit 10.1

CONTRACT

BETWEEN

STILLWATER MINING COMPANY

AND

UNITED STEEL WORKERS UNION
AND ITS LOCAL 11-0001

EAST BOULDER UNIT

Table of Contents
Articles of Agreement

Introduction
Article 1	—	Recognition	1
Article 2	—	Non-Discrimination	2
Article 3	—	Union Security	2
Article 4	—	Management Rights	3
Article 5	—	Management-Union Committee	4
Article 6	—	Grievance and Arbitration	4
Article 7	—	Medical Arbitration	7
Article 8	—	Seniority	7
Article 9	—	Probationary Period	8
Article 10	—	Job Postings	9
Article 11	—	Lay-Off and Recall	10
Article 12	—	Severance Pay	11
Article 13	—	Hours of Work and Overtime	11
Article 14	—	Sick/Personal Leave/Attendance	12
Article 15	—	Discipline Process	14
Article 16	—	Classification and Wages	15
Article 17	—	Safety and Health	15
Article 18	—	Benefits	17
Article 19	—	Holidays	19
Article 20	—	Vacation	20
Article 21	—	Union Leaves of Absence	21
Article 22	—	Family and Medical Leave	21
Article 23	—	Military Service	23
Article 24	—	Bereavement Leave	23
Article 25	—	Jury and Witness Duty	23
Article 26	—	Contracting Out	24
Article 27	—	Miscellaneous	24
Article 28	—	Mine/Plant Closure	26
Article 29	—	No Strike	26
Article 30	—	Past Practice	26
Article 31	—	Validity	27
Article 32	—	Complete Agreement	27
Article 33	—	Term of Agreement	27
Appendix A	—	Base Rate Structure	29
	—	Lines of Progression	30
	—	Memoranda of Understanding	31-40

ARTICLES OF AGREEMENT

This Agreement is between Stillwater Mining Company East Boulder operation (hereinafter referred to as the “Company”), its successors and assigns, and the USW International Union (hereinafter referred to as the “Union”), its successors and assigns. The general purpose of this agreement is to foster and promote a consistent, stable and cooperative relationship between the Company and its represented employees to promote the mutual interests of the Company and the Union. By setting forth mutual promises and obligations herein assumed, the parties agree as follows:

ARTICLE 1
RECOGNITION

Section 1. The Company recognizes the Union as the sole and exclusive bargaining representative for the purpose of collective bargaining with respect to rates of pay, benefits, hours of employment pertaining to Stillwater Mining Company employees employed by the Company at 12 Miles FS 205, McLeod, Montana, to wit: All hourly production and maintenance employees, warehouse employees and custodians; but excluding all temporary employees, student summer hires, professional and technical employees, office clerical employees, guards, dispatchers, supervisors and those above the rank of supervisor as defined in the National Labor Relations Act.

Section 2. The Union’s Workers’ Committee represents Union interests to the Company. The Workers’ Committee will be selected by the Union, and consist of four (4) members, including the Local Unit Chairman who will be the Chair. The three (3) remaining members will consist of one (1) Miner’s Representative, one (1) Surface Representative, and one (1) Underground Representative. Alternates may be selected to replace absent Committee members.

Section 3. The Local Unit Chairman will promptly notify the Company, in writing, of the names of the Workers’ Committee members and Stewards. The Company will be notified, in writing, of any changes to these groups.

Section 4. The Company recognizes the Workers’ Committee as the bargaining committee for purposes of collective bargaining; as representatives in the Management-Union Committee meetings as set forth in Article 5; and as Chief Stewards as set forth in Article 6. The Company recognizes the role of the International Union Representative. As such, the International Union Representative may be present at meetings between Management and the Union, providing notice is given in advance. The Union agrees that such activities will not result in any disruption of the Company’s operations and employees will not neglect their duties and responsibilities.

ARTICLE 2
NON-DISCRIMINATION

Section 1. The Company and Union agree that neither will discriminate nor harass any employee or applicant for employment because of race, creed, marital status, color, age, disability, religion, national origin or sex in violation of any applicable Federal, State or local law.

Section 2. There shall be no discrimination or harassment by the Company, its officers or agents, or the Union or its members against any employee because of membership or non-membership in any lawful union, participation or non-participation in any lawful union activity, or because any employee has exercised or failed to exercise any right specifically provided under this Agreement.

ARTICLE 3
UNION SECURITY

Section 1. Every employee covered by this Agreement must, for the life of this Agreement after the grace period described below, satisfy a financial obligation to the Union as the exclusive bargaining representative. Under this Agreement, the financial obligation for union members is an amount equivalent to monthly dues, and for non-members a fee amount, as determined by the Union, to perform the duties as exclusive representative under this Agreement.

This financial obligation is a condition of continued employment and is in consideration for the cost of representation and collective bargaining and is not contingent upon present or future membership in the Union.

The grace period for this Agreement is thirty (30) calendar days following the completion of the employee’s probationary period or by the thirtieth (30th) calendar day following the effective date of this Agreement, whichever is later.

Neither the Union, Company, nor any of their officers, agent or members will intimidate or coerce employees about membership or non-membership in the Union. If any dispute arises as to whether there has been any violation of this provision (or whether an employee affected by this Agreement has failed to meet the financial obligation), the dispute will be submitted directly to arbitration for determination.

The Union will indemnify and save the Company harmless against any and all claims, demands, suits or other forms of liability that will arise out of or by reason of action taken by the Company complying with the provisions of this Article.

Section 2. For employees in the bargaining unit, the Company agrees to deduct the Union dues for the month from the wages due each month, providing each employee from whose check Union dues are to be deducted has on file a signed payroll deduction authorization.

ARTICLE 4
MANAGEMENT RIGHTS

Section 1. Management retains all the general and traditional rights to manage the business as well as any rights under the law or agreed by the parties. These rights rest exclusively in management who are the sole decision makers regarding the Company’s operations. The following list of specific management rights is not intended to be all-inclusive, but are some of those rights considered to be general rights of management. The fact that a particular management right is not included in the following listing does not mean the right does not exist.

Section 2. The Company has the right to determine the number of employees required by the Company at any place from time to time, for any and all operations; to determine the jobs, content of jobs and to modify, combine or end any job, classification, department or operation; to hire, classify, transfer, promote, demote and layoff employees; to determine qualifications, evaluate performance and assign and direct the workforce; to maintain order and discipline; and to reprimand, suspend, discharge and otherwise discipline for just cause.

Section 3. The Company has the right to create and administer rules, policies and procedures. This will include the right to establish or revise attendance, work, substance abuse, drug and/or alcohol testing, functional testing and safety rules. The Company has the right to establish or revise a disciplinary policy to address violations of these rules.

Section 4. The Company also has the right to determine the number and types of facilities and working places; the kinds and locations of machines, tools and equipment to be used; and the right to schedule production; to maintain efficiency; to introduce new or improved research methods, materials, processes, techniques, machinery and equipment, means of processing, distribution and mining; to set the standards of productivity and the products to be produced; to determine employees’ working schedules, including, but not limited to, the number of hours and shifts to be worked; to determine when overtime work is necessary and to assign overtime; to choose customers; to utilize part-time and temporary employees; to decide where or when training on a particular operation or job is required, how much training is required and the right to move or retrain employees; to determine the amount and form of any incentive and/or bonus compensation to be paid in addition to wages; to establish, implement, modify, suspend or terminate any contract or incentive program; to use independent contractors to perform any work or services.

Section 5. The Company’s failure to exercise any right or function reserved to it, or the exercise of a management right in a particular way, will not prevent the Company from exercising any of its rights in the future or in some other way not in conflict with this Agreement. The only restrictions on management rights are those expressly provided for in this Agreement.

Section 6. The exercise of these rights alleged to be in conflict with any other provision of this Agreement will be subject to the grievance and arbitration procedures.

ARTICLE 5
MANAGEMENT-UNION COMMITTEE

Section 1. The Company and the Union recognize the benefits of an open forum where information, mutual concerns, interests, and complaints (not covered by the grievance and arbitration procedures) affecting the workplace can be freely discussed, with a view to exploring possible solutions which are acceptable and beneficial to employees, the Union and the Company. Without limiting the opportunity for the Union and the Company to meet informally at the East Boulder Operations, the parties agree to establish a Management-Union Committee (MUC).

Section 2. The Workers’ Committee will serve as representatives for the Union at MUC meetings. The Company representatives will be comprised of Senior Management personnel.

Section 3. MUC meetings will normally be held during regular business hours on at least a quarterly basis or as necessary. Logistics for the meeting will be mutually agreed upon and coordinated through the Human Resources Department. Senior Management from the East Boulder Operations will discuss agenda items with the Local Union President and the Local Unit Chairman prior to the meeting. A formal meeting agenda will be given to all Committee members at least five (5) days prior to the meeting, whenever possible.

Section 4. Hours spent by MUC members attending MUC meetings will be considered as time worked and will be paid at the employee’s normal base rate. The Company will make every reasonable effort to schedule the MUC meetings during the members’ regular shift.

Section 5. The MUC is limited to joint discussion and consultation, and is not intended to limit or restrict the rights reserved to the Union or the Company by this Agreement. The Committee is not intended to take the place of normal communication between employees and the Company, or to serve as an alternative to the grievance and arbitration procedures of this Agreement.

ARTICLE 6
GRIEVANCE AND ARBITRATION

Section 1. It is recognized that, from time to time, dispute(s) between the Company and its employees may occur. The employees will try to settle these differences as quickly as possible with their immediate foreman or supervisor. The employee has the right to be accompanied and assisted by a Steward or Committee Member. If the disagreement cannot be resolved between the parties, a grievance may be filed.

A “grievance” is a dispute as to the interpretation, application, or alleged violation of any of the provisions of this Agreement.

Section 2. Should a grievance arise that is not verbally settled with the immediate supervisor, an earnest effort will be made to settle such grievances in the following manner:

Step 1: The grievance shall be presented in writing to the Human Resources Department within fifteen (15) days from the time the employee has knowledge of the occurrence. The supervisor has fifteen (15) days to respond in writing to the grievance. If the supervisor’s written answer is not accepted, the Union must advance the grievance through the Human Resources Department to the applicable manager or his designee in writing within fifteen (15) days following the supervisor’s written answer.

Step 2: The applicable manager or his designee will have up to fifteen (15) days to conduct a grievance meeting. The meeting will be comprised of no more than three Union Representatives and up to three Company Representatives, to include at least one representative from the department from which the grievance arose. In an earnest effort to resolve the dispute, the Company and Union will disclose throughout the grievance process, facts and information relied upon. Following the meeting the Company will have fifteen (15) days to respond in writing to the grievance. The Union will have fifteen (15) days to respond in writing to the Companies’ answer from the second step meeting.

Section 3. Failure by either party to comply with the time limits set forth in this Article shall result in the grievance being advanced to the next step. The time limits set forth in this Article may be extended, in writing, by mutual agreement, on a case-by-case basis. The Company will pay for time spent by Union representatives in grievance meetings that are scheduled during their regular working hours.

Section 4. If the answer from the grievance Step 2 meeting is not accepted by the Union, the grievance will automatically be referred to arbitration. The Company and Union will agree on a tentative date for the arbitration, not to exceed 50 days following the Union’s notice to the Company that they do not accept the Company’s Step 2 response.

A.

The Company and the Union mutually agree to select a three (3)-member arbitration panel. The arbitrators will normally reside in the State of Montana and will have direct experience in collective bargaining disputes. The parties will establish a rotation for the arbitration panel. Following the hearing, the arbitrator’s decision will be reduced to writing and submitted to both parties within five (5) working days from the date of the hearing.

B.

Should the members of the panel be unavailable or in instances where the Company and the Union determine not to use a member of the Panel, the

following procedure will be utilized. The parties shall refer the grievance to the Federal Mediation and Conciliation Service. The parties shall request the Federal Mediation Service to submit a panel of seven (7) arbitrators. Each party shall have the right to reject one panel of arbitrators. Striking of the first name shall be determined by the flip of a coin and then the parties shall alternately strike a name until one arbitrator is left. The arbitrator shall be notified of selection by a letter from the parties requesting that the arbitrator set a time for the hearing, subject to the availability of the Company and the Union representative. Arbitration hearings shall be held in Billings, Montana.

Section 5. In rendering a decision, the arbitrator will be governed and limited by this Agreement’s provisions, applicable law, and the expressed intent of the parties as described in this Agreement. The arbitrator will have no power to add to, subtract from, or modify any of the terms and provisions of this Agreement, or substitute his judgment for that of the Company. The arbitrator will confine his judgment strictly to the facts submitted in the hearing, the evidence before him, and this Agreement’s express terms and provisions. The arbitrator’s decision will be final and binding upon the parties.

Section 6. The Company and the Union shall bear the costs of their respective expenses, and shall share, equally, the cost of the arbitrator.

Section 7. The Union and the employees waive their right to pursue any judicial or administrative remedy against the Company as to any matter subject to the procedures established in this Article until such procedures are exhausted. Any settlement under the procedures established under this Article, short of arbitration, will be binding upon the Company, the Union, and the employees and will preclude any further administrative or judicial relief.

Section 8. Any employee has the right to have a Steward or Committee Member present if they are called into a meeting, which may result in disciplinary action.

Section 9. If it is necessary for a Steward or Committee Member to take time off during their regularly scheduled shift to investigate or resolve a grievance, they shall request the permission of their immediate supervisor, which permission shall not be unreasonably withheld. When a Steward or Committee Member enters an area other than their normal work area, they shall inform the supervisor of that area of their presence and reason for being there. As well, a Steward or Committee Member shall inform their supervisor when returning to their normal work area or duties.

Section 10. Grievances dealing with suspensions and/or discharges will be moved immediately to Step 2 of the grievance procedure.

Section 11. The Union, by not exercising any functions thus reserved to it or by exercising any such function in a particular way, shall not be deemed to have waived its right to exercise such function as set forth in this Agreement.

Section 12. Stewards will be compensated for time spent in grievance meetings when the meetings are held during their regularly scheduled work shift or when the Steward is specifically requested by the Company.

ARTICLE 7
MEDICAL ARBITRATION

Section 1. In the event a dispute arises concerning the physical fitness of an employee to return to work or to continue to work, an attempt to resolve the dispute by conference or consultation between a licensed physician selected by the Company and a licensed physician selected by the Union, will first be made.

Section 2. If no satisfactory conclusion is reached and the Union or the Company so elects, a Board of three (3) licensed physicians will be selected, one by the Company, one by the Union, and one by the two so-named, who will decide the case. The decision of the Board will be final and binding on both parties to this Agreement and retroactive to the date the dispute arose.

Section 3. The Company will bear the expense of the physician of its choice, and the Union will bear the expense of the physician of its choice. The expense of the third physician will be paid by the losing party. In the event that the decision of the Board does not result in a clear-cut losing party, the expense of the third physician will be paid equally by the parties.

ARTICLE 8
SENIORITY

Section 1. Company seniority will be determined by an employee’s date of original employment with the Company, or predecessor companies Chevron or Manville, if there has been no service break. Company seniority will apply only for purpose of applicable benefit plans and earned vacation.

Section 2. Union seniority will be determined from the employee’s date of original employment with the Company at its facilities covered by this Agreement or date of employment if there had been a break in service. An employee’s union seniority will be lost if the employee:

A.	Quits.
B.	Is discharged for just cause.
C.	Fails to work for any reason for two (2) years, or length of service, whichever is less.
D.	Fails to return to work upon termination of a leave of absence.

In addition, an employee’s Union seniority shall be lost if the employee is promoted to a full-time non-bargaining unit position for a period in excess of one (1) year. If the employee returns to the bargaining unit, he/she must make the Union whole.

If an employee is re-employed subsequent to termination for an above-stated cause, said employee shall be considered a new employee for seniority purposes.

Section 3. Department Mine, Concentrator, Underground Maintenance and Warehouse seniority will be determined by the date on which the employee begins continuous service in one of the following departments:

A.	Mine
B.	Concentrator/Concentrator Maintenance/Surface
C.	Underground Maintenance
D.	Warehouse

The employee will lose department seniority in any previous department once department seniority is established in any other department.

Section 4. Upon request, the Company will provide the Union with a current seniority list which will also be posted in the workplace.

Section 5. If employees are hired on the same day, seniority will be decided by the birthday rule. For example, a January 1 birth date would be senior over any other date in a calendar year, without the employee’s age being a factor.

ARTICLE 9
PROBATIONARY PERIOD

Section 1. All new employees will be considered probationary employees for a period of seven hundred eighty (780) hours worked.

Section 2 Unless Company policies provide otherwise, probationary employees will not be eligible for any benefits granted to regular employees under this Agreement. No terms of this Agreement other than this Article and the appropriate wage rate will apply to probationary employees.

Section 3. Employees continued in employment after the end of the probationary period will become full-time employees and will be credited with continuous service from the original date of hire.

ARTICLE 10
JOB POSTINGS

Section 1. Whenever the Company determines a vacancy, other than a temporary vacancy, exists in any biddable job classification, or a new job becomes available, the Company will post a job posting on the bulletin boards for ten (10) consecutive days. Employees desiring to bid on the vacancy will apply in writing to the Human Resources Department within the allotted ten (10) days. At the end of the ten (10) days, the successful senior qualified candidate will be determined based on their departmental seniority. If there are no qualified employees within the department, Union seniority will apply. If no qualified candidate from within the bargaining unit applies or no bid is received within the time frame set forth above, the job may be filled by the Company from any other sources. Laid off employees, who have seniority rights, will be eligible to bid on all job postings. Upon request, a copy of the job posting and of all bids will be provided to the Local Union President and the Local Unit Chairman.

