Document:

<PAGE>   1
                                                                   EXHIBIT 10.17

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT, dated as of May 28, 2000, is by and between STILLWATER
MINING COMPANY, a corporation duly organized and existing under the laws of the
State of Delaware (the "Company"), and Robert M. Taylor ("Employee").

         WHEREAS, the Company desires to employ Employee and Employee desires to
be employed by the Company pursuant to the terms and conditions of this
Agreement; and

         WHEREAS, the Company has heretofore determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have the continued dedication of the Employee, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of the Company;
and

         WHEREAS, the Company has determined it is imperative to diminish the
inevitable distraction of the Employee by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control, to encourage the
Employee's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control and to provide the Employee
with compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits to be paid to the Employee are at
least as favorable as those in effect at the time of the Change of Control and
which are competitive with those of other corporations.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:

                                   ARTICLE 1
                                   EMPLOYMENT

         The Company hereby employs Employee, and Employee agrees to serve as
Vice President, East Boulder Operations for the Company.

                                   ARTICLE 2
                                      TERM

         The term of this Agreement shall be for a period commencing on the date
above and ending December 31, 2000, unless sooner terminated as hereinafter
provided. The Agreement shall thereafter continue in effect for subsequent one
(1) year terms, commencing January 1, unless altered or terminated as
hereinafter provided; provided, however, that following a Change of Control, as
defined in Section 5.6, the Employment Term shall continue for no less than one
(1) additional year. The period of Employee's employment hereunder, including
any extension or extensions pursuant to the foregoing sentence, from the date of
commencement until the date of expiration or termination of this Agreement, is
referred to hereinafter as the "Employment Term."

<PAGE>   2

                                    ARTICLE 3
                              DUTIES AND AUTHORITY

         Employee agrees, unless otherwise specifically authorized by the
Company, to devote substantially all of his business time and effort to his
duties for the profit, benefit and advantage of the business of the Company,
except that Employee may serve on the boards of directors of other business
corporations that have no business relationship with the Company and which do
not compete with the Company. In performing his duties hereunder, Employee shall
have the authority customarily held by others holding positions similar to those
assigned to Employee in similar businesses, subject to the general and customary
supervision of the Company's Board of Directors and Chief Executive Officer.

                                   ARTICLE 4
                                  COMPENSATION

     4.1 Base Salary. The Company agrees to pay Employee a base salary of One
Hundred Fifty Thousand Dollars ($150,000) per year, payable at the usual times
for the payment of the Company's executive employees, subject to adjustment as
provided herein. Employee's base salary shall be reviewed at least annually and
may be increased, but not decreased, consistent with general salary increases
for the Company's executive employees or as appropriate in light of the
performance of Employee and the Company. Notwithstanding anything herein to the
contrary, Employee's base salary may be reduced in the event of an
across-the-board salary reduction for all executive officers; provided, however,
that the percentage reduction of Employee's base salary shall not exceed the
highest percentage reduction in base salary of any other executive officer.

     4.2 Incentive Compensation. Employee shall participate in the Company's
incentive compensation plans for executive officers of the Company, as in effect
from time to time during the Employment Term. The Company shall adopt an annual
incentive program for executive officers of the Company that will provide for a
performance based cash bonus of an amount to be determined by the Board of
Directors of the Company (the "Annual Bonus"). Until changed by the Board of
Directors of the Company, the Annual Bonus shall be set at a target of 30% of
the Employee's base salary. At the discretion of the Board of Directors all or
part on any bonus earned may be paid in Restricted Stock.

     4.3 Employee Benefits. Employee shall be eligible to receive annual grants
of stock options at the discretion of the Board of Directors. Employee shall be
eligible to participate in such other of the Company's employee benefit plans
and to receive such benefits for which his level of employment makes him
eligible, in accordance with the Company's policies as in effect from time to
time during the Employment Term; provided, however, that Employee shall be
entitled to four weeks of vacation during the initial term of this Agreement and
during the term of each extension hereof. The Employee shall be eligible to use
a Company vehicle during the term of this Agreement in accordance with Company
policy. The Company shall pay the Employee's reasonable moving expenses incurred
in conjunction with his move to Montana in accordance with Company policy.
Employee acknowledges that he has received a copy of the foregoing policies.

                                       2

<PAGE>   3

                                   ARTICLE 5
                                  TERMINATION

         5.1 Termination by the Company Without Cause; Termination by Employee
for Good Reason.

               (a) The Company shall have the right to terminate this Agreement
         without Cause (as defined below) upon thirty (30) days' notice to
         Employee. If Employee's employment hereunder is terminated by the
         Company without Cause or by Employee for "Good Reason" (as defined
         below) (other than a termination involving a Change of Control or by
         reason of death or disability), the Company shall pay Employee at the
         time of such termination in a lump sum a cash amount equal to 100
         percent of his annual base salary in effect immediately preceding such
         termination.

               (b) For purposes of this Agreement, "Good Reason" shall mean:

                    (i) A material reduction in Employee's responsibilities,
               authorities, or duties;

                    (ii) Employee's job is eliminated other than by reason of
               promotion or termination for Cause;

                    (iii) The Company fails to pay Employee any amount otherwise
               vested and due hereunder or under any plan or policy of the
               Company, which failure is not cured within five (5) business days
               of receipt by the Company of written notice from Employee which
               describes in reasonable detail the amount which is due;

                    (iv) A material reduction in Employee's base salary except
               in the event of an across-the-board salary reduction for all
               executive officers;

                    (v) A material reduction in Employee's aggregate level of
               benefits under the Company's pension, life insurance, medical,
               health and accident, disability, deferred compensation or savings
               or similar plans, except in the event of an across-the-board
               reduction in such benefits for all executive officers;

                    (vi) A material reduction in Employee's reasonable
               opportunity to earn incentive compensation under any plan in
               which Employee is a participant, except in the event of an
               across-the-board reduction in such benefits for all executive
               officers;

                    (vii) The Company and its successor(s) (as described in
               subparagraph (viii) below) shall discontinue the business of the
               Company; or

                    (viii) The failure of the Company to obtain an agreement to
               expressly assume this Agreement from any successor to the Company
               (whether such succession is direct or indirect by purchase,
               merger, consolidation or otherwise, to

                                       3

<PAGE>   4

               substantially all of the business and/or assets of the Company or
               a controlling portion of the Company's stock).

               Solely for the purposes of Section 5.6, any good faith
determination of Good Reason made by the Employee shall be conclusive.

         5.2 Termination by the Company for Cause; Voluntary Termination by
Employee.

               (a) Employee's employment hereunder may be terminated by the
         Company for "Cause." For purposes of Section 5.1, "Cause" shall mean
         (i) Employee's willful and continued failure substantially to perform
         his duties hereunder for a period of fifteen (15) days after written
         notice to Employee by the Company of each such failure; (ii) Employee's
         dishonesty in the performance of his duties hereunder; or (iii)
         Employee's conviction of a felony under the laws of the United States
         or any state thereof.

               (b) Employee shall have the right to voluntarily terminate this
         Agreement upon thirty (30) days' notice to the Company.

               (c) If Employee is terminated for Cause, or if Employee
         voluntarily terminates employment hereunder other than for Good Reason,
         he shall be entitled to receive his base salary through the date of
         termination. All other benefits, if any, payable to Employee following
         such termination of Employee's employment shall be determined in
         accordance with the plans, policies and practices of the Company.

         5.3 Notice of Termination. Any termination by the Company or by the
Employee shall be communicated by Notice of Termination to the other party
hereto given in accordance with Article 18 of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Termination Date
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 30 days after the giving
of such notice). The failure by the Employee or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Employee or the Company,
respectively, hereunder or preclude the Employee or the Company, respectively,
from asserting such fact or circumstance in enforcing the Employee's or the
Company's rights hereunder.

         5.4 Termination Date. "Termination Date" means the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be.

         5.5 Termination by Death or Disability. Upon termination of Employee's
employment due to death of Employee, Employee shall be entitled to his base
salary at the rate in effect at the time of Employee's death through the end of
the month in which his death occurs. Employee's employment hereunder may be
terminated by the Company if Employee becomes physically or mentally
incapacitated and is therefore unable for a period of one hundred eighty (180)
consecutive days to perform his duties (such incapacity is hereinafter referred
to as "Disability"). Upon any such termination for Disability, Employee shall be
entitled to receive

                                       4

<PAGE>   5

payment of disability benefits in lieu of salary under the Company's Employee
benefit plans as then in effect.

