A federal class action lawsuit alleges that a Montana mining company's board improperly awarded its chairman more than 104,000 shares of company stock.
The lawsuit comes as a group that includes former Gov. Brian Schweitzer seeks to oust the leadership of Stillwater Mining Co. for alleged mismanagement.
Billings Attorney Thomas Towe, who represents the Pennsylvania woman named as a plaintiff in the case, said Friday that stock awards to Stillwater Chairman and CEO Frank McAllister violated a shareholder-approved incentive plan.
That plan limited the number of shares McAllister could receive in a given year to 250,000, according to the suit. In 2010 he received, 337,447 shares, and in 2012 he received 267,512 shares.
The suit, filed Thursday in U.S. District Court in Billings, calls for the shares to be rescinded.
It also claims Stillwater and its board violated federal securities laws by not disclosing the stock awards. The alleged excess shares were worth almost $1.3 million at Stillwater's most recent stock price.
Stillwater spokesman Dan Gagnier said Friday the company was aware of the lawsuit and was reviewing it, but had no further comment.
Stillwater is the only U.S. producer of platinum and palladium, precious metals used primarily used to make catalytic converters that reduce vehicle pollution.
The company employs more than 1,664 people and operates two mines in the Beartooth Mountains of south-central Montana. It also runs a precious metals recycling plant in Columbus.
In recent years, Stillwater sought to expand internationally. Under McAllister's leadership, it bought a proposed gold and palladium mine in Canada and a vast reserve of copper in a remote area of the Andes in Argentina.
The foreign ventures cost hundreds of millions of dollars. Critics say they distracted from the company's core operations in Montana and prompted potential investors to shy away.
Stillwater closed Friday down 2-cents, to $12.09 on the New York Stock Exchange.
Plaintiff's attorney Towe said he knows of no connection between his client, Sylvia Jurgelewicz, and Schweitzer's group, which is led by a New York hedge fund, the Clinton Group.
But the class action suit extensively cites proxy material put out by the Clinton Group as part its corporate takeover.
The group is trying to convince shareholders to replace Stillwater's eight-member board with a slate of nominees that includes Schweitzer, former Stillwater CEO Charles Engles and Clinton Group managing director Greg Taxin.
The issue will be decided by a vote of shareholders during Stillwater's annual meeting, scheduled for May 2 in Montana.