Section 2. The Company will determine the successful candidate based on relevant job-related criteria utilizing job skills assessment. The requisite skills, knowledge and ability to perform the relevant tasks of the job may be determined through tests, licenses or certifications. Employees who have incurred any of the following in the twelve (12) months prior to bidding or promotion are not entitled to consideration for advancement:

one (1) or more suspensions, or
two (2) or more written safety-related disciplinary actions, or
one (1) or more safety-related lost time incidents, or
one (1) or more MSHA medical reportable incidents.

Section 3. Temporary vacancies of less than ninety (90) days may be filled at the Company’s discretion.

Section 4. If the successful bidder proves unsatisfactory after a thirty (30) day evaluation period, or chooses not to continue in the new position within the thirty (30) day evaluation period, the employee will be returned to the position last held with no loss of seniority. The Company will then fill the position with the next senior qualified candidate from the original posting.

Section 5. The Company will award the bid and, to the extent practicable, will transfer the successful bidder to the awarded position within twenty (20) days of acceptance. In the event the Company cannot allow the employee to transfer without negatively impacting the respective operation, the employee will be paid at the higher rate of pay beginning the twenty-first (21^st) day after acceptance.

Section 6. An employee who is awarded a job posting outside his department cannot bid for another job for a period of one (1) year. An employee who is awarded

a job posting within his department cannot bid for another job for a period of four (4) months.

ARTICLE 11
LAY-OFF AND RECALL

Section 1. For the purpose of lay-off and recall, qualifications to perform the job(s) concerned and seniority shall apply. The employee(s) with the least departmental seniority in the affected classification within the department shall be the first full-time employee laid off in each department, and so on. Employee(s) displaced from their classification(s) shall first be entitled to displace the junior employee in their department provided they are qualified to perform the work involved. Employee(s) not qualified to displace junior employees within their department shall be entitled to displace the junior employee in other departments, based upon Union seniority, provided they are qualified to perform the work involved. Upon recall, the last full-time employee laid off will be the first full-time employee recalled, providing such employee is qualified to perform the job in question, utilizing Union seniority. Temporary employees and probationary employees will be laid off prior to employees on the seniority list, unless the temporary or probationary employees have special skills not held by regular employees.

Section 2. An employee has fifteen (15) days to respond to a recall to work by certified mail. The fifteen (15) days will begin running when the Company makes its initial attempt to recall. Unless other arrangements are made, the recalled employee will have up to fifteen (15) days to return to work after responding to the Company’s offer. Failure to respond or return to work within the time limits outlined in this Section will result in a loss of seniority.

Section 3. The Company will meet with the MUC Committee to discuss any layoffs or reduction-in-force prior to implementation. The Company will notify the Union of any pending layoff or reduction-in-force as far in advance as possible. If a layoff is less than ninety (90) days in duration, the Company will pay its portion of the cost of fringe benefits during the layoff.

Section 4. For purposes of this Article, it is understood that an employee’s qualifications to perform a job will be based on relevant job-related criteria utilizing job Skills Assessment. The requisite skills, knowledge and ability to perform the relevant tasks of the job may be determined through tests, licenses or certifications.

Section 5. The proposed creation of a new test, or the elimination or change of an existing test, shall first be discussed with the Local Unit Chairman with written notification provided to the Local Union President. If the parties aren’t able to agree on such new test or changes, the Union may file a grievance as to the reasonableness of the test as set forth in this Agreement.

Section 6. Employees on lay off are required to inform the Company of any address changes via Certified Mail.

Section 7. If a laid-off employee, with recall rights, refuses a reinstatement offer, the employee forfeits his/her Union seniority.

ARTICLE 12
SEVERANCE PAY

Section 1. Any full-time employee who loses seniority because of a long-term layoff or a permanent mine closure will be entitled to one (1) week of severance at the employee’s base rate of pay for each full year of continuous service with the Company up to a maximum of fifteen (15) weeks of pay.

Any full-time employee who is laid off and granted severance pay pursuant to this section, if re-employed and subsequently laid off through a reduction-in-force, shall be denied a second severance pay allowance unless continuous service since re-employment has been one year or more. Any employee who, is laid off or whose employment is severed and granted severance pay pursuant to this Section, returns to active work within a length of time which is less than that paid as severance, may continue to reimburse the Company the excess severance pay within sixty (60) days of recall. Any excess severance pay repaid to the Company as set forth above, shall be paid to the employee in the event of a subsequent lay-off.

ARTICLE 13
HOURS OF WORK AND OVERTIME

Section 1. The normal work week will begin at 7:01 a.m. each Sunday and end at 7:00 a.m. the following Sunday. Overtime will paid for all hours worked in excess of forty (40) hours during a work week.

Section 2. Changes in working schedules (other than temporary incidental changes) will be discussed with the MUC prior to implementation.

Section 3. An employee who is called back for immediate work after leaving Company property or who is called for immediate work outside their scheduled working hours, and actually begins working, will be paid time and one-half (1¹/2) for work actually performed. Under this Section, employees will be called out and paid for a minimum of five (5) hours at the time and one-half (1¹/2) rate (in lieu of travel time and mileage).

Section 4. If an employee’s regularly scheduled shift is canceled less than ninety (90) minutes before it is scheduled to begin, the employee will either work a minimum of four (4) hours or be paid four (4) hours at this regular hourly rate in lieu of work.

Section 5. Upon prior approval of the supervisors involved, employees may mutually agree to exchange shifts or days off provided the exchange does not cause any disruption or increased cost to the Company, and that the exchange does not cause the employee to be on duty more than sixteen (16) hours in any twenty-four (24) hour period.

Section 6. The Company agrees that overtime will be distributed as uniformly and equally as possible and practical within each classification. Employees will not be forced to work overtime as long as there are employees in their classification who are qualified and willing to work such overtime. If no qualified employees volunteer to accept requested overtime, the Company will assign the overtime to a qualified employee, based on reverse order of department seniority. Employees who decline offered overtime will be charged for the overtime offered as if it has been worked for the purpose of overtime allocation.

Section 7. Any employee who has worked sixteen (16) consecutive hours will be compensated at double (2) time for all hours worked over sixteen (16). Any employee who has worked sixteen (16) or more hours will be allowed a rest period of at least eight (8) hours with no loss of overtime pay.

Section 8. Pyramiding of overtime is prohibited.

Section 9. For the purpose of computing weekly overtime the following will be considered as time worked: holidays, jury/witness service, union business involving contract administration or negotiations for the purpose of renewing this Agreement, which fall on an employee’s regularly scheduled work day; or meetings, training and conferences required by the Company. These hours will not exceed the number of hours in the employee’s normal work day.

Section 10. Except for the first shift worked for each work rotation, an employee will be given twenty-four (24) hours notice of a change in shift. In the event that such twenty-four (24) hours notice is not given, the employee shall receive one and one-half (1¹/2) times their base rate for all hours worked on the first shift of the change. This does not apply to employees requesting change of rotation.

Section 11. Employees who work a shift other than day shift will be paid a shift differential of fifty cents ($.50) per hour.

ARTICLE 14
SICK/PERSONAL LEAVE/ATTENDANCE

Section 1. Effective July 9^th, 2008 and each July 1 during the term of this Agreement, employees who have completed their probationary period shall have available six (6) full or partial, paid or unpaid days for sick/personal leave each year as well as one (1) vacation day. The vacation day may be taken at random and is to be used at the employee’s discretion to cover attendance issues. This leave is

intended for time for which the employee is absent for reasons of non-work related sickness, injury or accident, emergency or personal business.

Section 2. In order to receive payment for hours absent in a shift under this Article, employees shall be required to submit on the first shift worked after the absence(s), a doctor’s statement verifying the employee’s inability to work due to his/her own non-occupational illness or injury.

Section 3. Commencing September 2008 and each year thereafter, employees shall be paid a bonus for all sick/personal days not used from July 1 of the previous year to July 1 of the current year. Such bonus shall be paid as follows:

No. of Unused Days	Bonus Calculation
6		2.00	X	hours/shift	X	base rate	X	6 days
5		1.75	X	hours/shift	X	base rate	X	5 days
4		1.50	X	hours/shift	X	base rate	X	4 days
3		1.50	X	hours/shift	X	base rate	X	3 days
2		1.25	X	hours/shift	X	base rate	X	2 days
1		1.00	X	hours/shift	X	base rate	X	1 day

Section 4. Employees who qualify for Short Term Disability (“STD”) benefits are required to use available vacation, the personal holiday and/or sick /personal days (or a combination thereof) to satisfy the waiting period. The Company will waive the advanced notice requirements for an employee electing to use paid vacation.

Section 5. Upon completion of their probationary period, employees shall be granted a pro-rated number of full or partial, unpaid or paid sick/personal days available for use in the remainder of the year. Employees completing their probationary period in July, August or September are eligible for four (4) sick/personal days; in October, November or December, three (3) days; in January, February or March, two (2) days; or in April, May or June, one (1) day.

Section 6. To maintain order and efficiency in the Stillwater Mining Company operation, employees must be available to perform their work on a full-time basis. Good attendance, including reporting to work on time, is a condition of continued employment.

Section 7. Any excused time off covered in the Collective Bargaining Agreement or under State or Federal employment law will be excluded from this Article; however, proper reporting off procedures must be followed for all absences.

Section 8. Reporting Off. Employees must call the designated call off number at least thirty (30) minutes prior to the start of their shift and state the reason for the absence. Calls must be made by the employee and not from spouses, family members or others. Employees who report off properly will use one (1) sick/personal day for each absence.

Section 9. Tardy. Employees will be considered Tardy should he/she report to work within three (3) hours from the start of his/her scheduled shift. Employees that will be tardy must call the designated call off number prior to the start of their shift. If the tardy occurs on a shift when shuttle service is unavailable to the mine, a management person will call the employee as soon as is practical to arrange for transportation to the mine from Big Timber. The employee is required to leave accurate and complete information on the call off and be available to take the phone call from management. Employees who are tardy will use one (1) sick/personal day upon the third offense. Every tardy thereafter, and within the twelve (12) month period, will result in the use of one sick/personal day.

In the event that management cannot arrange for transportation to the mine, the employee will not be charged a tardy but will be required to work one regular scheduled shift within his/her next scheduled rotation off. The employee must state which day in their next scheduled rotation off will be their regular work day to the management person that returns their call.

Section 10. Employees who fail to properly report off shall be defined as AWOL and shall be charged sick/personal days as follows:

A.	Employee fails to report off properly, but calls within one hour after the start of shift – uses 2 sick/personal days
B.	Employee does not call off – uses 3 sick/personal days

Section 11. Employees who have further absence(s), not otherwise provided for in this Agreement, will be discharged.

ARTICLE 15
DISCIPLINE PROCESS

Section 1. The Company has guidelines of conduct, which provides an opportunity to address employee performance and/or modify behavior. The Company has the right to initiate progressive disciplinary procedures as follows:

Step 1: Written Warning

Step 2: One (1) day suspension without pay

Step 3: Three (3) day suspension without pay

Step 4: Discharge

Section 2. The type of progressive discipline given will be based upon the severity of the problem. Progressive disciplinary procedures may be taken by the Company for just cause. In cases of written warnings and suspensions, the Company will meet with the employee and a union steward regarding performance. The employee will also be informed that further failure to improve performance will result in the more severe discipline up to and including discharge.

Termination of employment will be in cases where the severity of the problem justifies termination or in cases where other progressive disciplinary steps have been taken.

Section 3. An employee may elect not to have a Union representative present.

Section 4. Records of disciplinary action will remain in the employee’s personnel file for twenty-four (24) months from the date it was originally written. Twenty-four (24) months after the date it originated, the disciplinary action will not be cited for other progressive discipline or job performance issues.

ARTICLE 16
CLASSIFICATION AND WAGES

Section 1. The classifications and rates of pay are attached to this Agreement and will continue in effect for the duration of this Agreement.

Section 2. Employees temporarily assigned to work in a classification other than their current classification will continue to be paid the rate of pay for their current classification.

Section 3. Management personnel may perform bargaining unit work when training, investigating, testing, and in emergencies, or situations in which no qualified bargaining unit employee is available to do the job required.

Section 4. If a full-time employee is demoted, through no fault of their own, from their regular classification, the employee will receive the higher rate of pay for a period of one (1) week for each full year of service at the previous classification, at the time assigned to the lower classification. There will be no pyramiding of rate retention under this Article.

ARTICLE 17
SAFETY AND HEALTH

Section 1. The Company and the Union believe an effective safety and health program is essential for employee morale and well-being, as well as the long-term viability of the Company. Accordingly, the Company recognizes its obligation to prevent, correct and eliminate all unhealthy and unsafe working conditions and practices. Employees are also expected to recognize, address and report unhealthy or unsafe working conditions. Further, employees will follow all Company safety and health rules and procedures and comply with applicable State and Federal regulations.

Section 2. The Company will recognize one (1) Joint Safety and Health Committee (Committee) for the East Boulder Operations comprised of representatives from the Management Union Committee and an equal number of Management representatives. This Committee will meet monthly, or as needed, to discuss safety

and health issues, recommend corrective actions, and communicate safety and health information back to employees.

Section 3. The Committee will assign (at their respective leadman rate) one (1) bargaining unit employee to act as a Health and Safety Representative (Representative) for the East Boulder mine. The Representative shall serve at the discretion of the Committee and will be reviewed annually by the Joint Safety and Health Committee. The Committee shall establish duties (excluding matters involving the administration of the Collective Bargaining Agreement) and responsibilities as well as qualifications for the Representative. The Representative shall provide updates to the Committee during Committee meetings and shall administratively report to the East Boulder Safety Manager.

Section 4. The Company will conduct occupational health and medical monitoring to measure exposures in the workplace as appropriate, or upon the recommendation of the Joint Safety and Health Committee. Results will be distributed to the Committee, the Local Union President and the Local Unit Chairman, to the extent that employee confidentiality is not compromised.

Section 5. The Company will pay for required medical examinations and the results will be kept in the employee’s confidential medical file. Upon request, a copy of these records will be provided to the affected employee.

Section 6. Personal protective equipment required by statute or for special tasks not regularly performed will be provided by the Company at no cost to the employee. Upon employment, the Company will provide a one-time allocation of other Company required personal protective equipment. The Company will allow employees to purchase subsequent or additional personal protective equipment through the warehouse at Company cost. Employees whose personal protective equipment is damaged or destroyed through abnormal conditions, not attributed to abuse, will receive replacement personal protective equipment through the warehouse at Company expense.

Section 7. Prescription safety glasses will be provided at a rate of one (1) pair per year. Replacement non-prescription safety glasses will be available.

Section 8. The Company will provide for an ongoing safety and health training program. The content of health and safety training courses will be reviewed with the Committee prior to selection. Time spent on Company approved training will be considered as time worked. The cost of Company approved training will be paid by the Company and expenses reimbursed based on current Company policy.

Section 9. No employee will perform unsafe work or be required to perform unsafe work. Employees performing unsafe work or unsafe practices will be subject to disciplinary action, up to and including discharge. Refusal to perform unsafe work will not warrant or justify any present or future disciplinary action.

ARTICLE 18
BENEFITS

Section 1. The Company will provide bargaining unit members with the benefits described in this Article.

Section 2. There will no unilateral changes by the Company to benefit levels during the life of this Agreement, except those required by regulatory agencies.

Section 3. BENEFIT PLANS

A. Health Insurance (medical, dental and prescription)

• The Company will pay 80% of premium and Employee will pay 20% of the premium. Employee premiums will be deducted on a pretax basis. Employee contributions will be subject to adjustment on January 1 of each year of this Agreement.

• Deductible does not apply to most provider services

• $1,000 / $2,000 out-of-pocket maximum amounts

• Diagnostic and preventative services: No deductible. Payable at 100 percent of the allowable fee. Dental work involving crowns are designated Type II service.

• Prescriptions

Generic	$	10	(maximum 30 day supply)
Formulary	$	20	(maximum 30 day supply)
Non-Formulary	$	30	(maximum 30 day supply)

• Some maintenance type prescriptions, i.e., high blood pressure, cardiovascular, insulin. etc., are available in a 90-day supply for the price of (2) co-pays through a mail order pharmacy.

• Accident benefits are payable only for services provided within 90 days of the Accident. After 90 days or $500, whichever comes first, general Plan Benefits apply.

• Treatment of Chemical Dependency is subject to pre-authorization and case management

B. Short Term Disability

• Eligibility: All full-time active employees who regularly work at least 30 hours per week and have completed one (1) year of continuous service.

• Elimination Period: Loss of wages for 40 hours or 5 scheduled shifts, whichever is less, for Disability due to a non-occupational injury or illness.

• Schedule of Benefits

Less than 1 year of Company seniority     no benefits
1 year of Company seniority, but less than
5 years of Company seniority                     .60% benefit up to 26 wks
5 years or more of Company seniority      100% benefit up to 26 wks

C. Long Term Disability

• Waiting Period: 180 days

• Benefit: 60% of regular pay, not to exceed $6,000 per month subject to reduction by deductible sources of income or Disability Earnings

• Maximum Period: Age 65

D. 401(k) Plan and Trust

• Employer contributions are equal to a 1 to 1 match based on an employee’s pretax contributions up to 6%.