         5.6 Termination Following a Change of Control; Benefits.

               (a) In the event there is a Termination Following a Change of
         Control, this Agreement shall terminate and Employee shall be entitled
         to the following severance benefits:

                    (i) 150 percent of Employee's annual base salary at the rate
               in effect immediately prior to the Change of Control or on the
               Termination Date, whichever is higher, payable in a lump sum
               within thirty (30) days after the Termination Date;

                    (ii) 150 percent of the Employee's target bonus in effect
               immediately prior to the Change of Control (or on the Termination
               Date, whichever is higher).

                    (iii) The Company shall timely pay or provide to Employee
               any other amounts or benefits required to be paid or provided or
               which Employee is eligible to receive under any plan, program,
               policy, practice, contract or agreement of the Company (other
               than customary severance pay, office facilities and equity
               incentive program participation) to the same extent that Employee
               would be eligible therefor if he were employed on a full-time
               basis by the Company in the capacity provided for herein for a
               period of 18 months after the Termination Date, including
               receiving the full benefit of 18 months of employment at the
               income levels provided for herein for purposes of any retirement
               plan utilizing years of service as a criteria in the provision of
               benefits (such other amounts and benefits shall be hereinafter
               referred to as the "Other Benefits"); provided, however, that (i)
               for the purposes of the Company's equity incentive programs,
               Employee's employment shall be deemed terminated as of the
               Termination Date hereunder; and (ii) to the extent Employee,
               following the Termination Date, becomes employed by another
               employer and becomes entitled to receive health insurance
               benefits from such employer, the Company's obligation to provide
               such health insurance benefits hereunder shall be decreased;

                    (iv) All accrued compensation (including base salary and
               Highest Annual Bonus, each prorated through the Termination Date)
               and unreimbursed expenses through the Termination Date. Such
               amounts shall be paid to Employee in a lump sum in cash within
               thirty (30) days after the Termination Date.

                    (v) The Employee shall be free to accept other employment
               following such Termination, and, except as provided herein, there
               shall be no offset of any employment compensation earned by the
               Employee in such other employment during such period against
               payments due Employee hereunder, and there shall be no offset in
               any compensation received from such other employment against the
               continued salary set forth above.

               (b) The following terms shall have the meanings set forth below:

                                       5

<PAGE>   6

                    (i) A "Change in Control" of the Company shall mean and
               shall be deemed to have occurred if any of the following events
               shall have occurred:

                         (a) Any person (as defined in Sections 13(d) and 14(d)
                    of the Securities Exchange Act of 1934, as amended (the
                    "Exchange Act")) is or becomes the beneficial owner (as
                    defined in Rule 13d-3 of the Exchange Act), directly or
                    indirectly, of securities of the Company (not including in
                    the securities beneficially owned by such person any
                    securities acquired directly from the Company or its
                    affiliates) representing 30% or more of the combined voting
                    power of the Company's then outstanding securities,
                    excluding any person who becomes such a beneficial owner in
                    connection with a transaction described in clause (i) of
                    paragraph (c) below; or

                         (b) the following individuals cease for any reason to
                    constitute a majority of the number of directors then
                    serving: Individuals who, on the date hereof, constitute the
                    Board and any new director (other than a director whose
                    initial assumption of office is in connection with an actual
                    or threatened election contest, including but not limited to
                    a consent solicitation, relating to the election of
                    directors of the Company) whose appointment or election by
                    the Board or nomination for election by the Company's
                    stockholders was approved or recommended by a vote of at
                    least two-thirds (2/3) of the directors then still in office
                    who either were directors on the date hereof or whose
                    appointment, election or nomination for election was
                    previously so approved or recommended; or

                         (c) there is consummated a merger or consolidation of
                    the Company or any direct or indirect subsidiary of the
                    Company with any other corporation, other than (i) a merger
                    or consolidation which would result in the voting securities
                    of the Company outstanding immediately prior to such merger
                    or consolidation continuing to represent (either by
                    remaining outstanding or by being converted into voting
                    securities of the surviving entity or any parent thereof) at
                    least 55% of the combined voting power of the securities of
                    the Company or such surviving entity or any parent thereof
                    outstanding immediately after such merger or consolidation,
                    or (ii) a merger or consolidation effected to implement a
                    recapitalization of the Company (or similar transaction) in
                    which no person is or becomes the beneficial owner, directly
                    or indirectly, of securities of the Company (not including
                    in the securities beneficially owned by such person any
                    securities acquired directly from the Company or its
                    affiliates) representing 30% or more of the combined voting
                    power of the Company's then outstanding securities; or

                         (d) the stockholders of the Company approve a plan of
                    complete liquidation or dissolution of the Company or there
                    is consummated an agreement for the sale or disposition by
                    the Company of all or substantially all of the Company's
                    assets, other than a sale or disposition by the Company of
                    all or substantially all of the Company's assets to an

                                       6

<PAGE>   7

                    entity, at least 60% of the combined voting power of the
                    voting securities of which are owned by stockholders of the
                    Company in substantially the same proportions as their
                    ownership of the Company immediately prior to such sale.

               Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the record holders
of the common stock of the Company immediately prior to such transaction or
series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the
Company immediately following such transaction or series of transactions.

                    (ii) "Termination Following a Change of Control" shall mean
               a Termination of the Employee without Cause by the Company in
               connection with or within two years following a Change of Control
               or a termination by the Employee for Good Reason of the
               Employee's employment with the Company within two years following
               a Change of Control.

                    (iii) For the purposes of this Section 5.6 only, "Cause"
               shall mean:

                         (a) Misfeasance or nonfeasance by the Employee in the
                    performance of his duties under this Agreement intended to
                    injure the Company which has a material adverse effect on
                    the Company's business or operations, if such failure is not
                    remedied or reasonable steps to effect such remedy are not
                    commenced within thirty (30) days after written notice of
                    such violation; or

                         (b) Employee's conviction of a felony or any crime
                    involving moral turpitude.

     5.7 Certain Additional Provisions. Anything in this Agreement to the
contrary notwithstanding, any payment or distribution by the Company to or for
the benefit of the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") shall be limited to the maximum amount that can be payable without
such Payment being subject to the excise tax imposed by Section 4999 of the Code
on Employee. The Company agrees to comply, to the extent feasible, with the
Employee's preferences concerning the components of any Payment required to be
limited under the previous sentence.

                                   ARTICLE 6
                                    INSURANCE

         Employee agrees that the Company may, from time to time, apply for and
take out in its own name and at its own expense, life, health, accident, or
other insurance upon Employee that the Company may deem necessary or advisable
to protect its interests hereunder; and Employee agrees to submit to any medical
or other examination necessary for such purposes and to assist and cooperate
with the Company in preparing such insurance; and Employee agrees that he shall
have no right, title, or interest in or to such insurance.

                                       6

<PAGE>   8

                                    ARTICLE 7
                             FACILITIES AND EXPENSES

               The Company shall make available to Employee such office space,
secretarial services, office equipment and furnishings as are suitable and
appropriate to Employee's title and duties. The Company shall promptly reimburse
Employee for all reasonable expenses incurred in the performance of his duties
hereunder, including without limitation, expenses for entertainment, travel,
management seminars and use of the telephone, subject to the Company's
reasonable requirements with respect to the reporting and documentation of such
expenses.

                                   ARTICLE 8
                                 NONCOMPETITION

         8.1 Necessity of Covenant. The Company and Employee acknowledge that:

               (a) The Company's business is highly competitive;

               (b) The Company maintains confidential information and trade
         secrets as described in Article 9, all of which are zealously protected
         and kept secret by the Company;

               (c) In the course of his employment, Employee will acquire
         certain of the information described in Article 9 and the Company would
         be adversely affected if such information subsequently, and in the
         event of the termination of Employee's employment, is used for the
         purposes of competing with the Company;

               (d) The Company transacts business throughout the world; and

               (e) For these reasons, both the Company and Employee further
         acknowledge and agree that the restrictions contained herein are
         reasonable and necessary for the protection of their respective
         legitimate interests and that any violation of these restrictions would
         cause substantial injury to the Company.

         8.2 Covenant Not to Compete. Employee agrees that from and after the
date hereof during the Employment Term and for a period of one (1) year after
the end of the Employment Term, he will not, without the express written
permission of the Company, which may be given or withheld in the Company's sole
discretion, directly or indirectly own, manage, operate, control, lend money to,
endorse the obligations of, or participate or be connected as an officer,
director, 5% or more stockholder of a publicly-held company, stockholder of a
closely-held company, employee, partner, or otherwise, with any enterprise or
individual engaged in a business which is competitive with the Platinum Group
Metals business conducted by the Company. It is understood and acknowledged by
both parties that, inasmuch as the Company transacts business worldwide, this
covenant not to compete shall be enforced throughout the United States and in
any other country in which the Company is doing business as of the date of
Employee's termination of employment.

         8.3 Disclosure of Outside Activities. Employee, during the term of his
employment by the Company, shall at all times keep the Company informed of any
outside business activity

                                       8

<PAGE>   9

and employment, and shall not engage in any outside business activity or
employment which may be in conflict with the Company's interests.

         8.4 Survival. The terms of this Article 8 shall survive the expiration
or termination of this Agreement for any reason.

                                   ARTICLE 9
                   CONFIDENTIAL INFORMATION AND TRADE SECRETS

         9.1 Nondisclosure of Confidential Information. Employee has acquired
and will acquire certain "Confidential Information" of the Company.
"Confidential Information" shall mean any information that is not generally
known, including trade secrets, outside the Company and that is proprietary to
the Company, relating to any phase of the Company's existing or reasonably
foreseeable business which is disclosed to Employee by the Company including
information conceived, discovered or developed by Employee. Confidential
Information includes, but shall not be limited to, business plans, financial
statements and projections, operating forms (including contracts) and
procedures, payroll and personnel records, marketing materials and plans,
proposals, software codes and computer programs, project lists, project files,
price information and cost information and any other document or information
that is designated by the Company as "Confidential." The term "trade secret"
shall be defined as follows:

               A trade secret may consist of any formula, pattern, device or
               compilation of information which is used in one's business, and
               which provides to the holder an opportunity to obtain an
               advantage over competitors who do not know or use it.

Accordingly, employee agrees that he shall not, during the Employment Term and
for three (3) years thereafter, use for his own benefit such Confidential
Information or trade secrets acquired during the term of his employment by the
Company. Further, during the Employment Term and for three (3) years thereafter,
Employee shall not, without the written consent of the Board of Directors of the
Company or a person duly authorized thereby, which consent may be given or
withheld in the Company's sole discretion, disclose to any person, other than an
employee of the Company or a person to whom disclosure is reasonably necessary
or appropriate in connection with the performance by Employee of his duties, any
Confidential Information or trade secrets obtained by him while in the employ of
the Company.

         9.2 Return of Confidential Information. Upon termination of employment,
Employee agrees to deliver to the Company all materials that include
Confidential Information or trade secrets, and all other materials of a
confidential nature which belong to or relate to the business of the Company.

         9.3 Exceptions. The restrictions and obligations in Section 9.1 shall
not apply with respect to any Confidential Information which: (i) is or becomes
generally available to the public through any means other than a breach by
Employee of his obligations under this Agreement; (ii) is disclosed to Employee
without obligation of confidentiality by a third party who has the right to make
such disclosure; (iii) is developed independently by Employee without use of or
benefit from the Confidential Information; (iv) was in possession of Employee
without obligations of

                                       9

<PAGE>   10

confidentiality prior to receipt under this Agreement; or (v) is required to be
disclosed to enforce rights under this Agreement.

     9.4 Survival. The terms of this Article 9 shall survive the expiration or
termination of this Agreement for any reason.

                                   ARTICLE 10
                              JUDICIAL CONSTRUCTION

         Employee believes and acknowledges that the provisions contained in
this Agreement, including the covenants contained in Articles 8 and 9 of this
Agreement, are fair and reasonable. Nonetheless, it is agreed that if a court
finds any of these provisions to be invalid in whole or in part under the laws
of any state, such finding shall not invalidate the covenants, nor the Agreement
in its entirety, but rather the covenants shall be construed and/or blue-lined,
reformed or rewritten by the court as if the most restrictive covenants
permissible under applicable law were contained herein.

                                   ARTICLE 11
                           RIGHT TO INJUNCTIVE RELIEF

         Employee acknowledges that a breach by Employee of any of the terms of
Articles 8 or 9 of this Agreement will render irreparable harm to the Company,
and that in the event of such breach the Company shall therefore be entitled to
any and all equitable relief, including, but not limited to, injunctive relief,
and to any other remedy that may be available under any applicable law or
agreement between the parties.

                                   ARTICLE 12
                         CESSATION OF CORPORATE BUSINESS

         This Agreement shall cease and terminate if the Company shall
discontinue its business, and all rights and liabilities hereunder shall cease,
except as provided in Section 5.6 and Article 13.

                                   ARTICLE 13
                                   ASSIGNMENT

     13.1 Permitted Assignment. Subject to the provisions of Section 5.6, the
Company shall have the right to assign this contract to its successors or
assigns, and all covenants or agreements hereunder shall inure to the benefit of
and be enforceable by or against its successors or assigns.

     13.2 Successors and Assigns. The terms "successors" and "assigns" shall
mean any person or entity which buys all or substantially all of the Company's
assets, or a controlling portion of its stock, or with which it merges or
consolidates.

                                       10

<PAGE>   11

                                   ARTICLE 14
                    FAILURE TO DEMAND, PERFORMANCE AND WAIVER

         The failure by either party to demand strict performance and compliance
with any part of this Agreement during the Employment Term shall not be deemed
to be a waiver of the rights of such party under this Agreement or by operation
of law. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any subsequent
breach thereof.

                                   ARTICLE 15
                                ENTIRE AGREEMENT

         The Company and Employee acknowledge that this Agreement contains the
full and complete agreement between and among the parties, that there are no
oral or implied agreements or other modifications not specifically set forth
herein, and that this Agreement supersedes any prior agreements or
understandings, if any, between the Company and Employee, whether written or
oral. The parties further agree that no modifications of this Agreement may be
made except by means of a written agreement or memorandum signed by the parties.

                                   ARTICLE 16
                                  GOVERNING LAW

         The parties hereby agree that this Agreement shall be construed in
accordance with the laws of the State of Colorado, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
Colorado or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Colorado.

                                   ARTICLE 17
                                 ATTORNEYS' FEES

         If either party shall commence any action or proceeding against the
other that arises out of the provisions hereof, or to recover damages as the
result of the alleged breach of any of the provisions hereof, the prevailing
party therein shall be entitled to recover all reasonable costs incurred in
connection therewith, including reasonable attorneys' fees.

                                   ARTICLE 18
                                     NOTICE

         All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

If to the Employee:
Robert M. Taylor
PO Box 1296
Big Timber, MT 59011

                                       11

<PAGE>   12

----------

If to the Company:
Vice President, Human Resources
Stillwater Mining Company
536 East Pike Ave.
PO Box 1330
Columbus, MT 59019

                                   ARTICLE 19
                                  COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one instrument.

                                       12

<PAGE>   13

         IN WITNESS WHEREOF, the Company has hereunto signed its name and
Employee hereunder has signed his name, all as of the day and year first-above
written.

                                       STILLWATER MINING COMPANY

                                       By: /s/ William E. Nettles
                                           --------------------------
                                       Name: William E. Nettles
                                       Title: Chief Executive Officer

                                       EMPLOYEE

                                       /s/ Robert M. Taylor
                                       ------------------------------
                                       Robert M. Taylor<PAGE>   1
                                                                   EXHIBIT 10.18

                            STILLWATER MINING COMPANY

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement"), dated as of February 12,
2001, is made by and between Stillwater Mining Company, a Delaware corporation
(the "Company"), and Francis McAllister ("Executive") (each individually a
"Party" and collectively, the "Parties").

                                 R E C I T A L S

         WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company pursuant to the terms and conditions of this
Agreement.

         NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the Parties
agree as follows:

         1. Employment; Duties and Scope.

              (a) Position. Executive shall serve as the Company's Chief
Executive Officer and Chairman of its Board of Directors (the "Board"). For so
long as he is serving on the Board, Executive agrees to serve as a member of any
committee of the Board to which he is elected. In any and all such capacities,
Executive shall report only to the Board. Executive shall have and perform such
duties, responsibilities, and authorities as are customary for the chairman and
chief executive officer of corporations of similar size and businesses as the
Company as they may exist from time to time and as are consistent with such
positions and status.