• Employer matching contributions made in non-restricted Company stock

• Maximum employee deferral amount will be 60%; subject to Plan guidelines and limitations

• During the term of this Agreement, the Company will maintain the current matching contribution level for the 401(k) Plan and retains the ability to change the form of match (cash or stock)

E.	Vision Service Plan
F.	Company Sponsored Life Insurance and Accidental Death & Dismemberment
G.	Employee Assistance Plan and Nurse Advisor
H.	Employee Stock Purchase Plan
I.	Flexible Spending Accounts

Section 4. Revised benefit brochure will be distributed to all employees periodically. This information is being provided as a summary only and not intended to replace or amend and benefit Plan Documents or Summary Plan Descriptions.

ARTICLE 19
HOLIDAYS

Section 1. The following days will be considered holidays:

New Year’s Day	Good Friday
Memorial Day	Independence Day
Labor Day	Thanksgiving
Day after Thanksgiving	Christmas Eve
Christmas Day	Personal Holiday

Section 2. Employees who are required to work on any of the above holidays will receive pay at the rate of time and one-half (1¹/2) plus holiday pay for all hours worked. Each full-time employee not required to work on these holidays will receive eight (8) hours pay for such holidays at their regular rate of pay. Employees scheduled to work on a holiday who fail to report to work will not receive holiday pay.

Section 3. When a Saturday or Sunday holiday is observed on a weekday, the holiday pay will apply on that weekday. Employees scheduled to work a rotating shift, will be paid holiday pay on the calendar day on which the holiday occurs. The actual holiday schedule will be posted each year, as soon as practical.

Section 4. An employee absent on either the scheduled workday before or after the holiday will not receive pay if the absence is not scheduled and approved by the Company. An employee who is receiving disability benefits on both the scheduled workday before and after the holiday will not receive pay for the holiday.

Section 5. Employees will be entitled to one (1) personal holiday which may be taken after the employee has completed their probationary period, provided at least one (1) rotation’s notice is given to the Company. Scheduled annual vacation will take precedence over the scheduling of personal holidays. In the case where more than one employee per crew requests to take a personal holiday on the same day, department seniority will govern if the personal holiday had been scheduled between January 1 and March 31 of any year. Personal holidays will be allocated on a first come, first serve basis if scheduled after April 1 of any year. Personal holidays will be allocated and granted based on operational needs and the wishes of the employee. No more than one (1) person per crew will be allowed off on personal holiday on any particular day, except at Company discretion. When an employee takes the personal holiday immediately prior to or immediately after a holiday, the employee will be paid according to this Article, provided that the employee works the last scheduled shift prior to and the next scheduled shift after the holiday and the personal holiday. If the personal holiday is not scheduled to be taken in the calendar

year, the employee will be paid for eight (8) hours for the personal holiday at their base rate. Personal holidays may not be banked or carried over into the next year.

ARTICLE 20
VACATION

Section 1. Employees will be eligible for paid vacation time in accordance with the following provisions.

	Amount of Paid
Years of Service	Vacation Available
1 through 4	80 hours
5 through 9	120 hours
10 or more	160 hours

Section 2. At the beginning of the calendar year, each full-time employee who has completed one year of continuous service will be credited with vacation based on length of service. Employees who have less than one year of service, but have completed their probationary period, will be credited with a pro rata amount of vacation on January 1.

Section 3. At the beginning of each calendar year, full-time employees who have completed fourteen (14) or more years of continuous service will receive a one thousand dollar ($1,000) bonus.

Section 4. Employees may choose to receive pay in lieu of time off for vacation. Pay in lieu of time off will also be provided when the Company requests an employee to forego his vacation. If, due to an extreme situation, the Company requires an employee to work during a previously scheduled vacation, the Company will make the employee whole for any verifiable, non-refundable expenses incurred by the employee. Vacation cannot be carried over into the next calendar year without the Company’s approval. Vacation must be taken in full-shift increments, unless shift scheduling dictates otherwise.

Section 5. Vacation schedules will be posted or circulated among employees during the month of January of each year for employee to indicate their vacation preference. Vacation request forms will be utilized, with a copy of the approved form returned to the employee. Vacation will be scheduled to meet the preference of employees whenever possible. In case of conflict over any vacation period, vacation will be granted in order of department seniority. Where an employee elects to split a vacation, that employee’s seniority rights will prevail only for the first choice until all other employees in the vacation unit have had their first choice. It is understood that the Company retains the right to schedule vacations as operational conditions dictate. However, no employee will be forced to take vacation which has already been approved at a time undesirable to the employee. Vacation requests must be pre-authorized by the supervisor at least one (1) rotation’s notice in advance.

Section 6. Holidays falling during an employee’s vacation will be compensated for by holiday pay or by a one-day extension of the vacation, as the employee elects.

Section 7. Employees terminating service with the Company will be paid vacation earned in the current year.

Section 8. Employees on vacation will be paid in ten (10) hour shift increments.

ARTICLE 21
UNION LEAVES OF ABSENCE

Section 1. The Company may grant a short-term unpaid leave of absence for Union officials or members to attend Union functions. These leaves will be granted based on the Company’s operational requirements. Employees will retain service, seniority and benefit during this leave of absence. Requests for these leaves must be made by the Union to the Company not less than fourteen (14) days before the leave.

Section 2. Upon thirty (30) days written notice from the Union, a long-term unpaid leave of absence to perform work for the Union will be granted for one (1) employee for up to one (1) year. The employee may elect to return to the employee’s previous classification with a thirty (30) day written notice for reinstatement from the Union to the Company. The employee will hold and accumulate seniority and continuous service for all purposes during the leave. Upon request, the employee will be allowed to continue in the Company Group Health Plan, and any Disability Plans, by paying the full cost of the benefits during the leave. Reinstatement will be granted if the employee is physically able to return to the previously held classification, as determined by the Company paid physical examination. If the employee is physically unable to return to the previous held classification, the employee will be allowed to return to a job the employee is qualified to perform, if such job exists.

ARTICLE 22
FAMILY AND MEDICAL LEAVE

Section 1. The Company will comply with all applicable State and Federal laws, which address employees’ rights to request or obtain family or medical leaves. Employees who have been employed for at least one (1) year and worked at least 1250 hours during the preceding twelve (12) month period, shall be granted leave of absence in the event of: the birth of a child and in order to care for that child; the placement of a child for adoption or foster care, and to care for the newly placed child; care for a spouse, child, or parent with a serious health condition; or a serious health condition that makes the employee incapable of performing the essential functions of his/her job.

Such leave will be guaranteed for up to a maximum of twelve (12) weeks in a rolling twelve (12) month period. Leave while an employee is off work receiving short-term disability benefits or worker’s compensation benefits will be designated as Family

Medical Leave, to the extent that it qualifies under State or Federal law, and will run concurrently with Family Medical Leave Act “FMLA” leave.

Section 2. Request for such leave shall be made through the Human Resources Department. When the need for leave is foreseeable, the employee shall provide at least thirty (30) days advance notice. An employee may request more than one (1) family leave within a twelve (12) month period, but the total time on leave within that period may not exceed twelve (12) weeks.

Section 3. The employee will provide medical certification to the Company confirming the need for family and medical leave within 15 days of the request for leave. The request for such leave may require renewal and new medical certification submitted to the Company every thirty (30) days.

Section 4. Credited service for all purposes under this Agreement will accrue during the period covered by the family and medical leave of absence. The employee returning from family and medical leave will be reinstated to the position held prior to the leave, or a comparable position.

Section 5. Employees will not be disciplined for absences covered under the FMLA. Employees will not be required to use vacation for approved FMLA absences. However, the Company will waive the advanced vacation notice requirement for an employee electing to use paid vacation for this leave.

Available vacation, the personal holiday and/or sick/personal days (or a combination thereof) used to satisfy the waiting period for short-term disability benefits will not be charged against FMLA leave entitlement.

Section 6. Represented Employees that are absent from work due to their own non-occupational illness or injury and are eligible and approved for leave under the FMLA but do not qualify for STD benefits will be required to substitute paid leave for the unpaid leave provided under the FMLA.

Employees absent in the above circumstances will be provided the option of using available regular vacation, personal holiday and/or sick and personal days as paid time to be substituted for unpaid Family and Medical Leave. The Company will waive the advanced notice requirement for an employee electing to use paid vacation and/or personal holiday. The order and combination of which days to be used is at the option of the employee, provided that their selection is made in writing and received by the Human Resources department no later than 15 days after receiving notice that such selection needs to be made. If the employee makes no choice to the contrary within the 15 days, the Company will substitute available sick/personal days, regular vacation and the personal holiday, in that order, for all unpaid Family and Medical leave taken under the circumstances described herein.

Section 7. Employees will not perform work for pay while on family and medical leave, except with written permission of the Company.

Section 8. All other requirements and conditions under the FMLA of 1993 shall apply.

ARTICLE 23
MILITARY SERVICE

Section 1. The Company shall accord to each employee who leaves active employment to enter military service of the United States or Reserve or National Guard, such rights as the employee shall be entitled to under the Uniform Services and Reemployment Rights Act (USERRA).

Section 2. With the exception of an Executive Order, any employee who is required to attend duty for the Reserve of the Armed Forces or the National Guard shall be paid, for a period or periods not to exceed a total of seventeen (17) days per calendar year and such pay shall be the excess of the employee’s base wages over Government base wage for the period of military leave, not to include any forms of living expenses.

ARTICLE 24
BEREAVEMENT LEAVE

Section 1. In the event of the death of an employee’s immediate family member, a reasonable period of unpaid leave will be granted to the employee. Immediate family includes the employee’s spouse, children, stepchildren, parents, stepparents, brothers, sisters, stepbrothers, stepsisters, grandparents and grandchildren, and the parents and grandparents of the employee’s spouse.

Section 2. To offset the expenses associated with attending the funeral, any employee who has completed the probationary period will be paid forty (40) hours of base wages in the event of the death of a spouse, child or step-child, or twenty-four (24) hours of base wages in the event of the death of any other immediate family members listed above.

ARTICLE 25
JURY AND WITNESS DUTY

Section 1. Employees selected for jury duty or subpoenaed for witness service will be allowed the necessary time off to perform the service. Employees must contact their immediate supervisor prior to reporting for jury duty or subpoenaed witness service. An employee who reports and is then released from service must immediately contact the employee’s supervisor to coordinate return to work. The Company will make reasonable allowances for travel and shift schedules.

Section 2. Regular full-time employees who are absent because of jury duty, government subpoena where the Company is not a party, or Company subpoena,

will be paid the difference between the jury duty or specified witness pay and their normal base wages for scheduled shifts missed. Employees will be required to provide documentation of service to receive applicable pay.

ARTICLE 26
CONTRACTING OUT

Section 1. The Company, having the availability of equipment, skills, manpower, or the time to do the work, will not contract out classified work now being done by employees of the Company as long as there are qualified employees or qualified former employees with re-employment rights and provided such contracting does not result in the layoff of employees or their displacement to other job classifications covered by this Agreement. This will not apply to the installation of equipment or construction or any other activities not ordinarily done by employees of the Company.

Section 2. Before commencing any major contract job to be performed on the premises, the Company will notify the Local Union President and/or the Local Unit Chairman in writing and/or email describing the nature, scope, and expected duration of the work to be performed. The Company further agrees that it will meet, as necessary, with the Local Union President and/or Local Unit Chairman to discuss information concerning contracting out. Requests for such meetings shall not be unreasonably denied.

ARTICLE 27
MISCELLANEOUS

Section 1. In July of each year, mechanics and electricians who are on the seniority list will receive a tool allowance of four hundred dollars ($400.00) and two hundred dollars ($200.00) respectively.

Section 2. In July of each year, the Company will provide a one hundred fifty dollar ($150.00) boot allowance for all employess on the seniority list. It is required that employee’s be in compliance with Stillwater Mining Company’s safey footwear equipment.

Section 3. The Company will provide a secure bulletin board at each of the locations covered by this Agreement.

Section 4. Employees in the bargaining unit will have access to their own personnel file, by appointment with the Human Resources Manager, for the purpose of reviewing it in person. A union representative may accompany the employee.

Section 5. Required notices may be made by personal service, confirmed facsimile transmission or certified mail, return receipt requested. The designated party for the Company is the Human Resources Manager. The designated party for the Union is

the International Representative. Each party will provide the other with the name and address of the individual who is authorized to receive notices under this Section.

Section 6. Any employee required to work more than two (2) hours beyond the normal quitting time will be provided with a meal. An additional meal will be furnished for each additional four (4) hours of continuous work. The Company may, with the agreement of the involved employees, in lieu of a meal and time to eat the meal, compensate the employee by the payment of one (1) additional hour at time and one-half (1¹/2).

Section 7. The Company shall provide reasonable access to East Boulder Mine property to the Local International Representative, Local President, Local Chairman and Workers Committee members for the purpose of conducting Union business as provided by existing permits, agreements, plans and proceedures.

Sectiion 8. The Company shall provide emergency response systems including medical, communication, and rescue coordination.

Section 9. It was agreed upon that the bus transporting employees to the East Boulder Operations will have a scheduled site arrival time of fifteen (15) minutes before the start of shift. The bus is scheduled to depart the property fifteen (15) minutes after the end of shift. If the bus departs the property more than fifteen (15) minutes after the scheduled departure time as a result of Company actions, employees will receive one half (1/2) hour of their base pay. It is understood that employees will arrive at work and be ready on time for their scheduled shift or the Big Timber departure time will need to be re-adjusted. Bussing shall continue along existing routes including reasonable locations within the pickup and drop off points as provided by the bussing provider.

Section 10. The Company and the Union shall equally share the expense to print and provide a copy of this Agreement in booklet form produced by a union print shop, if available, to each employee.

Section 11. Employees that have completed probation and have less then one (1) year of service may request an Emergency Leave of Absence for the reasons set-forth below in subsection (b). Before any leave of Absence can be considered under this article, the employees must have used all their vacation, sick/personal leave and personal holiday, and have a reasonable assurance of returning to work unrestricted.

a. Upon an employee making the request for the Leave of Absence under this section of the Collective Bargaining Agreement, the Company and Union will meet to review the employee’s request and determine whether he or she has the special circumstance to qualify for such leave.

b.	This leave of absence will be utilized only for legitimate medical reasons. For purposes of this section, a legitimate medical reason is defined as one that satisfies the requirements for Family Medical Leave Act.
c.	Any occurrence which exceeds thirty (30) calendar days requires the employee to request an extension in writing to the Company’s Human Resource Department. Upon receipt of an extension request, the Company and Union will meet and determine if the extension will be approved.

Any occurrence request for leave under this section will require the employee to provide proof of medical condition.

ARTICLE 28
MINE/PLANT CLOSURE

Section 1. The Company agrees it will notify the Union in writing of any mine/plant closure at least thirty (30) days in advance, or as is practical, in compliance with the Worker Adjustment Retraining and Notification Act. The Company and the Union shall meet to bargain in good faith regarding the effect and possible options for employees and the Company.

ARTICLE 29
NO STRIKE

Section 1. During the term of this Agreement, there will be no strike, work stoppage, picketing, honoring of any picket line at the Company premises, work slowdown, sympathy strike, or any other form of economic pressure directed against the Company or its services on the part of the Union or its members covered by this Agreement. The Company will not lock out any bargaining unit employee during the term of this Agreement.

Section 2. In the event of any breach of this Article, the Union will immediately declare publicly that such action is unauthorized, will immediately order its members to resume their normal duties and continue to take any necessary action to correct the problem and restore the Company to full operation.

ARTICLE 30
PAST PRACTICE

Section 1. This Agreement supercedes any previous oral and written agreements between the Company, its employees and the Union. The Company will not be bound by any past understandings, practices and/or customs between the Company, its employees, and the Union on matters not specifically governed by the terms of this Agreement, except those mutually agreed upon in writing during the negotiations for this agreement.

ARTICLE 31
VALIDITY

Section 1. Nothing contained in this Agreement will be construed in any way as interfering with the obligation of the parties to comply with any and all State and Federal laws, or any rules, regulations, and orders of duly constituted authorities pertaining to matters covered by this Agreement, and such compliance will not constitute a breach of this Agreement.

Section 2. If any court holds any part of this Agreement invalid, that decision will not invalidate the entire Agreement.

ARTICLE 32
COMPLETE AGREEMENT

Section 1. This Agreement during its life may be amended only by mutual consent of the parties. Any amendments made to this Agreement will be reduced to written form and will be duly signed by the authorized representatives of the Company and the Union.

Section 2. The parties acknowledge that during the negotiations resulting in this Agreement, each had the unlimited right to make proposals with respect to all subjects of collective bargaining. The understandings and agreements arrived at by the parties after exercise of that right are included in this Agreement. Therefore, the Company and the Union each waive the right and each agrees that the other will not be obligated to bargain collectively with respect to any matter referred to by this Agreement or with respect to any subject not specifically referred to in this Agreement, except those required by law, even though the subject may not have been within the knowledge or contemplation of either or both of the parties at the time that they negotiated this Agreement.