              (b) Duties; Obligations to the Company. During the Employment
Term, Executive shall devote his full business efforts and time to the Company
and the Company will be entitled to all of the benefits and profits arising from
or incident to all such work services and advice. Executive shall be responsible
for performing the business and professional services typically performed by the
chief executive officer of any company, or as may reasonably assigned to him by
the Board, subject to the general and customary supervision of the Board.
Executive agrees not to render commercial or professional services of any nature
to any person or organization, whether or not for compensation, during the
Employment Term without advance written approval of the Board, and Executive
will not directly or indirectly engage or participate during the Employment Term
in any business that is competitive in any manner with the Company's business;
provided, however, that this shall not preclude Executive from owning up to two
percent (2%) of the outstanding equity securities of a corporation whose stock
is listed on a national stock exchange or the NASDAQ.

              (c) No Conflicting Obligations. Executive represents and warrants
to the Company that he is under no obligation or commitment, whether contractual
or otherwise, that is inconsistent with his obligations under this Agreement.
Executive represents and warrants that he will not use or disclose, in
connection with his employment by the Company, any trade secrets or other
proprietary information or intellectual property in which Executive or any other
person has any

                                      -1-
<PAGE>   2

right, title, or interest and that his employment by the Company as contemplated
by this Agreement will not infringe or violate the rights of any other person or
entity. Executive represents and warrants to the Company that he has returned
all property and confidential information belonging to any prior employers.

         2. Employment Term.

              (a) The Initial Period of Executive's employment pursuant to this
Agreement shall begin February 12, 2001 (the "Commencement Date") and shall end
on February 11, 2004 ("Initial Period"), unless otherwise terminated by either
Party prior to the scheduled termination date as provided in Section 9 of this
Agreement.

              (b) The Initial Period shall automatically be extended for
successive one year periods ("Renewal Period"), if not already otherwise
terminated as provided in this Agreement, unless either Party notifies the other
no later than six (6) months prior to the scheduled termination such Initial
Period or Renewal Period, in which case Executive's employment shall terminate
upon the scheduled termination date of the applicable Initial Period or Renewal
Period.

              (c) In the event that this Agreement is not renewed because
Executive has given the 6-month notice prescribed in Section 2(b) on or before
the expiration of the Initial Period or any Renewal Period, such non-renewal
shall be treated as a Termination for Cause and Executive shall have the same
entitlements as provided in Section 10(b)(iii) below.

              (d) The entire term of Executive's employment pursuant to this
Agreement from the Commencement Date until the date of expiration or termination
of Executive's employment pursuant to this Agreement shall be referred to herein
as the "Employment Term."

         3. Board Membership. Executive currently serves as Chairman of the
Board. Executive's service on the Board at all times shall be without additional
compensation.

         4. Cash Compensation.

              (a) Base Salary. During the Employment Term, the Company shall pay
the Executive as compensation for his services a semi-monthly base salary at the
annualized rate of three hundred seventy-five thousand dollars ($375,000), less
applicable deductions and withholdings. Such base salary shall be paid
semi-monthly in accordance with normal Company payroll practices and procedures.
Executive's base salary shall be reviewed for increase no less than every twelve
(12) months and shall be subject to decrease only in the event (and only to the
extent) of an across-the-board reduction for other senior management employees
of the Company. (The annualized base salary to be paid to Executive pursuant to
this Section 4(a), together with any subsequent modifications thereto, shall be
referred to in this Agreement as the "Base Salary.")

              (b) Bonuses. Executive shall be eligible to earn an annual target
bonus equal to 50% of his Base Salary (the "Target Bonus") based upon criteria
determined by the Board for each year during the Employment Term, starting with
the year commencing January 1, 2001 (except that for the year 2001, the Target
Bonus amount shall be $165,000, which is a pro rata portion of the

                                      -2-
<PAGE>   3

Target Bonus for such period based on the Commencement Date). Although 50% of
the Base Salary is the Target Bonus, the Board in its discretion may pay
Executive a bonus equal to as low as 0% of his Base Salary or as high as 100%,
depending on the level of goal achievement. For 2001, the Company shall provide
Executive with written notice of that period's performance goals no later than
April 31, 2001; thereafter, written notice of the performance goals shall be
provided by February 28 of the applicable year.

         5. Employee Benefits.

              (a) During the Employment Term, Executive shall be eligible to
participate in such other of the Company's employee benefit plans and to receive
such benefits for which his position makes him eligible, including use of a
Company vehicle, in accordance with the Company's plans and policies as in
effect from time to time during the Employment Term, subject in each case to the
generally applicable terms and conditions of the plan or policy in question and
to the determinations of any person or committee administering such plan or
policy

              (b) Executive shall be entitled to four (4) weeks of vacation per
year during the Employment Term.

         6. Business Expense Reimbursements. During the Employment Term,
Executive shall be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with the performance of
his duties hereunder. The Company shall reimburse Executive for such expenses
upon presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company's generally applicable
policies.

         7. Relocation Costs. The Company will reimburse Executive for costs
related to his relocation to Montana, in accordance with Company's Relocation
Policy.

         8. Equity.

              (a) Subject to Board approval, Executive shall be granted an
option to purchase 75,000 shares of the Company's Common Stock (the "Option
Shares"), at the aggregate Fair Market Value of the Option Shares on the date of
grant, pursuant to the Company's 1998 Equity Incentive Plan. "Fair Market Value"
means as of any given date, the closing sale price per share of the Company's
common stock reported on a consolidated basis for securities listed on the
principal stock exchange or market on which the common stock is traded on the
date as of which such value is being determined or, if there is no sale on that
day, then on the last previous day on which a sale was reported." The grant and
exercise of the Option Shares shall be subject to the terms of the notice of
grant of the Option and the Company's standard form of Non-Qualified Stock
Option Agreement ("Option Agreement"), and shall be contingent upon Executive
executing such Option Agreement and, for exercise, the Company's standard form
of stock purchase agreement. The Option Shares shall have a ten (10) year term
and shall vest in three (3) equal installments on each of the first three (3)
anniversaries of the date of this Agreement," as specified in the Option
Agreement. The Option Shares may only be exercised by Executive to the extent
that they have vested.

                                      -3-
<PAGE>   4

              (b) Executive also shall be eligible to participate in annual
option grants, if any, by the Company to its executives. Whether any option is
granted and if so, the number of shares which Executive may be granted the
option to purchase, shall be entirely within the discretion of the Board and/or
its Compensation Committee.

         9. Termination of Employment. Notwithstanding the fixed term of
Executive's employment under this Agreement, the Company and Executive each may
terminate Executive's employment at any time for any or no reason with or
without cause (as defined in Section 10(b)(ii)), upon written notice to the
other Party. Executive's employment will terminate automatically in the event of
his death. Any payments and/or benefits due Executive from the Company upon
and/or after termination are specified in Section 10.

         10. Termination Payments and Benefits

              (a) Payments and Reimbursements Upon Any Termination of
Employment. In the event that Executive's employment terminates for any reason,
the Company shall pay Executive all Base Salary, any accrued but unpaid bonuses
for the period prior to the year of termination of employment, and all accrued
but unpaid vacation earned through the date of termination of employment, each
less applicable withholdings and deductions, and any reimbursement of expenses
owed pursuant to this Agreement within ten (10) days of the date of termination
("Termination Date"). Only the amounts stated in this Section 10(a), and no
severance payments or benefits, shall be due to Executive upon a termination of
his employment on the scheduled termination date of the Initial Period or
Renewal Period.

              (b) Effect of Termination for Cause.

                  (i) in the event that the Company terminates Executive's
         employment for Cause or Executive terminates employment (including any
         non-renewal) without Good Reason (as defined below):

                      (A) Executive shall receive all payments provided in
              Section 10(a) above;

                      (B) Executive's outstanding vested Option Shares shall be
              exercisable in accordance with the terms and time limits of the
              applicable Option Agreement; and

                      (C) Any unvested Option Shares shall be forfeited on the
              Termination Date

                  (ii) Definition of Termination for Cause. For the purposes of
         this Agreement, a termination of Executive's employment for "Cause"
         means a termination of Executive's employment by the Company based upon
         a determination that any one or more of the following has occurred: (A)
         misfeasance or nonfeasance of duty by Executive that which was intended
         to or does injure the reputation of Company or its business or
         relationships; (B) conviction of, or plea of guilty or nolo contend ere
         by Executive to, any felony or crime involving moral turpitude; (C)
         Executive's willful and continued failure to

                                      -4-
<PAGE>   5

         substantially perform his duties under this Agreement (except by reason
         of physical or mental incapacity) after written notice from the Board
         and 15 days to cure such failure; (D) dishonesty by Executive in
         performance of his duties under this Agreement; or (E) willful and
         material breach of the restrictive covenants contained in this
         Agreement; provided however, that definitions (C) through (E) shall not
         provide Cause for termination if such termination occurs within two (2)
         years following a Change in Control. A termination of Executive's
         employment by the Company for any other reason will be a termination
         without Cause.