ARTICLE 33
TERM OF AGREEMENT

Section 1. This Agreement will be in effect from July 9^th, 2008 until noon July 1, 2012, and if not terminated at the end of that period by sixty (60) days written notice by one party to the other prior to this date, will continue in effect until terminated by either party upon ninety (90) days written notice of its desire to terminate or modify this Agreement.

APPENDIX A

STILLWATER MINING COMPANY
BARGAINING UNIT RATE STRUCTURE

	7/9/2008		7/1/2009		7/1/2010		7/1/2011
Position Title	Base Rate		Base Rate		Base Rate		Base Rate
Lead — Electrician	$	28.21	$	29.34	$	30.51	$	31.73
Lead — Mechanic	$	28.21	$	29.34	$	30.51	$	31.73
Electrician 1	$	25.88	$	26.92	$	27.99	$	29.11
Mechanic 1	$	25.88	$	26.92	$	27.99	$	29.11
Lead — Miner/Mill Operator	$	25.75	$	26.78	$	27.85	$	28.97
Lead — UG Oper/UG Cnstr/Hvy Eq Oper/Water Plant Oper/Warehouse	$	24.99	$	25.99	$	27.03	$	28.11
Electrician 2	$	23.85	$	24.81	$	25.80	$	26.83
Mechanic 2	$	23.85	$	24.81	$	25.80	$	26.83
Mill Operator 1	$	23.85	$	24.81	$	25.80	$	26.83
Water Plant Operator 1	$	23.85	$	24.81	$	25.80	$	26.83
Diamond Driller 1	$	23.62	$	24.57	$	25.55	$	26.57
Miner 1	$	23.62	$	24.57	$	25.55	$	26.57
Sublevel Miner 1	$	23.62	$	24.57	$	25.55	$	26.57
U/G Construction 1	$	23.62	$	24.57	$	25.55	$	26.57
Heavy Equipment Operator 1	$	22.51	$	23.41	$	24.35	$	25.32
Miner 2	$	22.51	$	23.41	$	24.35	$	25.32
Sand Plant Operator	$	22.51	$	23.41	$	24.35	$	25.32
Sublevel Miner 2	$	22.51	$	23.41	$	24.35	$	25.32
UG Construction 2	$	22.51	$	23.41	$	24.35	$	25.32
UG Operator 1	$	22.51	$	23.41	$	24.35	$	25.32
Warehouse I	$	22.51	$	23.41	$	24.35	$	25.32
Water Plant Operator 2	$	22.51	$	23.41	$	24.35	$	25.32
Mechanic 3	$	20.27	$	21.08	$	21.93	$	22.81
Electrician 3	$	20.27	$	21.08	$	21.93	$	22.81
Diamond Driller 2	$	19.42	$	20.20	$	21.00	$	21.84
Heavy Equipment Operator 2	$	19.42	$	20.20	$	21.00	$	21.84
Lead Custodian	$	19.42	$	20.20	$	21.00	$	21.84
Mill Operator 2	$	19.42	$	20.20	$	21.00	$	21.84
Miner 3	$	19.42	$	20.20	$	21.00	$	21.84
Sublevel Miner 3	$	19.42	$	20.20	$	21.00	$	21.84
UG Construction 3	$	19.42	$	20.20	$	21.00	$	21.84
UG Operator 2	$	19.42	$	20.20	$	21.00	$	21.84
Custodian	$	17.07	$	17.75	$	18.46	$	19.20
Mill Operator 3	$	17.07	$	17.75	$	18.46	$	19.20
UG Operator 3	$	17.07	$	17.75	$	18.46	$	19.20
Warehouse 2	$	17.07	$	17.75	$	18.46	$	19.20
Laborer Rate	$	15.50	$	16.00	$	16.50	$	17.00

Memorandum of Understanding

Between
Stillwater Mining Company
East Boulder Operation
AND
USW International Union, Local 11-0001
East Boulder Unit

The Company and the Union mutually agree to extend the Labor Agreement set to expire on July 1, 2008 at 12:00 noon Mountain Daylight Time (MDT). This extension will remain in effect until 11:59 p.m. July 10^th, 2008 MDT.

Stillwater Mining Company,

East Boulder Operations

                                                            
Company Official

USW International Union, Local 11-0001,
East Boulder Unit

                                                            
Union Official

Signed this                      day of                     , 2008.

Memorandum of Understanding

Between
Stillwater Mining Company
East Boulder Operation
AND
USW International Union, Local 11-0001
East Boulder Unit

Stillwater Mining Company (Company), and USW International Union (Union), hereby agree as follows:

The following past practices or prior settlements will be continued throughout the duration of this Agreement:

The Company provides a bonus payment to employees who participate in Mine Rescue at East Boulder Operations. The Company agrees to continue its current practice through the life of this Collective Bargaining Agreement.

Stillwater Mining Company,

East Boulder Operations

                                                            
Company Official

USW International Union, Local 11-0001,
East Boulder Unit

                                                            
Union Official

Signed this                     day of                     , 2008.

Memorandum of Understanding

Between
Stillwater Mining Company
East Boulder Operation
AND
USW International Union, Local 11-0001
East Boulder Unit

The Company agrees to pay represented employees providing EMS service to the East Boulder Mine within the following guidelines.

• The Company will schedule appropriate EMS continuing education sessions at site.

• The Company will schedule adequate sessions for each EMS employee to keep their certification active and up to date.

• The Company will make reasonable efforts to schedule these sessions in such a fashion that the EMS employees will not have to miss any regularly scheduled work.

• It is expected, to the extent practicable, that represented EMS employees participate in continuing education classes that are scheduled on other than the employees’ regular shifts.

• Time spent in the EMS continuing education classes will be considered as worked time.

• Represented employees that attend and participate in EMS continuing education classes will be paid at their regular classified base rate of pay for the time spent in such classes.

This Agreement will remain in effect until the end of the current term of the CBA, unless modified or extended by mutual consent.

Stillwater Mining Company,

East Boulder Operations

                                                            
Company Official

USW International Union, Local 11-0001,
East Boulder Unit

                                                            
Union Official

Signed this                     day of                      , 2008.

Memorandum of Understanding

Between
Stillwater Mining Company
East Boulder Operation
AND
USW International Union, Local 11-0001
East Boulder Unit

An employee who has qualified for Long Term Disability, Short Term Disability and/or Worker’s Compensation will be able to participate in the following benefit plans: Medical/Dental & Prescription Plan, Vision Service Plan, Employee Assistance Program, Nurse Advisor Program; provided the employee continues to pay their portion of the premium. Non-payment of premiums will result in loss of coverage.

The maximum benefit period is two (2) years. Employees will be eligible for COBRA benefits after the benefit period has been terminated.

This Memorandum of Understanding will expire with the Current Collective Bargaining Agreement.

Stillwater Mining Company,

East Boulder Operations

                                                            
Company Official

USW International Union, Local 11-0001,
East Boulder Unit

                                                            
Union Official

Signed this                     day of                     , 2008.

Memorandum of Understanding

Between
Stillwater Mining Company
East Boulder Operation
AND
USW International Union, Local 11-0001
East Boulder Unit

Stillwater Mining Company (Company), and USW International Union hereby agree to the following:

Hourly employees represented by the USW International Union, Local 11-0001, East Boulder Unit will be able to transfer to available hourly positions listed in the Collective Bargaining Agreement in place at the Nye Mine or the Columbus Facilities under the following conditions:

•	Employees wishing to transfer from East Boulder to the Nye Mine or the Columbus Facilities must contact their site Human Resource department.
•	Employees requesting a transfer must have completed their probationary period under the CBA.
•	The Company will determine the transfer qualifications based on relevant job-related criteria utilizing job skills assessment. The requisite skills, knowledge and ability to perform the relevant tasks of the job may be determined through tests, licenses or certifications.
•	Employees who have incurred any of the following in the twelve (12) months prior to transfer are not eligible for transfer consideration:
	one (1) or more suspensions, or two (2) or more written safety-related disciplinary actions, or one (1) or more safety-related lost time incidents, or one (1) or more MSHA medical reportable incidents

• Employees may be given one transfer opportunity per rolling 12 months regardless whether they assume the position they are awarded or if they decline the position they are awarded.

• In the event the Company cannot afford to allow the employee to transfer at the requested time (due to manpower, required skill, etc.) the Company will put the employee on a list to be transferred at a time when the East Boulder operation will not be negatively impacted.

• Employees will establish new department seniority at the transferred location beginning with their first day of work at that facility. Company seniority will not be adversely affected for the purpose of vacation entitlement and 401-k vesting.

This Memorandum of Understanding will expire with the Current Collective Bargaining Agreement.

Stillwater Mining Company,

East Boulder Operations

                                                            
Company Official

USW International Union, Local 11-0001,
East Boulder Unit

                                                            
Union Official

Signed this                     day of                      , 2008.

Memorandum of Understanding

Between
Stillwater Mining Company
East Boulder Operation
AND
USW International Union, Local 11-0001
East Boulder Unit

Stillwater Mining Company (Company) and USW International Union hereby agree to the following:

1. East Boulder Bargaining Unit employees will be provided bidding opportunities from the East Boulder Bargaining Unit to bargaining unit positions at the Columbus Facilities of Stillwater Mining Company.

2. In order to ensure that East Boulder Unit Bargaining Unit employees will have the same rights as other employees of the Company, the Company is entitled to consider eligible and qualified bidders from the East Boulder Bargaining Unit.

3. East Boulder Bargaining Unit employees will be considered eligible and qualified if they meet the qualifications provided for in Article 10, “Job Postings”, of the extant Agreement.

4. If an East Boulder Bargaining Unit employee is awarded a bargaining unit position in the Columbus Facilities, that employee will accrue seniority in the Company’s Nye and Columbus Bargaining Unit from the date of selection and will forfeit seniority rights in the East Boulder Bargaining Unit.

The terms of this Memorandum of Agreement recite completely the agreement between the parties and no oral modifications or interpretations are to be relied on between the Parties, except those expressly provided for herein or by written modification hereof. This Memorandum of Understanding will expire with the current Collective Bargaining Agreement.

Stillwater Mining Company,

East Boulder Operations

                                                            
Company Official

USW International Union, Local 11-0001,
East Boulder Unit

                                                            
Union Official

Signed this                     day of                      , 2008.

Memorandum of Understanding

Between
Stillwater Mining Company
East Boulder Operation
AND
USW International Union, Local 11-0001
East Boulder Unit

Based on discussions through the negotiation of the Collective Bargaining Agreement (CBA), the Company recognizes employee concerns with the East Boulder Hourly Incentive Systems (Incentive). The Company will continue to communicate with employees and the Union on all aspects of the East Boulder Hourly Incentive Systems.

The Company will not make Plan changes which on the average reduce the hourly incentive system(s) unless mutually agreed upon with the Union. Structural changes within the incentive system(s) will be discussed with the Union prior to implementation. Normally the Company will give the Workers’ Committee thirty (30) days advance notice of such changes and to the employees involved, one incentive period prior to implementation. The Union will also be notified of any incidental or administrative adjustments, which may become necessary throughout the CBA period.

The Company will administer the incentive systems. The Company and Union agree that the following hourly incentive systems will continue at the East Boulder Mine:

• Miner and Diamond Driller Incentive System, No Change

• Operational (Support) Incentive System, AMPR(aggregate miner pay rate) converted to Total Tons Mined multiplied by dollar per ton rate($1.76/ton)

• Concentrator Incentive System, No Change

The Safety Eligibility component shall continue to apply only to individuals separate from Attendance Eligibility and will not affect others within the work group. Should the rolling three month safety incident rate calculated within each incentive system above exceed MSHA’s incident rate for Underground Metal/Non-Metal mines, this component may be subject to change.

Modifications, exclusive rates, or rate adjustments due to special or abnormal circumstances are not subject to mutual agreement. Examples may include tunnel rehab, unique construction projects or other infrequent or one time projects. This Memorandum of Understanding will expire with the Current Collective Bargaining Agreement.

Stillwater Mining Company,

East Boulder Operations

                                                            
Company Official

USW International Union, Local 11-0001,
East Boulder Unit

                                                            
Union Official

Signed this                     day of                     , 2008.

EX-10.2

Exhibit 10.2

STILLWATER MINING COMPANY
2004 EQUITY INCENTIVE PLAN
(As Amended and Restated February 21, 2008)

     SECTION 1. Purposes. The purposes of this Stillwater Mining Company 2004 Equity Incentive Plan, as may be amended from time to time (the “Plan”), are to promote the interests of Stillwater Mining Company and its stockholders by (i) attracting and retaining personnel, including executive and other key employees, consultants, and directors of the Company and its Affiliates, as defined below, (ii) motivating such employees by means of performance-related incentives to achieve longer-range performance goals, (iii) enabling such employees, consultants and directors to participate in the long-term growth and financial success of the Company, and (iv) to permit the payment of compensation that qualifies as performance-based compensation under Section 162(m) of the Code. Notwithstanding any provision of the Plan, to the extent that any Award would be subject to Section 409A of the Code, no such Award may be granted if it would fail to comply with the requirements set forth in Section 409A of the Code and any regulations or guidance promulgated thereunder.

     SECTION 2. Definitions. As used in the Plan, the following terms shall have the meanings set forth below:

     “Affiliate” shall mean any entity that, directly or indirectly, is controlled by the Company for purposes of Section 409A of the Code.

     “Alternative Award” shall mean an Award granted in tandem with, either at the same or a later time as, another Award having substantially similar economic characteristics, the exercise of which would result in the cancellation of such other Award.

     “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, or Other Stock-Based Award.

     “Award Agreement” shall mean any written agreement, contract, or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.

     “Board” shall mean the Board of Directors of the Company.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

     “Committee” shall mean (i) the Board, or (ii) a Committee of the Board designated by the Board to administer the Plan and composed of not less than the minimum number of Persons from time to time required by Rule 16b-3, each of whom, to the extent necessary to comply with 16b-3 only, is a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3)(i).

     “Company” shall mean Stillwater Mining Company, together with any successor thereto.

     “Consultant” shall mean any Person who is engaged by the Company or any Affiliate to render consulting or advisory services as an independent contractor and is compensated for such services.

     “Covered Employee” shall have the meaning set forth in Section 162(m)(3) of the Code.

     “Employee” shall mean any employee of the Company or of any Affiliate.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

     “Fair Market Value” means, with respect to Shares or other property, the fair market value of such Shares or other property determined by such methods or procedures as shall be established from time to time by the Committee. Unless otherwise determined by the Committee in good faith, the Fair Market Value of a Share as of a particular date shall mean, (i) the closing sales price of a Share on the national securities exchange on which the Share is principally traded, for the last preceding date on which there was a sale of such Share on such exchange, or (ii) if the Shares are then traded in an over-the-counter market, the average of the closing bid and asked prices for the Shares in such over-the-counter market for the last preceding date on which there was a sale of such Shares in such market, or if the Shares are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall determine in good faith.

     “Incentive Stock Option” shall mean an Option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.

     “Non-Employee Director” (i) shall have the meaning set forth in Rule 16b-3(b)(3)(i) of the Exchange Act, or any successor provision thereto, for purposes of the definition of “Committee” set forth in the Plan, and (ii) shall mean a director who is not an Employee of the Company for all other purposes, including, but not limited to, Section 6(a)(iv) of the Plan.

     “Non-Qualified Stock Option” shall mean an Option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.

     “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

     “Other Stock-Based Award” shall mean any right granted under Section 6(d) of the Plan.

     “Participant” shall mean any Employee, Non-Employee Director or Consultant selected by the Committee to receive an Award under the Plan.

     “Performance Goals” shall mean performance goals based on one or more of the following criteria: (i) earnings including operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) pre-tax income or after-tax income; (iii) earnings per common share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on

2

investment, return on capital, or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) stock price appreciation; (x) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) cumulative earnings per share growth; (xiv) operating margin or profit margin; (xv) common stock price or total stockholder return; (xvi) cost targets, reductions and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xviii) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; and (xix) any combination of, or a specified increase in, any of the foregoing. Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company, a Subsidiary or Affiliate, or a division or strategic business unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. The Performance Goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). Each of the foregoing Performance Goals shall be determined in accordance with generally accepted accounting principles and shall be subject to certification by the Committee; provided that the Committee shall have the authority to make equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Company or any Subsidiary or Affiliate or the financial statements of the Company or any Subsidiary or Affiliate, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles.

     “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.

     “Restricted Period” shall mean the period of time selected by the Committee (as may be amended by the Committee from time to time) during which a grant of Restricted Stock may be forfeited to the Company.

     “Restricted Stock” shall mean any Share granted under Section 6(c) of the Plan.

     “Rule 16b-3” shall mean Rule 16b-3 as promulgated by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.

3

     “SEC” shall mean the Securities and Exchange Commission, or any successor thereto and shall include the staff thereof.

     “Shares” shall mean the common shares of the Company, $0.01 par value, or, following an adjustment under Section 4(c) of the Plan, such other securities or property as may become subject to Awards in substitution for such common shares pursuant to such adjustment.

     “Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.

     “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if, at the time of granting of an Award, each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

     SECTION 3. Administration.