              (c) Effect of Termination Without Cause or Resignation for Good
Reason Other Than Within Two Years Following A Change in Control.

                  (i) In the event that, at any time other than within two "(2)"
         years following a Change in Control, the Company terminates Executive's
         employment without Cause or Executive resigns his employment for Good
         Reason, then, contingent upon Executive signing and not revoking the
         Severance Agreement and Release attached hereto as Exhibit A, and not
         breaching the provisions of Sections 15 and 16 hereof, the Company
         shall provide Executive with the following:

                      (A) all payments stated in Section 10 (a) above;

                      (B) a pro rata portion of Executive's Target Bonus, less
              applicable withholdings and deductions, which pro rata portion
              shall be determined by multiplying the Target Bonus by a fraction,
              the numerator of which is the number of days elapsed in the
              calendar year of the date of termination and the denominator of
              which is 365 (except for 2001, when the numerator equals the
              number of days elapsed since February 12 and the denominator is
              322) payable within 10 days of the Termination Date;

                      (C) continued semi-monthly payments at Executive's Base
              Salary rate, less applicable withholdings and deductions, for a
              period of twenty-four (24) months;

                      (D) continuation of Executive's medical, health, and life
              insurance (as in effect immediately prior to the date of
              termination) for a period of twenty-four (24) months, or if not
              permissible or commercially reasonable to continue the same
              coverage of Executive under one or more of the insurance policies
              or plans, continued payment for a period of twenty-four (24)
              months of the after-tax cost to the Company of providing such
              coverage to Executive (as measured immediately prior to the date
              of termination); provided however, that such benefits or payments
              shall cease upon the date on which Executive is eligible for
              similar aggregate coverage from a subsequent employer; and

                      (E) the applicable accelerated vesting if any of the
              Option Shares, pursuant to the applicable Option Agreement.

                                      -5-
<PAGE>   6

                  (ii) Relevant Definitions.

                      (A) Change in Control. For the purposes of this Agreement,
              a "Change in Control" shall mean and shall be deemed to have
              occurred if any of the following events shall have occurred:

                          (1) Any "person" (as such term is used in Sections
                  13(d) and 14(d) of the Securities Exchange Act of 1934, as
                  amended (the "Exchange Act") becomes the "beneficial owner"
                  (as defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of the Company (not including in the
                  securities beneficially owned by such person any securities
                  acquired directly from the Company or its affiliates)
                  representing thirty percent (30%) or more of the combined
                  voting power of the Company's then outstanding voting
                  securities, excluding any person who becomes such a beneficial
                  owner in connection with a transaction described in clause (i)
                  of subsection (3) below; or

                          (2) A change in the composition of the Board occurring
                  within a two-year period, as a result of which fewer than a
                  majority of the directors are Incumbent Directors. "Incumbent
                  Directors" shall mean directors who either (i) are directors
                  of the Company as of the date hereof, or (ii) are elected, or
                  nominated for election, to the Board with the affirmative
                  votes of at least two-thirds (2/3) of the Incumbent Directors
                  at the time of such election or nomination (but shall not
                  include an individual whose election or nomination is in
                  connection with an actual or threatened election or proxy
                  contest, including but not limited to a consent solicitation
                  relating to the election of directors to the Company); or

                          (3) The consummation of a merger or consolidation of
                  the Company or any direct or indirect subsidiary of the
                  Company with any other corporation, other than (i) a merger or
                  consolidation which would result in the voting securities of
                  the Company outstanding immediately prior thereto continuing
                  to represent (either by remaining outstanding or by being
                  converted into voting securities of the surviving entity or
                  any parent thereof) at least fifty-five percent (55%) of the
                  combined voting power of the voting securities of the Company
                  or such surviving entity or any parent thereof outstanding
                  immediately after such merger or consolidation, or (ii) a
                  merger or consolidation effected to implement a
                  recapitalization of the Company (or similar transaction) in
                  which no person is or becomes the beneficial owner, directly
                  or indirectly, of securities of the Company (not including in
                  the securities beneficially owned by such person any
                  securities acquired directly from the Company or its
                  affiliates) representing thirty percent (30%) or more of the
                  combined voting power of the Company's then outstanding
                  securities; or

                                      -6-
<PAGE>   7

                          (4) The consummation of a stockholder-approved sale,
                  transfer, or other disposition by the Company of all or
                  substantially all of the Company's assets in complete
                  liquidation or dissolution of the Company, other than a sale,
                  transfer, or other disposition by the Company of all or
                  substantially all of the Company's assets to an entity, at
                  least sixty percent (60%) of the combined voting power of the
                  voting securities of which are owned by stockholders of the
                  Company in substantially the same proportions as their
                  ownership of the Company immediately prior to such sale.

                          (5) Notwithstanding the foregoing subsections (1)
                  through-(4), a Change in Control shall not be deemed to have
                  occurred by virtue of the consummation of any transaction or
                  series of integrated transactions immediately following which
                  the record holders of the common stock of the Company
                  immediately prior to such transaction or series of
                  transactions continue to have substantially the same
                  proportionate ownership in an entity which owns all or
                  substantially all of the assets of the Company immediately
                  following such transaction or series of transactions.

                      (B) Resignation for Good Reason. For the purposes of this
              Agreement, a resignation for "Good Reason" means a termination of
              Executive's employment at his initiative following the occurrence,
              without Executive's written consent, of one or more of the
              following events (except as a result of a prior termination):

                          (1) a material diminution or change, adverse to
                  Executive, in Executive's positions, titles, or offices as set
                  forth in Section 1, status, rank, nature of responsibilities,
                  or authority within the Company, or a removal of Executive
                  from or any failure to elect or re-elect or, as the case may
                  be, nominate Executive to any such positions or offices,
                  including as a member of the Board;

                          (2) the assignment to Executive of any duties that is
                  inconsistent with his status as the Company's Chairman and
                  Chief Executive Officer or other positions held hereunder;

                          (3) a decrease in Executive's annual Base Salary or
                  Target Bonus award opportunity below 50% of Base Salary (other
                  than an across-the-board percentage reduction for senior
                  management executives);

                          (4) a material reduction in the aggregate benefits for
                  which Executive is eligible under the Company's benefit plans
                  (other than an across-the-board reduction in the aggregate
                  benefits for senior management executives);

                          (5) any other failure by the Company to perform any
                  material obligation under, or breach by the Company of any
                  material

                                      -7-
<PAGE>   8

                  provision of, this Agreement that is not cured within 10
                  business days of receipt of written notice from Executive;

                          (6) a relocation of the Company's corporate offices
                  outside of the State of Montana, or

                          (7) any failure to secure the agreement of any
                  successor corporation or other entity to the Company to fully
                  assume the Company's obligations under this Agreement.

              (d) Effect of Termination Without Cause or Resignation for Good
Reason Within Two (2) Years Following A Change in Control. If, upon or within
two (2) years following a Change in Control, Executive resigns his employment
with the Company for Good Reason or the Company (or its successor) terminates
Executive's employment without Cause, then, in lieu of the severance payments
and benefits stated in Section 10(c) above, and contingent upon Executive
signing and not revoking the Severance Agreement and Release attached hereto as
Exhibit A, and not materially breaching the provisions of Sections 15 and 16
hereof, the Company shall provide Executive with the following:

                  (i) all payments stated in Section 10(a) above;

                  (ii) a lump sum, payable within thirty (30) days of the
         Termination Date, equal to three (3) times the sum of (A) Executive's
         Base Salary (or if a reduction of Base Salary is the reason for
         Executive's termination for Good Reason, the Base Salary in effect
         immediately prior to such reduction) plus (B) the greater of (i)
         Executive's Target Bonus, or (ii) the bonus paid to Executive for the
         most recent calendar year, less applicable withholdings and deductions;

                  (iii) continuation of Executive's medical, health, and life
         insurance (as in effect immediately prior to the date of termination)
         for a period of thirty-six (36) months, or if not permissible or
         commercially reasonable to continue the same coverage of Executive
         under one or more of the insurance policies or plans, continued payment
         for a period of thirty-six (36) months of the after-tax cost to the
         Company of providing such coverage to Executive (as measured
         immediately prior to the date of termination); provided however, that
         such benefits or payments shall cease upon the date on which Executive
         is eligible for similar aggregate coverage from a subsequent employer;
         and

                  (iv) immediate accelerated vesting of all Option Shares,
         pursuant to the applicable Option Agreement, with the Option Shares
         remaining exercisable for the balance of the term as determined in
         accordance with the terms of the Option Agreement.