     (a) Authority of Committee. The Plan shall be administered by the Committee. In no event, however, shall the Committee modify the distribution terms in any Award or Award Agreement that has a feature for the deferral of compensation if such modification would result in taxes, additional interest and/or penalties pursuant to Section 409A of the Code.. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to eligible Participants; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions (including Performance Goals) of any Award; (v) determine Performance Goals no later than such time as is required to ensure that an underlying Award which is intended to comply with the requirements of Section 162(m) of the Code so complies; (vi) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or cancelled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, cancelled, forfeited, or suspended; (vii) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (ix) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.

     (b) Determinations Under the Plan. Unless otherwise expressly provided in the Plan all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any shareholder and any Employee.

4

     SECTION 4. Shares Available For Awards.

     (a) Shares Available. Subject to adjustment as provided in Section 4(c), the number of Shares with respect to which Awards may be granted under the Plan shall be 5,250,000. If, after the effective date of the Plan (as described in Section 9), any Shares covered by an Award granted under the Plan, or to which such an Award relates, are forfeited, or if an Award otherwise terminates or is cancelled without the delivery of Shares or of other consideration, then the Shares covered by such Award, or to which such Award relates, or the number of Shares otherwise counted against the aggregate number of Shares with respect to which Awards may be granted, to the extent of any such forfeiture, termination or cancellation, shall again be, or shall become, to the extent permissible under Rule 16b-3, Shares with respect to which Awards may be granted.

     (b) Annual Limit on Awards to an Individual. Subject to adjustment as provided in Section 4(c), the number of Shares subject to Awards that are granted to any one individual in a single calendar year may not exceed 250,000. Determinations made in respect of the limitation set forth in the preceding sentence shall be made in a manner consistent with Section 162(m) of the Code.

     For Incentive Stock Options granted under the Plan, the aggregate Fair Market Value (determined as of the date of grant) of the number of whole Shares with respect to which Incentive Stock Options are exercisable for the first time during any calendar year under all plans of the Company shall not exceed $100,000, or such other amount as determined under Section 422 of the Code.

     (c) Adjustments. In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall adjust any or all of (i) the number of Shares or the kind of equity securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted, both in the aggregate and in one calendar year to an individual, (ii) the number of Shares or the kind of equity securities of the Company (or number and kind of other securities or property) subject to outstanding Awards, (iii) the grant or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award, and (iv) the Performance Goals; provided, in each case, that with respect to Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that such authority would cause the Plan or the Awards of Incentive Stock Options to fail to comply with Section 422 of the Code, as from time to time amended and provided further, that the number of Shares subject to any Award denominated in Shares shall always be a whole number, and provided further that no such adjustment shall cause any Award hereunder which is or becomes subject to Section 409A of the Code to be considered a new Award or a modification of such Award for purposes of Section 409A of the Code.

5

     (d) Sources of Shares Deliverable For Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasure Shares.

     SECTION 5. Eligibility. Employees, Non-Employee Directors and Consultants of the Company or any Affiliate shall be eligible to be designated as Participants.

     SECTION 6. Awards.

     (a) Options.

     (i) Grant. Subject to the provisions of the Plan, the Committee shall have authority to determine the Participants to whom options shall be granted, the number of Shares to be covered by each Option, the option price therefore and the conditions and limitations applicable to the exercise of the Option. The Committee shall have the authority to grant Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant both types of options; provided, however, that Incentive Stock Options may only be granted to Employees. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to, and comply with, the requirements of Section 422 of the Code, as from time to time amended. Any Option or a portion thereof that is designated as an Incentive Stock Option that for any reason fails to meet the requirements of an Incentive Stock Option shall be treated hereunder as a Non-Qualified Stock Option.

     (ii) Exercise Price. The Committee shall establish the exercise price at the time each Option is granted, which price shall not be less than 100% of the per share Fair Market Value of the Shares on the date of grant. If an Employee owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company and an Incentive Stock Option is granted to such Employee, the option price shall be no less than 110% of the Fair Market Value of the Shares on the date of grant.

     (iii) Exercise. Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable Award Agreement or thereafter. The Committee may impose such conditions with respect to the exercise of Options, including without limitation, any relating to the application of Federal or state securities laws, as it may deem necessary or advisable.

     (b) Stock Appreciation Rights.

     (i) Grant. Subject to the provisions of the Plan, the Committee shall have authority to determine the Participants to whom Stock Appreciation Rights shall be granted, the number of Shares to be covered by each Stock Appreciation Right Award, the grant price thereof and the conditions and limitations applicable to the exercise thereof. A Stock Appreciation Right may be granted in tandem with another Award, in addition to another Award, or freestanding and unrelated to another Award. A stock Appreciation Right granted in tandem with or in Addition to another Award may be granted either at the same time as such other Award or at a later time. A Stock Appreciation Right shall not be exercisable earlier than six months after grant, unless otherwise determined by the Committee, and shall have a per share grant price of not less than 100% of the per share Fair Market Value of the Shares on the date of grant.

6

     (ii) Exercise and Payment. A Stock Appreciation Right shall entitle the Participant to receive with respect to each Share covered by such Stock Appreciation Right an amount equal to the excess of the Fair Market Value of a Share on the date of exercise of the Stock Appreciation Right over the per share grant price thereof, provided that the Committee may, for administrative convenience, determine that the exercise of any Stock Appreciation Right, which is not related to an Incentive Stock Option and which can only be exercised for cash during limited periods of time in order to satisfy the conditions of certain rules of the SEC, shall be deemed to occur for all purposes hereunder on the day during such limited period on which the Fair Market Value of the Shares is the highest. Any such determination by the Committee may be changed by the Committee from time to time and may govern the exercise of Stock Appreciation Rights granted prior to such determination as well as Stock Appreciation Rights thereafter granted.

     (iii) Other Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine, at or after the grant of a Stock Appreciation Right, the term, methods of exercise, methods and form of settlement, and any other terms and conditions of any Stock Appreciation Right. Any such determination by the Committee may be changed by the Committee from time to time and may govern the exercise of Stock Appreciation Rights granted or exercised prior to such determination as well as Stock Appreciation Rights granted or exercised thereafter. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it shall deem appropriate.

     (c) Restricted Stock.

     (i) Grant. Subject to the provisions of the Plan, the Committee shall have authority to determine the Participants to whom Restricted Stock shall be granted, to each such Participant, the duration of the Restricted Period during which, and the conditions under which, the Restricted Stock may be forfeited to the Company, and the other terms and conditions of such Awards. The vesting of a Restricted Stock Award granted under the Plan may be conditioned upon the completion of a specified period of employment or service with the Company or any Subsidiary or Affiliate, upon the attainment of specified Performance Goals, and/or upon such other criteria as the Committee may determine in its sole discretion. Unless otherwise determined by the Committee, Restricted Stock Awards shall provide for the payment of dividends. Dividends paid on Restricted Stock may be paid directly to the Participant and may be subject to risk of forfeiture and/or transfer restrictions during any period established by the Committee, or may be reinvested in additional Shares of Restricted Stock all as determined by the Committee in its discretion.

     (ii) Transfer Restrictions. During the Restricted Period, Restricted Stock will be subject to the limitations on transfer as provided in Section 8(g)(iii).

7

     (d) Other Stock-Based Awards. The Committee shall have authority to determine the Participants who shall receive an “Other Stock-Based Award,” which shall consist of a right (i) which is other than an Award or right described in Section 6(a), (b), or (c) above and (ii) which is denominated or payable in, valued in whole or in part or by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), deemed by the Committee to be consistent with the purposes of the Plan; provided, that any such right must comply, to the extent deemed desirable by the Committee, with Rule 16b-3, and provided, further, that any such right must not result in taxes, additional interest and/or penalties pursuant to Section 409A of the Code. Without limiting the generality of the preceding sentence, if any Other Stock-Based Award is subject to Section 409A of the Code, any payment or benefits otherwise due thereunder to any Participant upon the Participant’s termination of employment or consultancy or other service with the Company shall not be made until and unless such termination constitutes a “separation from service,” as such term is defined under Section 409A of the Code, and if at the time of such separation from service with the Company the Participant is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable thereunder as a result of such separation from service is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits thereunder (without any reduction in such payments or benefits ultimately paid or provided to the Participant) until the date that is six months following the Participant’s separation from service with the Company (or the earliest date permitted under Section 409A of the Code). Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such other Stock-Based Award, including Performance Goals and performance periods. Except in the case of an Other Stock-Based Award that is an Alternative Award and subject to Section 6(e)(viii), the price at which securities may be purchased pursuant to any Other Stock-Based Award granted under this Plan, or the provision, if any, of any such Award that is analogous to the purchase or exercise price, shall not be less than 100% of the Fair Market Value of the security to which such Award relates on the date of the grant.

     (e) General.

     (i) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for, any other Award granted under the Plan. Awards granted in addition to, or in tandem with, other Awards may be granted either at the same time as, or at a different time from, the grant of such other Awards.

     (ii) Forms of Payment by Company Under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee.

8

     (iii) Limits on Transfer of Awards. Awards (other than Incentive Stock Options) shall be transferable to the extent provided in any Award Agreement. Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred or disposed if in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant; provided, however, that the Participant may designate a beneficiary of the Participant’s Incentive Stock Option in the event of the Participant’s death on a beneficiary designation form provide by the Company.

     (iv) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee; provided, that in no event shall the term of any Option exceed a period of ten years from the date of its grant.

     (v) Share Certificates. All certificates for Shares or other securities of the Company or any Affiliate delivered under the Plan pursuant to any Award, or the exercise thereof, shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. The Committee may require that, during the Restricted Period, a certificate for Shares of Restricted Stock registered in the name of a Participant shall be deposited by such Participant, together with a stock power endorsed in blank, with the Company.

     (vi) Consideration for Grants. Awards may be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.

     (vii) Delivery of Shares or Other Securities and Payment by Participant of Consideration. No Shares or other securities shall be delivered pursuant to any Award until payment in full or any amount required to be paid pursuant to the Plan or the applicable Award Agreement is, or is arranged to be, received by the Company. Such payment may be made by such method or methods and in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof; provided that the combined value, as determined by the Committee, of all cash and cash equivalents and the Fair Market Value of any such Shares or other property so tendered, or arranged to be tendered, to the Company, as of the date of such tender, is at least equal to the full amount required to be paid pursuant to the Plan or the applicable Award Agreement to the Company.

     (viii) Prohibition on Repricing. Notwithstanding any other provision of this Plan, in no event may the exercise price under any Option be reduced, other than pursuant to an adjustment contemplated in Section 4(c), after it is granted, either directly or by cancellation of an outstanding option in return for a newly granted option or other Award (including an Alternative Award) that has the effect of lowering the exercise price of the option.

9

     SECTION 7. Amendment And Termination. Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan:

     (a) Amendments to the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan at any time without the consent of any shareholder, Participant, other holder or beneficiary of an Award, or other Person; provided that notwithstanding any other provision of the Plan or any Award agreement, no such amendment, alteration, suspension, discontinuation, or termination shall be made without shareholder approval if such approval is necessary to comply with, or to obtain exemptive relief under, any tax or regulatory requirement that the Board deems desirable to comply with, or obtain exemptive relief under, including for these purposes any approval requirement which is a prerequisite for exemptive relief from Section 16(b) of the Exchange Act. Notwithstanding anything to the contrary herein, the Committee may amend the Plan in such a manner as may be necessary so as to have the Plan conform with local rules and regulations in any jurisdiction outside the United States.

     (b) Amendments to Awards. The Committee may waive any conditions or rights under, amend any terms of, or accelerate or alter, any Award theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or holder or beneficiary of an Award, provided that such action does not (i) materially impair the rights of any Participant or holder or beneficiary of an Award without such person’s consent, or (ii) result in a decrease in the Fair Market Value of an Award without such Participant’s or holder’s or beneficiary’s consent. Notwithstanding anything to the contrary herein, in no event shall the Committee amend the distribution terms in any Award or Award Agreement that has a feature for the deferral of compensation if such amendment would result in taxes, additional interest and/or penalties pursuant to Section 409A of the Code..

     (c) Adjustments of Awards Upon Certain Acquisitions. In the event the Company or any Affiliate shall assume outstanding Awards or the right or obligation to make future Awards in connection with the acquisition of another business or another corporation or business entity, the Committee may make such adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it shall deem appropriate in order to achieve reasonable comparability or an equitable relationship between the assumed Awards and the Awards as so adjusted, provided, however, that such adjustment does not result in such awards being considered new awards or modifications of such awards for purposes of Section 409A of the Code..

     (d) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(c) hereof) affecting the Company, an Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, provided, however, that such adjustment does not result in taxes, additional interest and/or penalties pursuant to Section 409A of the Code..

10

     (e) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award or Award Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect.

     (f) Cancellation. Any provision of this Plan or any Award Agreement other than Section 6(e)(viii) hereof to the contrary notwithstanding, the Committee may cause any Award granted hereunder to be cancelled in consideration of a cash payment or alternative award (equal to the Fair Market Value of the Award to be cancelled) made to the holder of such cancelled Award.

     SECTION 8. General Provisions.

     (a) No Rights to Awards. No Employee, Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Employees, Participants, or holders or beneficiaries of Awards. The terms and conditions of Awards need not be the same with respect to each recipient.

     (b) Delegation. Subject to the terms of the Plan and applicable law, the Committee may delegate to one or more officers or managers of the Company or any Affiliate, or to a Committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify or waive rights with respect to, or to alter, discontinue, suspend, or terminate Awards held by, Employees who are not officers or directors of the Company for purposes of Section 16 of the Exchange Act, or any successor section thereto, or who are otherwise not subject to such section.

     (c) Withholding. A participant may be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant, the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding taxes in respect of an Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such other action as any be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. In the case of payments of Awards in the form of Shares, at the Committee’s discretion the Participant may be required to pay to the Employer the amount of any taxes required to be withheld with respect to such Shares or, in lieu thereof, the Employer shall have the right to retain (or the Participant may be offered the opportunity to elect to tender) the number of Shares whose Fair Market Value equals the amount required to be withheld. The Committee may provide for additional cash payments to holders of Awards to defray or offset any tax arising from the grant, vesting, exercise or payments of any Award. In the discretion of the Committee, and subject to applicable law, the Company may offer loans to Participants to satisfy withholding requirements on such terms as the Committee may determine, which terms may in the discretion of the Committee be non-interest bearing. Other provisions of the Plan notwithstanding, only the minimum amount of Shares deliverable in connection with an Award necessary to satisfy statutory withholding requirements will be withheld, unless withholding of any additional amount of Shares will not result in additional accounting expense to the Company.

11

     (d) Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement, which shall be delivered to the Participant and shall specify the terms and conditions of the Award and any rules applicable thereto, including but not limited to the effect on such Award of the death, retirement or other termination of employment or service of a Participant and the effect, if any, of a change in control of the Company.

     (e) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other compensation arrangements, which may (but need not) provide for the grant of options, restricted stock and other types of security-based awards provided for hereunder (subject to shareholder approval if such approval is required), and such arrangements may be either generally applicable or applicable only in specific cases.

     (f) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, except to the extent expressly provided otherwise in the Plan or in any Award Agreement.

     (g) No Rights as Stockholder. Subject to the provisions of the applicable Award Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan until he or she has become the holder of such Shares. Notwithstanding the foregoing, in connection with each grant of Restricted Stock hereunder, the applicable Award shall specify if, and to what extent, the Participant shall not be entitled to the rights of a stockholder in respect of such Restricted Stock.

     (h) Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of Delaware and applicable Federal law.

     (i) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

     (j) Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee has determined that any such offer, if made, would be in compliance with all applicable requirements of Federal securities laws.

12

     (k) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.

     (l) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be cancelled, terminated, or otherwise eliminated.

     (m) Headings. Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

     SECTION 9. Effective Date Of The Plan. The Plan was effective as of April 29, 2004 (the date of its approval by the shareholders of the Company).

     SECTION 10. Term Of The Plan. No Award shall be granted under the Plan after the tenth anniversary of the effective date of the Plan. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, and Award theretofore granted may, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under any such Award shall, extend beyond such date.

13

EX-10.3

Exhibit 10.3

STILLWATER MINING COMPANY

409A NONQUALIFIED DEFERRED COMPENSATION PLAN
(As Amended and Restated February 15, 2008)

Exhibit 10.3

STILLWATER MINING COMPANY

409A NONQUALIFIED DEFERRED COMPENSATION PLAN
(As Amended and Restated January 18, 2008)

		Page
1.	Purpose		1
2.	Definitions		1
3.	Shares Subject to the Plan		3
4.	Administration		3
5.	Participation		3
6.	Participant Deferrals		4
7.	Employer Contributions		5
8.	Terms and Conditions of Deferrals and Settlement		6
9.	Adjustments		8
10.	Compliance with Code Section 409A		8
11.	Investment Risks of Notional Investments		9
12.	General Provisions		9

STILLWATER MINING COMPANY

409A NONQUALIFIED DEFERRED COMPENSATION PLAN
(As Amended and Restated February 15, 2008)

     1. Purpose. The purpose of this 409A Nonqualified Deferred Compensation Plan (the “Plan”) is to provide to members of a select group of management or highly compensated employees of Stillwater Mining Company (the “Company”) and its subsidiaries and/or its affiliates who are selected for participation in the Plan a means to defer receipt of specified portions of compensation and to have such deferred amounts treated as if invested in specified investment vehicles, to enhance the competitiveness of the Company’s executive compensation program and, therefore, its ability to attract and retain qualified key personnel necessary for the continued success and progress of the Company, and to encourage such persons to retain a significant equity stake in the Company.