              (e) Termination of Employment Due to Disability.

                  (i) In the event that Executive's employment terminates due to
         Disability, Executive shall receive the following:

                                      -8-
<PAGE>   9

                      (A) the payments stated in section 10(a), provided that
              the Base Salary, less applicable withholdings and deductions,
              shall be paid at least through the date on which Executive is
              eligible to receive disability payments;

                      (B) A pro rata portion of the annual Target Bonus for the
              year in which Executive's employment terminates, less applicable
              withholdings and deductions, calculated by multiplying the Target
              Bonus by a fraction, the numerator of which is the number of days
              elapsed in the year as of the date of termination, and the
              denominator of which is 365 (except for 2001 when numerator equals
              the number of days elapsed since February 12 and the denominator
              is 322) payable within 10 days of the Termination Date; and

                      (C) Disability benefits in accordance with the Company's
              long-term disability plan.

                  (ii) A termination of Executive's employment due to
         "Disability" shall mean a termination of Executive's employment by the
         Board of Directors because physical or mental incapacity has rendered
         or will render Executive unable to perform his duties as Chief
         Executive Officer for a period of 180 consecutive days. The
         determination regarding the existence and expected or actual duration
         of such incapacity shall be made by a health professional mutually
         acceptable to the Company and Executive. The Company shall provide 30
         days' written notice of a termination due to Disability, or payment in
         lieu thereof.

                  (iii) Executive's Option Shares shall vest and become
         exercisable in accordance with the terms of the Option Agreement.

              (f) Termination of Employment Due to Death.

                  (i) Executive's employment shall terminate automatically in
         the event of his death.

                  (ii) In the event that Executive's employment terminates due
         to his death, Executive (or Executive's estate) shall receive the
         following:

                      (A) the payments stated in Section 10(a) above, except
              that the Base Salary, less applicable deductions and withholdings,
              shall be paid through the 90th day following the date of death;

                      (B) A pro rata portion of the annual Target Bonus for the
              year in which Executive's employment terminates, less applicable
              deductions and withholdings, calculated by multiplying the annual
              Target Bonus by a fraction, the numerator of which is the number
              of days elapsed in the year of termination and the denominator of
              which is 365 (except for 2001 when numerator equals the number of
              days elapsed since February 12 and the denominator is 322) payable
              within 10 days of the Termination Date; and

                                      -9-
<PAGE>   10

                      (C) Executive's Option Shares shall vest and become
              exercisable in accordance with the terms of the Option Agreement.

         11. Excise Tax Gross-up.

              (a) Subject to Section 11(b) below, if Executive becomes entitled
to one or more payments (with a "payment" including, without limitation, the
vesting of an option or other non-cash benefit or property), whether pursuant to
the terms of this Agreement or any other plan, arrangement, or agreement with
the Company or any affiliated company (the "Total Payments"), which are or
become subject to the tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code") (or any similar tax that may hereafter be
imposed) (the "Excise Tax"), the Company shall pay to Executive at the time
specified below an additional amount (the "Gross-up Payment") (which shall
include, without limitation, reimbursement for any penalties and interest that
may accrue in respect of such Excise Tax) such that the net amount retained by
Executive, after reduction for any Excise Tax (including any penalties or
interest thereon) on the Total Payments and any federal, state and local income
or employment tax and Excise Tax on the Gross-up Payment provided for by this
Section 18, but before reduction for any federal, state, or local income or
employment tax on the Total Payments, shall be equal to the sum of (A) the Total
Payments, and (B) an amount equal to the product of any deductions disallowed
for federal, state, or local income tax purposes because of the inclusion of the
Gross-up Payment in Executive's adjusted gross income multiplied by the highest
applicable marginal rate of federal, state, or local income taxation,
respectively, for the calendar year in which the Gross-up Payment is to be made.
For purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax:

                  (i) The Total Payments shall be treated as "parachute
         payments" within the meaning of Section 280G(b)(2) of the Code, and all
         "excess parachute payments" within the meaning of Section 280G(b)(1) of
         the Code shall be treated as subject to the Excise Tax, unless, and
         except to the extent that, in the written opinion of independent
         compensation consultants, counsel or auditors of nationally recognized
         standing ("Independent Advisors") selected by the Company and
         reasonably acceptable to Executive, the Total Payments (in whole or in
         part) do not constitute parachute payments, or such excess parachute
         payments (in whole or in part) represent reasonable compensation for
         services actually rendered within the meaning of Section 280G(b)(4) of
         the Code in excess of the base amount within the meaning of Section
         280G(b)(3) of the Code or are otherwise not subject to the Excise Tax;

                  (ii) The amount of the Total Payments which shall be treated
         as subject to the Excise Tax shall be equal to the lesser of (A) the
         total amount of the Total Payments or (B) the total amount of excess
         parachute payments within the meaning of Section 280G(b)(1) of the Code
         (after applying clause (i) above); and

                  (iii) The value of any non-cash benefits or any deferred
         payment or benefit shall be determined by the Independent Advisors in
         accordance with the principles of Sections 280G(d)(3) and (4) of the
         Code.

                                      -10-
<PAGE>   11

         For purposes of determining the amount of the Gross-up Payment,
Executive shall be deemed (A) to pay federal income taxes at the highest
marginal rate of federal income taxation for the calendar year in which the
Gross-up Payment is to be made; (B) to pay any applicable state and local income
taxes at the highest marginal rate of taxation for the calendar year in which
the Gross-up Payment is to be made, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes if paid in such year (determined without regard to limitations on
deductions based upon the amount of Executive's adjusted gross income); and (C)
to have otherwise allowable deductions for federal, state, and local income tax
purposes at least equal to those disallowed because of the inclusion of the
Gross-up Payment in Executive's adjusted gross income. In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time the Gross-up Payment is made, Executive shall
repay to the Company at the time that the amount of such reduction in Excise Tax
is finally determined (but, if previously paid to the taxing authorities, not
prior to the time the amount of such reduction is refunded to Executive or
otherwise realized as a benefit by Executive) the portion of the Gross-up
Payment that would not have been paid if such Excise Tax had been applied in
initially calculating the Gross-up Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time the Gross-up Payment is made (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-up Payment), the Company shall make an additional Gross-up Payment in
respect of such excess (plus any interest and penalties payable with respect to
such excess) at the time that the amount of such excess is finally determined.

         The Gross-up Payment provided for above shall be paid on the 30th day
(or such earlier date as the Excise Tax becomes due and payable to the taxing
authorities) after it has been determined that the Total Payments (or any
portion thereof) are subject to the Excise Tax; provided, however, that if the
amount of such Gross-up Payment or portion thereof cannot be finally determined
on or before such day, the Company shall pay to Executive on such day an
estimate, as determined by the Independent Advisors, of the minimum amount of
such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code), as soon as
the amount thereof can be determined. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to Executive, payable on the
fifth day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code). If more than one Gross-up
Payment is made, the amount of each Gross-up Payment shall be computed so as not
to duplicate any prior Gross-up Payment. The Company shall have the right to
control all proceedings with the Internal Revenue Service that may arise in
connection with the determination and assessment of any Excise Tax and, at its
sole option, the Company may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with any taxing authority in
respect of such Excise Tax (including any interest or penalties thereon);
provided, however, that the Company's control over any such proceedings shall be
limited to issues with respect to which a Gross-up Payment would be payable
hereunder, and Executive shall be entitled to settle or contest any other issue
raised by the Internal Revenue Service or any other taxing authority. Executive
shall cooperate with the Company in any proceedings relating to the
determination and assessment of any

                                      -11-
<PAGE>   12

Excise Tax and shall not take any position or action that would materially
increase the amount of any Gross-Up Payment hereunder.

              (b) Modified Cutback. Notwithstanding the foregoing Section 11(a),
if it shall be determined that the amount of any payment due Executive pursuant
to Section 11(a) above would result in less than $20,000 in net after-tax value
to Executive, then no Gross-Up payment shall be made to Executive and the total
payments due Executive pursuant to Section 11(a) shall be reduced to an amount
that would not result in the imposition of any Excise Tax.

         12. Indemnification. The Company will hold harmless, indemnify, and
provide a defense to Executive to the fullest extent permitted by Delaware law
with respect to any claims, actions, suits, or proceedings, brought against
Executive by reason of, or arising out of, Executive's service as, or the
performance of Executive's duties as, an employee, director, officer, and/or
agent of the Company, provided that such claims, actions, suites, or proceedings
are not found by a court or arbitrator to have arisen out of employee's
intentional misconduct or gross negligence. The Company will pay, and subject to
any legal limitations, advance all costs, expenses, and losses, including
without limitation reasonable attorneys' fees, costs of settlements, and
consequential damages, actually and necessarily incurred by Executive in
connection with the defense of any such claims, actions, suits, or proceedings,
and in connection with any appeal thereof.

         13. Directors' and Officers' Insurance. The Company shall use
commercially reasonable efforts to obtain and maintain directors' and officers'
liability insurance coverage in an amount equivalent to that of a well-insured
similarly situated company; provided, however, that, the failure to obtain and
maintain such insurance after the Company has exercised such commercially
reasonable efforts shall not be a breach of the Company's obligations under this
Agreement. Any directors' and officers' liability insurance covering Executive
shall continue to apply following the period in which Executive is serving as
officer or director of the Company for actions or omissions during the period in
which Executive was acting as officer or director.

         14. Forfeiture Provisions.

              (a) Forfeiture of Stock Options and Other Awards and Gains
Realized Upon Prior Option Exercises or Award Settlements. Unless otherwise
determined by the Committee, upon Executive's violation of any of the
restrictive covenants contained in [Sections 15 or 16] (each a "Forfeiture
Event") during the Term of Employment [and for 36 months thereafter], all of the
following forfeitures will result:

                  (i) The unexercised portion of any stock option, whether or
         not vested, and any other Award not then settled (except for an Award
         that has not been settled solely due to an elective deferral by
         Executive and otherwise is not forfeitable in the event of any
         termination of Executive's service) will be immediately forfeited and
         canceled upon the occurrence of the Forfeiture Event; and

                                      -12-
<PAGE>   13

                  (ii) Executive will be obligated to repay to the Company, in
         cash, within five (5) business days after demand is made therefor by
         the Company, the total amount of Award Gain (as defined herein)
         realized by Executive upon each exercise of a stock option or
         settlement of an Award (regardless of any elective deferral) that
         occurred (A) during the period commencing with the date that is 24
         months prior to the occurrence of the Forfeiture Event and the date 24
         months after the Forfeiture Date, if the Forfeiture Event occurred
         while Executive was employed by the Company, or (B) during the period
         commencing 24 months prior to the date Executive's employment by the
         Company terminated and ending 24 months after the date of such
         termination, if the Forfeiture Event occurred after Executive ceased to
         be so employed. For purposes of this Section, the term "Award Gain"
         shall mean (i), in respect of a given stock option exercise, the
         product of (x) the Fair Market Value per share of common stock at the
         date of such exercise (without regard to any subsequent change in the
         market price of shares) minus the exercise price times (y) the number
         of shares as to which the stock option was exercised at that date, and
         (ii), in respect of any other settlement of an Award granted to
         Executive, the Fair Market Value of the cash or stock paid or payable
         to Executive (regardless of any elective deferral) less any cash or the
         Fair Market Value of any stock or property (other than an Award or
         award which would have itself then been forfeitable hereunder and
         excluding any payment of tax withholding) paid by Executive to the
         Company as a condition of or in connection such settlement.

         For purposes of this Agreement, "Award" shall mean any cash award,
stock option, stock appreciation right, restricted stock, deferred stock, bonus
stock, dividend equivalent, or other stock-based or performance-based award or
similar award, together with any related right or interest, granted to or held
by Executive.

              (b) Committee Discretion. The Committee may, in its discretion,
waive in whole or in part the Company's right to forfeiture under this Section,
but no such waiver shall be effective unless evidenced by a writing signed by a
duly authorized officer of the Company. In addition, the Committee may impose
additional conditions on Awards, by inclusion of appropriate provisions in the
document evidencing or governing any such Award.

         15. Non-Competition and Non-Solicitation.

              (a) Necessity of Covenants. The Company and Executive acknowledge
that:

                  (i) The Company's business is highly competitive;

                  (ii) The Company maintains Confidential Information and trade
         secrets (each described below), as discussed below, all of which are
         zealously protected and kept secret by the Company;

                  (iii) In the course of his employment, Executive will acquire
         certain of the Company's Confidential Information, and in the event of
         any termination of Executive's employment, the Company would be
         adversely affected if such information is used for the purposes of
         competing with the Company;

                                      -13-
<PAGE>   14

                  (iv) The Company transacts business throughout the world; and

                  (v) For these reasons, both the Company and Executive further
         acknowledge and agree that the restrictions contained herein are
         reasonable and necessary for the protection of their respective
         legitimate interests and that any violation of these restrictions would
         cause substantial injury to the Company.

              (b) Covenant Not to Compete. Executive agrees that from and after
the Commencement Date and until the earlier of (i) three (3) years after the
Employment Term , or (ii) the later of (x) one (1) year after the Termination
Date, and (y) the end of the period during which Executive is receiving
severance payments and/or benefits from the Company under Section 10(c) or
10(d), he will not, without the express written permission of the Company, which
may be given or withheld in the Company's sole discretion, directly or
indirectly own, manage, operate, control, lend money to, endorse the obligations
of, or participate or be connected as an officer, director 5% or more
stockholder of a publicly-held company, stockholder of a closely-held company,
employee, partner, or otherwise, with any enterprise or individual engaged in
mining or the processing of metals or minerals in the United States and
throughout the world at the time of the termination of the Employment Term. It
is understood and acknowledge by both Executive and the Company that, because
the Company transacts business worldwide, the term of this Section 15(b) shall
be enforced throughout the United States and in any other country in which the
Company is doing business as of the Termination Date.

              (c) Covenant Not To Solicit. Executive agrees that from and after
the Commencement Date and until the earlier of (i) three (3) years after the
Employment Term , or (ii) the later of (x) one (1) year after the Termination
Date, and (y) the end of the period during which Executive is receiving
severance payments and/or benefits from the Company under Section 10(c) or
10(d), he will not, except on behalf of the Company or with the express written
permission of the Company, which may be given or withheld in the Company's sole
discretion, directly or indirectly solicit, or attempt to solicit (on
Executive's own behalf or on behalf of any other person or entity) the
employment or retaining of any employee or consultant of the Company or any of
the Company's affiliates.

              (d) Disclosure of Outside Activities. Executive, during the
Employment Term, shall at all times keep the Company informed of any outside
business activity and employment, and shall not engage in any outside business
activity or employment which may be in conflict with the Company's interests.

              (e) Survival. The terms of this Section shall survive the
expiration or termination for any reason of this Agreement.

         16. Confidential Information and Trade Secrets.

              (a) Nondisclosure of Confidential Information. Executive has and
will acquire certain "Confidential Information" of the Company throughout the
Employment Term. For purposes of this Agreement, "Confidential Information"
shall mean any information that is not generally known (including trade secrets)
outside the Company and that is proprietary to the Company, relating

                                      -14-
<PAGE>   15

to any phase of the Company's existing or reasonably foreseeable business that
is disclosed to Executive by the Company, including information conceived,
discovered, or developed by Executive. "Confidential Information" includes,
without limitation, business plans, financial statements and projections,
operating forms (including contracts) and procedures, payroll and personnel
records, marketing materials and plans, proposals, software codes and computer
programs, project lists, project files, price information and cost information
and any other document or information that is designated by the Company as
"Confidential." For purposes of this Agreement, the term "trade secret" shall
include any formula, pattern, device, or compilation of information which is
used in the Company's business, and which provides to the holder of such trade
secret an opportunity to obtain an advantage over competitors who do not know or
use such trade secret.

                  (i) Executive agrees that he shall not use for his own benefit
         such Confidential Information or trade secrets acquired during the
         Employment Term. Further, Executive shall not, without the written
         consent of the Board of Directors of the Company or a person duly
         authorized thereby, which consent may be given or withheld in the
         Company's sole discretion, disclose to any person, other than an
         employee of the Company or a person to whom disclosure is reasonably
         necessary or appropriate in connection with the performance by
         Executive of his duties, any Confidential Information or trade secrets
         obtained by him during the Employment Term.