     2. Definitions. In addition to the terms defined in Section 1 above, the following terms used in the Plan shall have the meanings set forth below:

          (a) Account: The account established and maintained by the Company for a Participant to track deferrals and earnings under the Plan. An Account may include one or more subaccounts, in order that different distribution elections may apply to different subaccounts. Deferred Shares and Deferred Cash shall be credited to separate subaccounts. All subaccounts to which Deferred Shares are credited shall be deemed the Deferred Share Account, and all subaccounts to which Deferred Cash is credited shall be deemed the Deferred Cash Account. The Account and subaccounts, and Deferred Shares and Deferred Cash credited thereto, will be maintained solely as bookkeeping entries by the Company to evidence unfunded obligations of the Company.

          (b) Administrator: The Committee shall administer the Plan, provided that any duty of the Committee as Administrator may be performed by a committee consisting of the Chief Financial Officer, Vice President-Human Resources and General Counsel. The Committee may expressly limit the scope of authority of the Administrator when acting under this delegated authority and the Committee may designate persons in addition to or in place of those specified officers to serve as the Administrator.

          (c) Beneficiary: The person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive the benefits specified under the Plan upon a Participant’s death, provided that, if and to the extent authorized by the Administrator, a Participant may be permitted to designate a Beneficiary, in which case the “Beneficiary” instead will be the person, persons, trust or trusts (if any are then surviving) which have been designated by a Participant in his or her most recent written beneficiary designation filed with the Administrator to receive the benefits specified under the Plan upon such Participant’s death. Unless otherwise determined by the Administrator, a Participant’s designation of a Beneficiary other than the Participant’s spouse shall be subject to the written consent of the spouse.

          (d) Board: The Board of Directors of the Company.

          (e) Change in Control: A change in ownership or effective control of the Company or in ownership of a substantial portion of the Company’s assets within the meaning of Code Section 409A(a)(2)(A)(v).

          (f) Committee: The Compensation Committee of the Board. Any function of the Committee may also be performed by the Board, in which case any reference to the Committee shall be deemed to include the Board.

Page 1 of 12

          (g) Code: The U.S. Internal Revenue Code of 1986, as amended, including regulations thereunder and successor provisions thereto.

          (h) Deferred Cash: A right credited under the Plan constituting a contractual commitment of the Company to pay to the Participant, at a future date, cash in settlement of the right, subject to the terms of the Plan, and compliance with Code Section 409A.

          (i) Deferred Share: A right credited under the Plan constituting a contractual commitment of the Company to deliver to the Participant, at a future date, one Share in settlement of the right, subject to the terms of the Plan.

          (j) Disability: A Participant’s becoming “disabled” within the meaning of Code Section 409A(a)(2)(C).

          (k) Dividend Equivalents: An amount equal to the value of dividends paid on an outstanding Share, which amount will be paid or credited on Deferred Shares in accordance with Section 8(b).

          (l) Effective Date: The date on which the Board has approved the Plan and adopted it on behalf of the Company.

          (m ) Employer Contributions: Amounts credited to a Participant’s Account as a contribution of the Company or a subsidiary and not representing a direct deferral of compensation by the Participant. Employer Contributions shall consist of “Employer Matching Contributions” and “Employer Discretionary Contributions” as specified in Section 7.

          (n) Fair Market Value: As of any given day, the fair market value of a Share determined in good faith in the same manner as “fair market value” is then determined under the Company’s 2004 Equity Incentive Plan (or successor to such plan).

          (o) Participant: An employee of the Company or any subsidiary who is eligible to defer compensation under the Plan and who has currently elected to defer or has previously deferred compensation under the Plan which has not been distributed.

          (p) Plan Year: The calendar year, provided that the initial Plan Year shall be the partial year from the Effective Date until December 31, 2006.

          (q) Restricted Stock Units: Awards designated as Restricted Stock Units granted to Participants under the 2004 Equity Incentive Plan (or successor to such plan).

          (r) Retirement: A Participant’s voluntary termination of employment at or after attaining age 65 or a Participant’s voluntary termination of employment at or after attaining both age 55 and five years of service with the Company and its subsidiaries.

          (s) Share: A share of Common Stock, $0.01 par value, of the Company or any securities or rights into which such Share may be changed by reason of any transaction or event of the type described in Section 9.

          (t) Trust: Any trust or trusts established by the Company as part of the Plan; provided, however, that the assets of such trusts shall remain subject to the claims of the general creditors of the Company.

          (u) Trustee: The trustee of the Trust, as designated from time to time by the Board or Committee. Initially, the Trustee shall be Investors Bank & Trust Company, Boston, MA.

Page 2 of 12

     3. Shares Subject to the Plan. Shares shall be issued or delivered under this Plan as required to settle Deferred Shares. Shares issued or delivered in settlement of Deferred Shares resulting from deferral of Restricted Stock Units and Deferred Shares resulting from a any matching grant under Section 7 will be drawn from and count against the shares reserved and available under the 2004 Equity Incentive Plan (or successor to such plan) in accordance with the terms of such plan. Shares shall be reserved by the Company for delivery in connection with Dividend Equivalents, and drawn for such purpose, out of authorized but unissued shares, unless otherwise required to comply with applicable requirements of the New York Stock Exchange. If any Deferred Shares are to be credited at a time insufficient Shares remain available under the Company’s Certificate of Incorporation and treasury shares or under the 2004 Equity Incentive Plan (or successor to such plan), Deferred Cash shall be credited to the Participant’s Account rather than Deferred Shares. In such case, the Committee may permit the reallocation of such Deferred Cash into Deferred Shares on a one-time basis at such time as Shares have become available. Shares delivered upon a distribution in settlement of Deferred Shares may be newly issued shares or treasury shares, as determined by the Company’s General Counsel.

     4. Administration.

          (a) Authority. The Administrator shall administer the Plan in accordance with its terms, and shall have all powers necessary to accomplish such purpose, including the power and authority to construe and interpret the Plan, to define the terms used herein, to prescribe, amend and rescind rules and regulations, agreements, forms, and notices relating to the administration of the Plan, to make all other determinations necessary or advisable for the administration of the Plan, and to determine whether to terminate participation of Participants, including Participants who engage in activities competitive with or not in the best interests of the Company. Any actions of the Administrator with respect to the Plan and determination in all matters referred to herein shall be conclusive and binding for all purposes and upon all persons including the Company, the Administrator and members of the committee serving as such, Participants and employees, and their respective successors in interest (subject to the Committee’s authority to oversee any person acting under delegated authority).

          (b) Delegation. The Administrator may appoint agents and delegate thereto powers and duties under the Plan, except as otherwise limited by the Plan. No member of the committee serving as Administrator shall be entitled to act on or decide any matter relating solely to himself or herself or any of his or her rights or benefits under the Plan. No bond or other security shall be required in connection with the Plan of the Administrator or any member of the committee serving as Administrator in any jurisdiction.

          (c) Limitation of Liability. The Administrator and each member of any committee serving as Administrator shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or other employee of the Company or any subsidiary or affiliate, the Company’s independent certified public accountants, or any executive compensation consultant, legal counsel, or other professional retained by the Company to assist in the administration of the Plan. To the maximum extent permitted by law, no person acting for or on behalf of the Administrator, nor any person to whom ministerial duties have been delegated under the Plan, shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan, except for the willful misconduct or gross negligence of such member or person.

     5. Participation. The Administrator shall determine those employees of the Company and its subsidiaries and/or affiliates, from among the senior executives of the Company who qualify as a select group of management or highly compensated employees (for purposes of the Employee Retirement Income Security Act of 1974), who will be eligible to participate in the Plan. Such persons shall be notified of such eligibility by the Company’s Vice President-Human Resources, subject to the direction of the Administrator. A Participant in a given Plan Year shall be eligible to participate in the next following Plan Year unless otherwise notified prior to the beginning of the next following Plan Year. Persons eligible to participate in the Plan in the initial Plan Year shall be those executive officers identified on Exhibit A hereto.

Page 3 of 12

     6. Participant Deferrals. A Participant may elect to defer compensation as specified in this Section 6.

          (a) Cash Compensation That May Be Deferred. Unless otherwise determined by the Administrator, cash compensation that may be deferred under the Plan includes earned amounts of salary, annual incentive (bonus), long-term incentives payable in cash, and, to the extent specifically authorized by the Administrator, other cash compensation (including any form of cash compensation that the Participant would be permitted to defer under any Company 401(k) plan). Amounts that may be deferred in a given Plan Year shall be up to 60% of salary and, unless otherwise determined by the Administrator, up to 100% of cash compensation other than salary. The minimum deferral of cash compensation shall be the greater of 1% of cash compensation or $1,000 per Plan Year.

          (b) Equity Awards That May Be Deferred. To the extent specifically authorized by the Administrator (and any governing body with authority over the particular equity award plan), equity awards that may be deferred under the Plan include Stock-denominated awards (including Stock payouts and other property) to be received from the Company or a subsidiary or affiliate under the 2004 Equity Incentive Plan (or successor to such plan). Such deferrals will result in the crediting of a number of Deferred Shares equal to the number of shares of Stock that would have been deliverable in the absence of deferral. Amounts that may be deferred in a given Plan Year shall be, unless otherwise determined by the Administrator, up to 100% of the deferrable types of awards. There is no minimum deferral amount for equity award deferrals.

          (c) Vesting and Forfeiture of Participant Deferrals. Participant deferrals of cash compensation shall be fully vested and non-forfeitable at the time of deferral. This shall not result in the vesting of any incentive or other award that is subject to vesting under an incentive plan. Rather, deferrals of such amounts shall be deemed to occur for purposes of the Plan at the time such payments vest under such other incentive plan. Equity awards likewise shall vest and become non-forfeitable only in accordance with the terms of the applicable plan and any other agreement or document governing such awards. For administrative purposes, equity awards may be treated as deferred under the Plan prior to such vesting, with the understanding that such awards shall remain subject to the risk of forfeiture and all other terms of the equity award other than distribution terms necessarily changed by virtue of the deferral of the award under the Plan. Any acceleration of vesting of such awards shall be governed by the terms and administration of the plan under which such equity award was granted, and any such acceleration of vesting shall be permitted only to the extent that it does not include or result in an acceleration of distributions not otherwise permissible under Code Section 409A.

          (d) Elections.

(i) Elections Irrevocable. Once an election form, properly completed, is received by the Company, the elections of the Participant shall be irrevocable; provided, however, that (i) the Administrator may in its discretion determine that elections are revocable until the deadline specified for the filing of such election; (ii) a Participant may elect a further deferral of amounts credited to a Participant’s Account by filing a later election form in accordance with Section 6(e); (iii) a Participant may change distribution elections in accordance with regulations promulgated under Code Section 409A during any transition period permitted thereunder; (iv) deferral elections in a given Plan Year may be suspended if and to the extent permitted under Section 8(h); and (v) to the extent determined by the Administrator, a Participant’s deferrals under the Plan shall cease during the period deferrals cease under the Company’s qualified 401(k) plan as required by the terms of the Company’s qualified 401(k) plan as it relates to a Participant’s request for a hardship withdrawal from the 401(k) plan.

Page 4 of 12

(ii) Date of Election. An election to defer compensation or awards hereunder must be received by the Administrator on or before any applicable deadline under Code Section 409A and on or before any earlier deadline date specified by or at the direction of the Administrator. Under no circumstances may a Participant defer compensation or awards to which the Participant has attained, at the time of deferral, a legally enforceable right to current receipt of such compensation or awards. Unless otherwise determined by the Administrator, the following election deadlines shall apply:

• At such time as an executive officer is first eligible to participate in the Plan, such executive officer may file an election to defer compensation up to 30 days after such first eligibility, but such election shall be irrevocable when filed and may not apply to compensation for services performed prior to the filing of the election;

• An election may be filed on or before the last day of the calendar year to defer any compensation that will be earned entirely by services performed in the next year or thereafter;

• Any deadline for elections specified under the transition rules in regulations promulgated under Code Section 409A shall apply to such elections, which may be made to the fullest extent permitted thereunder; and

• Any election to defer performance-based compensation may, if permitted under Code Section 409A(a)(4)(B)(iii), be filed no later than six months before the end of the performance period, provided that the performance period is at least 12 months in length.

(iii) Unique Plan Year Deferral Elections. Unless otherwise determined by the Administrator (and announced in advance), deferral elections filed with respect to a given Plan Year will not apply to compensation earned in a subsequent Plan Year.

          (e) Redeferral. A Participant will be permitted to elect to further defer the distribution of the balance of his or her Account to the extent permitted and in accordance with the requirements of Code Section 409A(a)(4)(C) and regulations promulgated under Code Section 409A, including the requirement that (i) a redeferral election may not take effect until at least 12 months after such election is filed with the Company, (ii) an election to further defer a distribution (other than a distribution upon death, disability or an unforeseeable emergency) must result in the first distribution subject to the election being made at least five years after the previously elected date of distribution, and (iii) any redeferral election affecting a distribution at a fixed date must be filed with the Company at least 12 months before the first scheduled payment under the previous fixed date distribution election.

     7. Employer Contributions.

          (a) Employer Matching Contributions. Unless otherwise determined by the Committee, the Company shall make Employer Matching Contributions to the Account of each Participant at times determined by the Administrator. For each Plan Year, the amount of Employer Matching Contributions under this Plan in respect of a Participant shall be the amount that, together with any matching contribution to the Participant’s account under any 401(k) plan of the Company, equals 100% of the aggregate of the Participant’s contributions under such 401(k) plan plus deferrals of cash compensation under this Plan for the calendar year up to a maximum of 6% of the Participant’s compensation for the calendar year. For this purpose, the Participant’s deferrals and the Participant’s compensation shall include those types of compensation eligible for the Participant to contribute under any such 401(k) plan plus 409A deferrals (without regard to any limit on the amount of such compensation that may be contributed under the 401(k) plan). Unless otherwise determined by the Committee or Administrator, the Employer Matching Contribution shall be made only to a Participant who has participated in any available Company 401(k) plan to the maximum extent permitted in the applicable calendar year. The Committee may determine the form of such Employer Matching Contributions (Deferred Cash or Deferred Shares).

Page 5 of 12

          (b) Employer Discretionary Contributions. Unless otherwise determined by the Committee, the Company may make Employer Discretionary Contributions to the Account of each Participant at such times and in such form and amount as may be determined by the Committee. Employer Discretionary Contributions shall be subject to such terms and conditions as may be specified by the Committee. The Committee may determine the form of such Employer Discretionary Contributions.

          (c) Vesting and Forfeiture of Employer Contributions. Employer Matching Contributions shall be subject to forfeiture to the same extent and the related matching contributions under the applicable 401(k) plan are forfeitable (generally, upon specified terminations of employment before the Participant has three years of service as measured under the terms of the applicable 401(k) plan). Accordingly, Employer Matching Contributions to a Participant’s Account shall be deemed vested at such time as this risk of forfeiture has lapsed. Employer Discretionary Contributions shall be subject to such risk of forfeiture and vesting terms as shall be determined by the Committee. In addition to any terms relating to acceleration under the applicable 401(k) plan (relating to Employer Matching Contributions) and as specified by the Committee (relating to Employer Discretionary Contributions), any acceleration of vesting of Employer Contributions shall be permitted only to the extent that it does not include or result in an acceleration of distributions not otherwise permissible under Code Section 409A.

          (d) Elections. Any elections as to deferrals or redeferrals of Employer Contributions shall be subject to the provisions of Sections 6(d) and (e).

     8. Terms and Conditions of Deferrals and Settlements.

          (a) Establishment; Crediting of Amounts Deferred. The Company will establish and maintain an Account for each Participant. The amount of compensation or awards deferred with respect to each Account will be credited to such Account as of the date on which such amounts would have been paid to the Participant but for the Participant’s election to defer receipt hereunder, unless otherwise determined by the Administrator. With respect to any fractional shares of Stock or Stock-denominated awards, the Administrator shall determine whether to credit a fraction of a Deferred Share, to pay cash in lieu of the fractional share or carry forward such cash amount under the Plan, round to the nearest whole Deferred Share, round to the next whole Deferred Share, or round down to eliminate the fractional Deferred Share or otherwise make provision for the fractional Share. With respect to Cash Deferrals, amounts of hypothetical income and appreciation and depreciation in value of such account will be credited and debited to, or otherwise reflected in, such Account from time to time. Unless otherwise determined by the Administrator (including under Section 8(e)), Deferred Cash shall be deemed invested in a hypothetical investment as of the date of deferral.

          (b) Payment or Crediting of Dividend Equivalents. Whenever dividends are paid or distributions made with respect to Shares, a Participant to whom Deferred Shares are then credited hereunder shall be entitled to Dividend Equivalents in an amount equal to the cash amount of the dividend paid or fair value of property other than Shares distributed on a single Share multiplied by the number of Deferred Shares (including any fractional Deferred Share) credited to his or her Account as of the record date for such dividend or distribution. Dividend Equivalents will be credited as a cash amount to the account maintained for the Participant and converted into additional Deferred Shares at a date in each calendar quarter on or after the dividend payment date, which conversion date shall be designated by the Administrator. In the alternative, the Company may elect to credit Dividend Equivalents as Deferred Cash (i.e., not deem them reinvested in additional Deferred Shares) or vary the timing of any conversion of Dividend Equivalents into additional Deferred Shares in order minimize the administrative burden of reporting Participants’ transactions on Form 4 under Section 16 of the U.S. Securities Exchange Act of 1934 or otherwise to promote the purposes and administrative efficiency of the Plan. In the case of a dividend of Shares, an equal number of Deferred Shares will be credited to the Participant’s Account at the dividend payment date on each Deferred Share credited to such Account at the record date. Any Deferred Shares or Deferred Cash resulting under this Section 8(b) shall be subject to the same terms and date of distribution in all cases as the Deferred Shares to which the Dividend Equivalents related. In the

Page 6 of 12

case of Deferred Shares relating to an equity award, the method and terms of crediting Dividend Equivalents may be modified to conform to the method and terms of such crediting under the Plan or award agreement governing the equity award.