              (b) Return of Confidential Information. Upon any termination of
employment, Executive agrees to deliver any Company property and any documents,
notes, drawings, specifications, computer software, data and other materials of
any nature pertaining to any Confidential Information that are held by Executive
and will not take any of the foregoing, or any reproduction of any of the
foregoing, that is embodied an any tangible medium of expression, provided that
the foregoing shall not prohibit Executive from retaining his personal phone
directories and rolodexes.

              (c) Exceptions. The restrictions and obligations in Section 16(a)
shall not apply with respect to any Confidential Information which (i) is or
becomes generally available to the public through any means other than a breach
by Executive of his obligations under this Agreement; (ii) is disclosed to
Executive without an obligation of confidentiality by a third party that is not
an affiliate of the Company who has the right to make such disclosure; (iii) is
developed by Executive independent of his performance of duties hereunder
without use of or benefit from the Confidential Information; (iv) was in
possession of Executive without obligations of confidentiality prior to receipt
under this Agreement; or (v) is required to be disclosed by law.

              (d) Survival. The terms of this Section 16 shall survive the
expiration or termination for any reason of this Agreement.

         17. Binding Arbitration.

              (a) Executive and the Company each agree, to the extent permitted
by law, to arbitrate before a single neutral arbitrator, in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association ("AAA") and Delaware law regarding discovery, any
dispute, claim, or controversy arising out of, relating to, or in connection
with this Agreement, or the interpretation, validity, construction, performance,
breach, or termination

                                      -15-
<PAGE>   16

thereof, or Executive's employment, recruitment to employment, or the
termination of such employment, whether in tort or contract, pursuant to current
or future statute or regulation, or otherwise, including but not limited to
claims for wrongful termination, breach of contract or contractual obligation,
discrimination, retaliation and harassment based on race, age, sex, disability,
and/or any other basis under Title VII of the Civil Rights Act of 1964, as
amended, and any and all federal, state, and local laws and regulations,
infliction of emotional distress, misrepresentation, fraud, and claims for
wages, commissions, bonuses, severance, stock options, fringe benefits, and the
like, except that the following will not be resolved by arbitration: any
dispute, claim, or controversy regarding workers' compensation benefits,
unemployment insurance benefits, or disability insurance benefits, or regarding
Sections 15 and/or 16 of this Agreement, and/or the validity, infringement, or
enforceability of any trade secret, patent right, copyright, trademark, or any
other intellectual property.

              (b) The Company shall pay the cost of the arbitration filing and
hearing fees and the cost of the arbitrator, and any other expense or cost that
is unique to arbitration or that Executive would not be required to bear if he
were free to bring the dispute or claim in court. All reasonable costs and
expenses (including fees and disbursements of counsel) incurred by Executive
pursuant to this Section 16 shall be paid on behalf of or reimbursed to
Executive promptly by the Company; provided, however, that in the event the
arbitrator(s) determine(s) that any of Executive's litigation assertions or
defenses are determined to be in bad faith or frivolous, no such reimbursements
shall be due Executive, and any such expenses already paid to Executive shall be
immediately returned by Executive to the Company. The arbitration shall take
place in the AAA location that is closest to the Company's corporate offices in
Montana. The arbitrator shall apply Delaware law, without reference to rules of
conflicts of law, to the resolution of any dispute. The arbitrator shall issue a
written award that sets forth the essential findings and conclusions on which
the award is based. Judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The award shall be subject to
correction, confirmation, or vacation, as provided by Delaware law and any
applicable Delaware case law setting forth the standard of judicial review of
arbitration awards. Notwithstanding the foregoing, the parties may apply to any
court of competent jurisdiction for preliminary or interim equitable relief, or
to compel arbitration in accordance with this Section 17, without breach of this
Section 17.

              (c) Executive and the Company each understand and agree that the
arbitration of any dispute or controversy listed in Section 17(c) shall be
instead of a hearing or trial before a court or jury. Executive and the Company
each understand that Executive and the Company are expressly waiving any and all
rights to a hearing or trial before a court or jury regarding any dispute or
controversy listed in Section 17(c) which they now have or which they may have
in the future. Nothing in this Agreement shall be interpreted as restricting or
prohibiting Executive from filing a charge or complaint with a federal, state,
or local administrative agency charged with investigating and/or prosecuting
such charges or complaints under any applicable federal, state, or municipal law
or regulation.

              (d) The terms of this Section 17 shall survive the expiration or
termination for any reason of this Agreement.

                                      -16-
<PAGE>   17

         18. Essential Covenants. The covenants by Executive in Sections 15 and
16 are essential elements of this Agreement and without Executive's agreement to
comply with such covenants, the Company would not have entered into this
Agreement or employed Executive.

         19. Injunctive Relief. Executive acknowledges that the injury suffered
as a result of a breach of any provision of this Agreement (including any
provision of Sections 15 and 16) would be irreparable and that an award of
monetary damages to the Company for such a breach would be an inadequate remedy.
Consequently, Executive agrees that the Company will have the right, in addition
to any other rights it may have, to obtain injunctive relief to restrain any
breach or threatened breach or otherwise to specifically enforce any provision
of this Agreement, and the Company will not be required to post bond or other
security in seeking such relief.

         20. Assignment. The Company shall have the right to assign this
Agreement to its successors or assigns, and all covenants or agreements
hereunder shall inure to the benefit of and be enforceable by or against its
successors or assigns. The term "successors" and "assigns" shall include any
person or entity which buys all or substantially all of the Company's assets, or
a controlling portion of its stock, or with which it merges or consolidates.
This Agreement and all rights of Executive hereunder shall inure to the benefit
of, and be enforceable by, Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. The rights, duties, and covenants of Executive under this Agreement
may not be assigned.

         21. No Waiver. The failure of either party to demand strict performance
and compliance with any part of this Agreement during the Employment Term shall
not be deemed to be a waiver of the rights of such party under this Agreement or
by operation of law. Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.

         22. Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given if (a)
delivered personally or by facsimile, (b) one (1) day after being sent by
Federal Express or a similar commercial overnight service, or (c) three (3) days
after being mailed by registered or certified mail, return receipt requested,
prepaid and addressed to the parties or their successors in interest at the
following addresses, or at such other addresses as the parties may designate by
written notice in the manner aforesaid:

              If to the Company: Stillwater Mining Company
                                 PO Box 1330
                                 Columbus, Montana 59019

              If to Executive:   at the last residential address known by the
                                 Company.

         23. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.

                                      -17-
<PAGE>   18

         24. Entire Agreement. This Agreement, together with the Company's
Relocation Policy, and the applicable stock option and stock purchase agreements
and notices of grant referenced herein, represent the entire agreement and
understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersede and replace any and all
prior agreements and understandings concerning Executive's employment
relationship with the Company.

         25. No Oral Modification, Cancellation or Discharge. This Agreement may
only be amended, canceled or discharged in a writing signed by Executive and an
authorized member of the Board.

         26. Withholding. The Company shall be entitled to withhold, or cause to
be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his employment
hereunder.

         27. Key-Man Insurance. Executive agrees that the Company may, from time
to time, apply for and take out in its own name and at its own expense, life,
health, accident, or other insurance upon Executive that the Company may deem
necessary or advisable to protect its interests hereunder; and Executive agrees
to submit to any medical or other examination necessary for such purposes and to
assist and cooperate with the Company in preparing such insurance; and Executive
agrees that he shall have no right, title, or interest in or to such insurance.

         28. Attorneys' Fees. Should a dispute arise under this Agreement
following a Change in Control, or should any action or proceeding be commenced
to recover damages as a result of an alleged breach following a Change in
Control of the terms of this Agreement, then the successor to the Company as a
result of the Change in Control shall be required to pay the costs incurred by
Executive in connection therewith, including reasonable attorneys' fees, unless
it is determined that the dispute, action, or proceeding was frivolous or
brought by Executive in bad faith.

         29. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware without reference to rules relating to conflict of law.

         30. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         31. Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

                                      -18-
<PAGE>   19

         IN WITNESS WHEREOF, the undersigned have executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first written above:

STILLWATER MINING COMPANY

By: /s/ Richard E. Gilbert
   ----------------------------

Title: Chairman of Compensation
       Committee
      -------------------------

EXECUTIVE

/s/ Francis McAllister
-------------------------------
Francis McAllister

                                      -19-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}]]