          (c) Notional Investments of Deferred Cash. Amounts of hypothetical income and appreciation and depreciation in value of Deferred Cash will be credited and debited to, or otherwise reflected in, the Participant’s Account from time to time.

(i)

Subject to other applicable provisions of the Plan, Deferred Cash shall be deemed to be invested, at the Participant’s direction, in one or more notional investment vehicles (i.e., hypothetical investments) from a list of permitted notional investments specified from time to time by the Administrator. Subject to any rules and restrictions as the Administrator may specify, a Participant may reallocate Deferred Cash out of one notional investment vehicle and into another, except that Deferred Cash may not be reallocated into Deferred Shares. Amounts allocated out of one notional investment and into another shall be based on the fair market value of such notional investment at the reallocation date (or as near as practicable to the reallocation date, as determined by the Administrator), except as otherwise provided under Section 8(e).

(ii)

The Administrator may change or discontinue any notional investment vehicle available under the Plan in its discretion; provided, however, that each affected Participant shall be given the opportunity to reallocate his or her Deferred Cash previously deemed invested in a discontinued notional investment among the other notional investment vehicles.

          (d) No Reallocation of Deferred Shares. Amounts credited as Deferred Shares to a Participant’s Account may not be reallocated or deemed reinvested in any other notional investment vehicle, but shall remain as Deferred Shares until such time as the Account is distributed in accordance with Section 7(e).

          (e) Trusts. The Administrator may, in its discretion, establish one or more Trusts (including sub-accounts under such Trust(s)), and deposit therein amounts of cash, Stock, or other property not exceeding the amount of the Company’s obligations with respect to a Participant’s Account. In such case, the provisions of Section 8(a) notwithstanding, the amounts of hypothetical income and appreciation and depreciation in value of such Account shall be equal to the actual income on, and appreciation and depreciation of, the assets in such Trust(s). Other provisions of this Section 8(e) notwithstanding, the timing of allocations and reallocations of assets in such an Account, and the investment vehicles available with respect to the Deferred Cash portion of the Account, may be varied to reflect the timing of actual investments of the assets of such Trust(s) and the actual investments available to such Trust(s).

          (f) Form of Distributions. The Company will distribute a Participant’s Account, and discharge all of its obligations to pay deferred compensation under the Plan with respect to such Account, as follows:

(i)

With respect to a Deferred Cash balance, payment of cash; provided, however, that if the Company owns fully liquid assets that match a Participant’s notional investment in the Account at the time of distribution, the Administrator may authorize the distribution of those assets so long as such distribution represents a payment of value to the Participant comparable to cash and does not otherwise result in adverse tax or other consequences to the Participant;

(ii)

with respect to Deferred Shares, by delivery of one Share for each Deferred Share then being distributed.

Page 7 of 12

          (g) Timing of Distributions. Except to the extent distribution alternatives may be limited under applicable law or upon a determination by the Administrator, distributions of a Participant’s Account will be made in a single lump sum or in annual installments the latest of which is not more than ten years after Participant’s separation from service (within the meaning of Code Section 409A) due to Retirement or five years after commencement of installment distributions at any other date, with such distributions commencing at either:

• a fixed date elected by the Participant

• a date fixed in relation to the Participant’s separation from service (within the meaning of Code Section 409A)

• the Participant’s Disability

• a date fixed in relation to a Change in Control

• the Participant’s death

• in connection with an unforeseeable emergency under Section 8(h).

A distribution for any reason other than Retirement, Disability or death will result in an automatic lump sum distribution, as will a Change in Control of the Company if such election has been made at the time of the Participant’s initial deferral election, provided that, notwithstanding such deferral election, the delivery of such lump sum payment to Participant may be delayed by the Company to the extent necessary to comply with Code Section 409A of the Code.

Unless limited by the Administrator, distributions may be elected differently by Participant for different subaccounts, and distributions may be elected at the earlier of or later of permitted distribution dates. If installments have been elected but the Participant’s Account balance (together with all other amounts credited to the Participant under all plans with which this Plan is aggregated under Code Section 409A) is less than $10,000 in value (including both Deferred Cash and Deferred Shares) at the date of the first installment, the Account will instead be paid as a single lump sum.

          (h) Unforeseeable Emergency. In the event a Participant has an unforeseeable emergency, as defined under Code Section 409A, the Participant will be permitted to receive an unscheduled distribution of his Account, to the extent permitted under Code Section 409A.

     9. Adjustments.

     The Administrator shall adjust the number of Deferred Shares credited to each Participant and the kind of Shares deliverable in settlement thereof as determined in good faith in its sole discretion in order to prevent dilution or enlargement of the rights of Participants that otherwise would result from any stock dividend, extraordinary dividend of cash or other property, stock split, reverse stock split, combination of shares, recapitalization or other change in the capital structure of the Company, merger, consolidation, spin-off, reorganization, partial or complete liquidation, issuance of rights or warrants to purchase securities or any other corporate transaction or event having an effect similar to any of the foregoing (in each case taking into account any Dividend Equivalents credited to a Participant in connection with such transaction). The Administrator retains discretion under the Plan to provide for alternative treatment of fractional Deferred Shares, in order to promote efficient administration of the Plan. In addition, the Committee shall retain the authority to terminate deferrals under the Plan during the 12-month period following a Change in Control, to the fullest extent permitted under Code Section 409A.

     10. Compliance with Code Section 409A.

     Other provisions of this Plan notwithstanding, deferrals under this Plan shall comply with the requirements under Code Section 409A and, in accordance with U.S. federal income tax laws and Treasury Regulations (including proposed regulations) as presently in effect or hereafter implemented, (i) if the timing of any distribution under this Plan would result in a Participant’s constructive receipt of income or tax penalties prior to such distribution, the distribution will be the earliest date after the specified

Page 8 of 12

payment date that distribution can be effected without resulting in such constructive receipt; (ii) the Company shall have no authority to accelerate any payment hereunder except as permitted under Code Section 409A and regulations thereunder; and (iii) any rights of the Participant or retained authority of the Company with respect to deferrals hereunder shall be automatically modified and limited to the extent necessary so that the Participant will not be deemed to be in constructive receipt of income relating to the deferrals prior to the payment and so that the Participant shall not be subject to any penalty under Code Section 409A.

     11. Investment Risk of Notional Investments.

     The amount distributable in settlement of a Participant’s Account will equal the value of the Account (or distributable portion thereof) at the time of distribution. The value of an Account will vary over time based on the changes in value and investment returns of the notional investments in which the Account balance is deemed invested. The Company will not guarantee the value of the Account, and thus the amount distributable from the Account may be less than the amounts originally deferred. The Plan permits the Participant to freely choose the amount and timing of the deferrals, whether cash deferrals will be deemed invested in Deferred Shares or Deferred Cash, and the notional investments for portions of deferrals in the form of Deferred Cash. The Company, its subsidiaries and affiliates, and its and their directors, officers, stockholders, employees and agents, have not and will not advise a Participant with respect to whether or how much to defer under the Plan, whether to defer as Deferred Shares or Deferred Cash, and whether Deferred Cash should be deemed invested in any particular notional investment. A Participant will bear the full risk with respect to these decisions and with respect to any decline in the value of Deferred Shares or notional investments relating to Deferred Cash and any failure of these investments to appreciate at a rate deemed satisfactory by the Participant. The Participant will be solely responsible for determining the suitability of such notional investments. The Company recommends that each Participant consult with his or her own investment advisors regarding investment decisions with respect to the Account.

     12. General Provisions.

          (a) Successors and Assigns. All obligations of the Company under the Plan shall be binding on any successor of the Company. The Plan shall be binding on all successors and assigns of a Participant, including without limitation, the estate of a Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors, or any designated beneficiary.

          (b) Amendments. The Plan may be amended from time to time by the Board or the Administrator; provided, however, that the Administrator may not amend the Plan without Board approval if such amendment would broaden eligibility, materially increase benefits to Participants or the cost of the Plan to the Company, or require shareholder approval under applicable law or stock exchange rules. The Administrator may amend any agreement or otherwise take action that would affect a Participant’s Account or rights hereunder, provided that no such amendment or action may materially adversely affect a Participant’s rights without the consent of the Participant.

          (c) Nontransferability of Awards. Rights of a Participant relating to his or her Account shall not be transferable or assignable by the Participant otherwise than by will or the laws of descent and distribution, or in accordance with a beneficiary designation in effect at the time of the Participant’s death.

          (d) Statements. The Administrator will furnish statements, at least once each calendar year, to each Participant reflecting the amounts credited to a Participant’s Accounts, transactions therein since the date reported on in the last previous statement, and other information deemed relevant by the Administrator.

Page 9 of 12

          (e) Nonexclusivity of the Plan. The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensatory arrangements as it may deem desirable.

          (f) No Right to Continued Employment. The Plan shall not confer upon any Participant any right with respect to continuance as an employee or otherwise in service to the Company, nor shall it interfere in any way with any right the Company would otherwise have to terminate a Participant’s service at any time.

          (g) Legal Compliance. The Company shall have no obligation to settle any Participant’s Account until all legal and contractual obligations of the Company relating to establishment of the Plan and such settlement shall have been complied with in full. In addition, the Company shall impose such restrictions on Shares delivered to a Participant hereunder and any other interest under the Plan constituting a security as it may deem advisable in order to comply with the Securities Act of 1933, as amended, the requirements of the New York Stock Exchange or any other stock exchange or automated quotation system upon which the Shares are then listed or quoted, any provision of the Company’s Certificate of Incorporation or By-laws, or any other law, regulation, or binding contract to which the Company is a party.

          (h) Choice of Law. This Plan and all related agreements and elections shall be construed in accordance with and governed by the laws of the State of Montana, without regard to principles of conflict of laws, and applicable federal law.

          (i) Tax Withholding. The Company and any subsidiary or affiliate shall have the right to deduct from amounts otherwise payable by the Company or any subsidiary or affiliate to the Participant, including compensation not subject to deferral as well as amounts payable hereunder in settlement of the Participant’s Account, any sums that federal, state, local or foreign tax law requires to be withheld with respect to the deferral of compensation hereunder, transactions affecting the Participant’s Account, and payments in settlement of the Participant’s Account, including FICA, Medicare and other employment taxes. Shares may be withheld to satisfy such obligations in any case where taxation would be imposed upon the delivery of shares, except that shares issued or delivered under any plan, program, employment agreement or other arrangement may be withheld only in accordance with the terms of such plan, program, employment agreement or other arrangement and any applicable rules, regulations, or resolutions thereunder.

          (j) Right of Setoff. The Company or any subsidiary may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or a subsidiary may owe to the Participant from time to time, including amounts payable in connection with Participant’s Account, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff; provided, however, that this setoff may occur only at the date on which the amount would otherwise be distributed to the Participant (as required to satisfy Code Section 409A). By electing to participate in the Plan and defer compensation hereunder, the Participant agrees to any deduction or setoff under this Section 12(j). Notwithstanding the foregoing provisions of this Section 12(j), in no event may such deductions and offsets exceed $5,000 in the aggregate in any taxable year of the Company or otherwise violate the requirements set forth in Treasury Regulation 1.409A-3(j)(4)(xiii).

          (k) Receipt and Release. Payments (in any form) to any Participant or Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims for the compensation or awards deferred and relating to the Account to which the payments relate against the Company or any subsidiary or affiliate, and the Administrator may require such Participant or Beneficiary, as a condition to such payments, to execute a receipt and release to such effect. In the case of any payment under the Plan of less than all amounts then credited to an account in the form of Deferred Shares, the amounts paid shall be deemed to relate to the Deferred Shares credited to the account at the earliest time.

Page 10 of 12

          (l) Unfunded Status. The Plan is intended to constitute an “unfunded” plan for deferred compensation and Participants shall rely solely on the unsecured promise of the Company for payment hereunder. With respect to any payment not yet made to a Participant under the Plan, nothing contained in the Plan shall give a Participant any rights that are greater than those of a general unsecured creditor of the Company; provided, however, that the Administrator may authorize the creation of Trusts, including but not limited to the Trusts referred to in Section 8 hereof, or make other arrangements to meet the Company’s obligations under the Plan, which Trusts or other arrangements shall be consistent with the “unfunded” status of the Plan.

          (m) Effectiveness of the Plan and Plan Termination. The Plan shall become effective as of February 1, 2006. The Plan will terminate at such time as may be determined by the Board; provided, however, that upon termination of the Plan, amounts will remain distributable in accordance with the terms of the Plan as in effect immediately before the termination except to the extent otherwise permitted under Code Section 409A.

Page 11 of 12

Exhibit A

STILLWATER MINING COMPANY

409A NONQUALIFIED DEFERRED COMPENSATION PLAN
(As Amended and Restated February 15, 2008)

Executive Officers Eligible to Participate in 2008 Plan Year

McAllister, Francis R.	Chairman of the Board and Chief Executive Officer
Struble, Greg R.	Executive Vice President and Chief Operating Officer
Wing, Gregory A.	Vice President and Chief Financial Officer
Stark, John R.	Vice President, Human Resources, Secretary and General Counsel
Ackerman, Terrell I.	Vice President, Planning and Processing Operations

Page 12 of 12

EX-10.4

Exhibit 10.4

STILLWATER MINING COMPANY
2005 NON-EMPLOYEE DIRECTORS’ DEFERRAL PLAN
(As Amended and Restated February 15, 2008)

1. Purpose of the Plan.

     The purpose of this 2005 Non-Employee Directors’ Deferral Plan (the “Plan”) of Stillwater Mining Company (the “Company”) is to provide an additional compensation feature for non-employee directors to help attract and retain them in service to the Company and to provide a convenient means for directors to increase their proprietary interest in the Company. The Plan provides an opportunity for non-employee directors to elect to defer cash compensation in the form of Deferred Shares or Deferred Cash, and to defer settlement of Restricted Stock Units.

2. Definitions.

     The following capitalized terms used in the Plan have the meanings set forth in this Section (other terms are defined in Section 1 and elsewhere in this Plan):

     (a) Account: The account established and maintained by the Company for a Participant to track deferrals and earnings under the Plan. An Account may include one or more subaccounts, including a Deferred Share Account and a Deferred Cash Account. The Account and subaccounts, and Deferred Shares and Deferred Cash credited thereto, will be maintained solely as bookkeeping entries by the Company to evidence unfunded obligations of the Company.

     (b) Board: The Board of Directors of the Company.

     (c) Change in Control: A change in ownership or effective control of the Company or in ownership of a substantial portion of the Company’s assets within the meaning of Code Section 409A(a)(2)(A)(v).

     (d) Committee: The Corporate Governance and Nominating Committee of the Board.

     (e) Code: The U.S. Internal Revenue Code of 1986, as amended, including regulations thereunder and successor provisions thereto.

     (f) Deferred Cash: A right credited under Section 6(c) constituting a contractual commitment of the Company to pay to the Participant, at a future date, cash in settlement of the right, subject to the terms of the Plan.

     (g) Deferred Share: A right credited under Section 6(b) constituting a contractual commitment of the Company to deliver to the Participant, at a future date, one Share in settlement of the right, subject to the terms of the Plan.

     (h) Dividend Equivalents: An amount equal to the value of dividends paid on an outstanding Share, which amount will be paid or credited on Deferred Shares in accordance with Section 7(a).

     (i) Fair Market Value: As of any given day, the fair market value of a Share determined in good faith in the same manner as “fair market value” is then determined under the Company’s 2004 Equity Incentive Plan (or successor to such plan).

     (j) Participant: A person who is entitled to defer compensation under the Plan or who previously deferred compensation under the Plan which has not been distributed.

     (k) Restricted Stock Units: Awards designated as Restricted Stock Units granted to non-employee directors under the 2004 Equity Incentive Plan (or successor to such plan).

     (l) Share: A share of Common Stock, $0.01 par value, of the Company or any securities or rights into which such Share may be changed by reason of any transaction or event of the type described in Section 9.

3. Shares Subject to the Plan.

     Shares shall be issued or delivered under this Plan as required to settle Deferred Shares. Shares shall be reserved for this purpose at the date of crediting of Deferred Shares hereunder. The foregoing notwithstanding, Shares issued or delivered in settlement of Deferred Shares resulting from deferral of Restricted Stock Units and Deferred Shares resulting from a matching grant under Section 6(b) will be drawn from and count against the shares reserved and available under the 2004 Equity Incentive Plan (or successor to such plan) in accordance with the terms of such plan. If any Deferred Shares are to be credited at a time insufficient Shares remain available under the Company’s Certificate of Incorporation and as treasury shares, Deferred Cash shall be credited to the Participant’s Account rather than Deferred Shares. In such case, the Committee may permit the reallocation of such Deferred Cash into Deferred Shares on a one-time basis at such time as Shares have become available. Shares delivered in settlement of Deferred Shares may be newly issued shares or treasury shares, as determined by the Company’s General Counsel.

4. Administration.

     The Plan and its administration shall be subject to oversight by the Committee. The day-to-day administration of the Plan shall be the responsibility of an administrative committee (the “Administrator”) which, unless otherwise determined by the Committee, shall consist of the Chief Financial Officer and the Vice President, Human Relations, and General Counsel. Subject to the oversight by the Committee, the Administrator is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan, except that determinations that would result in significant additional cost to the Plan or significant additional benefits to Participants must be approved by the Committee. Except as provided in this Section 4, any decision of the Committee or Administrator in the interpretation and administration of the Plan shall be final, conclusive and binding on the Company, on Participants and their beneficiaries or successors, and on all other parties.

5. Eligibility.

     A non-employee director who is eligible to receive fees for service on the Board shall be eligible to participate under this Plan.

6. Deferral of Cash Fees and Restricted Stock Units.

     An eligible director may elect to defer cash compensation otherwise payable for service to the Company in his or her capacity as a director and, upon such deferral, to have Deferred Shares or Deferred Cash credited to his or her Account. Cash fees for this purpose include retainer fees and similar payments, any meeting fees for service as a member of the Board or a Board committee, fees for service in a leadership capacity with respect to the Board or a Board committee, and any other fees for such service (but not reimbursements for expenses). An eligible non-employee director may elect to receive Deferred Shares upon settlement of Restricted Stock Units and, upon such deferral, to have Deferred Shares credited to his or her Account. Deferrals under this Section 6 will be subject to the following terms and conditions and to such other terms and conditions, not inconsistent herewith, as the Board or Committee shall determine:

     (a) Elections. Each director who elects to defer fees payable in a given calendar year or to defer Restricted Stock Units that may be granted in a given calendar year must file an irrevocable written election with the Company no later than the December 31 of the preceding year; provided, however, that any newly elected or appointed director may file an election for any year not later than 30 days after the date such person first became a director, which election shall apply only to fees for services performed or

Page 2 of 6

Restricted Stock Units granted after the date of filing of the election. An election under this Section 6(a) must specify the following:

(i)	With respect to fees, a percentage, not to exceed 100% of the Participant’s fees, or a stated dollar amount of fees to be deferred under the Plan in a specified year.
(ii)	With respect to Restricted Stock Units, a percentage, not to exceed 100%, or a fixed number of Restricted Stock Units to be deferred under the Plan in a specified year.
(iii)	The date upon which the Participant’s Account (or portion thereof) resulting from the deferrals in the specified year will be settled, and whether such settlement will be in a lump sum or installments (up to ten).

The Company also will provide a means for the Participant to elect the notional investments for deferrals into Deferred Cash. The Company may specify terms and limitations on elections intended to ensure compliance with applicable laws and regulations, including terms that will ensure that deferrals will not result in constructive receipt of income or tax penalties under Code Section 409A. In the event that directors’ fees or grant of Restricted Stock Units increases during any year, a Participant’s election as to a percentage to be deferred in that year will apply also to the amount of such increase.

     (b) Deferral of Fees in the Form of Deferred Shares. If a Participant elects to defer fees and receive Deferred Shares, the Company will credit to the Participant’s Account a number of Deferred Shares determined by dividing the amount of cash fees deferred during the preceding calendar quarter by the Fair Market Value of a Share on the last day that the stock traded before the end of the calendar quarter; provided, however, that the Administrator may vary the timing of the conversion of deferred amounts into Deferred Shares to minimize administrative burdens under the Plan so long as amounts deferred are converted into Deferred Shares no later than 120 days after the date of deferral of such amounts. Upon receiving Deferred Shares, a Participant will be credited additional “matching” Deferred Shares in the amount of 20% of the Deferred Shares determined under the preceding sentence. The Administrator may determine an appropriate method of accounting for a fractional share that may result upon each such conversion (for example, through crediting fractional shares to the Account, rounding up to whole shares, or carrying forward unused deferral amounts to a subsequent conversion date).

     (c) Deferral of Fees in the Form of Deferred Cash. If a Participant elects to defer fees and receive Deferred Cash, the Company will credit to the Participant’s Account an amount of Deferred Cash equal to the amount of cash fees deferred. Such crediting shall be as of the date the compensation would otherwise have been payable to the Participant but for his or her election to defer.

     (d) Vesting. The interest of each Participant in Deferred Shares and Deferred Cash credited to his or her Account shall be at all times fully vested and non-forfeitable, except that any Restricted Stock Units which have not settled will result in forfeiture, unless otherwise provided under the terms of the Restricted Stock Units.

     (e) Other Terms of Deferrals. Subject to other provisions of the Plan, the Committee may specify all other terms relating to Deferred Shares, Deferred Cash and the Participant’s Account.

7. Terms and Conditions of Deferrals and Settlements.

     (a) Payment or Crediting of Dividend Equivalents. Whenever dividends are paid or distributions made with respect to Shares, a Participant to whom Deferred Shares are then credited hereunder shall be entitled to Dividend Equivalents in an amount equal to the cash amount of the dividend paid or fair value of property other than Shares distributed on a single Share multiplied by the number of Deferred Shares (including any fractional Deferred Share) credited to his or her Account as of the record date for such dividend or distribution. Dividend Equivalents will be credited as a cash amount to the account maintained for the Participant and converted into additional Deferred Shares at the conversion date under Section 6(a) that coincides with or next follows the dividend payment date. In the alternative, the Company may elect to credit Dividend Equivalents as Deferred Cash (i.e., not deem them reinvested

Page 3 of 6

in additional Deferred Shares) or vary the timing of any conversion of Dividend Equivalents into additional Deferred Shares in order minimize the administrative burden of reporting directors’ transactions on Form 4 under Section 16 of the U.S. Securities Exchange Act of 1934 or otherwise to promote the purposes and administrative efficiency of the Plan. In the case of a dividend of Shares, an equal number of Deferred Shares will be credited to the Participant’s Account at the dividend payment date on each Deferred Share credited to such Account at the record date. Any Deferred Shares or Deferred Cash resulting under this Section 7(a) shall be subject to the same terms and date of settlement in all cases as the Deferred Shares to which the Dividend Equivalents related. In the case of Deferred Shares relating to Restricted Stock Units, the method and terms of crediting Dividend Equivalents may be modified to conform to the method and terms of such crediting under the Plan or award agreement governing the Restricted Stock Units.

     (b) Notional Investments of Deferred Cash. Amounts of hypothetical income and appreciation and depreciation in value of Deferred Cash will be credited and debited to, or otherwise reflected in, the Participant’s Account from time to time.

(i)

Subject to the provisions of Section 6 and 7, Deferred Cash shall be deemed to be invested, at the Participant’s direction, in one or more notional investment vehicles (i.e., hypothetical investments) from a list of permitted notional investments specified from time to time by the Administrator. Subject to any rules and restrictions as the Administrator may specify, a Participant may reallocate Deferred Cash out of one notional investment vehicle and into another. Amounts allocated out of one notional investment and into another shall be based on the fair market value of such notional investment at the reallocation date (or as near as practicable to the reallocation date).

(ii)

The Administrator may change or discontinue any notional investment vehicle available under the Plan in its discretion; provided, however, that each affected Participant shall be given the opportunity to reallocate his or her Deferred Cash previously deemed invested in a discontinued notional investment among the other notional investment vehicles.

     (c) No Reallocation of Deferred Shares. Amounts credited as Deferred Shares to a Participant’s Account may not be reallocated or deemed reinvested in any other notional investment vehicle, but shall remain as Deferred Shares until such time as the Account is distributed in accordance with Section 7(e).

     (d) Redeferral. A Participant will be permitted to elect to further defer the settlement of the balance of his or her Account to the extent permitted and in accordance with the requirements of Code Section 409A(a)(4)(C), including the requirement that (i) a redeferral election may not take effect until at least 12 months after such election is filed with the Company, (ii) an election to further defer a distribution (other than a distribution upon death, disability (within the meaning of Code Section 409A) or an unforeseeable emergency (within the meaning of Code Section 409A)) must result in the first distribution subject to the election being made at least five years after the previously elected date of distribution, and (iii) any redeferral election affecting a distribution at a fixed date must be filed with the Company at least 12 months before the first scheduled payment under the previous fixed date distribution election.

     (e) Form of Distributions. The Company will distribute a Participant’s Account, and discharge all of its obligations to pay deferred compensation under the Plan with respect to such Account, as follows:

(i)

With respect to a Deferred Cash balance, payment of cash; provided, however, that if the Company owns liquid assets that match a Participant’s notional investment in the Account at the time of distribution, the Administrator may authorize the distribution of those assets so long as such distribution represents a payment of value to the Participant comparable to cash and does not otherwise result in adverse tax or other consequences to the Participant;

(ii)

with respect to Deferred Shares, by delivery of Shares for each Deferred Share then being distributed.

Page 4 of 6

     (f) Timing of Distributions. Except to the extent distribution alternatives may be limited under applicable law or upon a determination by the Administrator, distributions of a Participant’s Account will be made in a single lump sum or in annual installments the latest of which is not more than ten years after Participant’s separation from service (within the meaning of Code Section 409A) with the Company at, or commencing at, either (i) a fixed date elected by the Participant, (ii) a date fixed in relation to the Participant’s separation from service (within the meaning of Code Section 409A) with the Company, (iii) at a date fixed in relation to a Change in Control, (iv) upon the Participant’s death, or (v) in connection with an unforeseeable emergency under Section 7(g). If installments have been elected but the Participant’s Account balance (together with all other amounts credited to the Participant under all plans with which this Plan is aggregated under Code Section 409A) is less than $10,000 in value at the date of the first installment, the Account will instead be paid as a single lump sum.

     (g) Unforeseeable Emergency. In the event a Participant has an unforeseeable emergency, as defined under Code Section 409A, the Participant will be permitted to receive an unscheduled distribution of his Account, to the extent permitted under Code Section 409A.

8. Compliance with Code Section 409A.

     Other provisions of this Plan notwithstanding, deferrals under this Plan shall comply with the requirements under Code Section 409A and, in accordance with U.S. federal income tax laws and Treasury Regulations (including proposed regulations) as presently in effect or hereafter implemented, (i) if the timing of any distribution under this Plan would result in a Participant’s constructive receipt of income or tax penalties prior to such distribution, the distribution will be the earliest date after the specified payment date that distribution can be effected without resulting in such constructive receipt; (ii) the Company shall have no authority to accelerate any payment hereunder except as permitted under Code Section 409A and regulations thereunder; and (iii) any rights of the Participant or retained authority of the Company with respect to deferrals hereunder shall be automatically modified and limited to the extent necessary so that the Participant will not be deemed to be in constructive receipt of income relating to the deferrals prior to the payment and so that the Participant shall not be subject to any penalty under Code Section 409A.

9. Adjustments.

     The Board or Committee shall adjust the number of Deferred Shares credited to each Participant and the kind of Shares deliverable in settlement thereof as determined in good faith in its sole discretion in order to prevent dilution or enlargement of the rights of Participants that otherwise would result from any stock dividend, extraordinary dividend of cash or other property, stock split, reverse stock split, combination of shares, recapitalization or other change in the capital structure of the Company, merger, consolidation, spin-off, reorganization, partial or complete liquidation, issuance of rights or warrants to purchase securities or any other corporate transaction or event having an effect similar to any of the foregoing (in each case taking into account any Dividend Equivalents credited to a Participant in connection with such transaction). The Board or Committee retains discretion under the Plan to provide for alternative treatment of fractional Deferred Shares, in order to promote efficient administration of the Plan.

10. Investment Risk of Notional Investments.

     The amount distributable in settlement of a Participant’s Account will equal the value of the Account (or distributable portion thereof) at the time of distribution. The value of an Account will vary over time based on the changes in value and investment returns of the notional investments in which the Account balance is deemed invested. The Company will not guarantee the value of the Account, and thus the amount distributable from the Account may be less than the amounts originally deferred. The Plan permits the Participant to freely choose the amount and timing of the deferrals, whether cash deferrals will be deemed invested in Deferred Shares or Deferred Cash, and the notional investments for portions of deferrals in the form of Deferred Cash. The Company, its subsidiaries and affiliates, and its and their directors, officers, stockholders, employees and agents, have not and will not advise a Participant with

Page 5 of 6

respect to whether or how much to defer under the Plan, whether to defer as Deferred Shares or Deferred Cash, and whether Deferred Cash should be deemed invested in any particular notional investment. A Participant will bear the full risk with respect to these decisions and with respect to any decline in the value of Deferred Shares or notional investments relating to Deferred Cash and any failure of these investments to appreciate at a rate deemed satisfactory by the Participant. The Participant will be solely responsible for determining the suitability of such notional investments. The Company recommends that each Participant consult with his or her own investment advisors regarding investment decisions with respect to the Account.

11. General Provisions.

     (a) Successors and Assigns. All obligations of the Company under the Plan shall be binding on any successor of the Company. The Plan shall be binding on all successors and assigns of a Participant, including without limitation, the estate of a Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors, or any designated beneficiary.

     (b) Amendments. The Plan may be amended from time to time by the Board or by the Committee thereof; provided, however, that the Committee may not amend the Plan without Board approval if such amendment would broaden eligibility, materially increase benefits to Participants or the cost of the Plan to the Company, or require shareholder approval under applicable law or stock exchange rules. The Committee may amend any agreement or otherwise take action that would affect a Participant’s Account or rights hereunder, provided that no such amendment or action may materially adversely affect a Participant’s rights without the consent of the Participant.

     (c) Nontransferability of Awards. Rights of a Participant relating to his or her Account shall not be transferable or assignable by the Participant otherwise than by will or the laws of descent and distribution, or in accordance with a beneficiary designation in effect at the time of the Participant’s death.

     (d) Nonexclusivity of the Plan. The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensatory arrangements as it may deem desirable.

     (e) No Right to Continued Service. The Plan shall not confer upon any Participant any right with respect to continuance as a director or otherwise in service to the Company, nor shall it interfere in any way with any right the Company would otherwise have to terminate a Participant’s service at any time.

     (f) Legal Compliance. The Company shall have no obligation to settle any Participant’s Account until all legal and contractual obligations of the Company relating to establishment of the Plan and such settlement shall have been complied with in full. In addition, the Company shall impose such restrictions on Shares delivered to a Participant hereunder and any other interest under the Plan constituting a security as it may deem advisable in order to comply with the Securities Act of 1933, as amended, the requirements of the New York Stock Exchange or any other stock exchange or automated quotation system upon which the Shares are then listed or quoted, any provision of the Company’s Certificate of Incorporation or By-laws, or any other law, regulation, or binding contract to which the Company is a party.

     (g) Choice of Law. This Plan and all related agreements and elections shall be construed in accordance with and governed by the laws of the State of Montana, without regard to principles of conflict of laws, and applicable federal law.

     (h) Effectiveness of the Plan and Plan Termination. The Plan shall become effective as of May 3, 2005. The Plan will terminate at such time as may be determined by the Board; provided, however, that upon termination of the Plan, amounts will remain distributable in accordance with the terms of the Plan as in effect immediately before the termination except to the extent otherwise permitted under Code Section 409A.

Page 6 of 6

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Francis R. McAllister, certify that;

1.	I have reviewed this Quarterly Report on Form 10-Q of Stillwater Mining Company (the “Company”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.	The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Company and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors:

a)	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

Dated: August 11, 2008	/s/ Francis R. McAllister
	Francis R. McAllister
	Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Gregory A. Wing, certify that;

1.	I have reviewed this Quarterly Report on Form 10-Q of Stillwater Mining Company (the “Company”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.	The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Company and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors:

a)	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

Dated: August 11, 2008	/s/ Gregory A. Wing
	Gregory A. Wing
	Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the following certifications were made to accompany the Form 10-Q.

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
OF STILLWATER MINING COMPANY
PURSUANT TO 18 U.S.C. § 1350

Pursuant to 18 U.S.C. § 1350 and in connection with the accompanying report on Form 10-Q for the period ended June 30, 2008 that is being filed concurrently with the Securities and Exchange Commission on the date hereof (the “Report”), I, Francis R. McAllister, Chief Executive Officer of Stillwater Mining Company (the “Company”) hereby certify that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 11, 2008

/s/ Francis R. McAllister  

Francis R. McAllister 

Chairman and Chief Executive Officer 

The above certification is furnished solely to accompany the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part of the Form 10-Q or as a separate disclosure statement.

EX-32.2

Exhibit 32.2

CERTIFICATION OF
CHIEF FINANCIAL OFFICER
OF STILLWATER MINING COMPANY
PURSUANT TO 18 U.S.C. § 1350

Pursuant to 18 U.S.C. § 1350 and in connection with the accompanying report on Form 10-Q for the period ended June 30, 2008 that is being filed concurrently with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory A. Wing, Vice President and Chief Financial Officer of Stillwater Mining Company (the “Company”) hereby certify that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 11, 2008

/s/ Gregory A. Wing  

Gregory A. Wing 

Vice President and Chief Financial Officer 

The above certification is furnished solely to accompany the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part of the Form 10-Q or as a separate disclosure statement.